COURT FILE NO.: FC-17-985

DATE: 20210419

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

RUBY DAGHER

Applicant

– and –

JEAN HAJJ

Respondent

Emily Comor, for the Applicant

Chris Folz, acting as a friend of the Court for the Respondent

HEARD: April 15, 2021

REASONS FOR decision

Audet J.

1This is a motion brought by the Applicant wife seeking an order striking the Respondent husband’s pleadings and allowing this matter to proceed to an uncontested trial.

2For the reasons set out below, the Applicant’s motion is granted.

Background

Background

3The parties married on October 6, 2002 and separated on April 12, 2017. They have four children, namely Matheo Hajj, born January 1, 2004, Rhea Hajj, born April 17, 2005, Luka Hajj, born May 20, 2007 and Mia Hajj, born April 27, 2010.

4The Application was issued on December 4, 2017. Among other relief, the Applicant, Ms. Ruby Dagher (“Ms. Dagher”), claimed sole decision-making responsibility (then custody) of the children, exclusive possession of the matrimonial home, a restraining order, child support, spousal support and equalization of the net family properties. The Respondent’s Answer is dated February 14, 2018. The Respondent, Mr. Jean Hajj (“Mr. Hajj”), also claimed sole decision-making responsibility (then custody), child support, spousal support and division of the family property.

5Most of the parenting issues were settled on consent by order of Parfett J. dated March 4, 2019. Ms. Dagher has sole decision-making responsibility for the children and Mr. Hajj has no parenting time. Outstanding issues include retroactive and ongoing child support, division of the children’s extraordinary expenses and division of the net family properties. Mr. Hajj continues to pursue his claim for spousal support, but Ms. Dagher does not.

6This case is scheduled for a 13-day trial on the May 10, 2021 trial list. At a Settlement Conference on March 22, 2021, the case management judge, Shelston J., gave Ms. Dagher leave to bring this motion to strike Mr. Hajj’s pleadings. Ms. Dagher asserts that Mr. Hajj is intentionally underemployed and hiding income. Mr. Hajj has reported significantly less income over the four years since the separation than he earned during the marriage. Mr. Hajj claims he is depressed and unable to work at his full potential.

7It is readily apparent from reading past endorsements made by this Court that Mr. Hajj has not been forthcoming about his financial circumstances. Since this matter was initiated, three temporary orders for disclosure were made against Mr. Hajj; the first by myself dated March 9, 2018, the second by Roger J. dated June 27, 2018 and the third by Shelston J. dated March 22, 2019. Despite these three clear orders, Ms. Dagher was required to bring a motion on December 6, 2020, less than two months before the trial was originally set to proceed at the end of January 2021, to obtain one final order for disclosure.

8Ms. Dagher’s motion was heard on December 6, 2020 before Corthorn J. In her decision released on January 8, 2021, she ordered that Mr. Hajj had 30 days to produce sixteen items of disclosure, many of which had already been ordered produced in previous orders. More specifically, Corthorn J. ordered Mr. Hajj to produce the following:

a) Complete, unredacted copies of the passport(s) held by the respondent from the date of separation to the present.

b) Complete, unredacted copies of account statements for the respondent's CIBC Mellon account from January l, 2017 to the present.

c) Complete, unredacted copies of account statements for the respondent’s ING savings account no. XXXXXX494 from January 1, 2017 to the present;

d) Complete, unredacted copies of account statements for the respondent's Desjardins accounts from January 1, 2017 to the present.

e) Complete, unredacted copies of account statements for the respondent's RBC accounts from January 1, 2017 to the present.

f) Complete, unredacted copies of statements running from January 1, 20 I 7 to the present for all credit cards held by the respondent or since the date of separation.

g) A complete, unredacted copy of a valuation of the respondent’s pension as of the date of separation.

h) Complete, unredacted copies of account statements for the respondent’s Freedom 55 and/or Quadros account from January 1, 2017 to the present.

i) Complete, unredacted copies of account statements for the respondent’s Airbnb accounts, including both the “Lukito” and the “Lukito and Mr. Hajj” accounts, from January 1, 2017 to the present.

j) Complete, unredacted copies of account statements for the respondent’s PayPal accounts, including account balances, from January 1, 2017 to the present.

k) The respondent’s home address(es) and copies of the rental agreements, if any, for the respondent to rent out his home from the date of separation to the present, with the exception of the redaction of the personal information of third parties pursuant to the privacy laws of Canada, Ontario, or Quebec.

l) A complete, unredacted copy of the respondent’s 2019 T4RSP slip with respect to the withdrawal of funds in that year.

m) Complete, unredacted copies of account statements for the respondent’s RRSP accounts from January I, 2017 to the present.

n) Complete unredacted copies of benefits submissions and responses received with respect to the respondent’s medical/dental benefits plan from the date of separation to the present.

o) A complete unredacted copy of the August 2020 letter from Manulife to the respondent with respect to the denial of his request for additional life insurance coverage (i.e., an additional $100,000).

p) The respondent shall advise the applicant whether any expenses, other than those already disclosed, were incurred by the respondent with respect to training as a real estate agent and, if so, the respondent shall produce complete, unredacted copies of records of the expenses incurred.

9Corthorn J. also ordered Mr. Hajj to pay to Ms. Dagher costs for the motion in the amount of $5650.00 (both decisions herein referred to as “Corthorn J.’s 2021 Order”).

10Although Mr. Hajj provided some disclosure, most of the disclosure remains outstanding. I have attached to this decision as Schedule “A” a chart created by Ms. Dagher, which was part of her evidence, and which provides a comprehensive account of what was disclosed and what was not. I find as a fact that this chart and its contents accurately reflect Mr. Hajj’s compliance and non-compliance with Corthorn J.’s 2021 Order.

11Mr. Hajj has also not paid the costs awarded to Ms. Dagher by Corthorn J., in the amount of $5650, nor has he paid the cost award made against him by Master Kaufman on August 29, 2019, in the amount of $1,500. The evidence before me confirms that Mr. Hajj had sufficient funds in one of his Desjardins bank accounts at that time to pay that amount, and that around that date he purchased a new car at a cost of $26,000.

Legal Framework

Legal Framework

12The court’s power to strike a party’s pleadings is found in subrule 1(8) b) and c) of the Family Law Rules, O. Reg. 114/99. It provides that if a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including an order dismissing a claim or striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party.

13This power to strike pleadings is rooted in the court’s obligation to apply the Rules in a way that promotes its primary objective of dealing with cases justly. Rule 2(3) confirms that dealing with cases justly includes ensuring that the procedure is fair to all parties, saving expense and time, dealing with the case in ways that are appropriate to its importance and complexity, and giving appropriate court resources to the case while taking account of the need to give resources to other cases.

14The legal principles applicable to the court’s power to strike pleadings were concisely summarized by MacEachern J. in the context of her earlier decision in this case of Murray v. Choudhary, 2020 ONSC 1183 at paras. 21 and 22, as follows:

21 The legal principle governing the exercise of judicial discretion to strike a party’s pleadings is a three-pronged test as follows:

1. Is there a triggering event justifying the striking of pleadings?

2. Is it appropriate to strike the pleadings in the circumstances of the case?

3. Are there other remedies in lieu of striking pleadings that might suffice?

22 The power to strike out a party’s pleadings should be used sparingly and only in exceptional cases. In family law cases, pleadings should only be struck, and trial participation denied, in exceptional circumstances and where no other remedy would suffice.¹

15The Ontario Court of Appeal has on several occasions in the past years reiterated the importance for the parties involved in family litigation to provided full and frank financial disclosure. In Roberts v. Roberts 2015 ONCA 450, 65 R.F.L. (7th) 6, at paras. 11, 12 and 13, the Court stated:

11 The most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing.

12 Failure to abide by this fundamental principle impedes the progress of the action, causes delay and generally acts to the disadvantage of the opposite party. It also impacts the administration of justice. Unnecessary judicial time is spent and the final adjudication is stalled.

13 Financial disclosure is automatic. It should not require court orders — let alone three — to obtain production.

16In 2015, Family Law Rule 13 was amended to emphasize a party's financial disclosure obligations. In Manchanda v. Thethi 2016 ONCA 909, 84 R.F.L. (7th) 374, at para. 13, the Court of Appeal stated:

13 … after continual admonitions by the courts and the legislature that parties to a matrimonial proceeding must produce financial documentation, willful non-compliance must be considered egregious and exceptional. […] Those who choose not to disclose financial information or to ignore court orders will be at risk of losing their standing in the proceedings as their claims or answers to claims may be struck.

17These principles were most recently reiterated by the Court of Appeal in Sparr v. Downing, 2020 ONCA 793 and Peerenboom v. Peerenboom, 2020 ONCA 240, 446 D.L.R. (4th) 418.

18On March 1, 2021, amendments to the Divorce Act, R.S.C., 1985, c. 3 (2^nd Supp)² came into force to reinforce the principle that family law litigants have a clear and legislated obligation to provide complete, accurate and up-to-date information and to comply with court orders (ss 7.4 and 7.5 of the Act).

19Mr. Hajj was represented by counsel for the first two years of this litigation. At the time of the settlement conference before Shelston J. on March 22, 2021, and for the purpose of today’s motion, he was assisted by counsel who appeared as friend of the court for him. I find that Mr. Hajj knows and understands his duty as a family law litigant to provide full and frank financial disclosure and to obey court orders. He has simply chosen not to.

20Consequently, I find that it would be appropriate in this case to strike Mr. Hajj’s pleadings. As stated earlier, parenting issues have been settled except for Ms. Dagher’s claim to be able to travel with the children and obtain official documents for them without Mr. Hajj’s consent. Those issues are hardly disputable in this case given that Ms. Dagher has sole decision-making responsibility for the children and Mr. Hajj has no parenting time with them. As a result, the only issues remaining are the equalization of the parties’ net family property and support.

21I further find that no other remedies in lieu of striking Mr. Hajj’s pleadings would suffice to cure the significant injustice befalling on Ms. Dagher as a result of Mr. Hajj’s failure to disclose and follow court orders.

22In Mullin v. Sherlock, 2018 ONCA 1063, 19 R.F.L. (8th) 1 at para. 45, the Court stated that once satisfied that a litigant has not complied with an order for disclosure, the Court may assess the most appropriate remedy having regard to the following factors:

a) the relevance of the non-disclosure, including its significance in hindering the resolution of issues in dispute;

b) the context and complexity of the issues in dispute, understanding that an uncomplicated case should have little tolerance for non-disclosure, whereas a case involving extensive valuation of assets may permit some reasonable delay in responsiveness;

c) the extensiveness of existing disclosure;

d) the seriousness of efforts made to disclose, and the explanations offered by a defaulting party for the inadequate or non-disclosure; and

e) any other relevant factors.

23The disclosure ordered to be produced by Mr. Hajj, which he has failed to produce, is not insignificant or inconsequential, as he would want the court to believe. A large part of the court-ordered disclosure goes to the root of Mr. Hajj’s claim for spousal support and Ms. Dagher’s claim for child support, namely, the establishment of Mr. Hajj’s true income for support purposes. Additional documents ordered to be produced are necessary to determine the parties’ entitlement to an equalization payment, and its quantification. It would be highly unfair to Ms. Dagher to have the entirety of her net family property subject to division when the quantification of Mr. Hajj’s net family property cannot be determined with any degree of certainty.

24Mr. Hajj takes the position that he has provided most, if not all, of the disclosure ordered, well before Corthorn J. ordered its production. He states that Ms. Dagher simply does not like the format in which it was produced. To support this, Mr. Hajj submitted a lengthy Factum containing pictures of emails sent to Ms. Comor in the past (all with the exception of one having been sent to her during the years preceding Corthorn J.’s 2021 Order), without attaching the documents themselves (although many of them were included in Ms. Dagher’s own evidence). That information had not been included in his equally lengthy affidavit filed in response to the motion, and as such, it was not properly before the court. Nonetheless, I have taken the time to review it carefully, and I find that Mr. Hajj has fallen quite short of establishing that he had produced the missing disclosure.

25As noted by counsel for Ms. Dagher, even though there are no complicated issues in this case (such as the need to value a family business), Mr. Hajj’s financial circumstances are complicated by reason of the numerous bank accounts he has held and closed, the multiple credit cards he has obtained and used, his reliance on service providers such as Airbnb and Paypal with respect to property rental, changes in his employment status over time, and allegations that many of his living expenses have been covered by gifts from his parents (none of which he has been able to support with documentary evidence). The burden was on Mr. Hajj, not on Ms. Dagher, to provide a complete and accurate picture of his financial circumstances in an organized and timely fashion, supported by unredacted and reliable documentary evidence. He has failed to do so.

26Allowing Mr. Hajj to participate in the trial without having provided all court-ordered and relevant disclosure would unfairly deny Ms. Dagher’s lawyer the opportunity to prepare to meet his evidence about his financial situation. Simply drawing an adverse inference with regards to his assets and liabilities would prolong the trial without the disclosure necessary to arrive at a fair determination. Mr. Hajj’s deception and unfocused approach, which has unfortunately plagued this court proceeding with unreasonable costs and undue delays, will undoubtedly prolong the trial without advancing its truth-seeking purpose.

27Mr. Hajj has had many opportunities to correct breaches of disclosure orders and has failed to do so. After 3 ½ years of litigation and four disclosure orders, the trial is only a few weeks away. The non-disclosure has already had a significant impact on the length and cost of this case, requiring the motion before Corthorn J., delaying the trial originally scheduled to be proceed in January 2021, and forcing Ms. Dagher to bring the within motion. Ms. Dagher was left to expand significant resources to wade through what has been disclosed in order to determine what is missing. Her ability to prepare for trial and engage in meaningful settlement discussions has been severely compromised. Mr. Hajj has demonstrated that even if I were inclined to compensate Ms. Dagher by a further award of costs, those will not be paid.

Conclusion

28For all these reasons, Ms. Dagher’s motion is granted, and Mr. Hajj’s pleadings are hereby struck.

29This matter shall proceed to an uncontested trial to be heard in writing or, at the election of Ms. Dagher, it may remain on the May 2021 Trial Sittings to be heard orally. Ms. Dagher’s counsel shall confirm her choice of process with Trial Coordination on or before April 23, 2021.

Madam Justice Julie Audet

Released: April 19, 2021

Schedule A

Items ordered by Judge Corthorn

What is Missing

Also Ordered by

2a) Complete, unredacted copies of the passport(s) held by the respondent from the date of separation to the present.

Fully disclosed

b) Complete, unredacted copies of account statements for the respondent’s CIBC Mellon account from January 1, 2017 to the present.

No statements disclosed.

Jean claims that CIBC Mellon accounts are his TD group RRSP accounts. This may have been addressed by disclosure subsequently

provided by the father. No longer an issue

Justice Shelston (March 22, 2019)

Justice Roger (June 27, 2018)

c) Complete, unredacted copies of account statements for the respondent’s ING savings account no. 319425494 from January 1, 2017 to the present.

No account statements disclosed. Provided list of transactions from April 3, 2017 to September 30, 2020. No running balance, account number or address.

Justice Shelston (March 22, 2019)

Justice Audet (March 9, 2018) ordered copies of bank and investment account statements

d) Complete, unredacted copies of account statements for the respondent’s Desjardins accounts from January 1, 2017 to the present.

Previously received statements for February, March, April and May 2018. No other account statements received following Justice Corthorn’s order.

Provided list of transactions only identified by general transaction banking code from January 11, 2018 to December 31, 2020. Name and address is redacted.

Justice Shelston (June 27, 2018)

Justice Roger (June 27, 2018)

e) Complete, unredacted copies of account statements for the respondent’s RBC accounts from January 1, 2017 to the present.

No statements disclosed for period from March 2018 to February 2019 (inclusive) and no statements after January 2020.

A TD Visa statement shows payment was from “Royal Bank of Canada Montreal” in the amount of $1,192.11 on December 29, 2020.

Justice Audet (March 9, 2018)

f) Complete, unredacted copies of statements running from January 1, 2017 to the present for all credit cards held by the respondent or since the date of separation.

TD Visa: Missing August, September and December 2020 statements. The account number changed from July 2020 to Oct 2020. There was a $551.04 payment made to TD Visa from Jean’s Desjardins account on Oct 8, 2020. The statement with this transaction and the closing statement for the prior account were not disclosed.

MBNA credit card: No statements provided for period from March 2018 to July 2020 inclusive. The account number changed from the February 2018 statement to the August 2020 statement.

RBC Visa: No statements provided for January 2018 and for the period March 2018 to present.

Tangerine credit card: No statements after August 2020, and statements missing for April and May 2018.

Justice Roger (June 27, 2018) ordered RBC Visa statement for January 20 to Feb. 19, 2018

g) A complete, unredacted copy of a valuation of the respondent’s pension as of the date of separation.

Not provided. We have conceded this issue.

h) Complete, unredacted copies of account statements for the respondent’s Freedom 55 and/or Quadros account from January 1, 2017 to the present.

Nothing produced following Justice Corthorn’s order.

Jean states that his Freedom 55 fund is now with Quadros but he has not provided any evidence of the transfer of the Freedom 55 funds to Quadros. Provided Quadros statements from January 2018 forward but no statement for date of separation. These statements are redacted (no account number, address, name of representative, page numbers).

Justice Shelston (March 22, 2019)

i) Complete, unredacted copies of account statements for the respondent’s Airbnb accounts, including both the “Lukito” and the “Lukito and Jean” accounts, from January 1, 2017 to the present.

Nothing disclosed following Justice Corthorn’s order.

Lukito: Provided limited list with discrepancies with the Paypal statements and no balances.

Non-Lukito account: Information for 2017, 2018 and 2020 is redacted. Also, we have incomplete lists of 2018 (ends in March 2018), no running balance, and discrepancies between Paypal and Airbnb lists, especially as we only have one transaction for 2019.

Justice Shelston (March 22, 2019)

Justice Roger (June 27, 2018)

Justice Audet (March 9, 2018) ordered list of all bookings and gross income received from Airbnb for 2014 to date printed directly from the website for all accounts

j) Complete, unredacted copies of account statements for the respondent’s PayPal accounts, including account balances, from January 1, 2017 to the present.

Nothing new disclosed following Justice Corthorn’s order.

Jean provided list of transactions with no balance for the account at date of separation or any other time.

Justice Shelston (June 27, 2018)

k) The respondent’s home address(es) and copies of the rental agreements, if any, for the respondent to rent out his home from the date of separation to the present, with the exception of the redaction of the personal information of third parties pursuant to the privacy laws of Canada, Ontario, or Quebec.

No response. Jean variably uses three addresses: 1427 Forest Valley Drive, Ottawa (the matrimonial home), 178 Parkin Circle and 10-98 Dollard-des-Ormeaux. There is no indication that he is renting any other housing. No rental agreements produced.

o) A complete, unredacted copy of the respondent’s 2019 T4RSP slip with respect to the withdrawal of funds in that year.

Disclosed

p) Complete, unredacted copies of account statements for the respondent’s RRSP accounts from January 1, 2017 to the present.

All RBC RRSP statements disclosed.

q) Complete unredacted copies of benefits submissions and responses received with respect to the respondent’s medical/dental benefits plan from the date of separation to the present.

-Only a few statements provided

• List of submissions and reimbursements for 2020 provided but amounts do not match total amount deposited in Jean’s accounts.

• No information for 2019.

r) A complete unredacted copy of the August 2020 letter from Manulife to the respondent with respect to the denial of his request for additional life insurance coverage (i.e., an additional $100,000).

Disclosed

s) The respondent shall advise the applicant whether any expenses, other than those already disclosed, were incurred by the respondent with respect to training as a real estate agent and, if so, the respondent shall produce complete, unredacted copies of records of the expenses incurred.

Disclosed

Footnotes

1. 1MacEachern J. relied on the well-established principles set out by the Ontario Court of Appeal in Kovachis v. Kovachis, 2013 ONCA 663, 36 R.F.L. (7th) 1; Chiaramonte v. Chiaramonte, 2013 ONCA 641, 36 R.F.L. (7th) 11; Purcaru v. Purcaru, 2010 ONCA 92, 75 R.F.L. (6th) 33; Haunert-Faga v. Faga (2005), 2005 CanLII 39324 (ON CA), 20 R.F.L. (6th) 293 (Ont. C.A.); and Marcoccia v. Marcoccia 2008 ONCA 866, 60 R.F.L. (6th) 1; Roberts v. Roberts, 2015 ONCA 450, 65 R.F.L. (7th) 6, among others.
2. 2An Act to amend the Divorce Act, the Family Orders and Agreements Enforcement Assistance Act and the Garnishment, Attachment and Pension Diversion Act and to make consequential amendments to another Act, Statutes of Canada, Chapter 16.