Court File and Parties

COURT FILE NO.: FS-18-00003644 DATE: 201905 22 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Daniela Pizarro, Applicant AND: Adam Kretschmann, Respondent

BEFORE: S. Shore, J.

COUNSEL: Howard Wolch, for the Applicant James Marks, for the Respondent

HEARD: May 14, 2019

Endorsement

[1] There are two motions before me today; one by the Applicant and one by the Respondent. I am going to first address the motion by the Respondent.

[2] The Respondent brought a motion for leave to question the Applicant, disclosure and leave to amend his pleadings.

Disclosure

[3] The Respondent provided me with a draft order, setting out the disclosure he is requesting from the Applicant. I reviewed each item with both counsel. Most of the disclosure requested was reasonable, although some amendments were made. As such, order to go in accordance with paragraph 2 of the Respondent’s draft order, as amended, attached as Schedule “A”.

[4] There was a concern raised by the Applicant that she cannot afford to produce five years’ worth of bank statements and credit card statements if she is charged for same. As set out in my endorsement for the Applicant’s motion, I have concerns about the Applicant’s financial ability to proceed with the litigation. As such, if there are fees from the bank or other institutions to produce the statements, the Respondent shall advance the funds for same. The advance is without prejudice and shall be characterized at a later date. To be clear, the Respondent shall receive credit for paying for this expense.

[5] Both parties shall serve an Affidavit Listing Documents no later than June 14, 2019, under r. 19 of the Family Law Rules, O. Reg. 114/99 (“FLR”).

Amending Pleadings

[6] Both parties sought leave to amend their pleadings and have now consented to a mutual order for same. The Applicant shall serve and file her Amended Application on or before May 24, 2019, and the Respondent shall serve and file his amended Answer on or before May 31, 2019. Any Reply by the Applicant shall be served on or before June 7, 2019.

Questioning

[7] The Applicant objected to questioning, concerned that it would be both expensive and cause delay. She refers to Boisvert v. Boisvert (2006), 40 R.F.L. (6th) 137 (Ont. S.C.J.) and Durban v. Medina, 2012 ONSC 640, cases which caution against allowing questioning if it will add undue delay or costs. However, these concerns can be addressed in an order. For the reasons set out below, leave is granted for both parties to question the other, for no more than a half day each, to be completed on or before June 30, 2019, on mutually convenient dates.

[8] Rule 20(5) of the FLR provides:

“The court may, on motion, order that a person be questioned by a party or disclose information by affidavit…if the following conditions are met:

1. It would be unfair to the party who wants the questioning or disclosure to carry on with the case without it;
2. The information is not easily available by any other method; and
3. The questioning or disclosure will not cause unacceptable delay or undue expense.

[9] The court is also obligated to promote the primary objective, set out at Rule 2(2), which is to enable the court to deal with cases justly. The procedure must be fair to both parties.

[10] Counsel for the Respondent referred to Birdi v. Birdi, 2015 ONSC 1974, wherein Emery J. explores the divergence in various cases regarding questioning. At paragraph 20, Emery J. states, “[t]he threshold to meet for the court to make an order to permit questioning is very low.”

[11] After reviewing the various cases, Emery J. concludes that the positions are not so divergent and that the “cases that have found questioning a useful, if not an essential tool generally involve facts where no mitigating reason stands out against the utility of questioning….the reality is that family law in Ontario is currently an adversarial process”: paras. 26-27. At paragraph 29 of the decision, Emery J. sets out some of the purposes of questioning, all of which would apply in the case before me. In an adversarial system, questioning allows parties to test the strength and weakness of their own case, and assists with settlement and narrowing the issues. In the case before me, there are still a number of material facts in dispute. In fact, the parties disagree on some key facts related to both property and support. Credibility is going to be a key issue at trial. This is a high conflict case. The parties are entitled to know the full case before them.

[12] In this case, I consider it necessary to permit questioning.

[13] The time limit (both length and date) has been ordered so that costs are kept to a minimum and questioning will not delay the trial management conference scheduled. This is consistent with the primary objective of the Family Law Rules, with authority set out at r. 2(5)(d), which allows the court to set timetables and otherwise control the progress of the case. The parties separated over three years ago, in February 2016. The parties need a final resolution of the issues.

[14] Finally, the Applicant expressed concern and hesitation about being in the same room as the Respondent while undergoing questioning. I will leave it up to counsel to address this issue, but at a minimum, the room should be set up so that the Respondent is not in the Applicant’s line of view while she is being questioned.

Applicant’s Motion:

[15] I now turn to the Applicant’s motion. The Applicant has brought a motion for child support, interim disbursements in the amount of $40,000, in the alternative an advance on the equalization payment in the amount of $33,000, and in the further alternative, $33,927 for retroactive spousal support. She, too, is asking for an order for disclosure, leave to amend her pleadings and costs. The issue of amended pleading is addressed above.

Disclosure

[16] At paragraph 7(g-i) of her amended confirmation form, the Applicant sets out the specific disclosure that she is requesting from the Respondent, including an affidavit listing documents. I have addressed the affidavit listing documents above. The other disclosure requested is reasonable and as such, the Respondent shall provide the following documents within 30 days:

a. statements from any bank accounts, investment accounts, and credit card accounts for the last five years; and b. an accounting with respect to the proceeds of sale of the matrimonial home with related documentation.

Child Support

[17] The issue of child support does not appear to be in dispute and is fairly straightforward. The respondent earned an income of $149,636 in 2018 (although his 2018 income tax return was not in evidence). As such, according to the Federal Child Support Guidelines, the Respondent shall pay interim child support to the Applicant in the amount of $1,296 per month for the child of the marriage, namely Chloe, born August 14, 2001. Child support shall be payable commencing January 1, 2018, and on the first day of each month thereafter until varied by court order or agreement. The Respondent shall receive credit for the monthly voluntary payments made from January 1, 2018 to date. This is without prejudice to any claims advanced at trial. Determination of any child support owing from the date of separation will be addressed by the trial judge, who will have full information with respect to the parties’ respective incomes as well as credits owing between them.

[18] The parties shall pay for reasonable special and extraordinary expenses for the child, as set out in section 7 of the Federal Child Support Guidelines, in proportion to their incomes, being 65% by the Respondent and 35% by the Applicant. Chloe’s current s.7 expenses include the cost of her therapist, dental expenses and orthodontia. This amount has been determined based on my findings below with respect to the parties’ respective incomes.

Spousal Support

[19] The Applicant is seeking spousal support, retroactive to separation.

[20] The parties started cohabiting in 1997, married on February 21, 2001 and separated on February 1, 2016. They had a 19 year cohabitation. The Applicant was 21 and the Respondent was 28 when the parties started their relationship.

[21] In 2016, the Applicant earned $21,462 and the Respondent earned $83,311. In 2017, the Respondent earned $121,074 and the Applicant earned $33,966. In 2018, the Respondent earned approximately $149,636 and the Applicant earned $41,999. The Respondent has been earning significantly more than the Applicant at least since separation.

[22] The Respondent started paying spousal support in November 2018, in the amount of $2,000 net per month, when he was faced with a motion for spousal support. There is no agreement or court order in place and as such support is paid on a voluntary basis, which is not deductible to the Respondent or included by the Applicant when determining their income for income tax purposes. Prior to November 2018, the Respondent did not make any payments for spousal support for almost three years, during which time the Applicant had to draw down on her capital to pay her daily expenses. The parties participated in a Collaborative Family Law process before starting court proceedings. The Respondent was therefore aware of the Applicant’s claim for spousal support prior to the commencement of the court proceedings in 2018.

[23] In his financial statement, dated July 31, 2018, the Applicant shows expenses of $95,092. The Respondent is able to pay his ongoing expenses without incurring any debt. In his recent financial statement, sworn May 7, 2019, his expenses have increased by $100,000, to $195,163. However, this includes his legal fees, his spousal support (without tax relief, which will now change as a result of this order), savings to RRSPs, vacations, $800 for meals out, etcetera. The Applicant’s budget is just over $77,000, being less than half of the Respondent’s budget, which she cannot afford without support.

[24] I am satisfied that for the purposes of determining spousal support on an interim basis, that the Applicant is entitled to support. I do not need to determine if she has a compensatory claim on an interim basis (as can be determined by the trial judge) because I am satisfied that she is entitled to support on a needs basis due to the large discrepancy in the parties’ incomes and the financial consequences arising as a result of the breakdown of the relationship.

[25] On a without prejudice basis to any claims made by the parties at trial, the Respondent shall pay the Applicant spousal support in the amount of $2,185 per month, commencing January 1, 2018 and on the first day of each month thereafter, being the mid-range of the Spousal Support Advisory Guidelines calculation. The Respondent shall receive credit for the payments of spousal support that he has made since November 2018.

Interim Disbursements:

[26] The Applicant advises that although she left the marriage with positive net family property, she is now in significant debt. This comes as no surprise given that the Respondent failed to pay any spousal support from the date of separation in February 2016 until November 2018. She is seeking interim disbursements under r. 24(18) of the FLR (what used to be r. 24(12)), which provides as follows:

The court may make an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees.

[27] This provision is often used to “level the playing field” between parties: Ludmer v. Ludmer, 2012 ONSC 4478, 25 R.F.L. (7th) 397 at para. 14. Unlike in the civil context, as a result of the FLR, a finding of “exceptional circumstances” is not required in family law cases to order interim disbursements: Ma v. Chao, 2016 ONSC 585, 95 C.P.C. (7th) 374.

[28] The leading case in this area is Stuart v. Stuart (2001), 24 R.F.L. (5th) 188 (Ont. S.C.). In Stuart at para. 8, the court set out the relevant considerations in determining whether to award interim disbursements, as follows:

1. The ordering of interim disbursements is discretionary.
2. A claimant must demonstrate that absent of the advance of funds for interim disbursements, the claimant cannot present or analyse settlement offers or pursue entitlement.
3. The expense must be necessary.
4. The claim must be meritorious.
5. As stated above, as a result of the Family Law Rules, the exercise of discretion is on a less stringent basis than the cases that call for such only in exceptional cases.
6. Interim costs may be granted to level the playing field.
7. The court must consider which of these principals adhere to the primary objective of the Family Law Rules.

[29] The applicant has requested interim disbursements of $40,000. She will be receiving approximately $24,000 as retroactive spousal support, as per the order above, albeit taxable. This does not include any spousal support owing from February 2016 to December 31, 2017.

[30] The applicant has $50,000 of unpaid legal fees from January 2018 to date. She estimates she will incur a further $25,000-$40,000 if she has to proceed through to trial. Given her financial circumstances, I accept that absent the advance of funds, she will not be able to pursue her entitlement.

[31] The test for a claim to be meritorious is quite low at the initial stages of a case. There is no doubt that the Respondent has met that test in the materials before me.

[32] The quantum of the disbursement ordered must be proportionate and rational. The Respondent has budgeted $30,000 per year for his own legal fees. The Applicant’s fees are not disproportionate to same.

[33] The Court is also required to consider the principles found in r. 2 of the FLR, in that “The primary objective of these rules is to enable the court to deal with cases justly”. Dealing with a case justly includes ensuring that the procedure is fair to both parties. The Respondent submits that he is unable to afford to pay interim disbursements. He has almost $50,000 sitting in his RRSPs. He has not accounted for the $100,000 he received from the proceeds of sale of the matrimonial home. The Applicant received $50,000 from the sale of the matrimonial home. He has outstanding disclosure owing to the Applicant. It is therefore difficult for the Court to determine his ability to pay. However, the Applicant should not bear the burden of the Respondent failing to give proper disclosure.

[34] Having considered the money both parties have spent to date, the issues for trial, the retroactive spousal support being ordered herein and the financial positions of the parties, I order the Respondent to pay interim disbursements in the sum of $20,000 to the Applicant, on a without prejudice basis, within 60 days, with the nature of the payment to be characterized at a later date.

Order:

[35] Order to go as follows:

1. The applicant shall provide the disclosure reflected in paragraph 2 of the Respondent’s draft order, as amended, attached as Schedule “A”. If the Applicant is charged fees from the bank or other institutions to produce the ordered disclosure, the Respondent shall advance the funds for same to be credited at a later date.
2. The Respondent shall provide the following documents within 30 days: (i) statements from any bank accounts, investment accounts, and credit card accounts for the last five years; and (ii) an accounting with respect to the proceeds of sale of the matrimonial home with related documentation.
3. Both parties shall serve an Affidavit Listing Documents no later than June 4, 2019;
4. The Applicant shall serve and file her Amended Application on or before May 26, 2019, and the Respondent shall serve and file his amended Answer on or before June 4, 2019. Any Reply by the Applicant shall be served on or before June 10, 2019.
5. Both parties may question the other, for no more than a half day each, to be completed on or before June 30, 2019, on mutually convenient dates. At questioning, the room should be set up so that the Respondent is not in the Applicant’s line of vision while she is being questioned, in addition to any other accommodations counsel arrange.
6. Without prejudice to any claims made at trial, the Respondent shall pay interim child support to the Applicant in the amount of $1,296 per month. Child support is based on the respondent’s 2018 income of $149,636 and in accordance with the table amount set out in the Child Support Guidelines. Child support shall be payable commencing January 1, 2018, and on the first day of each month thereafter until varied by court order or agreement. The Respondent shall receive credit for the monthly voluntary payments made from January 1, 2018 to date.
7. The parties shall pay for reasonable special and extraordinary expenses for the child, as set out in section 7 of the Federal Child Support Guidelines, in proportion to their incomes, being 65% by the Respondent and 35% by the Applicant. The current s.7 expenses for the child include therapy, dental expenses and orthodontia.
8. Without prejudice to any claims made at trial, the Respondent shall pay the Applicant spousal support in the amount of $2,185 per month, commencing January 1, 2018 and on the first day of each month thereafter being the mid-range of the Spousal Support Advisory Guidelines. The Respondent shall receive credit for the payments of spousal support that he has made since November 2018.
9. The Respondent shall pay interim disbursements in the sum of $20,000 to the Applicant, on a without prejudice basis, within 60 days, with the nature of the payment to be characterized at a later date.

S. Shore, J. Date: May 22, 2019