CITATION: Switzer v. Switzer, 2017 ONSC 4671
COURT FILE NO.: 16-FC-1046
DATE: 20170801
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MICHAEL SWITZER, Applicant
-and-
COLLEEN SWITZER, Respondent
BEFORE: Madam Justice Julie Audet
COUNSEL: Paul Fitzgerald, for the Applicant
Gina Rossi, for the Respondent
HEARD: July 31, 2017
ENDORSEMENT
[1] The within motion was brought by the Respondent wife prior to the hearing of a motion brought by the Applicant husband to vary the child and spousal support he is required to pay pursuant to a temporary without prejudice agreement dated June 28, 2016. The motion to vary the support terms of the temporary agreement was filed by the Applicant husband on April 26, 2017, and is set to proceed for one hour on September 12, 2017.
[2] The father is a lawyer from Ottawa. Throughout the parties’ brief marriage and up to the month of May 2017, he worked for the firm of Flaherty McCarthy (“the firm”) earning income in the range of $400,000 per annum (some years less, some years more). Whether or not he ever was a true partner in that firm is disputed. A draft partnership agreement signed by four of the six partners in 2012 makes it clear that the husband refused to sign the agreement when it was presented to him at that time. However, when his association with the firm ended, he was offered payments which appear to be in accordance with the draft partnership agreement. He explains that his employment\association with the firm was terminated as a result of its decision to close the Ottawa office (among other things). The letter received from his firm which details the terms of the agreement reached between them and dated May 19, 2017, was submitted into evidence (“the settlement letter”). The husband states that he was able to retain a portion of his clientele and he is trying to rebuild his practice. As a result, he claims he has suffered a significant reduction in his income and he is unable to continue to pay support at the level he had agreed to a year ago. He brought his motion to vary one month before his association with the firm ended, in April 2017. He has not paid child or spousal support since that date, although he has continued to cover the mortgage, car and other third party payments on behalf of the wife and the children. The extent of the husband’s contributions to the support of his family since April\May 2017 as well after the temporary agreement was signed is in dispute. The husband’s unilateral reduction of his support payments has resulted in significant arrears accruing under the temporary agreement, which the wife has now filed with the Family Responsibility Office for enforcement. She claims that the husband is also in breach of his obligation to contribute to the children’s special and extraordinary expenses, thus creating even more arrears. The husband claims that in light of his true income for 2017, he has significantly overpaid both spousal and child support under the temporary agreement.
[3] The wife’s motion was first brought before Justice Shelston on June 29, 2017 in procedural motions court. Along with her request for disclosure from the husband, the wife was seeking orders for the immediate payment of the arrears which she claims have accrued since the temporary agreement was reached, as well as significant arrears that would flow from a readjustment of the husband’s 2016 support obligations based on his true income for 2016, which was only recently confirmed based on his most recent income tax return. The wife was of the view that the motion was urgent as the disclosure she was seeking was necessary for the September 12 motion, and the wife was finding herself in dire financial circumstances.
[4] Justice Shelston found that the relief sought, except for the request for disclosure, was substantive and not procedural. He ordered that the wife was permitted to bring a motion in the month of July 2017 to adjudicate her disclosure requests. He ordered that the balance of her claims for relief were to be adjourned to the judge hearing the September 12 motion. A date was set for July 31, 2017 for the hearing of the wife’s motion for disclosure.
[5] On July 17, the wife filed her notice of motion in which she requested extensive financial disclosure as well as an order that the husband immediately pay to her interim disbursements of $50,000 pursuant to rule 24(12) of the Family Law Rules, O. Reg. 114/99 to fund expert and legal fees. Further, she sought an adjournment of the September 12 motion to afford her sufficient time to review the husband’s disclosure and to obtain valuation reports. The husband filed a cross-motion seeking detailed disclosure as well. He opposes the request for an adjournment on the basis that the Family Responsibility Office has initiated enforcement proceedings which will significantly jeopardize his ability to continue to run his law practice, should arrears of support which allegedly accrued under the temporary agreement be garnished.
[6] Based on the evidence that is before me, I make the following disclosure order:
- the husband shall provide to the wife on or before Monday, August 7, 2017 the following:
a. the corporate financial statements for the years 2012 to present for 1012713 Ontario Limited, or a copy of the written response received from its authorized representative evidencing the company’s refusal to provide same;
b. documentary proof and tracing to the source of the alleged loans in the total amount of $250,000 owing by Mr. Switzer to his parents, including all bank statements and cancelled checks evidencing same;
c. a copy of the promissory note referenced at page 2, paragraph 7 of the May 19, 2017 termination/resignation letter from the husband’s law firm of the firm’s response to that request confirming that none was ever prepared or signed.
- The wife shall provide to the husband on or before Monday, August 7, 2017, the disclosure sought in paragraphs 2, 4 (or a letter from counsel confirming that nothing is outstanding), 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 17 of the husband’s notice of motion dated July 25, 2017.
[7] During the motion, the wife confirmed that she did not and/or would not take the position now or at trial that she is unable to work due to medical/health reasons.
[8] The requests for disclosure found at paragraph 3 and 4 of Schedule A (wife’s list of requested disclosure) is denied. If the mother wants to obtain information from the husband’s former law firm, she will have to give them notice and follow the process set out in rule 20(4) and (5) of the Family Law Rules.
[9] With regards to the wife’s request for an advance of $50,000 with which to obtain income and business valuations, I am of the view that such valuations are not necessary for the purpose of the motion to vary temporary child and spousal support which is set to proceed in September. Business valuations relate to the issue of equalization which is a matter for trial. In the context of this motion, I was not provided with the firm’s or its associated corporation’s financial statements; for that reason, I am unable to ascertain whether or not business valuations are necessary at all in this case to assist the trier of facts. Further, the cost of obtaining these reports and the parties’ ability to pay for them is an important factor to be considered. I note that these parties have been married for about four years, which raises significant concerns on my part with regards to the costs-benefits analysis that a court must entertain in ordering business valuations. In any event, I am of the view that the Court will be in a much better position to assess these factors after having heard all of the relevant evidence at the September motion, and having made a determination as to the husband’s current income since he is currently the sole provider for this family.
[10] Given that the husband no longer has any interest in his former law firm or in any of the corporations associated with it, as evidenced by the settlement letter, I fail to see how the wife could successfully argue that he should be attributed income from these corporations based on s. 18 or 19 of the Federal Child Support Guidelines, S.O.R./97-175 for the purpose of prospective support. In the context of the parties’ arguments it was confirmed that arrears of child and spousal support for the years 2014 (year of the parties’ separation) and 2015 had been settled on a final basis leaving only 2016 and four months in 2017 to be adjudicated upon based on the husband’s income from the firm and associated corporations during that time. While the wife might want to obtain an income valuation report for this period of time for the purpose of trial, it is my view that the Court is going to be in a better position to assess the necessity for an income report at the September motion.
[11] For the reasons set out above, the wife’s claim for an advance of $50,000 on account of disbursements and expenses to carry on the case is deferred to the September 2017 motion.
[12] With regards to the wife’s request for an adjournment to give her sufficient time within which to obtain business and income experts reports, as stated above, based on the above I am of the view that they are not necessary to provide the Court and the parties with helpful information as to the husband’s current income for the purpose of prospective support. Given that the balance of the disclosure sought by the wife will be provided within one week, she and her counsel will have about six weeks to review the additional disclosure provided by the husband which is more than sufficient in my view to prepare for the September motion. For that reason, the wife’s request for an adjournment of the September motion is denied.
[13] The husband’s motion to vary the temporary child and spousal support in place pursuant to the temporary agreement as well as the mother’s claims as detailed and set out in her notices of motion dated June 22 and July 25, 2017 are to proceed before me on September 12 at 10:00 a.m. (for half a day). The costs of today’s motion are reserved to the September motion.
[14] No further notices of motion may be filed by the parties with the Court without my leave for the purpose of the September motion. The parties are also not allowed to file any supplementary affidavits unless those affidavits are meant to provide the Court with updated financial information following the recent financial disclosure received prior to, or to be received as per, this Order. The husband shall serve and file any such supplementary affidavit on or before August 23, 2017 at 5:00 p.m. The wife shall serve and file any supplementary affidavit by September 4, 2017 at 5:00 p.m. If necessary, the husband shall have the right to serve and file a brief reply affidavit by September 6, 2017 at 5:00 p.m. Factums and books of authorities shall be served and filed by no later than 2:00 p.m. on September 8, 2017.
[15] On a final note, and on consent of the parties, the without prejudice draft affidavit filed by the wife as Exhibit “D” of her July 17, 2017 affidavit shall be removed from the continuing record, as well as any reference to this document in her affidavit.
Madam Justice Julie Audet
Date: August 1, 2017
CITATION: Switzer v. Switzer, 2017 ONSC 4671
COURT FILE NO.: 16-FC-1046
DATE: 20170801
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: MICHAEL SWITZER, Applicant
-and-
COLLEEN SWITZER, Respondent
BEFORE: Madam Justice Julie Audet
COUNSEL: Paul Fitzgerald, for the Applicant
Gina Rossi, for the Respondent
ENDORSEMENT
Audet J.
Released: August 1, 2017