COURT FILE NO.: FS-21-22627

DATE: 20221011

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SURINDER KAUR UPPAL

Applicant

– and –

DALJIT SINGH

Respondent

Tyler Teichert, for the Applicant/Defendant

Kenneth Younie, for the Respondent

HEARD: September 20, 2022

DAVIES, J.

REASONS FOR DECISION

A. Overview

[1] On August 18, 2022, I heard Ms. Uppal’s motion for various relief in relation to the sale of the matrimonial home. Ms. Uppal also sought an order striking Mr. Singh’s pleadings if he did not comply with an earlier disclosure order within 45 days. Finally, Ms. Uppal sought an order requiring Mr. Singh to value his business interests in a jewelry business he owned during their marriage.

[2] On September 13, 2022, I released my reasons dealing with the sale of the matrimonial home only.

[3] Mr. Singh retained new counsel shortly before the motion. Counsel was not prepared to respond to the motion to strike or the request for a business valuation. I convened a further hearing on September 20, 2022 to receive submissions on the two outstanding issues.

[4] Mr. Singh acknowledges there is outstanding disclosure but argues this is not an appropriate case to strike his pleadings. Mr. Singh also acknowledges he needs to provide more information about the sale of the jewelry business but argues that ordering a business valuation is not reasonable or proportionate in this case.

B. Motion to Strike

[5] Ms. Uppal argues that Mr. Singh’s pleadings should be struck if he fails to provide full financial disclosure within 45 days.

[6] Every party to a family court proceeding has an immediate and ongoing obligation to provide full and frank financial disclosure: Colucci v. Colucci, 2021 SCC 24 at paras. 48 – 51, Roberts v. Roberts, 2015 ONCA 450 at para. 11. Failing to provide disclosure is an all-too-common cause of frustration and delay in family proceedings. Failure to comply with disclosure orders can add significantly to the cost of litigation and waste judicial resources (which are in very short supply).

[7] If a party fails to comply with any court order – including a disclosure order – the court can make “any order that it considers necessary for a just determination of the matter” including striking out the offending party’s pleadings: Family Law Rules, Rule 1(8)(c).

[8] A two-stage analysis is required on a motion to strike. First, I must decide if Mr. Singh has breached a court order. Second, I must consider whether it is appropriate to strike Mr. Singh’s pleadings to address the breach. When a party has breached a disclosure order, the nature and relevance of the missing disclosure, the extent to which the proceedings are being frustrated by the non-disclosure, the complexity of the issues in dispute, the volume of disclosure that has been provided and the efforts made to comply with the order will be relevant factors when assessing the appropriate remedy: Mullin v. Sherlock, 2018 ONCA 1063 at para. 45.

[9] Striking pleadings should only be granted as a remedy for breaching a disclosure order in exceptional circumstances where no other remedy would suffice: Purcaru v. Purcaru, 2010 ONCA 92 at para. 47, Chiaramonte v. Chiaramonte, 2013 ONCA 641 at paras. 31 – 33.

[10] I am satisfied that Mr. Singh is in breach of a court order and has been for months. I will give Mr. Singh one last, brief opportunity to remedy the breach. I will not, however, give Mr. Singh another 45 days. Mr. Singh has known about the motion to strike for more than two months. He should have been working to remedy any deficits in his disclosure during that time. Mr. Singh will have 21 days to provide any disclosure that is outstanding.

[11] I am not willing to order that Mr. Singh’s pleadings are struck or will be struck if he fails to comply. It is almost inevitable there will be a disagreement between Ms. Uppal and Mr. Singh about whether he has complied with this order. There is already a disagreement between them about what disclosure is outstanding. Because a further hearing is very likely, I will make an order that Mr. Singh provide the outstanding disclosure within 21 days and will allow Ms. Uppal to renew her motion to strike if he fails to comply. Mr. Singh should understand that if he breaches this order as well, his pleadings will very likely be struck.

[12] On August 24, 2021, following a case conference, Justice Leiper made a detailed disclosure order. Justice Leiper ordered Mr. Singh to produce a long list of items within 30 days, including

• a letter from his employer confirming his payment structure, bonus structure, commission structure, and his total paid in 2019, 2020, and 2021.

• a letter from his doctor and any medical report pertaining to any diagnosis of multiple sclerosis.

• copies of all domestic and foreign bank statements and credit card statements for from January 1, 2019, to August 24, 2021.

• deposit slips and any supporting documentation of any cash deposit into any of his accounts of $1,000 or greater from January 1, 2019, to August 24, 2021.

• any documents he has in his possession or control pertaining to the Malaysian Gold Shop, Pournamis Jewels (M) Sdn. Bhd.

• any documents in his possession pertaining to the gold bars he alleges are in the possession of the Applicant.

• documentation pertaining to the acquisition and/or gifts of any gold jewelry that either party held as of the date of separation.

[13] Ms. Uppal brought a motion for interim spousal support and for the sale of the matrimonial home in December 2021. During that motion, Ms. Uppal complained that Mr. Singh had not complied with Justice Leiper’s order. Ms. Uppal asked the court to impute an income to Mr. Singh because he had not made full financial disclosure. In her reasons, Justice Kimmel noted that Mr. Singh had not complied with Justice Leiper’s order to produce deposit slips for deposits over $1000 Justice Kimmel also drew an adverse inference against Mr. Singh because he had failed produce a letter from his employer confirming his payment structure, bonus structure, commission structure as ordered by Justice Leiper.

[14] Since Justice Kimmel’s decision, Mr. Singh has provided some disclosure. He has produced some but not all his bank and credit card statements, he has disclosed documents related to the sale of Pournamis Jewels including the share transfer, corporate information from August 2018 and January 2021, and two return of allotment of shares from 2018. He has provided authorizations for all his financial institutions in Canada and Malaysia so Ms. Uppal can make inquiries about his assets and debt on the date of separation. He has provided medical reports related to his diagnosis of multiple sclerosis. Mr. Singh acknowledges there is still some disclosure outstanding and has also undertaken to work with his lawyer to correct the deficits in his disclosure as quickly as possible.

[15] On this motion, Ms. Uppal produced a chart of the disclosure she has received and the disclosure she says is still outstanding. According to the chart, Mr. Singh still has not provided (a) some of his bank and credit card statements, (b) a letter from his employer confirming his pay structure and total pay in 2019, 2020, and 2021, (c) deposit slips for cash deposits over $1,000, and (d) documentation to prove his claim that Ms. Uppal is in possession of $300,000 in gold bars.

[16] Based on Ms. Uppal’s evidence and Mr. Singh’s admission, I find that he is in breach of Justice Leiper’s disclosure order. The real question is what remedy, if any, is appropriate in the circumstances.

[17] Ms. Uppal has every right to be frustrated by Mr. Singh’s failure to provide complete financial disclosure. Ms. Uppal and Mr. Singh separated almost two years ago. Justice Leiper’s disclosure order was made more than a year ago. Mr. Singh’s failure to provide disclosure has delayed the process. Mr. Singh must not be permitted to delay these proceedings anymore.

[18] Some of the outstanding disclosure, including bank account statements, deposit slips and income information, is crucial to a fair resolution to the case. On the other hand, Mr. Singh’s failure to produce some items in Justice Leiper’s order will simply undermine his own claim. For example, Ms. Uppal complains that Mr. Singh has not produced anything to support his claim that she is in possession of $300,000 of gold bars. This suggests that Mr. Singh has no documents to support this part of his claim. This gap in the disclosure does not prejudice Ms. Uppal’s position. It only prejudices Mr. Singh’s claim. Similarly, Mr. Singh has not produced any applications for disability benefits. This suggests that Mr. Singh has not applied for any benefits. Again, this tends to undermine his position that he is not able to work because of his medical condition.

[19] I will give Mr. Singh one last very brief opportunity to correct the deficits in his disclosure. I will not give Mr. Singh another 45 days. Ms. Uppal served her notice of motion on Mr. Singh on July 18, 2022. Ms. Uppal’s motion was originally scheduled for July 26, 2022 but was adjourned at Mr. Singh’s request. Mr. Singh has already had more than two months to correct the deficits in his disclosure. Mr. Singh will be given 21 days to fully comply with Justice Leiper’s order. If he fails to do so, Ms. Uppal may renew her motion to strike.

C. Business Valuator

[20] One of the key issues at trial will be the value of Mr. Singh’s jewelry business, Pournamis Jewels, on the date of separation. Ms. Uppal seeks an order requiring Mr. Singh, at his own expense, to produce an expert business valuation. Mr. Singh argues that valuing his business will be complicated and costly. He also argues that an expert valuation is unnecessary because Ms. Uppal was a co-owner of the company, was involved in the sale of the business and knows what the business was worth. As an alternative to an expert valuation, Mr. Singh has offered to provide an affidavit setting out the details of the transfer of his shares in the business.

[21] I find that this is an appropriate case to require Mr. Singh to have an expert business valuation.

[22] At trial, Mr. Singh will have to establish the value of his assets on the date of separation for the purpose of calculating whether an equalization payment is owing and by whom. An accurate valuation of the assets owned by each spouse on the date of marriage and the date of separation is crucial to the fair resolution of property issues. Mr. Singh has an obligation to provide credible evidence as to the value of his assets, including Pournamis Jewels: Laurent v. Laurent, 2019 ONSC 3535 at para. 17. If the value of an asset, such as Pournamis Jewels, cannot be easily established or there is a serious dispute about its value, an independent, expert valuation will be required: Di Luca v. Di Luca, 2004 CanLII 5044 at para. 10. And the Court has the authority to order a party to obtain an independent valuation of the disputed asset.

[23] Mr. Singh has given inconsistent information about his ownership interest in and the value of Pournamis Jewels. Mr. Singh did not include Pournamis Jewels as an asset on the date of separation in his December 13, 2021 financial statement. In his affidavit on this motion, he swore he sold his interest in Pournamis in 2019 (before the date of separation). He swore the proceeds were split and the business closed:

[T]he Applicant is well aware that I no longer have an interest in Pournamis. The Applicant and I sold this interest and closed the business in 2019. The Applicant got her share in gold bars.

[24] However, in an affidavit filed on Ms. Uppal’s motion for interim support (heard by Justice Kimmel in December 2021), Mr. Singh swore he transferred his shares in the jewelry business on December 22, 2020 – after he and Ms. Uppal separated. On Ms. Uppal’s support motion, Mr. Singh urged Justice Kimmel not to impute income to him before an expert valuation could be done. Justice Kimmel wrote at para. 30(f) of her decision,

[Mr. Singh] acknowledges that he transferred his shares in Pournamis Jewels on December 22, 2020 (after the parties separated), but he disputes the value that [Ms. Uppal] attributes to those shares (of $600,000). He maintains that the value of his interest in this company will have to be established through expert testimony, but has not offered any such evidence thus far. He has offered no evidence as to what consideration he received upon the purported transfer of these shares and has not explained why he asserts in his Answer that he sold his interest in the Malaysian gold shop for the equivalent of $600,000 in gold bars at the end of 2019.

[25] Mr. Singh cannot take inconsistent positions on issues when it suits him. He acknowledged months ago that an expert valuation of Pournamis Jewels will be required to fairly resolve this matter. He has not taken steps to obtain an expert valuation. Given the inconsistencies in Mr. Singh’s evidence on this issue, I find this is an appropriate case to order Mr. Singh to retain an expert to value Pournamis Jewels and to produce a report on the value of Pournamis Jewels on the date of separation and the date of marriage (if Mr. Singh owned the business on the date of marriage). Mr. Singh is to cover the cost of the expert report. Depending on the outcome at trial, who should ultimately be responsible for the cost of the expert valuation can be addressed in final cost submissions.

D. Costs

[26] Ms. Uppal seeks $12,564.35 in costs on a partial recovery basis.

[27] Mr. Singh argues that Ms. Uppal should be ordered to pay him $3,000 in costs. In the alternative, he argues that no cost should be ordered.

[28] Ms. Uppal was only partially successful on her motion. She sought a declaration that she and Mr. Singh had a binding contract for him to purchase the matrimonial home. She also sought specific performance of that contract. I dismissed that aspect of her motion. On that issue, Mr. Singh was successful.

[29] In the alternative, Ms. Uppal sought an order dispensing with Mr. Singh’s consent to sell the matrimonial home. I also denied that aspect of Ms. Uppal’s motion. I found that Mr. Singh had a right to participate in the sale but imposed conditions to ensure he could not frustrate the sale in future.

[30] Ms. Uppal was successful on the issue of non-disclosure. Ms. Uppal did not seek an order striking Mr. Singh’s pleadings now. She sought an order that Mr. Singh’s pleads would be struck if he did not satisfy Justice Leiper’s disclosure order within 45 days. I have found that Mr. Singh is in breach of Justice Leiper’s order. I ordered him to provide the missing disclosure within 21 days. I have given Ms. Uppal leave to renew her motion if he does not comply with this order within 21 days. Ms. Uppal should not have had to seek the court’s assistance to ensure Mr. Singh complied with a court order that was made more than a year ago. Court orders are not suggestions. They must be followed. When they are not followed, Mr. Singh should expect there to be consequences, including a requirement that he pay costs.

[31] Finally, Ms. Uppal was successful on her request that Mr. Singh produce a valuation report. Again, Mr. Singh said he intended to retain an expert almost a year ago. His failure to do so has contributed to the delay and the cost of these proceedings.

[32] Costs awards are intended to partially indemnify successful litigants, encourage settlement and discourage inappropriate behaviour: Serra v. Serra, 2009 ONCA 395. Any costs order I make must be fair, reasonable and proportionate having regard to all the circumstances, including the complexity of the issues, the conduct of the parties, the time spent by counsel and any offers to settle: Family Law Rules, Rule 24(12). When, like here, success in a step in a case is divided, the court may apportion the costs as appropriate: Family Law Rules, Rule 24(6).

[33] Most of the time and resources were devoted to whether Ms. Uppal and Mr. Singh had a binding agreement for him to buy her interest in the matrimonial home. If that were the only issue I was asked to decide, I would likely have granted costs to Mr. Singh in the range of $5,000. However, given Ms. Uppal’s success on the other issues and Mr. Singh’s continued failure to comply with Justice Leiper’s order, I am not prepared to grant him any costs.

[34] A second hearing was required to deal with the non-disclosure and expert valuation issues because Mr. Singh retained new counsel right before the motion and, understandably, counsel was not prepared to argue those issues. The need for a second hearing delayed the matter and increased the cost of Ms. Uppal’s motion. Ms. Uppal was entirely successful on the disclosure and expert valuation issues. I find that Mr. Singh has acted unreasonably in relation to both issues. He has been in breach of Justice Leiper’s order for more than a year. Mr. Singh has had almost two months since receiving Ms. Uppal’s motion materials to rectify the problems with his disclosure and he still had not done that. His continued non-compliance warrants an enhanced costs award. Similarly, Mr. Singh’s position on whether an expert is required changed to suit his purposes on the different motions. This is precisely the sort of inappropriate conduct that should be discouraged through the imposition of costs.

[35] On the non-disclosure and expert valuation issues, Ms. Uppal is entitled to costs on a substantial recovery basis. I cannot tell from the bills of cost how much time was spent on those issues specifically. I appreciate the non-disclosure and expert valuations issue are not legally or factually complex. Nonetheless, I would have awarded Ms. Uppal somewhere in the range of $5,000 on those issues.

[36] In my view, the most just and reasonable result is to award no costs of the motion to reflect the divided success and to account for Mr. Singh’s misconduct in relation to the disclosure and expert valuation issues.

ORDER:

1. Within 21 days, Mr. Singh shall produce the following:

a. A letter from his employer confirming his total compensation for 2019, 2020 and 2021.

b. A letter from his employer explaining his payment structure, bonus structure, commission structure.

c. A copy of any application for disability benefits with all supporting documents.

d. A copy of monthly statements for all domestic and foreign bank accounts and credit cards between January 1, 2019 and present.

e. Deposit slips for any cash deposit into any account of $1,000 or more from January 1, 2019 to present.

f. All documents related to Malaysian Gold Shop, Pournamis Jewels (M) Sdn. Bhd.

g. All documents pertaining to the gold bars Mr. Singh alleges are in Ms. Uppal’s possession.

h. All documents pertaining to the acquisition of gold jewelry that either party had on the date of separation.

i. All documents pertaining to gold jewelry that either party had on the date of separation that was gifted to them by the other party.

2. If any of the items listed in paragraph 1 are not in Mr. Singh’s possession but he is entitled to obtain them from a third party (i.e., bank, financial institution, government agency), Mr. Singh must immediately request the documents.

3. If any item requested from a third party is not available within 21 days despite Mr. Singh’s best efforts, he shall produce an affidavit setting out what documents have been requested, when and from whom.

4. If Mr. Singh has already produced an item listed paragraph 1, he shall, within 21 days, deliver an affidavit confirming that he has no other documents in his possession relevant to that item.

5. If any of the items listed in paragraph 1 do not exist, Mr. Singh shall, within 21 days, deliver an affidavit explaining which items do not exist, why they do not exist and what efforts he made to obtain them.

6. If Mr. Singh fails to produce the disclosure ordered in paragraph 1 or an affidavit required in paragraphs 3, 4 and 5 within 21 days, Ms. Uppal may renew her motion to strike.

7. Mr. Singh shall forthwith retain, at his own expense, an expert to value his interest in Pournamis Jewels on the date of separation and the date of marriage (if he owned an interest in Pournamis Jewels on the date of marriage) and shall, within 90 days, produce a business valuation report for Pournamis Jewels.

Davies J.

Released: October 11, 2022