COURT FILE NO.: FS-19-11971
DATE: 20220511
ONTARIO SUPERIOR COURT OF JUSTICE
M. KRAFT, J.
REASONS FOR ORDER
Nature of Motion
The respondent (“wife”) brings a motion seeking partial summary judgment dismissing the husband’s spousal support claim. The applicant (“husband”) brings a cross-motion for disclosure, including an order that the wife answer her undertakings.
Overview
The parties were married for 35 years and have five children. Currently, the husband is almost 67 years of age and the wife is almost 62 years of age. They separated on January 23, 2017. At the time of separation, the children ranged in age from 21 to 31 years of age. The four elder children are married. The youngest child is currently in medical school and resides with the wife in the matrimonial home.
The wife is a commercial real estate lawyer and practices at Reiter-Nemetz, her own law firm, where she had practiced part-time during the marriage with her father, until he died. The husband is an intellectual property and trademark lawyer. During the marriage, he practiced full- time for some years and he also pursued three Masters degrees. Additionally, the husband obtained a Certificate in Fine Arts from Sotheby’s in New York from 2012-2016, and completed a four- year Rabbinical Studies degree during the marriage in New York. He spent time away from Toronto and the family to pursue many of these degrees/diplomas. He is now an ordained Orthodox Rabbi, without a congregation.
The parties disagree about the roles they played during the marriage. The wife submits that she was responsible for maintaining the parties’ household and looking after the parties’ five children; she worked part-time as a lawyer; and gave up significant career opportunities as a result of the role she played during the marriage, while the husband was primarily preoccupied with his own interests. The wife discontinued a Masters in Law at the University of Toronto which she began in or around 1997 as a result of her child-care responsibilities.
The husband submits that he was primarily involved in the child-rearing while the wife focused on her career, with the exception of a five-year period between 1999 to 2004 when he worked at downtown law firms in Toronto and attended the Sotheby’s program in New York City. The husband attended Yeshiva University in New York beginning in 2014 for the Rabbinical School Program and graduated in 2017. In 2014, the parties’ youngest daughter was 18 years of age and in her last year of High School.
The parties each own shares in real estate businesses that were started by their respective families of origin. Each party owned shares in these businesses as at the date of marriage. Further, each party received inheritances and gifts during the marriage and, as a result, has exclusions from their respective net family property. The extent of each party’s excluded property is unknown. To date, the wife has valued her non-excluded property for net family property purposes but she refuses to value her excluded property until this motion for partial summary judgment is determined.
In February 2016, the Husband sold his shareholdings in two family companies, Goran Holdings Inc. (“Goran”) and Grandview Holdings Inc. (“Grandview”), in a settlement with two of his uncles who were the majority shareholders, for $12,187,550.58. After paying the income taxes associated with the sale, the husband placed the balance of the settlement into a GIC, which had a balance of $10,360,202.97 as at the date of separation. The husband has a date of marriage deduction for the value of the shares he brought into the marriage, which has yet to be quantified. During the marriage, the husband inherited additional shares in Goran and in Grandview when his mother died. He also seeks an exclusion for the value of the shares he inherited during the marriage which are traceable into the settlement he entered into in 2016. The extent of his exclusions have also yet to be quantified or traced
The wife’s father died in April 1999. The wife’s mother was the sole beneficiary of his estate. The wife’s mother gifted the Reiter-Nemetz law practice to the wife. As part of an estate freeze undertaken by the wife’s mother in 2001, the wife was gifted shares in Reiter International Limited and Midking Investments Limited, along with each of her three siblings. The wife deposes that her interest in these corporations, which mostly own commercial real estate, along with her interest in Reiter, Nemetz Law Firm, are excluded from her net family property. The wife has declined to give any financial disclosure regarding her excluded assets to the husband since she argues she has provided sufficient disclosure to demonstrate that these assets were gifted to her or inherited by her after the separation.
In terms of her non-excluded assets, the wife deposes that as at the date of separation, she had a 25% interest in a) 2424454 Ontario Inc. (incorporated June 26, 2014); b) 251488 Ontario Limited (incorporated April 19, 2016); and c) Veireit Inc., a corporation in which she also had an interest as at the date of marriage. These three corporations own real estate. The wife retained ap Valuations to value her interests in these three corporations as at the date of marriage and the date of separation. In the wife’s financial statement, sworn January 10, 2020, she deposes that her net family property is $2,255,159.15.
This proceeding was commenced on August 19, 2019. There is a lengthy history of claims, amendments and withdrawals in this matter. The only issues still outstanding between the parties are the husband’s spousal support claim and property division.
Preliminary Evidentiary Issue – The Admissibility of the Husband’s Doctor’s Affidavit
At the outset of the motion for partial summary judgment, the wife brought a motion seeking to strike the affidavit of the husband’s doctor, sworn on March 18, 2022, from the record. In response, the husband sought leave to file his doctor’s affidavit. The parties agreed to proceed with the long motion without my first ruling on the admissibility of the husband’s doctor’s affidavit and for me to render a decision regarding the admissibility of the affidavit, when I determined the issues argued on the motion.
Issues
The issues on this motion are:
a. Should the husband’s doctor’s affidavit be struck from the record?
b. Is this case an appropriate case for partial summary judgment? If it is, should the husband’s spousal support claims be dismissed because there is no genuine issue requiring a trial with respect to the husband’s entitlement to receive spousal support on a compensatory or needs basis?
c. If the husband’s spousal support claim is not dismissed, should the wife be required to answer her undertakings given during her questioning on August 3, 2021, and February 28, 2022; to answer the questions she took under advisement; and/or to answer questions she refused to answer?
Issue One: Should the Husband’s Doctor’s affidavit be struck from the record?
The husband’s doctor was the husband’s physician from 2017-2020, a period of three years post-separation. The husband’s doctor’s affidavit was tendered by the husband as a “participant expert” report. The husband argues that the husband’s doctor’s evidence is relevant to the wife’s partial summary judgment motion as it corroborates his own evidence about his health struggles which, in turn, relates to his future employability and therefore, impacts his spousal support claim. He submits that he was not able to serve the husband’s doctor’s evidence on the wife until a sealing order was made by Justice Shore on March 17, 2022, given the sensitive nature of the information contained in the husband’s doctor’s affidavit.
Rule 20.2(1) of the Family Law Rules (O. Reg. 114/99, as am.) (“FLRs”) defines a “participant expert” as a person who is not engaged to provide expert opinion evidence for the purposes of litigation, but who provides expert opinion evidence based on the exercise of his or her skills, knowledge, training or experience while observing or participating in the events at issue.
The husband's doctor has extensive training and experience. He has worked at several hospitals. The husband was a patient of his as part of his private practice.
Rule 20.2(15) of the FLRs provides that expert opinion evidence may be used on a motion. In Simcoe Muskoka Child, Youth and Family Services v. A.H., 2021 ONSC 2789, Krause, J. held that rule 20.5(15) allows for both a participant expert’s report and a practitioner’s report to be admitted into evidence at a motion for summary judgment.
The Legal Test regarding the Admissibility of the Husband’s Doctor’s Affidavit
To determine whether the husband’s doctor’s affidavit ought to be struck from the record, I must first determine whether filing the affidavit violates Rule 20 and/or Rule 2 of the FLRs. If it does not violate the FLRs, then must determine whether it is relevant for this motion.
I find that the filing of the husband’s doctor’s affidavit, sworn on March 17, 2022, violates the FLRs for the reasons articulated below. As a result, his affidavit is to be struck from the record and not relied upon in determine the wife’s partial summary judgment motion. Since the filing of the participant expert’s report violates the FLRs, I have not considered the substantive admissibility of the husband’s doctor’s opinion evidence.
The Wife’s Position
The wife argues that the filing of the husband’s doctor’s affidavit is a contrary to the FLRs and violates the primary objective of the FLRs for the following reasons:
a. The husband served and filed the husband’s doctor’s report after the parties were questioned, leaving the wife’s counsel with no opportunity to test the husband’s doctor’s evidence;
b. The husband’s counsel advised the wife’s counsel that if he intended to rely on the evidence of a health practitioner at the partial summary judgment motion, he would seek leave to do so if the wife did not consent. He did not do so;
c. The husband’s counsel had advised the wife’s counsel that he did not intend to rely on the evidence of a health practitioner or doctor for purposes of the wife’s partial summary judgment; and
d. Notwithstanding (b) and (c) above, the husband served and filed the husband’s doctor’s affidavit after he served his Factum for the summary judgment motion on March 22, 2022, without having asked for the wife’s consent or leave of the court.
Furthermore, the wife argues that the evidence of the husband’s doctor is not relevant to the issues on her partial summary judgment motion and that its probative value does not outweigh the potential prejudicial effects of admitting the affidavit. She submits that the husband was under the clinical care of the husband doctor after the parties’ separated from 2017 to 2020 and, as a result, the husband’s doctor’s summary of the treatment provided to the husband does not have any impact on the husband’s health during the marriage.
The Husband’s Position
The husband acknowledges that he did not serve the husband’s doctor’s affidavit until March 22, 2022, which was after he had been questioned, but submits he could not do so until Shore, J. granted him a sealing order because the information contained in the husband’s doctor’s affidavit was sensitive. Further, the husband argues that the husband’s doctor’s report is highly relevant to his spousal support claim because he suffers from various health issues. He submits that he cannot now, at age 67, find remunerative employment given his health issues, which forms part of the basis of his spousal support claim.
Analysis
Rule 20(8) of the FLRs provides that a party who wants to question a person or obtain information by affidavit or by another method may do so only if the party (a) has served and filed any answer, financial statement or net family property statement that these rules require; and (b) promises in writing not to serve or file any further material for the next step in the case, except in reply to the answers of information obtained. In filing the husband’s doctor’s affidavit on the wife on March 22, 2022, the husband did so well after the wife was questioned on August 5, 2021 and February 28, 2022. Accordingly, I find that the husband breached rules 20(8)(b), 2(3) and 2(4) of the FLRs since he filed material after the questioning, which is not permitted.
I am not persuaded that the husband was only able to serve the husband’s doctor’s affidavit after the sealing order was made by Shore, J. The husband filed his first affidavit in defence of the wife’s partial summary judgment motion on December 20, 2021. His affidavit is replete with references about his health struggles. If the husband were truly concerned about the sensitive nature of the information in the husband’s doctor’s affidavit, he would have also been worried about his own affidavit material.
The husband could have easily provided the wife with a copy of the husband’s doctor’s affidavit and asked her to consent to him not filing it in the court file until the sealing order had been made. This is especially the case, since the parties consented to the sealing order made by Shore, J. on March 17, 2022. Further, there was nothing preventing the husband from bringing his motion for a sealing order after his first day of questioning on August 3, 2021, if he intended to rely on the husband’s doctor’s evidence. This would have given the wife the opportunity to review the evidence and test it by examination.
The husband’s counsel was asked if he intended to rely on any evidence as to the husband’s health on the summary judgment motion when he was questioned on August 3, 2021. Mr. Joseph first answered that he would be doing so, and it was pointed out to him that he would have to seek the wife’s consent or leave to do so since the questioning of the parties was underway.
When Mr. Joseph was asked again, six months later when the questioning of the husband continued on February 28, 2022, he advised that he did not intend to rely on any evidence as to his client’s health for the wife’s partial summary judgment motion. Ms. Goldhart relied on this information. If Mr. Joseph subsequently changed his mind, it was incumbent on him to have raised the issue with Ms. Goldhart and obtain her consent to filing the affidavit; and adjourn the two long motion dates to give Ms. Goldhart an opportunity to cross examine the husband’s doctor; and/or he ought to have brought his motion for a sealing order earlier. To have served the husband’s doctor’s affidavit in the manner he did, four days prior to the return date of the partial summary judgment motion, was not fair or reasonable and does not promote the primary objective of the FLRs.
Given that I have found that the husband’s doctor’s affidavit was not filed in compliance with the FLRs, it is not necessary for me to determine the substantive admissibility of the affidavit. Accordingly, the husband’s doctor’s affidavit sworn on March 22, 2022 and any reference to it in the husband’s Factum is hereby struck.
Issue Two: Is this case an appropriate case for partial summary judgment?
The wife seeks partial summary judgment dismissing the husband’s spousal support claims on the basis that
a. there is no merit to the husband’s claim for spousal support.
b. the husband has never had a successful career in law and, as a result, pursued many other educational and personal interest pursuits instead of advancing in his legal career.
c. the husband’s lack of success in the field of law and/or his inability to find remunerative employment now, is not, according to the wife, linked in any way to the role the husband played during the marriage or the expectations placed upon him by the parties.
As a result, she seeks partial summary judgment dismissing his spousal support claim on the basis that there is no genuine issue for trial about his entitlement to receive spousal support. If partial summary judgment is granted as sought, the issues relating to equalization and property claims will remain outstanding. Until a determination of the wife’s partial summary judgment motion is made, she has refused to make full disclosure as to her excluded assets.
The husband argues that he is entitled to spousal support on a compensatory and non- compensatory basis having regard to the economic disadvantages he suffered as a result of the marriage and its breakdown. He submits that he took on the role of caring for the children; eroded his capital to pay for the family home; and contributed disproportionately to the children’s expenses. He also submits that he experiences health struggles and cannot now, at his age (67), secure remunerative employment. As such, he argues that his entitlement to spousal support is a genuine issue requiring a trial. The husband’s position is that if partial summary judgment is granted and I find the husband has no genuine entitlement to spousal support requiring a trial, then the trial judge could end up making different findings about the roles the parties played in the marriage and the economic interdependence of the relationship.
The husband argues that the wife has not met her onus to dismiss his spousal support claims on a summary basis because:
a. partial summary judgment should not be granted because there is a possibility of inconsistent findings between the part of the action to be decided by summary judgment and the property issues to be decided at trial;
b. partial summary judgment would not lead to a fair, faster or more proportional resolution of this dispute but would, instead, lead to increased costs and delay this matter; and
c. the wife has stonewalled her financial disclosure obligations making it impossible for the court to determine her means. He maintains that his entitlement to spousal support cannot be determined before the issues of property division are determined and/or the sale of the matrimonial home is ordered because the court cannot properly determine if there has been or can be an equitable sharing of the consequences of the parties marriage or its breakdown, without making an order for spousal support.
Both parties agree that it is not currently possible to calculate either his or her net family property. As a result, a trial is needed to determine the property division issues.
The Legal Test for Partial Summary Judgment
The test for summary judgment is well-known. Under r. 16(6.1) and (6.2) of the FLRs, summary judgment must be granted where there is no genuine issue requiring a trial. In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Court held, at para. 49, that there will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a summary judgment motion. “This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.”
When asked to make a determination about partial summary judgment, where there still remain claims that need to be tried, courts must be particularly careful. As Brown J.A. described in Malik v. Attia, 2020 ONCA 787, at para. 61, there are risks to a motion for partial summary judgment, including the risk of inconsistent findings, delay, and increased expense.
Although Malik v. Attia was a civil case, the same considerations and questions should be answered by counsel seeking partial summary judgment in a family law context.
Specifically, Brown, J. stated at paras. 61 and 62:
[61] Yet, the risk of inconsistent findings is only one of several matters that a motion judge must consider when asked to entertain a motion for partial summary judgment. Reduced to its essence, the decision in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 promoted summary judgment as a procedural tool that offers the prospect, when used in the right circumstances, to provide litigants with timely and affordable access to the civil court system: at paras. 2-5. Given that simple objective, before embarking on hearing a motion for partial summary judgment a motion judge must determine whether, in the circumstances, partial summary judgment will achieve the objectives of proportionate, timely, and affordable justice or, instead, cause delay and increase expense: Butera v. Chown, Cairns LLP, 2017 ONCA 783, 137 O.R. (3d) 561, at paras. 29-34; Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, 146 O.R. (3d) 135, at para. 14.
[62] When faced with a request to hear a motion for partial summary judgment, a motion judge should make three simple requests of counsel or the parties:
(i) Demonstrate that dividing the determination of this case into several parts will prove cheaper for the parties;
(ii) Show how partial summary judgment will get the parties’ case in and out of the court system more quickly;
(iii) Establish how partial summary judgment will not result in inconsistent findings by the multiple judges who will touch the divided case.
Neither party raised this case in his/her factum. On April 19, 2022, I asked both counsel to review the considerations set out in the Malik v. Attia and to make further written submissions addressing these questions.
The Wife’s Position
The wife’s position is that granting partial summary judgment and dismissing the husband’s claim for spousal support will be cheaper for the parties; will result in the case moving through the court system expeditiously; and will not result in inconsistent findings, because:
a. Neither party would need to have an expert complete an income analysis if the husband’s spousal support claim were summarily dismissed. Given that the wife is self-employed and is a shareholder in various corporations, she would need to retain an expert to value her excluded assets to determine her potential sources of incomes from her excluded assets which would be costly and would then require the husband to retain an expert to critique that report. Similarly, the wife argues the husband would need an expert report for his sources of income from his excluded assets;
b. The wife would not need to retain an expert to determine the husband’s ability to earn an income based on his education and employment history;
c. The duration of examinations and the amount of required disclosure would be reduced as questioning would be effectively limited to each party’s claimed exclusions from his/her net family property;
d. The trial would be at least one week shorter because the husband would not have to prove a compensatory spousal support claim and there would not be a need for evidence on the roles played by the parties during their marriage;
e. A trial could be scheduled sooner;
f. The factual underpinnings to determine the husband’s entitlement to spousal support is separate and distinct from the factual and evidentiary basis upon which the property issues will be decided since the calculation of each spouse’s net family property and related property issues will be based upon:
i. Documentary financial disclosure to support the value of the matrimonial home, bank accounts and investment accounts owned by each party on the date of separation;
ii. Valuation reports as well as viva voce testimony from each party’s valuators regarding each spouse’s business interests as at the date of marriage and the date of separation;
iii. Viva voce testimony from the spouses to identify and explain the assets he/she each claim are excluded, as well as to quantify any post-separation adjustments.
iv. None of the viva voce or documentary evidence necessary to calculate net family property and/or post-separation adjustments has any connection to and/or overlaps with the evidence submitted in relation to the husband’s claim for compensatory spousal support.
The Husband’s Position
The husband’s position is that the wife’s motion for partial summary judgment seeking to dismiss his spousal support claims has not streamlined the resolution of the issues in this matter for the following reasons:
a. The wife’s motion has caused the main action to be significantly delayed. As a result of the motion, the parties are now waiting for an outcome on one of the issues between them, spousal support, and the wife’s disclosure is still outstanding.
b. Her notice of motion to dismiss his spousal support claim was served on December 4, 2020, well over a year before the summary judgment motion was heard. In 2020, the wife delayed the completion of the income reports and disclosure. Had the matter proceeded to trial, a far more efficient global resolution of the issues would have been reached. A year and a half later, the parties are now waiting for a determination of the issue of spousal support on an incomplete record and are not further ahead on the issue of the wife’s disclosure;
c. The wife’s partial summary judgment motion, along with her refusal to provide financial disclosure has consumed two full-day attendances in this court. In preparation for the wife’s partial summary judgment motion, each party prepared two factums and filed numerous affidavits. The parties also attended four days of cross- examination on the evidence filed.
d. The property and spousal support issues are not readily bifurcated. There will be overlap in the evidence necessary to support positions for both claims. In the wife’s sworn financial statement, she deposes that she receives income from Midking Properties Limited, 1458298 Ontario Limited, and the Reiter-Nemetz law firm. The wife has a business interest in Midking Investment Limited and the Reiter-Nemetz law firm. Disclosure relating to these business interests is necessary to establish her claimed exclusion, and her net family property. It is also disclosure that is relevant to the determination of spousal support, as it goes to the wife’s means;
e. In family law, everything is inter-related and interdependent. Isolating spousal support and equalization as two separate issues is not cost-effective and not a good use of judicial resources.
f. In analyzing whether there will be time saving if partial summary judgment is granted, the issue must be analyzed from the perspective of the proceeding as a whole. Here the entire action has sat, for two years after being commenced and it has not reached a final resolution and the disclosure is not complete. The parties separated five years ago. The parties have not yet had a settlement conference to deal with all of the issues. The matter could be further delayed if partial summary judgment were granted as an appeal could be brought, resulting in further delay.
g. Inconsistent findings could end up resulting since it is only after the property issues are determined that the condition, means and circumstances of both spouses can be determined which then impacts entitlement to and the quantum/duration of a spousal support order.
Analysis
I find that this is not an appropriate case for partial summary judgment. Bifurcating spousal support from property division in this case will only increase the legal costs and cause further delay in these proceedings. Further, I am not persuaded by the wife’s argument that spousal support claims can be determined or analyzed separately from property division claims.
This is a case where a judge should determine the entirety of the case once and for all on its merits, instead of slicing determinations into a series of partial summary judgments.
Applying the three considerations to partial summary judgment set out in Malik v. Attia to the case at bar, I find as follows:
a. Dividing the determination of spousal support entitlement and property division will not prove to be cheaper for the parties. While the wife argues a dismissal of the husband’s spousal support will make the trial shorter and less expensive because expert reports regarding the value of the wife’s excluded assets; the wife’s income and means; the husband’s income and means; and/or the husband’s employability will not be needed, her argument does not consider the increase in costs of these proceedings as a result of her having brought this partial summary judgment motion nor does it consider the case as a whole. Had the parties simply proceeded with the trial of this case in the usual course, significant resources could have been spared, including four days of questioning, and several case conferences, In addition, lengthy materials filed by each party in support of and in response to this long motion would not have been needed; and the parties’ legal resources could have been used to determine the issues of spousal support and property division. Furthermore, the expert reports the wife submits will not be necessary is not, in my view, correct. The wife will have to value her excluded assets for property division purposes. Both parties will still need to engage their experts to complete a tracing analysis and to provide date of marriage valuations. Further, it is not until these valuations are complete, that income and means can be determined, since income derived from each party’s respective assets, excluded or not excluded, is relevant;
b. Granting partial summary judgment and dismissing the husband’s spousal support claims does not necessarily result in the balance of the parties’ case getting in and out of the court system more quickly. A trial will need to be scheduled for property division. This trial will still be complicated and will involve
i. a thorough understanding of the parties’ complex and layered corporate interests;
ii. a thorough analysis of the inheritances and gifts each party received post- marriage;
iii. an understanding of the date of marriage deductions claimed by each party; and
iv. lengthy testimony from expert witnesses.
The same witnesses who will be called to explain the value of each party’s property for net family property purposes will also be in the best position to provide evidence about each party’s income and/or means from these assets. In this way, new expert witnesses will not be necessary if both spousal support and property division are determined at the same time; and
c. Finally, and most importantly, for the case at bar, granting partial summary judgment and dismissing the husband’s spousal support claims may result in inconsistent findings by the multiple judges who will touch the divided case. Since it is only after the property issues are determined that the condition, means and circumstances of both spouses can be determined, dismissing the husband’s entitlement to support means that the court is being asked to make a finding now that may well be inconsistent with the trial judge who determines property division. If, for example, the wife is able to prove her exclusions and date of marriage deductions, and the husband is not able to prove his exclusions and date of marriage deductions and he ends up owing the wife a significant equalization payment, then his entitlement to spousal support on a non-compensatory basis may be legitimate. However, if I grant partial summary judgment and dismiss the husband’s spousal support claim now, he will lose the opportunity to advance this claim, which he would not otherwise be able to revive at a later point in time. It is on this basis, that I decline to grant the wife partial summary judgment.
In support of my finding above that the spousal support and property division claims ought not to be bifurcated, Moge v. Moge, [1992] 3 SCR 813 recognizes the equitable sharing of the consequences of marriage and/or its breakdown which can be achieved by child support, spousal support, division of assets or a combination thereof [emphasis added]. Since the wife has made a claim for equalization of the net family properties and a significant portion of her assets are excluded, it is unknown at this stage whether the husband could end up owing the wife a significant equalization payment if she is able to establish her excluded property and he is not, or whether she would owe the husband an equalization payment. As both parties have significant assets, I find that the property payment would be particularly important to the spousal support claim.
In Hartshorne v. Hartshorne, 2004 SCC 22, [2004] 1 SCR 550, at paragraph 56, the SCC found that property division and spousal support are inextricably linked and as a result, there is a proper sequencing of claims that has to occur with property division being determined first before a final order for spousal support can be made. Specifically, Bastarache, J., writing for the majority, in commenting on the approach taken by the trial judge in that case, stated “Beames J. first awarded spousal support and then reapportioned the family assets. In doing so, she considered the respondent’s need to become and remain economically independent and self- sufficient twice. This was an error in law.”
This sequencing of issues was also echoed by the Ontario Court of Appeal in Greenglass v. Greenglass, 2010 ONCA 675. There are cases where the payment of equalization has little bearing on the spousal support analysis, however, the amount of the equalization payment and the impact of any potential income-generating potential associated with the assets with which each party is left will almost invariably affect the support analysis. As a matter of law, therefore, the calculation of the division of assets and resulting equalization payment must always precede any support analysis: Greenglass, at para. 44.
Since the husband has not yet been able to complete the tracing of his excluded property and/or determine his date of marriage assets, it is not yet possible for either party to calculate his or her net family property or for the court to determine which party owes the other an equalization payment.
In order to determine entitlement to spousal support, the court must consider what is reasonable having regard to the “conditions, means and other circumstances of the parties”. The reference to “means” includes all resources and assets from which a spouse can generate gains or benefits, including the ability to earn income from a property judgment.
The husband’s compensatory spousal support claim is premised on the parties’ relationship being a joint endeavour. He argues that he and the wife were equally involved in the care of the children in the early years of the marriage. According to the husband, his career languished while the wife’s career thrived. He describes the family as being dependent on the wife’s income and assets while he depleted his own capital which had been gifted to him during the marriage by his family. He depleted his own capital to fund family expenses, vacations, etc. while the wife kept her capital intact. The husband submits that he is still entitled to compensatory spousal support even though he worked throughout the marriage. There is a conflict on the record before me on this issue. There are issues of credibility which, on a written record, are not easily determined.
Even if there is little basis for the husband’s compensatory claim, which I cannot find at this stage of the case, the husband also seeks spousal support on a needs basis. In long-term marriages, the court has held that the merger of parties’ economic lifestyles creates a joint standard of living which must be considered in a spousal support analysis. The husband argues that despite his net worth of $12 million, his capital position, at the end of the marriage, does not sufficiently compensate him for the economic disadvantages arising from the marriage. Rather the disparity between his net worth and the wife’s net worth must be corrected through a generous spousal support order. This analysis cannot be determined at this stage, because the court is not able to determine the property division issues at this time.
Issue Three: If the husband’s spousal support claim is not dismissed on the partial summary judgment motion, should the wife be required to answer her undertakings given during her questioning on August 3, 2021 and February 28, 2022; answer the questions she took under advisement and/or answer questions she refused to answer most of which relate to the value of her excluded assets and her income?
The wife was questioned on August 5, 2021 and February 22, 2022. She refused to answer a number of questions regarding the value of her assets, claimed exclusions and her income for support purposes. The husband’s cross-motion is for disclosure seeking that the wife answer her refusals because she has failed to provide relevant disclosure pertaining to her income in the face of his spousal support claim and/or to value her exclusions on the date of marriage, date of separation or current date. Attached to the husband’s notice of motion as Schedule “A” is a list of 20 categories of questions/items the husband wants the wife to answer and/or disclose.
To understand what has transpired with respect to financial disclosure thus far, a brief history of the production requested is required and set out below:
a. The wife served and filed her Answer in January 2020. On January 24, 2020 the wife produced some financial disclosure. The parties attended the first case conference on February 5, 2020. The day before the case conference, on February 4, 2020, the husband made a preliminary request for disclosure from the wife, which was an initial production request of his expert, Steve Ranot, of Marmer Penner Inc., dated January 24, 2020. The wife did not produce any of the disclosure requested by Marmer Penner Inc.
b. On May 28, 2020, the husband renewed his request for financial disclosure and served the wife with a consolidated Request for Information, which incorporated the February 4, 2020 initial request for disclosure.
c. On August 20, 2020, the husband filed an Amended Application in which he sought spousal support on a compensatory and non-compensatory basis.
d. By letter, dated September 9, 2020, the wife responded to the husband’s initial request for disclosure and indicated that she refused to produce the majority of the requested disclosure. On September 14, 2020, a case conference was conducted and the issue of the wife’s failure to comply with her disclosure obligation was canvassed.
e. On October 13, 2020, the husband updated his initial request for disclosure and served the wife with an updated Request for Information. On October 19, 2020, the wife responded to the husband’s updated Request for Information by refusing to produce the majority of the requested disclosure.
f. On October 26, 2020, a third case conference was conducted and, against, the wife’s failure to comply with her disclosure obligations was canvassed,
g. On November 27, 2020, the husband’s expert, Marmer Penner Inc. issued a second production request. The wife refused to provide disclosure.
h. On August 3, 2021, the husband was questioned, after which, the wife sought leave to withdraw her claim that the parties’ date of separation was January 1, 2013.
i. On August 5, 2021, the wife was questioned and abandoned/adjourned her questioning at 11:50 a.m.
j. On October 12, 2021, the parties appeared before Leiper, J. who dismissed the wife’s motion and ordered costs of $10,000 against her. The balance of the husband’s issues on the cross-motion were not determined and the parties consented to addressing these matters at a fourth case conference on January 19, 2022.
k. On January 19, 2022, the parties appeared before Papageorgiou, J. at the fourth case conference, to resolve the issues of costs arising from the wife abandoning her questioning on August 5, 2021; and costs of the wife’s withdrawing her child support and s.7 expenses claims; and the outstanding answers to undertakings arising from both parties being questioned on August 3, 2021 and August 5, 2021. The wife paid costs for withdrawing her child support claims and her abandoned questioning in the sum of $3,000. She also consented to produce her outstanding undertakings arising from her questioning on August 5, 2021, by no later than February 14, 2022. She did not do so.
The Wife’s Position
The wife submits that the husband’s disclosure motion focuses on production requested of her that she has refused to disclose, thus far, until the court makes a determination on her partial summary judgment motion. Until there is a determination as to whether the husband has a spousal support claim, the wife has refused to go through the expense of disclosing information about her means and income. The wife argues that she is not refusing to provide the husband with the financial disclosure. Rather, she objects to giving disclosure about her income because she maintains that the husband has not established his entitlement to receive spousal support.
The wife’s position is that the husband’s requests for disclosure are not proportionate and are excessive. She submits that a party’s immediate obligation to provide full and frank financial disclosure is found within the principle of proportionality, which is intended to provide balance between the obligation to disclose, the relevance to what is being disclosed to the matters at issue, and the fairness and common sense driving the request itself.
The wife submits that many of her most valuable assets held at the date of separation are excluded from equalization of net family properties. She has produced some disclosure to demonstrate that these gifts and inheritances were given to her. However, the wife refuses to provide the supporting documents to enable the husband and/or his experts to truly examine her exclusion claims. Her position is that she is absolved from the obligation to provide relevant disclosure regarding her exclusions because she has asserted an exclusion claim and provided documentary evidence to support that these holdings are excluded.
The wife’s corporate interests hold real estate directly and through joint ventures. However, the wife has refused to provide values for the underlying real estate and/or contemporaneous valuations that have been prepared of the assets for other purpose; and/or she has refused to speak to the husband’s experts about the corporations she operates.
Further, the wife has not provided disclosure for her date of marriage deductions claimed.
The Husband’s Position
The husband argues that the wife’s income disclosure is necessary both in terms of property division and his claim for spousal support. Having regard to the complexity of the wife’s holdings, he submits that his disclosure requests are relevant, reasonable and proportionate.
The husband submits that the wife has an obligation to value her assets and liabilities as at the date of marriage and the date of separation. This obligation includes the wife obtaining business valuations of her corporate and trust interests, as well as appraisals of any underlying real estate holdings. The wife has only produced business valuations of her holdings that she claims are not excluded assets.
The husband has raised concerns about the wife having disposed of or having manipulated assets to avoid his equalization claims. He bases these concerns on the fact that the wife disclosed that her income in 2018 was $95,632, yet she lists expenses of $462,835.68. Further, the husband argues that income disclosure with respect to the wife’s corporate interests could assist in the valuation of her shareholdings.
Analysis
Rule 13(11) of the FLRs requires the wife to provide the requested financial disclosure:
Insufficient financial information
(11) If a party believes that the financial disclosure provided by another party under this rule, whether in a financial statement or otherwise, does not provide enough information for a full understanding of the other party’s financial circumstances,
(a) the party shall make a request in writing to the other party for the necessary additional information; and
(b) if any requested information is not given within seven days of the request, the court may, on motion or at a case conference or settlement conference, order the other party to give the information or to serve and file a new financial statement. O. Reg. 522/21, s. 4 (4).
The Ontario Court of Appeal in Roberts v Roberts, 2015 ONCA 450, paras 11-13 and Leitch v Novac, 2020 ONCA 257, para 44-45, has emphasized that the most basic obligation in family law is the duty to disclose financial information. The requirement is immediate and ongoing and should not require court orders. Failure to abide by this fundamental principle impedes the progress of the action, causes delay, generally acts to the disadvantage of the opposite party, and impedes the administration of justice.
In Manchanda v. Thethi, 2016 ONSC 3776, paras. 16-22. Myers, J. made clear that “refusals to disclose, or slow disclosure, or late disclosure, or failure to apply for third documents” are not legitimate litigation strategies. His Honour held that such strategies must be strictly sanctioned and explained the need for such sanctions as follows:
A party who does not make early, voluntary, and complete financial disclosure is not participating in the process. He or she is not fulfilling the primary duty to help promote a just outcome. As this case so aptly demonstrates, trips to court are wasted due to disclosure not being completed. Hearings have been cancelled or derailed due to the lack of disclosure. Disclosure motions take significant time to go through numerous requests and hear argument on each...Motions to require a party to do what he or she was supposed to have done voluntarily, or what he or she has already been ordered to do, are a waste of judicial resources and for that reason too are contrary to the parties’ duties to help the court implement the primary objective as set out in Rules 2(3)(d)and (4) above.
Without enforcement of the primary objective, a party can frustrate the civil justice system's goals of efficiency, affordability, proportionality, and fairness, by making the process slow, expensive, and distressful. Without enforcement, 17 years into the piece, all of the important words recited above, written by so many experienced family law judges, amount to little more than spilled ink. The Supreme Court of Canada has already issued a clarion call for a culture shift to enhance access to civil justice in Canada: Hryniak v. Mauldin, 2014 SCC 7 (S.C.C.). Seventeen years is enough lead time. If family cases are to be made more efficient, quicker, cheaper, and less distressing for the parties, then the first step is for all participants to commit to and fulfill their disclosure obligations early, voluntarily, and completely.
A party should not have to endure order after order after order being ignored and breached by the other side. A refusal to disclose one's financial affairs is not just a mis-step in the pre-trial tactical game that deserves a two minute delay of game penalty. Failure to disclose is a breach of the primary objective. Especially if it involves breach of a court order, a party who fails to disclose evinces a determination that he or she does not want to play by the rules. It is time to oblige such parties by assessing a game misconduct to eject them from the proceeding.
The equalization framework established by the Family Law Act, R.S.O. 1990, c.F.3, dictates that questions of title to property be determined before the Court undertakes the equalization calculation. Once issues of title are resolved, the determination of a party’s net family property starts with calculating the value of their property, debts and liabilities as of the “valuation date,” which section 4(1) of the Act defines as follows:
4(1) “valuation date” means the earliest of the following dates:
The date the spouses separate and there is no reasonable prospect that they will resume cohabitation.
The date a divorce is granted.
The date the marriage is declared a nullity.
The date one of the spouses commences an application based on subsection 5 (3) (improvident depletion) that is subsequently granted.
The date before the date on which one of the spouses dies leaving the other spouse surviving. R.S.O. 1990, c. F.3, s. 4 (1); 2006, c. 19, Sched. C, s. 1 (2); 2009, c. 11, s. 22 (1-4); 2009, c. 33, Sched. 2, s. 34 (1).
Full and complete disclosure of property must be made in a party's financial statement. Fleury, J. in Menage v Hedges, (1987), 8 R.F.L. (3d) 225 (Ont. U.F.C.), para. 44, explained that the onus of establishing the value of property is on the party owning same. Czutrin, J. in Blaney v Blaney, 2012 ONSC 1777 (S.C.J.), at para. 5, confirms,
“The obligation and onus to satisfy the court as to income and the value of assets and debts is on the person whose income or asset or debt is called into question…[the] obligation existed prior to any court orders, conferences or court attendances.”
In Wilson-Embree v. Embree, 2007 ONSC 36636, para. 37, Kruzick, J. citing Master Cork in Greenwood v Greenwood, (1988), 18 R.F.L. (3d) 273, clearly sets out the obligation on each party to the litigation to disclose the value of their business interests. At paragraphs. 37- 38 of the decision Kruzick, J. explained:
“There is a legal duty for the parties to disclose all their assets and to provide each other with any values which they have obtained from experts or valuations upon which they rely for the value of their assets. I refer to Silverstein v. Silverstein (1978), 20 O.R. (2d) 185 (HC), and also Montreuil v. Montreuil, [1999] O.J. No. 4450. I also refer to the Greenwood v. Greenwood (1988), 18 R.F.L. (3d) 273 and Dearing v. Dearing (1991), 37 R.F.L. (3d) 102 (Ont. Gen. Div.). All of these cases support the parties' obligation to provide values.”
The onus on a spouse to establish a value for his or her property may extend to retaining the services of an expert valuator. This is commonly undertaken when a spouse is valuing their pension or a business interest. A realistic value for each asset is required, not a guess or a fictional amount: Sheikh v. Sheikh, 2005 ONSC 14151. The wife has provided a valuation of her business interests on the date of separation, yet she has excluded the value of business interests that she claims were gifted to her. The husband takes the position that she has not completed an accurate valuation of all of her business interests.
Section 4(2) of the Family Law Act provides that certain types of property that a spouse owns on the date of separation are excluded from the spouse’s net family property. Section 4(3) stipulates that the onus of proving a deduction under the definition of “net family property” or an exclusion under section 4(2) is on the person claiming it. The wife submits that her most valuable assets at the valuation date are excluded from the equalization of the parties’ net family properties. The wife has refused to provide financial disclosure as to the value of her excluded property because she claims she has provided some documentation to demonstrate these interests were gifted to her.
The wife has provided a valuation of her business interests as at the date of separation. However, she has excluded the value of business interests that she claims were gifted or inherited by her during the marriage. In Hamilton v. Hamilton, 1996 ONCA 599, Osbourne, J. explained that in determining a spouse’s net family property,
“The first step required by s.4 is to identify all relevant property. Then ownership has to be determined. At this stage, trust principles may be brought to bear such that ownership of property for net family property purposes is deemed to be different from that which may be recorded in a title document. Once the ownership of property is established, the value of the property at the valuation date must be determined.
Next, the court must determine the relevant deductions and exclusions under s. 4(1) and 4(2) of the Family Law Act. When that exercise is complete, the court calculates each spouse's net family property and then, following the Act, determines the required equalization payment to be paid by one party to the other. It is at this point that the court considers whether to reduce or eliminate the equalization payment by resort to the provisions of s. 5(6) of the Act.”
The wife is required, therefore, to value her excluded assets. The usual course with respect to excluded property (e.g., inherited property) is to include it all and “back it out” later as the form provides. It does not follow that because property is excluded, i.e., not part of net family property and subject to equalization, that there is no disclosure obligation. In addition, this property may well be relevant for the purpose of the determination of spousal support: Citron v. Citron: 2008 ONSC 71525, at para. 5.
Further, I find that the wife is required to provide disclosure of her means. The disclosure requested by the husband is relevant to the valuation of the wife’s business assets and her income analysis. This is particularly so since the wife’s source of income is partially derived from her business holdings, both excluded and non-excluded. The test about whether the disclosure requested is relevant is that the disclosure must have some semblance of relevance. The husband is concerned that the wife has manipulated assets to reduce her income. The disclosure requested is relevant to material issues in this case. It would be unfair to require the husband to proceed without the disclosure sought.
Accordingly, I find that the following categories and requests for disclosure made by the husband shall be answered by the wife, in reference to the item numbers found in Schedule “A” to the husband’s notice of motion, dated December 3, 2020:
a. Requests that relate to the wife’s income and/or means to pay spousal support: Items 1(a); 1(b); 1(c); 1(d); 1(e); 1(f); 1(g); 1(h); 1(i); 1(j); 1(k); 1(m); 1(n); 1(q); 1(s); 1(q); 1(u); 1(v); 8; 12; 14; 15; 16; 17; 18; 19; and
b. Requests that relate to the value of the wife’s excluded property including the value of her business interests: Items 1(l); 1(o); 1(p); 1(r); 1(t); 1(v); 1(w); 1(x); 2(a); 2(b); 2(c); 3; 4; 5(a); 5(b); 5(c); 5(d); 6(a); 6(b); 6(c); 9; 10; 11 (once clarified by the husband); and 13.
Using the chart attached as Schedule “A” to the husband’s notice of motion, dated December 3, 2020, I make the following specific findings with respect to the disclosure sought:
| Item | Request | Disposition by the Court |
|---|---|---|
| 1.(a) | Details of Ms. Reiter-Nemetz’s expected 2020 income. | The wife shall answer this undertaking and produce her 2020 income tax return, along with attachments. This disclosure relates to the wife’s income and means. |
| (b) | Financial statements of 2424454 Ontario Inc. (“2424454”) for the year ended December 31, 2019, when available. The Respondent has provided Financial Statements for this company in 2016 & 2017. |
The wife submits that she already produced this financial statement. If she has not done so, the wife shall answer this undertaking and produce 2424454’s financial statements. This disclosure relates to the wife’s income and means. |
| (c) | Details of 2424454’s 2019 income and expected 2020 income. | The wife shall answer this undertaking. This disclosure relates to the wife’s income and means. |
| (d) | 2424454’s corporate income tax return for the year ended December 31, 2019, when available. | The wife shall answer this undertaking and produce the 2019 income tax return, along with attachments. This disclosure relates to the wife’s income and means. |
| (e) | Financial statements of 2514488 Ontario Inc. (“2514488”) for the year ended December 31, 2019, when available. | The wife shall answer this undertaking and produce 2514488’s 2019 financial statements. This disclosure relates to the wife’s income and means. |
| (f) | Details of 2514488’s 2019 income and expected 2020 income. | The wife shall answer this undertaking. This disclosure relates to the wife’s income and means. |
| (g) | 2514488’s corporate income tax return for the year ended December 31, 2019. | The wife shall answer this undertaking and produce 2414488’s 2019 tax return (with attachments). This disclosure relates to the wife’s income and means. |
| (h) | Financial statements for Viereit Inc. (“Viereit”) for the year ended December 31, 2019, when available. | The wife shall answer this undertaking and produce Viereit’s 2019 financial statements. This disclosure relates to the wife’s income and means. |
| (i) | Details of Viereit’s 2019 income and expected 2020 income. | The wife shall answer this undertaking. This disclosure relates to the wife’s income and means. |
| (j) | Viereit’s corporate income tax return for the year ended December 31, 2019, when available. | The wife shall answer this undertaking and produce Viereit’s 2019 corporate income tax return, along with attachments. This disclosure relates to the wife’s income and means. |
| (k) | Financial statements for Viereit’s co-tenancy for the last five fiscal years. | The wife shall produce this disclosure. |
| (l) | Financial statements of Reiter International Limited (“International”), Midking Investments Limited (“Midking”) and Reiter, Nemetz Law Firm for the last five fiscal years | The wife shall produce this disclosure. |
| (m) | International’s and Midking’s corporate income tax returns for the last five fiscal years. | The wife shall produce this disclosure. The wife disputes this production on the basis that the value of these shares were frozen on V-date. However, this disclosure could impact the wife’s means and/or income. |
| (n) | Capital dividend account balances of all of the above-mentioned corporations at their 2016 fiscal year-ends. | The wife shall produce these items. The wife disputes this production on the basis that the value of these shares were frozen on V-date. However, this disclosure could impact the wife’s means and/or income. |
| (o) | All business valuations and analyses of the above-mentioned entities prepared for any purpose in the last seven years. | The wife objects to this item since she produced a valuation report for the entities as at the date of separation. However, the husband raised concerns about the wife manipulating or reorganizing her assets to depress her income. Accordingly, this production is relevant and shall be produced. |
| (p) | All appraisals of all real property held by all of the above-mentioned entities prepared for any purpose in the last seven years. Ms. Reiter Nemetz has produced an appraisal of: 1) 370 & 400 Monarch Avenue, Ajax, Ontario; 2) 400 Flint Road, Toronto; 3) 70 Wilson Park Road, Toronto; 4) 5 & 7 Thorburn Avenue, Toronto from Wagner, Andrews, Kovacs as of January 23, 2017 alongside her scope of review documents for the report of AP Valuations dated February 14, 2022. Ms. Reiter Nemetz had not produced an appraisal on the date of separation f for the following properties (that we know the company owned at that time- we do not know what they owned today): 2514488 Ontario Limited: 1711 Kingston Road; • Capora Holdings Limited: 665 Westney Road S, Ajax and 0 Chisholm Court, Ajax; • Alness Properties Joint Venture: 1111 Finch Ave. W., Toronto; 30 Bermondsey Rd., Toronto; 154-156 Grenfell St., Hamilton; 327-331 Talbot St., St. Thoma; 341 Talbot St., St. Thomas; 925 Lakefront Prom., Mississauga; 2390 Drew Rd., Mississauga; 423-433 Millen Rd., Stoney Creek; 2545-2567 Drew Rd., Mississauga; 980 East Main St., Welland; 954-958 Leathorne St., London; 155 Clark Side Rd., London; 2380 Drew Rd., Mississauga; 55 Milburn Rd., Hamilton; 90 and 94 Bessemer Ct., London; 850- 908 Magnetic Dr., Toronto; Silver Alness Property: 2799 Barton Street E., Hamilton; |
The wife shall produce the appraisal reports for the outstanding properties. |
| (q) | Details of all share or partnership interest transactions in the last seven years in any of the above-mentioned entities, including but not limited to the purchase or redemption of Mr. Marcel Jakubovic’s shares of 2424454 in 2017. | The wife objects to this item since she produced a valuation report for the entities as at the date of separation. However, the husband raised concerns about the wife manipulating or reorganizing her assets to depress her income. Accordingly, this production is relevant and shall be produced. |
| (r) | Redemption value of preferred shares of any of the above-mentioned corporations including but not limited to Midking’s Class A and B shares | The wife shall produce this disclosure, to the extent that it has not yet been produced as a scope of review document and/or is not part of the ap Valuations report. |
| (s) | Details of personal expenses charged to any of the above-mentioned entities, if any, such as automobile, travel, promotion, education and professional fees for the years ended from 2016 to date, broken out by fiscal year, amount and description. | The wife shall produce this disclosure of personal expenses over $1,500 charged to the above-mentioned entities. This is relevant to her means and/or income. |
| (t) | Details of non-arm’s length expenses, such as salaries or fees to related parties charged as business expenses to any of the above-mentioned entitles for the years ended from 2016 to date, broken out by fiscal year, amount and description. | The wife shall produce this disclosure. This is relevant to her means and/or income. |
| (u) | The law practice’s general ledger expense details for the years ended December 31, 2016 to date. | The wife shall produce this disclosure. |
| (v) | All statements of net worth and net income prepared by or on behalf of Ms. Reiter- Nemetz for any purpose in the last seven years, including but not limited to credit and mortgage applications | The wife shall produce this disclosure. This is relevant to her means and/or income. |
| (w) | Opportunity to discuss operations with Ms. Reiter-Nemetz. | The husband shall produce questions in writing regarding operations and the wife shall answer the questions to the best of her ability. If she does not know the answer(s) and she can direct the husband to a person who knows the answer, she shall do so. |
| (x) | Such additional information and documentation as may be requested by Marmer Penner Inc. after it has had an opportunity to review the responses to the requests set out in 1 b) – 1 x), above. | Any further questions Marmer Penner Inc. has after the responses from the wife have been reviewed shall be considered based on the relevance and proportionality of the questions. |
| 2.(a) | All outstanding items in the Applicant’s preliminary disclosure request dated February 4, 2020, as follows: 1. Access to the original Minutes Books for all of the companies listed on Ms. Reiter-Nemetz’s sworn financial statement under business interests: (i) 2424454, (ii) 2514488, (iii) Viereit, (iv) International, (v) Midking, and (vi) Reiter-Nemetz law firm. Ms. Reiter-Nemetz has only provided a copy of the shareholder register of (i)- (iv). |
The wife shall provide the husband’s experts with access to the original Minutes Books for these companies. |
| 2 (b) | The following information/documentation related to 1458298 Ontario Ltd (“1458298”): Who are the shareholders of this company? Copies of any contracts, including any employment contracts, between Ms. Reiter- Nemetz and the company. |
The wife shall produce the information requested. |
| 2(c) | Ms. Reiter-Nemetz’s income tax returns for the years 1999 and 2000. | The wife shall produce this documentation. |
| 3. | Electronic copies of the Minute Books, as previously requested due to COVID-19 and the restrictions in place, until such time that an in-person review of the Minute Books can be conducted, for all the companies listed on Ms. Reiter- Nemetz’s 13.1 sworn financial statement under business interests: (i) 2424454, (ii) 2514488, (iii) Viereit, (iv) International, and (v) Reiter-Nemetz law firm. Ms. Reiter-Nemetz has only provided a copy of the shareholder register of (i)-(iv). |
The wife shall produce this documentation. |
| 4. | Documents regarding the purchase and sale of 47 Viewmount Avenue, including the reporting letters and statement of adjustments. | The wife shall produce the documentation requested. |
| 5. | Viereit: (i) A CBV valuation report of the value as at the date of marriage for Viereit. (ii) A CBV valuation report as at the date of separation of Ms. Reiter Nemetz’s direct, or indirect, interest in real estate and joint ventures based on certified appraisals. Ms. Reiter Nemetz has produced a valuation of her interest in Viereit on the date of separation AP Valuations Report dated February 14, 2022, she has not produced an appraisal of the 40 Flint Road property on the date of separation. The tax returns show several associated companies: International, Midking Properties Limited, Midking, Midking Holdings Inc. and 1458298. The tax return reports that as a group these associated companies hold assets worth $78 million (which will be an amortized figure) and generate an income of over $9 million annually. Documents/information to be provided are: |
5 (i) The wife submits that a CBV has been retained and the valuation report for Viereit as at the date of marriage is in progress. The report shall be produced as soon as it is completed. 5(ii) The wife shall produce an appraisal of the 40 Flint Road property as at the date of separation. 5(iii) The wife shall produce these tax returns. |
| (a) | Details of the relationship of International, Midking Properties Limited, Midking, Midking Holdings Inc. and 1458298and the corporate structure? | The wife shall provide the details requested. |
| (b) | This was provided in as Appendix D of AP Valuations Report dated February 14, 2022. |
This has been provided already. |
| (c) | Access to the original copies of the Minute Books of International, Midking Properties Limited, Midking, Midking Holdings Inc. and 1458298. | The wife shall provide the husband’s experts with access to the original Minutes Books of these companies. |
| (d) | Electronic copies of the Minute Books of International, Midking Properties Limited, Midking, Midking Holdings Inc. and 1458298, until such time that an in-person review of the original Minute Books can be conducted (given the current COVID-19 restrictions) | The wife shall provide copies of these Minutes Books. |
| 6. | According to the shareholder register for Midking Holdings Inc., Ms. Reiter- Nemetz holds not only 100 common shares but 22,250 Class A shares and 1000 Class B shares acquired in January 2019. Documents/information to be provided are: |
|
| (a) | Reason for the omission of the Class A and B shares from her 13.1 sworn financial statement? | The wife shall answer this question. |
| (b) | The value of these shares? Ms. Reiter Nemetz has only provided the value of her interest in the shares that were not gifted to her, and only the redemption value of those shares without valuing the company. |
The wife submits that the value of her Midking Holdings Inc. shares were frozen as of 2001 and, as such, the value of the shares on V-date is irrelevant. The wife shall provide the value of these shares at V-date. |
| (c) | Details and documents confirming the amalgamation and the consideration that Ms. Reiter-Nemetz provided for these shares. | The wife shall provide the details and/or documents requested. |
| 7. | Details of all shares owned on the date of marriage and date of separation, including values of all shares owned as at the date of marriage regardless of their alleged excluded status at date of separation. | The wife submits that she answered this in her updated financial statement. |
| 8. | Are there any other business interests/shares that were omitted from Ms. Reiter-Nemetz’s 13.1 sworn financial statement? If so, details are to be provided. | This is relevant to her means and/or income. The wife shall answer the question. |
| 9. | A valuation of all real estate holdings of all companies that Ms. Reiter- Nemetz has any interest in, including any expert valuation reports of Ms. Reiter-Nemetz’s assets. Ms. Reiter Nemetz has produced an appraisal of: 5) 370 & 400 Monarch Avenue, Ajax, Ontario; 6) 400 Flint Road, Toronto; 7) 70 Wilson Park Road, Toronto; 8) 5 & 7 Thorburn Avenue, Toronto from Wagner, Andrews, Kovacs as of January 23, 2017 alongside her scope of review documents for the report of AP Valuations dated February 14, 2022. Ms. Reiter Nemetz had not produced an appraisal on the date of separation for the following properties (that we know the company owned at that time- we do not know what they owned today): • 2514488 Ontario Limited: 1711 Kingston Road; • Capora Holdings Limited: 665 Westney Road S, Ajax and 0 Chisholm Court, Ajax; • Alness Properties Joint Venture: 1111 Finch Ave. W., Toronto; 30 Bermondsey Rd., Toronto; 154-156 Grenfell St., Hamilton; 327-331 Talbot St., St. Thoma; 341 Talbot St., St. Thomas; 925 Lakefront Prom., Mississauga; 2390 Drew Rd., Mississauga; 423-433 Millen Rd., Stoney Creek; 2545-2567 Drew Rd., Mississauga; 980 East Main St., Welland; 954-958 Leathorne St., London; 155 Clark Side Rd., London; 2380 Drew Rd., Mississauga; 55 Milburn Rd., Hamilton; 90 and 94 Bessemer Ct., London; 850- 908 Magnetic Dr., Toronto; Silver Alness Property: 2799 Barton Street E., Hamilton. |
The wife shall produce these reports. |
| 10. | Financial statements and Corporate Tax Returns for 1458298 from date of separation (January 2017) to present. | The wife shall produce these financial statements and corporate ITRs. |
| 11. | There are numerous large shareholder loans owing by the various companies shown on the financial statements provided. To whom are the shareholder loans owed? | Within ten days, the husband shall clarify the time period for which this request is being made. The wife shall then answer the question. |
| 12. | To whom are the professional fees of the law firm (Reiter, Nemetz) paid. Copies of invoices to be provided | The wife shall answer this question. |
| 13. | Details and supporting documentation for any gifts made by Ms. Reiter- Nemetz with a value in excess of $10,000 since 2013. | The wife shall answer this question back to three years prior to separation. |
| 14. | Ms. Reiter-Nemetz’s Income Tax Returns with all slips and schedules and Notices of Assessment/Re- Assessment, for the following years: 2001 to 2009 and 2011 to 2015. | The wife shall produce this documentation for the years 2011-2015. |
| 15. | Proof of Ms. Reiter-Nemetz’s current income, including most recent pay stubs from Midking Properties Limited and 1458298. | The wife shall answer this question. |
| 16. | Details of all employment benefits paid by Reiter, Nemetz (medical insurance, cellphone, car maintenance) and yearly market value, listed as TBD on the 13.1 sworn financial statement. | The wife shall answer this question. |
| 17. | Proof of rental income paid by Penina and her husband. | The wife shall answer this question. |
| 18. | Details of Ms. Reiter-Nemetz’s source of funds to fund Elisheva’s tuition and the expenses paid on behalf of the other children. | The wife shall answer this question. |
| 19. | Details of Ms. Reiter-Nemetz’s source of funds to cover the expenses listed on her financial statement in excess of her declared income. | The wife shall answer this question. |
| 20. | An updated 13.1 sworn financial statement, with supporting documents for today values. | The wife has already produced an updated financial statement |
Disposition
Accordingly, I make the following order:
a. The wife’s motion for partial summary judgment is dismissed;
b. The wife shall answer the questions referred to in the chart above at paragraph [71], which is attached at Schedule “A” to the husband’s Notice of Motion, dated December 3, 2020, within 60 days;
c. Pursuant to Rule 16(9) of the Family Law Rules and/or Rule 20.05(k) of the Rules of Civil Procedure, the parties shall direct their respective chartered business valuators and/or other experts engaged by each party in relation to this application to meet on a without prejudice basis, prior to a Trial Management Conference, in order to identify the issues on which the experts agree and the issues on which they do not agree, to attempt to clarify and resolve any issues that are the subject of disagreement and to prepare a joint statement setting out the areas of agreement and any areas of disagreement and the reasons for it;
d. The parties shall schedule a Trial Management Conference on a date agreeable to both counsel, at the earliest possible date after the wife has answered the questions to her undertakings; questions taken under advisement; and/or refusals, to schedule the trial of this matter.
e. The parties shall attempt to settle the issue of costs arising from the partial summary judgment and the disclosure motion. If they are unable to do so, the parties shall exchange written costs submissions of no more than 3 pages in writing, not including a Bill of Costs or Offers to Settle within 30 days from the release of this Endorsement.
May 11, 2022
Kraft J