Court File and Parties
COURT FILE NO.: FS-14-81586-00 DATE: 2019 11 06 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JACQUELINE GALLYOT, Applicant - and - CHRISTIAN EZEAGU, Respondent
BEFORE: L. Shaw J.
COUNSEL: R. Miculinic, for the Applicant M. Trenhome for the Respondent
HEARD: September 9, 2019
ENDORSEMENT
[1] The applicant moves to strike all of the non-parenting related claims in the respondent’s amended Answer on the basis that he has failed to make proper financial disclosure and has failed to comply with a court order that he do so. The Application was commenced on September 9, 2014 and the trial is scheduled to proceed during the January 2020 sittings.
[2] For the reasons that follow, I decline to grant the relief requested by the applicant subject to terms to be specified in these reasons.
[3] The parties married on July 3, 2005 in Ghana. According to the applicant, they separated on March 7, 2014. They have one child who is 8 years of age who lives with the applicant.
[4] At the time of separation, the respondent operated a used vehicle dealership in Brampton that closed shortly after the parties separated. He operated it as a sole proprietorship. The respondent has produced his income tax returns which includes the income he declared form this business. Much of the outstanding disclosure relates to assets, primarily vehicles, owned on the date of separation.
[5] The matter has followed an unfortunately typical slow and painful progress through the litigation process. The following is an overview of the litigation;
• March 30, 2015 – Early Case Conference • June 23, 2015 – Motion for access and child support • April 27, 2016 – Case Conference • July 31, 2016 – Motion- resolved on consent • December 1, 2064 – Trial Management Conference – matter struck from list. Respondent was to serve and file a certificate of financial disclosure within two weeks and amended answer • April 10, 2018 – Trial Management Conference – combined Settlement Conference and Trial Management Conference set for May 18, 2018 • May 18, 2018 – Settlement Conference and Trial Management Conference – further Trial Management Conference set for June 29, 2018 • June 29, 2018 - Trial Management Conference – Order made that the respondent provide disclosure to the applicant • December 19, 2018 – Motion – Matter adjourned to June 2020 trial sittings peremptory on both parties • June 5, 2019 – Questioning of the respondent
[6] The applicant’s position is that the respondent has been failing to or delaying disclosure since the outset of this litigation and points to the endorsement of Van Melle J., dated April 27, 2016 from the Case Conference where she stated:
“Disclosure is a significant problem. [Christian] is to comply with the Request for [Information] within 30 days; failing which [Jacqueline] may apply on motion to have [Christian’s] pleadings struck. As a note to subsequent justices, [Christian] appears to be in non-compliance with previous court orders on disclosure as well. This [is] all very unfortunate because failure to disclose impedes headway today.
[7] At a Trial Management Conference conducted by Price J. on September 29, 2018 he made the following order for disclosure:
- With reference to Price J.’s Temporary Order of June 29, 2018, the following information/documentation continues to remain outstanding from Christian:
Item:
Status:
Paragraph 8: all monthly statements of account for all personal bank accounts which Christian held, or formerly held, solely or in joint with any other person(s), form January 1, 2011 to June 30, 2018
Still outstanding
Paragraph 9: All monthly statements of account for all credit cards, lines of credit, personal loans or other credit facilities which Christian held, or formerly held, solely or in joint with any other person(s), from January 1, 2011 to June 30, 2018
Still outstanding
Paragraph 14(a): Documentation sufficient to corroborate NGA’s gross income earned in 2013 and 2014, its costs of goods purchased in 2013 and 2014, and its total business expenses incurred in 2013 and 2014
Still outstanding
Paragraph 14(b): Bills of lading and export declarations for all motor vehicles purchases and sold through NGA at any time throughout its existence
Still outstanding
Paragraph 14(c): Contact information for all freight carriers and shipping companies which NGA has transacted with at any time throughout its existence
Still outstanding
[8] The applicant’s position is that given the history of the respondent’s non-disclosure and failure to comply with Price, J’s order, his non-parenting pleadings should be struck. The applicant relies on Rule s1(6), 1(8), 1(8.9), 2(2), 2(3), 13(5) and 13(16) of the Family Law Rules.
[9] The respondent’s position is that he has provided significant disclosure and will sign any authorization so that the applicant can obtain other documentation she is requesting.
[10] This is not a situation where the respondent has not provided any disclosure. For example, in a Request to Admit dated December 21, 2016, the respondent listed 52 items of primarily financial records that he had disclosed to the applicant. Despite this level of disclosure, he has not fully complied with the order of Justice Price. Nonetheless, I do not consider the respondent’s conduct to be exceptional and egregious: Manchanda v. Theti, 2016 ONCA 909 at para. 9. I have also considered the issue of proportionality in light of the disclosure already provided to date. I must keep in mind, however, that the most basic obligation in family law proceedings is the duty to disclose financial information: Manchrarda para. 13
[11] While I have authority pursuant to Rule 1(8) to strike pleadings, I decline to do so in this case.
[12] During submissions, it became apparent that the only bank accounts for which records have not been produced in accordance with the order of Price J. are records from a bank account in Nigeria and a CIBC saving account in the United States.
[13] The applicant produced documents that indicate that the respondent still had an account at Skye Bank-BBA Branch in Nigeria in August 2013. The respondent has not produced any records regarding that account,
[14] At his questioning conducted on June 5, 2019, the respondent’s evidence was that that he was not sure if his savings account in the US with the CIBC was closed. He undertook to provide confirmation about the status of that account. He has not done so.
[15] With respect to this credit card and other debts listed in his financial statement, while the respondent has provided records for those debts on the date of separation, he has failed to produce the records to June 30, 2018 as per the terms of the order of Price J. The applicant points to the respondent’s financial statement sworn September 30, 2018. In that statement, the respondent’s debts on the date of separation totalled $93,532.54. As of the date of that statement, his debts totalled $20,000 suggesting that he had paid down debt of $73,532 since the date of separation.
[16] The respondent asserts that he prepared that financial statement when he was self-represented, and he has not paid the debt. He has not obtained updated statements and is prepared to sign authorizations for the applicant to contact the financial institutions to request any and all missing statements. I agree with the applicant’s counsel that it is the responsibility of the respondent to obtain the records, at his expense. The applicant should not incur the legal fees or cost to obtain records that ought to be produced by the respondent.
[17] Paragraphs 14(a), (b) and (c) of Price J.’s order deal with production from the respondent’s business. In particular, it orders that records be produced to corroborate the income earned by the business, its expenses, bills of lading and export declarations for all cars bought and sold by the business and contact information for all freight carriers and shipping companies that the company dealt with while in existence.
[18] The applicant’s position is that this disclosure is required to address the equalization of net family property issue particularly as the respondent has claimed a number of debts associated with the business on the date of separation but no corresponding assets, such as vehicles. She also asserts that although the income and expenses of the business are set out in the respondent’s income tax returns, that have been produced, she is entitled to examine the records of how income and expenses were calculated as that could have an impact on an assessment on the respondent’s income at the time of separation and his ability to pay support. I fail to see how that information would have any bearing on an assessment of his current income and ability to pay support as the business has not been in operation for over five years. It was, nonetheless, ordered by Price J.
[19] According to the respondent, he had an accountant who handled the financial records for the business with whom he has not been in touch since 2014. The respondent asserts that does not have any of the records that Price J. ordered he produce for his business but has failed to disclose what steps he has taken to comply with the order.
[20] Accordingly, I make the following order:
- The respondent shall comply with para. 8 of Price J.’s order as it relates to bank accounts in Nigeria and the CIBC savings account in the US for the peroid of January 1, 2011 to June 30, 2018 by December 6, 2019. He shall provide a copy of his letter requesting the records, and the response he receives, to the applicant.
- The respondent shall provide copies of all missing statements for the debts listed in his financial statement by December 6, 2019. He shall provide a copy of his letters to those financial institutions, and any resopnse he receives, to the applicant.
- The applicant shall contact his accountant to provide all records to satisfy paras. 14(a), (b) and (c) of Price J.’s order and shall produce those records by December 6, 2019. He shall provide to the applicant a copy of his letter to the accountant and a copy of any response he receives.
- If the respondent cannot produce any of the documentation or if the documentation or the information no longer exists, he shall provide the applicant with a sworn affidavit by December 6, 2019 of the precise steps he has taken to obtain the records and why the records are not available.
[21] Given the disclosure that has been produced to date, while not complete, I am not prepared to strike the respondent’s pleadings. If disclosure remains outstanding at the commencement of trial, the applicant can renew this motion. It will also be open to the trial judge to make any adverse findings against the respondent, if persuaded to do so.
[22] The applicant is entitled to her costs of this motion and the motion that was before Doi J. on December 14, 2018. According to her Bill of Costs, she seeks costs of $15,772.52 on a partial indemnity basis. The applicant provided copies of offers to settle but that was for the action in its entirety and not just this motion. I have therefore not considered those offers for the purpose of determining costs.
[23] Given the importance of timely and complete financial disclosure in family law proceedings, I find that the applicant is entitled to costs. The applicant should not be required to bring motions seeking disclosure or compliance with previous court orders. While I am not prepared to dismiss his pleadings, the respondent’s conduct cannot be sanctioned, and I find that an appropriate amount of costs is $10,000 which he shall pay to the applicant by January 6, 2020.
L. Shaw J.
Released: November 6, 2019
COURT FILE NO.: FS-14-81586-00
DATE: 2019 11 06
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
RE: JACQUELINE GALLYOT Applicant
- and –
CHRISTIAN EZEAGU Respondent
ENDORSEMENT
L SHAW J.
Released: November 6, 2019