Court File and Parties

NEWMARKET COURT FILE NO.: FC-15-49711-00 DATE: 20190826 SUPERIOR COURT OF JUSTICE – ONTARIO – FAMILY COURT

RE: Diane Florovksi, Applicant -and- Louie Florovski, Respondent

BEFORE: The Honourable Madam Justice M.E. Vallee

COUNSEL: Ms. F. Yehia, for the Applicant Mr. N. Epstien, for the Respondent

HEARD: October 31 and November 2, 2018 and July 30, 2019

ENDORSEMENT

Introduction

[1] The applicant wife brings a motion to strike the respondent husband’s pleadings for failure to produce disclosure, or in the alternative, an order for production of disclosure with a penalty for each day that the father fails to comply with the order.

[2] This motion was first before me on October 31, 2018. The husband requested an adjournment. A considerable amount of time was spent by counsel arguing the adjournment which was ultimately denied. The motion began but there was not enough time on October 31, 2018 to complete it. It was adjourned to November 2, 2018. The motion continued but was not completed. It was adjourned to a date to be fixed because the applicant wife wanted to obtain a forensic report. Counsel advised the court in February 2019 that the forensic report was not required. Two hours on July 30, 2019 were set aside for the completion of the motion. It was fully argued on that date.

[3] I note that in Jarvis J.’s endorsement dated February 25, 2019, para 2, he states, “Pending the conclusion of the applicant mother’s motion to strike, no motions shall be brought by either party without leave to be addressed by 14B motion brought on 10 days notice to the other party.” Despite this, the husband breached the order by serving a counter-motion to be heard on July 30, 2019. In this motion, he requests a divorce and an order to vary child and spousal support. His affidavit for that counter-motion is one-inch thick. He expected to argue this motion on July 30, 2019 as well. He did not obtain leave to bring this motion. I declined to hear it.

Background

[4] The wife issued her application in November 2015. Four years have almost passed. Five court orders have been made regarding disclosure and yet the wife is still requesting compliance with those orders. When the matter was first before me on October 31, 2018, the wife prepared a chart of the items that had not yet been disclosed. As noted above, the motion was adjourned to November 2, 2018. That morning, the husband provided a number of documents. Court time was wasted because the wife’s counsel had to take time to review these documents and update the chart. As a result, the motion could not be completed on that date.

[5] Between November 2, 2018 and July 30, 2019, the husband has provided additional documents. The wife states that he produced 150 pages on November 14, 2018; however, much of this is a duplication of what he has already produced. The wife maintains that certain items are still outstanding.

[6] The husband provided no responding affidavit to the issues before me on July 30, 2019. His counsel made a number of comments from the floor which do not constitute evidence before me on this motion. His response to the issues before me seems to be a cross-application on other issues.

The Parties Positions on Items Alleged to be Outstanding

[7] The wife provided an updated chart. It was sent to opposing counsel on July 2, 2019. The husband had four weeks to respond to the chart. Attached as Schedule A are the pages from the chart which show the alleged outstanding items. I will refer to the items in the chart that have numbers rather than reproduce the particulars of all of the items within this endorsement.

[8] Items 2(f) and (g) concern statements from Hollis Wealth Financial for specific accounts. In the notes on the chart, the wife acknowledges that she has received some of the statements but not all of them. They are required because the husband distributes his money among various accounts in Hollis. The statements are required to determine what the parties had at the date of separation and what the husband has now. His current financial situation is relevant because child support and spousal support are issues in this matter. A Hollis employee, Ms. Cheng, sent an email to the husband, dated November 6, 2018, stating that all the statements were attached. The wife states that when this was forwarded to her the statements were not attached. Ms. Cheng also states in her email that she could only find statements for account 38-AXLY-S, which is the first one listed in the chart in 2(g), from August 2016 to July 2017. She stated that she did not see anything prior to August 2016 unless it was under a different account number.

[9] The husband’s counsel’s response regarding this item was that he would call Ms. Cheng on the morning break to ask her about the documents requested in 2(f) and (g). The wife’s counsel states that the chart was sent to the husband’s counsel four weeks ago. He has had plenty of time to follow up on this and prepare a response. After the morning break, the husband’s counsel provided a copy of Ms. Cheng’s email, dated November 6, 2018, together with what appears to be two consolidated portfolio summaries with values as of January 31, 2017 and February 28, 2017.

[10] Ms. Cheng’s letter states that she can find statements for 38-AXLY-S only from August 2016 to July 2017. Accordingly, disclosure with respect to account 4BT-Q8NS-N, being statements from January 1 to July 31, 2016, have not been produced nor has any explanation been provided as to why they are not produced. The same can be said for accounts 38-AXLY-W, 38-AXLY-A and 38-AXLY-W. The husband’s counsel stated from the floor that he understood they were not available. I note that no letter has been produced to confirm this.

[11] Regarding 2(h), being the HPE pension plan, the wife states that statements from the date that the pension was opened until May 31, 2018 have been produced; however, she has received no updates.

[12] The husband’s response to this issue is that he was terminated last week from his employment with Huawei. He has provided a paystub which covers June, 2019. He also provided a letter dated July 16, 2019 that he received from Huawei regarding his termination. His counsel advised that there is no Huawei pension.

[13] This is not responsive to the disclosure request. The wife seeks details with respect to the HPE pension, not a pension relating to Huawei. There is no evidence before me that the documents requested have been provided nor is there any evidence before me as to why they have not been provided.

[14] Regarding 2(k), the wife states that statements for the Scotiabank iTrade account have been provided from one year prior to separation to current; however, updates are outstanding.

[15] The husband’s position is that this account was consolidated with Hollis. He cannot say what the date was of the last statement before consolidation. His counsel stated that this information might be back at his office. The husband produced two statements for March 2015 and June 2015 which are attached as exhibits to his affidavit sworn November 1, 2018. Counsel states that there are no other statements because the account was consolidated with Hollis; however, no document has been produced to confirm that this account was consolidated with Hollis.

[16] Regarding 3(b), which concerns statements from a TD Arrow plan Visa account, the wife states that statements are outstanding from June 2016 to present. She wonders whether this account still exists.

[17] The husband’s counsel states that the date of the last statement is May 2016 and that a letter was produced showing that the account was closed. Counsel could not direct me as to where I might find that letter in his client’s affidavits. Accordingly, I find that the husband must either provide documentation to show that this account has been closed or he must provide the outstanding statements from June 2016 to present.

[18] Regarding 6, the wife states that the husband withdrew $25,000 from the joint account shortly before separation. She has requested an accounting for this cash. The husband does not appear to dispute that this accounting has not yet been provided. Accordingly, this is outstanding.

[19] Regarding 7, the wife states that the husband’s position is that he had either $200,000 or $250,000 on the date of marriage and claims a deduction for it. No evidence has been provided to confirm that he had these funds. This item is outstanding.

[20] The husband’s counsel stated that this money was used to buy the family home from the wife’s parents. They have the documents. The money came out of the husband’s bank account. TD Bank states that it cannot obtain records from 2004 when the money was withdrawn. Counsel advises that the source of the funds is not shown on the real estate lawyer’s trust ledger statement. If the matter proceeds to trial, the husband will testify that he contributed these funds for the purchase of the home. Relating to the $200,000 or $250,000 that the husband alleges he had on the date of marriage, the husband shall provide a letter from TD Bank stating that it cannot obtain his 2004 bank account statements for account 1882 311-5398.

[21] Given the above, 8 is a duplication.

[22] Regarding 9, the husband’s last financial statement is dated December 16, 2018. The wife requested an updated financial statement on February 8, 2019. She requests one with all sections fully completed with respect to date of marriage, date of separation and current values identified with all assets and liabilities listed. The husband should have provided an updated financial statement when he filed the counter-motion. He shall provide an updated financial statement with all sections fully completed with respect to values at date of marriage, date of separation and current values for all assets and liabilities listed.

Summary of Disclosure to be Provided by the Husband

[23] Although a considerable number of disclosure items were outstanding when this motion commenced, the husband has made some disclosure between November 2018 and now. I am prepared to give the husband one last chance to provide the outstanding disclosure on strict terms.

[24] The husband shall provide the following within seven days of the release date of this decision:

(a) disclosure with respect to account 4BT-Q8NS-N, 38-AXLY-W, 38-AXLY-A and 38-AXLY-W, being statements from January 1 to July 31, 2016 or an explanation from the financial institution regarding why they cannot be produced;

(b) details with respect to the HPE pension, or a letter from the pension plan administration as to why the details cannot be produced;

(c) a copy of the last statement before the Scotiabank iTrade account was consolidated with Hollis and a letter from Hollis to confirm the consolidation date;

(d) either documentation from TD Aeroplan Visa to show that this account has been closed and the relevant date or the outstanding statements from June 2016 to present;

(e) an accounting for the $25,000 that the husband withdrew from the joint account shortly before separation;

(f) a letter from TD Bank stating that it cannot obtain the husband’s 2004 bank account statements for account 1882 311-5398 (regarding the $200,000 or $250,000 that the husband alleges he had on the date of marriage); and,

(g) an updated financial statement with all sections fully completed with respect to values at date of marriage, date of separation and current values identified with all assets and liabilities listed.

[25] The husband shall provide this disclosure in an organized fashion. If statements are available regarding items (a) and (d), they shall be grouped together and in chronological order. The husband shall not provide copies of documents that he has already provided. If he fails to comply with this provision, the wife may address it in costs submissions.

The Wife’s Request for a Daily Penalty

[26] The wife notes that in Roberts v. Roberts, 2015 ONCA 450, para 11, the court stated that, “The most basic obligation in family law is the duty to disclose financial information. This obligation requirement is immediate and ongoing.” The court should not have to make orders requiring parties to disclose information. The husband has the means to litigate. His TD investment account increased by over $1,190,000 from March 2017 to March 2018. He is quite savvy at investing and moving his money around. He earned $722,154 in 2018. A series of deposits in his bank account cannot be traced. The wife does not know where the children’s RESP funds have gone. She had to hire an accountant to make sense of the disclosure that has been produced.

[27] The wife refers to Granofsky v. Lambersky, 2019 ONSC 3251, in which the court referred to Mantella v. Mantalla [2008] CarswellOnt 5623. In Mantella, the court ordered the respondent to pay a fine for each day until disclosure was complete. In para 16 of Granofsky, the court noted that there is no provision in the Rules of Civil Procedure for imposition of a fine or penalty on a party who fails to disclose relevant documents. Despite this, in paras 28, 30 and 31, the court stated that,

In my view, the Court has jurisdiction under the Family Law Rules “to order a fine or monetary payment as part of its role to control and enforce its own process…. [While it] should be reserved to exceptional and/or egregious circumstances, the respondent has been given opportunity after opportunity to comply with his duty to disclose financial information and documentation and I find the case before me to be a fitting example.

…costs orders have been made against the respondent, and while he has complied with those costs orders, their impact has not resulted in compliance with his duty to disclose financial information/documentation.

A daily, monetary penalty payable to the applicant will hopefully have a different impact.

[28] The court ordered that the respondent pay $500 per day for each day that there was noncompliance with the order.

[29] The wife states that another court order alone will not compel the husband to provide the documents. Five other orders have already been made, he has paid the associated costs and yet he has not complied with them. All of this shows that he believes he can disregard court orders. MacPherson J. stated in para 11 of his Order, dated August 29, 2018, which was two months before this motion commenced before me,

Here we are, three years after separation, and we do not have sufficient information upon which to hold a discussion on equalization or finalize spousal and child support. It is a waste of time. It is expensive. It demonstrates bad faith. The respondent states that the litigation is quite complex and quite involved. It is not.

[30] I find that the husband will not comply with a further disclosure order unless there is a penalty. The fact that the husband brought a counter-motion and expected it to be heard today when he did not have leave as required by Jarvis J. demonstrates a further breach of a court order.

The Husband’s Position

[31] The husband states that he is not a businessman. He is just an employee. He does not have the records in issue. The wife kept certain financial information when the parties separated. The husband does not have it. It is held by third parties. He has requested it. He suffers from psychiatric problems. Granofsky can be distinguished because it related to life insurance. In that case, the production was completely within the party’s purview.

Analysis

[32] There is no medical evidence of the husband’s alleged psychiatric problems. Most of the outstanding items are easy to obtain. The husband simply has to write to financial institutions to request the information. If it cannot be provided, the institution can provide this response. The husband has to provide to the wife with copies of the requests and the responses. This is basic family law practice. The husband knows how he spent the $25,000 that he withdrew from the joint account prior to separation. The husband knows how to prepare a financial statement. Considering the passage of time, he should have been able to provide values for his assets and liabilities well before now.

[33] This is the sixth court order requiring disclosure. Given the husband’s litigation history, I agree with the wife that the prospect of compliance with this order is very poor unless stiff consequences are imposed. These circumstances are exceptional and egregious.

Conclusion

[34] The husband shall provide the disclosure set out above by September 2, 2019.

[35] If he fails to do so, he shall pay a daily fine to the wife of $500 per day for each day of non-compliance commencing on September 3, 2019.

[36] If he has not provided the disclosure set out above by September 16, 2019, the wife may proceed with her motion to have his pleadings struck on five days’ notice.

Costs

[37] If the parties cannot agree on costs, the wife may provide written submissions by September 16, 2019. The husband may provide responding submissions by September 23, 2019. The text of the submissions shall be no longer than 3 pages (14 pt. font size, regular 1-inch margins, 1.5 spacing), exclusive of any costs outline or offers to settle. Costs outlines shall be itemized to show how the time was spent and shall show full recovery and partial recovery amounts. Any offers to settle shall be included. All costs submissions shall be delivered via email through my assistant at BarrieJudSec@ontario.ca. If counsel do not adhere to the timelines, the court will assume that costs have been resolved and no decision is required.

Vallee J.

Released: August 26, 2019