COURT FILE NO.: FS-18-96428-00

DATE: 2021-06-25

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

SANDHYA CASSON Applicant

• and -

SCOTT CASSON Respondent

COUNSEL: Paul C. Buttigieg, for the Applicant Maxine M. Kerr, for the Respondent

HEARD: June 25, 2021, at Brampton, Ontario

BEFORE: Price J.

REASONS FOR ORDER AT CASE CONFERENCE

Nature of the Proceeding

1The parties attended today for their Case Conference.

2The procedural arc of a Family Law case entails three conferences:

a. The Case Conference is designed to ensure that the parties have all of the information and documents they need in order to obtain advice from the lawyers they retain or consult and engage in discussions with each other in an effort to come to an agreement on the issues in dispute. If agreement can be reached at the Case Conference on a substantive issue in dispute, the Court may make an Order, on consent, resolving that issue.

b. The Settlement Conference, which normally follows several months after the Case Conference, is an opportunity for the parties to receive an opinion from a judge of the Court that will eventually try their case as to how any issues on which they disagree is likely to be decided at trial. This may enable the parties to compare the likely outcome with the proposals they have discussed, and come to an agreement if they have been unable to do so to that point. If they are unable to agree after obtaining this opinion, they are asked to identify the issues on which they need a decision from a trial judge, and the witnesses they intend to call at trial, and the time they will need with each of the witnesses and to make their argument to the court. The Court can then make a realistic estimate of how long the trial will take, and find the earliest date when a judge and courtroom can be made available to them. The Court also sets a timetable for the remaining steps that must be taken before the trial begins.

c. At the Trial Management Conference, the parties check in with the Court and confirm that they have completed the steps set out in the timetable made at the Settlement Conference, and are ready to proceed to trial.

3The purpose of the three conferences, taken as a whole, is to give the parties the best opportunity possible to make the decisions in their case themselves, by agreement, rather than having a decision imposed on them by the Court. Litigants can derive substantial benefits from making the decisions in the case themselves, with the help of their lawyers. Four major benefits are as follows:

a. The parties are better situated than a trial judge to find an outcome that is acceptable to both of them. The parties can guide their lawyers, or their own decision-making, by their own priorities and motivations. The trial judge cannot lawfully base a decision on the parties’ motivations but rather, must base a decision on the factors set out in the relevant legislation and in the reasoning approved by higher courts. Unless the parties’ motivations are legally relevant, in the sense of being capable of lawfully affecting the judge’s decision, evidence about them is not even admissible.

b. The parties can make the decisions in their case themselves at must less expense than obtaining a decision from a trial judge would entail. The lawyers in the present case estimate that the trial is likely to take five to seven days. Based on even a five day trial requiring 6 hours of each lawyer’s time each day, and preparation for an equal amount of time, the trial, conservatively, will require 30 hours. Each of the laweyers has practiced law for 20 years or more. If successful at trial, they are entitled to claim an inflation-adjusted, partial indemnity hourly rate of $460.00, based on the 2005 Costs Bulletin. The compensation one of the parties, if unsuccessful, is likely to be ordered to pay to the other for trial and preparation is therefore approximately $27,600.00 (5 days x 6 hours x $460 x 2). If the successful party achieves an outcome that is better than an Offer to Settle, the unsuccessful party is likely to be ordered to pay 50% greater complensation, (substantial indemnity costs being 1.5 times partial indemnity costs), for a total of $41,400.00. The cost of the lawyers’ time for preparing pleadings, financial statements, net family property statements, and disclosure, is likely to exceed $10,000.00, and the three conferences are likely to cost over $3,000.00 each, for another $10,000.00. The cost of those steps, when added to the cost of trial and preparation, will likely be $61,400.00 or more. Adding H.S.T. will increase that amount to $69,382.00. Given that the unsuccessful party will have to pay his or her own lawyer an even greater amount than the 60% or 90% to be paid in costs to the other party, the cost each party faces, if unsuccessful, is likely to reach $140,000.00. Adding the cost of experts, such as Mr. Casson’s Chartered Business Valuator, whom he says he has paid $32,000.00, the cost each party faces, if unsuccessful, is likely to exceed $170,000.00. If the parties are able to find a mutually acceptable outcome through negotiation or mediation, the cost is likely to be far less.

c. There is a greater likelihood that the parties can get on with their lives after making the decisions themselves, by agreement, than if they must get a decision from a trial judge. The decision at trial, where one of the parties, if unsuccessful, faces costs of $170,000.00 or more, may be catastrophic. If Ms. Casson, who earns $43,3432.00, were unsuccessful, and faced costs on that scale, she could feel compelled to consider an appeal, which in family cases is likely to entail an additional $20,000.00 to $25,000.00. This could bring the potential costs of the unsuccessful party, including the fees to be paid to his or her own lawyer and the compensation to be paid to the other party, could reach, or exceed, $200,000.00. If the parties, with the help of their lawyers, can find an outcome they both feel they can live with, and avoid the expense of a trial, they are more likely to be able to move on with their lives.

d. The potential impact of the outcome on the parties’ children is likely to be better if the parties can reach agreement than if they must get a decision by a five to seven day trial that will deplete family resources otherwise available to meet the children’s post-secondary expenses and other needs. Additionally, the anger and resentment the parties may feel toward each other at the end of an expensive trial may spill over onto their children, with a negative impact on their relationships with the parent whom they blame for the outcome. An agreement between the parents is more likely to leave the children with the view that their parents had diffrerences that prevented them form remaining with each other, but were rational, fair-minded people who could resolve their differences without catastrophically depleting the family’s collective resources.

4The conferences in a family law proceeding are an important means of enabling the parties to achieve a just outcome at the least cost and with the least delay. The Case Conference plays an important role, by ensuring that each of the parties has the information and documents they need in order to make or assess offers to settle. If a party lacks a document that is likely to affect his or her willingness to accept a settlement, the party’s lawyer is unlikely to want to advise acceptance. Doing so without a document that the client is entitled to demand may result in an unfair outcome and the lawyer’s liability for the client’s loss. It is therefore of fundamental importance that lawyers encourage their clients to comply with their obligations to make full financial disclosure in a timely manner.

5The obligation to make full financial disclosure includes providing a timely response to Requests for Information made before the Case Conference, and providing timely up-dates of financial information, as circumstances change.

6This should have been a routine Conference. The parties separated in 2013 after a 24 year marriage. The marriage produced three children, now aged 21, 23, and 26 years old. Mr. Casson reported earnings of $396,754.00 in 2019 from APPS Transport Group Inc., of which he owned an 8.5% interest. Ms. Casson, who suffered a stroke in 2016, is a contract professor at a Community College and reported earnings of $43,342.00 in 2020.

7Ms. Casson required financial disclosure from Mr. Casson in order to value his Net Family Property and to determine the amount of his income for purposes of child support and spousal support. Instead of providing the necessary disclosure to Ms. Casson in a timely manner, Mr. Casson waited until the Case Conference to reveal that he and his partners had sold their business the previous day. Mr. Casson acknowledged that he had known for the past five months of his partners’ negotiation with the buyer but failed to disclose the fact to Ms. Casson.

8Mr. Casson’s failure to disclose these developments to Ms. Casson before the sale closed will likely make it more difficult for her to obtain access to the information and documents necessary to value his interest in the business on the date of separation and, therefore, his Net Family Property, the amount of equalization payment to be made, and the child and spousal support which she is entitled to receive. In response to Ms. Casson’s request for information about the sale, and the documents on which the sale price was based, Mr. Casson’s lawyer responded, at the Case Conference, by saying that her client may no longer have access to them because they are now under the control of the buyers. Mr. Casson declined to divulge even the amount he had received for his 8.5% in the business until ordered to do so by the Court, whereupon he estimated that he would receive between $4 million and $5 million for his interest.

9Ms. Casson’s lawyer questions how, when the company’s revenues increased from $54 million in 2010 to $73 million in 2013, Melanie Russell, the Chartered Business Valuator at Kalex Valuations whom Mr. Casson retained to provide a Calculation Valuation of his interest in the business estimated that the value declined from $34 million in 2009 to 10.2 million in 2013. In response to Ms. Casson’s request for an explanation of this apparent discrepancy, Mr. Casson’s lawyer replied, simply, that the 2009 value is not relevant.

10Ms. Casson seeks to obtain a new valuation from a different Chartered Business Valuator, Andrew Freedman of Duff & Phelps. Mr. Casson opposes her request on the ground that he and Ms. Casson jointly retained Ms. Russell. He relies on Rule 20.1(13) of the Family Law Rules, which provides:

RESTRICTION ON EXPERTS ON SAME ISSUE

(13) If a joint litigation expert provides opinion evidence on an issue for a party, no other litigation expert may present opinion evidence on that issue for that party, unless the court orders otherwise. O. Reg. 250/19, s. 8.

11Mr. Casson attributes the decline in the value of his interest from 2009 to 2013 while the business’ revenues were increasing to the fact that in 2011, the business lost its major client, accounting for $18 million of its revenue, and that its profit margin declined because it had to reduce the rates it charged in an effort to retain its market share in the transport industry.

12Mr. Casson’s explanation, offered at the same Case Conference where he discloses, for the first time, that he and his partners sold their business the previous day after negotiating the sale for the past five months, is not a basis upon which the Court should reasonably decline Ms. Casson’s request to retain her own valuator. Mr. Casson acknowledges that one of his former partners, who owned a 6% interest in the business, sold his shares in 2011 for $2 million. The fact that Mr. Casson was able to sell his 8.5 % interest yesterday for between $4 million and $5 million before taxes would suggest that, contrary to Ms. Russell’s conclusion, the value of the business was increasing from 2011 to the present, not declining.

13Mr. Casson elected to obtain only a “calculation valuation” from Ms. Russell, whom e retained with Ms. Casson’s concurrence. In a “calculation valuation”, the valuator relies on information supplied by the client/business owner, rather than verifying the information from independent sources, as is done in a “comprehensive valuation.”

14In Caskie v. Caskie, 2020 ONSC 7010, this Court explained the different levels of reliability that the three forms of business valuation have, and the significance of the difference in the context of a spouse’s obligation to make full financial disclosure in a family law case. in Caskie, the Court held that the kind of “Estimate Valuation” that Mr. Caskie obtained provided little assurance of its accuracy. The Court in Caskie concluded that it was not a substitute for Mr. Caskie’s obligation to make full financial disclosure. The Court awarded Ms. Caskie $20,000.00 costs for the expense she incurred in chasing the financial disclosure Mr. Caskie should have voluntarily provided to her, and an additional $10,000.00 for the costs she had incurred in the motion.

15In Caskie, the Court stated, at paragraph 10:

Newbould J. noted in Cummings v. Solutia SDO Ltd., 2008 ONSCI 42017 (CanLII), at paras. 33 to 34, the professional standards for valuation which apply to Chartered Business Valuators and describes the different types of valuation reports. An Estimate Valuation Report is not a Comprehensive Valuation Report, which is given with the highest level of assurance, and is not a Calculation Evaluation Report, which is given with the lowest level of assurance.

16For these reasons, the Court will grant leave to Ms. Casson to retain her own valuator to prepare a comprehensive valuation of Mr. Casson’s interest in APPS Transport Group Inc. on the date of separation and the income he has derived from his interest. The parties have consented to an order declaring that their date of separation was November 3, 2013, and to an order requiring Mr. Casson to pay a $100,000.00 advance to Ms. Casson on her entitlement to an equalization payment.

17I find that Mr. Casson failed to comply with his obligation to provide full financial disclosure to Ms. Casson. His failure to disclose to Ms. Casson the impending sale until the Case Conference resulted in the Conference being substantially less productive than it otherwise would have been. Rule 17(18) provides:

(18) Costs shall not be awarded at a conference unless a party to the conference was not prepared, did not serve the required documents, did not make any required disclosure, otherwise contributed to the conference being unproductive or otherwise did not follow these rules, in which case the judge shall, despite subrule 24 (10),

(a) order the party to pay the costs of the conference immediately;

(b) decide the amount of the costs; and

(c) give any directions that are needed.

18Mr. Casson will be ordered to pay Ms. Casson’s costs of the Case Conference in an amount the Court will determine based on written submissions from the parties.

19For the foregoing reasons, it is ordered that:

COSTS

1. The costs of the conference are reserved, pending receipt of written arguments, not exceeding two pages and a Costs Outline, which the Applicant shall submit by June 28, 2021, and which the Respondent shall submit by June 30, 2021, to my judicial assistants sherry.mchady@ontario.ca and Brenda.berger@ontario.ca.

CONSENT ORDERS

2. On consent, he parties date of separation shall be deemed to be November 3, 2013.

3. On consent, the Respondent shall forthwith pay to the Applicant an advance of $100,000.00 toward her claim for an equalization payment.

DISCLOSURE

4. The Respondent shall, by July 26, 2021, produce the following documents to the Applicant:

a. His Share Purchase Agreement;

b. The documents used by the APPS Transport accountants for purposes of determining the value of the shares for sale purposes;

c. Full particulars of all payments made and to be made to the Respondent arising from the sale transaction; and

d. A copy of the employment agreement entered into by Mr. Casson setting out the details of all remuneration that shall be paid to him.

5. The Applicant shall, by July 26, 2021, produce the following documents to the Respondent:

a. An affidavit listing all documents in the Applicant's control, or available to her on request, relevant to the issues in this proceeding, together with copies of the documents listed therein. This will include but not be limited to copies of the documents related to the Applicant's purchase of her current housing and financing, and all medical or therapeutic clinical notes and records since January 1, 2016, concerning the diagnosis and treatment of her for any conditions she says have impeded or prevented her from securing or maintaining full employment since November 3, 2013;

b. Any communications she has had with her accountant(s) and/or the Canada Revenue Agency concerning the issues in this proceeding;

c. Her year to date pay stub;

d. Proof of all s. 7 expenses incurred that the Applicant intends to claim in this proceeding, with proof of the source of payment;

e. An itemization of all s. 7 expenses that the Applicant intends to claim in this proceeding for the next I 2 months;

f. Copies of all communications or any oral requests the Applicant relies upon in support of a contribution from the Respondent to s. 7 expenses;

g. Proof of the Applicant's best efforts to become financially self-supporting since separation;

h. All documents the Applicant relies on to establish that she is unable to earn an income other than on a contract basis at George Brown;

i. All documents that the Applicant relies upon in support of the position that her employment at George Brown is precarious; and

6. If any document required by this Order to be produced is not produced, the party required to produce it shall, by July 26, 2021, produce a sworn affidavit, setting out the following:

a. Whether the document ever existed, and whether it was ever in the party’s possession, power, or control;

b. If the document once was, but no longer is, in the party’s possession, power, or control, when and under what circumstances it ceased to be in his/her possession;

c. In whose possession the document is now believed to be, including the full contact information of the person and agency;

d. The efforts made to obtain the document or information, including written requests made (and written requests shall be made for every document not produced), and the responses received;

e. The reasons the document was not produced.

7. If a party produces an affidavit as required above, he/she shall additionally, within seven days of receipt, sign and return to the other party a Direction, authorizing and directing the person or agency believed to be in possession of the document to produce it, at the expense of the party whom this Order required to produce it, to produce the document directly to the lawyer for the party to whom this Order required it to be produced.

8. The Applicant has leave to retain her own Chartered Business Valuator to provide a comprehensive valuation of the business interests of the Respondent on November 3, 2013, and the income he has derived from those interests, and to rely on the valuation as evidence at the trial of this proceeding.

9. Each party shall, by June 1 each year beginning 2021, produce to the other their Income Tax Returns, both personal and corporate, with all schedules and attachments, for the previous year and by July 1 each year beginning 2021, their Notices of Assessment and Re-Assessment received from the Canada Revenue Agency.

MEDIATION

10. The parties shall attend a mediation by August 6, 2021. The Applicant shall, by July 2, 2021, submit the names of three qualified and available family law mediators to the Respondent, with their qualifications, hourly rates, estimated cost, and availability, and the Respondent shall, by July 9, 2021, select one of them. The mediation shall initially be paid for by the Respondent, subject to re-apportionment by the trial judge in a costs order at trial.

MOTIONS AND QUESTIONING

11. If the issues have not been resolved by August 6, 2021, the Applicant has leave to make a motion for temporary child and spousal support, and/or to enforce the Respondent’s disclosure obligations, or, on notice to non-parties, for production of documents from, or questioning of, non-parties. The parties shall conform to the following timetable.

a. The moving party shall electronically serve and file their motion material by August 13, 2021;

b. The responding party shall electronically serve and file their motion material, including a factum, by August 20, 2021;

c. The moving party shall electronically serve and file their reply material, including factum, by August 24, 2021;

d. The motion shall be heard by video-conference on Friday, August 27, 2021, at 10:00 a.m.;

e. Argument on the motion shall be restricted to 20 minutes for the moving party, 25 minutes for the responding party, and a 5-minute reply for the moving party.

QUESTIONING

12. Each party has leave to conduct questioning, not to exceed three hours.

SETTLEMENT CONFERENCE

13. The parties shall attend a Settlement Conference on February 4, 2022, at 10:00 a.m.

Price J.