Court File and Parties

Newmarket Court File No.: FC-13-43111-00 Date: 20160511

Ontario Superior Court of Justice Family Court

Between: Dini Cohen, Applicant – and – Robert Cohen, Respondent

Counsel: Robert A. McNeely, for the Applicant Lawrence Liquornik, for the Respondent

Heard: April 29, 2016

Ruling on Motion

JARVIS J.

[1] This Ruling deals with a renewed motion by the wife, first brought in November 2014, to strike the husband’s pleadings for financial non-disclosure. On June 5, 2015 I reviewed the procedural history of this case and the disclosure Orders previously made (see Cohen v. Cohen, 2015 ONSC 3374). Noting that the husband had provided sufficient disclosure to avoid, at that time, his pleadings being struck, directions were given pursuant to Family Law Rule 1 (7.2). Paragraphs (2) and (3) of that Ruling are relevant,

(2) On or before June 30, 2015, the husband shall also deliver to the wife and file with the court an affidavit which contains a chart identifying what if any disclosure is outstanding from Exhibit “D” to the wife’s affidavit sworn November 7, 2014 as referenced in Paragraph 2 of the Order of Douglas J. dated December 17, 2014 and advising as to why non-compliance has not been possible;

(3) If the husband fails to comply with (1) of this Order, the wife may move for an Order (pursuant to Form 14B) for an uncontested Trial. In the event that the husband fails to comply with (2), and the wife contends that the husband’s explanation for any non-compliance is unsatisfactory, then she may renew her motion to strike, on financial issues only. If so, the wife shall file along with her supporting material a list itemizing the husband’s disclosure deficiencies and their importance to the financial issues between the parties.

[2] The husband complied with (2) in the sense that he delivered an affidavit purporting to comply with the contents of that direction. The wife challenges that, hence this motion.

[3] Both parties delivered charts identifying the outstanding disclosure and explaining whether what had been provided was compliant with the court’s direction. Each was detailed.

[4] The wife’s chart identified each earlier disclosure deficiency, the disclosure made since then and what was deficient. In several instances where there were missing documents, the wife complained that the husband did not appear to have exercised his best efforts to obtain those documents: in other complaints, the wife had questions and requested documents arising from the disclosure made which while not clearly spelled out in the disclosure Order, arose from her review of that disclosure and to which, although requested of him, the husband had not answered or, if he had, the answer was unsatisfactory.

[5] The husband’s chart was similar in structure to that of the wife and responded in detail to the deficiencies she challenged. In many instances the husband’s explanation response to the deficiency complaints was that, while he had complied with the disclosure ordered, the wife’s complaints related to inquiries flowing from that disclosure. It was open to the wife to address her further inquiries at a questioning or trial.

[6] To this the wife replied that the decision to question, and the scope of that questioning, was a function of the disclosure process in the first place and not a “cavalier” default option. Significant time, expense, and possible delay is involved in questioning. Complicating that process in this case too is the husband’s allegation, not independently supported by any credible evidence, that he has cognitive challenges that have impacted his record of disclosure compliance and his ability to more fulsomely answer the wife’s inquires. Despite the observations made by McGee J. on February 18, 2015 and repeated in my June 5, 2015 Ruling (paragraphs [10], [11] and [20]) neither the husband nor his counsel take the position that the husband is incapable of instructing counsel.

[7] The genesis of the wife’s motion is the undetermined value of the husband’s business interests. In his June 29, 2015 Financial Statement, for which he was granted leave to file, the husband recorded “TBD” (i.e. to be determined). In argument before me, his counsel advised that no one had been yet retained by the husband to value the husband’s business interests. That, in my view, is not compliant with the husband’s clear duty to value that interest. As noted by Clarke J. in Demchuk v. Demchuk, [1986] O.J. No. 1500 (1 R.F.L.) (3rd) 176 (H.C.J.), over 30 years ago,

The new Act imposes a positive duty on both parties to disclose. If the purpose of disclosure is not to be frustrated, disclosure must perforce embrace not merely the existence of significant assets but also their extent or value. The speedy and equitable resolution of domestic disputes mandates that this information be completely and accurately disclosed (bolding added).

[8] No satisfactory explanation has been given by the husband why ever since the wife commenced this case over three years ago no steps have been taken by him to comply with this obligation. I am especially perplexed about this in light of my July 30, 2015 costs Ruling (see Cohen v. Cohen, 2015 ONSC 4820) in which I noted that in earlier domestic proceedings with a former spouse, the court had made adverse findings about the husband’s financial probity which are now echoed by the wife in this case: see Coulsen v. Cohen [1998] O.J. No. 1781, 59 O.T.C. 266, 79 A.C.W.S. (3d) 316 (Ont. Gen. Div.).

[9] In his very eloquent argument Mr. McNeely maintained that if the husband’s pleadings were struck the wife had sufficient evidence based on the disclosure already made, or otherwise in her possession, with which to persuade the court about the value of the husband’s business interests but this assertion is belied by not only the wife’s record, as disclosed by her chart, of missing or inadequately explained information but also why she has felt it so necessary to press forward with this motion rather than proceed to questioning or, better, to trial. The obligation to disclose and value is the husband’s, not hers, and the Order I intend to make will in my view balance the parties’ competing interests and obligations as well as (it is hoped) more easily facilitate the court’s disposition of the parties’ equalization claims.

[10] Accordingly, an Order shall issues as follows:

(1) Within 30 days of the date of this Order the husband shall retain at his expense a Chartered Business Valuator to undertake a mid-level valuation of his business interests;

(2) Within 40 days of the date of this Order the husband shall confirm to the wife the identity of the valuator and shall provide written confirmation from the valuator to the wife as to the date by which the valuator’s report will be concluded, such date to be no later than five months from the date of this Order;

(3) The wife shall be entitled to provide to the valuator all information which she may view as relevant to the valuator’s engagement. This direction in no way relieves the husband of providing to the valuator any and all such information as the valuator may require;

(4) The valuator’s report must be delivered no later than five months from the date of this Order.

[11] The foregoing in no way prevents the wife from taking such steps as she may choose to separately value the husband’s business interests.

[12] In an Endorsement made January 26, 2016 on the original return date for this motion, which had to be adjourned because husband’s counsel was incapacitated, I ordered that no further material be delivered by either party. Despite that direction, the husband delivered two further affidavits on the eve of hearing this motion. I declined to receive an affidavit from the husband’s father but permitted the filing of the husband’s affidavit sworn April 27, 2016 because portions of it referenced the husband’s continuing disclosure efforts. His counsel confirmed too, when the wife’s motion was argued, that only the evening before he had received certain bank disclosure which was then provided to wife’s counsel. The foregoing is noted because in his affidavit the husband advised that he had cash flow issues but I note that he has not filed any updated Financial Statement nor an affidavit as to material change since his sworn June 29, 2015 statement. That pleading disclosed that the husband’s net family property (without valuing his business interests) was $1,768,200 as of June 26, 2011 and, as of the date of his Financial Statement, his net worth still exceeded $500,000. He should have, when the parties separated, taken timely pro-active steps to value his assets and his delay in doing so since then is, in my view, entirely his fault.

[13] In my view, the husband has the financial ability to manage his assets in such a way as to enable him to meet his litigation obligations.

[14] In addition to the Orders made above, the wife’s motion is dismissed. I am not inclined to award the husband costs in light of what I view as his failure to timely, and more robustly, comply with his obligation to value his business interests but in the event that either, or both of, the parties disagree they shall deliver and file with the Continuing Record within 20 days of the date of this Order their costs submissions limited to three double-spaced pages, together with their Offers to Settle (if any) and Bills of Costs. Authorities shall be filed at the same time but not as part of the Continuing Record.

Justice D.A. Jarvis Date: May 11, 2016