Court File and Parties

COURT FILE NO.: FS-16-21091-0000 DATE: 20170713 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

RANDI JOY COGAN SHINDER Applicant – and – NEIL ALLEN SHINDER and SOL SHINDER Respondents

Counsel: Jaret Moldaver, Linday Konkol, for the Applicant Harold Niman/Daryl Gelgoot/Vanessa Amyot, for the Respondent Neil Allen Shinder Stephen Grant/Erin Crawford for the Respondent Sol Shinder

HEARD: June 8 and 13, 2017

J. WILSON J

The Motions

[1] The Respondents bring a motion for summary judgment pursuant to Rule 16 of the Family Law Rules, O. Reg. 114/99, arguing that there is no genuine issue requiring a trial. They seek dismissal of the former wife’s claim that there was material misrepresentation by the Respondents, former husband Neil Shinder (“Neil” or “Neil Shinder”) and his father Solomon Shinder (“Sol” or “Sol Shinder”), at the time the Separation Agreement was executed on June 25, 2012 (the “Separation Agreement”). The Applicant, former wife Randi Shinder (“Randi” or “Ms. Shinder”), opposes this motion, arguing that there is a genuine issue requiring a trial as to non-disclosure, that her claim is meritorious, and that this motion is premature as the Respondents have refused to provide any financial disclosure to allow a court to assess the merits of her claim.

[2] In his two sworn Financial Statements, Neil Shinder did not disclose that he was a beneficiary of the Solomon and Zelaine Shinder Canadian Grandchildren Family Trust (the “Grandchildren’s Trust”).

[3] The Respondents rely on the disclosure provided by the accountant for Neil Shinder on a disk with many documents, which included a copy of the Grandchildren’s Trust deed. They also rely on a largely illegible corporate chart in small print attached to the affidavit sworn by Sol Shinder in 2011. They argue that this is adequate disclosure that trumps any deficiency in the Financial Statements. If Ms. Shinder did not carefully review the disclosure, that is her fault. They argue that, as the Respondents have provided full and complete disclosure, this claim should be dismissed.

[4] Ms. Shinder asserts that she did not pursue disclosure about the Grandchildren’s Trust prior to entering the Separation Agreement because she relied on the sworn Financial Statements and what she was told by Neil Shinder: that their children were the beneficiaries of the Grandchildren’s Trust.

[5] Further, Ms. Shinder claims various forms of relief against Neil and Sol Shinder, including that they conspired to commit fraud. She seeks damages for the tort of deceit and punitive damages. The Respondents seek to have these claims dismissed, relying on their arguments that the disclosure was adequate.

[6] Ms. Shinder also brings a cross-motion to preserve the assets of Neil Shinder, as he is allegedly purchasing a property in Costa Rica and Ms. Shinder has concerns that he is taking steps to leave the jurisdiction.

The Claim

[7] Ms. Shinder alleges that the Separation Agreement should be set aside for material non-disclosure and alternatively for various material breaches of the contract.

[8] Counsel for Ms. Shinder argued that there were three aspects to the non-disclosure, including:

(1) Failure of the respondent Neil Shinder to disclose that he was a beneficiary of the Grandchildren’s Trust; (2) Post-separation, Neil Shinder claimed the entire tax deduction of a charitable donation given from joint funds prior to separation; and (3) That Neil Shinder claimed all of the losses from the sale of the matrimonial home post-separation.

[9] In this highly contested proceeding, I conclude that clearly the last two items are not issues of non-disclosure that could underpin a challenge to the validity of the Separation Agreement. These issues arose after the Separation Agreement was entered into and are implementation issues in this complex case that are covered by the arbitration/mediation provisions.

[10] The alternative claim by the former wife that the Separation Agreement should be set aside for various breaches of the Agreement (including paras. 8, 2, and 3 above) is therefore dismissed, as the relief sought is covered by the parties’ agreement to mediate or arbitrate post separation issues. This does not mean that such conduct is condoned, or that Ms. Shinder does not have a remedy. I expressed the view during argument that, if Neil Shinder unfairly procured tax benefits post-separation that ought to be shared, the remedy for this conduct shall be determined in arbitration.

[11] The parties have been in dispute about the terms of the Separation Agreement since it was signed in 2012. They have had assistance of Mr. Alf Mamo as both mediator and arbitrator since 2012 until September 2016, when this application to set aside the Separation Agreement was initiated. He has intervened on several occasions and has both mediated and arbitrated various issues.

[12] Ms. Shinder seeks retroactive and future child support for her two university-age children, linked to her claim for non-disclosure. Child support obligations are stipulated in the Separation Agreement. Any implementation issues, including any issues in relation to past or future child support, or the alleged breaches outlined in paras. 8, 2, and 3 above, or new issues interpreting the Separation Agreement, are to be dealt with by mediation/arbitration. Obviously, if the entire Separation Agreement is ultimately set aside for material non-disclosure, all issues will be before this court.

[13] Therefore, the only issue for consideration in this motion for summary judgment to set aside the Separation Agreement is whether there is a triable issue that the former husband failed to disclose that he was a beneficiary in the Grandchildren’s Trust.

[14] The Respondents did not argue any limitation issue before me, although it is pleaded in the Amended Answer filed by Neil Shinder.

Overview of Conclusions

[15] For reasons that I will fully outline, I conclude that the Respondents have not met their preliminary burden of proof that there is no genuine issue requiring a trial on the narrow question of the non-disclosure of Neil Shinder’s interest in the Grandchildren’s Trust. I find that the failure to disclose that Neil Shinder is a beneficiary in the Grandchildren’s’ Trust in his sworn Financial Statements, in the facts of this case, is non-disclosure.

[16] The Court of Appeal is clear in Virc v. Blair, 2014 ONCA 392, 119 O.R. (3d) 721, at para. 69 that, if there is non-disclosure, then the onus is upon the party who failed to disclose to prove that the opposing party had actual knowledge of the non-disclosure and chose to enter into the separation agreement in any event with this knowledge.

[17] I conclude that the Respondents have failed to prove that Ms. Shinder had actual knowledge of the non-disclosure and entered into the Separation Agreement regardless: Virc v. Blair (2014 ONCA), at para. 69. The evidence is clear that she did not know that Neil Shinder was a beneficiary of the Grandchildren’s Trust.

[18] As I will outline, these factual issues can readily be determined on the evidence before me, without the need of a trial. My findings on these issues are final and binding in this action.

[19] Struggles to obtain candid and complete disclosure have been a theme throughout this case from its inception in 2010 to the present. Neil Shinder has refused to provide a sworn Financial Statement required by the Family Law Rules. The Respondents have refused to provide any financial disclosure post-separation. The cross-examination of Neil Shinder was a series of refusals.

[20] As a result of the refusals by the Respondents, there is no evidence before the court to assess whether the non-disclosure was significant, or material.

[21] Therefore, the remaining issue for determination, either by way of motion or by trial after full disclosure has been provided, is whether the non-disclosure that Neil Shinder held a beneficial interest in the Grandchildren’s Trust was material, or “a significant asset” within the meaning of section 56(4)(a) of the Family Law Act, R.S.O. 1990, c. F.3.

[22] Whether there is any merit to the very aggressive claims made against Sol Shinder and Neil Shinder for alleged conspiracy, etc. can only be determined after fulsome disclosure has taken place.

[23] The request for Sol Shinder to file an Affidavit of Documents with respect to assets owned by Neil Shinder at marriage and separation is dismissed as inappropriate.

The Test for Setting Aside a Domestic Contract

[24] The test for setting aside a separation agreement is found at section 56(4)(a) of the Family Law Act:

A court may, on application, set aside a domestic contract or a provision in it,

(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;

[25] The decision Virc v. Blair (2014 ONCA), at para. 52, confirms the two-part test to be applied in a hearing to determine whether a domestic contract should be set aside:

(i) Can the party seeking to set aside the agreement demonstrate that one or more of the s. 56(4) circumstances is engaged? (ii) If so, is it appropriate for the court to exercise its discretion to set aside the agreement?

The Law on the Obligation to Make Financial Disclosure

[26] Rule 13 of the Family Law Rules imposes mandatory financial disclosure obligations upon all parties making and responding to claims for support, property, and exclusive possession of the matrimonial home.

[27] Rule 13(1)(b) requires that “the party against whom the claim is made shall serve and file a financial statement”.

[28] Further, Rule 13(15) requires a party to correct or update documents they have served under Rule 13 that they discover to be “incorrect, incomplete or out of date”.

[29] The Supreme Court of Canada has confirmed that honest, complete financial disclosure is a bedrock principle in family law disputes. In Rick v. Brandsema, 2009 SCC 10, 303 D.L.R. (4th) 193, Abella J. states, at para. 47:

a duty to make full and honest disclosure of all relevant financial information is required to protect the integrity of the result of negotiations undertaken in these uniquely vulnerable circumstances. The deliberate failure to make such disclosure may render the agreement vulnerable to judicial intervention where the result is a negotiated settlement that is substantially at variance from the objectives of the governing legislation.

[30] I adopt the comments of Aitken J. in Buttrum v. Buttrum (2001), 15 R.F.L. (5th) 250, at para. 68 (Ont. S.C.) that the obligation to disclose requires completeness, clarity, and simplicity in disclosure made in sworn Financial Statements:

Complete, honest and on-going financial disclosure is required during the course of a family law case. That is the very purpose of r. 13. […] The purpose of financial statements is to ensure disclosure is made quickly and repeatedly as circumstances change, and in a manner that is consistent and easy to follow. [Emphasis added.]

[31] Disclosure cannot be selective or misleading. Understanding the assets and debts at marriage and separation is not meant to be a costly game, requiring parties to read the fine print seeking clarification and ferreting out information.

[32] Parties are entitled to, and do rely on sworn Financial Statements to accurately set out the assets and interests and values the property of a party as a basis for settling their cases. Accurate and complete Financial Statements are crucially important in all cases, but particularly so in complex cases such as this where both parties may not be aware of the financial issues during the marriage.

[33] The Respondents rely on the decision of Brown J., the motion judge in Quinn v. Epstein Cole LLP (2007), 87 O.R. (3d) 184, aff’d 2008 ONCA 662, 92 O.R. (3d) 1. The Quinn case is distinguishable from the facts of this case.

[34] Justice Brown confirms in Quinn, at para 48, that having a sworn financial statement is not essential for parties to enter into a binding agreement:

Finally, formal disclosure by way of sworn financial statements prior to executing an agreement is not necessary to meet the obligation to disclose. A general awareness of the assets of the other party may be sufficient to avoid setting aside an agreement. Parties are expected to use due diligence in ascertaining the facts underlying their agreements; a party cannot fail to ask the correct questions and then rely on a lack of disclosure. One must inquire whether the responding party withheld information or whether the information was available to the party seeking to set aside the agreement.

[35] The respondents rely on this paragraph in support of their argument that the failure to disclose that Neil Shinder was a beneficiary of the Grandchildren’s Trust in his sworn Financial Statements dated April and November 2011 cannot justify setting aside the Separation Agreement as the Grandchildren’s Trust was disclosed on the disk of documents provided by the accountant for Neil Shinder and in the affidavits.

[36] The Quinn decision does not assist the Respondents. After a careful analysis, Brown J. found there was no evidence of non-disclosure by the husband in his listed informal disclosure. He concluded that, although no sworn Financial Statements were exchanged, this was not a prerequisite for the parties to enter a valid and binding agreement.

[37] Quinn is clearly distinguishable from this case: it does not deal with omissions in a sworn Financial Statement, relied upon by the opposing party.

[38] I pause to outline in some detail the reasons in Virc v. Blair (2014 ONCA) as the case outlines important principles as to the onus of proof in a motion for summary judgment considering questions of misrepresentations or non-disclosure of assets.

[39] Pepall J.A. confirms that once it is proved that there is a triable issue as to misrepresentations or omissions in the disclosure, the onus is upon the party who failed to disclose to prove that Ms. Shinder had actual knowledge of the misrepresentations or non-disclosure, and chose to enter the agreement:

56. In making this determination [to dismiss the motion for summary judgment], the motion judge relied on an excerpt from Cheshire & Fifoot. She wrote at para. 83 of her reasons:

Further, where the recipient spouse has a reason to question the information provided, but does not, no misrepresentation or omission could result in the contract being avoided. I refer to Cheshire and Fifoot, The Law of Contract, 10th ed., at p. 244, and quoted in Farquar, at para. 35:

Knowledge of the untruth of a representation is a complete bar to relief, since the plaintiff cannot assert that he has been misled by the statement, even if the misstatement was made fraudulently. In such a case, "the misrepresentation and concealment go for just absolutely nothing...".

57. However, the motion judge failed to mention that the authors of Cheshire & Fifoot went on to write:

It must be carefully noticed, however, that relief will not be withheld on this ground except upon clear proof that the plaintiff possessed actual and complete knowledge of the true facts - actual not constructive, complete not fragmentary. The onus is on the defendant to prove that the plaintiff had unequivocal notice of the truth [emphasis added in original]. In particular, the mere fact that a party has been afforded an opportunity to investigate and verify a representation does not deprive him of his right to resist specific performance or to sue for rescission. As Lord Dunedin once said:

No one is entitled to make a statement which on the face of it conveys a false impression and then excuse himself on the ground that the person to whom he made it had available the means of correction.

[I]t is no answer to a suit for relief to say that inspection of the contracts or of the lease or of the bills of costs was expressly invited but was not accepted.

58. Once the motion judge assumed that there had been deliberate material misrepresentations, she erred in shifting the onus to the appellant to inquire as to the veracity of the respondent's financial disclosure. In the face of a deliberate material misrepresentation, the onus is not appropriately placed on the recipient spouse. Rather, the burden is on the party disclosing to establish actual knowledge of the falsehood by the recipient [emphasis added]. The respondent could point to no authority for the proposition that the suggested duty of a spouse receiving financial disclosure in a matrimonial case, to investigate or test the veracity of the information provided, overtakes deliberate material non-disclosure by the other spouse……

59. Furthermore, a clear finding of actual knowledge of the misrepresentation is required [emphasis added]. While, as noted in Cheshire and Fifoot, actual knowledge of the falsehood may constitute a defence, a mere suspicion of lack of veracity does not absolve a fraudster of responsibility. In this case, there was insufficient evidence to conclude that the appellant had knowledge of the respondent's misrepresentations.

[40] The Court in Virc v. Blair (2014 ONCA) found there were misrepresentations in the value of assets and concluded that there was a triable issue as to whether the misrepresentation was deliberate and material.

[41] If there are misrepresentations or non-disclosure, Pepall J.A confirms an important point that Ms. Shinder is not obliged to ferret out the truth, contrary to the submissions made by counsel for the Respondents. The Court confirmed, at para. 68:

It is one thing to disclose assets and liabilities and their values believing the disclosure to be true. It is quite another to deliberately misrepresent the values of assets and liabilities knowing them to be untrue. The law does not entitle a liar to succeed just because the recipient of the falsehoods has not ferreted them out.

[Emphasis added.]

The Summary Judgment Rule

[42] Rules 16 (6.1) and (6.2) outline the test for summary judgment motions in family law cases:

(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 trial:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

(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.

Two Steps in Evaluating the Evidence in a Summary Judgment Motion

[43] Justice Kiteley in Turk v. Turk, 2015 ONSC 5845, 68 R.F.L. (7th) 106, at para. 47, provides a helpful analysis of the two-step process in evaluating the evidence to assess whether there is a genuine issue requiring a trial pursuant to Rule 16 in family law cases. The procedure mirrors that outlined in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 66, for a motion for summary judgment brought pursuant to Rule 20 of the Rules of Civil Procedure, R.R.O., Reg. 194.

[44] Justice Kiteley describes the test as follows, at para. 42:

STEP 1:

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;

STEP 2:

If there appear 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.

The Shifting Two Step Burden of Proof on Summary Judgment Motions

[45] In a motion for summary judgment, there is also a two-step shifting evidentiary burden of proof to determine whether there is a genuine issue requiring a trial.

[46] Again, the test in the family law context mirrors the approach taken in civil cases. The slight difference in the wording of the applicable rules is not substantive with respect to the evidentiary burden.

[47] The Court of Appeal recently provided guidance on how to apply the evidentiary burden in a summary judgment motion pursuant to Rule 20 of the Rules of Civil Procedure in Sanzone v. Schechter, 2016 ONCA 566, 402 DLR (4th) 135, at para. 30:

The evidentiary burden on a moving party defendant on a motion for summary judgment is that set out in rule 20.01(3) – “a defendant may… move with supporting affidavit material or other evidence.” As explained in Connerty, at para. 9, only after the moving party defendant has discharged its evidentiary burden of proving there is no genuine issue requiring a trial for its resolution does the burden shift to the responding party to prove that its claim has a real chance of success.

[48] This is consistent with the approach taken in Turk v. Turk (2015 ONSC), at para. 47:

First: The burden is on the moving party to establish that prima facia there is no genuine issue for trial; the burden is not on the responding party to establish that there is a genuine issue for trial.

Second: If the moving party meets its burden by establishing a prima facie case that there is no genuine issue requiring a trial, 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.

[49] In the context of this motion for summary judgment, the Respondents could establish a prima facie case that that there is no genuine issue requiring a trial by establishing one of:

1. That Neil Shinder did not fail to disclose significant assets; or
2. If there was non-disclosure, Ms. Shinder had actual knowledge that there was non-disclosure and entered into the Separation Agreement regardless: Virc v. Blair (2014 ONCA), at para. 69; or
3. If there was any non-disclosure, it was not material to Ms. Shinder’s decision to enter into the Separation Agreement: see LeVan v. LeVan (2006), 82 O.R. (3d) 1, at para. 200 (Ont. S.C.); Virc v. Blair, 2016 ONSC 49, 80 R.F.L. (7th) 124, at para. 104.

[50] The threshold for striking a claim at this stage of the proceeding is high. No genuine issue for trial has been interpreted to mean, in Catholic Children’s Aid Society of Hamilton v W. (B.), 2015 ONSC 7621, at para. 84:

…. “no chance of success”, when the outcome is a foregone conclusion”, “plain and obvious that the action cannot succeed”, and “where there is no realistic possibility of an outcome other than that sought by the Applicant.”

Failure by Ms. Shinder to Proceed with Motion for Disclosure

[51] During Reply, after concluding the argument on behalf of Neil Shinder, counsel for Neil Shinder argued that Ms. Shinder should have proceeded with the outstanding long motion scheduled for September 2017 for Neil and Sol Shinder to answer the refusals to provide financial disclosure prior to proceeding with this motion for Summary Judgment. (September was the first court date available for the long motion.)

[52] Curiously, counsel argues that, by failing to insist on the adjournment of the summary judgment motion (which the Respondents refused to adjourn), and by failing to force the issue of disclosure, the former wife has not put reliable evidence before the court on the materiality of the alleged non-disclosure. Thus, counsel argues, Ms. Shinder has not met the secondary onus of proof that there is a genuine issue requiring a trial.

[53] Clearly, it would have been preferable for the Respondents to have been required to comply with their financial disclosure obligations prior to this motion in accordance with the procedures outlined by Justice Darla Wilson in Turk v. Turk, 2014 ONSC 4490. I adopt her reasoning and approach.

[54] Ms. Turk was seeking to set aside the separation agreement for non-disclosure. Justice D. Wilson required Mr. Turk to file his Financial Statement, which she found is a mandatory requirement of the Family Law Rules, and as well she required Mr. Turk to produce the requested relevant disclosure.

[55] She confirmed, at para. 18:

…it makes no sense for the Respondent to fail to address the financial disclosure issue now because one of the issues before the court on the Summary Judgment motion will be the adequacy of the financial information that was provided at the time of the execution of the Separation Agreement and thus, the information requests from Rudson must be answered.

[56] I disagree with the argument made by counsel for Neil Shinder for two reasons.

[57] First, in law, it is only if the Respondents discharge the evidentiary burden of establishing a prima facie case that there is no genuine issue requiring a trial that the burden shifts to Ms. Shinder to review the evidence and “to set out specific facts that there is a genuine issue that requires a trial”.

[58] For reasons I will outline, as I have concluded that the Respondents have not met their preliminary burden of proof, there is no onus that shifts to Ms. Shinder to call further evidence supporting the merits of her case.

[59] Second, in fairness and practicality, the Respondents cannot rely on their blanket refusal to cooperate to support an argument that Ms. Shinder has failed to put her best foot forward. The Respondent, Neil Shinder, has refused to provide a current sworn Financial Statement required by the Family Law Rules. Further, he refused to provide any documentary disclosure or to answer questions. His counsel refused to adjourn this motion. Had there been an onus upon Ms. Shinder (which I conclude there is not), I would not, in the circumstances, have drawn any adverse inferences on the evidence against Ms. Shinder at this juncture.

Background Facts

[60] The parties were married in 1996 and have two children, who are now in university. The parties separated in October 2009.

[61] During the marriage, the parties developed a number of very successful companies that marketed and distributed beauty products. Ms. Shinder handled the creative aspect of the businesses, including product development and marketing. Neil Shinder handled the finances as Chief Operating officer and was in charge of day-to-day operations. At separation, these companies were worth tens of millions of dollars.

[62] The parties’ financial affairs were complex and they held significant assets. Each had retained competent counsel and accountants to assist with understanding the interests held by each of the parties and to sort out the issues of disclosure and valuation.

[63] There were significant concerns as to the adequacy of the disclosure by Neil Shinder and his father, Sol Shinder, in the proceedings initiated by Ms. Shinder in 2010.

[64] Neil Shinder is an accountant by training, retained and he instructed Linda Brent to assist with the disclosure issues.

[65] Sol Shinder was unwilling to make full disclosure without a confidentiality agreement. The parties were unable to agree on the scope of such an agreement and disclosure by Sol Shinder did not take place. One of the required terms of the proposed confidentiality agreement was that Ms. Shinder would not be allowed to discuss any disclosure with her father or her uncle, an accountant and lawyer respectively, both who were trusted advisors to Ms. Shinder in the litigation.

[66] Disclosure had not been completed when the parties entered into the Minutes of Settlement dated December 2011 and the Separation Agreement dated June 25, 2012 after the two settlement conferences with the assistance of Speigel J.

[67] Signing the Separation Agreement did not end the parties’ dispute. Implementation of the Separation Agreement was complex due to the numerous holdings of the parties to be unraveled or divided in accordance with the framework of the Separation Agreement. As well, the parties have fought vigorously on all fronts, including items of section 7 expenses (prom dresses and the like) and questions about furniture.

[68] In September 2016, Ms. Shinder brought this action seeking to set aside the Separation Agreement in its entirety and to obtain various other relief claimed against both Neil and Sol Shinder.

Estate Freeze and Creation of the Grandchildren’s Trust

[69] At the date of the marriage in 1996, Neil Shinder had 48 common shares in Coofer Holdings Inc., which is a real estate development company that was owned and controlled by his father, Sol Shinder. The company has various minority interests with partners in commercial real estate in Ottawa. Similarly, Neil Shinder’s brother had 48 common shares.

[70] Two years prior to the parties’ separation, Sol Shinder initiated an estate freeze through two trusts with the consent of his two sons with his express intention to pass on the benefit of future growth to his five grandchildren. As a result of this reorganization, Neil Shinder received preference shares with a fixed value of $1,106,784.00 based upon an internal valuation by the accountants of the 48 common shares at the date of the re-organization.

[71] In this lawsuit, initiated in 2016, Ms. Shinder challenges the bona fides of this plan and alleges that the Grandchildren’s Trust was a sham designed to defeat her claim as Neil Shinder failed disclose that he was a beneficiary of the Grandchildren’s Trust. She suggests (without any supporting evidence) that the Grandchildren’s Trust has been wound up and that funds found their way to Neil Shinder.

[72] Ms. Shinder alleges that the lifestyle lived by the former husband post-separation without working cannot be reconciled with the assets he disclosed at the time of entering into the Separation Agreement without taking into account payments she alleges must come directly or indirectly from the Grandchildren’s Trust.

[73] If the allegations of Ms. Shinder are found to be true, once fulsome financial disclosure has been provided, the non-disclosure appears to be significant. However, if the allegations are not supported by the future disclosure, this is a sad state of affairs for this family, and these aggressive proceedings should immediately cease.

The Chronology

[74] The chronology in this case is relevant.

[75] The parties entered into a Marriage Contract in 2005 giving the home and cottage to Ms. Shinder and equally sharing the corporations owned by the parties. In 2005, Neil Shinder wanted the Marriage Contract, entered into nine years after their marriage, as he was concerned that he owned 30% of the various family businesses, while Ms. Shinder owned 70%. Ms. Shinder alleges that the Marriage Contract was the beginning of a plan in case of the separation of the parties.

[76] The estate freeze and setting up the trust initiated by Sol Shinder began in 2007 and was settled in January 2008.

[77] The parties attended marriage counseling in 2008. [1]

[78] The parties separated in October 2009.

[79] An issue that is unanswered is whether this restructuring of Coofer was done for the bona fide interests of the grandchildren, as alleged by the Respondents, or whether it was part of a plan to protect assets from a claim by Ms. Shinder in case of the parties’ separation.

Disclosure Issues in the 2011 Proceedings

[80] Ms. Shinder commenced the matrimonial proceeding in 2010. She was having difficulty obtaining financial disclosure from the Respondents. On April 8, 2011, Herman J. made an order for financial disclosure.

[81] Disclosure took place between May and November 2011. All of the disclosure requested by Ms. Shinder’s advisors had not been provided.

[82] The parties’ finances were complex.

[83] At separation, each party had hired an accountant to assist with assessing the existence and valuation of assets. The former husband retained Linda Brent, and the former wife, Andrew Freedman.

[84] In April 2011, Neil Shinder swore a Financial Statement in the outstanding proceeding. His preference shares in Coofer Holdings Inc. are disclosed using the estate freeze valuation price, less adjustments.

[85] His interest as a beneficiary of the Grandchildren’s Trust is not disclosed.

[86] Disclosure relating to the reorganization and the value of the underlying assets of Coofer was an important issue. There were requests for disclosure made by Mr. Freedman on behalf of the former wife in April 2011.

[87] In May 2011, in response to the order for disclosure and the requests from Mr. Freedman, Linda Brent provided a 23-page response to requests for disclosure from Mr. Freedman, acting on behalf of Ms. Shinder.

[88] She sent a further letter in June 2011 providing further disclosure. There is no mention of the Grandchildren’s Trust in that letter.

[89] Items 53 to 55 in the May 13, 2011 letter of Ms. Brent respond to questions asked by Ms. Shinder’s accountant concerning the Grandchildren’s Trust. She confirms that she provided the Grandchildren’s Trust document to counsel for Ms. Shinder, confirms no tax returns were filed, and provides the names of the children. Her letter states:

53. Trust indenture. Response: Enclosed at Tab 53.

54. Trust returns for 2007, 2008, 2009 and 2010. Response: No tax returns were filed. Enclosed at Tab 54 is exemption for fiscal 2009 and 2010

55. Financial statements for 2007, 2008, 2009 and 2010. Response: None were prepared.

56. Ages and names of Sol and Zelaine Shinder’s grandchildren. Response: Samantha was born February 11, 1997. Benjamin was born March 3, 1998. Grandchildren other than the children of Neil and Randi Shinder are not relevant and have not been provided.

[90] Along with her letter, Ms. Brent provided a disk with the many documents including a copy of the Trust Deed at item 53.

[91] The Trust Deed provides:

WHEREAS the Settlor desires to establish a trust, to be known as The Solomon and Zelaine Shinder Canadian Grandchildren Family Trust, for the benefit of SOLOMON SHINDER, ZELAINE SHINDER, NEIL SHINDER, RANDI SHINDER and the children of NEIL SHINDER (hereinafter referred to collectively as the “children”, or individually as the “child”).

[92] Ms. Brent’s response to inquiries about the valuation of Neil Shinder’s preference shares in Coofer Holdings Inc. and the reorganization are found at 23 and 27 of her May 2011 letter:

Request 23. Rent rolls for the following properties at the date immediately preceding Coofer’s reorganization, at the Date of Separation and at the current date:

(a) 126 York Street (b) 335 Cooper Street (c) 1322 Pinecrest (d) 200 Elgin Street

Response:

(a) Before reorganization and currently – This request is not relevant and therefore will not be provided. Further consideration will be given to this request, if particulars of the purpose of this request and its relevancy are provided. Furthermore, Mr. Shinder advises that this information is not in his possession and has been requested from Mr. Sol Shinder. Sol Shinder has refused to provide this information for confidentiality reasons relating to the interests of other third parties, and that such information cannot be disclosed without the prior written consent of third parties.

(b) Date of separation – As Ms. Shinder held fixed value preference shares and since his contingent interest in The Solomon and Zelaine Shinder Canadian Grandchildren Family Trust was received as a gift during marriage and is excluded property, this request is not relevant. Further consideration will be given to this request, if particulars of the purpose of this request and its relevancy are provided. Furthermore, Mr. Shinder advises that this information is not in his possession and has been requested from Mr. Sol Shinder. Sol Shinder has refused to provide this information for confidentiality reasons relating to interests of other third parties, and that such information cannot be disclosed without the prior written consent of such third parties.

Request 27. Support for the fair market value of marketable securities held by Coofer at the date immediately preceding the reorganization, at the Date of Separation and at the current date.

Response:

(a) Before reorganization and currently – This request is not relevant and therefore will not be provided. Further consideration will be given to this request, if particulars of the purpose of this request and its relevancy are provided. Furthermore, Mr. Shinder advises that this information is not in his possession and would have to be obtained from Sol Shinder.

(b) Date of separation – As Mr. Shinder held fixed value preference shares and since his contingent interest in The Solomon and Zelaine Shinder Canadian Grandchildren Family Trust was received as a gift during marriage and is excluded property, this request is not relevant. Further consideration will be given to this request, if particulars of the purpose of this request and its relevancy are provided. Furthermore, Mr. Shinder advises that this information is not in his possession and would have to be obtained from Sol Shinder.

[93] These responses of Ms. Brent refer to Neil Shinder having a “contingent interest” in the Grandchildren’s Trust but do not confirm that he is a beneficiary.

[94] In his cross-examination, Neil Shinder confirmed that the responses given by Ms. Brent in her letter were in accordance with his instructions.

[95] I conclude that Neil and Sol Shinder were well aware the Neil was a beneficiary of the Grandchildren’s Trust, yet both failed to squarely reveal the truth.

[96] The affidavit of Neil Shinder in June 17, 2011 does not disclose that he is a beneficiary of the Grandchildren’s Trust.

[97] His affidavit confirms:

• “in the fall of 2007 my parents undertook an estate plan review of their assets and decided to re-organize their affairs (including the shareholdings of Coofer) so that the ultimate principal beneficiaries of their estates would be their 5 grandchildren. ” • “The Sol and Zelaine Shinder Canadian Grandchildren Trust was created as of January 1, 2008 and holds 48 Class B Common Shares of Coofer. These shares are dividend bearing and voting. The ultimate residual beneficiaries of the trust are Neil and Randi’s children, Samantha Shinder and Benjamin Shinder.” • “Randi correctly states that there is a trust of which our children are beneficiaries. It was established by my father, Sol Shinder”.

[98] The affidavit of Sol Shinder does not disclose that Neil Shinder is a beneficiary of the Grandchildren’s Trust. It states:

6. That Randi is willing to spend hundreds of thousands of dollars on legal and accounting fees to attempt to challenge and undo the estate plan, which was designed purely to benefit Neil’s and her children (as well as Jeffrey’s 3 children), that occurred approximately two years before her separation from Neil is disappointing and upsetting to me, to say the least.

7. On or about January 1, 2008, I created the “Sol and Zelaine Shinder Canadian Grandchildren Trust” (“The Canadian Grandchildren Trust”). The Canadian Grandchildren Trust holds 48 Class B common shares of Coofer. The ultimate residual beneficiaries of The Canadian Grandchildren Trust are Neil and Randi’s children (Samantha and Benjamin).

[99] There was also a corporate chart that was attached to the affidavit. Sol Shinder states:

7. In 1985 I incorporated Coofer to serve as the holding company for my principal investment assets. At Exhibit A is a copy of the Sol Shinder Group of Companies as at February 28, 2010.

[100] In the fine print, barely legible, is the disclosure that Neil and Randi are beneficiaries of the Grandchildren’s Trust.

[101] The former husband and his father rely on the productions by Ms. Brent, the statements in her May letter of a “contingent interest”, and the corporate chart attached to Sol Shinder’s affidavit, as well as the affidavits, as definitive proof that disclosure of Neil Shinder’s interest as a trustee and beneficiary was made in this motion for summary judgment.

[102] Neil Shinder swore the second Financial Statement on November 22, 2011 after the Trust deed had been provided by Ms. Brent on the disk.

[103] Financial Statements in proceedings are often updated and clarified as the disclosure process unfolds.

[104] Importantly, the second sworn Financial Statement dated November 22, after the Brent letters in May and June 2011, fails to disclose that Neil Shinder is a beneficiary, or fails to flag any sort of “contingent” interest in the Grandchildren’s Trust.

Documents Filed During the Motion

[105] This motion proceeded for two half days. By way of response to whether the parties had filed Net Family Property Statements, and questions about the materiality of the alleged non-disclosure, counsel for Neil Shinder sought to file the Settlement Conference briefs of the parties from 2011 filed in the conferences in December 2011 and June 2012 before Speigel J. He also sought to file correspondence between counsel after the date of these proceedings.

[106] I ruled that the Settlement Conference briefs could be filed as they were part of the court record and may be of assistance to assess the issues on this motion. I ruled that any subsequent correspondence between counsel was not admissible at that point in the argument.

[107] As counsel for Ms. Shinder was caught by surprise and had not had an opportunity to review the case conference briefs and make submissions on the content of the settlement briefs that I ruled were admissible, I allowed him to make brief submissions in writing after the argument was concluded, with the right of Neil Shinder’s counsel to respond.

[108] I have read the submissions by counsel for Ms. Shinder and Mr. Niman’s response.

[109] The submissions of counsel for Ms. Shinder seem to focus on the question of admissibility, which I ruled on, rather than the content of the documents filed.

[110] The settlement conference briefs were filed after conclusion of argument and I have had an opportunity to review them. The contents of the settlement conference briefs speak for themselves. They are relevant to the matters in this motion.

The Settlement Conference Briefs

[111] In their briefs, both parties review in some detail the issues and problems of non-disclosure by Neil and Sol Shinder. The former wife’s brief makes it clear that she and her counsel had significant frustration and ongoing concerns about non-disclosure.

[112] Ms. Shinder’s counsel confirms in the Settlement Conference memo Ms. Shinder’s reliance on the November 22, 2011 Financial Statement sworn by Neil Shinder as an important document in the proceeding:

“Mr. Shinder’s Financial Statement

On November 22, 2011 for the first time since separation (which was more than 2 years ago) Mr. Shinder served a Financial Statement which contained values for the assets subject to equalization.”

[113] Based upon the numbers disclosed in Neil Shinder’s sworn Financial Statement and applying the Marriage Contract, the former wife made an offer to settle that she would keep her assets, and Neil Shinder would pay $500,000.00.

[114] The Settlement Conference brief of Ms. Shinder confirms that she placed reliance upon the sworn Financial Statement dated November 22, 2011.

[115] Neil Shinder’s conference brief raises issues about the Marriage Contract and disputes that there had been a lack of cooperation in making disclosure. He argued that the non-disclosure of Coofer was because the former wife refused to sign the proposed confidentiality agreement (which included a term that she could not discuss these documents with her father or her uncle).

[116] Neil Shinder’s settlement brief confirms that the grandchildren are the beneficiaries of the Grandchildren’s Trust, but does not disclose that Neil was also a beneficiary, at para. 45:

Despite having been provided with abundant disclosure, Randi continues to claim that Neil is hiding assets and has threatened to bring an urgent motion to compel disclosure. Randi’s claims are erroneous. Contrary to Randi’s allegations, she has been provided with numerous documents concerning the reorganization of Coffer Holdings Inc. That occurred in January 2008. Coffer is a holding company created by Neil’s father, Sol Shinder. It was reorganized for the benefit of his grandchildren, including Samantha and Ben. At the time of the reorganization, Neil’s shares in the company were converted to preference shares, all of which have been disclosed to Randi.

[117] The brief confirms, at 48:

The Sol and Zelaine Shinder Canadian Grandchildren Trust was created as of January 1 2008 and holds 48 Class B common shares of Coffer. These shares are dividend bearing and voting. The ultimate residual beneficiaries of the trust are Neil and Randi’s children, Samantha Shinder and Benjamin Shinder. Sol retains effective voting control of Coffer through preference shares.

[118] Nowhere in the settlement conference brief filed by Neil Shinder is it disclosed in the written analysis of the issues, or in the Financial Statement, or in the Net Family Property Statement that Neil Shinder is also a beneficiary of the Grandchildren’s Trust.

[119] The parties entered into Minutes of Settlement in a settlement conference with Speigel J. in December 2011 confirming the basic structure of the settlement. There is no evidence of any further disclosure made after December 2011. After issues arose, the parties had a further conference with Speigel J., and entered into the final Separation Agreement on June 25, 2012.

The Cross-examinations

[120] The cross-examination of Ms. Shinder was carefully controlled, but it is clear that the former wife was not permitted to give complete answers to questions asked.

[121] I outline excerpts from the cross-examination of Ms. Shinder that I accept as true:

A. We made a decision to settle, and I relied on my ex-husband’s sworn affidavit in which he did not mention that he was a beneficiary and a trustee of that trust. In fact, he didn’t mention the trust at all, nor did my father-in-law… Q. All right. A. … in his sworn affidavit. (p 85 excerpt marked 5) A. Well, he indicates that he has some fixed value shares, but it goes on to say that, “… The particulars of which will not be provided because they’re not relevant and they’re not in his possession. They’re in the possession of Mr. Sol Shinder …”. And he refuses to provide that information because it’s confidential Q. All right. A. Why is it confidential if it’s a trust that my children… Q. All right. A. … and myself are the beneficiaries of? Q. Well, you were only a beneficiary as long as you were living with my client. A. How would I know that? (Page 88 to 89 insert 6) Q. But your lawyers knew about it. Your accountants knew about it. Your uncle knew about it. Your dad knew about it. A. Actually, they didn’t. That’s the problem, Mr. Niman, they didn’t know about it. (Page 93 insert 7) A. Well, we had decided to try to settle matters, so it became less important … Q. Okay. A. … and I relied on the sworn financial statements… Q. Oh, come on, that’s just nonsense. You had all of this information… MR. MOLDAVER: Excuse me, Mr. Niman. THE DEPONENT: No, please don’t tell me that it’s nonsense Reference BY MR. NIMAN: Q. You had all of this document. Take a look at page 4 of this affidavit? A. Mr. Niman, more importantly, I relied on Neil’s assurance to me that none of this was really valuable. And Sol’s e-mail to my father indicated he was worth at most half a million dollars to me, and that CRA would be involved, and this was really all not worth fighting about. We should settle and we would have peace if we settled. That’s what I relied on… Q. I see. A. … to settle. Q. And you were satisfied with that at the time you settled? A. Yes. I looked at their sworn financial statements which, by the way, omitted the trust. (Page 94/ 95 insert 8) Q. Actually, I don’t think that you’re entirely correct when you read the Brent letter, because he’s identified as being a contingent beneficiary, isn’t he? A. Well, I didn’t read the Brent letter. Q. Well, you should have. A. Why didn’t Neil and Sol just tell me?

BY MR. NIMAN: Q. So, I just want to understand. Your lawyers must have read that affidavit, right? A. You will have to ask them. I don’t know. Q. Well, okay. Did you say that your lawyers were not satisfied with the disclosure? A. Nobody was satisfied with the disclosure. Q. No, I’m not asking that. Did you say that your lawyers were not satisfied with the disclosure concerning the trust? A. I am telling you… Q. I want an answer to that question, please? A. …nobody was satisfied with the disclosure.

[122] Reading the transcript as a whole, I find that it is clear that Ms. Shinder was not aware that Neil was a beneficiary of the Grandchildren’s Trust, nor that she was a beneficiary whose rights terminated upon the parties’ separation.

[123] The cross-examination of Neil Shinder is a long series of refusals with virtually no answers given to questions asked. There is an outstanding long motion date scheduled in the fall to hear the refusals motion.

[124] Neil Shinder has refused to file a Financial Statement in this proceeding. He has not provided any documentary proof to support his allegations that the trust was not material in the context of this lawsuit. Both he and his father confirm that he has received no benefit from the Grandchildren’s Trust since its inception, without back up documentary proof.

[125] The following are excerpts from the cross-examination of Neil Shinder that outline the flavor of the refusal to provide documentary proof:

Q.377 Well would you provide the tax returns for the trust for the years….. A. No. Q.378 Well, you’ve got to, before you say no, you should at least hear the question. A. I don’t have them, so I can say no. Q. 379 Yes, but you don’t even know what I’m asking A. It doesn’t matter. Q.380 I think you should let me get my question on the record. I know you want to be difficult and you don’t want to answer anything but I think you have to. Q. 405 Well that is a nice speech, but can you answer my question, which is, where is it here? [disclosure that he is a beneficiary of the Grandchildren’s Trust] Where is it in this Financial Statement that you swore under oath? A. It is not in here, it is in the other disclosures and Affidavits. Q.406 Why wasn’t it in your sworn statement. MR. GELGOOT: Don’t answer the question Q. 407 Did you review this document before you swore to the truth of it? A. Yes. Q. 408 And you have, you’re an accountant by trade? A. That is my training, yes. Q. 409 I see from the same document that you listed all of your other trust interests in the Shinder Family Trust. So, you obviously knew that you were supposed to list trust interests. Do you see that? A. Yes. Q. 410 If you go to page 9. So, why didn’t you include your interest in the S & Z Canadian Grandchildren Trust? A It was disclosed prior and there’s no value to it. Q. 411 Well, on what basis do you say there’s no value to it? You’re a contingent beneficiary of that Trust, why would there be no value? Why would you assume there was no value? A. Because the Trust, in my view and what had been relayed to me, is for the benefit of my children. Q. 412 So, if you could get out your – well, let’s mark this as the next exhibit.

--- EXHIBIT NO. 2: Form 13.1 Financial Affidavit of Neil Shinder sworn November 22, 2011.

Q.416 So, you took the position that if an asset as really beneficially for somebody else, you didn’t note it within your Financial Statement. Is that what you’re saying? A. With that particular asset, yes.

[126] The cross-examination of Sol Shinder provides somewhat more candid answers to the questions asked, but he refused to provide any financial documents to back up his evidence. He did provide an excerpt from his last will, confirming that Neil would not be a sole trustee controlling the funds in the Grandchildren’s Trust if he died. Neil had the power to appoint other trustees.

No Evidence from Advisors to Ms. Shinder

[127] Counsel for the Respondents argue that the failure to provide evidence as to the knowledge of the lawyer and accountant for Ms. Shinder that Neil Shinder was a beneficiary under the Grandchildren’s Trust confirms that Ms. Shinder has not met her onus of proof and has not put her best foot forward in this motion. They suggest that their knowledge (if present) becomes the knowledge of Ms. Shinder.

[128] I cannot determine from the evidence before me whether the former wife’s counsel, her accountant, or her other family advisors (her father and uncle) were aware of the terms of the Grandchildren’s Trust.

[129] However, as I conclude that Respondents have not meet their onus of proving a prima facie case that there was no genuine issue requiring a trial for non-disclosure, therefore the evidentiary onus does not shift to Ms. Shinder.

[130] In any event, applying the principles outlined in Virc v. Blair (2014 ONCA), once there has been non-disclosure, the onus shifts to the Respondents to show that Ms. Shinder had actual knowledge of the undisclosed asset: Neil’s beneficial interest in the Grandchildren’s Trust.

[131] Neil Shinder argues, in essence, that his disclosure was sufficient. However, as stated in the following passage of Cheshire & Fifoot, quoted with approval by the Court of Appeal in Virc v. Blair (2014 ONCA), at para. 57:

relief [for material misrepresentation] will not be withheld on this ground except upon clear proof that the plaintiff possessed actual and complete knowledge of the true facts - actual not constructive, complete not fragmentary. The onus is on the defendant to prove that the plaintiff had unequivocal notice of the truth.

[Emphasis added]

[132] I conclude from a review of the file that there is no doubt that Ms. Shinder was unaware that Neil Shinder was a beneficiary of the Grandchildren’s Trust and that she relied on both the Financial Statement of Neil Shinder, which fails to make this disclosure, as well as his representations made to her.

[133] In these circumstances, is not necessary to review what her counsel or accountant did or did not know.

[134] Further, the disclosure of the trust deed in a disk of documents and attaching information to Sol Shinder’s corporate chart in fine print do not establish, as set out in Virc, at para. 57: “clear proof that [Randi] possessed actual and complete knowledge of the true facts - actual not constructive, complete not fragmentary”.

Inference that Counsel for Neil Shinder Unaware

[135] As well, I infer from the evidence that it appears that co-counsel for Neil Shinder was not aware that Neil Shinder was a beneficiary of the Grandchildren’s Trust.

[136] Mr. Gelgoot, who was co-counsel to Mr. Shinder in 2011, witnessed the execution of the November 22, 2011 Financial Statement, which fails to disclose that Neil Shinder was a beneficiary of the Grandchildren’s Trust.

[137] Had he been aware of the omission, I am confident that counsel would have advised Neil Shinder that it was necessary to make disclosure that he was a beneficiary of the Grandchildren’s Trust, even if the trust was genuinely structured to benefit the children.

[138] A reasonable inference that may be drawn is that co-counsel for Neil Shinder, who witnessed the signing of the Financial Statement, was unaware that Neil Shinder was a beneficiary of the Grandchildren’s Trust.

[139] If the reasonable inference may be drawn that co-counsel for Neil Shinder charged with responsibility to prepare and swear the Financial Statement of Neil Shinder was unaware of the non-disclosure, how could Ms. Shinder be expected to know?

Conclusions on whether there is no genuine issue requiring a trial on non-disclosure.

[140] Counsel for the Respondents argue that adequate disclosure was made that Neil was a beneficiary in the Grandchildren’s Trust. They argue that Ms. Shinder chose to enter into a global agreement while there were still some disclosure issues outstanding and that this is not the fault or responsibility of the Respondents.

[141] I am satisfied upon a review of the voluminous file that the former wife became aware of the estate freeze and restructuring of Coofer Holdings Inc. during the matrimonial proceedings in 2011. Her father was aware of the fact of estate freeze in 2008, though not necessarily the terms, as he the provided the $100 to settle the trust.

[142] Ms. Shinder in recent cross-examination confirmed that she relied on the former husband’s two sworn Financial Statements filed in the proceeding, which fail to disclose that the former husband is a beneficiary of the Grandchildren’s Trust. As well, she relies upon what she was told by Neil Shinder at the time negotiations were taking place that the children were the trust beneficiaries.

[143] Further, she asserts that the sworn affidavits of both Neil and Sol filed in June and August 2011 were unclear, misleading, and fail to disclose that Neil Shinder is a beneficiary of the Grandchildren’s Trust.

[144] I find that failure to declare that Neil Shinder was a beneficiary of the Grandchildren’s Trust in a sworn Financial Statement, relied upon by the recipient as being true, is a serious omission and cannot simply be rectified by a passive disclosure of the trust document buried on a disk of disclosure exchanged between the accountants appointed by the parties, or attached as an illegible chart to an affidavit. There is no doubt that the affidavits sworn by the Respondents in 2011 were misleading.

[145] The evidence is clear, that Ms. Shinder was not aware that Neil Shinder was a beneficiary of the Grandchildren’s Trust.

[146] There need to be bright lines defining the obligation to disclose, particularly in family law cases where parties are under tremendous stress. The parties must be entitled to rely on sworn Financial Statements.

[147] If there is an error or a change as the disclosure process unfolds, this change must be clearly, squarely brought to the attention of opposing counsel and their client, preferably, but not necessarily in an updated Financial Statement.

[148] If counsel for the Respondents are correct that the disclosure requirements have been met in the facts of this case, when an asset is not disclosed in a sworn Financial Statement, but is buried in the disclosure, it creates a costly minefield of due diligence for advisors to clients, both lawyers and accountants. It places an onus on the opposing party to ferret out the truth.

[149] For these reasons, I find, based upon the evidence before me, that the moving parties have not met the onus of proof of showing that there is no genuine issue requiring a trial on the question of non-disclosure.

Use of fact-finding powers: No Trial is Necessary on the Issue of Non-disclosure

[150] I must now decide based upon the evidence before me in this summary judgment motion whether to use my fact-finding powers to determine the issues or whether a trial is necessary on the question of non-disclosure. As summarized in Catholic Children's Aid Society of Hamilton v. M. (R.), 2015 ONSC 5101, 65 R.F.L. (7th) 330, at para. 46, citing Hryniak, once I conclude that there is a genuine issue requiring a trial based on the materials before the court, I should:

…then determine if the need for a trial can be avoided by using the new fact finding powers set out in the rule. Finally, even if the court is satisfied that using the fact finding powers will allow for a resolution of the dispute by summary judgment, the court must nevertheless decide whether the interests of justice require that the powers only be exercised in the context of a full trial.

[151] The Court of Appeal has confirmed in the context of motions for summary judgment under the Rules of Civil Procedure, “[t]he case law is clear that summary judgment may be granted against the moving party in the absence of a motion from the responding party”: see e.g. Klein v. Dick, 2016 ONCA 8, at para. 5; Hazel v. Rainy River First Nation, 2016 ONSC 5875, at para. 20. The same principles apply in family law cases.

[152] Some issues may require a trial and some issues may not. As explained in Turk v. Turk (2015 ONSC), at para. 47, quoting Afolabi v. Fala, 2014 ONSC 1713, 46 R.F.L. (7th) 75, at para. 47 the motions judge can decide “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”.

[153] In my view, I have all the relevant evidence to determine the non-disclosure issue, apart from the question of materiality, or significance of the non-disclosure. The issues are narrow and clear, the facts and the position of the parties are also clear. No further evidence is necessary to determine these preliminary questions.

Conclusion that Neil Shinder Deliberately Did Not Disclose his Beneficial Interest in the Grandchildren’s Trust

[154] Neil Shinder is an accountant by training. In his cross-examination, it was clear that Neil Shinder was aware of the need to include assets held by him for others, such as the RESPs that he disclosed that he held for the children. He disclosed other trust interests. He is sophisticated in the ways of finance and was aware of the need to make disclosure and did disclose other trust interests in his sworn Financial Statement.

[155] In the 2011 proceeding, it is clear that the creation of the Grandchildren’s Trust, and the freeze of Neil Shinder’s 48 common shares in Coofer were of significant concern to Ms. Shinder and her advisors.

[156] I can only infer that Neil Shinder, an accountant by training, and a sophisticated businessman who was involved in looking after the finances of the parties and their corporate holdings, was aware of the necessity of providing information that he was a beneficiary of the Grandchildren’s Trust. For some reason, he deliberately did not disclose this beneficial interest in his Financial Statement sworn in April 2011 and on November 22, 2011.

[157] I have carefully read the cross-examination of the former wife, as well as the entire cross-examinations of Neil and Sol Shinder. The cross-examinations, read as a whole, along with the undisputed factual background, confirms the reasonable inference that there was knowing non-disclosure by Neil Shinder in his sworn Financial Statements, particularly the Financial Statement dated November 22, 2011 that failed to disclose that Neil Shinder was a beneficiary in the Grandchildren’s Trust.

[158] I find as a fact that the only reasonable inference from the voluminous evidence is that Neil Shinder, for whatever reason, deliberately failed to disclose his interest in the Grandchildren’s Trust. I conclude that it is not necessary, nor in the interests of justice, to have a trial on the question of non-disclosure.

[159] Once there has been non-disclosure, as confirmed in Virc v. Blair (2014 ONCA), the onus shifts to the Respondents to show that Ms. Shinder had actual knowledge of the undisclosed asset: that is, his beneficial interest in the Grandchildren’s Trust. He has failed to meet this onus.

[160] I also find as a fact that the evidence clearly establishes that the former wife did not know that Neil was a beneficiary of the Grandchildren’s Trust when she entered into the Separation Agreement. Hence this proceeding.

Summary of Conclusions

[161] I dismiss Neil Shinder’s motion for summary judgment against Ms. Shinder.

[162] On the following two issues in this action, I have exercised my fact-finding powers to find that there is no genuine issue requiring a trial and grant partial summary judgment in favour of the former wife:

• First, I find that Neil Shinder deliberately failed to disclose his interest in the Grandchildren’s Trust to Ms. Shinder, i.e. that there has been non-disclosure. • Second, I find that Ms. Shinder did not have actual knowledge of the non-disclosure when she entered into the Separation Agreement. Neil Shinder’s attempt to defend the action on the grounds that Ms. Shinder had actual knowledge of his non-disclosure cannot succeed.

[163] My disposition of this summary judgment motion leaves only one issue requiring a further hearing- be it by motion or by trial, after the Respondents have made fulsome, adequate disclosure. That issue is whether Neil Shinder’s failure to disclose that he was a beneficiary of the Grandchildren’s Trust was material, or significant, non-disclosure within the meaning of section 56 of the Family Law Act. If the non-disclosure is material, or significant, the court must then determine what the appropriate remedy would be. This will include consideration of the merits of the alternative claims advanced by Ms. Shinder against both Neil and Sol Shinder.

[164] Notwithstanding that Neil Shinder did not disclose he was a beneficiary of the Grandchildren’s Trust, if he and Sol Shinder can now show with cogent documentary proof that the Grandchildren’s Trust was always for the benefit of the parties’ children, and that he has not received and will not receive a benefit either directly or indirectly from the Grandchildren’s Trust now or in the future, then this will end the action as in these circumstances, the non-disclosure cannot be significant or material.

Next Steps in this Proceeding

[165] Rule 16(9) of the Family Law Rules provides that, where “the court does not make a final order”, the court can “state the issues” and “give directions”. Rule 1(7.1) and (7.2) allow the court, “at any time during a case”, to order “that a party make any other disclosure, within a reasonable time”.

[166] First, I order that Neil Shinder is required to file a sworn Financial Statement forthwith, and no later than 30 days, in accordance with the guidelines in the decision of Justice Darla Wilson in Turk v. Turk (2014 ONSC). In particular, I order that Neil Shinder is required to file a sworn Form 13.1 Financial Statement, making disclosure for the following dates: (1) as of the valuation date in October 2009, (2) as of the date of the separation agreement in June 2012, and (3) as of the date of the financial statement.

[167] Counsel for Ms. Shinder confirms that providing the documents refused to be produced and answering the questions that were not answered during the cross-examination will probably be sufficient to assess the substantive merits of Ms. Shinder’s claim. I order that the refusals arising from the cross-examinations of Neil and Sol Shinder should be answered and the requested documents produced without the necessity of yet another motion.

[168] If counsel for the Respondents have any objections to make about the scope of disclosure in accordance with the list of refusals, counsel may appear before me for a motion on a motion day (Tuesday or Thursday) during the week of July 24 or August 1, 2017. The motion will not be permitted to take more than two hours.

[169] The merits of the various claims advanced against Neil and Sol Shinder for conspiracy, fraud, and punitive damages cannot be determined until there is fulsome disclosure.

[170] The request for Sol Shinder to file an Affidavit of Documents with respect to assets owned by Neil Shinder at marriage and separation is dismissed as inappropriate.

[171] I hasten to warn counsel for Ms. Shinder that this partial disposition of the summary judgment motion at this preliminary stage does not deal with the merits of Ms. Shinder’s allegations.

[172] Mr. Shinder stated in his cross-examination:

(p. 98) Q.511 Notwithstanding the fact that one of Ms. Shinder’s allegations is that this trust or freeze was effectively undone and you’ve been enjoying the fruits of the assets ever since, you’re not willing to show that she is wrong. Correct? A. She is wrong. Q.512 But you’re not willing to prove it by way of sworn Financial Statement. Correct? A. If my motion, if the summary judgment motion is not found in my favour, whatever the wording is, then I will file a Financial Statement, which will prove your client absolutely wrong.

[173] It may be clear after fulsome disclosure that the Grandchildren’s Trust was and still is for the benefit of the parties’ children as represented to Ms. Shinder at the time of entering into the Separation Agreement and that there is no merit to the very aggressive claims brought against Neil and Sol Shinder.

[174] It must be remembered, as confirmed in Virc v. Blair (2014 ONCA), at para. 52, that even if a party is able to prove that one of the circumstances outlined in section 56(4) of the FLA is engaged, the court must still determine whether it is appropriate to exercise its discretion to set aside the agreement.

[175] At the end of the day, unless the Separation Agreement is set aside in its entirety on the narrow ground of the non-disclosure of Neil Shinder’s interest in the Grandchildren’s Trust (which is a significant hurdle to meet), I conclude that all of the other issues raised (section 7 expenses, child support, contents, as well as any other alleged breaches related to failure to share tax benefits outlined in paras. 8 to 10 above, etc.) are to be dealt with by mediation/arbitration process stipulated in the Separation Agreement.

Cross-Motion for Preservation Order

[176] Ms. Shinder brings a cross-motion seeking a preservation order pursuant to section 12 of the Family Law Act. I conclude that there is no merit to the allegation that there is a danger that Neil Shinder is going to skip the jurisdiction to avoid his obligations to Ms. Shinder because he is acquiring a property in Costa Rica. The non-dissipation/ preservation motion is dismissed.

Costs

[177] I requested that counsel provide their brief written submissions on costs after the motion was argued. I thank counsel for providing their responses. As counsel for Neil Shinder referred to an offer to settle the motion, (which I did not review), I will deal with the question of costs in a brief endorsement to follow. There is no need to make further submissions.

J. Wilson, J.

Released: July 13, 2017

COURT FILE NO.: FS-16-21091-0000 DATE: 20170713 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

RANDI JOY COGAN SHINDER Applicant – and – NEIL ALLEN SHINDER and SOL SHINDER Respondents

REASONS FOR JUDGMENT J. Wilson J. Released: July 13, 2017

[1] See the transcript of questioning of Neil Shinder dated April 21, 2017 at pp. 119, q. 604.