SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: FS – 09 - 349878
DATE: 20140103
RE: Marco Lucente, Applicant
AND:
Cinzia Lucente, Respondent
BEFORE: Kiteley J.
COUNSEL:
Elissa Gamus, for the Applicant
Courtney G. Hughes, for the Respondent
Amanda Jackson, for the Toronto Dominion Bank in related action
Tilda Roll, for Natalino Lucente and Roberto Lucente, parties against whom Respondent seeks disclosure
HEARD: December 10, 2013
ENDORSEMENT
The Respondent had brought motions against the Applicant for an order for disclosure, an order for an advance on the equalization payment or interim disbursements in the amount of $50,000, an order requiring the Applicant to pay s. 7 expenses, and other relief. The Respondent served a separate Notice of Contempt Motion against the Applicant. The Respondent also brought a motion against Natalino Lucente (father of the Applicant) and Roberto Lucente (brother of the Applicant) for an order for disclosure and questioning. The Applicant brought a motion for sale of the matrimonial home, varying the order of Perkins J. dated January 5, 2010 as to temporary child support, an order authorizing service of documents through SIX, appointment of the OCL, and related relief and costs.
Some of the notices of motion had been before me on October 21, 2013. Although Mr. Joseph had agreed to that date weeks earlier, Ms. Hughes had had to acquiesce in that adjournment because Ms. Gamus and Mr. Joseph were involved in a trial. Counsel had agreed to adjourn without setting a new date. In my endorsement, I indicated that given the background, I would pick two dates and directed counsel for Mr. Lucente to make reasonable efforts to be available. I adjourned all the motions to December 12, 2013 for 3 hours.
Neither Ms. Gamus nor Mr. Joseph were available on December 12th. Counsel advanced the matter to December 10th. By that point, all of the motions had been served and filed. Counsel advised at the outset that they had agreed to adjourn to a long motion on February 6, 2014 the Respondent’s motion for contempt and for an order striking the Application as a consequence of his contempt; for an order for an advance on the equalization payment or interim disbursements; and for an order for case management and for questioning of the Applicant. The Applicant’s motion for an order for sale of the home was also adjourned to that date. Counsel asked to make submissions on December 10th on whatever matters time permitted.
Ms. Hughes and Ms. Roll agreed to a consent order by which the Respondent’s motion for disclosure and questioning of Natalino Lucente and Roberto Lucente was adjourned to Thursday January 30, 2014 on condition that certain disclosure would be provided in the meantime and a timetable for filing materials was established.
I indicated to counsel that I declined to hear submissions on the motion for contempt and indicated I intended to dismiss it on the basis that the Respondent’s factum was inadequate and did not address the legal principles that are applicable. I also indicated I would dismiss the request that the Applicant’s pleadings be struck because it was predicated on the success of the motion for contempt.
Ms. Hughes made submissions on five issues. Ms. Gamus responded and made submissions on three issues.
Motion by Respondent for Contempt and Striking Application
As indicated above, when counsel were reviewing the issues that they had agreed would be dealt with on a long motion on February 6, 2014, I observed that the factum filed on behalf of the Respondent was inadequate and for that reason I intended to dismiss the motion for a finding that the Applicant be held in contempt and for an order striking his pleadings. I did not make an endorsement on the point on December 19th. Having reserved in order to consider the other issues raised by counsel, I have reconsidered that intention.
On December 10th, the concern that I had was the inadequacy of the factum on behalf of the Respondent. Counsel had filed a separate factum on the contempt motion. It set out some of the facts on which the Respondent relied but none of the legal principles. As the factum filed on behalf of the Applicant demonstrates, the legal issues arising from a motion for contempt are many including how and when service is effected; the direction from the Court of Appeal that the civil contempt remedy is one of last resort; that in family law litigation, some restraint in the exercise of the contempt powers of the court must be exercised; that contempt proceedings are quasi-criminal in nature and compliance with rule 31 is mandatory; that the burden of proof is beyond a reasonable doubt; that the moving party must set out with precision the full factual basis of the allegations of contempt, and that the court will apply the factors identified in various cases including Peers v. Poupore[^1].
This particular motion has considerable history. It was launched by the Respondent’s prior counsel (Sandra Couto) by form 31 Notice of Contempt Motion and form 14 in a motion returnable June 28, 2012. After Katherine Skinner was appointed as counsel for the Respondent, she served a notice of motion originally returnable May 23, 2013 in which she included the following:
An order vacating the Notice of Contempt Motion dated June 13, 2012 originally returnable June 28, 2013.
Ms. Hughes went on the record in September 2013. She served an amended notice of motion returnable October 21, 2013 in which she included the same request. On November 18, 2013, Ms. Hughes served on the Applicant what is described as a Notice of Contempt Motion returnable December 10, 2013 and affidavit of the Respondent sworn November 15, 2013. What appears in the court file is a Notice of Contempt Motion (incorrectly referred to as a Form 14) and there is no Form 31.
As the affidavits indicate, there were communications between Ms. Gamus and Ms. Hughes about whether the contempt issue was proceeding or not and Ms. Hughes ultimately confirmed that it was proceeding,
Other than pointing out those important formalities, I did not closely analyze the evidence in support of the motion for contempt. Rather, I was concerned about the inadequacy of the factum. In retrospect, since counsel had agreed to adjourn the contempt motion to the long motion date, I was too hasty in indicating an intention to dismiss that aspect of the motion. Counsel may be able to assemble the legal submissions necessary to pursue that relief. It will of course be necessary for counsel for the Respondent to serve and file a more comprehensive factum before confirming that that issue should be placed before the court for decision.
Motion by Respondent for an Advance on Equalization Payment/Interim Disbursements
In the Notice of Motion returnable June 28, 2012, the Respondent asked for an order for an advance on an equalization payment in the amount of $50,000 or in the alternative an order for interim disbursements in the amount of $50,000 for a forensic audit. The same request was made in the motion returnable May 23, 2013 and in the Amended Notice of Motion returnable October 21 as well as in the Notice of Contempt Motion returnable December 10, 2013. On December 10th, counsel for the Respondent asked for $10,000. The request is opposed on behalf of the Applicant. Neither of the facta filed on behalf of the Respondent address the legal principles that the court must apply. The factum filed on behalf of the Applicant addresses both an advance of the equalization payment and interim disbursements.
According to paragraph 79 of his affidavit sworn December 6, 2013, the Respondent summarizes his corporate interests as follows:
(a) 1431871 Ontario Inc.: he and his brother Roberto are equal owners of the shares of this holding company that holds title to 46 Northline Road. It has no employees. He said that he and his brother acquired the business through monies loaned by their father. His father’s business rents out the building but he notes that his father does not pay any money in exchange for the brothers not paying him back what he loaned them.
(b) 542643 Ontario Ltd. (Dufferin Manufacturing): he is the owner of the shares of the business.
(c) Parkview Ready Mix Inc.: he and his brother own the shares. He said it has been inactive since its inception and registration in or about 2005-2006. He said the company has not carried on any business operations and has never earned any income or acquired any assets. It was wound up in 2013.
(d) Marco E. Lucente Investments and Managment: he says this was a sole proprietorship established prior to marriage but it has been inactive for seven years and does not own any assets. He said all documentation was left behind at the matrimonial home when he left.
This request for a payment of $10,000 is caught up in the many challenges that the Respondent feels she has faced in obtaining sufficient financial disclosure from the Applicant. The affidavits filed by both parties indicate that there is a significant difference between them on this point. The Respondent insists that the Applicant has failed to fulfill orders made by Perkins J. dated January 5, 2010 and February 11, 2010 (which are also the subject of the contempt motion) and has failed to respond to three disclosure letters. The Respondent insists that the Applicant’s father and brother are covering up his assets and his income (which is also the basis for the motion for disclosure and questioning from the father and the brother). The Applicant insists equally as strenuously that his family members are not shielding him, that he has repeatedly provided disclosure that seems to get lost amongst the Respondent’s changes in counsel, that the Respondent does not appreciate the extent to which he has given documents and information, that he did obtain a valuation of the one business in which he is a shareholder that was active at valuation date, and that the Respondent persists in this fishing expedition because she remains angry with him.
There are anomalies in his disclosure. For example, while he says in paragraph 79 that he and his brother are equal owners of the shares in 1431871, in his financial statement sworn October 15, 2009, he said that he owned 51% of the shares at valuation date. While he said that Parkview has been inactive since its inception, in his financial statement sworn June 11, 2009, he deposed he was employed by Parkview. Furthermore, at paragraph 95 of her affidavit sworn June 12, 2002 the Respondent referred to a conversation she had had with Natalino Lucente shortly after the separation in which she said he said he would make her life a living hell and she would be “left with nothing”. In the voluminous record on these motions, I do not see a specific denial. As well in his affidavit sworn December 6, 2013 at paragraph 6, the Applicant said that his parents had always been prepared to help the family and at paragraph 89, that the Applicant and Respondent had managed their lifestyle because of the generosity and assistance of his father. In those circumstances, it might be a reasonable inference that his father continues to be generous but in secret.
On this record, it is impossible to determine which perspective most closely resembles reality. It is apparent that considerable attention has been paid by counsel on both sides to dealing with these issues. That will be the subject matter of the long motion.
In the interim, counsel for the Respondent asks that an order be made for a payment of $10,000 to enable the Respondent to continue to retain her expert to at least review and critique the work done on behalf of the Applicant and if possible, prepare a report on the value of the Applicant’s assets and income.
In order for the payment to be characterized as an advance on the equalization payment, the court must be satisfied that there is a reasonable requirement for the funds; that there is little doubt that the person will receive an equalization payment of at least that amount; and that it is just to do so in the circumstances, including the payor’s ability.[^2]
At Exhibit B to the affidavit of the Respondent sworn December 5, 2013 is a draft net family property statement. Title to the matrimonial home is registered in the name of the Applicant yet the full value of the home is listed in the Respondent’s column and the line of credit secured against title to the matrimonial home is in the Applicant’s column. This net family property statement has been prepared to reflect the outcome that the Respondent seeks. It is not consistent with the Family Law Act. The bottom line that indicates that the Applicant owes an equalization payment in the amount of $32965 while the Respondent retains all of the equity in the home is not realistic.
In Exhibit D to the affidavit of the Applicant sworn October 15, 2013, he provides a draft net family property statement which properly allocates the value of the matrimonial home in his column and allocates substantial debt to him. On that calculation, he owes to her an equalization payment in the amount of $195,167. While relying on that draft statement, he also takes the position that the Respondent is liable for substantial financing costs for the matrimonial home since he says she failed to pay the mortgage notwithstanding receipt of spousal support which he says was intended to have her meet those payments. He takes the position that there will be a substantial credit owed to him that will wipe out the equalization payment.
I understand that the Respondent takes issue with a substantial debt, namely $467,000 which he says is a promissory note due to “Natalino Lucente either personally or through his business for renovations to 46 Northline” and that the Respondent has been persistently demanding documentation to verify that debt and insisted that the document dated April 2, 2008 at Exhibit DD to her affidavit sworn June 12, 2012 is insufficient.
As indicated above, the issue is whether there is little doubt that the Respondent will receive an equalization payment. The issue is not whether the entitlement to an equalization payment will be set off against some other transactions. On the evidence of the Applicant, and ignoring that the equalization payment might increase if he is unable to prove on a balance of probabilities that he owes his father or his father’s business $467,000, there is little doubt that the Respondent will receive an equalization payment.
I turn to the other two factors, namely whether there is a reasonable requirement for the funds and whether it is just to do so. On this record, I do not accept that what the Respondent seeks to do is a fishing expedition. On the evidence of the Applicant, at valuation date he had an interest in 4 enterprises. The evidence on behalf of the Respondent is that she and her advisors have done considerable work to try to analyze the disclosure provided by the Applicant. Leaving aside whether he has produced the same material more than once or whether there remains anything outstanding, I am persuaded that it is a reasonable requirement for the Respondent to have $10,000 for purposes of engaging her own professional.
As to whether it is just to order a payment, the Applicant insists that he has no money and cannot pay it. He has provided a letter from a financial institution rejecting his request for a loan. He says his brother will not help him.
The Applicant has provided a financial statement sworn October 15, 2013 in which he lists assets and liabilities at valuation date and at the date of statement. He believes the matrimonial home is currently valued at $1,080,000. He has not paid any amount to his father on account of the above described loan. Since valuation date, he has acquired personal loans in the amount of $29994 owing to Linda Gores, $64,000 owing to his father, $12,012 owing to his accountant, and Laurie Lucent in the amount of $20,000. He has no liability to his lawyers. I infer that even if he does not have the capital nor the cash flow, he has the ability to ensure that his legal interests are protected. On the other hand, in paragraph 92 of her affidavit sworn June 12, 2012 the Respondent asserts that she inquired of Legal Aid Ontario if it would approve the expenditure and her request was refused.
I am satisfied that it is just to require the Applicant to pay $10,000 so that she can engage what will be a modest amount of professional assistance that will help to level the playing field between the two of them so that the court will have sufficient evidence to make a finding of the appropriate equalization payment, or hopefully, inform an early settlement.
Respondent’s Motion for fresh Financial Statement from Applicant
Counsel for the Respondent points out that the Applicant has served and filed six financial statements and that even the most recent omits bank accounts. She asks for a fresh financial statement.
Ms. Gamus takes the position that most of the accounts that were omitted were corporate accounts and are not properly included in a personal sworn financial statement. I agree with that position. She acknowledged that there might have been a couple of omissions. She consented to the delivery of updated financial statements if the obligation was on both spouses and if it was accompanied with a brief proving assets and liabilities.
I agree that that is appropriate and will facilitate discussion at the settlement conference referred to below.
Respondent’s motion for questioning Applicant on his recent disclosure
Following the consent order on October 21, 2013, the Applicant did provide more disclosure. Counsel for the Respondent seeks an order for questioning. Counsel for the Applicant is opposed.
I agree that the motion for questioning should be dismissed at this time in order that the parties focus on the early settlement conference referred to below.
Respondent’s motion to Dispense with Applicant’s consent to obtain police report
The oldest son was involved in a minor car accident in late 2013. The Respondent takes the position that the Applicant has breached an order made by Aston J. that required disclosure of information related to events such as that and she asks for an order dispensing with the consent of the Applicant so that she might obtain a copy of the police report. The Applicant points out that the order requires that information be provided if medical intervention was required and it was not, so there is no breach.
Michael was born April 18, 1996 and until October 28, 2013, he lived with his mother. Based on the evidence of both of the parents, Michael has been in the middle of the conflict since the separation. He is almost 18 years old and I am not prepared to make an order. However, the Applicant has said that there is a legal proceeding arising out of the accident. That would be a public document. The Applicant will be required to make a copy available.
Applicant’s motion to Appoint OCL
The children were born as follows: Michael - April 18, 1996; David - May 7, 1999; Marc Anthony – July 29, 2002; and Vanessa – born February 21, 2008. The parties separated on May 8, 2009 at which time the children and the Respondent remained in the former matrimonial home.
As indicated above, Michael began living with his father at the end of October, 2013. The Applicant takes the position that there is considerable conflict between the parents that is affecting Michael and David. In his affidavit sworn December 4th, he says that the Respondent had earlier consented to the appointment and then had changed her mind. He asks for an order appointing the Office of Children’s Lawyer. Counsel for the Respondent left it in my hands.
As counsel and the parties are aware, I do not have the jurisdiction to appoint the OCL. I only have jurisdiction to make an order asking the OCL to consider the referral. I am not persuaded that the order of referral to the OCL should be made. Michael is old enough that he does not have to participate. The parents disagree about the extent to which the conflict is affecting David. There is no evidence that there are issues with respect to Marc Anthony or Vanessa. Based on the evidence, I expect that the OCL would not accept the referral. I do not want the parties to suspend their efforts to reduce the conflict and deal with what has to be done with the children while waiting for intervention that will likely not happen.
Applicant’s motion to vary child support
Michael has been with his father since October 28, 2013. The Applicant says that the move is permanent. The Respondent does not agree. Counsel for the Applicant asks that the order be varied to provide that he pay child support for three children. Counsel for the Respondent asks that it be left to the long motion.
I agree that it is premature to make an adjustment at this time. That analysis should await the long motion. The Respondent has an outstanding claim for s. 7 expenses. If the Applicant is found to have overpaid on child support for Michael, perhaps the overpayment can be taken into consideration in dealing with that claim.
Applicant’s motion for service using SIX
In the Applicant’s notice of motion, he seeks an order requiring both counsel to use an electronic document website known as “SIX” as a facility for serving documents. In his affidavit, he indicates that the Respondent and her counsel were refusing to accept service in that manner despite being aware of the reasons for decision in Fehervari v Kiss[^3]. Counsel for the Respondent resists primarily because of the time taken to learn the system.
In Fehervari v Kiss, the moving party asked for an order validating service of his answer using “SIX”. The motion was not opposed. That distinguishes the case from the situation here where counsel want to use it for depositing disclosure documents and affidavits and notices of motion. I support the technology but when the opposing counsel objects, I am not prepared to order it as the mandatory method for either counsel.
Respondent’s motion for an order for case management
The only single point on which counsel appear to agree is that this matter should be subject to case management.
The action started in June 2009. On August 11, 2009, Aston J. made a temporary order in accordance with minutes of settlement and adjourned the motion to September 22, 2009. Justice Speigel held a case conference on September 2, 2009 that she adjourned to September 30, 2009. On November 13, 2009, she adjourned it to February 26, 2010. Justice Perkins dealt with the Respondent’s motion on January 5, 2010 and completed it on February 11, 2010. On June 11, 2010, Justice Speigel held a case conference and made an endorsement that the endorsement of Perkins J. dated Feb. 11, 2010 needed clarification. On June 11, 2010, Justice Perkins made an endorsement clarifying his earlier endorsement about the car. On November 17, 2010, Justice Speigel held a settlement conference.
The next event that occurred was a consent non-dissipation order on July 24, 2013.
As indicated above, the current motion activity started in June 2012. The affidavits indicate the reasons for the hiatus during the fall and winter of 2012-2013 including efforts to settle. The litigation activity resumed in May of 2013.
As the brief summary of the many issues currently before the court in the motions indicates, virtually everything is in dispute. The voluminous affidavits and exhibits (which reach Exhibit FFF in the affidavit of the Respondent sworn June 12, 2012) indicate the high level of conflict and activity. I agree with counsel that the primary objective of the rules, which directs the court to deal with cases justly, will be met if a judge (plus an alternate in the absence of the primary judge) is responsible for managing the activity. The first step will be a settlement conference.
I agree with counsel that if the proceeding is case managed, there should be less conflict, more focus on priorities, and an early effort to settle. For that reason, I will substitute a settlement conference for the long motion on February 6th. I am aware that that is a Thursday and not typically a settlement conference date. However, the transition from long motions starting at 10:00 to settlement conference starting at 2:30 has been confirmed through the trial co-ordinator. As indicated below, a timetable has been established that will attempt to optimize the prospects of resolution.
Costs of the attendance on December 10, 2013
- I have wide discretion is determining how to deal with costs. Success was divided on the issues that were before me. The substantive issues are left for another day. Under the circumstances, there will be no costs of the attendance on December 10, 2013.
Counsel for the Toronto Dominion Bank
- Ms. Jackson attended because her client has an execution registered against title to the former matrimonial home, namely 20 Squires Avenue, Toronto. Pursuant to the order of Aston J. dated August 20, 2013 in the civil action, the Bank is to be given advance notice of any motion or other step in the divorce proceeding as if it were a party to that proceeding. Counsel for the Bank may attend the settlement conference.
ORDER TO GO AS FOLLOWS:
- Motion against Natalino Lucente and Roberto Lucente adjourned on consent to January 30, 2014 for 60 minutes, peremptory on all parties on these conditions:
(a) On or before Monday January 20, 2014, Robert and Natalino Lucente shall serve and file affidavits in response to the respondent’s request in the notice of motion. The affidavits will include shareholder’s registry for Parkview Building and Romala Construction and copies of Minutes book(s) from 2006 to the present for Parkview Building and Romala Construction.
(b) The Respondent will file a reply, if any, by Monday, January 27, 2014.
By January 13, 2014, the Applicant shall pay to the Respondent the sum of $10,000 as an advance against the equalization payment he owes to her.
The motion by the Applicant for an order appointing the Office of Children’s Lawyer is dismissed.
The Respondent’s motion for questioning of the Applicant is dismissed without prejudice to renewal at the long motion after the settlement conference on February 6, 2014.
The Respondent’s motion to dispense with consent to obtaining a police report is dismissed. By January 13, 2014, the Applicant shall provide to the Respondent a copy of whatever statement of claim or other documents have been filed in court with respect to the car accident in which Michael was recently involved.
The Applicant’s motion to vary child support by reducing the payment made on account of Michael is adjourned to the long motion to be heard after the settlement conference on February 6, 2014.
The Applicant’s motion compelling both counsel to use “SIX” is dismissed.
Pursuant to rule 2(5), this proceeding shall be case managed and accordingly, the Trial Co-ordinator will use best efforts to have all matters heard by one of Justice Mesbur, Justice Horkins or Justice Kiteley.
Neither party is entitled to costs of the attendance on December 10, 2013.
The balance of the issues raised in Notices of Motion served on behalf of the Respondent and the Applicant are adjourned to be heard at a long motion date after the settlement conference referred to below.
The long motions will not be argued on February 6, 2014.
On Thursday, February 6, 2014, the parties shall attend with their counsel for a settlement conference from 2:30 to 4:30 p.m. on these conditions:
(a) by January 31, 2014, each party shall serve and file an up-to-date financial statement form 13.1 attached to which is a document that confirms every entry under assets and liabilities;
(b) by February 3, 2014, each party shall serve and file a settlement conference brief that includes a settlement conference memo; sworn financial statement; net family property statement and offer to settle;
(c) this date is peremptory to both parties;
(d) this settlement conference will occur regardless of the results of the motion returnable January 30, 2014 seeking disclosure and questioning from Natalino Lucente and Roberto Lucente;
(e) counsel for the Applicant will confirm the settlement conference in the usual way;
(f) counsel for the Applicant and Respondent shall immediately confer and arrange a date for the hearing of the long motions which is after the settlement conference on February 6, 2014.
Kiteley J.
Date: January 3, 2014
[^1]: 2012 CarswellOnt 62889
[^2]: Laamanen v. Laamanen 2005 50808 (ON SC), 2005 CarswellOnt 8037
[^3]: Unreported. November 19, 2013 by Perkins J. in Toronto action FS – 13 - 388757