COURT FILE NO.: FC-17-1323 DATE: 20190724 SUPERIOR COURT OF JUSTICE – ONTARIO

IN THE MATTER OF THE ESTATE OF SIDNEY COHEN RE: BARBARA COHEN, Applicant AND STEVEN ERIC COHEN, in his capacity as Trustee of the Estate of SIDNEY COHEN, Deceased, and SUSAN CHARENDOFF, Respondents

BEFORE: Madam Justice Julie Audet

COUNSEL: Stephen Victor/Katherine Cooligan/Kathleen McDormand, for the Applicant Daniel Schwartz/Marta Siemiarczuk, for the Respondent Estate Jonathan M. Richardson, for the Respondent, Susan Charendoff

HEARD: June 28, 2019

Endorsement

[1] This motion brought by the respondent Estate deals with the question as to whether, on a balance of probabilities, bifurcation of the issue of the validity of a Marriage Contract from the other issues raised in the case will result in the just, expeditious and least expensive determination of this proceeding on its merits.

[2] I have decided that the proceeding should be bifurcated as requested by the respondent Estate.

Background Facts

[3] The applicant, Barbara Cohen (“Ms. Cohen”) and her late husband, Sidney Cohen (“Mr. Cohen”) were married on July 1, 1986. This was a second marriage for both; Mr. Cohen’s first wife had passed away in 1977 and Ms. Cohen was divorced from her first husband. Both parties had children from these prior relationships, all of whom were adults and living independently.

[4] On June 30, 1986, the day before their marriage, Ms. Cohen and Mr. Cohen entered into a Marriage Contract (“the Marriage Contract”). Both were represented by legal counsel; Ms. Cohen was represented by Kenneth Radnoff and Mr. Cohen was represented by Arnel Goldberg. Mr. Goldberg has since passed.

[5] At the time of the parties’ marriage, Mr. Cohen was already a very wealthy man. Ms. Cohen was a retired bookkeeper and she was not expected to return to the workforce after her marriage. Schedule “A” of the Marriage Contract consisted of a personal balance sheet for Mr. Cohen setting out that as of May 31, 1986, he had a net worth exceeding $12 million. The Marriage Contract does include a similar balance sheet for Ms. Cohen, but the evidence before me suggests that her net worth was very modest.

[6] Under the Marriage Contract, both parties waived their right to elect an equalization of net family property on death. If Ms. Cohen died prior to Mr. Cohen, he would be entitled to nothing from her. If Mr. Cohen died prior to Ms. Cohen, she would be entitled to receive the income and, if necessary, the capital of a $1,000,000 trust that Mr. Cohen was required to set up in his Will. To the extent that Ms. Cohen survived Mr. Cohen for 10 years, the balance of the trust funds was to be paid to her (“the Trust Arrangement”). The Marriage Contract further provided that upon Mr. Cohen’s death, Ms. Cohen would be entitled to receive full ownership of the family residence, or any substitution thereof.

[7] It is very important to note at this juncture that the Marriage Contract did not bar the parties’ right to claim dependant relief under the Succession Law Reform Act, R.S.O. 1990, c. S.26 (“the SLRA”).

[8] The Marriage Contract also made provisions for the division of the parties’ property and significantly modified the spousal support rights they would otherwise have had pursuant to the Divorce Act, 1985, c. 3 (2nd Supp.) and Family Law Act, R.S.O. 1990, c. F.3 (“FLA”) upon marriage breakdown.

[9] At the time of the parties’ marriage, Mr. Cohen owned a house at 389 Roger Road, in Ottawa (“the Roger Road Property”). After the parties’ marriage, Ms. Cohen moved into that home and it became the parties’ matrimonial home. In late 2007 or early 2008, Mr. Cohen and Ms. Cohen moved from the Roger Road house to a two floor penthouse condominium at 40 Boteler St., owned by Mr. Cohen’s company (“the Boteler Penthouse”). In connection with this change of residence, they entered into an Amended Marriage Contract dated August 25, 2008 (“the Amending Marriage Contract”).

[10] The Amending Marriage Contract meant to clarify the parties’ rights and obligations related to the sale of the Roger Road Property and subsequent purchase of the Boteler Penthouse. It confirmed that title to the Boteler Penthouse was to be transferred to Ms. Cohen and Mr. Cohen as joint tenants, subject to a mortgage in favour of Mr. Cohen’s daughter, Susan Charendoff, for the full purchase price of $1,350,000. Like with their Marriage Contract, both parties had independent legal advice prior to signing the Amending Marriage Contract.

[11] Mr. Cohen passed away on January 4, 2017. It is not disputed that, during his lifetime, Mr. Cohen made substantial gifts to Ms. Cohen. According to her sworn financial statement, Ms. Cohen’s net worth at the time of Mr. Cohen’s death was approximately $3,000,000, which included several investments, the Boteler Penthouse as well as a condo in Florida. She is currently 77 years old.

[12] Mr. Cohen’s wealth also continued to grow during his marriage. Pursuant to the most recent financial statement prepared by his Estate, its value currently exceeds $24 million. Ms. Cohen believes it may very well be worth more.

[13] As required by the Marriage Contract, Mr. Cohen provided for Ms. Cohen in his Will. He actually provided her with a choice; she could elect to receive the Trust Arrangement as contemplated in the Marriage Contract, or receive a life annuity based on a capital investment of $1.5 million, less the gross value of Mr. Cohen’s RRIFs, which RRIFs would be transferred to her outright (“the RRIF/Annuity Arrangement”).

[14] Ms. Cohen also became the sole owner of the Boteler Penthouse. However, its value was significantly reduced by Ms. Charendoff’s mortgage registered against the property. Similarly, Ms. Cohen’s Florida condominium was encumbered by a mortgage in favour of Steven Cohen, Mr. Cohen’s son, in the amount of $200,000. It is Ms. Cohen’s allegation in this litigation that neither children advanced any funds in relation to their respective mortgage and that those mortgages were a scheme to ensure that the equity in these properties reverted to the children upon his death and not to her.

[15] After Mr. Cohen’s death, Ms. Cohen commenced this proceeding before the family court to set aside the Marriage Contract and the Amending Marriage Contract, and to elect equalization. She also filed an application pursuant to the SLRA, before the superior court, to seek dependent relief and to have the mortgages registered on the Boteler Penthouse and the Florida condominium set aside.

[16] In the context of the contested motion brought by Ms. Cohen on March 8, 2018, Justice Maranger consolidated the two actions into one, to be dealt with by the family court. Of relevance in the context of the within motion is the following comment he made:

It seems to me that an order consolidating the two actions is logical, the issues are inextricably intertwined, the family law application is an attempt to net equalize family property by setting aside domestic contracts, the dependent relief application is for all intents and purposes a means of dealing with appropriate spousal support in the circumstances.

The Parties’ Positions

[17] Mr. Cohen’s Estate moves to bifurcate the proceeding in two trials: a determination of the validity of the Marriage Contract, followed by the determination of any remaining issues, if necessary. The Estate takes the position that the validity of the Marriage Contract is a discrete threshold issue, and that there is no overlap between the evidence on this issue and the multitude of other issues that Ms. Cohen has raised.

[18] In the Estate’s view, Ms. Cohen’s litigation conduct over the past two years demonstrates a party focused on creating expense and complexity, which is demonstrated by her relentless demands for disclosure, including disclosure related to the precise value of Mr. Cohen’s net worth at the time of his death (the valuation date for the purpose of equalization), as well as other monetary requests which have since been addressed. Much of the disclosure sought by Ms. Cohen, according to the Estate, is either confidential or within the possession and control of third parties, and will not be necessary if the Marriage Contract is upheld as Ms. Cohen’s only remaining claim (aside from her challenge of the two mortgages) will be her dependant relief claim under the SLRA.

[19] Further, the Estate argues that there is limited evidence available today regarding the circumstances of the Marriage Contract. Mr. Cohen and his lawyer, Mr. Goldberg, are deceased. Both Mr. Goldberg’s firm and Mr. Radnoff’s firm have confirmed that they do not presently have files regarding the Marriage Contract signed by Ms. Cohen and Mr. Cohen. Ms. Cohen has refused the Estate’s request to question Mr. Radnoff, who has now retired from practice and who has confirmed being prepared to be questioned on this issue. The Estate is of the view that, if this litigation is not bifurcated, it will take years for Ms. Cohen’s never ending disclosure demands to be satisfied in the trial held on all issues. Given Mr. Radnoff’s age, there may very well be no independent evidence of the circumstances surrounding the execution of the Marriage Contract which will significantly prejudice the Estate, in the Estate’s view.

[20] It is Ms. Cohen’s position that, contrary to the Estate’s assertion that bifurcation would be efficient and promote resolution of these proceedings, bifurcation offers minimal efficiencies in this case. It would, in her view, create a duplication of proceedings, would cause considerable delay, would increase costs to all parties, and more importantly, would be prejudicial to her. It is Ms. Cohen’s position that Maranger J.’s decision on the issue of consolidation dealt with this very issue and that a bifurcation at this time would significantly undermine his prior decision.

[21] Further, it is Ms. Cohen’s position that the Estate is relying on a mistaken belief that the need to value the Estate at the date of Mr. Cohen’s death would be avoided in the event that the impugned Marriage Contract is upheld. To the contrary, it is Ms. Cohen’s argument that her application for dependent support relief, which would proceed notwithstanding the validity of the Marriage Contract and which would necessarily be adjudicated in “phase 2” of the bifurcated proceeding, requires a precise valuation of the Estate at the date of death as well as at the date of the hearing.

[22] The respondent, Ms. Charendoff, supports the Estate’s position and asks that the trial of the issues in this case be bifurcated as requested by the Estate. She argues that the only issue that relates to her is the narrow issue of the validity of the mortgage she holds on the Boteler Penthouse. As such, she would play no role whatsoever in the first trial, from which she could be excused. Further, the outcome of the first trial will, in her view, significantly increase the chances of settlement, thus reducing costs for everyone. Otherwise, she will be dragged into this very lengthy and costly proceeding, which will include a several week-long trial, for no legitimate reason and at great expense to her.

Legal Framework

[23] Rule 12(5) of the Family Law Rules, O. Reg. 439/07, s.1 (“the Rules”) permits the court to split a case into two or more separate cases, claims or issues, where it would be more convenient to do so. The leading case in Ontario about bifurcation is Simioni v. Simioni, (2004), 74 R.F.L. (6th) 202 (Ont. S.C.J.).

[24] In that case, the court stated that its authority to bifurcate a proceeding ought to be exercised if convenient and if the exercise of the power would be in the interests of justice. The interests of justice will be served if there are clear time and expense benefits to be gained from the bifurcation and determination of the threshold issue, provided no real or meaningful prejudice is caused to either party. That case makes it clear that the moving party bears the onus of satisfying the court on a balance of probabilities that there would be clear time and expense benefits to be gained from bifurcation. Once the moving party establishes that there is a clear benefit to be gained from bifurcation in terms of time and expenses, the onus shifts to the opposing party to demonstrate through evidence that real prejudice outweighs any such expediency (Schulman v. Ganz, 2015 ONSC 3254, 61 R.F.L. (7th) 118).

[25] The relevant factors that the court must consider, as set out in Simioni, are the following;

(i) Whether the issues for the first trial are relatively straightforward and the extent to which the issues proposed for the first trial are intertwined with those that will arise in the second;

(ii) Whether a decision from the first trial will likely put an end to the action, significantly narrow remaining issues, or significantly increase the likelihood of settlement;

(iii) Whether resources have already been devoted to all issues;

(iv) Whether bifurcation would cause any delay;

(v) The advantages or prejudice the parties are likely to experience if the proceeding is bifurcated, and;

(vi) Whether the severance is sought on consent or over the objections of one or more parties.

[26] In Simioni, the court added the following caution:

16 Nevertheless, it is equally important to remember that the splitting of a trial effectively denies the fundamental principle that as far as possible, multiplicities of proceedings are to be avoided, and thus the power to split a case should be regarded as one that is narrowly circumscribed and to be exercised in only the clearest of cases — in cases that exhibit the exceptional merit that calls upon the Court to exercise its inherent power: Courts of Justice Act, section 138; Elcano, above; Carreiro (Litigation Guardian of) v. Flynn, [2004] O.J. No. 3117 (S.C.J.O.). In light of this caution, the onus necessarily lies upon the party seeking to bifurcate to satisfy the Court on a balance of probabilities that if granted, severance will result in the “just, expeditious and least expensive determination of the proceeding on its merits”.: Merck & Co. v. Brantford Chemicals Inc., 2004 FC 1400, [2004] F.C.J. No. 1704 (F.C.C.) at para 4.

[27] Simioni was released in 2004, well before the Supreme Court of Canada rendered its seminal decision in Hyrniak v. Mauldin, 2014 SCC 7, 1 S.C.R. 87. In Hyrniak, the court expressed the view that there had to be a culture shift away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case:

Ensuring access to justice is the greatest challenge to the rule of law in Canada today. Trials have become increasingly expensive and protracted. Most Canadians cannot afford to sue when they are wrong or defend themselves when they are sued, and cannot afford to go to trial. Without an effective and accessible means of enforcing rights, the rule of law is threatened. Without public adjudication of civil cases, the development of the common law is stunted.

Increasingly, there is recognition that a culture shift is required in order to create an environment promoting timely and affordable access to the civil justice system. This shift entails simplifying pretrial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just.

[28] I agree with Justice R. P. Kaufmann’s statement in Balsmeier v. Balsmeier, 2014 ONSC 5305, 50 R.F.L. (7th) 390 at para. 45, that the duty to promote the primary objective of the Rules takes on an even greater significance than that anticipated when the legislation was originally implemented. In my view, the Supreme Court’s direction in Hyrniak impacts on the court’s conclusion in Simione that the power to split a case should be regarded as one that is narrowly circumscribed and to be exercised in only the clearest of cases. Both Hyrniak and the Family Law Rules require that the court promote the primary objective of the Family Law Rules which is to deal with cases justly. Dealing with cases justly includes saving time and expense, employing fair procedure and conserving scarce judicial resources. The promotion of settlements is also clearly enshrined in the Family Law Rules, and is one of the goals that bifurcation in appropriate cases can achieve.

[29] For the purpose of promoting the primary objective of the Rules, the court is granted wide powers to make procedural orders aimed at reducing costs and delays, and making the process as expeditious as possible. Some of those powers are set out in subrules 1(7.2) and 2(5), and include a vast discretion to make adjustments to the procedure to meet the needs of any given case.

[30] In my view, considering if there are “threshold” issues in family law cases that once determined will facilitate resolution or save resources requires a balancing act, and should not be reserved to the clearest of cases. The judicial toolbox available to the court is large enough to craft a procedure that will meet the needs of any given case, address the parties’ concerns related to fairness, and promote the primary objective of the Family Law Rules, and the court should thrive to do so whenever possible.

Analysis

Preliminary comments

[31] As a preliminary comment, I wish to note that the parties’ respective allegations that the other party has engaged in inappropriate litigation strategies and has intentionally created increased costs and delays since these proceedings were commenced have played no part in my decision. This litigation involves significant amounts of money as well as complex issues of facts and law, and six lawyers in total appeared before me on this temporary motion from five different firms, on behalf of three parties. Litigation in these circumstances takes time, and costs money. Both parties appear to have engaged in what I would call “highly strategic litigation”, and the price to pay for that common decision is increased costs and delays. So be it.

[32] As a second preliminary comment, it is important to note that, although the Amending Marriage Contract confirms that the parties are bound by a prior Marriage Contract, counsel for the Estate confirmed that if the Marriage Contract is set aside, the Estate will not argue that it was revived by virtue of the parties executing the Amending Marriage Contract years later. In other words, if the first Marriage Contract falls, the Estate concedes that the Amending Marriage Contract is not a domestic contract for the purpose of Part IV of the FLA, as it was meant to amend a prior domestic contract that is no longer valid. For that reason, the only issue that the Estate wishes to have bifurcated as a threshold issue is the issue of the validity of the Marriage Contract.

Bifurcation

[33] Ms. Cohen opposes bifurcation on the basis that the advantages of having the validity of the Marriage Contract determined in a first trial would be defeated by the need to call much of the same evidence in a second trial. To support her contention, she relies on several cases in which courts have refused bifurcation where a spousal support claim was asserted despite the existence of a domestic contract restricting such claims. In particular, she asserts that stage two of the analysis set out in the seminal case of Miglin v. Miglin, 2003 SCC 24, 1 S.C.R. 303, requires complete consideration of a payor’s assets and liabilities at the valuation date, and since the same evidence is relevant and necessary for the determination of the issue of spousal support, there is no saving of time and expenses in allowing the bifurcation.

[34] I am of the view that the two-stage analysis laid out in Miglin has no application here. Miglin sets out the test applicable on an originating application for spousal support under 15.2 of the Divorce Act where the parties have executed a pre-existing agreement that is inconsistent with the claim of spousal support. The purpose of the two-stage analysis is to determine the proper weight to be accorded to a pre-existing waiver of spousal support in an original application for spousal support under s. 15.2(4)(c) of the Divorce Act, since the existence of such contract is but one of the factors that the court must consider.

[35] In all of the cases presented to me by Ms. Cohen’s counsel in support of her position against bifurcation, the court was faced with an original claim for spousal support in light of a pre-existing domestic contract in which support had been waived or significantly curtailed (G.(C.M.) v. G.(R.), 2013 ONSC 961, 48 R.F.L. (7th) 422; Hall v. Sabri, 2011 ONSC 5495, 11, R.F.L. (7th) 380; Lakhoo v. Lakhoo, 2014 ABCA 98; and Dove v. Dove, 2016 ONSC 4091, 84 R.F.L. (7th) 193). In those cases, the courts were alive to the fact that the evidence relevant to the validity of the domestic contract was also relevant to the determination of the spouse’s claim for spousal support in the second trial, even if the contract was set aside. This is because part two of the Miglin test requires the court to consider the extent to which circumstances may have changed in a way that was not contemplated by the parties initially, and to assess whether enforcement of the domestic contract at the present time would still reflect the original intention of the parties and is still in substantial compliance with the four objectives of the Divorce Act for spousal support.

[36] Part two of the Miglin analysis, therefore, requires a complete consideration of the support payor’s assets and liabilities at the valuation date in order to determine whether the domestic contract is valid. This significant evidence is necessarily beyond the scope of a trial restricted to determining the validity of an impugned domestic contract, and will be necessary in the context of the court’s determination of the issue of spousal support in any event, regardless of whether or not the impugned contract is valid. Broadening the scope of a first trial to include such evidence essentially eliminates the efficiencies bifurcation is meant to create and creates duplication of the same evidence (See G.(C.M.), at para. 15; Van Eck v. Pham, 2019 ONSC 1006, at para. 36). For that reason, requests for bifurcation in that context have often been denied.

[37] Other judges have allowed bifurcation even if a spousal support claim was being made (Baudanza v. Nicoletti, 2011 ONSC 352, 11 R.F.L. (7th) 329; Dillon v. Dillon, 2013 ONSC 7679; Balsmeier; Grossman v. Grossman, 2014 ONSC 2090, 55 R.F.L. (7th) 207 and Schulman). In those cases, the court saw much value in having this threshold issue determined early on in the context of a separate trial even in light of the duplication of evidence, because the determination of the validity of the domestic contract had a significant impact on many other issues in the case, or for other valid reasons specific to each case.

[38] At the risk of repeating myself, it seems to me that subrules 1(7.2) and 2(5) offer a variety of options to address concerns about duplication of evidence in such cases, particularly when the determination of threshold issues will likely dispose of several issues in the second trial and highly promote settlements. One such option might be to order that the same judge hear both trials and that the evidence gathered in the first trial be an integral part of the second trial as well.

[39] Going back to the case at hand, Ms. Cohen is seeking to set aside the Marriage Contract pursuant to s. 56(4) of the FLA, on the basis that Mr. Cohen failed to provide proper financial disclosure, that she did not understand the nature or consequences of the contracts, that she did not receive proper independent legal advice, that she was the victim of pressure and undue influence, and that the contract is otherwise unconscionable. Her claim in that regard will be assessed pursuant to s. 56(4) of the FLA, and the caselaw that has interpreted this provision (Hartshorne v. Hartshorne, 2004 SCC 22, 1 S.C.R. 550; LeVan v. LeVan, 2008 ONCA 388, 90 O.R. (3d) 1). If the Marriage Contract is set aside under s. 56(4), Ms. Cohen is not seeking spousal support; she seeks the equalization of the parties’ net family property. Unlike a potential spousal support claim, her equalization claim will not survive a determination that the Marriage Contract is valid and enforceable.

[40] Her dependant relief claim, however, will proceed regardless of the success of her claim to set aside the Marriage Contract. The determination of her dependant relief claim does not engage a review of the circumstances which led to the execution of the Marriage Contract, nor will it require an assessment as to whether circumstances may have changed in a way that was not contemplated by the parties, whether its enforcement at the present time would still reflect the original intention of the parties at the time it was entered into, and whether it continues to be in substantial compliance with the four objectives of spousal support as set out in s. 15.2(6) of the Divorce Act. Ms. Cohen did not waive her right to assert a dependant’s relief claim in the Marriage Contract.

[41] Whether or not the Marriage Contract is upheld, her dependant support claim will still be assessed as a completely separate issue, and the evidence relevant to the determination of the validity of the Marriage Contract will have little relevance to the determination of her claim as a dependant under the SLRA, although the determination of this threshold issue will have a significant impact on her SLRA claim.

[42] Ms. Cohen’s dependant claim is governed by s. 58 of the SLRA, which reads as follows:

58. (1) Where a deceased, whether Estate or intestate, has not made adequate provision for the proper support of his dependents or any of them, the court, on application, may order that such provision as it considers adequate be made out of the Estate of the deceased for the proper support of the dependents or any of them.

[43] Under s. 58, the court must address the following issues: (1) whether or not the applicant was a “dependent” of the deceased at the time of his death, which requires the court to determine whether the applicant was being supported by the deceased at the time of his death; if the applicant was a dependant (2) whether the deceased made adequate provision for her; and if not (3) what relief should be afforded to the applicant (Middel v. Vanden Top Estate, 2010 ONSC 2951, 87 R.F.L. (6th) 141 at para. 2).

[44] There is no dispute here that Ms. Cohen was a dependent of Mr. Cohen at the time of his death. The issues left for determination are whether he made adequate provision for her, and if not, what relief she should be entitled to. By virtue of ss. 58(4) of the SLRA, the adequacy of Mr. Cohen’s provision for the support of Ms. Cohen is to be determined as of the date of the hearing of the application, in light of the factors set out in s. 62 of the SLRA. Section 62 of the SLRA reads as follows:

Determination of amount

62 (1) In determining the amount and duration, if any, of support, the court shall consider all the circumstances of the application, including,

(a) the dependant’s current assets and means;

(b) the assets and means that the dependant is likely to have in the future;

(c) the dependant’s capacity to contribute to his or her own support;

(d) the dependant’s age and physical and mental health;

(e) the dependant’s needs, in determining which the court shall have regard to the dependant’s accustomed standard of living;

(f) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;

(g) the proximity and duration of the dependant’s relationship with the deceased;

(h) the contributions made by the dependant to the deceased’s welfare, including indirect and non-financial contributions;

(i) the contributions made by the dependant to the acquisition, maintenance and improvement of the deceased’s property or business;

(j) a contribution by the dependant to the realization of the deceased’s career potential;

(k) whether the dependant has a legal obligation to provide support for another person;

(l) the circumstances of the deceased at the time of death;

(m) any agreement between the deceased and the dependant;

(n) any previous distribution or division of property made by the deceased in favour of the dependant by gift or agreement or under court order;

(o) the claims that any other person may have as a dependant;

(r) if the dependant is a spouse,

(i) a course of conduct by the spouse during the deceased’s lifetime that is so unconscionable as to constitute an obvious and gross repudiation of the relationship,

(ii) the length of time the spouses cohabited,

(iii) the effect on the spouse’s earning capacity of the responsibilities assumed during cohabitation,

(iv) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,

(v) whether the spouse has undertaken to assist in the continuation of a program of education for a child eighteen years of age or over who is unable for that reason to withdraw from the charge of his or her parents,

(vi) any housekeeping, child care or other domestic service performed by the spouse for the family, as if the spouse had devoted the time spent in performing that service in remunerative employment and had contributed the earnings to the family’s support,

(vi.1) Repealed: 2005, c. 5, s. 66 (10).

(vii) the effect on the spouse’s earnings and career development of the responsibility of caring for a child,

(viii) the desirability of the spouse remaining at home to care for a child; and

(s) any other legal right of the dependant to support, other than out of public money.

[45] The purpose of a dependant support order under the SLRA was described as follows by Ray J. in MacDougall v. MacDougall Estate, (2008), 56 R.F.L. (6th) 336:

47 While utilizing the same s. 62 principles, the first step involves a consideration of all the circumstances “from the deceased’s point of view” as well as the dependent’s circumstances at the time of the hearing. This is the threshold that must be reached before the court can exercise its unfettered discretion. (See Swire v. Swire, [1986] O.J. No. 2023 (Ont. Surr. Ct.) at paras. 84 and 85, aff’d (1987), 10 R.F.L. (3d) 399, 24 O.A.C. 147 (Ont. Div. Ct.).)

48 In every case, the Court is required “to place itself in the position of the testator and consider what he ought to have done in all the circumstances of the case, treating the testator for that purpose as a wise and just, rather than a fond and foolish husband....” Cummings v. Cummings, [2004 CarswellOnt 99 (Ont. C.A.)];, quoting with approval Lord Romer in Bosch v. Perpetual Trustee Co., [1938] A.C. 463 (New South Wales P.C.), at pp. 478-479.

49 The purpose of the SLRA is not to enable Ms. MacDougall to acquire an Estate but is to ensure the adequacy of her support. The test for 'adequate provision' is whether it is sufficient to enable Ms. MacDougall to live neither luxuriously nor miserably, but decent and according to her station in life. (See Duranceau, Re, [1952] 3 D.L.R. 714 (Ont. C.A.) at paras. 36 and 37.)

50 McLachlin C.J. in Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807 (S.C.C.) considered that two interests were protected by the legislative equivalent to the SLRA; firstly, adequate, just and equitable provision for dependents; secondly, testamentary autonomy, which must give way to the first. Paragraph 33 reads:

In the absence of other evidence, a will should be seen as reflecting the means chosen by the testator to meet his legitimate concerns and provide for an ordered administration and distribution of his Estate in the best interests of the persons and institutions closest to him. It is the exercise by the testator of his freedom to dispose of his property and is to be interfered with not lightly but only so far as the statute requires.

[46] The purpose of a dependant support order under the SLRA is significantly different than the purpose of a spousal support under the Divorce Act or FLA. The dependant relief provisions of the SLRA are meant to provide not only for the needs of dependants but also to ensure that spouses and children receive a fair share of family wealth (Cummings v. Cummings, 2004 CarswellOnt 99 (Ont. C.A.), at para. 48). It usually involves competing interests, including the testator’s desire to leave much of his legacy to his children, although those children may very well be adult, wealthy or financially independent. The importance of this key difference was noted by the court in Phillips-Renwick v. Renwick Estate, (2003), 41 R.F.L. (5th) 337, at para. 74.

[47] The Estate is not taking the position that the Marriage Contract signed, and its waiver of spousal support in the event of a separation, precludes a dependant claim. However, if the Marriage Contract is upheld, the question as to whether or not Mr. Cohen made adequate provision for Ms. Cohen in his Will, and if not, the relief she should be entitled to, will be determined on the basis that Ms. Cohen is left with a net worth in the range of $2-3 million dollars, whereas if it is set aside, those same issues will be determined in light of her having a net worth in the range of $8 million or more (as a result of her entitlement to an equalization payment). I venture to say that the possibilities of settlement of Ms. Cohen’s dependant relief claim will be significantly enhanced by a determination of the validity of the Marriage Contract.

[48] Similarly, there has been significant conflict so far in this litigation with respect to documentary disclosure arising from Ms. Cohen’s desire to assess, with exact precision, the value of Mr. Cohen’s Estate as of the date of his death. If the Marriage Contract is upheld, thus making her claim for equalization moot, I am of the view that this will have an important impact on the relevance of Ms. Cohen’s demands for more disclosure. So far, the Estate has disclosed a significant amount of financial documentation which was available to it regarding Mr. Cohen’s finances, both at the date of the parties’ marriage as well as at the date of his death. Two valuation reports have already been prepared by the Estate for the purpose of its proper administration and they were provided to Ms. Cohen. However, Ms. Cohen seeks significantly more information, including back-up information much of which is allegedly in the hands of third parties or subject to third-party confidentiality obligations, and which she claims is necessary for her own experts to test the earlier two reports.

[49] Despite Ms. Cohen’s claim to the contrary, I am of the view that if the Marriage Contract is upheld, the need to determine the precise value of Mr. Cohen’s Estate at the time of his death for the purpose of her dependant relief claim will not be necessary. As stated by Justice Ray in MacDougall, the purpose of the SLRA is not to enable an applicant to acquire an Estate, but is to ensure the adequacy of her support. Ability to pay on the part of Mr. Cohen’s Estate which, based on current disclosure, is worth at least $24 million, is not an issue.

[50] The case of Cummings, upon which Ms. Cohen relies to support her assertion that a precise valuation at the time of death and of the hearing is necessary, can easily be distinguished from this case. In that case, there were many dependants with significant needs, and not enough money in the Estate to meet everyone’s needs. It is easy to understand, in those circumstances, why a precise valuation was necessary.

[51] Looking at all the factors set out in Simione, I am of the view that there are clear advantages in allowing the issue of the validity of the Marriage Contract to be bifurcated from the other issues in the case and adjudicated prior to the trial on the remaining issues. The validity of the Marriage Contract is a relatively straightforward issue requiring limited documentary evidence, and that evidence is already available and has been disclosed. The only anticipated oral evidence required to determine the issue is that of Ms. Cohen, Steven Cohen, Mr. Radnoff and possibly his ex-wife, all of whom will be testifying as to the circumstances surrounding the execution of the Marriage Contract.

[52] The determination of this threshold issue is going to allow the parties to manage their expectations about disclosure, and may very well relieve this litigation from any subsequent dispute over disclosure issues. There is no doubt in my mind that the determination of the validity of the Marriage Contract will substantially increase the opportunities for settlement in this case. If the Marriage Contract is upheld, Ms. Cohen’s claim for an equalization of the parties’ net family property falls. This will significantly reduce not only the length of trial, but also the costs associated with the trial and its preparation. If the Marriage Contract is set aside, her dependant claim will be significantly impacted by her increased net worth. Assuming that her dependant claim settles as a result of her receiving an important equalization payment, the only issue left for trial will be the validity of the two mortgages registered against her property.

[53] Equally important is the added advantage of excusing the respondent, Ms. Charendoff, from the obligation to spend time and expenses participating in a lengthy trial when most of the issues are irrelevant to her, with the exception of a very narrow commercial issue.

[54] Based on the above, I find that the Estate has met its onus of satisfying me, on a balance of probabilities, that there would be clear time and expense benefits to be gained from bifurcation. The onus therefore shifts to Ms. Cohen to demonstrate, through evidence, that real prejudice outweighs any such expediency. I find that she has not met that onus.

[55] Ms. Cohen argues that bifurcation will double the cost of this proceeding by forcing her to argue two lengthy, complex trials instead of one, over a considerably longer period of time. I disagree. Without repeating what I have already said, my view is that there will be very little overlapping of evidence in the two trials, and that the determination made in the first trial will significantly reduce the time and expenses required to complete the second trial. Any remaining concerns in that regard can properly be addressed by an order that both trials be heard by the same judge, and that the evidence adduced in the first trial be an integral part of second trial, and I so order.

[56] Further, the first trial will not be significantly long or complex. The Estate’s estimate, given that there will be no more than four witnesses, is that it will likely take no more than four days. This first trial could be heard as early as the winter or spring of 2020. If all issues are dealt with in the context of one trial, it will be a very lengthy trial which will not be ready for years.

[57] As a final point, I wish to address Ms. Cohen’s argument that bifurcation in this case undermines the consolidation order made by Maranger J. The purpose of a consolidation order is not only to reduce trial time by having two matters heard at the same time in the context of one trial. It is also to reduce the time and expenses associated with the carriage of two files which share the same parties and the same evidentiary backdrop, from a procedural perspective. Doing so reduces the number of court appearances, and relieves the parties from the obligation to maintain two complete sets of records for two different files in two different courts, and to meet disclosure and other procedural obligations under two sets of procedural rules instead of just one.

[58] Bifurcating the issue of the validity of the Marriage Contract within this combined application does not defeat that purpose. On the contrary, it is an integral part of the court’s ongoing duty to ensure an expeditious and cost effective process which maximizes the efficient use of scarce judicial resources.

Order

[59] As a result, an order shall issue as follows:

1- This proceeding shall be bifurcated, pursuant to Rule 12(5) of the Family Law Rules, such that the determination of the validity and enforceability of the Marriage Contract entered into by the applicant, Barbara Cohen, and the deceased, Sidney Cohen, form the first trial, with all other issues to be determined at a second trial.

2- The two trials in this matter shall be heard by the same judge, and the evidence in the first trial shall form an integral part of the second trial.

3- As soon as the parties have duly completed and submitted their Trial Scheduling Endorsement Form to Shelston J., as their Case Management Judge, or as otherwise directed by him, the first trial in this matter may be added to the next available trial list.

Costs

[60] The respondent Estate is clearly the successful party in this motion. If the parties cannot agree on costs, I will accept brief written submissions from them not exceeding three pages (exclusive of Bills of Costs and Offers to Settle) in accordance with the following timelines:

• The Respondent Estate shall provide its submissions within 15 days;

• The Respondent Ms. Charendoff shall provide her submissions within 15 days thereafter;

• The Applicant Ms. Cohen shall provide her submissions within 15 days thereafter;

• Both Respondents shall have a right of reply, if deemed necessary, not exceeding one page, which shall be provided within 5 days thereafter

Madam Justice Julie Audet Date: July 24, 2019