Citation: Turk v. Turk, 2015 ONSC 5845
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jennifer Sandra Turk, Applicant
AND:
Stuart Bernard Turk, Respondent
BEFORE: Kiteley J.
COUNSEL: Harold Niman and Katharine Rajczak, for the Applicant
Heather Hansen, Stephen Grant and Jenna Beaton, for the Respondent
HEARD: September 3, 2015
ENDORSEMENT
1This is a motion for summary judgment pursuant to rule 16 of the Family Law Rules in which the Respondent asks that the court dismiss claims set out in paragraphs 1-3 and 11-13 of the Application and alternative relief. For the reasons that follow, the motion is dismissed.
Background
2According to the Application, the parties starting living together in April 1989. They married in August 1989.
3The parties signed two marriage contracts. The first is dated December 15, 1988 and was intended to ensure that the Respondent’s interests in S.E.J. Holdings Limited would not be part of any division of assets in the event of a breakdown of their marriage. Attached as Schedule A to the marriage contract was a list of significant assets, debts and liabilities as of the date of the contract. In the Respondent’s Schedule A, he listed that value of shares in S.E.J. Holdings Limited at $10 million. According to the Applicant, the Respondent’s family disapproved of the marriage when they were so young so the imminent wedding was cancelled. They eloped and were married August 2, 1989.
4The second marriage contract, dated November 15, 1990, revoked the first contract and contained an acknowledgement that their rights would be governed by the applicable laws. Attached as a schedule to the second marriage contract is a copy of the first marriage contract and the Schedule A disclosure that had been provided in 1988. There was a schedule B that reflected assets, debts and liabilities of each of them at November 12, 1990 which had no entry for S.E.J. but did include the shares of The Cellular Connection Ltd. valued at $350,000.
5Their children (Jordan and Sydney) were born in June 1994 and June 1998 respectively. According to the Applicant, the parties separated on January 2, 2008 while the Respondent takes the position that the separation was on November 5, 2007. They continued to live in the matrimonial home until the Respondent left in July 2008.
6During their almost 20 years together, the Applicant was primarily a homemaker and the Respondent was a businessman. At the time of the separation in either November 2007 or January 2008, the children were 13 and 10 years old.
7Each party retained a lawyer (Melanie Kraft for the Applicant and Rose Muscolino for the Respondent) but they did not negotiate the terms of the agreement through lawyers. Instead, the parties agreed to engage Jaret Moldaver who acted as mediator to help them to negotiate the terms of the agreement.
8The parties signed a separation agreement dated April 26, 2010 and a divorce judgment was issued November 2, 2010.
Relevant Excerpts from the Separation Agreement dated April 26, 2010
9For purposes of this motion, the relevant sections of the Separation Agreement are as follows:
Support:
The Respondent agreed to pay blended child and spousal support in the total amount of $10,000 net per month on the basis that the parties would co-operate to apportion the support between child and spousal support in a tax effective manner.
The Respondent agreed to pay all s. 7 expenses.
Child and spousal support were non-variable until January 1, 2013.
On or after January 1, 2013, either party could seek a variation in child or spousal support if there was a material change in circumstances. If there was a variation, the Applicant’s entitlement to spousal support and the Respondent’s obligation to pay spousal support would never exceed $11,000 gross per month with cost of living adjustment; and any child support variation would be in accordance with the Guidelines. Until adjusted by an amending agreement or order the Respondent would continue to pay the status quo amounts. Any disputes would be mediated by Jaret Moldaver.
Equalization of Net Family Property:
The Applicant was entitled to the net proceeds of sale of the former matrimonial home subject to paying to the Respondent an equalization payment of approximately $181,000.
10The Separation Agreement also contained the following clauses:
Agreement that given “these special provisions”, the application of the Guidelines would result in an amount of child support that is inequitable and agreement that the child support arrangement was reasonable and met the objectives of the Guidelines.
At paragraph 13.11 each acknowledged having “investigated the other’s financial circumstances to his or her satisfaction”. Standard acknowledgements that each had had independent legal advice, understood his or her rights and obligations and the nature and consequences of the agreement; that the agreement was fair and reasonable; that he or she was not under any undue influence or duress; and each was signing voluntarily.
Standard certificates of independent legal advice signed by counsel for each party that included an acknowledgment to each counsel that the party completely understood the nature and effect of the agreement and executed it of his or her “own volition without any fear, threats, compulsion or influence by the other”.
11In the section on support there is no indication of the amount of the Respondent’s income that was used to arrive at the child and spousal support amounts.
2013 Review of child support
12In early 2013, the Respondent asked for a review of the child support provisions on the basis that Jordan’s living arrangements had changed. He invoked the mediation clause and the parties re-engaged Jaret Moldaver. An agreement was not reached.
13According to the Applicant, the Respondent provided a Form 13 financial statement sworn December 6, 2013 which showed annual expenses of $239,974 and a net worth of $853,075.
Application issued on March 11, 2014
14The Applicant changed counsel and an Application was issued on her behalf dated March 11, 2014. The following is a summary of the relief sought with quotation from paragraphs 1-3 and 11-13 which are the subject matter of this motion.
15The Applicant asked for child and spousal support pursuant to the Divorce Act as well as pursuant to the Family Law Act and she sought an order for an equalization of net family properties and freezing assets. At box 50, the Applicant indicated that she sought to set aside the Agreement dated April 26, 2010 and she sought the following orders:
A declaration that the Separation Agreement dated the 26th day of April 2010 is null and void;
An order that the Separation agreement dated the 26th day of April 2010 be set aside in its entirety;
In the alternative, if necessary, an Order specifically setting aside the child and spousal support provisions of the Agreement and specifically an order for appropriate support retroactive to the date of separation with credit for any support payments made to date;
Paragraphs 4 – 10 seek orders for disclosure as of the date of separation and currently and preservation orders
An order for division of the parties’ net family property in accordance with section 5(1) of the Family Law Act or in the alternative, an Order for an unequal division of the parties’ net family property pursuant to the Family Law Act, R.S.O. 1990 c.F.3, as amended;
An order, if appropriate, requiring the Respondent to immediately pay to the Applicant the equalization payment which is found to be owing by him to her;
An Order, if appropriate, requiring the Respondent to immediately reimburse to the Applicant any funds paid by her to him as a result of any previously incorrect calculation of the equalization payment;
Paragraphs 14–15 seek orders with respect to parenting
Paragraphs 16-17 seek orders for child support pursuant to the Child Support Guidelines pursuant to the Divorce Act and the Family Law Act and for s. 7 expenses
Paragraphs 18–20 seek orders for spousal support retroactive to the date of separation and an order for compensatory support by way of a lump sum as well as indexing annually
Paragraphs 21–22 seek orders with respect to life insurance
Paragraphs 23–25 seek orders for interim disbursements for the services of a forensic accountant or other expert pursuant to s. 131 of the Courts of Justice Act, substantial indemnity costs and pre-judgment and post-judgment interest.
Respondent’s Summary Judgment Motion
16The Respondent was served on March 26, 2014. Instead of filing an Answer, on May 16, 2014, the Respondent’s counsel served the notice of motion returnable November 17, 2014 in which he asked for an order pursuant to rule 16 dismissing the Application and other relief. That motion was subsequently amended and the relief sought is as follows:
(a) An Order pursuant to Rule 16 of the Family Law Rules for Summary Judgment dismissing the claims set out in paragraphs 1-3 and 11-13 of the Application;
(b) In the alternative, an Order pursuant to Rule 16(8) and 16(12) that the parties’ Separation Agreement is enforceable and binding;
(c) In the further alternative, an Order pursuant to Rule 16(9) directing a trial of the issue of the enforceability and binding nature of the parties’ Separation Agreement;
(d) Costs on a full recovery basis.
17In support of the motion, the Respondent’s affidavit sworn May 13, 2014 was served in which the Respondent challenged the allegations contained in the Application and specifically the relief in paragraphs 1-3 and 11-13.
Steps since service of the Summary Judgment Motion
18There has been considerable conflict from the outset. For purposes of this endorsement, I will summarize the outcome of the steps taken without detailing the conflict between the parties.
19On June 16, 2014, Moore J. made an endorsement arising from a case conference attached to which was a consent which established a timetable for the Applicant’s motion for Form 13.1 disclosure and questioning on September 22 and 24 and confirmed that the summary judgment motion would proceed on November 17, 2014.
20The Respondent signed a Form 13 financial statement dated July 17, 2014. In his submissions, counsel for the Respondent took the position that Form 13.1 was not required because there was then no “live property issue”.
21On July 24, 2014, Justice Darla Wilson heard the Applicant’s motion for disclosure and she made an order that the Respondent deliver a “properly executed Form 13.1 Financial Statement with supporting documentation” on or before August 15, 2014 and that he produce the disclosure listed in the letter of request from Wayne Rudson dated June 9, 2014 on or before September 30, 2014.
22In an endorsement dated September 30, 2014, Mesbur J. made a consent order that the Respondent pay costs of that motion in the amount of $12000.
23The Respondent’s counsel served a Form 13.1 sworn August 14, 2014 which indicated that it was filed “without prejudice to any rights or claims of the parties”. It also noted that the Respondent had retained a valuator to “complete a valuation of the Respondent’s corporate income and assets” and that the Respondent would file an amended financial statement after the valuation was completed”.
24The Applicant brought a motion for an order requiring the Respondent to fulfill the undertakings he gave on questioning as well as an order requiring him to complete his disclosure and an order that he re-attend for questioning. It appears that counsel agreed that the Respondent would re-attend on November 7, 2014 and he would fulfill all unanswered undertakings. In his endorsement dated October 30, 2014 reflecting that outcome, Paisley J. reserved costs to the judge hearing the summary judgment motion.
25In an endorsement dated March 31, 2015 an order was made by Paisley J. at the request of the Respondent that, as Team Leader, I would case manage the proceeding.
26The Respondent delivered another Form 13.1 financial Statement sworn April 16, 2015 in which there were no values for the Respondent’s interests in 1112396 Ontario Limited, in 1579954 Ontario Ltd., and in Turk Management Group Inc., on the basis that all such assets were excluded property.
27Both parties brought long motions before Justice McWatt on May 5, 2015. She did not have enough time to deal with all of the issues. She made an order on consent that the Applicant would re-attend to complete her questioning within 37 days and that, on June 5, 2015, a case management meeting would be held to deal with outstanding issues. In her written endorsement released May 20, 20151, McWatt J. noted that the Application had been commenced for purposes of setting aside the entire Separation Agreement, and alternatively for an order relating to support. In that context, McWatt J. held that the Respondent should be paying the amount he had agreed to pay in the separation agreement (that he sought to uphold) with respect to child and spousal support, namely $10,000 per month. She ordered that the payments would be non-taxable to the Applicant and non-deductible to the Respondent. She also ordered the Respondent to pay the arrears as calculated by the Applicant in the amount of $63,150 plus interest which represented the shortfall for the period January 2013 to April 30, 2015 as required by the Separation Agreement.
28In response to a motion brought on behalf of the Applicant to remove some of the material filed on behalf of the Respondent, McWatt J. also made a ruling that transcripts of interactions involving one or both children and the Applicant which the child surreptitiously recorded were not admissible and the paragraphs in the Respondent’s affidavits were struck.2
29Because the time allocated for the motion (90 minutes vs 4 hours actual time) was not sufficient to address the motions and cross-motions, at the conclusion of submissions, McWatt J. asked counsel to send her a joint letter identifying the remaining issues. Counsel sent a joint letter dated May 8, 2015 in which they listed the five outstanding motions that needed to be addressed at the case management conference.
30The parties subsequently agreed that the Respondent would pay costs of the motion before McWatt J. in the amount of $18,500 to be paid by June 30, 2015.
31On or about May 26, 2015, the Respondent delivered a Form 13.1 Financial Statement.
32The case conference scheduled for June 5 was changed by the court office to June 30, 2014. In an endorsement dated July 3, 2015,3 I reviewed the progress of the case to that point, indicated why the summary judgment motion had priority, and I outlined the scheduling of the motion for summary judgment which I set for September 3, 2015 before me.
33The confirmation form filed by counsel for this motion indicates that the following were relied on by the Respondent: affidavits of the Respondent sworn May 13, 2014; Applicant sworn September 21, 2014; Respondent sworn September 23, 2014; financial statement of Applicant sworn January 29, 2015; financial statement of Respondent sworn May 26, 2015; other affidavit material referenced in the Respondent’s Factum and as contained in his E-Compendium.
34The confirmation form filed by counsel indicate that the following were relied on by the Applicant: affidavits of the Applicant sworn September 21, 2014, April 20, 2015 and July 27, 2015; Applicant’s Form 13.1 sworn April 24, 2015; compendium; financial statement brief containing all financial statements produced by the Respondent.
35In addition, counsel filed transcripts of questioning of the Applicant on April 20 and 27, 2015 and of the Respondent on September 22, 2014, April 20, 2015 and July 31, 2015.
Analysis
A. Hyrniak v Mauldin4
36At paragraph 49, the Supreme Court held that there will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
37At paragraph 50, the Court observed that those principles are interconnected and all speak to whether summary judgment will provide a fair and just adjudication. When a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. The court held that it bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.
38At paragraph 51, the Court noted that often, concerns about credibility or clarification of the evidence can be addressed by calling oral evidence on the motion itself. However, there may be cases where, given the nature of the issues and the evidence required, the judge cannot make the necessary findings of fact, or apply the legal principles to reach a just and fair determination.
39At paragraph 59, the Court pointed out that, in practice, whether it is against the “interest of justice” to use the new fact-finding powers will often coincide with whether there is a “genuine issue requiring a trial”. It is logical that, when the use of the new powers would enable a judge to fairly and justly adjudicate a claim, it will generally not be against the interest of justice to do so. What is fair and just turns on the nature of the issues, the nature and strength of the evidence and what is the proportional procedure.
40At paragraph 60, the Court held that the “interest of justice” inquiry goes further, and also considers the consequences of the motion in the context of the litigation as a whole. For example, if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. On the other hand, the resolution of an important claim against a key party could significantly advance access to justice, and be the most proportionate, timely and cost effective approach.
41At paragraph 65, the court concluded that oral evidence should be used to promote the fair and just resolution of the dispute in light of principles of proportionality, timeliness and affordability.
42At paragraph 66, the Supreme Court set out the “roadmap/approach to a motion for summary judgment” described as this two-step approach for deciding whether a genuine issue requiring a trial exists on a summary judgment motion and when to exercise the expanded powers afforded to court under rule 20 of the Rules of Civil Procedure:
The motions judge should take a liberal approach only on the evidence before her, without using the new fact-finding powers. If the summary judgment process provides the motions judge with the evidence required to fairly and justly determine the issue and is a timely, affordable and proportionate procedure, it will be held that there is no genuine issue requiring a trial; and
If there appears to be a genuine issue requiring a trial, the motions judge is entitled, at her discretion, to weigh evidence, evaluate credibility and draw reasonable inferences, to determine if the need for a trial can be avoided by using these new tools to come to a fair and just result.
B. Since Hyrniak v. Mauldin
43Since the release of the decision in Hyrniak, rule 16 of the Family Law Rules has been amended to mirror what rule 20 of the Rules of Civil Procedure had provided. The relevant portions of rule 16 are as follows:
16(1) After the respondent has served an answer or after the time for serving an answer has expired, a party may make a motion for summary judgment for a final order without a trial on all or part of any claim made or any defence presented in the case.
16(4) The party making the motion shall serve an affidavit or other evidence that sets out specific facts showing that there is no genuine issue requiring a trial.
16(4.1) In response to the affidavit or other evidence served by the party making the motion, the party responding to the motion may not rest on mere allegations or denials but shall set out, in an affidavit or other evidence, specific facts showing that there is a genuine issue for trial.
16(5) If a party’s evidence is not from a person who has personal knowledge of the facts in dispute, the court may draw conclusions unfavourable to the party.
16(6) If there is no genuine issue requiring a trial of a claim or defence, the court shall make a final order accordingly.
16(6.1) In determining whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties, and the court may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
16(6.2) The court may, for the purposes of exercising any of the powers set out in subrule (6.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.
16(9) If the court does not make a final order, or makes an order for a trial of an issue, the court may, in addition to exercising a power in subrule 1(7.2)
(a) specify what facts are not in dispute, state the issues and give directions about how and when the case will go to trial (in which case the order governs how the trial proceeds, unless the trial judge orders otherwise);
(b) give directions; and
(c) impose conditions (for example require a party to pay money into court as security, or limit a party’s pretrial disclosure).
44It is noteworthy that rule 16 references a “genuine issue requiring a trial” as opposed to a “genuine issue for trial” and that rule 16(6.1) is mandatory.
45Pursuant to rule 16(9) as amended, subrule (7.2) becomes engaged which expands the orders the court may make for the purposes of promoting the primary objective of the rules which is found in rule 2 as follows:
(2) The primary objective of these rules is to enable the court to deal with cases justly.
(3) Dealing with a case justly includes,
(a) ensuring that the procedure is fair to all parties;
(b) saving expense and time;
(c) dealing with the case in ways that are appropriate to its importance and complexity; and
(d) giving appropriate court resources to the case while taking account of the need to give resources to other cases.
(4) The court is required to apply these rules to promote the primary objective, and parties and their lawyers are required to help the court to promote the primary objective.
(5) The court shall promote the primary objective by active management of cases, which includes,
(a) at an early stage, identifying the issues, and separating and disposing of those that do not need full investigation and trial;
(b) encouraging and facilitating use of alternatives to the court process;
(c) helping the parties to settle all or part of the case;
(d) setting timetables or otherwise controlling the progress of the case;
(e) considering whether the likely benefits of taking a step justify the costs;
(f) dealing with as many aspects of the case as possible on the same occasion; and
(f) if appropriate, dealing with the case without parties and their lawyers needing to come to court, on the basis of written documents or by holding a telephone or video conference.
46In the factum filed on behalf of the Respondent, counsel identified five judgments in family law where the amended rule 16 has been mentioned.5 None of them is of assistance in applying the amended rule 16 in the context of this case.
47The moving party has the burden of establishing a prima facie case that there is no genuine issue requiring a trial. If that burden is met, the onus shifts to the responding party “to set out specific facts that there is a genuine issue that requires a trial”. It is this evidentiary burden that “enables the motions judge to assess . . . whether he or she is confident that the factual record provides the evidence required by the court to take a good hard look at whether the claim or defence can be adjudicated justly without requiring a trial”.6
48As indicated above, the court can draw “reasonable inferences” from the evidence. During submissions, much was said about the fact that the Applicant had not produced the contents of her solicitor’s file covering the period of the negotiations. The Applicant had pleaded duress and lack of financial disclosure and she had put her state of mind in issue. On that basis, counsel for the Respondent has asked for production of the file and had brought a motion before McWatt J. for an order that the Applicant produce a copy of the contents.
49Relying on Leopold v. Leopold7 counsel for the Applicant took the position that she had not challenged the legal advice she received and therefore had not waived her privilege in the contents of her file. The Applicant took the position that until a court made a finding that the privilege had been waived by the allegations that had been made, that the Applicant was entitled to resist production on the basis of privilege.
50As I expressed during submissions, it seemed to me that I should draw an inference that had the file been produced, it would not have supported the position taken by the Applicant.
51I have now had the opportunity to reflect on that initial perspective. As summarized above, counsel for the Respondent had brought a motion to compel production of the file. It was an issue before McWatt J. during the hearing on May 5, 2015 which was not reached. It was the fifth item listed in the letter that counsel provided to McWatt J. as matters that were outstanding and is referenced at paragraph 13(e) of the July 3 endorsement. I decided that the summary judgment motion had to take priority and that other motions would have to be addressed at some future point. Given that it was my case management direction that that motion could not be heard before the summary judgment motion, it would be unfair to the Applicant and contrary to the primary objective to draw any negative inference from her refusal to provide the contents of the file of the lawyer who acted for her during the negotiations for the separation agreement. While other inferences are open to me, I will not consider that negative inference.
C. Setting aside a Domestic Contract
52Section 56(4) of the Family Law Act provides that a court may set aside a separation agreement or a provision in it if (a) a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the contract was made; (b) if a party did not understand the nature or consequences of the domestic contract; or (c) otherwise in accordance with the law of contract.
53In the decision in LeVan v. LeVan8 the Court of Appeal applied a two part test when conducting the analysis under s. 56(4):
(a) The court must determine if the party seeking to set aside the agreement can demonstrate that one or more of the circumstances in subsections (a) to (c) have been engaged; and
(b) If the moving party has fulfilled the first part, the court must then consider whether it is appropriate to exercise discretion in favour of setting aside the agreement.
54The onus is on the party seeking to set aside the separation agreement to prove his or her case.9
55In exercise its discretion as to whether it is appropriate to set aside the agreement, the following factors should be taken into account10:
(a) whether there had been concealment of the asset or material misrepresentation;
(b) whether there had been duress, or unconscionable circumstances;
(c) whether the petitioning party neglected to pursue full legal disclosure;
(d) whether he/she moved expeditiously to have the agreement set aside;
(e) whether he/she received substantial benefits under the agreement;
(f) whether the other party had fulfilled his/her obligations under the agreement.
56As indicated above, the Applicant’s threshold position is that the separation agreement should be declared to be null and void and set aside in its entirety. In the alternative, the Applicant asks for child and spousal support retroactive to the date of separation. Where the application for spousal support is pursuant to s.15.2 of the Divorce Act (as is the case here), the court is required to take into consideration the condition, means, needs and other circumstances of each spouse, including
(a) the length of time the spouses cohabited;
(b) the functions performed by each spouse during cohabitation; and
(c) any order, agreement or arrangement relating to support of either spouse.
57Pursuant to s. 15.2(6) when the court makes an order for support it should reflect the objectives of a spousal support order which are that the order should:
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
58In Miglin v. Miglin,11 the Supreme Court set out a two-stage test to determine whether a court will uphold an agreement that limits or waives a party’s support rights:
(a) At the first stage, the court should look at:
(i) The circumstances in which the agreement was negotiated and executed to determine whether there is any reason to discount it, including any circumstances of oppression, pressure or other vulnerabilities. A court should not presume an imbalance of power and the degree of professional assistance received by the parties may be sufficient to overcome any systemic imbalances between the parties.
(ii) The substance of the agreement to determine whether it is in substantial compliance with the objectives of the Divorce Act at the time it was entered into.
(b) At the second stage, the court must assess whether the agreement still reflects the original intentions of the parties and the extent to which it is still in substantial compliance with the objectives of the Divorce Act.
59Counsel for the Applicant relies on the decision of the Court of Appeal in Kelly v. Kelly12 and the caution that the analysis under rule 20 as it then existed required the court to draw inferences, determine credibility and find facts in the face of disputed evidence. Laskin J.A. held that those determinations lie in the domain of the trial judge, not the motions judge. I accept that generally speaking the court ought to be cautious about drawing inferences, determining credibility and finding facts in the face of disputed evidence, all of which are the norm in interim proceedings in family law. However, on the subject of summary judgment motions, the courts now have clear direction that such determinations do lie with the motions judge under the circumstances set out in rule 16 as amended. It appears that the analysis in Kelly no longer applies.13
D. Disclosure
60I turn now to the specifics of the challenges to the separation agreement. There are three corporate entities: Turk Management Group Inc. (referred to as Turk Management), 1112396 Ontario Limited (referred to as 396), and 1579954 Ontario Ltd. (referred to as 954).
61The process by which the agreement was negotiated was unusual. The parties and their counsel agreed to engage Jaret Moldaver as mediator. The parties met with Mr. Moldaver on six occasions between October 15, 2008 and December 11, 2009 including one of those where the Applicant’s counsel was present. In addition, in February 2009, Mr. Moldaver met with the Applicant and her lawyer and in February he met with the Respondent. The parties agreed that Mr. Moldaver would manage the disclosure process. On March 19, 2009 Mr. Moldaver met with the Respondent and the Respondent’s accountant (who also performed services for the Applicant).
62In his letter dated April 21, 2009, Mr. Moldaver summarized what he had learned from that meeting as to the value of assets owned by the Respondent at the date of marriage as well as a chronology of corporate events with respect to the Respondent’s shares in S.E.J. Holdings Limited. The initials reflect the names of the Respondent and his siblings. Mr. Moldaver reported that at the date of the marriage of the Applicant and the Respondent, each sibling owned 1/3 of the shares and, in the marriage contracts, the Respondent had valued his portion at $10 million. After the marriage, the Respondent’s father amalgamated S.E.J. with a numbered company owned by the father to form a new company. By the end of fiscal 1993, the amalgamated company was not worth even close to $30 million (assuming $10 million for each sibling). Mr. Rosenberg told Mr. Moldaver that the shares were relinquished by the children for no consideration.
63According to the April 21st letter, Mr. Rosenberg advised that, in or around 1998, “the amalgamated company was frozen” and Mr. Turk senior retained the preferred shares with a redemption value of $5,789,000 which represented the value of the assets of the amalgamated company, which included the remaining assets of the former S.E.J. and assets acquired by Mr. Turk senior. Mr. Moldaver wrote that he had been told Mr. Turk senior gifted the common shares to his children. The “amalgamated company” is not named in the letter but I infer from the evidence that it was 396.
64Mr. Moldaver also noted that at the time of the marriage contract the Respondent took the position that his shares in The Cellular Connection Limited were valued at $200,000. Mr. Moldaver reported that Mr. Rosenberg had advised him that the Respondent received income of $180,000 per annum from the amalgamated company which was paid to The Cellular Connection Limited which is owned by the Respondent.
65Mr. Moldaver listed the documents that he had received either from the Respondent or the accountant and he created a disclosure brief of those documents which he provided to the Applicant and her lawyer.
66The Applicant’s position is that the Respondent failed to disclose various assets, or he provided faulty information such as his purchase of Sultana before separation. It is not necessary for me to deal with all of the challenges to his disclosure. I will deal with the key issues which are the disclosure of the nature of and the value of his business interests and of his income for purposes of establishing child and spousal support because if I am satisfied that there is a genuine issue requiring a trial on either of those, then it follows that the less significant issues should also be explored in that trial.
• Business Interests
67I start with the issue as to whether the Respondent disclosed the nature of and the value of his interest in 396 and 954 and Turk Management. Included in the disclosure brief assembled by Mr. Moldaver were the following:
“SEJ Holdings Limited, Financial Statements as at December 31, 1993” and
“Document entitled: 112396 [should be 1112396] Ontario Limited Internal Estate Freeze of Value of Special Shares and Common Shares, with attachments”.
68In that last tab is a document that deals with an estate freeze although the first page is missing so I cannot verify the title. There is also a document called deed of gift dated October 30, 1998.
69Counsel for the Respondent takes the position that that disclosure combined with the information that Mr. Moldaver obtained from Mr. Rosenberg that was reflected in the letter dated April 21, 2009 was sufficient. At least six net family property statements were produced during the negotiations. According to the evidence of the Respondent, the disclosure brief circulated by Mr. Moldaver contained documents to support all but three assets in the net family property statement, namely the household furniture, 72 Sultana Avenue and the Florida Condo.
70I disagree. In the category of business interests, those net family property statements refer only to Metro One Development and Cellular Connection LTD. both valued at “nil”. They do not reflect any interest in Turk Management or 396 or 954 at date of separation.
71Counsel for the Respondent also argues that the Respondent had not claimed a pre-marital deduction for S.E.J. (which he no longer owned at date of separation) and while he did own shares in 396 and 954 and Turk Management that were not disclosed in the NFP statement, those shares were gifted to him and were excluded property and therefore he was not required to value the shares and if he had failed to fully disclose and provide a valuation, it would not matter because there was no prejudice to the Applicant.
72On the basis of the evidence before me, I am not satisfied that the value of the post-marriage exclusion (assuming the “deed of gift” complies with the Family Law Act) simply replaced the pre-marriage deduction and that it was all irrelevant to the calculation of the net family property. In his evidence at questioning on July 31 and April 20, the Respondent agreed that some of the assets that were owned by S.E.J. on the date of marriage found their way into 396. If the assets owned by 396 did include the assets owned by S.E.J., there could well be an argument that the Respondent is entitled to a deduction at the date of marriage but that some portion of the post-marriage gift can be traced directly to the date of marriage deduction, in which case there may be a submission that the increase in value after marriage should be included in the calculation of net family property regardless of the deed of gift. Furthermore, not only must the Respondent prove that the post marriage estate freeze with respect to the shares of 396 constituted excluded property but the onus is also on him to show that income from such property was expressly stated to be excluded from his net family property.
73As result of the claimed deductions and exclusions, the net family property of the Respondent was calculated to be a negative and consequently, the Applicant owed the Respondent an equalization payment of $181,000. Asserting that the share in 396 was a gift does not mean that it constitutes “excluded property” within the meaning of the Family Law Act. For the same reason, asserting that income from excluded property was expressly stated by the donor to be excluded must also be proven as well as the tracing of the excluded income. The onus is on the party to establish that property constitutes a pre-marriage deduction pursuant to s.4 or a post-marriage gift that is an exclusion pursuant to s. 4(2). That onus must be met particularly where the result is so profound, namely leaving the Applicant paying an equalization payment to the Respondent who has admitted that he is, and by inference, he was at the date of separation, a multi-millionaire.
74In this proceeding, the Respondent continues to not provide disclosure. In the Form 13 financial statement sworn July 17, 2014 he listed the following under “interest in business”:
1112396 Ontario Limited/Turk Management/1579954 Ontario:
My interest in these companies was gifted to me by my father
Value: unknown
75In the Form 13.1 financial statements sworn August 14, 2014 and September 8, 2014 under “business interests” he listed the value of his 1 common share (33.33%) in S.E.J. Holdings Limited at $10 million at date of marriage. However, for the value of his 1 share (33.33%) interest in 396, 954 and Turk Management, he indicated that the value at November 5, 2007, December 2008 and the date of statement was: “TBD/Excluded”.
In Part 7: Excluded Property, he listed the following:
| Category | Details | Value Nov. 5/07 | Value Dec. 2008 |
|---|---|---|---|
| Gift or inheritance from third person | 1112396 Ontario Limited | TBD/Excluded | TBD/Excluded |
| Income from property expressly excluded by donor/testator | 1112396 Ontario Limited | TBD/Excluded | TBD/Excluded |
| Traced property | 1579954 Ontario Ltd. | TBD/Excluded | TBD/Excluded |
| Traced property | Turk Management Group Inc. | TBD/Excluded | TBD/Excluded |
76In the Form 13.1 financial statement sworn April 16, 2015, the description is the same but under “estimated market value” in 2007, 2008 and date of statement, it was “excluded”; i.e. TBD had been removed.
77For the first time in his Form 13.1 financial statement sworn May 26, 2015, he listed this information both under business interests and excluded property:
| Category | Details | Value Nov. 5/07 | Value Dec./08 |
|---|---|---|---|
| Gift or inheritance from third person | 1112396 Ontario Limited | $5,087,739 | $5,658,913 |
| Income from property expressly excluded by donor/testator (included above in The Cellular Connection Ltd. revenue) | 1112396 Ontario Limited Traced property 1 common share Value per class of shares 2 Class A Preference 100% 3 common shares 0% |
||
| 1579954 Ontario Ltd. Traced property Book value at December 31, 2007 $471,228 / 3 = $157,076 |
$0 | $0 | |
| Turk Management Group Inc. | $157,076 | $267,884 |
78Attached to the May 26 statement were documents entitled as follows:
Valuation of 1112396 Ontario Limited at December 31, 2007
Valuation of 1112396 Ontario Limited at December 31, 2008
Valuation of 1112396 Ontario Limited at December 31, 2013
Turk Management Group Inc. All Income Traced to 1112396 Ontario Limited at December 31, 2007
Turk Management Group Inc. All Income Traced to 1112396 Ontario Limited at December 31, 2008.
79With the exception of the 2013 “valuation” which shows an estimated fair market value of the Respondent’s 1/3 interest at $9,290,105 and is not incorporated into the Form 13.1 the values on those documents are the same as on the May 26 financial statement listed above.
80As set out in paragraph 23 above, the Form 13.1 sworn August 14, 2014 contained a notation that the Respondent had retained a valuator to “complete a valuation of the Respondent’s corporate income and assets” and that the Respondent would file an amended financial statement after the valuation was completed. As a result of the May 26, 2015 Form 13.1, the Respondent attended for further questioning. No valuation report had been provided to counsel for the Applicant and at his questioning on July 31, 2015, the Respondent said that he and the accountant “sat at the table for three or four hours and went over this, and looked at all the financial statements and came up with the valuation”.
81In a letter dated April 21, 2014 to counsel for the Applicant, the accountant Stephen Rosenberg provided information to enable counsel to “better understand the details of Turk Management Group and 954 Ontario Ltd.” Mr. Rosenberg indicated that Turk Management had been incorporated on November 4, 2005 and there were 3 common shareholders, namely the Respondent and his brother and sister. The company was set up to earn management fees from 396 so that the management fees would enjoy lower rates of tax. When funds accumulate in Turk Management, they are typically lent back to either 396 or 954. 954 Ontario Ltd. was incorporated on July 8, 2003. There are five shareholders with the Respondents mother and father each holding 1 preference share and the Respondent and his siblings each holding 1 common share. During his lifetime, the corporation is managed by such persons as Harry Turk designates.
82While that letter has some historical information, it cannot be relied on in this motion because it was not the subject of evidence by Mr. Rosenberg, could not be the subject of questioning, and does not comply with rule 16(4.1). If anything, it broadens the extent of the non-disclosure during the negotiations and reinforces the lack of disclosure at the time of the negotiations as to the relationships amongst 396 and 954 and Turk Management.
83I agree with counsel for the Respondent that a party need not provide perfect disclosure but that disclosure needs to be sufficiently comprehensive and adequate for the other party to be able to understand and appreciate the financial circumstances of the other party. I am satisfied that it is a genuine issue requiring a trial as to whether the Respondent did fulfill his responsibility to provide disclosure that was real, complete, up-to-date and meaningful14 with respect to the nature of and the value of his shares in 396 and 954 and Turk Management.
84The Respondent has resisted providing disclosure that is comprehensive and meaningful from 2009 to the present. His belated attempt to provide a Form 13.1 financial statement sworn May 26, 2015 is too little too late in that it reflects his own attempt to calculate the value of his shares in Turk Management, 396 and 954. The fact that he attributes such significant value even informally demonstrates the need to consider whether in the circumstances of this case, he failed to fulfill his obligation to disclose.
85I agree with counsel for the Respondent that the Applicant had some responsibility for pursuing disclosure during the mediation. According to her evidence at her questioning on April 27, 2015, the Applicant acknowledged that she did not request further disclosure; did not instruct her lawyer to request further documents or disclosure; did not make disclosure or informational requests of Mr. Rosenberg; did not ask for business valuations to be completed; did not ask for any valuations to be completed; did not personally or ask her lawyer to run corporate searches of any corporations that the Respondent had an interest in and did not pursue any of the publicly available disclosure relating to the Respondent’s interest in a public business. The Applicant agreed that the Respondent had never refused to provide disclosure and that she did not ask that he provide a sworn form 13.1. She did not prepare a sworn Form 13.1.
86As the Court of Appeal held, it is important that the onus rests always on the person who is obliged to disclose and ought not to be shifted to the recipient of disclosure15. On the record before me, the inference I draw is that the Respondent was deliberately selective about the limited information and documentation he did provide about his business interests and the value of his business interests. Under such circumstances, it would be an error to shift responsibility to the Applicant for failing to investigate.
87In this case, the absence of a demand is complicated by the duress issue to which I will refer in a moment.
88Before leaving the issue of disclosure of property, I refer to the valuation date issue. As indicated above, the Applicant asserts that they separated on January 2, 2008 while the Respondent takes the position that the separation occurred in November 2007. Both parties have provided evidence as to the rationale for their respective dates but neither party addressed the “valuation date” which, pursuant to 2. 4(1) of the Family Law Act is the date they separated with no prospect of the resumption of cohabitation. For purposes of this motion, I will assume that the date is either January 2, 2008 or November 5, 2007.
89What is important, however, is that the date used for the equalization of net family property was December 2008. According to the Respondent, that date was agreed to for convenience only. According to the Applicant, the date was imposed on her unilaterally. On this record, I am satisfied that there is a genuine issue requiring a trial as to the “valuation date” and whether calculations made as of a date which is 13 months later than the Respondent’s date and 10 months later than the Applicant’s date is consistent with the Family Law Act.
• Income of the Respondent
90The other key disclosure issue is the income of the Respondent. The April 21, 2009 letter indicates that the Respondent’s income was $180,000 which he received from the amalgamated company and which was paid to The Cellular Connection Limited. According to the Applicant, since the separation, the Respondent has claimed Line 150 income of approximately $110,000. The evidence by the Respondent and by the Applicant as to the standard of living that the Respondent enjoyed at the time of the separation makes it clear that that income does not support the standard of living and that consequently there must have been other sources of funds. Indeed, the evidence of the Respondent in financial statements dated December 6, 2013 (provided in the context of the mediation to review child support) as well as the five financial statements in this proceeding as to repayment of loans advanced by his father is, to say the least, anomalous and reinforces that he benefits significantly from sources of funds that are not reflected in Line 150 of his income tax return.
91The Respondent did commission an Income Analysis Report which was provided to the Applicant on January 15, 2015, on the eve of questioning that had to be postponed. The Cohen report indicates, based on documents and information from the Respondent, that his income in 2013 was either $330,000 or $380,000 depending on whether business losses are reflected or not. The Cohen Report projected that the Respondent’s income in 2014 was only $230,000 to $270,000 but without supporting documentation. Counsel for the Applicant also received an updated analysis dated June 29, 2015 of the Respondent’s income. The updated report is largely dependent on documents and information provided by the Respondent and was not independently verified. In that report, Mr. Cohen revised the range of income in 2013 to $380,000 to $420,000 and provided a range for 2014 of $300,000 to $310,000.
92An analysis has not been provided for the years relevant to separation. However, based on the evidence that demonstrates that the Respondent’s income far exceeds $180,000 (as reported by Mr. Moldaver in the letter dated April 21, 2009) I am satisfied that it is a genuine issue requiring a trial as to whether the Respondent fulfilled his obligation to provide disclosure that was real, complete, up-to-date and meaningful with respect to the sources and amounts of his income.
E. Duress
93I accept and rely on this description of duress:
Duress is said to occur where there is such pressure placed on one of the parties that any consent by that party is not sufficient to uphold the agreement. There exists an absence of choice which in effect vitiates any ability to lawfully consent. However, duress sufficient to void an agreement does not arise based only upon a lack of will to proceed but rather it must be based upon a resolution on the part of the submitting party that there is no other practical choice but to perform the act in question. Duress can be established based upon actual or threatened violence or upon economic considerations.16
94The thrust of the Applicant’s evidence on this point is found first in her affidavit sworn September 21, 2014:
I was under a significant amount of stress when we separated and I felt bullied in the mediation process. I was very anxious about my financial future. I had always trusted Stuart to take care of our finances. Stuart took advantage of my anxiety and my trust. Stuart threatened that if I did not follow his advice or if I tried to seek information about his finances, and particularly his “land deals”, I would get nothing. Stuart also told me that I could trust him and that our agreement would ensure that I got 50% of everything. Due to Stuart’s threats and promises, both of which put me in a state of turmoil and fear, I was compelled to sign the Separation Agreement without obtaining full financial disclosure. I did not even know Stuart’s historic or current income at the time the Separation Agreement was signed. Furthermore, Stuart provided no disclosure whatsoever about the value of his various businesses. . . .
95In his affidavit sworn May 13, 2014 at paragraph 37, the Respondent denied that he had threatened the Applicant. In later evidence, he was critical of the Applicant’s motivations and insisted that this proceeding was caused by choices made by the Applicant since separation and by not controlling her spending. In submissions, counsel for the Respondent took the position that the Applicant had not provided any objective evidence that she was under duress and that the only objective evidence indicated the contrary, specifically the acknowledgements in the Separation Agreement and the Certificate of Independent Legal Advice. Furthermore, counsel pointed to evidence from her questioning summarized at paragraphs 80 to 82 of the Respondent’s factum that she did not feel anxious or rushed into completing the agreement. Indeed, she admitted that it was an exaggeration for her to have said that the mediation happened “whenever Stuart wanted to call a meeting”.
96I am not persuaded by the evidence referred to at paragraphs 80 to 82 because, as counsel for the Applicant pointed out in her submissions, that evidence must be understood in a larger context and answers to individual questions do not undermine the strength of that evidence.
97However, I do agree that the acknowledgements in the Separation Agreement and the Certificate of Independent Legal Advice are indicia of a lack of duress. On that evidence, the Respondent has fulfilled his onus to establish that there is no genuine issue requiring a trial.
98I turn to whether the Applicant has met her onus. Duress is a state of mind. For purposes of this motion, the evidence on behalf of the Applicant, particularly as summarized in paragraph 94 above, leads me to the conclusion that I cannot fairly and justly determine the issue of duress on this motion and that that is a genuine issue for which a trial is required. The question of duress is fundamentally a question of credibility as between the Applicant and the Respondent. The question of duress is engaged as one factor in the s. 56(4)(c) analysis but is also engaged in the disclosure factor in s. 56(4)(a). While rule 16(6.1) gives me the authority to evaluate the credibility of the parties, I am not confident that I can make findings of the necessary facts and apply the relevant legal principles so as to resolve that aspect of the dispute. In this case, it is in the interest of justice for that power to be exercised only at the trial.
F. Conclusion on genuine issues requiring a trial
99In Seif v. Toronto17 the Court of Appeal held that Hryniak identified three levels of evidentiary review available to the motion judge, namely:
(a) review the record without using the new fact-finding powers under rule 16(6.1)
(b) use the fact-finding powers, including evaluating credibility under rule 16(6.1)
(c) use the fact-finding powers with oral evidence under rule 16(6.2).
100In this case, I have reviewed the record and found that there is a genuine issue requiring a trial with respect to disclosure. I have dealt with the two most significant issues, namely disclosure of the nature of and the value of assets and disclosure of income. As mentioned above, there are sundry other disclosure issues which will also be the subject of the trial.
101While I found that the Respondent established a prima facie case that there was no genuine issue requiring a trial with respect to duress, for the reason indicated above, I am satisfied that there is a genuine issue requiring a trial on that issue as well.
102On the basis of those conclusions, I need not further consider the fact-finding powers or the possibility of ordering oral evidence. As indicated above, even if the Respondent had persuaded me to dismiss paragraphs 1-3 and 11-13, the case would nonetheless proceed on the support issues. Whether the agreement is valid is but one factor in whether the court orders spousal support pursuant to s. 15.2. The Respondent changed his notice of motion from seeking an order dismissing the Application to seeking an order dismissing parts of the Application from which I infer that he accepts that even if the separation agreement is set aside, there will be a trial on the claim for spousal support in which the evidence of the circumstances of the negotiations (stage 1 of Miglin) will be led. Given that inevitability, I see no point in ordering a mini-trial on any of the issues raised in this notice of motion. It would not be in the interest of justice to order a mini trial on whether the separation agreement should be set aside and duplicate much of that evidence in the trial of the s. 15.2 issues; nor would it be consistent with the primary objective to deal with a case justly because of the need to conserve the limited judicial resources and maximize their output. A trial is the only process that will allow a fair adjudication of the issues that will lead to a just result and at the same time, maximize judicial resources. Furthermore, a trial is proportionate to the complexity of the issues and is timely and cost-effective.
G. Section 56(4) analysis
103I am satisfied that the Respondent has not demonstrated that there is no genuine issue requiring a trial. Indeed, a trial is required to determine (a) whether the Respondent failed to disclose significant assets existing when the contract was made and whether he failed to disclose the value of those significant assets; and (b) whether the Applicant was subject to duress.
104The next step in the LeVan analysis is whether it is appropriate to exercise discretion in favour of setting aside the agreement. Given my conclusion on the first step in LeVan, I need not address the second step. However, it stands to reason that it is a genuine issue for trial whether the court should exercise its discretion in favour of setting aside the agreement.
105However, counsel made submissions on several of the factors that are to be taken into consideration as summarized in paragraph 55 above. The factor on which counsel focused was whether the Applicant had received substantial benefits under the agreement and the related issue as to whether she had in fact approbated the agreement.
106It is the case that the Applicant benefitted from the terms of the separation agreement in that she received child and spousal support and other benefits. It is also the case that the Applicant insisted on the Respondent complying with the agreement, for example, she invoked paragraph 5.13 that required the Respondent to maintain the status quo pending the mediation on the review of child support and she refused to participate unless the Respondent was in compliance.
107Counsel referred to the decision in Angelini v. Angelini18 which was a motion to dismiss the application to set aside the separation agreement on the basis of abuse of process because the applicant had, in an earlier application, sought to enforce the agreement. I share the view of the motion judge about affirmation in the absence of full disclosure and I adapt it to this case. I am not persuaded that any steps taken to directly or indirectly seek compliance with the separation agreement is a bar to seeking to have it set aside until full disclosure has been provided at which time the party has the opportunity to make an informed choice.
H. Miglin analysis
108The Respondent has not demonstrated that there is no genuine issue requiring a trial. Indeed, the circumstances in which the agreement was negotiated indicate that a trial is required to determine whether there are reasons, namely failure to disclose the value of assets and failure to disclose income, as well as whether the Applicant was subject to duress, for discounting the agreement which is stage 1 of the Miglin analysis. With respect to whether the substance of the agreement is in substantial compliance with the objective of the Divorce Act at the time it was entered into, I note that after a relationship of almost 20 years during which the Applicant was a homemaker dependent on the Respondent, there is a genuine issue requiring a trial as to whether the cap on the amount of support to which the Applicant was entitled was at the time of the separation agreement consistent with the objectives of the Divorce Act.
109I did not hear submissions on stage 2 of the Miglin analysis, but it will be a genuine issue for trial as to whether the agreement still reflects the original intentions of the parties and the extent to which it is still in substantial compliance with the objectives of the Divorce Act.
I. Limitation Period
110S. 7(3) of the Family Law Act provides that an application for the division of property cannot be brought more than two years after the divorce which was on November 2, 2010. Section 2(8) of the Family Law Act provides that the time may be extended if (a) there are apparent grounds for relief, (b) relief is unavailable because of delay that has been incurred in good faith and (c) no person will suffer substantial prejudice by reason of the delay.
111For the first time in the factum served for this motion, counsel for the Respondent took the position that the limitation period had expired and the Applicant does not meet the test for an extension.
112I heard submissions from counsel for the Respondent but I did not call on counsel for the Applicant. At paragraph 1 of Schedule A to the Application, the Applicant asserts the following:
Jennifer has recently determined that Stuart’s unilateral calculation of the equalization payment under their Separation Agreement was grossly incorrect. He failed to disclose the value of his various business and trust interests when the Separation Agreement was negotiated. Jennifer also believes that he lied about his true income at the date of separation.
113The Applicant’s affidavit contains evidence to that effect.
114That reference to timing is not in the context of any limitation period issue. There is no direct evidence from her on the issue of when she discovered that she had a cause of action, although I infer from her evidence that it may have occurred when the Respondent provided the limited disclosure in the review mediation in 2013. There is no evidence as to whether the court might exercise its discretion to extend the limitation period. It would be unfair to the Applicant (and contrary to the primary objective as indicated in rule 2(3)(a)) to allow the limitation period submission to be given consideration without affording her an opportunity to provide evidence as to s. 2(8)(a) and (b) of the Family Law Act.
115At paragraph 106 of the factum, counsel also asserted in relation to s. 2(8)(c) that the Respondent “will suffer significant prejudice if an extension is granted” on the basis that he has arranged his affairs in reliance on the parties’ agreement. The factum refers to paragraphs 15 and 124 of the affidavit of the Respondent sworn May 13, 2014. It is the case that those paragraphs reference reliance on the agreement in support of his position that the agreement should be upheld. However, there is no evidence that the Respondent will suffer significant prejudice if an extension is granted.
116As counsel for the Applicant pointed out, there is no limitation period with respect to the claim for support under the Divorce Act.
117It was unfortunate that this issue was raised in the factum served August 13, 2015. As counsel for the Applicant indicated, it required a hasty response (including whether the issue could be raised only if the Respondent filed an Answer) which will be taken into consideration in dealing with costs of this motion.
J. Alternative Relief Sought in the Motion
118In his notice of motion, the Respondent asks for an order pursuant to rule 16(8) and 16(12) that the Separation Agreement is enforceable and binding. Those subrules relate to questions of law. The issue of enforceability is a question of mixed law and fact. The motion for that relief is dismissed.
119In his notice of motion, the Respondent asks for an order pursuant to rule 16(9) directing a trial of the issue of the validity of the separation agreement, i.e. an order that that issue be bifurcated.
120As indicated above, a trial pursuant to s. 54(6) of the Family Law Act engages a number of factors while a trial pursuant to s. 15.2 of the Divorce Act engages some overlapping factors. The Respondent has effectively conceded that a trial pursuant to s. 15.2 is inevitable. I see no point in ordering a trial pursuant to s. 54(6) when the issues are interwoven and some of the same witnesses and factors will be relevant in trial pursuant to s. 15.2. That would not meet the primary objective in terms of maximizing limited judicial resources and would not be in the interest of justice as expressed in Hryniak.
K. Next Steps – Order for Directions
121Having dismissed the motion for summary judgment, I must consider rule 16(9) and decide what directions should be given in order to have the matter proceed to disposition as soon as possible.
122The first step is that the Respondent must file an Answer and Form 13.1 financial statement and Form 13A Certificate of Financial Disclosure.
123As indicated in paragraph 34 of the endorsement dated July 3, 2015 I will continue to manage this case which means that I will hold case conferences and, unless I direct otherwise, I will hear and decide motions and I will preside at the trial. I will not participate in settlement discussions.
124In her submissions on behalf of the Respondent, counsel elaborated on the undisputed facts (distinguished from the disputed facts) and endeavoured to establish that the undisputed facts and inferences drawn from them supported the position taken by the Respondent on the motion. I will not review those submissions in detail. As counsel for the Applicant demonstrated, some of the answers on which the Respondent relied must be put into a context of related questions and when that is understood, they have less impact. Suffice it to say that I am not persuaded that the record discloses sufficient undisputed facts and inferences that the position taken should be upheld. I do recognize that there will likely be undisputed facts that would contribute to the fact finding at the trial. Toward that end, I expect that counsel will serve requests to admit facts and documents.
125At the case conference held on June 30, I scheduled a case conference before me on October 3, 2015 at 10:00 to discuss next steps. At that case conference, I will expect counsel to have conferred and to provide a timetable for moving the matter toward a trial. Now that the logjam caused by the motion for summary judgment has been broken, there is no excuse for experienced counsel not to agree on which motions should proceed and in what order; on how to address disclosure in an orderly and reliable schedule; on expediting whatever experts’ reports are needed so as to meet the time requirements of the Family Law Rules, or agree to reduce those time requirements; on whether transcripts arising from questioning on affidavits filed in connection with this motion should be treated as questioning in the action; and whatever other procedural issues must be addressed.
126I also expect counsel to include in that timetable an opportunity for an effective settlement conference. Indeed, now that the motion for summary judgment has been decided, if counsel are of the view that an immediate settlement conference would be productive, that can be arranged.
Costs
127As indicated above, on two prior motions, counsel have agreed as to costs. I am optimistic that they will be successful in the case of this motion. If not, written submissions will be required.
ORDER TO GO AS FOLLOWS:
128The motion by the Respondent for the relief set out in paragraph 16 above is dismissed.
129All matters in issue in this case shall be resolved by a trial.
130By October 30, 2015, the Respondent shall serve and file an Answer, a sworn Form 13.1 financial statement, and a Form 13A Certificate of Financial Disclosure.
131Unless I order otherwise, I will hear all motions and I will be the trial judge.
132By October 9, 2015, counsel for the Respondent shall comply with paragraph 19 of the endorsement of McWatt J. dated May 20, 2015.
133If by October 20, 2015 the parties have not agreed as to costs of this motion, then they will make written submissions not exceeding 5 pages (plus costs outline and offers to settle if any) on this schedule:
(a) Applicant by October 30, 2015
(b) Respondent by November 10, 2015.
Kiteley J.
Date: September 30, 2015
Footnotes
- 2015 ONSC 3165
- That order has not been implemented. As indicated below, I have made an order directing that it be done.
- 2015 ONSC 4294
- 2014 SCC 7
- Philion v. Philion 2015 ONSC 4255; Family and Children’s Services of Frontenac, Lennox and Addington v. L.(A) 2015 ONSC 4491; Children’s Aid Society of Ottawa v. KA and ET 2015 ONSC 3378; Children’s Aid Society of Toronto v. AG and AB 2015 ONCJ 331; A(EA v H (FA) 2015 ONCJ 339
- Afolabi v. Fala 2014 CarswellOnt 6769 (Ont SCJ) para 45 and 47
- Leopold v. Leopold [1999] O.J. No. 2181
- 2008 ONCA 388
- Bruni v. Bruni 2010 ONSC 6858
- Dochuk v. Dochuk (1999) 1999 CanLII 14971 (ON SC), 44 R.F.L. (4th) 97; Quinn v. Epstein Cole LLP, 2008 ONCA 662, 2008 CarswellOnt 5760; Toscano v. Toscano 2015 ONSC 487
- 2003 1 SCC 303 at paras 80-91
- 2004 CarswellOnt 3074
- In Virc v. Blair 2014 ONCA 392, the court heard an appeal in November 2013 and released the decision in May 2014. At para 50, the Court assumed that the expanded powers contained in rule 20 were unavailable under rule 16. The amended regulation took effect May 2, 2015 and stipulates that the expanded powers do apply.
- Silverstein v. Silverstein (1978) 1978 CanLII 1605 (ON SC), 20 O.R. (2d) 185
- Virc v. Blair supra at para 57-58
- Keough v. Keough [2005] N.J. No. 327
- 2015 ONCA 321 at para 52
- 2008 CanLII 151 (ON SC), [2008] O.J. No. 30