Green v. Whyte, 2017 ONSC 4760

CITATION: Green v. Whyte, 2017 ONSC 4760

COURT FILE NO.: 4961/15

DATE: 2017-08-08

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jayme Anne Green, Applicant

AND:

Devon Whyte, Respondent

BEFORE: The Honourable Madam Justice L. Madsen

COUNSEL: Sadia Chowdhury, Counsel for the Applicant Justin Clark/Ida Mirzadeh, Counsel for the Respondent

HEARD: July 28, 2017

ENDORSEMENT

Overview

[1] The Applicant brings a Motion for Interim Disbursements, seeking an Order that the Respondent advance $30,000 to her pursuant to Rule 24(12) of the Family Law Rules.

[2] At this time, the Applicant can meet some but not all of the requirements for an Order for interim disbursements. For the reasons which follow, I dismiss the Applicant’s Motion, without prejudice to her to renew her Motion, if she wishes, on more fulsome evidence.

BACKGROUND FACTS

[3] The parties are the parents of Kingston Javon White, born March 29, 2014 [“Kingston”] who is now three years of age.

[4] The parties have had extensive litigation about the Respondent’s access to Kingston as well as regarding the appropriate amount of child support payable.

[5] The Applicant is an at-home parent with three children, one of whom is Kingston. Her middle child is eleven years old and has severe autism. Kingston has special needs including speech delays and some delays in cognition.

[6] Although the Applicant is trained as a nurse, she has not worked outside the home since 2007 due to the needs of the children. The Applicant’s income is $39,000, entirely derived from government benefits such as the Canada Child Benefit, the Ontario Child Disability Benefit, and other forms of social assistance. The Applicant currently resides in rent-geared-to-income housing, and has subsidized daycare. Her Financial Statement sworn April 11, 2017 shows virtually no assets (a total of $22,543), being a vehicle and an amount owing to her as arrears of child support in relation to another child. The value of those assets is more than offset by student loans.

[7] The Respondent is a former Major League baseball player. He retired in 2001, sixteen years ago. He is currently an employee of the Toronto Blue Jays Baseball Club. His 2017 salary, according to a letter from his employer, is $75,000 US Dollars. The Respondent states that he does not have other income. The Applicant appears to believe that he does have other income although has not indicated what she believes the sources are and on what basis she believes same.

[8] There have been two disclosure Orders made in this matter: The Order of Justice Brown dated October 6, 2016 and the Order of Justice Brown dated July 5, 2016. The Respondent indicates that he has fully complied with those Orders. On this Motion, the Applicant was unable to identify any disclosure that has not been provided under those Orders.

[9] Each party has produced three financial statements in this proceeding. The Respondent’s first and third financial statements (dated November 28, 2015 and July 6, 2017) are missing significant information.

[10] The Respondent voluntarily had an income report prepared by Valuquest Business Valuations, dated July 6, 2017. That valuation found his income for support purposes to be approximately $93,000 for 2015 and 2016.

[11] There are important limitations to the income report, as summarized on page 2 of that report as follows:

We requested counsel for the 2016 Income Tax Return of Mr. Whyte. We were advised that Mr. Whyte’s 2016 personal tax return was not available since he received an extension from IRS until September 2017 to file the return. We were asked to estimate Mr. Whyte’s income for 2016 based on his income from Rogers Blue Jays Baseball Partnership (“Blue Jays Contract”) and assuming no change from 2015 in his other sources of income. We understand the Blue Jays Contract is Mr. Whyte’s primary source of income. (Emphasis added.)

[12] The Respondent is currently paying child support in the amount of $500 per month, which is the equivalent of child support on an income of $55,000 Cdn. The Respondent has advised that he is prepared to bring his child support payments in compliance with the Child Support Guidelines on the basis of the income set out by the income valuator.

POSITIONS OF THE PARTIES

[13] The Applicant argues that this Court should order interim disbursements of $30,000 on the basis that she meets the test set out in the caselaw. She asserts that she is impecunious, that she has established a prima facie case of sufficient merit to warrant pursuit, and that an Order for interim disbursements is needed to level the playing field between herself and the Respondent. She states that the Order is required to ensure procedural fairness. She asserts that the Respondent’s income is complex and she requires the ability to meaningfully review his disclosure including the income valuation he produced. The Applicant claims that the Respondent’s financial disclosure has been inadequate.

[14] The Respondent argues that the Applicant’s Motion should be dismissed on the basis that she does not meet the test set out in the caselaw. He argues that the Applicant is not impecunious, and that her means are in fact not that dissimilar from his own. He argues that as such, an Order for interim disbursements is not necessary to level the playing field. He stresses that the Applicant has not set out, as is required, how the interim disbursements would move the case forward, which valuator she proposes to retain, and why a valuator is even necessary. He emphasizes that the Applicant has not availed herself of the opportunity to question him, as provided for in the Endorsement of Justice Brown dated October 6, 2016. The Respondent states that he has provided extensive disclosure and points out that the Applicant has not been able to identify any deficiencies in that disclosure.

LAW AND ANALYSIS

[15] The Supreme Court of Canada has set out the purpose of the power to award interim disbursements in the civil context as follows in British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371 at para 31:

Concerns about access to justice and the desirability of mitigating severe inequality between litigants also feature prominently in the rare cases where interim costs are awarded. An award of costs of this nature forestalls the danger that a meritorious legal argument will be prevented from going forward merely because a party lacks the financial resources to proceed.

[16] In Okanagan, supra, the Supreme Court set out the following conditions which must be satisfied for an Order for interim fees and disbursements to be granted:

1. The party seeking the Order must be impecunious to the extent that, without such an Order, the party would be deprived of the opportunity to proceed with the case;

2. The claimant must establish a prima facie case of sufficient merit to warrant pursuit; and

3. There must be special circumstances sufficient to satisfy the Court that the case is within the narrow class of cases where this extraordinary exercise of its powers is appropriate.

Okanagan, supra at 36.

[17] Rule 24(12) of the Family Law Rules provides authority for the Court to order interim disbursements in matrimonial litigation. That subrule reads as follows:

(12) PAYMENT OF EXPENSES – The Court may make an Order that a party pay an amount of money to another party to cover all or part of the expenses of a party or carrying on the case, including a lawyer’s fees.

[18] In Agresti v. Hatcher, 2004 CarswellOnt 917, Justice O’Neill of the Ontario Superior Court noted that the test for obtaining payment of expenses under Rule 24(12), in matrimonial litigation, may be “easier” to meet than the test set out by the Supreme Court. Justice O’Neill stated that the following additional principles, which modify the third leg of the Okanagan test, have been developed with respect to the interpretation of Rule 24(12):

1. The levelling of the playing field; and

2. The exercising of the Court’s discretion to ensure that “all parties can equally provide or test disclosure, make or consider offers, or possibly go to trial.”

Agresti, supra at 17, 18

[19] An Order for interim fees and disbursements is a discretionary remedy. See Okanagan, supra at 31, 32.

[20] A prima facie case does not mean that a claimant has to prove his or her case prior to obtaining an Order for interim fees and disbursements. As noted in Romanelli v. Romanelli, 2017 CarswellOnt 2724 (Ont. S.C.J.), this would be “too high a requirement…. It must be a case, which, based on the facts presented in the Affidavits, makes sense to prosecute… Would counsel advise a client of modest means to proceed with the claim?” See paragraph 24. As framed in Stuart v. Stuart, 2001 CanLII 28261 (ON SC), 2001 CarswellOnt 4586 at 13: “The claim or claims being advanced must be meritorious as far as can be determined on the balance of probabilities at the time of the request for disbursements.”

[21] It appears that the previous requirement that interim disbursements be limited to “exceptional cases” has been modified by Rule 24(12). Thus in Stuart, supra, for example, cited in Agresti, supra, Justice Rogers includes “exceptional circumstances” as one of the requirements under the heading “Former Case Law”, and then states as follows regarding the test under Rule 24(12):

The Court interprets the new Family Law Rules to require the exercise of discretion in Rule 24(12) on a less stringent basis than the cases that call for such only in exceptional circumstances. The discretion should be exercised to ensure that all parties can equally provide or test disclosure, make or consider offers or possibly go to trial. Simply described, the award should be made to level the playing field. (Emphasis added) See paragraph 9.

[22] See also Romanelli, supra at 15, 16, where Justice McDermot stated:

It appears that in family law cases, the issue of “exceptional circumstances” is secondary to the goal of levelling the playing field where one party has an economic disadvantage, the basis most often cited in the caselaw to justify an Order under Rule 24(12).

[23] This is echoed in Rea v. Rea, 2016 CarswellOnt 509, in which the Court cited Stuart, supra, commenting that it did not see the requirement of “exceptional circumstances” to be “strictly required by the case law in the matrimonial context.” See paragraphs 14 and 25.

[24] The moving party must show that the award of interim fees and disbursements is “necessary”. Thus in Agresti, supra, Justice O’Neill stated, citing Stuart, supra:

Certainly the proof of the necessity of the interim disbursements would be critical to a successful claim. The claimant clearly must demonstrate that the disbursements are necessary and reasonable given the needs of the case and the funds available. In particular, if an expert is the subject of a requested disbursement, the claimant must demonstrate there is a clear need for the service of said expert. See paragraph 11.

[25] The case law also requires that a party seeking interim disbursements particularize her claim, setting out what, specifically, the requested sums are intended to cover. In Romanelli supra, Justice McDermot stated:

The case law appears to confirm that a Motion for interim fees and disbursements must contain proper evidence of the reason for the fees and disbursements and the estimated cost of those disbursements… There must be a purpose behind the fees and disbursements and not just a fishing expedition. See paragraph 44.

[26] In that case, Justice McDermott had before him a specific breakdown of the proposed steps in the litigation, a statement as to the fees and disbursements already incurred, and an estimate of legal fees and disbursements to be incurred in the future. Justice McDermot found that this was sufficient evidence for the purpose of the Motion. See paras 46 – 51.

[27] In Hall v. Sabri, 2011 CarswellOnt 9749 (Ont. S.C.J.), by contrast, Justice Bielby found that the amount claimed for fees and disbursements appeared to have been “pulled out of the air without any evidence of anticipated costs.” He noted that there was nothing before him to suggest what litigation would cost, and that there were “no estimates of any kind.”

[28] The party seeking interim disbursements has the burden of proof.

[29] Applying the law to the Motion at hand, this Court finds as follows:

a) Impecuniosity

[30] I find that the Applicant is impecunious within the meaning of the first branch of the test. Although her income was set out to be $45,000 per year in her Financial Statement, that income included the child support payments received from the Respondent in the amount of $6,000 per year. Her income is thus approximately $39,000. Her materials indicate that this is entirely comprised of benefits received from the government. This Court accepts that, although she is trained as a nurse, she is unable to maintain employment due to the complex requirements of her middle child. In addition, the parties’ child, Kingston, as noted above, has special needs.

[31] On the basis of her impecuniosity, I find that the Applicant is “incapable of funding the requested amounts” as contemplated in Agresti, supra, at 11.

b) Prima Facie Case

[32] The Applicant asserts that she has a prima facie case because she clearly has a claim to child support and because, due to the inadequacy of the Respondent’s financial disclosure, she has been unable to ascertain the extent of her legal entitlement. She asserts that without the ability to review the Respondent’s financial circumstances properly, she cannot know how much child support she is entitled to. She claims in her Affidavit that “the Respondent has resources and sources of support that far surpass my own” but she does not state what the basis of her belief is or what she believes the sources of his income are other than his salary.

[33] The Applicant has not presented the Court with an evidentiary basis for a finding that she has a prima facie case.

[34] First, although she has a prima facie case to child support, I cannot find that she has a prima facie case that the child support amount she is entitled to is higher than the amount the Respondent proposes to pay on the basis of the income valuation he has obtained. She has simply stated that his resources “far surpass her own” but she has not advised the Court on what basis she believes this to be so. She has not set out what she believes the Respondent’s additional sources of income to be, or on what basis she believes he has additional sources of income. That he was a Major League baseball player sixteen years ago does not establish a prima facie case that his current income is higher than that set out in his income report.

[35] Second, the difficulty in resting the Motion in part on an assertion of inadequate disclosure is that during the Motion, the Applicant was unable to advise the Court the extent of any deficiency in the Respondent’s disclosure. The Applicant was invited to take the Court through the disclosure Orders made by the Court and to advise which Orders have not been satisfied. In response the Court was advised that the issue was not a lack of disclosure so much as the disclosure not having been presented in compendia or in an easily navigable form. The Applicant was also asked whether, apart from non-production under any Court Orders, any further disclosure had been requested by her and not received. The Applicant was unable to point to any disclosure requested and not received.

[36] In an Affidavit dated March 17, 2017, which was referred to during the Motion, the Respondent responded to allegations in an earlier Affidavit of the Applicant setting out in detail the disclosure he made in response to the two disclosure Orders. At paragraph 22 of that Affidavit, he set out a three-page chart listing the disclosure ordered and the disclosure produced in response. Where the disclosure was not produced, he provided explanations. The Court has no evidence from the Applicant to understand what difficulties she has with this chart and the Respondent’s explanations.

[37] I have some sympathy for the assertion that there are inadequacies in the Respondent’s Financial Statements and for counsel’s comment that the income report contains important limitations. However, without a basis for why the Applicant believes the Respondent’s income is higher than he says it is, a prima facie case sufficient to warrant pursuit is not made out at this time.

[38] To be clear, by these Reasons, this Court is not finding that there is no basis for higher support than the Respondent is proposing, or that the Respondent has met all of his disclosure obligations. It may very well be that the Respondent’s income is higher than $93,000 or that there are deficiencies in his income disclosure. However, the Applicant has not provided the Court with the evidentiary basis in her materials before the Court.

c) Levelling the Playing Field

[39] The third branch of the test for interim disbursements is whether the Order is required to level the playing field. This Court finds that an Order for interim disbursements would, in fact, level the playing field and ensure that both parties can equally provide or test disclosure, make or consider offers, or go to trial.

[40] The Applicant has a negative net worth and an income on which she supports three children, consisting entirely of various forms of assistance. The Respondent, by contrast, earns a minimum of the $93,000 set out in his income report, and has a net worth substantially higher than that of the Applicant, based on his own financial statements.

[41] An Order for interim disbursements would allow the Applicant to have the Respondent’s income report critiqued, and would allow her counsel to take further steps in the litigation, including questioning. This would help level the playing field. Of course, this is only relevant in the event that, on the return of the Motion, the Applicant is found to have a prima facie case. If there is no prima facie case there is no need to level the playing field.

d) Exceptional Case

[42] As noted above, the requirement that interim disbursements be awarded only in exceptional cases is not “strictly” adhered to in the matrimonial context. I make no finding at this time as to whether the case is “exceptional.”

e) How Funds will be Utilized

[43] An important limitation in the Applicant’s Motion materials, which was acknowledged by her counsel in argument, is her failure to set out how the requested funds would be used or how, specifically, those funds would advance the litigation.

[44] Thus, in her Affidavit, dated May 23, 2017 she says simply:

I ask that the Respondent pay interim disbursements in the amount of $30,000 CAD. This amount can be held in trust by my counsel for ongoing legal fees.

I will require the services of my own retained expert to assess the veracity and cogency of this valuation. I will also require funds to assist me in this respect.

[45] The Applicant does not provide information regarding the steps anticipated to be taken by counsel to advance the case or what those steps will likely cost. She also provides no information regarding which valuator she proposes to use to critique the Respondent’s income valuation, or the estimated fees for those services. The request for $30,000 is not grounded in evidence about proposed concrete steps in this litigation.

[46] In fairness, the Applicant did provide evidence regarding an amount advanced to her counsel for a retainer on March 23, 2017 and the balance remaining of those funds in May 2017. She also provided evidence regarding her counsel’s hourly rate and the rate of the law clerk. Counsel also stated in argument that the Respondent’s valuation cost $4,000 and therefore the critique would likely cost somewhere close to the same amount. However, this is not sufficient to form an evidentiary basis for the funds requested, at this time.

CONCLUSION

[47] In conclusion, the Applicant has shown that she is impecunious and I have found that the Order sought would level the playing field. However, the Applicant has not shown that she has a prima facie entitlement to child support based on an income higher than that to which the Respondent puts forward, and she has not provided adequate evidence of how the proposed interim disbursements would be utilized to advance the case.

[48] The issue in this matter concerns child support for a very young child with special needs. It is important that the Court has the evidence required to make an accurate determination of income for support purposes. In that context, and bearing in mind that objective, the Applicant’s Motion is dismissed without prejudice to her to renew her request on more fulsome evidence within 60 days, before me. If the Applicant renews her Motion, the issues of “impecuniosity” and “levelling the playing field” are not to be re-argued.

COSTS

[49] Costs arguments are deferred until after the 60 days I have allowed for the renewal of the Applicant’s Motion. If the Applicant has not renewed her Motion in 60 days, I will receive brief written submissions and a Bill of Costs from both parties by October 20, 2017 and brief responding submissions, if any, by November 3, 2017.

Madsen, J.

Date: August 8, 2017