Frick v. Frick, 2016 ONSC 359
COURT FILE NO.: D21065-15 DATE: 2016/02/18
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
TAMMY FRICK Applicant
- and -
BRUCE FRICK Respondent
COUNSEL: Sarah Strathopolous, for the Applicant Oren Weinberg, for the Respondent
HEARD: December 10, 2015
REASONS FOR DECISION
ellies j.
Overview
[1] The applicant commenced an application in which she sought a divorce and the equalization of net family property, among other things. Pursuant to an order made at a case conference, the applicant later amended her application. The amended application now includes allegations that the respondent recklessly depleted his net family property by spending money on a mistress, escorts, and adult websites. On that basis, the applicant seeks an unequal division of net family property in her favour, under s. 5(6) of the Family Law Act, R.S.O. 1990, c. F.3.
[2] In this motion (see tab 17 of the continuing record), the respondent asks the court to strike out these amendments under subrule 1(8.2) of the Family Law Rules, O. Reg. 114/99, on the basis that they are “without merit, inflammatory, a waste of the court’s time, and designed solely to personally attack the respondent”.
[3] For the reasons that follow, I find that the amendments in this case should be struck under subrule 16(12)(b) of the Family Law Rules rather than under subrule 1(8.2). I conclude that the amendments are without merit because they disclose no reasonable claim in law. As a result, I find no need to consider whether the amendments should be struck on any of the other grounds alleged.
[4] Because it is obvious from the amended application itself that the applicant cannot identify the effect, if any, of the respondent’s alleged spending on his net family property, I refuse to grant the applicant leave to further amend her application.
Factual background
[5] The parties were married for nearly 20 years and have two children. Both have been successful in their working lives. The respondent has been particularly successful. Until 2014, he was one of four partners in a business that managed employee benefits on behalf of employers. According to the answer he filed, he was earning roughly $300,000 per year while the parties were living together.
[6] The respondent’s interest in the business was held in a family trust over which the respondent had control, according to the allegations in the application. In 2014, the respondent sold his interest in the business to the remaining partners for over $1 million. As part of the sale agreement, the respondent continues to earn a significant salary.
[7] The parties separated in May 2013. Efforts to resolve the issues arising from the separation failed. As a result, on February 27, 2015, the applicant commenced an application for divorce, custody, access, and equalization. The respondent responded with an answer dated April 1, 2015. After serving her application, the applicant alleges that she discovered that the respondent had been having an affair for a period of about 10 years prior to the couple’s separation.
[8] At a case conference held on August 27, 2015, an order was made on consent, which permitted the applicant to amend her application, among other things. The order did not specify the nature of the amendments. The application was amended on September 30, 2015. Three of those amendments are the subject of this motion. In particular:
(1) at p. 5, para. 19, under the heading “Claim by applicant”, the applicant seeks an unequal division of net family property in her favour, pursuant to s. 5(6) of the Act, “as a result of the respondent’s reckless depletion of his net family property”;
(2) at p. 8, para. 18, under the heading “Important facts supporting my other claims”, the applicant alleges that the respondent had a ten year affair; and
(3) at p. 9, para. 30, under the same heading, the applicant alleges:
[The respondent] has had an ongoing affair since 2003. [The applicant] has recently discovered that during the marriage not only did [the respondent] have a mistress but he also hired various escort services … and had memberships to various adult websites. [The applicant] requires a full accounting of all money spent by [the respondent], directly or indirectly, on his mistress, the escort services and website memberships. [The applicant] is also seeking an unequal division of net family property as a result of [the respondent’s] reckless depletion of his net family property.
[9] In the notice of motion, the respondent seeks to strike the second and third amendments under subrule 1(8.2) of the Family Law Rules on the basis that they are “without merit, inflammatory, a waste of the court’s time, and designed solely to personally attack the respondent.”
[10] In the alternative, the respondent requests an order for particulars under rule 25.10 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
Issues
[11] The relief requested in the notice of motion gives rise to the following issues:
Should the amendments be struck from the amended application under subrule 1(8.2) because they are without merit, inflammatory, a waste of the court’s time, and designed solely to personally attack the respondent?
If the answer to question 1 is in the affirmative, should the order striking out the amendments be made without prejudice to the applicant making a further amendment?
If the answer to questions 1 is in the negative, should an order be made that the applicant provide particulars under rule 25.10?
Analysis
Should the amendments be struck?
[12] The respondent’s notice of motion makes specific reference only to subrule 1(8.2) of the Family Law Rules, which provides:
The court may strike out all or part of any document that may delay or make it difficult to have a fair trial or that is inflammatory, a waste of time, a nuisance or an abuse of the court process.
[13] The respondent’s factum, however, also refers to Rule 2 of the Family Law Rules. The relevant parts of Rule 2 read:
(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;
(e) considering whether the likely benefits of taking a step justify the cost;
[14] Counsel for the respondent argues that, when taken together with Rule 2, subrule 1(8.2) of the Family Law Rules provides a summary manner in which to dispose of claims that have no merit. This was the view of J.E. Caspers J. in Nichols v. Nichols, 2015 ONCJ 360, in which she wrote (para. 13):
In my view, these provisions of rule 2 and subrule 1(8.2) are analogous to the amended rule 2.1 of the Rules of Civil Procedure … which contemplates a summary dismissal process for claims without merit as long as the process for doing so is fair.
[15] I share this view. As Caspers J. pointed out in Nichols, it is in keeping with Supreme Court of Canada’s call for timely, proportionate, affordable access to justice in Hryniak v. Mauldin, 2014 SCC 7, [2014] S.C.J. No. 7. However, as I will explain, I do not believe that the amendments at issue in this case are the type of amendments that should be struck under these Family Law Rules.
[16] The relevant portions of rule 2.1.01 of the Rules of Civil Procedure provide:
(1) The court may, on its own initiative, stay or dismiss a proceeding if the proceeding appears on its face to be frivolous or vexatious or otherwise an abuse of the process of the court.
Summary Procedure
(2) The court may make a determination under subrule (1) in a summary manner, subject to the procedures set out in this rule.
(3) Unless the court orders otherwise, an order under subrule (1) shall be made on the basis of written submissions, if any, in accordance with the following procedures:
Request for Order
(6) Any party to the proceeding may file with the registrar a written request for an order under subrule (1).
[17] It will be readily apparent that there are at least two major differences between rule 2.1 of the Rules of Civil Procedure and subrule 1(8.2) of the Family Law Rules. For one, subrule 1(8.2) does not refer to the mechanism by which the rule is to be engaged (i.e. by written request or on the court’s own initiative, as in Rule 2.1). Nor does subrule 1(8.2) set out any minimum procedural requirements, once the rule is engaged. In Nichols, the Court had received a letter from the applicant, requesting that the respondent’s motion to change be dismissed. Taking guidance from the provisions of Rule 2.1 of the Rules of Civil Procedure, the Court ordered that the other party be given an opportunity to respond before it determined whether the motion to change at issue in that case should be dismissed under subrule 1(8.2) of the Family Law Rules.
[18] Recently, the Court of Appeal clarified that Rule 2.1 of the Rules of Civil Procedure should only be resorted to in the clearest of cases, where the abusive nature of the proceeding is apparent on the face of the pleading and there is a basis in the pleadings to support the resort to the attenuated process of the rule: see Scaduto v. Law Society of Upper Canada, 2015 ONCA 733, at para. 8.
[19] In Scaduto, the Court of Appeal endorsed the jurisprudence concerning Rule 2.1 developed by my colleague, Myers. J., in a series of cases beginning with Gao v. Ontario (Workplace Safety and Insurance Board), 2014 ONSC 6497. Those cases make it clear that rule 2.1 is designed to deal with “querulous” litigants who might use a motion to strike brought under a different rule as yet another vehicle through which to vex opposing parties and abuse the process of the court.
[20] In Scaduto (para.9), the Court of Appeal referred approvingly to these words by Myers J. in Raji v. Border Ladner Gervais LLP, 2015 ONSC 801, at paras. 8-9:
[R]ule 2.1 is not for close calls. Its availability is predicated on the abusive nature of the proceeding being apparent on the face of the pleadings themselves. No evidence is submitted on the motion... [T]here are two conditions generally required for rule 2.1 to be applied. First, the frivolous, vexatious, or abusive nature of the proceeding should be apparent on the face of the pleading as required by the rule. Second, there should generally be a basis in the pleadings to support the resort to the attenuated process of rule 2.1... This second requirement is not in the rule and is not a fixed requirement. It strikes me as a guideline that reminds the court that there are other rules available for the same subject matter and that resort to the attenuated process in rule 2.1 should be justified in each case.
[21] In my view, the amendments at issue in this motion would not meet either of the requirements set out above.
[22] First, there is nothing on the face of the amendments themselves that leads me to conclude that those amendments should be summarily struck as the pleadings of a querulous litigant. The fact that the amendments relate to allegations of arguably immoral behaviour on the part of the respondent is no more of a reason to strike the pleadings under subrule 1(8.2) than it is to award an unequal division of net family property, as I shall explain below.
[23] Second, the evil at which the summary procedure of Rule 2.1 of the Rules of Civil Procedure, and by analogy subrule 1(8.2) of the Family Law Rules, is aimed has already occurred. The respondent brought this motion and it has already been argued.
[24] For these reasons, I do not believe that the impugned amendments should be struck under subrule 1(8.2) of the Family Law Rules. However, I do not believe that they should escape scrutiny altogether.
[25] In my view, the respondent’s motion engages the provisions of subrule 16(12) of the Family Law Rules, even if the notice of motion fails to mention that subrule. Subrules 16(12) and (13) read as follows:
MOTION FOR SUMMARY DECISION ON LEGAL ISSUE
(12) The court may, on motion,
(a) decide a question of law before trial, if the decision may dispose of all or part of the case, substantially shorten the trial or save substantial costs;
(b) strike out an application, answer or reply because it sets out no reasonable claim or defence in law; or
(c) dismiss or suspend a case because,
(i) the court has no jurisdiction over it,
(ii) a party has no legal capacity to carry on the case,
(iii) there is another case going on between the same parties about the same matter, or
(iv) the case is a waste of time, a nuisance or an abuse of the court process.
EVIDENCE ON MOTION FOR SUMMARY DECISION OF LEGAL ISSUE
(13) On a motion under subrule (12), evidence is admissible only if the parties consent or the court gives permission.
[26] Subrules 16(12) and (13) of the Family Law Rules have been compared to Rule 21 of the Rules of Civil Procedure: see Stulberg v. Batler, 2010 ONSC 5299, at paras. 11-13.
[27] In my view, the respondent’s request that the amendments be struck because they are “without merit” engages the provisions of clause 16(12)(b) and his request that they be struck because they are “inflammatory, a waste of the court’s time, and designed solely to personally attack the respondent” engages the provisions of clause 16(12)(c)(iv). I do not believe that either party would be prejudiced if I deal with the respondent’s motion under these clauses. Counsel for both parties addressed both the abusive/inflammatory nature of the amendments as well as the merits-based, substantive requirements of a claim for unequal division of net family property in their written and in their oral submissions. In her factum, counsel for the applicant refers specifically to both rule 21.01 and rule 25.11 of the Rules of Civil Procedure.
[28] It is my further view that it would be helpful to consider the respondent’s merits-based argument first under subrule 16(12)(b). If it is determined that the amendments fail to disclose a reasonable claim under the Family Law Rules, then it would also be a waste of the court’s time to permit the claim to proceed.
[29] I turn, then, to the question of what the Family Law Rules require a party to plead in support of a claim such as the one advanced by the applicant in her amendments.
[30] While many of the relevant family law rules have counterparts in the Rules of Civil Procedure, there is at least one rule of civil procedure for which there is no similar family law rule. In particular, subrule 25.06(1) of the Rules of Civil Procedure requires that every pleading under those rules “contain a concise statement of the material facts on which the party relies for the claim or defence.” No analogous rule exists under the Family Law Rules.
[31] Rule 1(7) of the Family Law Rules provides that gaps in the family law rules may be filled having regard to other family law rules and certain other sources, including the Rules of Civil Procedure. Rule 1(7) of the family law rules provides:
(7) MATTERS NOT COVERED IN RULES – If these rules do not cover a matter adequately, the court may give directions, and the practice shall be decided by analogy to these rules, by reference to the Courts of Justice Act and the Act governing the case and, if the court considers it appropriate, by reference to the Rules of Civil Procedure.
[32] Counsel for the applicant urges the court not to incorporate into family law proceedings the more formalistic requirements of rule 25.06 of the Rules of Civil Procedure. She submits that the Family Law Rules were not intended to “bog down” those who must turn to them in the course of seeking relief from the court, many of whom are not represented by counsel. However, I believe that the obligation to plead all the material facts in support of a claim, in this case for unequal division of net family property, already exists in the Family Law Rules, although not by virtue of a specific rule in which that obligation is clearly set out. I reach this conclusion for three reasons.
[33] The first reason relates to the forms created under the Family Law Rules. With respect to divorce applications and applications under the Family Law Act for equalization of net family property, Rule 8 of the Family Law Rules requires a party to file an application in the appropriate form (Form 8, in this case). As I indicated, there is no rule governing the contents of the application. However, under the heading “Important facts supporting my other claim” (those claims other than the claim for a divorce), the following words appear in brackets on Form 8:
Set out below the facts that form the legal basis for your other claim(s). [Emphasis added.]
[34] In my view, by virtue of the instructions on the form, Form 8 requires the applicant to set out the material facts in support of her claim. A material fact is a fact which must be established as one of the prerequisites to obtaining the relief requested in a legal proceeding: see Rizmi Holdings Ltd. v. Vaughan (City) (2009), 63 M.P.L.R. (4th) 212 (Ont. S.C.), at para. 28; Frank v. Farlie, Turner & Co., LLC, 2012 ONSC 5519, at paras. 97 and 98. Therefore, although there is no rule in the Family Law Rules analogous to rule 25.06 of the Rules of Civil Procedure, Form 8 imposes the same obligation on a party to plead material facts.
[35] The second reason I believe a family law claimant must plead all material facts in support of a claim arises as a result of the provisions of rule 16(12)(b) of the Family Law Rules. It would make no sense to have a rule permitting a party to move to strike out an application on the ground that it discloses no reasonable claim if there is no obligation on the opposing party to disclose such a claim by pleading material facts in support of it.
[36] Lastly, requiring a party in family proceedings to plead all material facts in support of a claim furthers the primary objective of the Family Law Rules. Just as with other civil proceedings, the application and answer in a divorce proceeding frame the issues between the parties. In doing so, they assist the court to fulfill the primary objective set out in subrule 2(5)(a) of identifying and disposing of issues that do not require full investigation and trial.
[37] The primary objective of the Family Law Rules will not be achieved where the court allows a party to proceed with a claim that has no chance of success from the outset. In this case, for example, the consent order referred to earlier grants each party leave to question the other. The primary objective of the Family Law Rules will not be achieved if the court permits the applicant to question the respondent about his alleged activities where there is no reasonable basis to conclude from the pleadings that those activities could result in the unequal division of net family property.
[38] For these reasons, I believe that the rules implicitly, if not expressly, require an applicant for unequal division of net family property to plead the material facts upon which she relies. What material facts must be established, then, to obtain an unequal division of net family property?
[39] Section 5(6)(d) of the Family Law Act provides:
(6) The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,
(d) a spouse’s intentional or reckless depletion of his or her net family property…
[40] By virtue of this section, in order to obtain an order for unequal division of net family property based on “reckless depletion”, a spouse must prove three things:
(a) that the other spouse depleted his or her net family property;
(b) that he or she did so intentionally or recklessly; and
(c) that it would be unconscionable to equalize the parties’ net family properties as a result.
[41] I will deal with each of these statutory requirements in turn.
Depletion
[42] The Concise Oxford English Dictionary, 10th ed, (2002 Oxford University Press Inc., New York, NY) defines the verb “deplete” as meaning to “reduce the number or quantity of” something. This dictionary definition would suggest that spending money to even the smallest degree would suffice to meet this requirement under s. 5 (6)(d).
[43] However, other dictionaries include a quantitative aspect to the definition of the verb “deplete”. Webster’s II New Riverside Dictionary (1984 Houghton Mifflin Company, Boston, MA) defines the word “deplete” as meaning “to use up, empty or exhaust”. The definition of the verb “deplete” in Webster’s Ninth New Collegiate Dictionary, (1988 Merriam-Webster Inc., Springfield, MA) includes, “to lessen markedly in quantity, content, power or value”.
[44] I believe these definitions are more in keeping with the context in which the word “deplete” is used in s. 5(6)(d). The mere spending of money is not enough. In my view, in the context of s. 5(6)(d), the alleged spending must result in a significant reduction in net family property. Although I have not been referred to any case involving a motion to strike a claim for unequal division in advance of trial, I believe that my thinking on the issue of depletion is consistent with the decisions to which I have been referred, in which the courts have dealt with similar claims at trial.
[45] In Abaza v. Abaza (2001), 2001 CanLII 28192 (ON SC), a case relied upon by the applicant, the court ordered an unequal division of net family property in favour of the wife on the basis that the money diverted by the husband to nightly entertainment and escort services could “easily” have paid off the debts he had as of the valuation date. Although the exact amount of those debts is not mentioned, I conclude from this that there was evidence in Abaza that the money spent on extramarital affairs had a significant impact on the husband’s financial position.
[46] In Consentino v. Cosentino, 2015 ONSC 271, there was no such evidence. As a result, the court dismissed a wife’s claim for unequal division based on the extramarital affairs engaged in by the husband. The court held that there was no evidence that the husband’s affairs “had any significant effect on the parties’ debts, liabilities, or property” (para. 49).
[47] The only decision to which I have been referred that might support a different interpretation of the word “deplete” is that of the court in Hutchings v. Hutchings, 2001 CanLII 28130. In that case, the court credited the wife the sum of $5,100 under s. 5(6), which represented money spent by the husband on travel with another woman. However, I do not believe that the decision in Hutchings detracts from my view that, under s. 5(6) of the Family Law Act, the money spent must be significant. I say this for two reasons.
[48] Firstly, there is no indication in Hutchings of the incomes or assets of the parties. Therefore, it is not possible to tell exactly how significant the sum of $5,100 was relative to the income, assets, and liabilities of the husband. However, it is possible that it was a significant sum to the people involved.
[49] Secondly, Hutchings was decided before the Court of Appeal’s decision in Serra v. Serra, 2009 ONCA 105, 93 OR (3d) 161, in which the court clarified that the focus of the inquiry under s. 5(6) is on consequences and not on conduct.
[50] In arriving at his decision in Hutchings, the trial judge wrote (at para 4):
I note the case law requirements that unconscionable or shocking conduct is required, that there must be something more than an unequal division on the basis of what is fair and reasonable. [Emphasis added].
[51] In Serra, the husband sought an order for unequal division of net family property in his favour on the basis that his net family property had been depleted by virtue of circumstances beyond his control after the separation and that it would be unconscionable to equalize net family property based on the higher values at separation. In the course of reversing the trial judge and granting the husband’s request, Blair J. A. wrote on behalf of the court (para. 58):
Although unconscionable conduct is obviously an appropriate consideration in determining whether equalizing the net family properties would be unconscionable, in my opinion the true target of the limited exception to the general rule [of equalization] is a situation that leads to an unconscionable result, whether that result flows from fault-based conduct or not. [Emphasis added.]
[52] I am not sure that Hutchings would be decided the same way today, in light of the decision in Serra.
[53] For these reasons, I believe that the depletion component in s. 5(6)(d) means that the money spent must result in a significant reduction of the spending spouse’s net family property. In the present case, the applicant made no allegation that the respondent’s spending had any impact whatsoever on the respondent’s financial position.
“Intentionally or recklessly”
[54] Just as it is not sufficient under s. 5(6)(d) of the Family Law Act merely to prove that a spouse spent money, it is also not sufficient merely to prove that the expenditure was on something that may be morally repugnant or at odds with the trust upon which a sound marriage is based.
[55] I do not need to deal in detail with the case law to make this point. Many of the cases decided under s. 5(6)(d) deal with efforts on the part of a spouse to hide assets from the other spouse or to otherwise reduce or defeat the other spouse’s entitlement to equalization: see, for example, von Czieslik v. Ayuso, 2004 CanLII 12667 (ON SC); Helmy v. Helmy, 2000 CanLII 22452 (ON SC); Harry v. Harry (1987), 1987 CanLII 8288 (ON SC), 9 R.F.L. (3d) 121 (Ont. Dist. Ct.). Others deal with improvident spending: see, for example, DiManno v. DiManno (2002), 2002 CanLII 2776 (ON SC), 33 R.F.L. (5th) 77 (Ont. S.C.); Henderson v. Henderson, (1987) 1987 CanLII 8309 (ON SC), 10 R.F.L. (3d) 150 (Ont. Dist. Ct.). No case to which I have been referred or which I have considered stands for the proposition that the word “recklessly” in s. 5(6)(d) refers to the immoral or offensive nature of the expenditures. Indeed, just the opposite. As Perkins J. wrote in Biant v. Sagoo, [2001] O.J. No. 1685 (Ont. S.C.), at para. 126:
It would be a novel proposition that a philandering spouse is responsible under subsection 5(6) for paying to the other spouse a sum equal to the cost of an affair, either direct costs (jewellery and such) or indirect costs (diminished profits from business).
[56] In Cosentino, concerning a claim for unequal division based on a husband’s extramarital affairs, the same judge wrote (para. 49):
… section 5(6) was very tightly drawn specifically so as to exclude consideration of matrimonial misconduct such as this.
[57] As the court made clear in Serra, the focus of s. 5(6) of the Family Law Act is not on the conduct of the spending spouse, it is on the consequences of equalization. It is not enough just to plead that money was spent on something offensive to most people’s sense of propriety.
Unconscionability
[58] This brings me to the final prerequisite to obtaining an unequal division of net family property, namely the requirement of unconscionability.
[59] The Court of Appeal in Serra made it clear that the threshold for unequal division under s. 5(6) is a high one. At para. 47, Blair J. wrote:
In this regard, the threshold of “unconscionability” under s. 5(6) is exceptionally high. The jurisprudence is clear that circumstances which are “unfair”, “harsh” or “unjust” alone do not meet the test. To cross the threshold, an equal division of net family properties in the circumstances must “shock the conscience of the court”: [Citations omitted].
[60] I do not believe that the amendments at issue in this case contain allegations of fact that can possibly meet this high threshold. Broken down to its essentials, the applicant has pleaded only that an equal division of net family property would be unconscionable because the respondent spent money on things that were inconsistent with his status as a married man. That is not enough. Nothing has been pleaded with respect to the extent to which his net family property was reduced. Apart from the things on which the respondent allegedly spent money, nothing has been pleaded that would support a finding that the conscience of the court would be shocked if the parties’ net family properties were to be equalized.
[61] Applying what I have set out above regarding what must be proven to obtain an order under s. 5(6)(d) of the Family Law Act, it is plain and obvious that the claim in this case cannot succeed as pleaded. The applicant has failed to plead the material facts necessary to succeed under s. 5(6)(d) of the Family Law Act. The claim as pleaded, therefore, does not disclose a reasonable claim. To permit the claim to proceed would run counter to the primary objective set out in Rule 2 of the Family Law Rules. For that reason, the amendments relating to the claim ought to be struck.
[62] Given my conclusion with respect to the merits of the applicant’s amendments, I do not need to consider whether they should be struck on any of the other grounds alleged.
Should the order to strike be without prejudice to the applicant making a further amendment?
[63] The usual practice where a party fails to plead the material facts necessary to sustain a cause of action is to strike the pleading with leave to amend: see Fournier Leasing Co. v. Mercedes-Benz Canada Inc., 2012 ONSC 2752, at para. 46; Frank at para. 101. In a purely civil context, the Court of Appeal for Ontario has held that leave to amend should be denied only in the clearest of cases: South Holly Holdings Ltd. v. Toronto-Dominion Bank, 2007 ONCA 456, at para. 4.
[64] However, leave ought not to be given where it is clear that the pleading cannot be improved by any further and proper amendment. In Frank, referred to above, Perell J. struck a claim of exercising influence under s. 138.3 of the Ontario Securities Act against an individual defendant. The plaintiffs had pleaded that the defendant was an “influencial person,” but had failed to plead what he did to exercise that influence. Perell J. refused to allow the plaintiffs leave to amend their pleading because there was evidence before him that the plaintiffs had been unable to identify what the defendant did to exercise his influence, despite having had an opportunity to cross-examine the defendant on an affidavit he filed in connection with the proceeding.
[65] Similarly, there is evidence before me that the applicant is unable to specify the material facts in support of her claim. After the applicant served her amended application, counsel for the respondent wrote to the applicant’s counsel, requesting particulars of the claim for unequal division of net family property. Counsel for the applicant responded that she is not aware of any requirement in the Family Law Rules by virtue of which she was obliged to provide particulars. She closed her letter to the respondent’s counsel by writing:
We presume that Mr. Frick’s spending on his extracurricular activities will be flushed out during questioning and through further disclosure.
[66] It is arguable that this last paragraph was an assertion by counsel that she had no duty to provide particulars, rather than an admission that she was unable to do so. However, I believe that the amendments themselves lead to the conclusion that the situation is the latter, and not the former. As set out above, in her amendments, the applicant indicates that she has only recently discovered the respondent’s alleged activities, one of which (the affair) had allegedly gone on for ten years. The fact that this activity alleged went on for so long without being detected suggests pretty strongly that there was no obvious effect of it on the respondent’s net family property.
[67] More importantly, the applicant states that she “requires a full accounting of all monies spent by [the respondent], directly or indirectly, on his mistress, the escort services and website memberships”. In my view, this is a clear admission that the applicant is unaware of the amount of money the respondent has spent on the alleged activities. As a result, the applicant would be unable to identify in her pleadings the impact, if any, that the alleged spending has had on the respondent’s net family property. It follows that she would also not be able to specify why equalization would be unconscionable as a result.
Conclusion
[68] The motion is granted. The amendments at issue shall be struck, without leave to further amend.
[69] If they are unable to agree on the issue of costs, the parties may make written submissions, limited to five typewritten pages, excluding attachments, as follows:
(a) the respondent shall serve and file his submissions within 20 days of the release of these reasons;
(b) the applicant shall have 10 days thereafter to serve and file her submissions; and
(c) the respondent shall have 10 days thereafter to serve and file any necessary reply.
Ellies J.
Released: February 18, 2016