COURT FILE NO.: FS-21-26828

DATE: 20221223

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: David Kenneth Ford v. Kerstin Waldhart

BEFORE: M. Kraft, J.

COUNSEL: Bryan R.G. Smith and Sarah Conlin, for David Kenneth Ford

Julie Hannaford and Anita Volikis, for Kerstin Waldhart

HEARD: December 15th, 2022

Endorsement

Nature of the Motion

[1] This is a motion brought by Kerstin Waldhart (“the wife”) seeking, among other things, to receive the sum of $500,000 from the net proceeds of sale from the matrimonial home to permit her to pay her lawyers and forensic accountants. The net proceeds of sale from the matrimonial home amounted to $2,563,941, of which the husband received $1,350,000 as an advance against the equalization payment and interim disbursements. Title to the home was in the wife’s sole name yet she has not received any funds from this asset. The wife also seeks an order varying the order of Steele, J., dated September 2, 2022, to adjourn the questioning scheduled for October 18 and 19, 2022 to a date when she and her lawyer are available.

[2] David Ford (“the husband”) brought a cross-motion seeking to dismiss the wife’s motion because of her failure to comply with prior court orders. If the court is inclined to release any monies from the matrimonial home sale proceeds to the wife, the husband seeks alternate security for his property claims to restrain her from disposing of her RRSP, to place a collateral mortgage on her property in Florida or by the court making a general preservation order. He also seeks that questioning be fixed for a specified date. In addition, the husband asks the wife to respond to items 2, 3 and 8 of his accountant’s, Steve Ranot’s, fifth production letter within 10 days, and for an order that the wife pay him the sum of $8,000, for costs thrown away when he prepared for questioning that did not take place in October 2022.

Issues to be Decided

[3] The issues for me to decide on the motion are:

i) Should the wife be able to proceed with her motion given the husband’s submissions that she is currently in breach of court orders?

ii) If the answer to i) is yes, should the wife receive the sum of $500,000 from the net proceeds of sale of the parties’ matrimonial home?

iii) Should the wife provide alternate security for the husband’s property claims and if so, in what manner and/or in what amount?

iv) Should the wife be ordered to produce further disclosure to the husband?

v) Should paragraph 3 of the consent order of Steele, J., dated June 3, 2022 related to the wife giving the husband reasonable notice of CPI operations and/or bi-weekly reports of CPI’s payroll; bank account balance; indebtedness etc., other than the requirement that CPI pay the husband without prejudice uncharacterized payments of $15,000 a month, be suspended?

vi) Should a date for the questioning of the parties be fixed and should the wife pay the husband $8,000 fixed for costs thrown away on account of her last minute cancellation of the questioning?

[4] I find that the wife ought to be given an audience of the court and that any breaches of any court orders have either been rectified or are not sufficient to warrant her motion being dismissed. I also find that the sum of $500,000 from the net proceeds of sale being held in trust from the sale of the parties’ matrimonial home be released to the wife immediately, to enable her to pay her lawyer and forensic accountants. I find that the wife should preserve her assets pending further court order; a case management judge should be appointed to this matter; the questioning of both parties shall occur before the end of January 2023; the wife should pay the husband $2,000 fixed on account of costs thrown away on the cancelled questioning; and the motion to suspend paragraph 3 of the Steele, J. order dated June 3, 2022 shall be dismissed without prejudice to the wife’s right to return the motion if she deems it necessary, prior to trial.

Factual Background

[5] The parties were married on September 23, 1989. They have an adult daughter, V, who is 33 years of age. V was called to the Bar in 2022 and she is a respondent in this action. V was not a party to this motion.

[6] The parties separated on January 12, 2020.

[7] The wife owns and operates a plastics company, Caledonia Plastics Inc. (“CPI”), which was started with her parents in 1984. She owns 200 Class B special shares of CPI which are voting shares, and the common shares of CPI are held by the Kerstin Waldhart Family Trust (“KWF Trust”). The KWF Trust was settled in 2017 with the husband’s full knowledge. The wife is the trustee, protector and beneficiary of the Trust. V is a trustee and beneficiary of the Trust, as is the husband and a holding company, Rexgar Holdings Ltd.. In January 2021, the husband was removed as a trustee.

[8] After separation, the husband left the matrimonial home, municipally known a 536 Old Orchard Grove, Toronto and the wife and V lived in the matrimonial home until it was sold. The transaction closed in April 2022. Title to the matrimonial home was in the wife’s sole name. The total net proceeds of sale amounted to $2,593,941. The wife has not received any monies from this asset. There currently remains over $1,213,941 in trust with the real estate lawyer. She seeks the release of $500,000 from the net proceeds to pay her matrimonial lawyer and forensic accountant. This would leave $713,941 of proceeds in trust with the real estate lawyer. She needs the funds to continue this litigation. The husband will not consent to the wife receiving these proceeds on the basis that the funds are needed as “security” for his property claims, despite the fact that the wife, on consent, advanced to him the sum of $1,350,000 from the proceeds as an advance equalization payment (“EP”) and/or interim disbursements.

[9] In 2009, the Florida condominium was purchased for $340,000 USD. This condominium is owned by the Kerstin Waldhart Living Trust (“the KWL Trust”), of which the wife is the Trustee and beneficiary. The husband is neither a beneficiary nor a Trustee. He is a successor Trustee.

[10] In February 2021, the husband started a commercial action naming the wife and V as respondents. In November 2021, the husband then issued this application. The husband worked as the general manager of CPI until he was fired for cause. He never held shares in CPI nor was he a director. The husband initiated a lawsuit in commercial court seeking to be “reinstated” at CPI and he claimed to be a “creditor” by virtue of his claim that he had an interest in the company, that is owend by the KWF Trust.

[11] A temporary without prejudice order was made in commercial court by McEwan, J. on March 5, 2021. The McEwan order includes terms that, according to the wife, affect her ability to operate CPI by requiring her to provide the husband with “reasonable notice” when engaging in business operations. The husband’s consent is not required, only notice is to be provided. This consent order was intended to be temporary and its terms were incorporated into the consent order of Steele, J., dated June 3, 2022 and provides, among other things, as follows:

i) The wife is to provide bi-weekly disclosure relating to CPI (payroll payments, bank account balances, debts, sales figures and other detailed reporting);

ii) The husband is to be paid a without prejudice basis uncharacterized payment in the sum of $15,000 CDN per month;

iii) The husband is to be given reasonable notice of CPI operations beyond $60,000; and

iv) Either party is free to vary the terms of the order;

[12] On May 2022, the parties attended a case conference before Steele, J., at which point the commercial proceeding was stayed and the claims in that action were consolidated with the family proceeding on consent in June 2022.

The Law and Analysis

Should the wife be able to proceed with her motion given the husband’s submissions that she is currently in breach of court orders?

[13] The husband submits that the wife is in breach of the following orders and, as such, ought not to be able to seek relief from the court pursuant to r.1(8) of the Family Law Rules, O. Reg. 114/99 (“FLRs”):

i) The order of Shore, J., dated November 4, 2022, which requires her to pay spousal support to the husband in the sum of $20,000 a month, on a without prejudice basis, commencing September 1, 2022. The husband’s motion material indicates that the wife was in arrears of spousal support to the extent of $60,000 for the months of September, October and November.

ii) The orders of Steele, J., dated June 6, 2022 and September 2, 2022 by a) her cancellation of the scheduled Questioning dates on October 18th, and 19th, 2022; and b) the late delivery of her amended Answer

[14] In accordance with the consent order of Steele, J., dated June 6, 2022, a detailed procedural order was agreed to and the husband was to file a fresh as amended application and the wife was to file an amended answer. The wife was late in the delivery of her amended Answer, however, the parties agree that it was served and filed on October 21, 2022. She is, therefore, not in breach of this order.

[15] In June-July 2022, the husband brought two motions. The first motion was for interim disbursements and an advance equalization payment. The parties settled that motion and on June 29, 2022, the wife agreed to advance to the husband the sum of $1,350,000 from the net proceeds of sale from the matrimonial home. The husband’s second motion was for temporary spousal support and equal use of a Florida condominium, which was heard on August 30, 2022.

[16] On November 4, 2022, Shore, J. released her decision. She found that the wife’s income was $740,000 a year for support purposes and ordered the wife to pay the husband spousal support of $20,000 a month and to continue to pay the without prejudice, uncharacterized, payments of $15,000 a month to the husband as per the McEwan order (“the Shore support order”). On November 18, 2022, the husband filed his cross-motion seeking to dismiss the wife’s motion pursuant to her non-compliance with various court orders pursuant to r.1(8) of the FLRs. At that point in time, the wife had not yet complied with the Shore support order and had not paid the husband the $20,000 a month for September, October and November. After the wife was served with the husband’s cross-motion, she did comply with the Shore support order, and paid the husband the $60,000 of support owing for the three months. The wife has also paid the husband spousal support for December 2022. The wife is, therefore, not in breach of this order.

[17] The husband asserts that the wife is breach of making the $15,000 temporary without-prejudice payments to the husband under the McEwan order because these payments are meant to be tax-free. The order of Steele, J. which incorporates the terms of the McEwan order states that these $15,000 monthly payments were uncharacterized. The Shore support order, however, included the $15,000 a month payments in the calculation of the husband’s income, as if they were taxable in his hands. Based on the evidence in the record, I am not in a position to determine whether the $15,000 a month payments under the McEwan order were meant to be tax-free. This is a matter to be dealt with at trial when the court has a complete record before it with viva voce testimony. Since the wife is causing CPI to make the monthly payments of $15,000 to the husband, I do not find that she is in breach of this order.

[18] I do not find that the wife is in breach of either the Shore support order or the Steele order. The parties agree that as at the return date of the motion, the wife was current with the spousal support payments and that she served and filed her amended Answer on October 21, 2022. While it is correct that the wife cancelled the scheduled questioning originally set to proceed on October 18th, and 19th, 2022, she submits she had to do so because she owed her counsel legal fees, which she has not been able to pay, and that is why the questioning was cancelled. I do not find that the wife’s need to cancel the Questioning amounts to a breach of an order that would justify the court not granting her an audience for her motion.

Should the wife receive the sum of $500,000 from the net proceeds of sale of the parties’ matrimonial home?

[19] Title to the matrimonial home was in the wife’s name. She has a prima facie right, therefore, to the net proceeds of sale. However, she agreed to advance the husband the sum of $1,350,000 as an advance against the EP she would owe him and/or for interim disbursements. The wife has yet to receive any funds from the remaining net proceeds being held in trust by the real estate lawyer.

[20] While the husband asserts he is a one-half beneficial owner of the matrimonial home, he has in fact, received an amount of proceeds that is higher than one-half of the net proceeds of sale from the matrimonial home. He will not agree to the wife receiving $500,000 from the remaining proceeds of sale, even though she has not yet received any funds from the proceeds because of his concern that he owed a significant equalization payment, for which he wants security.

[21] The wife submits that she has incurred significant legal and accounting fees in this matter. Her lawyers have had to respond to both a commercial and family legal claim. Her chartered business valuator, ap Valuations, has prepared three reports on her behalf; an income analysis; a valuation of her corporate interest in CPI; and a tracing report of her excluded property. ap Valuations has also assisted in addressing the many production requests made by the husband’s chartered business valuator, Steve Ranot of Marmer Penner Inc. During the motion, the wife submits that she currently owes her lawyers and accountants just under $300,000 in fees.

[22] The wife’s financial statement, sworn on October 22, 2022, shows that she owns a townhouse in Toronto which she purchased after the date of separation of $1,280,000. There is a mortgage registered on title against this townhouse in the sum of $984,535.17. There is equity of only about $295,000 in this property. The wife has no further ability, therefore, to draw down further on this equity in this property to pay her professional fees.

[23] Other than the Toronto townhouse, the wife has a TFSA of $77,907.86 and an RRSP of $771,208.67. The husband wants an order that the wife pledge her RRSP of $771,208.67 as security to the husband for his property claims. The wife submits that such an order would result in her having to declare a deemed disposition of the entire RRSP, resulting in immediate taxes and her losing half of the equity in her RRSP, pursuant to s.146(10) of the Income Tax Act.

[24] The husband suggested that the wife simply cause CPI to bonus her the $500,000 she needs to pay her legal and accounting professionals. The wife submits that she cannot withdraw monies from CPI due to cash flow issues, another reason she seeks an order for the release of $500,000 from the matrimonial home sale proceeds. She relies on the affidavit of Long Ho, Vice President of CPI, who deposes that to operate in a financially responsible manner, CPI requires a minimum cash reserve of approximately $784,000 and currently it has $763,894 in cash reserves, a bit less than what would normally be required. While this evidence has not been tested, I am prepared to accept for the purposes of this motion that the wife is not able to pay her significant legal and accounting fees by drawing monies from CPI as a bonus.

[25] For these reasons, the wife seeks to access $500,000 from her own funds. The objection to her being able to do so with her own money is that the husband submits she ought to preserve a significant sum of money because he asserts he is entitled to a very large equalization payment from her. While typically on a motion for the release of proceeds, a full assessment of the merits of either party’s equalization payment claim is not possible, the wife asks the court to assess the merits of each party’s relative EP claims as part of the threshold issue of whether or not she is entitled to receive the release of $500,000 from her own funds.

[26] Each party has completed an NFP statement. The comparative NFP statements filed by both parties demonstrate that the wife believes she owes the husband an EP of $1,700,000. Given that the wife has already advanced to the husband the sum of $1,350,000, the most she would owe the husband, from her perspective in terms of an EP, is another $400,000.

[27] The husband’s NFP statement provides that he is owed an EP of $4.5 million. The difference between the parties’ two positions is as follows:

i) The husband asserts that he has an interest arising by way of a constructive or resulting trust in CPI. The wife’s expert, Martin Pont, of ap Valuations has prepared a valuation report which ascribes an en bloc value of her interest in CPI of approximately $3.1 million, net after taxes. The wife’s interest in CPI is held in a trust, in which the wife, husband and V have a beneficial interest.

ii) The husband asserts an interest in a Florida property in Naples. The husband claims the fair market value of this property is $1 million. The Florida property is held in a Trust of which the wife is a beneficiary.

[28] In terms of CPI, the husband asserts that in 2012/2013, the wife acquired the majority of the shares in CPI for consideration. However, the husband fails to acknowledge that when he was the corporate lawyer, working as a general manager of CPI, in 2017, he and the wife engaged counsel to assist them with estate and tax planning and the KFW Trust was established in 2017. The Trust was settled and granted to the wife a beneficial interest in CPI. The wife did not pay anything for this interest. The husband was also granted a beneficial interest in CPI. The wife was made the trustee and protector of the trust and given a power of appointment.

[29] The parties do not dispute that this trust was established. The wife claims an exclusion of her interest in KFW Trust. The husband disputes that this is an excluded asset.

[30] As at the valuation date, and today, the husband has a beneficial interest in the Trust, as does the wife, which holds an interest in CPI. Both parties received their beneficial interest for nothing. The husband’s claimed interest in CPI would require the Trust to be dismantled so he could be paid his interest in CPI, if he is correct that it is not an excluded asset.

[31] In terms of the Florida property in Naples, the husband submits its fair market value is $1 million CAD. The wife submits that the fair market value of the property is $639,499 CAD. The husband was part of the Florida property purchase and the establishment of the Trust which owns the Florida property. The husband is not a beneficiary of the Trust. The wife is the Trustee and beneficiary. Again, the husband asks that this Trust be dismantled so he can acquire his one-half interest in this property.

[32] The evidence from both parties about what the husband may be owed by the wife in terms of an EP is in conflict. On the evidence, I am not able to determine the merits of the husband EP claims. On the evidence, I am not persuaded that it is “necessary for the protection of” the husband’s interests under Part I of the Family Law Act, RSO 1990, c.F.3, that I make an order not allowing the wife to receive $500,000 from the net proceeds of sale from the matrimonial home.[^1]

[33] The husband received funds from the net proceeds of sale to enable him to pay his professionals. The wife needs to access her own funds in order to defend the husband’s property claims, which she submits have little merit. It is unfair that the husband has received $1,350,000, more than 50% of the matrimonial home sale proceeds and the wife has been unable to access any of the remaining proceeds which prima facie belongs to her. I liken this to the reason interim disbursements are often ordered – to level the litigation playing field. I find that the wife ought to receive the sum of $500,000 immediately and that the balance of the matrimonial home net proceeds of sale remain in trust pending further court order or agreement of the parties.

Should the wife provide alternate security for the husband’s property claims and if so, in what manner?

[34] The husband seeks an order restraining the wife from depleting her RRSP; an order that she place a mortgage on the Florida property and/or a preservation order pursuant to ss. 12 and 40 of the Family Law Act, which provide as follows:

12. In an application under section 7 or 10, if the court considers it necessary for the protection of the other spouse’s interests under this Part, the court may make an interim or final order,

(a) restraining the depletion of a spouse’s property; and

(b) for the possession, delivering up, safekeeping and preservation of the property.

Restraining orders

40. The court may, on application, make an interim or final order restraining the depletion of a spouse’s property that would impair or defeat a claim under this Part.

[35] In the decision of Conforti v. Conforti, 2021 ONSC 1767, Chown, J. summarized the legal test applied in ss.12 and 40 applications as follows:

The Test

[27] Under s. 12 of the Family Law Act, R.S.O. 1990, c. F.3, in an application for equalization or to resolve questions of ownership,

if the court considers it necessary for the protection of the other spouse’s interests …, the court may make an interim or final order,

(a) restraining the depletion of a spouse’s property; and

(b) for the possession, delivering up, safekeeping and preservation of the property.

For support applications, the court has similar authority under s. 40.

[28] An early leading case interpreting s. 12 is Lasch v. Lasch (1988), 1988 4581 (ON SC), 64 O.R. (2d) 464. Justice Granger said at para. 13:

The purpose of an order under s. 12 of the Act is to ensure that there are sufficient assets to make an equalization payment once the court determines such payment and makes an order under s.9 of the Act.

[29] He said at para. 17:

A restraining order should be restricted to specific assets and there should be an onus on the party seeking the restraining order to prima facie show that he or she is likely to receive an equalization payment equal to the value of the specific assets.

[30] In that case, the parties had run a joint line of credit up to its limit after separation. The husband had sold a property in his name and was intending to use the proceeds to buy a house. Justice Granger said he was “concerned, having regard to the past history of this case, that the ability of either party to satisfy an equalization payment will be impaired unless I make an order restraining the disposition and/or encumbrance of certain assets.” He made a preservation order accordingly.

[31] In Batler v. Batler (1988), 1988 4726 (ON SC), 67 O.R. (2d) 355 at para. 7, Justice Granger said:

If jointly owned property is sold prior to trial, prima facie the net proceeds of sale should be held in trust pending the determination of equalization to avoid prejudice to either spouse arising from the sale. If the parties agree or if there are sufficient assets to satisfy the potential equalization payment the funds could be dispersed.

[32] In Bronfman v. Bronfman, 2000 22710 (ON SC), decided 12 years later, the wife sought to extend a preservation order she had obtained on an ex parte motion. Justice Sachs applied the test applicable to a request for an injunction by considering: (1) the relative strengths of the parties’ positions; (2) the balance of convenience; and (3) whether irreparable harm may occur if relief is not granted. Paragraphs 26 though 31 of Justice Sachs’s decision are instructive. In particular, she says:

a court will want to consider how likely it is that the plaintiff or petitioner will receive an equalization payment. It will also want to consider the effect that granting, or not granting, such an order will have on the parties. Under s. 12, the agenda is to protect the spouse's interests under the Family Law Act, so that if a spouse is successful in obtaining relief under that Act, there are assets available to satisfy that relief. Relevant to this exercise is an assessment of the risk of dissipation of the assets in existence prior to trial.

[31] …There are certain cases where the factual record, and the applicable legal principles, make it very clear that a spouse will be entitled to an equalization payment in a particular amount. In such cases, considerable weight will be given by the court to this factor when deciding an interim application under s. 12, and perhaps less weight to the other factors. There are others where the facts and the law are disputed and complicated. ... In such cases, the court will want to go on and give serious consideration to the other factors, being the balance of convenience and the risk of dissipation prior to trial. [Emphasis added.]

[33] A more recent leading case is Taus v. Harry, 2016 ONSC 219. Justice Gauthier’s held, at para. 35, that the test under s. 12 or s. 40 is the same: “The question to be asked is whether there is a real risk that the applicant's equalization claim and claim for retroactive support could be defeated if the preservation/non-dissipation order is not made.” In that case, equalization had not been determined, with each party saying the other would owe a significant amount. Specifically, the applicant said the respondent would owe her $130,000. Justice Gauthier found no evidence that the respondent was financially irresponsible, and “nothing to suggest that he would take steps to avoid any financial obligation he is ultimately determined to have” (Ibid., at para. 24). She accepted the respondent’s position that $200,000 should be paid out from trust, leaving just $46,400 each secured.

[36] In the case at bar, the parties’ positions on what sum is owing by the wife to the husband as an EP is in dispute and cannot be readily assessed on the written record before me. The wife’s position is that she owes the husband an EP of $1,737,792, of which he has received $1,350,000, to date. The husband’s position is that the wife owes him an EP of $3,752,315, of which he has received $1,350,000 to date.

[37] This is not, therefore, a case where it is clear what amount will be owing to husband as an EP. The wife has not demonstrated that she is financially irresponsible. To the contrary, she deposes that she cannot access funds from CPI to pay her legal and accounting professionals. Between her RRSP, TFSA, her equity in the Toronto townhouse, she has about $1.1 million of available assets. This does not include her interest in the two Trusts that own CPI and the Florida condominium.

[38] The wife is current with her spousal support payments of $20,000 a month to the husband and she has caused CPI to be current with its uncharacterized payments of $15,000 a month to the husband. The wife is not a flight risk and there is no evidence to suggest that she would hide or deplete her assets. The wife had delivered 3 expert reports, an income report, a valuation report with respect to CPI and a report tracing her excluded property. She has also produced several sworn financial statements, delivered documentary disclosure and served and filed an Affidavit of Documents. A spouse is not entitled to security dollar for dollar of what he/she says is his/her best day in terms of property division. There is no evidence on the record that the wife would take any steps to avoid the EP she is ultimately determined to owe the husband. I am not persuaded, therefore, that it is necessary for me to make an order to pledge her RRSP of $775,000. Further, I agree with the wife that if she were ordered to pledge her RRSP as security as sought by the husband, this would create a deemed disposition under the Income Tax Act resulting in negative tax consequences for the wife.

[39] Section 146(10) of the Income Tax Act, R.S.C. 1985 c. 1 (5th Supp.) provides as follows:

Property used as security for loan

(10) If at any time in a taxation year a trust governed by a registered retirement savings plan uses or permits to be used any property of the trust as security for a loan, the fair market value of the property at the time it commenced to be so used shall be included in computing the income for the year of the taxpayer who is the annuitant under the plan at that time.

[40] I am prepared, however, to make a preservation order requiring the wife to preserve her property in Canada until further order of the court or court order.

Should the wife be ordered to produce further disclosure to the husband?

[41] The husband assets that the wife has not complied with her disclosure items because of three items he submits are outstanding from Mr. Ranot’s fifth disclosure letter. The wife submits that the parties’ experts dealt directly with one another and in September and October, the three items in dispute were addressed by the wife’s expert. The wife only learned that the husband took issue with her expert’s response when she was served with his cross-motion on November 18, 2022.

[42] Attached to the husband’s reply affidavit, sworn on December 12, 2022, as an exhibit is Mr. Ranot’s sixth production letter, dated December 12, 2022, which incorporates the items the husband claims are outstanding from Mr. Ranot’s fifth production letter. In total, Mr. Ranot seeks the production of 8 items, 7 of which, the husband claims are outstanding from earlier disclosure requests and 1 of which is a follow-up request. Two of the items sought by Mr. Ranot relate to items of disclosure required by the accountant of CPI, Ken Bell. Mr. Ford seeks an order that the wife be required to provide the disclosure requested in the 6th production letter by no later than January 20, 2023. I find that this order is a reasonable request in the circumstances, subject to the wife’s best efforts to answer the outstanding requests for production.

Should paragraphs 3(c)-(q) of the order of Steele, J., dated June 6, 2022 be suspended?

[43] As indicated above, the husband started a proceeding in commercial court, court file number CV-21- 00656159-00CL. Two orders were made in that proceeding, including the consent Order of McEwan J., dated March 5, 2021. The McEwan order includes terms that, according to the wife, affect her ability to operate CPI. This consent order was intended to be temporary and its terms were incorporated into the consent order of Steele, J., dated June 6, 2022 and provides as follows:

i) The wife is to provide bi-weekly disclosure relating to CPI (payroll payments, bank account balances, debts, sales figures and other detailed reporting);

ii) The wife is to provide the husband with “reasonable notice” when engaged in business operations including any singular expenditures beyond $60,000;

iii) The husband is to be paid a without prejudice basis uncharacterized payment in the sum of $15,000 CDN per month;

[44] The McEwan order was incorporated into the consent order of Steele, J., dated June 3, 2022 which also provides that its terms were “without prejudice to any claims or rights that the parties may have or assert in this proceeding and states that any party may move to vary or set aside any term…with time notice.”

[45] The wife seeks to suspend paragraph 3 of the Steele, J. order, dated June 3, 2022, except for the term which requires CPI to pay the husband $15,000 a month on a without prejudice, uncharacterized, basis.

[46] Given that this matter was on the regular motions list, submissions regarding how the terms of the Steele, J. order are onerous and/or “are permitting [the husband] to have a strong hand in the operations of CPI when he has no right to control how [she] runs the company” were not fully made by the wife, due to time constraints.[^2] My review of the material filed on the record about these terms are that the husband is to be given “reasonable notice” when the wife operates CPI or makes any expenditures above $60,000 but he has no right to consent, object to or control such operations, only to receive the notice of same. In these circumstances, I am not persuaded that paragraph 3 of the Steele, J. order should be suspended at this time. However, this ruling will be without prejudice to the wife’s right to return the motion at any time prior to trial if she deems it necessary.

[47] Further the wife’s cross-motion includes request for an order that the names in this proceeding be initialized. Again, due to time constraints this issue was not reached during the motion. The husband does not take a position on this issue in his reply affidavit, sworn on November 18, 2022. This ruling is without prejudice to the wife’s right to return the motion to initialize the names of the parties and/or other individuals named in the case at any time prior to trial.

Should a date for the Questioning of the parties be fixed and/or should the wife pay the husband costs of $8,000 on account of costs thrown away for the initial date of the Questioning?

[48] On the Friday before the Monday, October 18, 2022, the wife’s lawyers sent a letter to Mr. Smith advising that the wife would not be attending Questioning and that the Questioning of the husband would not be proceeding. Counsel for Mr. Ford submits that he had spent all of Thursday, October 14th, 2022 and Friday, October 15th, 2022 preparing for the Questioning. Accordingly, he seeks an order requiring the wife to pay him costs of $8,000, calculated as $4,000 a day, thrown away on account of the preparation for the Questioning that did not occur, pursuant to r.1(8) of the FLRs.

[49] During the motion, the parties were able to reach agreement that the Questioning of both parties will take place on January 25th, and 26th, 2023.

[50] I am not persuaded that all of the costs incurred by the husband’s counsel for two days of preparation in October were entirely thrown away by the last minute cancellation. While there may be some duplication when the Questioning is conducted in January, there is no doubt that the preparation which began in October will be useful in January. If the Questioning was cancelled because the wife owed her counsel significant funds, that information would have been known to her lawyers prior to when they cancelled the Questioning in October. Accordingly, I find that it is reasonable for the wife to pay the husband the sum of $1,500, fixed, on account of costs thrown away in preparing for the Questioning in October, 2022.

Order

[51] Accordingly, this court makes the following order:

a) A case management judge shall be appointed to this matter. A copy of this Endorsement shall be sent to Justices Shore and Diamond to ensure that a case management judge is appointed. Counsel for each party shall write to the Family Law team leaders, Justices Shore and Diamond seeking a case management judge to be appointed to this matter.

b) The Settlement Conference which is currently scheduled for January 30, 2023 shall occur and this date shall be used as a Case Management conference to schedule and determine next steps;

c) The Questioning of both parties shall occur on January 25th and 26th, 2023, or by the end of January 2023 if these dates are not workable;

d) The issue of whether the parties’ names in this case shall be initialized has not been determined as there was insufficient time to address this issue on the motion. This order is without prejudice to the wife returning her motion on this issue at any point between now and the trial of this matter.

e) The wife’s motion to suspect paragraph 3 of the Steele, J. order dated June 3, 2022 is hereby dismissed without prejudice to the wife’s right to return this motion before the court if she deems it necessary on better or further evidence. The consent order of Steele, J., dated June 3, 2022, remains in full force and effect until further order of the court or agreement of the parties.

f) The real estate lawyer currently holding the net proceeds of sale from the matrimonial home shall immediately pay to the wife the sum of $500,000 and the remaining net proceeds of sale shall continue to be held in trust by the real estate lawyer pending further agreement of the parties or court order;

g) The wife shall preserve her TFSA, Toronto condominium and her RRSP, subject to her being permitted to trade within her RRSP but not withdraw funds from it, pending further court order of the parties or agreement of the parties. If the wife intends to sell the Florida property she shall give the husband notice of 60 days of her intention to do so.

h) The wife shall answer the disclosure and/or production requests to the best of her ability as set out in Mr. Ranot’s 6th production letter, dated December 12, 2022, within 30 days.

i) Within thirty days, the wife shall pay the husband costs in the fixed sum of $2,000, inclusive of HST for costs thrown away on account of the cancelled Questioning in October 2022.

j) The parties are encouraged to agree on costs of this motion. If they are unable to do so, the wife shall serve and file her costs submissions in writing of no more than 3 pages, not including a Bill of Costs or offers to settle within 15 days from the release of this Endorsement. The husband shall serve and file his responding costs submission in writing of no more than 3 pages, not including a Bill of Costs or offers to settle within 7 days of being served with the wife’s costs submissions. Reply costs submission, if any, shall be served and fled by the wife within 5 days of receiving the husband’s responding costs submissions and shall be no more than 1 page.

December 28, 2022

M. Kraft, J.

[^1]: The language in s.12 of the Family Law Act is that the court may preserve property if the court considers it necessary for the protection of the other’s spouse’s interests under Part I of the act. [Emphasis added]

[^2]: As set out by the wife in her affidavit sworn on October 21, 2022.