Court File and Parties

Date: 2023-05-31 Superior Court of Justice - Ontario

Re: Marion Elizabeth Breukelman, Applicant And: Dario Antonio Miret, Respondent

Counsel: Tanya N. Road, for the Applicant, Marion Breukelman Evelyn Kohn Rayson, for the Respondent, Dario Miret Jeffrey Radnoff, for R. Avis Surveying Inc. (Plaintiff / Defendant to the Counterclaim) and for Dario Miret (Defendant to the Counterclaim) in the Civil Action CV-22-00675720) Rahul Shastri for Marion Breukelman (Defendant / Plaintiff by Counterclaim) and Tanya Basso (Defendant) in the Civil Action CV-22-0675720 Rahul Shastri, as Agent for Gil Fischler, for Marion Breukelman (Plaintiff/Defendant by Counterclaim) and Tanya Basso (Defendant to the Counterclaim) in Civil Action CV-22-00679352 Matthew Valitutti, for Roger Avis and Elise Avis (Defendants to the Counterclaim) in the Civil Action CV-22-00675720

Heard: February 9, 2023

Vella J.

Reasons for Decision

[1] The applicant/moving party, Marion Breukelman, seeks an order consolidating the following two civil proceedings into the within family law application:

(a) Ontario Superior Court File No. CV-22-00675720 (the “Civil Action”); and (b) Ontario Superior Court File No. CV-22-00679352 (the “Employment Action”).

[2] Ms. Breukelman relies on r. 107 of the Courts of Justice Act, R.S.O. 1990, c. C.43; Rule 12(5) of the Family Law Rules, O. Reg. 114/99; and Rule 6.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

Background

[3] Ms. Breukelman and Mr. Miret were involved in a long-term marriage. There are two adult children of the marriage.

[4] Mr. Miret’s parents, Roger and Elise Avis (“the Avis Parents”) founded and operated a land surveying business in Ontario, called R. Avis Surveying (“RAS”). They own 51% of the shares of RAS and Roger Avis continues to be the President, Secretary and sole Director, while Elise Avis is listed as the Chief Financial Officer. RAS is involved in the business of providing land surveying services and has operated since in or around 1988.

[5] In short, Ms. Breukelman claims that during their marriage, she was heavily engaged in the affairs of RAS as a joint family venture, initially on a part time basis while she was primarily responsible for raising the family and was able to work from home. She alleges that gradually, her work for RAS expanded in 2004 from part-time administrative work to a full-time management position since at least 2018. Meanwhile, she alleges that Mr. Miret was able to acquire his Ontario Land Surveyor status in 1992 due to her employment at an investment banking firm. Mr. Miret has been working with his parents at RAS since 1995.

[6] Ms. Breukelman alleges that in 2015, Roger Avis stopped going to the RAS office, preferring to work from home instead and has been reducing his involvement in RAS. Furthermore, Elise Avis formally retired in 2018. Ms. Breukelman further alleges that she assumed Elise Avis’s functions at RAS such as pay roll, accounts receivable and accounts payable while Mr. Miret assumed Roger Avis’s functions including as an Ontario Land Surveyor. Ms. Breukelman holds a Bachelor of Applied Science, Geological Engineering and a Master of Business Administration, and formerly was employed at a private investment banking firm called IBK Capital.

[7] Ms. Breukelman alleges that the intention of the Avis Parents was that she and Mr. Miret would succeed them in the RAS business. Throughout 2016, 2017 and 2020, the Avis Parents gradually transferred 49% of the shares of RAS to Mr. Miret. Ms. Breukelman claims that she was aware of these share transfers by the Avis Parents, who assured her that these transfers were intended to benefit both Mr. Miret and herself, reflecting a gradual devolution of RAS to Mr. Miret and Ms. Breukelman, jointly.

[8] Ms. Breukelman and Mr. Miret separated in either May 2020 or May 2021 according to the pleadings.

[9] After discovering that Mr. Miret was having an extra-marital affair in or around May 24, 2021, on August 11, 2021, Ms. Breukelman states that she went to the Avis Parents, and they signed a letter stating that it was their intention at the times of transferring shares to Mr. Miret, that the transfers were for the benefit of both Mr. Miret and Ms. Breukelman. [1]

[10] On or about January 16, 2022, Mr. Merit and ultimately RAS accused Mr. Breukelman of stealing property from RAS.

[11] Ms. Breukelman, and her sister, Tanya Basso, were terminated by RAS. Ms. Basso had been engaged in contract work for RAS to create billing software for the company and doing other administrative support work.

[12] In the wake of the marital breakdown, three actions have been commenced which are at the heart of this motion:

(a) RAS commenced the Civil Action against Ms. Breukelman and Ms. Basso, on January 24, 2022, alleging, inter alia, that they stole property from RAS and seeking a declaration that Ms. Breukelman is not a beneficial owner of RAS. Ms. Breukelman filed a Statement of Defence and issued a Counterclaim adding Mr. Miret and the Avis Parents as defendants to the Counterclaim. (b) Ms. Breukelman commenced the Employment Action in April 2022 against RAS and Mr. Merit alleging wrongful dismissal. By way of a Statement of Defence and Counterclaim, RAS and Mr. Miret added Ms. Basso as a defendant to the Counterclaim which mirrors the claims against Ms. Breukelman and Ms. Basso made in the Civil Action. (c) In or around May 31, 2022, Ms. Breukelman commenced this Application (FS-00030156-000) (the “Family Law Proceeding”) against Mr. Miret raising various issues including, inter alia, a claim that Mr. Miret’s 49% equity stake in RAS is a joint family venture, or alternatively that he holds half of those shares in trust for Ms. Breukelman.

[13] In the Civil Action, the Amended Statement of Claim includes a request for a declaration that Ms. Breukelman does not, and has never, owned any shares, beneficially or otherwise, of RAS. It also seeks damages for conversion and detinue against her and her sister, Ms. Basso, and exemplary and punitive damages, arising out of the alleged theft of real and intellectual property of RAS.

[14] Ms. Breukelman’s Counterclaim and Statement of Defence asserts that she does have a beneficial interest in the shares of RAS and pleads the matrimonial relationship, her relationship with the Avis Parents, and her claims as a beneficial owner in RAS as part of the allegations.

[15] In the Employment Action, Ms. Breukelman pleads her marital relationship and the events leading to separation with Mr. Miret, her duties and roles at RAS, the fact that 49% of the shares of RAS were transferred from the Avis Parents to Mr. Miret between 2018 and 2020, and her expectation that RAS would become a family business by way of succession for Mr. Miret and Ms. Breukelman.

[16] RAS and Mr. Miret’s Statement of Defence and Counterclaim to the Employment Action pleads facts relating to the marriage and separation, and the transfer of shares in RAS to Mr. Miret.

[17] In this Family Law Proceeding, Ms. Breukelman has pleaded that RAS is a Joint Family Venture in which she has an equitable interest.

[18] The parties agree that the Civil Action and Employment Action should be consolidated. However, Ms. Breukelman’s position is that the Civil Action and Employment Action should also be consolidated with this Family Law Proceeding.

[19] Ms. Basso consents to the proposed consolidation of the Civil Action and Employment Action into this Family Law Proceeding.

Issues

[20] The issues for this motion are:

(a) Is it more convenient to hear the Civil and Employment Actions with the Family Law Proceeding (r. 12(5) of the Family Law Rules)? (b) In this connection, is consolidation warranted under the criteria of r. 6.01 of the Rules of Civil Procedure? (c) Will a multiplicity of proceedings give rise to the real risk of inconsistent judgments? (d) Does the balance of convenience favour consolidation?

[21] For the reasons that follow, I find that the Civil and Employment Actions should be consolidated with the Family Law Proceeding.

Analysis

[22] Rule 12(5) of the Family Law Rules provides that other cases from the Superior Court of Justice can be consolidated with a family law proceeding. It is trite law that any judge of the Superior Court may hear any case for which this court has jurisdiction (Klassen v. Klassen, 2020 ONSC 4835, 43 R.F.L. (8th) 347, at paras. 27-28, 33-35). The fact that in Toronto, the Superior Court of Justice is organized such that judges are assigned to specific subject matter cases (e.g.: family law, civil law, and criminal law) does not take away from the general jurisdiction that every Superior Court judge is entitled to exercise over each of these areas of law.

[23] Furthermore, under r. 1(7), where there is a gap in the family law rules, the court may resort to the Rules of Civil Procedure to fill in that gap, in this case r. 6.01 which sets out the requirements for consolidation of multiple proceedings. [2] A judge of the Superior Court of Justice also has resort to the Courts of Justice Act, in this case s. 138. [3]

[24] The courts exercising jurisdiction under the Family Law Rules have routinely adopted the test developed under the rule 6.01 of the Rules of Civil Procedure in determining motions to consolidate civil actions with family law proceedings (see e.g.: Blatherwick v. Blatherwick, 2014 ONSC 1433, 44 R.F.L. (7th) 379; Bledin v. Bledin, 2021 ONSC 2674, at paras. 18-19).

[25] The court’s main task is to weigh and balance various factors including expediency, use of judicial resources and the risk of inconsistent judgments with convenience and possible prejudice to the parties. The court will consider relevant factors in making this assessment such as whether there will be a savings in expense to the parties and/or judicial resources, the complexity of the proceedings, and the stage at which each proceeding is in, when making this assessment (Bledin, at paras. 17-18, 21-23, and 25).

[26] The extra dimension brought to this assessment is that the primary objective of family law proceedings is to bring the proceeding to an expeditious and fair resolution leading to closure on all issues so the parties can move on with their respective lives (Cunningham v. Cunningham, 2013 ONSC 282, 35 R.F.L. (7th) 63, at paras. 14-15). Another overarching goal of consolidation is to avoid a multiplicity of proceedings which can pose a risk of inconsistent decisions (Logtenberg v. ING Insurance Co., at para. 10).

[27] In Valente v. Valente, [2004] O.J. No. 5267, Pierce J. consolidated the wife’s civil action against various parties, including her husband, two banks and her husband’s brother, because the relief claimed in the civil action was related to her claim for equalization of family property. In that case, not only were there common issues of fact but the requested relief arose from the same series of transactions.

[28] In this case, it makes sense to consolidate the Civil Action and the Employment Action with the Family Law Proceeding for the following reasons.

[29] First, the issue of beneficial ownership of the shares in RAS is a central issue for determination of the Family Law Proceeding by way of Ms. Breukelman’s claim of a joint family venture in relation to Mr. Merit’s 49% shareholdings and/or a constructive or resulting trust over one-half of those shares. Ms. Breukelman also pleads unequal division of net family property. The beneficial ownership of shares and Ms. Breukelman’s claim of an ownership stake in RAS are also central issues in the Civil Action and, to a lesser degree, in the Employment Action.

[30] The Application filed by Ms. Breukelman in the Family Law Proceeding is replete with facts alleged concerning RAS, the Avis Parents and her claim that the shares “gifted” by the Avis Parents to Mr. Miret were made with the intention of it being a joint family asset, or that the 49% equity stake in RAS is a joint family venture, or in the further alternative one-half of those shares are being held in trust (constructive or resulting) by Mr. Miret for Ms. Breukelman. Indeed, Ms. Breukelman pleads at paragraph 18 of the Application that, “In the event that the Applicant’s claims in the Civil Action do not proceed for any reason, then an order that the applicant has, by way of constructive and resulting trust, equitable interests in the Respondent’s 49% equity interest of R. Avis Surveying Inc. pursuant to the rules of equity and section 14 of the Family Law Act, R.S.O. 1990, c.F.3”. She also seeks an order that RAS be valued by a certified business valuator as at the date of separation and the date of the Application. The “Important Facts Support My Claim(s)” section of the Application also is replete with allegations involving RAS, the Avis Parents, the matrimonial relationship, and Ms. Breukelman’s claim over an equity interest in RAS by way of joint family venture, and/or constructive and/or resulting trust. Many of these same allegations are in the Civil Action and the Employment Action and RAS and Mr. Miret have squarely put the issue of Ms. Breukelman’s alleged ownership interest in RAS at issue in those proceedings.

[31] Both Ms. Breukelman and Mr. Miret plead that the transfers of RAS shares by the Avis Parents to Mr. Miret were gifts. However, Ms. Breukelman states that the intention of the Avis Parents at the time of transfer was to give her a beneficial interest in the shares. Ms. Breukelman’s Application in the Family Law Proceedings squarely places the ownership of the shares and business of RAS into issue under ss. 9(1)(d)(i), 12 and 14 of the Family Law Act, R.S.O. 1990 c. F.3. In addition, amongst other relief, Ms. Breukelman seeks damages for alleged tortious conduct arising out of allegations of family violence.

[32] In addition, Mr. Breukelman filed as an exhibit to her affidavit a letter purportedly signed by the Avis Parents, dated August 11, 2021, in reference to the disputed shares stating, in part, that “It was always our intention and assumption that the shares were gifted to the family and couple – for Marion as well. This gift was always intended to be a joint family asset.” The Avis Parents apparently claim they signed this letter under duress, however, the affidavit filed by Roger Avis in response to this motion does not address this letter or what their intention was when they transferred the shares to Mr. Miret. Mr. Avis’s affidavit speaks to the desire not to be involved in lengthy acrimonious family law proceedings and his expectation that the Civil Action would be resolved by summary judgment motion which, at the time of this motion, had not been heard. However, this last expectation has not come to fruition, in light of Vermette J.’s ruling denying the request to schedule a motion for partial summary judgment. [4] This fact also distinguishes this matter from Beardsley v. Beardsley, 2020 ONSC 6624, in which the court refused to consolidate civil proceedings with family law proceedings on the basis that a motion for summary judgment in the civil proceeding was about to be heard which could determine the civil action and shorten the issues to be decided in the family proceeding.

[33] Mr. Merit disputes that RAS was ever a family business, however this issue engages the same issues of fact and law whether in the Civil Action, the Family Law Proceeding or to a lesser extent the Employment Action. Accordingly, there is a common issue of fact and law evident in each of these proceedings.

[34] In fact, in the Civil Action and the Employment Action, Avis seeks an declaration that Ms. Breukelman does not and has never owned any shares of RAS. In her Statement of Defence and Counterclaim, Ms. Breukelman seeks a declaration that she was the legal owner of Avis’s shares or alternatively that she is a beneficial owner of Avis’s shares. She also pleads oppressive conduct and requests an order that Avis purchase her alleged shares for fair value as well as damages.

[35] Second, the Family Law Proceeding, Civil Action and, to a lesser extent, the Employment Action arise out of the same series of occurrences and transactions; namely, the circumstances under which the Avis Parents transferred 49% shareholdings of RAS to Mr. Miret, including their intention at the time of transfer, and the nature and contributions of Ms. Breukelman’s role at RAS including her role in facilitating Mr. Miret’s earlier efforts to become qualified as an Ontario land surveyor, as well as the nature of her relationship with the Avis Parents as related to RAS in terms of succession.

[36] As well, RAS will become engaged in the Family Law Proceeding in any event if Ms. Breukelman is successful in her request that it be valuated and has an interest since Ms. Breukelman is claiming an equity stake in it.

[37] In terms of the use of judicial resources, it is clear on the evidentiary record and the pleadings that having the matters consolidated will save time. The obvious example is that the various parties will have to testify only once rather than twice (assuming the Employment and Civil Actions were to be consolidated). The only exception is Ms. Basso who would only have to testify once in the Civil/Employment Actions but, as stated, she has consented to Ms. Breukelman’s request for consolidation.

[38] In addition, the issues raised in the Family Law Proceeding are more numerous and complex than in the Civil and Employment Actions.

[39] Furthermore, none of the proceedings have advanced to the questioning or discovery phase. Of note the three respective proceedings were started within months of each other. On the other hand, Ms. Breukelman, Mr. Miret and the Avis Parents have now delivered affidavits in the Civil Proceeding which will be of assistance in the Family Law Proceeding. As no examinations for discovery have taken place in the Civil Action or Employment Action, consolidation will result in saving of expenses in pre-trial processes. Mr. Miret and Ms. Breukelman will not be exposed to examinations for discovery and documentary disclosure in the Civil and Employment Actions in addition to questioning and documentary disclosure in the Family Law Proceeding. This is a neutral factor for the remaining parties who will now only be subject to one pre-trial disclosure and questioning process.

[40] For the same reason as above, the parties (except Ms. Basso) are likely to save legal expenses by having to participate in only one proceeding, instead of two civil proceedings plus as witnesses in the Family Law Proceeding. As stated above, the fact that the Family Law Proceeding may be longer than the Civil Action and Employment Action can be managed in terms of the Avis Parents and RAS’ (and their lawyers’) attendance at the trial of the Family Law Proceeding. This will eliminate the need to have overlapping testimony at each of the proceedings. I am also satisfied that by consolidating these three proceedings, there will be a net reduction in trial days given the common issues of fact and law, and the participation of the same individuals whether as parties or witnesses. Furthermore, consolidation of these three proceedings will not result in a delay to the resolution of the issues in the Civil and Employment Actions. If anything, it is likely that the Family Law Proceeding will reach trial sooner than the Civil and Employment Actions given the current state of the trial lists.

[41] The Employment Action is also related to the Civil Action and thus the Family Law Proceeding, insofar as the issue of cause will be determined by an overlapping factual matrix between the Family Law Application and the Employment Action (i.e., Ms. Breukelman’s relationship with the Avis Parents and Mr. Miret, her role at RAS and how the marriage breakdown may have impacted her termination from RAS). The fact that Ms. Basso consents to this consolidation eliminates any concern that she would be unduly inconvenienced by the consolidation. The fact that Mr. Miret, the Avis Parents and RAS intended to consolidate the Employment Action with the Civil Action weighs in favour of consolidation on the balance of convenience.

[42] I have considered the inconvenience and potential prejudice of consolidating the three proceedings on the Avis Parents and RAS. The Avis Parents and RAS submitted that it would be more expensive if they must participate as parties in the Family Law Proceeding since certain grounds of relief in this proceeding do not engage these parties. Furthermore, in Mr. Miret’s factum, [5] Mr. Miret states that “it would be very unfair to involve Dario’s elderly parents in acrimonious family law proceeding” and they “should not have to sit and listen to submissions/testimony about extra marital affairs, the marriage and other salacious evidence brought forward by Breukelman”. Roger Avis filed a brief affidavit in which he echoes these sentiments. Of note, RAS did not file an affidavit or factum in response to this motion.

[43] The Avis Parents would likely have to be present as witnesses in any event in the Family Law Proceeding. This means that they will be exposed to having to testify twice on the same issues relative to the share transfer/joint family venture matter. Furthermore, direction with respect to when the Avis Parents, in particular, must attend at the trial of the Family Law Proceeding can be managed by the parties with the assistance of the judge who conducts the trial management conference and ultimately the trial judge. In addition, case conferences can be requested in relatively short order to manage any pre-trial issues that may arise. The possibility that they will be exposed to hearing unflattering testimony concerning their son cannot be avoided whether or not these proceedings are consolidated. While this will no doubt be unpleasant for the Avis Parents, it cannot be avoided.

[44] Furthermore, the Family Law Rules also make provision for summary judgment determinations and provide the court “with numerous tools to efficiently manage proceedings to ensure that cases are dealt with justly” (Bledin, at paras. 34-35). Accordingly, the responding parties to this motion are not disadvantaged juridically and will have the benefit of the efficiencies provided in the Family Law Rules.

[45] The responding parties also state that Ms. Breukelman failed to plead that she wishes the Civil and Employment Actions to be consolidated into the Family Law Proceedings. However, I do not see this as a fatal flaw or impediment to bringing this motion. As stated earlier, Ms. Breukelman did reference the Civil Action in her Application for the Family Law Proceeding.

[46] I have also considered the fact that the Civil and Employment Actions raise legal and factual issues that are not duplicative of those raised in the Family Law Proceeding such as Avis’s claim that Ms. Breukelman (and Ms. Basso) have stolen property from it and that Ms. Breukelman has breached her fiduciary duty owed to Avis. This means that the Family Law Proceeding will be more complicated and require more pre-trial steps and trial days than if there was no consolidation. However, the question is whether overall there will be a net savings in legal resources, judicial resources, pre-trial proceedings, and trial days. For the reasons already stated, my conclusion is that there will be a net savings in these areas if consolidation is granted.

[47] An overriding consideration is the avoidance of a multiplicity of proceedings that could lead to inconsistent judgments. It will be open to the trial judge to make a finding that Ms. Breukelman does not have a beneficial interest in the shares held by Mr. Miret or any beneficial interest at all in RAS or vice versa. The trial judge presiding over the Family Law Proceeding will be asked to make a finding on this same central issue within the context of Ms. Breukelman’s assertion that RAS is a joint family venture and that she is entitled to beneficial ownership with respect to some of the shares held by Mr. Miret or alternatively that this may give rise to an unequal division of net family property.

[48] When considering all of the factors together, the balance of convenience favours an order consolidating the Civil and Employment Actions with the Family Law Proceeding, and I so order.

[49] If the parties cannot agree on costs, then the Applicant may deliver her cost submissions and cost outline within 10 days from today, and the Responding Parties may deliver their respective responding submissions and cost outlines within 10 days thereafter. The cost submissions will not exceed 3 pages double spaced from each party and should be delivered by email in care of my judicial assistant.

Justice S. Vella Date: May 31, 2023

[1] The Avis Parents apparently claim that they signed this letter under duress. The letter was filed as an exhibit however no affidavit evidence was tendered by the Avis Parents in response to Ms. Breukelman’s evidence concerning this letter.

[2] R. 6.01(1): Where two or more proceedings are pending in the court and it appears to the court that, (a) they have a question of law or fact in common; (b) the relief claimed in them arises out of the same transaction or occurrence or series of transactions or occurrences; or (c) for any other reason an order ought to be made under this rule, the court may order that, (d) the proceedings be consolidated, or heard at the same time or one immediately after the other…

[3] S. 138, Courts of Justice Act: As far as possible, multiplicity of legal proceedings shall be avoided.

[4] On February 13, 2023, Vermette J. declined to schedule a motion for partial summary judgment that had been requested by RAS in relation to the Civil Action.

[5] The Avis Parents did not file a factum.