Court File and Parties
NEWMARKET COURT FILE NO.: FC-22-286-00 DATE: 20230320 SUPERIOR COURT OF JUSTICE – ONTARIO – FAMILY COURT
RE: Giuseppe Paggiossi, Applicant AND: Angela Maria Paggiossi, Respondent
BEFORE: The Honourable Mr. Justice G.A. MacPherson
COUNSEL: E. Lenkinski, Counsel for the Applicant L.A. Bortolussi, Counsel for the Respondent
HEARD: March 15, 2023
Ruling on Motion
Relief Requested
1The Respondent brings a motion, on a regular motion list (one-hour motion), requesting the following relief:
(a) that the Applicant, Giuseppe Paggiossi, provide the disclosure listed in Schedules “A”, “B” and “C” to the Notice of Motion within 21 days of the Order at the sole expense of the Applicant, Giuseppe Paggiossi (this request consists of 15 pages with just shy of 100 items);
(b) that the Applicant (Husband), Giuseppe Paggiossi, cooperate with the Respondent, Angela Paggiossi’s Chartered Business Valuator and that the Applicant provide all documents and information requested from time to time as are relevant and necessary for the timely completion of the Business Valuation for Frontline Mechanical Services Ltd. and for the income determination of the Applicant, Giuseppe Paggiossi;
(c) that the Applicant, Giuseppe Paggiossi, respond and address the disclosure requested by the Chartered Business Valuator on an item-by-item basis;
(d) that the Applicant, Giuseppe Paggiossi, provide written authorization to the London Life Insurance Company and the Canada Life Assurance Company, that they release any and all information and documents, including but not limited to their complete file for each policy and memos to file, to the Respondent, Angela Paggiossi, at her request with respect to the following policies:
i. London Life Insurance Policy #B735896-5;
ii. London Life Insurance Policy #E255709T;
iii. London Life Insurance Policy #B722534-0 ;
iv. Canada Life Insurance Policy #40612397 or its replacement policy; and
v. all files and policies for Frontline Mechanical Systems Ltd., Giuseppe Paggiossi, and 1000163963 Ontario Inc. o/a Frontline HVAC Systems.
(e) that the Applicant (Husband), Giuseppe Paggiossi, designate the Respondent (Wife), Angela Paggiossi as the sole irrevocable beneficiary of the London Life Insurance Policy #E255709T, London Life Insurance Policy #B722534-0 and Canada Life Assurance Company Policy #40612397 or its replacement policy and that confirmation of the said designation be received directly from the London Life Insurance company;
(f) that the Applicant (Husband), Giuseppe Paggiossi reinstate and keep current the Canada Life Assurance Company Policy #40612397. If reinstatement is not possible, that the Applicant (Husband) replace Policy #40612397 with a new policy;
(g) that the Applicant (Husband), Giuseppe Paggiossi repay to Canada Life Assurance Company Policy #40612397 the sum of $50,000. If he is not able to repay the policy, the $50,000 shall be paid to the Respondent (Wife), Angela Paggiossi; and
(h) that the Applicant, Giuseppe Paggiossi, designate the Respondent, Angela Paggiossi, as the sole irrevocable beneficiary of the Canada Life Assurance Company Policy #4061397 or its replacement policy.
2The Applicant filed a cross-motion, returnable on the same regular motion’s list requesting the following relief:
(a) leave to amend his affidavits and Notice of Motion filed in support of the motion;
(b) an Order requiring the Respondent to provide disclosure set out in Schedule A to the Notice of Motion (which totals approximately 15 line items);
(c) an Order that the Respondent provide original versions of promissory notes which she signed with her father and to do so within 10 days;
(d) that the Respondent provide a complete list of all disclosure in her possession relating to Frontline Mechanical Systems Inc. and confirmation on behalf of the valuator, Mr. Ranot, that he has received all such disclosure from the Respondent;
(e) that the Respondent serve any expert reports upon which she intends to rely 60 days prior to questioning;
(f) adjourning the Respondent’s motion (set out in paragraph #1 herein) until she complies with paragraph (a) – (f) as set in this paragraph 2 and to a date after receipt of Mr. Ranot’s updated disclosure list including an explanation as to the necessity of the disclosure requested;
(g) leave to amend his Amended Application; and
(h) an Order validating service of documents on the co-Respondent, Frontline Mechanical Systems Inc. by service of said documents upon the Respondent.
3It is noteworthy that the Applicant has another motion scheduled and it is returnable March 22, 2023. That motion requests the following relief:
(a) sale of the matrimonial home, 71 Diana Drive, Nobleton, together with all of the corollary issues related to the sale;
(b) division of the household contents;
(c) that the Respondent return to the Applicant:
i. the gold Iraqui dinars;
ii. his jewellery;
iii. his tools; and
iv. his personal items including a Coco Cola fridge, Pepsi fridge, Samsung fridge, dishes and tool box.
(d) that the Respondent pay all household expenses including utilities and property taxes; and
(e) an equal division and release of the net proceeds from the sale of the matrimonial home.
4It is noteworthy that the Respondent also has another motion scheduled and it is returnable April 5, 2023. That motion requests the following relief:
(a) an Order imputing of income to the Applicant in the amount of $619,835;
(b) an Order that the Applicant pay monthly child support in the amount of $4,682 commencing May 1, 2023;
(c) an Order that the Applicant pay monthly section 7 expenses in the amount of $35 per month;
(d) an Order that the Applicant pay monthly spousal support in the mount of $9,258;
(e) an Order that the Applicant pay the Respondent $288,171.57 as an interim disbursement from the Applicant’s share of the net proceeds held in trust; and
(f) an Order that $419,721.45 be released to the Respondent from the net proceeds of the sale of 72 Diana so that she can pay off debts.
5I am told that the Applicant is also advancing a long motion during the May trial sittings. The relief for that motion is unknown.
Rule 2 - Family Law Rules
6Pursuant to Rule 2 of the Family Law Rules, the primary objective of the Rules is to enable the court to deal with cases justly.
7Dealing with cases justly includes:
a) ensuring the procedure is fair to all parties;
b) saving expense and time;
c) dealing with the case in ways that are appropriate to its importance and complexity; and
d) giving appropriate resources to the case while taking account of the need to give resources to other cases.
8Pursuant to Family Law Rule 2(4), while the court is required to apply the rules to promote the primary objective, the parties and their lawyers are also required to help the court promote the primary objective (emphasis added).
9The Court stated to counsel and the parties at the commencement of the motion that this file is a litigation train wreck. The time required to consider the motion and cross-motion scheduled for this day alone will well exceed the time allotted for a 1-hour motion. The number of pages filed for the motions exceed what is permitted pursuant to the Notice to Profession.
10It is wholly inappropriate for counsel to be scheduling serial motions and eating up valuable court time in what appears to be an attempt to litigate all issues in dispute by motion. It is discouraging to learn that counsel, in scheduling these serial motions, inundated the Trial Coordinator with a staggering 27 emails some of which included conflicting information.
11In Greco-Wang v. Wang, 2014 ONSC 5366, Kiteley J. observed that “members of the public who are users of civil courts are not entitled to unlimited access to trial judges.” I adopt those comments and offer that the scheduling of serial motions, like here, is an abuse of process. The parties and counsel are cautioned and reminded of their obligation pursuant to Rule 2 to assist the court in promoting the primary objective. The parties would be well advised to focus their time and resources on preparing for a trial, particularly with this many issues in dispute, rather than time consuming and expensive serial motions.
12Today I heard the Respondent’s motion for disclosure.
13On March 22, 2023 I will hear the Applicant’s cross-motion for disclosure.
14All motions already scheduled are vacated and the parties shall appear before their case management Judge, Justice Daurio, on April 14, 2023 at 9:30 a.m. The purpose of the case conference is to actively manage this matter through to the trial sittings in November 2023 when this matter, if not resolved, should be trial ready.
Brief Factual Background
15The parties married June 26, 1993 and separated August 3, 2021.
16There are three children namely, Nicole Paggiossi born April 18, 1995; Anthony Paggiossi born March 16, 1999 and Victoria Paggiossi born April 26, 2004. Victoria continues to be a dependent of the relationship.
17For 18 years the Applicant operated a heating, ventilation and air conditioning business under the corporate name, Frontline Mechanical HVAC Systems Ltd. (hereinafter the “old company”). Although incorporated, as I understand the evidence, the Minute Book for the old company has never been prepared and no shares were ever issued. In addition to the heating and air conditioning business, the old company also owned two industrial units, Units 49 and 50 at 665 Millway Avenue, Vaughan. Both units have been sold and there is $1,435,669 remaining in trust from the sale of the units.
18In April 2022 the Applicant, secretly, incorporated a new company. Although it was a numbered company, it operated as Frontline HVAC Systems Ltd. (hereinafter the “new company”). The names of both companies are very similar. The Respondent states that the Applicant transferred much of the lucrative business to the new company.
19The Respondent has been a teacher for 25 years and she teaches at St. Joan of Arc Catholic School in Barrie.
20In terms of issues, the Applicant, in his pleadings has 53 prayers for relief including the following:
(a) decision-making authority;
(b) parenting time;
(c) a restraining Order;
(d) the equalization of net family properties;
(e) an Order freezing assets;
(f) sale of property;
(g) spousal support;
(h) child support;
(i) section 7 expenses; and
(j) sale of both properties.
21In terms of issues, the Respondent, in her pleadings has 38 prayers for relief including the following:
(a) decision-making authority;
(b) parenting time;
(c) a restraining Order;
(d) an unequal division of net family properties in the Applicant’s favour;
(e) an Order freezing assets;
(f) sale of property;
(g) spousal support;
(h) child support;
(i) section 7 expenses;
(j) sale of both properties;
(k) life insurance;
(l) security for support; and
(m) exclusive possession of the matrimonial home.
22In terms of parenting issues, it is noteworthy that the youngest of the children turns 19 next month. Why are there parenting claims being litigated?
23In terms of the support claims, the Respondent is a T-4 employee. Her income is relatively easy to ascertain. I do appreciate that there may be some additional funds from tutoring that can be addressed through disclosure.
24However, it is the Applicant’s income that is not easy to ascertain. The Applicant was the operating mind of the company (both old and new). He was trained, licenced and experienced in HVAC and he ran the company for almost 20 years.
25In terms of property, the parties are joint owners of the matrimonial home and a vacation home in Naples, Florida. These properties can be easily valued and, at the very least, could be sold to ascertain their true value rather than embarking on an expensive process of competing valuations. The company, however, is not as straight forward.
26In February 2022 the parties agreed to have the old company valued and they jointly retained AB Valuations Inc. As the company was owned jointly, the value of the company was being determined as of December 31, 2021. The income stream was also being determined.
27In correspondence from the valuator it was clear that the financial records of the company were in shambles and, the Respondent states, there were two sets of books operating. By correspondence dated May 16, 2022, AB Valuations withdrew from the agreement to value the old company for some of the reasons set out below:
(a) the valuator met with the bookkeeper and the outside accountant for clarification on issues. During the discussion the bookkeeper and accountant blamed each other for errors and discrepancies;
(b) the valuator requested a meeting with both parties because information he was receiving was contradictory. The Respondent agreed to attend but the Applicant refused;
(c) the external accountant insisted that the valuator meet with the Applicant and, as stated above, the Applicant refused; and
(d) the valuator had concerns with the quality of the Financial Statements and misallocation errors. As the Financial Statements were not reliable and the Applicant refused to meet, the valuator withdrew.
28It is noteworthy that the valuator stated that the company was, essentially, working on a cash basis and this was not an acceptable practice.
29It is also noteworthy that, in August, 2022, the Applicant transferred the new company to his brother-in-law, Angelo Di Pardo.
30It is noteworthy that the Applicant hired a manager for the old company as a result of his “declining health.”
31By correspondence dated August 22, 2022, the Applicant took the position that he would no longer oversee the manager of the new company (effective that day) and he invited the Respondent to manage the operations subject to his imposing a condition that the Respondent was precluded from incurring any debt. As stated by the Respondent in her affidavit: “I have no education, training, licensing or experience in the HVAC industry nor did I ever operate FMSL. I taught full time, raised our children and took care of the household during the 18 years Giuseppe operated FMSL.” Alternatively, the Applicant advanced the position that the old company should be wound up.
32The Respondent states that the Applicant was busy diverting business, revenue and clients, including longstanding clients to the new company depleting the value of the old company.
33In July 2022 the Applicant stopped contributing to the mortgage, property taxes and insurance on the matrimonial home.
34On July 15, 2022 the Respondent hired her own business valuator, Marmer Penner, to prepare a business valuation as at the date of separation, a current value and an income stream.
Case Conference – October 6, 2022
35On October 6, 2022 the parties attended a Case Conference before Justice Daurio.
36On that date the parties entered into a comprehensive disclosure Order, on consent, that included requests for information from the valuator, Marmer Penner. Despite the consent Order, the Applicant has not provided all of the disclosure agreed upon.
37In his affidavit the Applicant states that he attempted to streamline the exchange of disclosure by connecting the business valuator with the bookkeeper and external accountant. However, he also states that the bookkeeper resigned the position in July 2022 and he states that the accountant suffered a stroke. Further, the Applicant takes the position that he is now disabled and unable to work. Accordingly, he directed the Respondent to the new manager to answer any questions. It is counter-intuitive to think that the recently hired manager would be able to answer the in-depth financial questions required to complete the valuation with the historical financial records in shambles. If the bookkeeper and external accountant could not answer the questions from the first valuator, how would the new manager be able to answer questions from the second valuator? It makes no sense
38The Applicant also takes the position that as the Respondent is a 50% owner she could provide any information required directly to the expert. The Respondent, like the new business manager, does not have the institutional knowledge to answer the in-depth accounting questions required.
39The Applicant’s excuses for his non-compliance with the disclosure Order and the further disclosure requests from the valuator are not even a little bit persuasive. The Applicant’s suggestion that the new manager or the Respondent answer the questions from the valuator is unrealistic. It was the Applicant who ran the business. It was the Applicant who was responsible for ensuring the Financial Statements were completed and up to date. It was the Applicant who kept two sets of books. It is the Applicant who has 18 years of institutional knowledge of the company. The Applicant is not permitted to pass his disclosure obligation on to someone else.
Temporary Order
(not on consent):
The Applicant’s cross-motion on the issue of disclosure is adjourned to March 22, 2023 at 9:30 a.m. before me and neither party is permitted to file additional affidavit evidence.
The Applicant’s motion for the sale of the matrimonial home returnable March 22, 2023 is vacated.
The Respondent’s motion for child support, spousal support, section 7 expenses, interim disbursements, and the release of funds held in trust is vacated.
There shall be no further motions scheduled in this matter without leave from the case management Judge, Justice Daurio.
The parties shall attend an in-person case conference before the Justice Daurio on April 14, 2023 at 9:30 a.m., to establish a resolution time frame that will conclude with a trial, if not resolved before, in November 2023.
Compliance with the disclosure ordered by Justice Daurio
- The Applicant shall, within 30 days, provide to the Respondent all of the disclosure set out in the October 6, 2022 Order of Justice Daurio. The Applicant shall, within 30 days, provide to the Respondent a sworn affidavit indicating, for each item not disclosed: a) why the disclosure is refused: b) if the disclosure is unavailable, why it is unavailable and c) what specific efforts were made to obtain the disclosure.
Disclosure request from Marmer Penner Inc.
- The Applicant shall, within 30 days, answer the questions and provide the disclosure set out in the letter of Marmer Penner Inc. dated February 6, 2023. The Applicant shall, within 30 days, provide to the Respondent a sworn affidavit indicating, for each item not disclosed: a) why the disclosure is refused; b) if the disclosure is unavailable, why it is unavailable and c) what specific efforts he made to obtain the disclosure.
Schedule B to the Notice of Motion
- The Applicant shall, within 30 days, provide the disclosure set out below or a sworn affidavit indicating, for each item not disclosed: a) why the disclosure is refused; b) if the disclosure is unavailable, why it is unavailable and c) what specific efforts he made to obtain the disclosure:
(a) a complete itemized list of accounts receivable with aging reports from August 3, 2021 to date for Frontline Mechanical Systems Ltd. together with full contact information;
(b) a full list of revenue collected from August 3, 2021 by or on behalf of Frontline Mechanical Systems Ltd. and a detailed accounting of how that money has been deposited and spent; and
(c) professional appraisals for the:
i. 2007 Ford Shelby Cobra; and
ii. 1967 Camaro/Firebird.
(on consent)
- The Applicant, Giuseppe Paggiossi, and the Respondent, Angela Paggiossi, shall have access to and obtain information from London Life and Canada Life Insurance for the following life insurance policies:
(a) London Life Insurance Policy #B735896-5;
(b) London Life Insurance Policy # E255709T;
(c) London Life Insurance Policy #B722534-0;
(d) Canada Life Insurance Policy #40612397 or any replacement policy); and
(e) any files and policies either company may have with Frontline Mechanical Systems Ltd., Giuseppe Paggiossi, 1000163963 Ontario Inc. or Frontline HVAC Systems.
The balance of the relief claimed, in relation to the life insurance policies, is not ordered today and is dismissed, without prejudice to the Respondent obtaining this relief in the future after receipt of the disclosure.
The issue of costs of this motion and costs of the motion before me March 22, 2023 will be addressed on March 22, 2023.
Justice G.A. MacPherson Date: March 20, 2023