COURT FILE NO.: FS-21-00000084-0000
DATE: 2023/07/10
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: AMANDA CHRISTINA BAKER, Applicant
AND:
JOHN ALLAN BAKER, Respondent
BEFORE: Justice I.F. Leach
COUNSEL: Iain D.D. Sneddon and Liam Thompson, for the Applicant
Howard Wolch, for the Respondent
HEARD: February 8, 2023
ENDORSEMENT
[1] Before me for resolution are aspects of two motions brought by the Applicant in relation to this ongoing and increasingly contentious matrimonial litigation. In particular:
a. in relation to the first motion brought by the Applicant, (initiated by a notice of motion dated June 10, 2022, but also the subject of a supplemental notice of motion dated December 15, 2022), I am called upon to address the Applicant’s request for an order compelling the Respondent to produce specified documents and/or information, pay child and spousal support on an interim without prejudice basis, and pay a further amount to address interim disbursements and legal fees incurred or anticipated by the Applicant in relation to this litigation; and
b. in relation to the second motion brought by the Applicant, (initiated by a notice of motion dated February 3, 2003), I am asked to strike, in part or altogether, certain affidavit evidence filed by the Respondent.
Background
[2] The material filed by the parties is voluminous and, for reasons noted in more detail below, not all of it is admissible and/or relevant to the issues to be addressed and decided in this endorsement.
[3] Nor will I attempt to summarize, in detail, the many hundreds of pages of material filed with the court that do have a bearing on the issues I will be deciding.
[4] For present purposes, and although I will have more to say about the evidence relating to particular issues in my comments below, the following will suffice by way of initial background and overview of the developments leading to the hearing before me:
a. When the parties met, the Respondent was the founder, President and Chief Executive Officer of a successful corporate business called “Desire 2 Learn”, (or “D2L”), described in the materials as “a major education tech company”, which had been in operation for approximately 14 years. The Applicant, (approximately 10 years younger than the Respondent), was working as an assistant in the Human Resources department of Johnson & Johnson, and had been in the workforce for approximately six years.
b. The parties began cohabiting in April of 2013, around the time of their engagement.
c. On May 7, 2014, the parties signed a marriage contract, the enforceability of which is now in dispute. At the risk of over-simplification in that regard:
i. The Applicant contends that she was given very limited time to consider the agreement’s content or implications, received inadequate financial disclosure, (including no valuation of the Respondent’s business interests), was unable to obtain adequate legal advice, and signed the agreement only because she was under severe pressure to do so shortly before the parties’ planned wedding in Hawaii. She accordingly takes the position that the marriage contract, (including its provisions which are said to make determination of spousal support depend on the duration of the parties’ marriage “rather than any of the considerations and objectives of the Divorce Act”), accordingly should be deemed invalid and unenforceable.
ii. The Respondent contends that the agreement was entered into by both parties willingly after lengthy negotiations, significant financial disclosure, and with each party having the benefit of independent legal advice. He also emphasizes that title to the parties’ residence and other property subsequently was transferred to the Applicant throughout the course of the parties’ marriage. He accordingly takes the position the marriage contract is valid and should be enforced. In the Respondent’s view, the spousal support contemplated by the marriage contract also is very generous insofar as it contemplates, (in the circumstances which eventually came to pass), a payment of lump sum spousal support quantified in the amount of $1 million, which the Respondent would receive in addition to other property she is said to have acquired via the marriage.
d. The parties were married on May 12, 2014; i.e., approximately five days after execution of the aforesaid marriage contract. Over the course of the next seven years, namely the period from May 2014 to May of 2021:
i. From April of 2014 into 2018, the parties continued to reside primarily in a home located in the city of Waterloo, Ontario, where they had lived together prior to marriage. That home, (title to which was held in the Applicant’s name following execution of the marriage contract), apparently was located near to the base of D2L’s business operations, in the Kitchener-Waterloo area. However, the parties also acquired and maintained a second residence in the Town of Bayfield, Ontario. Initially used as more of a “cottage” property, that large five-bedroom home, (title to which was held in the Respondent’s name), became their primary residence in 2018, as it was located closer to a number of the parties’ relatives and friends. The Waterloo home thereafter was retained for a further three years, but eventually was sold in September of 2020 for approximately $1.14 million. Although the net proceeds of sale initially were deposited into the Applicant’s bank account, they subsequently were “loaned” to the Respondent in December of 2020 to facilitate the Respondent’s payment of a large outstanding tax bill owed to the Canada Revenue Agency.
ii. The parties welcomed the arrival of three daughters, who were born in May of 2018, October of 2017 and August of 2019 respectively.
iii. For reasons which are now in dispute, the Applicant did not return to the workforce after the birth of the parties’ first child. At the risk of further over-simplification in that regard:
The Applicant says this reflected an agreement between the parties that the Applicant would assume the role of a “stay-at-home” wife and mother devoted to care of the parties’ children and fulltime household management, instead of returning to the workforce. Indeed, the Applicant says that was the Respondent’s preference and something he insisted upon, as he was able to provide “more than enough” for the family from a financial perspective.
The Respondent denies that he ever insisted upon the Applicant remaining at home or not returning to the workforce, and says there was never any agreement in that regard. In particular, he says that he never understood or supported the Applicant’s desire “to never work again”, and instead repeatedly tried to encourage the Applicant’s return to work “for her own wellbeing and growth”; e.g., by returning to work with her previous employer, by going to work with her father’s company or at a new recruiting job, or by starting her own company.
iv. The “D2L” company founded by the Respondent apparently continued to prosper, not only here in Canada but in numerous other jurisdictions around the world; e.g., with offices located not only in the Kitchener-Waterloo area, Toronto and Vancouver, but also in the United States, the United Kingdom, the Netherlands, Singapore and Australia.
e. The parties separated on or about May 16, 2021, for reasons addressed by the parties’ respective filings but which frankly are not relevant to the determinations to be made in relation to these motions. All members of the family nevertheless continued to reside in the Bayfield home for the next seven months, during which time there apparently was little or no discussion about finances. Nor were any steps taken to separate the parties’ financial affairs. The Applicant continued to use jointly held credit cards, the balances of which were paid by the Respondent.
f. On December 17, 2021, following a number of unsuccessful attempts by the Applicant to purchase or rent suitable accommodation for herself and the children, and unsuccessful efforts by the Applicant to persuade the Respondent to relocate to another residence instead, the Applicant and the children initially moved from the Bayfield property into a two-bedroom condominium located in the City of Goderich, Ontario, while the Respondent remained in the Bayfield home.
g. In circumstances that are now very much in dispute, steps then were taken, (starting with a land purchase in October of 2021, but also involving extensive work with a realtor, designer, architect and builder), to construct a new residence, apparently located on Coastal Drive in Goderich, for the Applicant and the children; a residence which seems to have incorporated numerous changes and expensive upgrades that eventually raised the total cost of the new home from its initial projected cost of approximately $1,375,000 to approximately $2.3 million. At the risk of further over-simplification of the associated disputes in that regard:
i. The Applicant contends that there initially was a determination that she would build that new home for her and the children, but the Respondent then voluntarily and repeatedly intervened in that process, indicating that he wanted to assist with and pay for expensive upgrades, high-cost changes, appliances and furnishings for the new residence as he wanted his daughters to have a nice home that was “done right”; i.e., that the Respondent’s expenditures in that regard were intended to be a gift or gifts “with no strings attached”, rather than sums to be regarded as credits towards any child and/or spousal support owed by the Respondent. The Applicant says that the Respondent, after making a number of payments in that regard, essentially then changed his position, failed to make further required payments, and/or attempted to extract a number of concessions from the Applicant before the Respondent would make any further payments in that regard; e.g., agreement to numerous conditions, including an agreement that all such payments were to be credited towards the Respondent’s child and/or spousal support obligations before any such further payments were made.
ii. The Respondent contends that it has always been his position that he would pay for part of the new home for the Applicant and the children, as long as such payments were considered part of his child support, “similar to how child support is often used to pay a mortgage”.
h. From December of 2021 to date, it seems the children have resided primarily with the Applicant, with the Respondent generally enjoying substantial parenting time. By way of an interim agreement, those parenting arrangements came to take the form of what generally is described in the family law vernacular as a “2/2/3” alternating week arrangement; i.e., with the children enjoying time with the Respondent on alternating week-ends and during specified additional mid-week access that also alternates on a weekly basis. The parties also apparently have been attempting to deal with decision making on a joint basis, as far as the children are concerned. However, there also now are significant disputes about parenting arrangements for the children going forward; disputes which I will not outline in more detail for the reasons noted below.
[5] The Applicant commenced this litigation on or about November 30, 2021. Although the parties attempted to resolve their disputes through mediation, (during which progress of the formal litigation apparently was placed “on hold” for a time), that process was unsuccessful.
Procedural history of motions
[6] As noted above, the Applicant’s primary motion herein was formally commenced by way of a notice of motion dated June 10, 2022; a notice of motion which was accompanied by a supporting affidavit sworn by the Applicant on the same date.
[7] That motion, brought before the holding of a case conference in stated reliance on Rule 14(4.2) of the Family Law Rules, and specifying a contemplated hearing date of July 6, 2022, sought relief that included:
a. orders determining, on an interim basis, the primary residence of the parties’ children and the parenting time the children were to have with the Respondent;
b. orders determining interim child support and interim spousal support to be paid by the Respondent;
c. orders requiring the Respondent to make specified payments to a named contractor and to the Applicant relating to construction of the Applicant’s current residence;
d. an order requiring the Respondent to provide specified items of financial disclosure, (enumerated in detail by way of a list approximately 4½ pages in length), said to be necessary for the Applicant’s expert to produce an Income Report and Business Evaluation relating to the Respondent and his business interests; and
e. an order requiring the Respondent to be responsible for the payment of fees associated with obtaining the aforesaid Income Report and Business Valuation.
[8] By way of an initial response, the Respondent delivered a responding affidavit sworn on July 6, 2022; i.e., the motion’s original return date. Amongst other things, that affidavit included indications that the Respondent had learned of the Applicant’s motion only the day before.
[9] The Applicant’s original motion initially was adjourned from July 6 to July 14, 2022, having regard to the Respondent’s recent retention of counsel. On the latter date, the parties consented to an Order, made by Justice Nicholson on an “interim interim without prejudice” basis. Amongst other things, that Order:
a. set forth detailed parenting time arrangements, including arrangements permitting the Respondent to travel with the children to Newfoundland, arrangements permitting the Applicant to have the children while the Respondent was travelling to a work-related conference, and other summer vacation arrangements;
b. permitted the Applicant’s continued use of the Respondent’s credit cards and an overdraft line of credit until the issue of child support and spousal support were determined by written party consent or by way of a further court order;
c. specified certain further payments to be made by the Respondent to a named contractor and to the Applicant, with some of those payments being made on a “with prejudice” basis, some being made on a “without prejudice” basis, and some to be credited to the Respondent in relation to any ongoing child support obligations owed by the Respondent;
d. indicated that, upon an apparently contemplated sale and closing in relation to the Applicant’s condominium property in Goderich, (already listed for sale at $469,900.00), the net sale proceeds were to be paid to the Respondent;
e. required the Respondent to deliver his Answer by August 12, 2022; and
f. adjourned the Applicant’s motion to date to be scheduled in consultation with the trial co-ordinator, after the holding of a Case Conference.
[10] On November 30, 2022, the matter came before Justice Heeney for a Case Conference, wherein the issues between the parties were identified as including disputes regarding disclosure, child and spousal support, (including determination of the Respondent’s income for support purposes), parenting time and decision-making, and validity of the marriage contract described above. At the conclusion of that Case Conference, Justice Heeney made an order that:
a. directed adjournment of the Applicant’s outstanding motion to a special appointment hearing on February 8, 2023, “primarily to argue the disclosure issues, and secondarily to argue the support issues, but not the parenting time issues”;
b. directed the Applicant to serve and file any supplementary material on the motion by December 17, 2022;
c. directed the Respondent to serve and file his supplementary materials by January 11, 2023;
d. directed the Applicant to serve and file any reply material by January 20, 2023; and
e. directed counsel for both parties to arrange a meeting between their respective experts for the purpose of “hot tubbing”, (i.e., information discussion), with a view to their discussing the disclosure issues and issuing a joint report outlining what disclosure they agreed needed to be provided, what disclosure they disagreed about, and the reasons for their disagreement.
[11] Between that Case Conference on November 30, 2022, and the hearing before me on February 8, 2023, additional motion material filed by the parties included the following:
a. the Applicant’s supplementary notice of motion dated December 15, 2022;
b. a further supporting affidavit from the Applicant sworn on December 16, 2022, and a supporting affidavit from Pamela Golden, (a senior law clerk employed by Applicant counsel), also sworn on December 16, 2022;
c. a supplementary responding affidavit sworn by the Respondent on January 11, 2023;
d. a reply affidavit from the Applicant sworn on January 20, 2023, and a reply affidavit from Ron Martindale, (a partner in the valuation and litigation department of Davis Martindale, the firm of Chartered Professional Accountants retained by the Applicant to provide an expert report in relation to the value of the Respondent’s business interests and the Respondent’s income for support purposes), also sworn on January 20, 2023;
e. an additional affidavit from Ameer Abdulla, (who was identified therein as a partner in the tax services group of Ernst & Young LLP, retained as an expert “with respect to these proceedings”), sworn on January 30, 2023;
f. a further affidavit from the Respondent sworn on February 2, 2023;
g. the Applicant’s notice of motion dated February 3, 2003, (noted above), bringing a second motion seeking to strike, in part or altogether, certain affidavit evidence filed by the Respondent;
h. a further affidavit from Mr Martindale, sworn on February 6, 2023, in response to the affidavit sworn by Mr Abdulla; and
i. facta filed by each party on February 6, 2023, two days before the motions were argued.
[12] Before turning to consideration of the issues I was called upon to determine, a number of preliminary evidentiary issues needed to be addressed.
Evidentiary issues
[13] As noted above, the Order made by Justice Heeney at the Case Conference specifically indicated that the special appointment hearing on February 8, 2023, (i.e., the hearing over which I eventually presided), was scheduled for argument of the production and support issues raised by the parties, but “not the parenting time issues”. [Emphasis added.]
[14] That express direction unfortunately did not stop either party from including, within their respective filings of material in advance of the special appointment hearing, extensive evidence related to parenting time issues; e.g., the advisability of an assessment focused on addressing such matters, and the Applicant’s desire for a “right of first refusal” in relation to parenting time with the children if the Respondent’s work and travel commitments otherwise would require him to leave the children in the care of others.
[15] As I indicated at the outset of the special appointment hearing on February 8, 2023, I intended to confine the parties to argument of the production and support issues. I did so not only to ensure that the Order made by Justice Heeney would be respected, but also because of the volume of material filed and the obvious time constraints.
[16] Evidence filed by the parties in relation to parenting issues accordingly was not relevant to the issues I was called upon to decide.
[17] As also noted above, the Applicant formally brought a second motion, (initiated by a notice of motion dated February 3, 2003), which in my view was inherently ancillary to the first; i.e., insofar as it asks the court to strike, in part or altogether, certain affidavit evidence filed by the Respondent in response to the first motion brought by the Applicant.
[18] In particular, the second motion brought by the Applicant sought/seeks an order striking the following evidence:
a. paragraphs 12 and 26 of the Respondent’s affidavit sworn on January 11, 2023, on the basis the content therein refers to settlement offers made during the course of efforts made to mediate a resolution of the parties’ dispute;
b. paragraphs 35 and 36 of the same affidavit, (i.e., the affidavit sworn by the Respondent on January 11, 2023), on the basis they contain reference to evidence that is hearsay and/or opinion evidence which the Respondent is not properly qualified to give;
c. the entire affidavit sworn by Mr Abdulla on January 30, 2023, on the basis it was delivered after the deadline for service of the Respondent’s motion material imposed by Justice Heeney; and
d. the entire affidavit sworn by the Respondent on February 2, 2023, on the basis it too was delivered after the deadline for service of the Respondent’s motion material imposed by Justice Heeney.
[19] In my view, the concerns raised by the Applicant in that regard have merit, and the order she has requested striking that specified evidence should be and hereby is granted.
[20] As for the Respondent’s references to settlement negotiations and settlement offers exchanged during mediation:
a. Although the Applicant’s ancillary notice of motion refers in that regard only to paragraphs 12 and 26 of the affidavit sworn by the Respondent on January 11, 2023, I note that the Respondent also refers to that mediation process in paragraphs 8, 11 and 115 of the same affidavit, with the latter containing a further reference to settlement offers that are said to have been made and refused. Paragraph 27 of the same affidavit makes further reference to settlement overtures, as does paragraph 9 of the earlier affidavit sworn by the Respondent on July 6, 2022.
b. It has long been recognized, as a public policy interest worth fostering by the courts, that parties be encouraged to resolve their private disputes without recourse to litigation, or be encouraged after the commencement of an action to effect a compromise without resort to trial. In furthering those objectives, the courts have protected, from disclosure, written and/or oral communications made with a view to reconciliation or settlement. In the absence of such protection, few parties would initiate or pursue settlement negotiations for fear that any concessions they might be prepared to make could be used to their detriment if no settlement agreement was forthcoming. That principle of exclusion, (applicable to such evidence even if it is otherwise relevant and probative), and a corresponding “without prejudice privilege” in relation to settlement negotiation and offers, have been recognized and enforced in Ontario for more than 150 years.[^1]
c. That principle of exclusion, and corresponding “without prejudice” privilege, apply whenever a litigious dispute exists or is within contemplation, a communication is made with the express or implied intention that it would not be disclosed to the court in the event negotiations failed, (with such intention being inferred when parties are clearly involved in negotiating a settlement or “buying peace”, in the absence of anything to suggest otherwise), and the communication was made for the purpose of attempting to effect a settlement.[^2]
d. In this case, evidence of the parties having engaged in what was intended to be a closed mediation process seems undisputed, and in my view the preconditions for application of the principle of exclusion in relation to such settlement negotiations and the settlement offers exchanged in relation thereto clearly apply. Neither party should be discussing such “without prejudice” settlement discussions and overtures in their motion material.
e. While the relief sought by the Applicant in her ancillary notice motion based on such concerns referred only to paragraphs 12 and 26 of the Respondent’s affidavit sworn on January 20, 2023, I also disregard paragraphs 8, 11, 27 and 115 of the same affidavit for similar reasons. I similarly have disregarded the second sentence of paragraph 9 in the Respondent’s original responding affidavit sworn on July 6, 2022.
[21] As for the content of paragraphs 35 and 36 of the Respondent’s affidavit sworn on January 11, 2023:
a. In those impugned paragraphs, the Respondent attempts to offer further support for his position, asserted in paragraph 34 of his affidavit, that the Applicant is capable of returning to the workforce, (e.g., as a recruiter or director of human resources), and earning significant income; i.e., a salary of $120,000 or more.
b. In particular, in paragraphs 35 and 36 of his affidavit, the Respondent provides links to internet sites, which he characterizes as being “good public examples”, and a table of information from what he characterizes as “a very trusted source for pay used by companies in Canada”, as proffered support for the salaries he believes the Applicant is capable of earning.
c. I agree with the Applicant’s position that such evidence is inadmissible, insofar as it effectively is not only hearsay but opinion evidence that improperly strays beyond the bounds of permissible lay opinion, (i.e., in relation to conclusions that ordinary people with ordinary experience are able to make), and into the realm of opinion evidence capable of being provided only by a properly qualified expert, in accordance with satisfaction of the criteria emphasized by the Supreme Court of Canada in R. v. Mohan, [1994] 2 S.C.R. 9, and by numerous authorities thereafter, which also have underscored the importance of our courts exercising a meaningful “gatekeeper function” in that regard. In this case, nothing in the material before me suggests that the Respondent has demonstrable expertise in the area of vocational and/or career consulting, rehabilitation or advice, (in relation to recruiting and/or human resources or otherwise), and no effort was made to qualify the Respondent as an expert in that regard. In such circumstances, the Respondent should not have introduced such information prepared and/or compiled by third parties, and is not qualified to express any opinion as to how “good”, “trustworthy”, representative or relevant such information may be in relation to the specifics of this case.
[22] As for the affidavit sworn by Mr Abdulla on January 30, 2023, and the further affidavit sworn by the Respondent on February 2, 2023:
a. I note again that, when the matter was before him on November 30, 2022, Justice Heeney set deadlines for the delivery of further material relating to the Applicant’s extant motion in advance of the special appointment hearing scheduled for February 8, 2023; i.e., the hearing before me. In particular:
i. the Applicant, (who already had filed material in support of that motion, in the form of her notice of motion dated June 10, 2022, and supporting affidavit sworn the same day), was directed to serve and file “any supplementary material on the motion” by December 17, 2022;
ii. the Respondent, (who already had filed an initial responding affidavit sworn on July 6, 2022), was directed to serve and file his “supplementary materials” by January 11, 2023; and
iii. the Applicant was directed to serve and file “any reply” by January 20, 2023.
b. In my view, that timetable set by Justice Heeney echoed, in large measure, the provisions of Rule 14(20) of the Family Law Rules, which are designed to promote the exchange of evidence in relation to argued motions in an organized fashion, and discourage the effective “splitting” of cases and lamentable phenomenon of successive “back and forth” affidavits frequently seen in the run up to motions argued in the context of matrimonial litigation. In particular, Rule 14(2) of the Family Law Rules reads as follows:
(20) RESTRICTIONS ON EVIDENCE – The following restrictions apply to evidence for use on a motion, unless the court orders otherwise:
The party making the motion shall serve all the evidence in support of the motion, with the notice of motion.
The party responding to the motion shall then serve all the evidence in response.
The party making the motion may then serve evidence replying to any new matters raised by the evidence served by the party responding to the motion.
No other evidence may be used.
[Emphasis added.]
c. In this case, Justice Heeney effectively considered whether a deviation from the outcome normally dictated by Rule 14(20) was appropriate, (i.e., having regard to the fact that both parties already had filed material in relation to the Applicant’s motion), and made a determination that the timetable set forth above was appropriate in the circumstances. In that regard, Justice Heeney no doubt had regard to the fact that several months had passed since the parties’ initial filings in relation to the motion, and therefore contemplated orderly provision to the court of more current information while still giving effect to the policy underlying Rule 14(20) of the Family Law Rules.
d. The Applicant and her counsel complied with the provisions of the timetable set by Justice Heeney, insofar as the filing of further evidence in relation to Applicant’s motion was concerned. In particular, as noted above, by December 17, 2022, the Applicant had served and filed, in addition to her original affidavit sworn on June 10, 2022:
i. a supplementary affidavit sworn by the Applicant on December 16, 2022; and
ii. the affidavit sworn by Ms Golden on December 16, 2022.[^3]
e. As noted above, the Respondent, in apparent compliance with the timetable set by Justice Heeney, thereafter served and filed his responding affidavit sworn on January 11, 2023; i.e., the deadline set by Justice Heeney for service and delivery of the Respondent’s responding motion material. In my view, the Applicant was entitled to infer that the Respondent accordingly had delivered all the motion material on which he intended to rely, and in respect of which the Applicant needed to consider and formulate reply evidence to be delivered, if any, in relation to the motion.
f. The Applicant determined that such reply evidence was necessary and appropriate in this case. In particular, as noted above, on January 20, 2023, (the deadline set by Justice Heeney for the delivery of such reply evidence), the Applicant served and filed a further affidavit sworn that day by herself, and the affidavit sworn that day by Mr Martindale. Both affidavits expressly address assertions made by the Respondent in his responding affidavit sworn on January 11, 2023, and in my view constitute proper reply evidence.
g. Pursuant to the timetable and deadlines set by Justice Heeney, the above filings should have been the end of the material filed in relation to the motion to be argued by way of a special appointment hearing on February 8, 2023. However, without seeking leave to do so, and therefore in contravention of the Order made by Justice Heeney on November 30, 2022, and the timetable set forth therein, the Respondent proceeded to file the further affidavit material noted above; i.e., an affidavit sworn by Mr Abdulla on January 30, 2023, and a further affidavit sworn by the Respondent on February 2, 2023. In my view, the information and evidence set forth in both of those affidavits inherently was capable of being delivered by the Respondent on or before January 11, 2023; i.e., the deadline set by Justice Heeney for delivery of the Respondent’s supplementary responding motion material.
h. In response to those further filings by the Respondent, beyond the deadline set by Justice Heeney in relation to the Respondent’s supplementary responding motion material, the Applicant and her counsel, as noted above, moved quickly to address the situation in two ways. In particular:
i. The Applicant served and filed her further notice of motion dated February 3, 2023, requesting the relief noted above; i.e., an order striking out specified evidence tendered by the Respondent, including the affidavit sworn by Mr Abdulla on January 30, 2023, and the further affidavit sworn by the Respondent on February 2, 2023. In my view, that was a permissible filing not falling outside the restrictions imposed by Justice Heeney. Not only does it formally represent a motion different from (albeit related to) the motion addressed by Justice Heeney, but it essentially documents and formalizes an admissibility objection raised on behalf of the Applicant in relation to the Applicant’s primary motion; an objection which the court may entertain at any point in the course of addressing that first motion.
ii. In an obvious effort to avoid being “caught short” on the evidentiary front, (i.e., if the Applicant’s objection to the admissibility of Mr Abdulla’s sworn affidavit was not sustained, and the contents of that affidavit were considered in relation to the Applicant’s motion), the Applicant also served and filed the further affidavit sworn by Mr Martindale on February 6, 2023; an affidavit expressly focused on responding to assertions made by Mr Abdulla in his affidavit sworn on February 3, 2023. In effect, the Respondent’s contravention of the Order made by Justice Heeney on November 30, 2022, in turn prompted a contravention of the deadline set by the same Order for delivery of the Applicant’s final reply material, as well as contravention of Rule 14(11)(a) of the Family Law Rules, which requires a party making a motion with notice to serve his or her affidavit evidence no later than six days before the motion’s scheduled hearing date.
i. Consideration of relevant evidence, whenever filed, arguably is consistent with the court’s search for the truth in any given case. In my view, however, furtherance of that objective is cast into doubt when evidence is served unexpectedly at the figurative “eleventh hour”; i.e., in circumstances where a litigant on the receiving end of such evidence may be denied an adequate opportunity to address such evidence as effectively as he or she might have done, had all evidence been served in a timely manner in compliance with the provisions of an applicable court order.[^4]
j. Moreover, I am mindful of the unfortunate but frequently demonstrated reality that “we promote what we permit”, in terms of courts allowing and thereby effectively condoning cavalier deviation from rule and order compliance. In other words, there is little incentive for parties to comply with a rule or court order if the court routinely allows such provisions to be “more honoured in the breach than the observance”.
k. In this instance, where the parties have engaged in their first hard fought motion, in the context of an action that bears all the hallmarks of highly contentious matrimonial litigation, (e.g., where the parties also have significantly more means than many other litigants, but apparently little inclination to agree on many of the underlying facts), I think the admission of late delivered evidence in blatant contravention of Justice Heeney’s order would be counterproductive and send entirely the wrong message going forward. All concerned need to know that the court’s orders in relation to this matter will be enforced.
l. Having regard to the above considerations, I think it appropriate to strike and disregard, for purposes of the motion issues argued before me, the affidavits served and filed after January 20, 2023. That material, filed in contravention of the Order made by Justice Heeney, includes not only the affidavit sworn by Mr Abdulla on January 30, 2023, and the further affidavit sworn by the Respondent on February 2, 2023, but also the further affidavit sworn by Mr Martindale on February 6, 2023.[^5]
[23] With the relevant and admissible evidence to be considered having been curtailed accordingly, I turn to consideration of the substantive issues identified by Justice Heeney for determination via the hearing before me.
Production issues
[24] The first such issue centres on whether the Respondent should be ordered to produce the items of financial disclosure listed in the Applicant’s original notice of motion dated June 10, 2022.
[25] The list of specific documents and information formally sought by the Applicant in that regard extends across 4½ pages of that original notice of motion, and accordingly will not be replicated here. By way of an extended and slightly reorganized summary, the list includes:
a. the Respondent’s personal tax returns, notices of assessment and T3, T4 and T5 statements for various specified years between 2013 and 2021 inclusive;
b. a “corporate organization chart showing all legal entities held, wholly or in part, directly or indirectly, by the Respondent from 2013 through 2021”, with further indications that those entities were thought to include 13 corporations specified by name;
c. corporate documentation and information for those companies, (in relation to various indicated years or fiscal years between 2013 and 2021 inclusive), with the specifics in that regard including requested production of the following in relation to each corporation:
i. articles of incorporation and amendment;
ii. shareholder registers;
iii. copies of any shareholder agreements and/or partnership agreements;
iv. copies of minutes from board director meetings, including any distributed materials;
v. details of any share transaction in the five-year period prior to the parties’ date of marriage and date of separation;
vi. annual fiscal year end financial statements;
vii. interim income statements for specified periods;
viii. general ledgers, trial balances, adjusting journal entries, budgets, bank loans details of any unusual or non-recurring items in financial statements, recorded personal expenses, and details of any transactions unreported in financial statements;
ix. income tax returns and notices of assessment;
x. as at April 30, 2024, and April 30, 2021, (i.e., dates respectively close to the dates on which the parties married and separated):
a description of each company, including its products/services offered, approximate revenue split by production/service line, target market, competitors and ease with which customers can switch, customer retention rate, method of obtaining new customers, sale process and marketing strategy;
a “Strengths, Weaknesses, Opportunities [and] Threats” or “SWOT” analysis;
a list of each companies Key Performance Indicators or “KIPs”;
an organizational structure and number of employees by department;
the names and titles of top executives and key personnel;
copies of contracts with customers that accounted for more than five percent of corporate revenue;
fair market value of any investments held by the company; and
appraisals of real estate held by the company;
xi. details of any lawsuits or contingencies expected or outstanding on or around the valuation dates;
xii. copies of any key person life insurance policy statements on or around the valuation dates;
xiii. a description of “major events” in the company’s history;
xiv. a list of each location maintained by the company and the primary activities carried on there;
xv. a list of all related parties, (e.g., subsidiaries, holding companies, affiliates or relatives), with which the company does business;
xvi. a list of shareholders and parties related to shareholders with job duties at the company, including a description of those job duties and the approximate hours worked per week in that regard;
xvii. payroll summaries for shareholders and parties related to shareholders that work, manage and/or are paid through the company;
xviii. descriptions and details of any other remuneration, (such as management fees, personal use of vehicles, cellphones, meals, etc.), paid to shareholders and related employees but not provided to non-related parties;
xix. a list of top vendors, including information regarding purchases by vendors for specified years, and whether vendors are capable of being easily replaced;
xx. a listing of top customers, including revenue by customer for specified years, as well as information regarding customer contracts, including indications of whether there are standard contracts, the average duration of contracts, and the renewal rate of such contracts;
xxi. details of any company pension plans, including copies of actuarial valuations;
xxii. all previous business valuations; and
xxiii. with respect to a company’s initial public offering, copies of the underwriting agreement, prospectus, due diligence reports, marketing materials, valuations done during the IPO process, and a timeline of the IPO process including an indication of the status as at April 30, 2021.
[26] As indicated in the initial motion material filed by the Applicant, that list reflects original and updated disclosure requests made in June of 2021 and May of 2022 by Mr Martindale, on behalf of the plaintiff’s accounting and valuation experts at Davis Martindale, itemizing the documents and information those experts were said to require in order to prepare a proper expert report in relation to the value of the Respondent’s business interests and income for support purposes.
[27] However, further motion material filed by the Applicant, after the Respondent had supplied some of the documentation requested, (apparently including a number of his personal income tax returns and notices of assessment, but little or nothing in the way of particulars concerning corporations in respect of which the Respondent has or has had an interest), but after the Respondent also had taken issue with other aspects of the Applicant’s production and disclosure requests, includes:
a. a letter from Mr Martindale dated December 12, 2022, (attached as an exhibit to Ms Golden’s affidavit), providing a lengthy update to those previous information requests, explaining and/or emphasizing why the disclosure of further specified documents and information is still required and that specified requested documents and information does not form part of available public filings; and
b. a reply affidavit sworn by Mr Martindale on January 20, 2023, which indicates and emphasizes, amongst other things:
i. that he and the Respondent’s expert Mr Abdulla actually did not agree, (after the “hot tubbing” discussions that took place in accordance with Justice Heeney’s direction), that the disclosure of documents and information previously requested by Davis Martindale was unnecessary;
ii. that Davis Martindale still required the documents addressed in Mr Martindale’s aforesaid letter of December 12, 2022, in order to prepare the income and valuation report requested by Applicant counsel;
iii. that obliging Davis Martindale to satisfy its disclosure requests by looking for and through documents and information potentially available through the “SEDAR” website, (i.e., the System for Electronic Document Analysis and Retrieval used for the electronic filing of securities related information with Canadian securities regulators/authorities), as suggested by the Respondent, not only would be less efficient and more expensive than the Respondent providing such disclosure directly, but might also lead Davis Martindale to incorrect conclusions; and
iv. that the affidavit sworn by the Respondent on January 11, 2023, contained a number of indications, (e.g., references to the Respondent borrowing money to pay for various items and contractor fees associated with the Applicant’s new residence, and to a $10.8 million reduction in the Respondent’s level of debt between April of 2021 and November of 2022), that warranted the Respondent’s disclosure of further specific personal loan application documentation, and information disclosing the source of income/funds used by the Respondent to reduce his debt.
[28] In short, many of the production and disclosure requests made by the Applicant remain outstanding.
Party Positions
[29] At the risk of over-simplification, the position of the Applicant in relation to her outstanding requests for production and disclosure may be summarized generally as follows:
a. The requested financial disclosure was said to be relevant to determination of the Respondent’s support obligations even if the Respondent is found to have no obligation to make an equalization payment, owing to provisions of the parties’ ostensible marriage contract or the Respondent having sustained a demonstrable decrease in his net worth over the course of the parties’ marriage. In particular, it was emphasized that the requested financial disclosure is:
i. relevant and material to determination of the Respondent’s actual income, which may or may not correspond with the “Line 15000” incomes indicated in his personal tax returns; and
ii. relevant and material to determination of the Respondent’s assets and “means”, which have an obvious bearing on his ability to pay child support, spousal support and any other sums that may be awarded to the Applicant.
b. It was said that reliance on the Respondent’s personal tax returns and assessments, corporate financial statements and/or the untested opinions of the Respondent’s accounting experts was insufficient to ensure a just outcome in the litigation; i.e., that disclosure sufficient for tax purposes is not equivalent to disclosure required for the purposes of family law litigation,[^6] and that basic considerations of fairness, (buttressed by legislative provisions permitting deviation from use of party “Line 15000” incomes in appropriate situations, and a wider examination of the “means” available to a party with support obligations), require disclosure that will permit examination and assessment of the Respondent’s “true financial picture” via the Applicant’s own income and business valuation experts, who have confirmed their corresponding need for production of the information and documents in question.
c. It was emphasized that the financial affairs of the Respondent in this case are complex, (e.g., insofar as there are at least 13 known corporate entities related to the Respondent and his income), that there are indications of the Respondent engaging in spending patterns that seem inconsistent with his professed levels of income and debt, and that a ful fulsome independent review and examination of the Respondent’s financial affairs by the Applicant’s experts is needed to understand whether the Respondent has access to additional sources of income beyond his “Line 15000” income received through D2L, the ability to finance personal expenses through the corporations in which he holds an interest, and/or other resources for support purposes.
d. Reliance was placed on Mr Martindale’s evidence, (essentially unchallenged having regard to my evidentiary rulings outlined above), indicating that the disclosure being requested is necessary for Davis Martindale’s proper preparation of the income and business valuation report required by the Applicant, and that forcing Davis Martindale to search for and through D2L’s public filings for requested information and documentation, (as opposed to the Respondent providing such information directly), would be less efficient, more expensive, and more likely to result in Davis Martindale reaching inaccurate conclusions.
e. It was emphasized that assertions of the Respondent’s inability to obtain and/or disclose confidential information relating to the company since it “went public” are not only based on inadmissible evidence, but also ignore the reality that such considerations should have no bearing on the Respondent’s ability to provide information relating to his corporations while they remained entirely private and under the Respondent’s control.
[30] At the risk of similar over-simplification, the position of the Respondent in relation to the Applicant’s requests for further production and disclosure may be summarized generally as follows:
a. It was said that provision of the disclosure requested by the Applicant will be unnecessary if the Applicant honours the marriage contract she signed, or is obliged to do so.
b. The relevance of further examination of valuations in relation to the Respondent’s business affairs was questioned; e.g., insofar as the apparently undisputed decrease in the Respondent’s net family property over the course of the marriage effectively eliminates the possibility of an equalization payment from the Respondent to the Applicant even if the marriage contract is not enforced. Indeed, if the marriage contract is not enforced, the Applicant arguably may owe an equalization payment to the Respondent.
c. It was emphasized that the Respondent has provided what he regards as significant financial disclosure and documentation, including a PDF version of a detailed net worth comparison statement. In that regard, the Respondent also has indicated a willingness to provide the Applicant, her counsel and/or her experts with Excel versions of spreadsheets containing further calculations and information, if the Applicant agrees to keep such information confidential. The Applicant and the Applicant’s experts were faulted for alleged failure to engage in further “hot tubbing” discussion in that regard, as contemplated by Justice Heeney.
d. It was said that the further disclosure and production exercise being suggested by the Applicant would be unnecessary and wasteful, for a variety of reasons, and that such disclosure and production should not be ordered unless the Applicant demonstrated a “compelling reason” why that should be done. For example:
i. It was said that the Applicant’s expert Mr Martindale had agreed that much of the requested further disclosure and production was unnecessary.
ii. It was suggested that the Applicant and her experts had made various incorrect assumptions about the existence of certain documents and information. For example:
It was said that such material was not generated in relation to a number of corporations in which the Respondent held an interest, that all of those already disclosed corporations essentially “roll up” into one specified holding company, and that all of the Respondent’s sources of income similarly “roll up” into his fully reported income, such that the Respondent’s business affairs were far less complicated than the number of corporations might suggest. “Nothing” was said to be missing from D2L’s public filings in that regard.
The Respondent emphatically denied that he ran any of his personal expenses through any of those corporations, as alleged by the Applicant.[^7] In relation to D2L in particular, it was emphasized that the public corporation is now governed by an independent board of directors, that the Respondent accordingly does not control his own compensation or approve his own work expenses, and that the company is subject to internal and external audits. Documentation and information relating to personal expenses supposedly put through the company by the Respondent accordingly does not exist.
The Respondent similarly denied that there have been any material bank loans to his companies, and emphasized that the only material debt beyond that already reported consisted of his tax liabilities, (a record of which already has been provided to the Applicant), and his personal bank loan, in respect of which the collateral corresponds to the assets listed in his aforesaid net worth statement.[^8]
iii. It was emphasized that the Respondent’s accounting experts at Ernst & Young, (which apparently also acts for D2L, and assisted with work done to take that company public), have “already pulled together” information relevant to this litigation, (e.g., effectively “combining all of the corporate subsidiaries into the final accounting for D2L”), and have prepared and reviewed appropriate net worth statements for the date of marriage and date of separation. It was said that such accounting work did not need to be repeated, as the resulting conclusions were said to be sufficiently accurate and trustworthy; e.g., insofar as Ernst & Young was said to be “one of the top accounting firms in the world”.
iv. It was said that the Applicant, her counsel and/or her experts can locate the “vast majority” of the requested disclosure on SEDAR insofar as it relates to the public company,[^9] are able to use the public “way back” machine to obtain information posted on D2L’s website in 2014, (i.e., the time of the parties’ marriage), and/or will be permitted to speak with the Respondent’s experts at Ernst & Young to obtain any further clarification that may be required; e.g., in relation to the net worth spreadsheet those experts have prepared, (which are said to cover the values of all the investments owned by a specified holding company into which all of Respondent’s personal holding companies are said to “roll up”, and by all of that company’s subsidiaries), or the underlying valuations and calculations made in that regard.
v. It was suggested that the share valuation used in relation to the date of marriage also should be regarded as trustworthy, insofar as it generally was corroborated by a near contemporaneous round of external financing and a purchase of D2L shares by external parties, albeit subject to the making of adjustments which were said to be appropriate having regard to a number of other developments; e.g., D2L’s main competitor publicly intimating that it was about to go public, and the death of D2L’s chief operating officer.
vi. It was suggested that the share valuation used in relation to the date of separation also should be regarded as trustworthy insofar as it was based on the annual valuation report done for D2L’s stock option plan, and corroborated by the value used for a taxable benefit assessed to the Respondent and his family in 2021, and the initial public offering (“IPO”) of D2L in November of 2021.
vii. It was suggested that, to the extent the suggested review and analysis to be performed by Davis Martindale discovered any inaccuracies in the work already done by Ernst & Young, and/or suggested any appropriate deviation from the earlier conclusions reached by Ernst & Young, such considerations would have no material impact sufficient to make the suggested exercise worthwhile.
[31] Before turning to consideration of those competing submissions, I had and have regard to the legislation and general principles governing such production and disclosure issues.
Legislation and General Principles
[32] The Family Law Rules contain numerous detailed provisions, (primarily in Rules 13 and 19), setting forth the obligations of those engaged in matrimonial litigation to disclose financial information and other relevant documents. For example:
a. A fundamental requirement for all family law proceedings is that each party must, soon after the proceeding is commenced, make complete and accurate financial disclosure.[^10]
b. Each party thereafter also has a continuing obligation to update his or her financial information, correct any erroneous information, and provide any omitted financial information as soon as it becomes known or is available.[^11]
c. More generally, (i.e., including but extending beyond financial disclosure), each party has an obligation to deliver a requested affidavit of documents listing every document, (with very few indicated exceptions), that is relevant to any issue in the case, and in the party’s control or available to the party on request.[^12]
d. The court also has authority to order a party to provide another party with an affidavit listing documents that are relevant to any issue in the case, and in the control of or available on request to a corporation that is controlled directly or indirectly by the party, or by another corporation that the party controls directly or indirectly.[^13]
e. A party who serves such an affidavit of documents thereafter also has an ongoing obligation, upon finding an additional document that should have been listed therein, to immediately serve an updated affidavit listing the correct information.[^14]
f. Opposing parties are entitled to examine any non-privileged document listed in any such affidavit of documents, and to receive copies of any such document at the party’s own expense, at the legal aid rate, (where the existence of the document was listed in a party’s initial disclosure affidavit listing relevant documents), or free of charge, (where a party failed to list the document in its initial disclosure affidavit listing relevant documents).
[33] Not surprisingly, the court is empowered to enforce the above disclosure obligations, if and as necessary, in various ways. In particular:
a. If a party believes that the financial disclosure provided by another party in a financial statement or otherwise does not provide enough information for “a full understanding of the other party’s financial circumstances”, the party may ask the other party to give the necessary additional information, and if the other party does not give it within seven days, the court may order the other party to give the information or to serve and file a new financial statement.[^15]
b. If a party does not follow the rules or an order regarding documentary disclosure, the court may deal with the failure by any of the ways outlined in Rules 1(8) and 1(8.1) of the Family Law Rules, (e.g., by awarding costs, dismissing a claim or striking out an answer, denying further relief and/or contempt proceedings), and/or by making further orders in relation to the offending party; e.g., obliging the offending party to permit the other party’s examination of relevant documents or supply the other party with copies of such documents free of charge.[^16]
[34] Although the court is given a broad discretion when it comes to dealing with rule non-compliance, (e.g., to make “any order that it considers necessary for a just determination of the matter”, including relief from strict rule compliance in appropriate circumstances),[^17] the entire tenor of the various rules outlined above underscores the fundamental importance of complete and accurate disclosure in family law litigation.
[35] Not surprisingly, our courts similarly have emphasized the bedrock importance of such disclosure. Judicial observations and general principles in that regard include the following:
a. Our Court of Appeal has described the immediate and ongoing duty to make honest and complete disclosure of financial information as “the most basic obligation in family law”,[^18] and the rules requiring disclosure and indicating the sanctions for non-compliance as “the centrepiece of the Family Law Rules”.[^19]
b. Such disclosure cannot be selective, or a costly game requiring parties to ferret out information.[^20]
c. Complete and accurate financial disclosure is fundamental to ensure that parties can engage in fair and informed discussions to enable them to reach an equitable and enforceable resolution of their family law dispute or, where necessary, to ensure that each party has all relevant and accurate financial information to place before a court so that the court can make an informed, fair and equitable judicial determination on the financial issues.[^21]
d. Where complete and financial disclosure is not forthcoming or is substantially delayed:
i. the opposing party is seriously prejudiced in his or her ability to advance claims for child support, spousal support and/or equalization;
ii. such failures routinely lead to lengthy and unnecessarily complex family law proceedings, unreasonable positions, unnecessary motions, high conflict situations and occasional resort to self-help remedies where a party feels unable to wait for court enforced compliance with the Family Law Rules or court orders; and/or
iii. a financially disadvantaged party may become self-represented, often because a refusal to make complete and accurate financial disclosure is the litigation strategy of the party with superior financial resources.[^22]
e. Such unfortunate realities have led our courts to characterize failure to make complete and accurate financial disclosure as a “cancer” in family law proceedings; a cancer which discourages settlement, promotes settlements which are inadequate, increases the time and expense of litigation, undermines confidence in our legal system, and brings the administration of justice into disrepute.[^23]
f. Court involvement should not be required to ensure the disclosure of complete and accurate financial information.[^24] When it is, courts should approach such situations in a manner that strongly reaffirms that that rules regarding disclosure must be followed or there will be consequences. In particular, parties should be deterred from engaging in non-disclosure, and courts must ensure that those engaging in such non-disclosure do not benefit from doing so.[^25]
g. Even where a party has complied with their minimum financial disclosure obligations set forth in the Family Law Rules, a more detailed and in depth analysis of their financial situation may nonetheless be required in cases where questions arise as to whether the income reported by a part is an accurate reflection of their true income, especially in cases where child support is in issue. In particular, as child support is the right of the child, who typically is not a party in child support proceedings, it is incumbent upon the court to err on the side of more extensive disclosure if this is necessary to ensure that the child receives the full protection of the law and the most fulsome benefit of support from his or her parents. Such an approach is consistent with the Supreme Court of Canada’s emphasis that any incentives for payor parents to be deficient in meeting their appropriate child support obligations should be eliminated.[^26]
[36] With all of the above in mind, I turn to a determination of the production and disclosure issues raised by the Applicant’s motion.
Analysis
[37] It would not be accurate to suggest that the Respondent has been entirely delinquent in producing and disclosing relevant information and documents. In particular, there did not seem to be any dispute that the Respondent has provided a number of T1 personal income tax returns, personal notices of assessment and “T slips”. He also has made a significant degree of disclosure in relation to his business affairs.[^27]
[38] However, it also was not disputed that the disclosure made to date by the Respondent falls far short of that sought by the Applicant for use by her income and business valuation experts.
[39] In my view, the relief sought by the Applicant in relation to disclosure and production should be granted for reasons that include the following:
a. Although it was argued that the requested relief should be denied unless the Applicant demonstrated a “compelling reason” for such disclosure and production, that effectively would reverse the applicable onus. As noted above, the Respondent’s obligation to make such financial disclosure is automatic, immediate and ongoing. It accordingly is the Respondent who has the burden of demonstrating why he should be relieved from his obligations in that regard, and in my view he has not done so.
b. The evidence of Mr Martindale, one of the income and business valuation experts retained by the Applicant, indicates that the requested disclosure is necessary to prepare a proper report in that regard, and that he disagrees with suggestions to the contrary by the Respondent and the Respondent’s expert Mr Abdulla. In my view, that evidence, (essentially uncontradicted by other direct sworn expert evidence in light of my evidentiary rulings outlined above), including Mr Martindale’s explanations of relevance, is entitled to a degree of deference.[^28]
c. In any event, having reviewed and considered the indications of disclosure being requested, I independently am of the view that they are relevant and material to the issues raised in this litigation. Without limiting the generality of the foregoing:
i. The validity and enforceability of the marriage contract signed by the parties is very much in dispute, for the reasons outlined above.
ii. Even if the Respondent will have no equalization obligation in any event owing to a decline in his net worth over the course of the marriage, and even if the parties’ ostensible marriage contract prevails so as to determine the Respondent’s spousal support obligations, the value of the Respondent’s corporate assets and related entities, and the potential direct and indirect sources of income the Respondent may derive from those corporations, are still relevant to determination of the Respondent’s ability to pay child support and money awarded to the Applicant via court orders.[^29] The items of required disclosure specified by Mr Martindale and incorporated into the Applicant’s requests for disclosure are all relevant to such matters and such determinations.
d. I reject the suggestion that the Applicant and her experts at Davis Martindale should be obliged to rummage through SEDAR or other public sources of information, (e.g., through use of a public “way back” machine to locate information posted on D2L’s website many years ago), in an effort to locate and obtain disclosure of the relevant information and documentation which has been requested, instead of the Respondent making efforts in that regard. Without limiting the generality of the foregoing:
i. In my view, the provisions of the Family Law Rules outlined above, establishing a party’s financial disclosure obligations, clearly cast an immediate, ongoing and direct obligation on a family law litigant in possession or control of relevant information and documentation to make such disclosure to the opposite party. The Family Law Rules establishing more general document disclosure obligations of family law litigants are to a similar effect, once an affidavit listing relevant documents has been requested. None of those financial and documentary disclosure rules contain provisions which permit a family law litigant to say, in effect: “You can get such information and documentation elsewhere, so don’t bother me with such requests”. To the contrary, it seems to me that the rules reflect a legislative determination that the most efficient, effective and rapid method of way of ensuring complete and proper disclosure is to have the party already in possession of such information and documentation make that available to the opposing party. Requiring both parties to focus on the specifics of relevant information and documentation, (i.e., through efforts to gather and disclose relevant material and review it upon receipt), also has the salutary effect of concentrating the attention of all concerned on matters to be considered in determination of the underlying issues.
ii. I appreciate and acknowledge that there may be cases in which the court, having regard to the provisions of Rules 1(8), 1(8.1) and 2(3) of the Family Law Rules, might be persuaded that certain requested disclosure may be effected by alternative means capable of saving time and expense without compromising procedural fairness, having regard to the importance and complexity of the case. In my view, however, that is not this case. In particular:
On any objective view, the business affairs of the Respondent seem complex; e.g., insofar as they involve at least 13 corporations, and business operations being carried out in multiple locations on multiple continents. The Respondent and his advisors inherently have much greater familiarity with the nature of what information and documents exist and where they may be located, thereby making it easier, cheaper and faster for the Respondent and his advisors to complete the steps necessary to put the Applicant and her experts in possession of such information and documentation as soon as possible.
That conclusion is buttressed by the essentially uncontradicted evidence of Mr Martindale that it would be far more expensive for Davis Martindale to search for such information and documentation, that doing so might lead Davis Martindale to the wrong conclusions, and that it would be more efficient for the Respondent and/or his advisors to provide the requested disclosure.
iii. In my view, the information and documentation available to the Applicant and her experts via SEDAR inherently seems destined to fall short of the relevant disclosure the Respondent is obliged to produce. In particular, while D2L may now be a public company, with a regulatory obligation to make certain information and material available via SEDAR, that obligation does not necessarily extend to all of the corporations in which the Respondent has a personal interest. Moreover, there are likely to be temporal limits on the information and documents shared by D2L on SEDAR, insofar as the public disclosure required and provided is unlikely to extend backwards in time indefinitely from the company “going public”. The information and documentation sought by the Applicant obviously has a wider temporal focus.
e. I reject the suggestion that the Applicant effectively should be obliged to content herself with the review, calculations and determinations made by the Respondent’s experts, whether generated in the context of the current litigation or on earlier occasions. Without limiting the generality of the foregoing:
i. The possibility of sanctions being imposed for misleading income tax filings and/or misrepresentations made in the filings of a public corporation create obvious incentives for accuracy. However, such inaccuracies, (both deliberate and unintended), nevertheless remain a possibility, still occur from time to time, and often remain undetected unless and until original calculations are subjected to further independent review.
ii. As emphasized by counsel for the Applicant, determinations of income and value for tax, business and banking purposes do not necessarily coincide with those made for the purposes of family law.
iii. As noted above, in dealing with such situations our courts repeatedly have underscored the importance of complete financial disclosure to the maintenance of confidence in the administration of justice. In particular, the Supreme Court of Canada has emphasized that family law litigants obliged to negotiate settlements or accept judicial determinations made in the absence of such disclosure are likely to take with them “the bitter aftertaste of a reasonably-based suspicion that justice was not done”.[^30] In my view, a family law litigant accordingly should be entitled to adopt a “trust but verify” approach, (e.g., through independent review and analysis carried out by his or her own independent expert), when considering conclusions reached by an opposing party or that party’s experts.
f. I am not persuaded by Respondent suggestions that the disclosure sought by the Applicant is unduly onerous. Without limiting the generality of the foregoing:
i. In my view, if the Respondent carried out all his business and financial affairs through a single corporation, the type of information and documentation sought by the Applicant and her experts in relation to that corporation clearly would be relevant and material. Expansion of the required disclosure exercise, owing to the number of corporations through which the Respondent has carried on his business and financial affairs, merely reflects the greater complexity of the underlying facts in this case.
ii. If the Respondent is correct in asserting that the Applicant and her expert have made incorrect assumptions about the existence of certain documents or information, (e.g., by requesting types of documentation that simply was not generated by or in relation to a number of the companies in which the Respondent has an interest, and/or by requesting an itemization of personal expenses of the Respondent paid by D2L or the other companies, or material loans when there are none), then addressing the disclosure sought by the Applicant is destined to be correspondingly less onerous than the extent of the Applicant’s requests otherwise might suggest.
g. I similarly am not persuaded by suggestions that the court should not grant the relief requested by the Applicant because the costs associated with disclosure, production and review of the requested material will be a waste of time and money; i.e., insofar as the contemplated exercise will simply result in the Respondent’s income and business valuation assertions being confirmed. The expense to be incurred by the Respondent in making necessary financial disclosure and production will form part of the costs incurred in relation to the litigation. If the Respondent is confident that he will be vindicated at trial, (i.e., insofar as he expects the court ultimately will accept the accuracy of his current factual assertions regarding income and business valuation, and his corresponding ability to pay support), he is free to make corresponding settlement offers capable of being considered by the court during the course of final cost submissions.
h. In my view, the disclosure and production relief requested by the Applicant appropriately errs on the side of caution in terms of ensuring accurate income and business valuation considerations in relation to determinations of appropriate support, and child support in particular.
[40] An order accordingly shall issue whereby:
a. the Respondent shall disclose and produce to the Applicant, to the extent he has not already done so, the documents and information described in:
i. paragraph 10 of the Applicant’s notice of motion dated June 10, 2022; and
ii. the letter from Davis Martindale to the Applicant dated December 12, 2022, addressing “Document Disclosure”, and attached as Exhibit “B” to the affidavit sworn by Pamela Golden on December 16, 2022; and
b. the Respondent, if the documents and information identified in the preceding sub-paragraph are not in his immediate possession and control, but in the possession and control of non-parties, shall request such documents and information from those non-parties in writing, and thereafter:
i. provide copies of such written requests to the Applicant; and
ii. provide the Applicant with documents and information provided to the Respondent by such non-parties.
Confidentiality Concerns
[41] During the submissions I received, it was suggested that some of the information and documentation being requested by the Applicant and/or her experts at Davis Martindale may be highly sensitive and/or confidential, and that the independent board of directors of D2L accordingly might object to its disclosure on that basis.
[42] However, I note that the evidence underlying those submissions was contained primarily in the affidavit sworn by Mr Abdulla on January 30, 2023, which is inadmissible for present purposes for the reasons outlined above. Moreover, even if that affidavit had been delivered on a timely basis, in compliance with Justice Heeney’s order, I note that Mr Abdulla’s indications of such confidentiality concerns, and the position of D2L in that regard, were inadmissible hearsay insofar as they purporting to relay unsworn statements attributed to D2L’s vice-president and Assistant General Counsel.
[43] For present purposes, I note and accept the indications made by Applicant counsel, during the course of oral submissions, that:
a. there is nothing to indicate or suggest that the Applicant is a competitor via-a-vis D2L or any of the other corporations in which the Respondent has an interest;
b. there similarly is nothing to indicate or suggest that the Applicant would benefit in any way from disclosing, to a competitor or otherwise, confidential information relating to the business interests of the Respondent or the corporations in which he has an interest;
c. any such disclosure of confidential information relating to the business interests of the Respondent or the corporations in which he has an interest inherently would risk a decrease in the Respondent’s income, which would be contrary to the interests of the Applicant and the parties’ children; and
d. the Applicant is perfectly willing to accept, as a condition of the requested disclosure being provided, a term expressly confirming that she is not to share that disclosure with anyone but her legal counsel and financial experts.
[44] I also note that, pursuant to Rule 20(24) of the Family Law Rules, (a subrule which is expressly described by its opening descriptive title as an “OBLIGATION TO KEEP INFORMATION CONFIDENTIAL”), when a party obtains under evidence under Rule 24, (relating to “QUESTIONING A WITNESS AND DISCLOSURE”), Rule 13, (relating to “FINANCIAL DISCLOSURE”), or Rule 19, (relating to “DOCUMENT DISCLOSURE”), “the party and the party’s lawyer may use the evidence and any information obtained from it only for the purposes of the case in which the evidence was obtained”, [emphasis added], subject to:
a. the limited exceptions specified in Rule 20(25), which include use of such evidence or information:
i. with the consent of the party who provided the evidence;
ii. if the evidence is filed with the court, given at a hearing or referred to a hearing;
iii. to impeach the testimony of a witness in another case; or
iv. in a later case between the same parties or their successors, if the case in which the evidence was obtained was withdrawn or dismissed; and/or
b. the court, on a motion brought pursuant to Rule 20(26), giving a party permission to disclose such evidence or information “if the interests of justice outweigh any harm that would result to the party who provided the evidence”.
[45] Moreover, to the extent any of the requested documents are now owned by D2L as a public company or are available only to that public company, and the company acting through its duly authorized directors and/or officers objects to their production and disclosure:
a. the possibility of court orders mandating D2L’s production and disclosure of such documents to the Applicant, Applicant counsel and/or the Applicant’s experts would be governed by Rule 19(11) of the Family Law Rules, which deals with documents in a non-party’s control; and
b. it was acknowledged by Applicant counsel during the course of oral submissions that the court was unable to consider or grant such relief in the current context, as the motions herein were not served on D2L and did not request such relief.
[46] Having said that, I also note the existence of authority indicating that refusal of a non-party to provide a family law litigant with relevant documents or information is not a sufficient excuse for that party’s failure to fulfil his or her obligation to make full financial disclosure; i.e., that a party who has been unable to obtain access to documents and information necessary to comply with that obligation must resort to a motion to gain access to the necessary material in the control of the non-party, and cannot say that the opposing party is obliged to do so.[^31]
[47] For now, the Respondent is obliged pursuant to the above production Order to disclose the requested information and documentation within his control, (to the extent it has not already been provided), and to request the provision and/or disclosure of information and documentation not within his immediate control but which he may have the ability to access. If any affected non-party properly raises an objection in that regard, that can be addressed if and as necessary by a further motion brought on notice to all concerned.
[48] In the meantime, the disclosure and production Order described above nevertheless shall include an additional term whereby, without any derogation from the obligation of the Applicant and her agents to abide by Rule 20(24) of the Family Law Rules, the disclosure provided by the Respondent to the Applicant shall not be shared with anyone other than the Applicant, her counsel, and experts retained by the Applicant in relation to this dispute.[^32]
Support issues
[49] Turning next to the support issues, (identified by Justice Heeney as the other principal matter to be addressed during the hearing before me), matters were simplified to some extent by:
a. indications by counsel for the Applicant that the court should focus for the time being on determination of appropriate interim interim child and spousal support, having regard to ongoing uncertainty about the Respondent’s income stemming from lack of disclosure;
b. the Respondent’s acknowledgement that he should pay child support and spousal support on an interim interim basis, in amounts to be determined by the court, subject to the possibility of later retroactive adjustments and his being given appropriate credit in that regard;
c. the absence of any suggestion in the motion material or counsel submissions that “special or extraordinary expenses”, (addressed by section 7 of the Federal Child Support Guidelines, SOR/97-175), currently were an issue; and
d. an agreement that the existing arrangement for the Respondent’s payment of child support and spousal support, (addressed by paragraph 9 of the interim interim without prejudice Order made by Justice Nicholson on July 14, 2022, whereby the Applicant has been allowed continued use of the credit cards and overdraft line of credit for which the Respondent is responsible, pending determination of the support issues by written party agreement or further court order), should come to an end with my making of a further court order quantifying the Respondent’s interim child and spousal support payments in a more definite way.
[50] However, appropriate interim interim support determinations were made more challenging by other factors, including:
a. suggestions by counsel for the Respondent that he was taken unfairly by surprise by the extraordinary levels of child and spousal support sought by counsel for the Applicant during the course of oral submissions;
b. ongoing fundamental disagreement as to the appropriate level of Respondent income to be used in making support determinations;
c. disagreement as to whether income should be imputed to the Applicant for the purposes of determining appropriate spousal support;
d. disagreement as to the financial needs of the Applicant, including disputes concerning her true levels of expenditure and whether the Applicant has a new partner providing her with a measure of support; and
e. implicit if not explicit assertions of hardship by the Respondent compromising his ability to pay, insofar as there were repeated suggestions that the Respondent is struggling financially because of significant debt obligations.
[51] The submissions I received in relation to child support and spousal support also seemed somewhat cursory, compared to the attention devoted to disclosure issues and the Applicant’s request for a substantial payment from the Respondent towards her interim expenses.
Party Positions
[52] At the risk of over-simplification, the position of the Applicant in relation to interim interim child and spousal support may be summarized generally as follows:
a. It was noted that the “default” starting point for quantification of such support normally should be the “Line 15000” income indication in the Respondent’s most recent available Income Tax Return, (i.e., for 2021), which in this case was a staggering $20,923,798. Based on that level of income:
i. the Respondent’s child support obligation in relation to his three children, suggested by normal application of the Federal Child Support Guidelines, supra, and the applicable Table calculations, would be $305,995 per month; and
ii. the Respondent’s monthly spousal support obligation, suggested by normal application of the Spousal Support Advisory Guidelines, would be $432,011 (“Low”), $465,009 (“Mid”), and $498,007 (“High”), with counsel for the Applicant suggesting that use of a figure in the mid-to-high range would be appropriate.
b. It was emphasized that the Respondent has the onus of proving that his income for support purposes should be something other than his most recent available “Line 15000” income, and/or that the court should deviate from the results suggested by normal application of the above guidelines, and it was submitted that the Respondent had failed to do so.
c. If the Respondent was found to have satisfied his onus in that regard, counsel for the Applicant suggested that a reasonable alternative approach, on a without prejudice basis, would be determination of appropriate interim interim child and spousal support based on an average of the Respondent’s “Line 15000” annual income indications over the past 10 years; i.e., an annual income of $3,652,613. Based on that level of income:
i. the Respondent’s child support obligation in relation to his three children, suggested by normal application of the Federal Child Support Guidelines, supra, and the applicable Table calculations, would be $53,836 per month; and
ii. the Respondent’s monthly spousal support obligation, suggested by normal application of the Spousal Support Advisory Guidelines, would be $73,359 (“Low”), $79,457 (“Mid”), and $85,556 (“High”), with counsel for the Applicant once again suggesting that use of a figure in the mid-to-high range would be appropriate.[^33]
d. By way of additional support for the admittedly high levels of child support and spousal support suggested by the above calculations:
i. Reliance was placed on authority emphasizing that the court’s ability to determine “inappropriate” and “appropriate” amounts of child support pursuant to s.4(b) of the Federal Child Support Guidelines, supra, (in situations where a spouse with an obligation to pay child support has an income over $150,000), was not constrained by considerations of adequacy or inadequacy, but instead permitted court determination of what would be suitable or unsuitable in the circumstances.
ii. In relation to child support and spousal support, it was argued that the parties and their children had led a somewhat “lavish” lifestyle prior to the parties’ separation; a consideration which merited the children and their mother receiving levels of support beyond mere adequacy.
iii. It was emphasized that the Respondent had not specifically pleaded the existence of any inability to pay such levels of support owing to any demonstrable “hardship”, and the court was asked to treat the Respondent’s evidence in that regard with skepticism insofar as the Respondent seemed to exhibit no pattern or intention of giving up his apparent high-expenditure lifestyle following the parties’ separation, and admittedly still had a net worth of at least $335 million despite the suggested decline in that net worth over the course of the parties’ marriage.
iv. It was suggested that an order effectively requiring the Respondent to pay interim interim support at excessive levels would have the salutary effect of encouraging the Respondent to make further financial disclosure as soon as possible; i.e., to establish the basis for an expedited motion by the Respondent to revisit and change such an order to decrease that interim interim support to appropriate amounts. Conversely, it was argued that ordering the Respondent to pay interim interim support at levels that were “too low” would have the opposite effect.
e. None of the above calculations attributed or imputed any income to the Applicant, with counsel for the Applicant submitting that it would be inappropriate to do so for the time being. In that regard:
i. Reliance was placed on the agreement said to have been reached between the parties, whereby the Respondent would assume the role of sole provider or “breadwinner” for the family via his very successful business activities, while the Applicant remained at home looking after the parties’ children.
ii. It was emphasized that the Applicant was working in a fairly low paying job as a human resource department assistant at the time of the parties’ marriage; has been out of the labour force for more than seven years;[^34] is still taking care of three very young children, not all of whom have reached school age; and now lives in the relatively small community of Goderich, in a predominantly rural county, where high paying jobs in the nature of those suggested by the Respondent are simply not available to someone in the Applicant’s circumstances.
f. It was emphasized that the children and the Applicant are demonstrably in need of meaningful ongoing support, despite Respondent suggestions to the contrary; e.g., having regard to the expenses outlined in her financial statement, her lack of access to any liquid assets, and her lack of independent income.
[53] At the risk of similar over-simplification, the position of the Respondent in relation to interim interim child and spousal support may be summarized generally as follows:
a. The extraordinary levels of child support and spousal support being suggested by counsel for the Applicant were characterized as “ludicrous” and “frankly outlandish”, and it was emphasized that the Respondent and his counsel had received little or no notice in that regard; i.e., through the Applicant’s notice of motion, supplementary notice of motion, late-delivered factum or motion confirmation form. In the circumstances, the Respondent and his counsel had formed an understanding that the Applicant was content, on an interim basis, with the more flexible payment of support as necessary being offered through the Applicant’s permitted use of the Respondent’s credit cards and line of credit facility.
b. It was emphasized that the Line 15000 income of $20,923,798 in the Respondent’s 2021 tax returns was entirely anomalous and by no means indicative of the Respondent’s “true” income for that year. In particular, as set forth in the Respondent’s motion material:
i. much of that “income” was attributable to highly unusual transactions, such as a non-recurring taxable dividend on the sale of the Respondent’s Bayfield Design asset, non-recurring income on the sale of a stock option and/or shares associated with D2L going public, and attribution of an assessed taxable benefit associated with legal fees paid by D2L in relation to a Canada Revenue Agency matter related to D2L; and
ii. the vast majority of that “income” was not received and retained by the Respondent, but was instead promptly redirected as required to pay outstanding tax liability and shareholder loans owed to D2L, with the amount of “income” left following subtraction of the amounts used to cover such liability payments being $519,285.
c. It was emphasized that, at least since D2L has “gone public”, (if not before), the income received by the Respondent from D2L is not only transparent and also something determined not by the Respondent but by an independent board of directors.
d. Respondent counsel argued, (somewhat “on the fly” having regard to the notice concerns outlined above), that a more realistic and appropriate basis for support determinations would be the income of $381,000 received by the Respondent in 2022, as indicated in the Respondent’s motion material and sworn evidence to that effect.
e. Based on that $381,000 level of income:
i. the Respondent’s child support obligation in relation to his three children, suggested by normal application of the Federal Child Support Guidelines, supra, and the applicable Table calculations, would be $6,071 per month; and
ii. the Respondent’s monthly spousal support obligation, suggested by normal application of the Spousal Support Advisory Guidelines, supra, and using an income of $120,000 imputed to the Applicant, (as suggested by the Respondent), would be $2,403 (“Low”), $3,882 (“Mid”), and $4,990 (“High”).[^35]
f. Based on that $381,000 level of income, but imputing or attributing no income to the Applicant:
i. the Respondent’s child support obligation in relation to his three children, suggested by normal application of the Federal Child Support Guidelines, supra, and the applicable Table calculations, still would be $6,071 per month; but
ii. the Respondent’s monthly spousal support obligation, suggested by normal application of the Spousal Support Advisory Guidelines, would be $3,317 (“Low”), $7,125 (“Mid”), and $7,912 (“High”).[^36]
Legislation and General Principles
[54] Legislative provisions and general principles applicable to determination of child and spousal support are well known, but include the following:
a. Pursuant to the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), a court of competent jurisdiction may make interim or final orders requiring a spouse to pay for the support of any or all children of the marriage, in accordance with “the applicable guidelines”. In doing so, the court may impose whatever terms, conditions or restrictions as it thinks fit and just.[^37]
b. Pursuant to section 3 of the Federal Child Support Guidelines, supra, the amount of child support order for children under the age of majority presumptively is the amount set out in the applicable table, (having regard to the number of children under the age of majority to whom the order relates and the income of the spouse against whom the order is sought), and the amount, if any, determined pursuant to section 7 in relation to “special or extraordinary expenses”.
c. However, pursuant to section 4 of the Federal Child Support Guidelines, supra, where the income of the spouse against whom a child support order is sought is over $150,000, the amount of a child support order may be:
i. the amount determined pursuant to section 3; or
ii. if the court considers that table amount to be “inappropriate”, (which the Supreme Court of Canada has interpreted as meaning “unsuitable”),[^38] then:
in respect of the first $150,000 of the spouse’s income, the amount set out in the applicable table for the number of children under the age of majority to whom the order relates;
in respect of the balance of the spouse’s income, the amount that the court considers appropriate, having regard to the condition, means, needs and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute to the support of the children; and
the amount for “special or extraordinary expenses”, if any, determined pursuant to section 7.
d. To maximize predictability and consistency, Parliament provided a definition of income that is clear and unambiguous, and which significantly narrowed the scope of judicial discretion. In particular:
i. pursuant to section 16 of the Federal Child Support Guidelines, supra, (and subject to the possibility of deviations and adjustments authorized pursuant to sections 17 to 20 of the Guidelines), a spouse’s annual income generally is determined using the “sources of income” set out under the heading “Total Income” in the T1 General Form issued by the Canada Revenue Agency, and has come to mean that a payor’s income for support purposes is presumptively the payor’s income as it appears on line 15000 of his or her income tax return; and
ii. the onus is on the support payor to prove on a balance of probabilities that his or her indicated “Line 15000” income should not be used for support determination purposes, and that the income he or she proposes fairly reflects money available to the spouse for the payment of child support.[^39]
e. Pursuant to the Divorce Act, supra, a court of competent jurisdiction also may make interim or final orders requiring a spouse to pay such lump sum or periodic sums as the court thinks reasonable for the support of the other spouse. In doing so, the court must take into consideration the “condition, means, needs and other circumstances of each spouse”, (including the length of their cohabitation, the functions performed by each during that time, and any order, agreement or arrangement relating to support of either spouse), and may impose whatever terms, conditions or restrictions as it thinks fit and just.[^40]
[55] With all of the above in mind, I turn to determination of appropriate quantification of child and spousal support to be ordered in this case on an interim interim basis.
Analysis
[56] In arriving at my determinations of appropriate interim interim child support and family support, my considerations and intermediate conclusions have included the following:
a. It should be emphasized again that I am deciding such matters only on an interim interim basis; i.e., without prejudice to the ability of either party to bring a further motion to have the child support and/or spousal support figures revised upwards or downwards retroactively or prospectively having regard to further developments, particularly insofar as such changes may be advisable having regard to the further disclosure ordered herein and the results of the analysis carried out once that disclosure has been made. Until those developments have occurred, I am inclined to agree with counsel for the Applicant’s decision that the court necessarily is obliged to struggle somewhat in figurative darkness for appropriate temporary solutions, particularly in relation to determining an appropriate Respondent income on which to base child and spousal support calculations.
b. As the Respondent is in default of his immediate and ongoing financial disclosure obligations, for the reasons outlined above, I do think it appropriate to approach disputed aspects of his income and expenditures with a healthy sense of skepticism.
c. Having said that, and while bearing in mind the court’s jurisdiction to award child and spousal support levels that are more than “adequate”, (pursuant to the legislative provisions and caselaw noted above), and what I regard as a probability based reasonable suspicion that the appropriate levels of child support and spousal support determined and retroactively adjusted after trial are likely to be higher, (once the parties’ pre-separation standard of living has been firmly established,[^41] along with the Respondent’s “true” income and the extent of the Respondent’s ability to pay such support), I also think it unhelpful to set child and spousal support, on an interim interim basis, at levels which seem likely to grossly exceed the reasonable financial needs of the children and the Applicant while living in Goderich, Ontario, where the cost of living is relatively modest compared to many other areas of the province. In particular, I think the same prevailing uncertainties regarding the Respondent’s “true” level of income and available means to pay support suggest caution when it comes to setting temporary support obligations that may be unrealistic or too challenging to address in the short term for demonstrable reasons; e.g., having regard to the possibility of demonstrable restrictions on the Respondent’s ability to liquidate or refinance assets in the short term.
d. I also think there is merit to counsel for the Respondent’s submission that he unfairly was taken somewhat by surprise, in relation to the extraordinarily high levels of child support and spousal requested by counsel for the Applicant during the hearing before me; a consideration in turn suggesting that the court should refrain from awarding support at anything approaching such extraordinary levels prior to a further motion, brought on adequate notice, and in respect of which the Respondent and his counsel have been given sufficient opportunity to prepare an appropriate response. Without limiting the generality of the foregoing, I note the following:
i. In the Applicant’s original notice of motion dated June 10, 2022, eventually leading to the hearing before me, the Applicant expressly sought interim child support in the amount of $6,890.00, (based on an imputed income of $437,098.67, representing the average of the Respondent’s reported Line 15000 incomes in 2018, 2019 and 2020), and an unspecified amount of interim spousal support “to be determined based on the parties’ respective incomes and the Spousal Support Advisory Guidelines, without prejudice to the Applicant’s claim for spousal support retroactive to the date of separation”. Although the amount of spousal support accordingly was unspecified, I think it fair to assume that the Respondent and his counsel would have expected the Applicant’s request in that regard to be in the region suggested by an appropriate DivorceMate calculation. Using the aforesaid imputed “three-year average” income of $437,098 and resulting child support of $6,890, and imputing/attributing no income to the Applicant, that would have suggested spousal support of $6,658 (“Low”), $7,598 (“Mid”) and $8,548 (“High”); i.e., child and spousal support suggesting nothing close to an approach based on an averaging going back further than three years, (so as to include the consideration and potential impact of extraordinarily high Line 15000 incomes reported by the Respondent in the more distant past, such as $12,597,245 in 2011, and $915,328 in 2017), and nothing suggesting that child and spousal support each should be quantified in the range of many tens of thousands of dollars each month.
ii. The Applicant’s supplementary notice of motion, dated December 15, 2022, (and therefore presumably served well after disclosure of the Respondent’s reported Line 15000 income for 2021), contained no indication of a revised request in relation to the amount of child and spousal support being sought by the Applicant. Indeed, the supplementary notice of motion makes no reference whatsoever to child and spousal support, although the request for relief set forth in the Applicant’s notice of motion remained outstanding.
iii. As for the factum served by counsel for the Applicant on February 6, 2023, being two days after the deadline set by the regional practice direction and only two days before the hearing before me:
It included a reference in paragraph 9 to the Respondent having “recently taken the position that his income is only $380,000 per year, that his income of nearly $21,000,000.00 last year was an ‘anomaly’, and that because D2L is now public, he does not have access to income outside of what is reported on his taxes”.
It also included a reference in paragraph 35 to the Respondent’s Form 13.1 Financial Statement sworn on September 8, 2022, and the Respondent’s position indicated therein that his income in 2021 was “really” $519,285.81, as well as a reference to the Respondent’s indication that his annual employment income is now $381,000, albeit also with the potential for bonuses that could be as high as that number, thereby doubling that income.
However, the factum included no express indication that the Applicant would be seeking, during the hearing before me, child and spousal support using numerical calculations based on the Respondent’s reported Line 15000 income for 2021, or any suggested average of his Line 15000 incomes for the previous 10 years.
Indeed, the indication of the Order being sought, set forth in the final paragraph of the factum, actually includes no mention whatsoever of child support or spousal support; a consideration which, in my view, lends a measure of support to Respondent counsel’s indication of having formed an impression that the Applicant was content, (at least for purposes of the hearing before me), with continuation of the open-ended credit card and line of credit arrangements for support set forth in the Order made by Justice Nicholson.
e. For the time being, at least, I think it inappropriate to impute any income to the Applicant, or attribute any annual income to her other than the somewhat negligible amount indicated in Line 15000 of her most recent and available income tax return; i.e., approximately 593 dollars.[^42] Without limiting the generality of the foregoing:
i. As noted above, the Respondent disputes the Applicant’s assertion of an agreement between the parties whereby the Respondent would be the family’s sole “breadwinner”, (i.e., providing for all the family’s economic needs), while the Applicant remained at home to concentrate on care of the parties’ children and management of their household. However, the suggested arrangement seems entirely plausible to me, having regard to such matters as:
the undisputed evidence before me that the Applicant repeatedly experienced high-risk pregnancies and birth complications, including the need for extended bedrest, testing for gestational diabetes and serious surgeries;
the Respondent’s extraordinary business success, asset acquisition and income, all of which inherently seem likely to have required considerable effort, travel and time away from home;
the importance both parties profess to place on direct parental involvement with their children, which in my view would have made the Respondent more inclined to accept an arrangement, (at least prior to the parties’ separation), whereby the Applicant was able to remain available at home with the children while the Respondent necessarily was working and/or travelling;
what seems likely to have been the relatively modest net financial benefit to have been gained from the Applicant working outside the home, at reasonably suitable employment available to her in the area surrounding Bayfield and Goderich, Ontario, (a matter addressed in further detail below), once one takes into account the likely cost of child care that would have been necessary to address the frequent absence of two working parents while their three young daughters had not yet reached school age; and
the reality that the net financial benefit likely to have been gained from the Applicant working outside the home was unnecessary to address the family’s financial needs, having regard to the business success, asset acquisition and income of the Respondent.
ii. In my view, the Applicant remaining at home and available to the children for the time being is not unreasonable having regard to the young age of the children and the Respondent’s ongoing work and travel needs, (especially if the Applicant succeeds in her outstanding request for a “right of first refusal” to care for the children whenever the Respondent understandably is not available to do that in person because of his other commitments), and the likelihood of the Applicant having to devote considerable time and attention to retraining and/or other efforts required to regain a competitive position in the work force and earn levels of income justifying time away from her daughters. Of course, such realities are likely to change over time, especially as the girls grow older and more independent in their personal care. For now, however, I think the Applicant’s approach to the particular situation of the parties and their children is realistic and practical.
iii. In any event, I agree with the Applicant that the Respondent’s suggestion of the Applicant being able to secure an immediate position as a Director of Human Resources, earning $120,000 a year, is entirely unrealistic and implausible. Without limiting the generality of the foregoing:
There is nothing before me to contradict the Applicant’s evidence that she never earned more than $60,000 per year while she remained in the labour force, prior to the birth of the parties’ first child more than seven years ago.
There similarly is nothing to contradict the Applicant’s evidence that her work in the area of human resources was limited to being a recruiter and assistant.
Even if the reasons for it are disputed, the Applicant unquestionably has been out of the work force entirely for more than seven years, inherently making her less appealing to potential employers than others competing for such work who have remained actively employed, and/or whose training and experience are up to date.
Moreover, in my view, the nature of work in the area of human resources inherently requires more direct interpersonal dealings and/or supervisory tasks than that associated with many other forms of work. The Applicant’s evidence in that regard, indicating that even human resource positions permitting a degree of remote work require some “in person” attendance, seems entirely reasonable to me. Having regard to such realities, I question the express or implicit suggestion that the Applicant would not face a serious additional competitive disadvantage in seeking human resource positions with employers whose operations generally are based beyond commuting distance from Goderich; i.e., if the Applicant understandably is required to advise such potential employers of her need to work remotely during the vast majority of her employment.
As for the likelihood of the Applicant finding such remunerative work within reasonable commuting distance:
a. Huron County indisputably is one of the most friendly, pleasant and attractive areas of this province in which to live, and an authority no less than Her Late Majesty Queen Elizabeth II once proclaimed Goderich “the prettiest town in Canada”.
b. Having presided over countless family conferences, motions and trial work in Goderich for more than 11 years, (i.e., during regular rota attendance and trial sittings in that venue), I nevertheless think it fair to say that six figure incomes in Huron County are comparatively rare, and very much the exception rather than the norm. In that regard, I think I also am entitled to take a degree of judicial notice that the most recent information in that regard available from Statistics Canada, (based on the profile for Huron County extrapolated from the 2016 Census), supports such a conclusion.
c. When it is reasonable and appropriate for the Applicant to re-enter the work force, the suitable employment likely to be available to her, within reasonable commuting distance, therefore almost certainly will generate income far below the levels apparently anticipated and/or expected by the Respondent.
f. I am not persuaded that the Applicant has a new partner, let alone a new partner that is contributing in any meaningful way to the support of the Applicant and the parties’ children. In that regard:
i. The Respondent asserts that the Applicant has “a new long-term partner”, through a relationship that started “long ago”; a person whom the Respondent describes as a “CEO/owner” of a grocery store, who “provides” for the Applicant and the parties children by often paying “for food, drinks, hotel rooms and expensive trips to places like Niagara-on-the-Lake”, in an effort to “woo” the Applicant and the parties’ children.
ii. The Respondent nevertheless provides no details for the basis of what he is said to “understand” in that regard, apart from indicating, (without express confirmation of his own personal observation in relation to such matters), that pictures of the Applicant and her supposed new long-term partner “as a couple” hang in the Applicant’s home.
iii. The Applicant firmly denies that she was unfaithful to the Respondent or has any new partner, and explains in her responding affidavit that the Respondent is referring to a family friend and neighbour who:
has given the parties’ children lemonade and other snacks from his grocery store as a kindness, but provides no financial support to the Applicant;
has never paid for trips or hotel rooms for the Applicant and the children;
has never attempted to “woo” the Applicant or the children; and
is depicted in photographs with the Applicant in the same manner as photographs of the Applicant with many of her other close friends, which are displayed all over her home.
iv. In her sworn evidence, the Applicant indicates that, in pale contrast to the many expensive post-separation trips taken by the Respondent, (i.e., flying to distant locations in Canada, as well as to seven other countries on three continents), her post-separation travel has been limited to attendance at a friend’s wedding in Niagara-on-the-Lake, and a short overnight visit to the Applicant’s brother in Port Elgin, (a one hour’s drive from Goderich), with the Applicant and the parties’ daughters staying at an inexpensive “Super 8” motel.
v. In my view, the evidence before me falls far short of establishing that the Applicant is receiving financial support from a new partner, or indeed from any source other than the Respondent.
g. In my view, the Applicant has a demonstrable need for financial support, as indicated by her current lack of income and the expense estimates in her Financial Statement.[^43] While the Applicant is possessed of assets in the form of her current home and the condominium in Goderich:
i. the Respondent is claiming credit for considerable expenditures made in relation to the former property, which the Applicant cannot sell without inflicting further disruption on the parties’ children, and which the Applicant realistically cannot borrow against without a demonstrable source of regular assured income; and
ii. the undisputed evidence before me indicates that the Applicant not only tried unsuccessfully to sell the condominium, (before renting it as a means of covering costs associated with that property), but also has an obligation to pay the net proceeds from that property’s eventual sale to the Respondent pursuant to paragraph 13 of the consent Order made by Justice Nicholson on July 14, 2022.
h. In my view, the Respondent clearly has the ability to pay child and spousal support. In that regard, I am mindful of the Respondent’s willingness to agree on a temporary support arrangement that was somewhat open-ended, (insofar as the Applicant has been permitted to use the Respondent’s credit cards and line of credit facility without apparent monetary limits), and was not persuaded by implicit or overt suggestions that the Respondent lacks access to funds and/or financing as and when needed; e.g., owing to his professed debt obligations. Without limiting the generality of the foregoing:
i. It was not disputed that, following the parties’ separation, the Respondent chose to purchase a high-end Tesla automobile at a cost of $200,000 or more, while thereafter allowing his new partner to drive the Audi A6 vehicle the Respondent had been using as his principal vehicle. Although the Respondent attempted to justify that decision on the basis of his view that the Tesla vehicle is a safer automobile, facilitating the corresponding availability of lower insurance premiums, I did not find such rationalizations of the unusual and extraordinarily high vehicle expenditure convincing. For present purposes, the purchase lends support to the Applicant’s contention that the Respondent’s post-separation spending has not been constrained by supposed concerns regarding his high level of debt.
ii. The Applicant also tendered evidence, (including social media posts and photographs), indicating that the Respondent has travelled extensively following the parties’ separation; e.g., to destinations including Costa Rica, Newfoundland, Colombia, Bermuda, Boston, the Turks & Caicos, Montreal, the Netherlands, the United Kingdom, Australia, Hawaii (Maui) and Prince Edward Island. I think it fair to infer that some of those trips may have been business-related, (at least in part), in which case the corresponding cost of those particular trips may have been covered to some extent as legitimate business expenditures; e.g., insofar as it was not disputed that D2L has offices in locations that include Boston, the United Kingdom, Amsterdam and Australia. Having said that:
There is nothing to suggest that the aforesaid trips to Costa Rica, Newfoundland, Columbia, Bermuda, the Turks & Caicos, Montreal, Hawaii and Prince Edward Island were business-related, or anything other than recreational travel. Indeed, the Applicant was able to indicate, (and it was not contradicted), that the Respondent travelled with the parties’ children to Newfoundland to attend a wedding, and took the children with him to Prince Edward Island on a holiday.
The Applicant also indicated, (and it was not denied by the Respondent), that the Respondent customarily travels in a manner that is more expensive than many travellers; e.g., ensuring that he and the children flew “first class” during their travel to and from Newfoundland and Prince Edward Island, (with the trip to Newfoundland having cost at least $30,000), and securing “VIP” passes to a baseball game at Fenway Park while visiting Boston.
On most of the above trips, (including the aforesaid travel to seven other countries and three continents), the Respondent was accompanied by his new partner; i.e., a girlfriend said by the Applicant to be in her “early twenties”, and described by the Respondent himself as someone who is “still a student”, although she was also said to be “a part time model” and the operator of an unspecified “successful retail commerce business”. For present purposes, I nevertheless think it noteworthy that the Respondent, while emphasizing that his new partner “never asks [him] for money or anything lavish”, and has “many nice things” such as clothes and handbags because of her modelling work and business, did not deny or contradict the Applicant’s belief that such travel by the Respondent’s new partner was funded by the Respondent personally or by D2L, (which in turn would suggest the Respondent’s ability to run personal expenses through the corporation despite his denials), and that the Respondent’s new partner almost certainly would have flown “first class” along with the Respondent.
While the Respondent attempted to justify and downplay the apparent extravagance of some of this personal travel, (e.g., by indicating that he took a number of such trips “to deal with the stress of the divorce and life as a public CEO”, and took the parties’ children to Newfoundland and Prince Edward Island to “connect” with their roots, extended family and friends), in my view the relevant implication of such evidence is that the Respondent clearly has access to funds allowing him to engage in such discretionary travel with his children and his new partner.
iii. The Respondent himself proactively indicated, as part of the evidence offered to underscore financial burdens he has been carrying, that he has paid expenses to care for his parents, (such as covering the costs associated with their flights and travel to visit a number of relatives in Newfoundland that have died or are dying), costs associated with care of his much larger extended family, (such as covering expenses and gifts for his six nephews and nieces, and occasional flights and travel with his three brothers and sisters and their partners), and the costs associated with flights for “extended family/relatives that want to spend time visiting with [his] parents and family in Ontario before they die of late stage cancer”. As noble-minded and generous as some of those expenditures may have been, (with the Applicant asserting that many of the expenditures were unnecessarily generous, insofar as the Respondent apparently purchased his father’s company in 2022 for $13 million, such that the Respondent’s parents are not without substantial assets of their own), the legal reality for present purposes is that the Respondent’s primary obligation is to support his children and the Applicant, rather than his extended relations. If necessary, the significant discretionary expenditure he has been directing towards his extended family can and should be redirected to the members of his immediate family.
iv. As I indicated during the course of oral submissions, the Respondent’s protests of being burdened by “crushing” debt and interest payments, (said to be approximately $20 million at the time of separation, with at least $8 million still owing to the Canada Revenue Agency and a bank), and supposed inability to obtain financing when needed, (e.g., because he cannot easily liquidate his shareholdings and/or use such assets to secure debt financing), do not sit well with his acknowledged ability to provide more than a million dollars of financing towards the post-separation construction of the new home now occupied by the Applicant and the children, even though that expense admittedly was unnecessary.
v. More generally, I think it important to remember that, even if the Respondent’s net worth was “significantly reduced” over the course of the marriage from approximately $519 million at the date of marriage to approximately $335 million at the date of separation, (which was emphasized repeatedly during the course of submissions), the Respondent admittedly still had a net worth of $335 million just two years ago; i.e., at the time of the parties’ separation in May of 2021. There was nothing before me to indicate or suggest that such assets have been significantly dissipated or squandered in the wake of the parties’ separation, and I think it more likely that the Respondent’s financial position has been enhanced by D2L going public. More to the point, I find it difficult to believe or accept that a party possessed of anything approximating such levels of wealth is incapable of finding some means of financing and paying substantial child and spousal support. My impression in that regard is reinforced by the demonstrated reality, (as outlined above), that the Respondent apparently has no difficulty finding the means of paying for other significant discretionary expenditures when he thinks such expenditures are appropriate.
i. In my view, the Respondent nevertheless has satisfied his onus of demonstrating why, in the words of s.17(1) of the Federal Child Support Guidelines, supra, “the determination of [his] annual income under section 16 would not be the fairest determination of that income”, for the purpose of determining appropriate interim interim child and spousal support. In that regard:
i. Without reiterating the full details of the Respondent’s explanation in that regard, (which in my view was not meaningfully disputed by the Applicant), the Respondent’s reported Line 15000 was clearly an anomaly. Indeed, that much is made clear, I think, by the Applicant’s own recitation of the Respondent’s reported Line 15000 incomes dating back to and including 2011. During that entire extended time period, the Respondent had only one other reported Line 15000 income in excess of $1 million, and one has to go back to 2011 to find it; i.e., a reported Line 15000 income of $12,597,245 in 2011.
ii. I think it fair to say that the relative speed with which counsel for the Applicant moved on from his initially requested relief in relation to child and spousal support, (i.e., for numerical calculation of interim interim child and spousal support based on the Respondent’s reported Line 15000 income for 2021), reflected a candid recognition that the Line 15000 income of $20,923,798 for 2021 was indeed clearly anomalous, in turn calling for some form of different or modified approach that would temper the obviously excessive and inappropriate amounts of interim interim child and spouse support otherwise generated by use of that particular income in DivorceMate calculations.
iii. In my view, the reality of that reported Line 15000 income for 2021 being anomalous strengthened the credibility of the detailed explanation for that anomaly offered by the Respondent; i.e., that the extraordinary $20,923,798 figure in question was generated in large measure by discrete non-recurring transactions and assessed benefit attribution, with similar discrete and immediate redirection of much of that “income” to payment of Respondent debt obligations, such that the vast majority of that figure actually was not and is not available for alternate use by the Respondent by way of support payment or otherwise. In the circumstances, I accept for present purposes, (without prejudice to the question being revisited once further disclosure has been made), the Respondent’s contention that his “true” income for 2021 actually was $519,285. In other words, but for the anomalous impact of the discrete and non-recurring events he has identified, I think that $519,285 figure would have represented his Line 15000 income for 2021. Having regard to such considerations, I see no practical benefit in approaching this matter as if the Respondent had or will have annual income of $20,923,798 available for the purpose of paying his support obligations. To the contrary, I think approaching this matter in that unrealistic fashion would do little but effectively require the Respondent’s payment of excessive support through liquidation and transfer of the Respondent’s assets, (i.e., substantial progressive transfers of wealth effected outside the legislated approach to equalization payments), rather than payment of support primarily tied – at least in the first instance -- to the Respondent’s actual income.
j. Based on the evidence before me, I do not think it can be fairly said that the Applicant has established, as yet, the preconditions for operation of section 18 of the Federal Child Support Guidelines, supra; i.e., that all or part of the pre-tax income of the D2L and/or the other corporations in which the Respondent holds an interest, or “an amount commensurate with the services that the [Respondent] provides” to such corporations, should be included in the Respondent’s income for the purpose of child and spousal support calculations. In that regard, I nevertheless emphasize my view that the Applicant’s present inability in that regard seems tied in large measure to the Respondent’s lack of disclosure and production outlined above. Relief pursuant to section 18 of the Guidelines may very well be appropriate once such disclosure and production has been made, and the Applicant’s income and business valuation experts have carried out their review and analysis in that regard.
k. Returning for now to the application of section 17 of the Guidelines:
i. As the preconditions for operation of that section have been established, (for the reasons outlined above), I accordingly “may have regard to the [Respondent’s] income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years”.
ii. In that regard, I begin by noting and emphasizing the explicit temporal limitation, (i.e., “the last three years”), imposed by section 17 on the years of a support payor’s income capable of being reviewed and considered when a court is operating within the parameters of section 17; i.e., one of the few expressly permitted exceptions to strict application of section 16 of the Guidelines. In my view, the structure and wording of sections 16 through 20 of the Guidelines simply do not permit consideration of a wider temporal range of annual income consideration, such as the averaging of the Respondent’s reported Line 15000 incomes over the past 10 years, as suggested by counsel for the Applicant.[^44]
iii. In my view, the operation of section 17 also should remain focused on “the last three years” in respect of which an available Line 15000 income has been provided for a payor spouse; i.e., consistent with the wording of section 17 expressly linking it to section 16, and section 17’s inherent focus on permissible deviation from the Line 15000 incomes reported by a payor spouse.[^45] In this case, I accordingly have regard to the Line 15000 incomes reported by the Respondent in 2019, 2020 and 2021. In that regard:
the Respondent’s reported Line 15000 income in 2019 was $604,660;
the Respondent’s reported Line 15000 income in 2020 was $252,530; and
as noted above, the Respondent’s reported Line 15000 in 2021 was $20,923,798, but I am satisfied on the basis of the evidence before me that the reported Line 15000 income for that year notionally should be adjusted to $519,285 for the purposes of support calculations.
iv. In my view, those income figures obviously suggested a pattern of significant fluctuations in the Respondent’s income, both upwards and downwards; a pattern that seems likely to continue insofar as the Respondent’s income, since D2L has “gone public”, apparently is tied not only to a base salary but also the prospect of bonuses which might effectively double the Respondent’s earnings.
v. While I am not limited in my use of section 17 to a straight averaging of the Respondent’s income over the relevant three-year time period, (for the reasons outlined above),[^46] in this case I think such an averaging will achieve an appropriate temporary just outcome for the time being, in terms of addressing such fluctuations in the Respondent’s income. Accordingly:
If I have done the mathematics correctly, a straight averaging of the Respondent’s reported Line 15000 incomes for 2019 and 2020 and adjusted Line 15000 income for 2021, (i.e., of $604,660, $252,530 and $519,285), suggests use of a base annual income of $458,825 for determination of the Respondent’s child and spousal support obligations.
For the reasons outlined above, I think it inappropriate, for the time being, to impute or attribute any income to the Applicant for the purpose of support calculations, apart from her most recent and available Line 15000 income of $593 for 2021.
Using those income figures for the Respondent and the Applicant, an appropriate DivorceMate calculation suggests monthly child support of $7,207, and monthly spousal support in the range of $7,063 (“Low”), $8,011 (“Mid”), and $9,023 (“High”). In my view, use of the “High” figure of that suggested range of spousal support is appropriate in the circumstances, having regard to the Respondent’s failure to make proper financial disclosure to date, and the probable elevated standard of living considerations noted above. I think both considerations suggest erring on the side of spousal support more favourable to the Applicant, at least for the time being.
[57] For the above reasons, an Order accordingly shall go whereby the Respondent will be required, on an interim, interim basis, and without prejudice to the ability of either party to request retrospective or prospective variations and adjustments having regard to further evidence and developments, to pay monthly child support of $7,207 and monthly spousal support of $9,023, based on an annual Respondent income of $458,825.
[58] As for the effective date of those now quantified interim interim without prejudice child and spousal obligations:
a. In the Applicant’s original notice of motion dated June 10, 2022, a request was made to have those child and spousal support obligations mad effective as of April 2, 2021; i.e., a time close to the date of May 16, 2021, on which the parties are said to have separated.
b. While I normally would be inclined to make an order “back dating” the commencement of an interim interim support order, (e.g., so as to create greater certainty for parties in relation to the calculation of interim support obligations and any possible arrears in that regard, as well as corresponding tax consequences), I can easily foresee that doing so in the present case might have unfortunate implications necessitating further litigation that might otherwise be avoided. In particular:
i. An order directing the Respondent’s payment of quantified child and spousal support obviously carries with it the prospect of an ancillary support deduction order and enforcement of the Respondent’s support obligations by the Family Responsibility Office.
ii. The Respondent obviously should receive credit for any child and spousal support he has paid to date. However, in this case, the relevant sums effectively paid to date in that regard by the Respondent are not easily quantified; i.e., owing to the somewhat loose and non-specific arrangement whereby the Applicant, through permitted use of the Respondent’s credit cards and line of credit facility, effectively has been receiving irregular and varied support payments from the Respondent. Nor have I been provided with all the documentation and information required to determine the total of sums essentially paid by the Respondent to the Applicant in that regard; e.g., bearing in mind my ruling on evidence admissibility, and the fact the Applicant has had access not only to the Respondent’s credit cards but also to his line of credit facility.
iii. If the child and spousal support order made now is “back dated” in its effect, any delay in resolution of further efforts to quantify the support effectively paid to date by the Respondent, and/or to take the steps necessary to formally confirm the credit the Respondent should receive in that regard, therefore might easily result in a situation whereby the Family Responsibility office might take steps to address nominal arrears in the Respondent’s payment of support obligations that actually may have been paid in part or in whole.
c. In the present circumstances, I therefore think it best to make my order regarding interim interim without prejudice child and spousal support effective as of July 1, 2023. Either party then can take further steps to make that obligation formally retroactive, once the appropriate credit for the Respondent’s past support payments has been quantified.
[59] Finally, that further order relating to child and spousal support now having been made, the consent Order made by Justice Nicholson on July 14, 2022, now should be amended so as to delete the provisions contained in paragraph 9 of that order. A further order to that effect shall go accordingly.
Request for payment of interim disbursement and legal fees
[60] The final substantive issue presented for my determination centred on the Applicant’s request for an order directing that the Respondent “shall be responsible for the payment of the fees associated with obtaining the Income Report and Business Valuation by the Applicant’s expert”,[^47] as well as “interim disbursements for legal fees” incurred by the Applicant.[^48]
[61] By the time of the hearing before me, the request for such relief had evolved into a specific and quantified request for an order requiring the Respondent to pay the Applicant the sum of $450,000.00 in that regard; i.e., as a contribution to the interim disbursements incurred and/or to be incurred by the Applicant in relation to accounting and legal fees.[^49]
Party Positions
[62] At the risk of over-simplification, the position of the Applicant in relation to her request for such relief may be summarized generally as follows:
a. The fees charged and/or to be charged by the Davis Martindale firm in connection with preparation of an Income and Business Valuation report, (as outlined in the “estimated fee quote” provided by Mr Martindale in his letter dated November 22, 2022, attached as exhibit “C” to the affidavit sworn by Ms Golden on December 16, 2022),[^50] were said to be necessary and reasonable for the reasons noted above; i.e., insofar as this matrimonial litigation requires a proper assessment of the Respondent’s complex financial affairs, the Applicant has had no control or access in that regard, and the Applicant should not be required to take the word of the Respondent and his experts in relation to such matters. Proper consideration of settlement offers and/or preparation for trial in such circumstances was said to require appropriate accounting expertise.
b. The lawyer fees incurred by the Applicant in relation to this litigation, (quantified “in the amount of approximately $150,000” at the time Ms Golden swore her affidavit on December 16, 2022),[^51] were said to be necessary and reasonable for similar reasons; e.g., insofar as the complexity of the matters in issue was said to be such that the Applicant effectively would be “lost”, and obliged to litigate on a completely uneven “playing field”, without the benefit of appropriate legal expertise and counsel.
c. It was emphasized that the Applicant is unable to fund such disbursements for accounting and legal fees for reasons similar to those outlined above; e.g., a current lack of income, no reasonable prospect of immediate income owing to her present circumstances, no ability to obtain mortgage financing in relation to property she owns without a steady source of income, and no access to disposable assets capable of being sold easily or in a manner that would generate any net sale proceeds for the Applicant.
d. It was argued that the Respondent, as the CEO of a major publicly traded corporation and the owner and shareholder of 13 known corporate entities, has access to far greater resources and sources of income than his “Line 15000” income standing alone.
e. It was emphasized that, regardless of the ultimate determination made in relation to validity of the parties’ ostensible marriage contract, there is no dispute regarding the Respondent’s obligation to provide support for his children and some form of spousal support for the Applicant.
f. In such circumstances, it was argued that Respondent contribution to payment of the Applicant’s disbursements was necessary to level the litigation “playing field” in relation to this matter; i.e., to help place the Applicant in a position where she can give proper consideration and responses to settlement offers, and/or prepare the matter for trial if necessary.
g. It was acknowledged that any funds paid by the Respondent in that regard should be subject to an accounting if and as necessary; e.g., with appropriate records being kept to confirm that the funds were directed towards their intended purpose, and/or to ensure that any unused portion of such funds could be returned to the Respondent in accordance with any further directions of the court.
h. Counsel for the Applicant also noted that the current request for Respondent payment of $450,000.00 towards such interim disbursements was intended to be made without prejudice to the ability of the Applicant to make further and similar requests in the future if that turned out to be necessary and appropriate.
[63] At the risk of similar over-simplification, the position of the Respondent in relation to the Applicant’s request for such relief may be summarized generally as follows:
a. It was emphasized that the Applicant has the burden of showing that any interim disbursements to be paid by the Respondent were or are necessary and reasonable, given the needs of the case and funds available, and the Applicant was said to have fallen short of that burden in the prevailing circumstances.
b. It was said that there was “nothing to be gained” by the expenditure of hundreds of thousands of dollars in relation to this litigation; e.g., having regard to the indisputable fact that the Respondent clearly had sustained a multi-million dollar decrease in the value of his Net Family Property over the course of the parties’ marriage.
c. It once again was said that the Respondent has no ability to fund hundreds of thousands of dollars in disbursements; e.g., insofar as his assets were said to be non-liquid and/or effectively incapable of being accessed, and he already is struggling to carry significant debt.
[64] Before turning to consideration of those competing submissions, I had and have regard to the legislation and general principles which govern such requests.
Legislation and General Principles
[65] Pursuant to Rule 24(18) of the Family Law Rules, the court “may make an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees”.
[66] General principles relating to the exercise of that jurisdiction include the following:
a. As indicated by the permissive wording of the rule, the making of such orders is discretionary. In exercising that discretion, courts strive to ensure that the primary objective of fairness under the Family Law Rules is met; e.g., by ensuring that all parties can equally provide or test disclosure, make or consider offers, or possibly go to trial. Simply described, such awards are made to “level the playing field” between family law litigants, especially in situations involving an impecunious party and a much more prosperous opponent; i.e., where one party in a matrimonial or family case is demonstrably at a severe financial or economic disadvantage.[^52]
b. Such awards are no longer made only in “exceptional” cases, or dependent on a finding of “exceptional” circumstances”, in the context of family law litigation.[^53]
c. Nor is the making of such orders limited to cases where the requested payment is to be “taken out of” an expected equalization payment. Such orders are possible even in cases where there will be no equalization payment; e.g., in cases where spousal support is the only meritorious claim.[^54] More generally, demonstration of a moving party’s ability to repay amounts a litigation opponent is required to pay pursuant to Rule 21(18) of the Family Law Rules is not required before the court will make such an order.[^55]
d. However, the party requesting such an order bears the onus on such a motion, and must demonstrate clearly that the disbursements are necessary and reasonable, having regard to the needs of the case and the funds available.[^56] For example:
i. if an expert is the subject of a disbursement in respect of which payment is sought, the party requesting the order must demonstrate that there is a clear need for the expert’s services, and should provide appropriate information and/or explanation in relation to the expert’s proposed fees;[^57] and
ii. a claim for payment of past and/or anticipated lawyer fees should be supported by an affidavit from the party’s lawyer providing details of when and how outstanding fees were incurred and details of anticipated legal costs, including how much time the lawyer expects to spend on anticipated matters, (such as trial preparation and/or trial), who will do the work, and at what hourly rates.[^58]
Where such particularity has not been provided in relation to a motion of this nature, (i.e., where a motion for payment of interim disbursements and fees fails to supply proper evidence of the reason for such disbursements and fees, and estimated costs in that regard), a court may make adverse findings, make downward adjustments in the amount to be awarded, or dismiss or adjourn the Rule 24(18) aspects of a motion without prejudice to the party seeking such an order renewing the request on the basis of “better and proper” evidence outlining, with greater detail and supporting evidence, the basis of the request.[^59]
e. The party requesting such an order also must demonstrate that he or she is incapable of funding the requested amounts.[^60] Demonstration of the responding party’s “ability to pay” is also a relevant consideration.[^61]
f. Moreover, the claim or claims being advanced by the party requesting such an order must be meritorious, insofar as that can be determined on the balance of probabilities at the time of the request for disbursements.[^62] In this context, the issue of whether a claim is meritorious is nevertheless a fairly low threshold, especially at an early stage of proceedings.[^63] It certainly does not mean that a claimant has to prove his or her case prior to obtaining such an order; a requirement that clearly would be too high, as someone who has proven his or her case then would have no need for such an order to facilitate proof of his or her case. In this context, demonstration of a “meritorious” case only requires that the claimant have a prima facie case, in the sense of there being no reason to conclude that a claim is clearly without merit, and the claimant having a case which “makes sense to prosecute” having regard to facts presented by way of affidavit; i.e., a reasonable case on the face of the material filed. In that regard, the test may be close to the test for approval of a legal aid certificate; i.e., would counsel advise a client of modest means to proceed with the claim?[^64]
g. Furthermore, any order made pursuant to Rule 24(18) of the Family Law Rules should not immunize a party from adverse cost awards. Such orders are made to allow a case to proceed fairly. They should not be such that the recipient of such a payment feels like he or she has a “licence to litigate”.[^65]
[67] Not surprisingly, the quantum of awards made pursuant to what is now Rule 24(18) of the Family Law Rules has been rising in a manner commensurate with the significant increases in the cost of litigation witnessed over the past several decades. For example, in Rosenberg v. Rosenberg, supra, it was noted that such awards in relation to interim disbursements and fees were not known to have exceeded $35,000. By 2016-2017, that upper range figure was considered “out of date”, as a recent review of more contemporary reported decisions indicated various cases in which such awards had been made in the range of $100,000 to $500,000; see Rea v. Rea, supra, at paragraph 16, and Romanelli v. Romanelli, supra, at paragraph 57. Having said that, it also has been suggested that awards in the upper level of that range were outliers dependent on their particular facts; e.g., with claims for $200,000 or more pursuant to Rule 24(18) still being regarded as “staggering” and amounts which risked such awards effectively providing a claimant with litigation carte blanche, which was not the intended purpose of the rule.[^66]
[68] In my view, such reported decisions confirm that Rule 24(18) awards in the six-figure range outlined above are certainly possible, but also emphasize that courts should take a cautious approach in that regard. Such awards are not made as a matter of course, and must still be demonstrably justified in the manner outlined above.
Analysis
[69] Turning to the question of whether relief should be granted pursuant to Rule 24(18) of the Family Law Rules in this case, I begin by noting the following:
a. In my view, it has been sufficiently demonstrated that disbursements in the nature of those contemplated by the Applicant are necessary in the particular circumstances of this case. Without limiting the generality of the foregoing:
i. The business affairs of the Respondent obviously have a complexity far beyond the norm, in terms of the relevant underlying corporate structure, (apparently involving no less than thirteen corporations), the geographic scope of the business operations associated with that corporate structure, (both national and international), and the temporal scope of a review appropriate to investigating the direct and indirect sources of income available to the Respondent, as well as the nature and extent of his asset acquisition. For reasons already outlined above, such matters have relevance to the issues raised by this litigation, (even if there is no reasonable prospect of the Respondent being obliged to pay an equalization payment to the Applicant), and the Applicant is entitled to test and challenge the conclusions reached by the Respondent’s accounting experts. However, neither the Applicant nor her lawyers have the expertise to carry out the forensic accounting analysis required in that regard, making it necessary for the Applicant to retain the services of a firm like Davis Martindale, (which has the needed expertise in such matters), in order to “level the playing field”. In my view, the situation presented in that regard is analogous to the situation addressed by Romanelli v. Romanelli, supra.
ii. In my view, the Applicant also clearly has required and will require ongoing legal assistance and advice as she navigates her way through the course of this litigation. Not only is the underlying factual matrix complex, for the reasons outlined above, but the proceedings to date have made it abundantly clear that this “high stakes” litigation, involving unusually high levels of income and wealth, will be characterized by significant party disagreement as to the underlying facts, (i.e., with few admissions in relation to a number of important matters), hard fought motions, and the definite prospect of a similarly hard fought trial. In such circumstances, it clearly is necessary for the Applicant to have the ongoing benefit of counsel in order to “level the playing field”.
iii. In my view, any lay person in the Applicant’s situation would be figuratively “lost”, in relation to this litigation, without the benefit of such accounting and legal expertise.
b. For reasons already discussed in relation to the Applicant’s need for spousal support, I am satisfied that she is incapable of funding the disbursements required to obtain such expert accounting and legal assistance without some measure of relief pursuant to Rule 24(18) of the Family Law Rules. In that regard, I am mindful that, going forward, the Applicant’s financial circumstances are likely to be improved somewhat by the interim interim relief I am granting in relation to child and spousal support. However, it needs to be remembered that such relief was ordered to address the purposes of child and spousal support, and not the payment of extraordinary accounting and legal fees.
c. For reasons already discussed in relation to the Respondent’s ability to pay child and spousal support, I also am satisfied that he generally has the ability to fund a payment or payments ordered pursuant to Rule 24 (18), in the range suggested by counsel for the Applicant, despite the Respondent’s professed financial challenges. Again, in my view, the Respondent has demonstrated an ability post-separation to obtain funds or financing in relation to significant discretionary expenditures when he thinks they are appropriate, for the benefit of himself and individuals other than the members of his immediate family. He needs to realize that addressing the issues raised by this litigation are a priority in that regard. Moreover, as noted above, to the extent the Respondent may need to liquidate some of his capital assets in order to satisfy a Rule 24(18) order awarding the Applicant a sum or sums to be directed towards payment of her interim disbursements, that may be considered reasonable and necessary in a situation like this, where there is a wide disparity between the parties’ respective financial positions.[^67] In my view, the Respondent has an obligation to do so in the present case, if he has no other means of addressing and satisfying orders granting Rule 24(18) relief to the Applicant.
d. In my view, the substantive claims being advanced by the Applicant in this litigation are “meritorious” in the sense required, insofar as that can be determined on the balance of probabilities at this early stage of the litigation, and in the absence of proper financial disclosure to date by the Respondent. In that regard:
i. I accept that, based on the evidence presented to date and the extent of the apparent diminution of the Respondent’s net worth over the course of the parties’ marriage, the Applicant may not have any meritorious claim to an equalization payment. Indeed, as emphasized repeatedly by counsel for the Respondent, the Applicant arguably may be obliged to make an equalization to the Respondent, if the ostensible marriage contract is not enforced.
ii. In my view, the evidence presented to date regarding the Respondent’s business success, asset acquisition, and levels of expenditure before and after separation, together with the indications of the family enjoying a high standard of living prior to the separation, nevertheless present a strong prima facie case that the children and the Applicant may be entitled to levels of child support that are equal to and potentially much higher than what I have ordered on an interim interim basis, particularly having regard to the Applicant’s claim for spousal support on a non-compensatory and compensatory basis. At the very least, such claims are not “clearly without merit”. To the contrary, I think it clearly “makes sense to prosecute” such claims, in the sense required, having regard to the Respondent’s unusually high levels of income and asset acquisition.
[70] In my view, the more difficult questions for resolution, in relation to the Applicant’s request for Rule 24(18) relief, are whether the sums sought by the Applicant in that regard are not only necessary but reasonable, and advanced on the basis of satisfactory evidence.
[71] As for the quantum of Rule 24(18) relief sought in relation to the past and/or anticipated expenditure associated with the Applicant’s use of services provided by the Davis Martindale firm:
a. For the reasons set out above in relation to the disclosure and production issues, I think the review recommended and contemplated by Davis Martindale is appropriate. I also recognize, (as did Mr Martindale), that exact estimates of the future costs associated with that review are inherently difficult and speculative at this stage of the litigation, particularly when the Respondent has yet to make proper financial disclosure; i.e., disclosure making clear the scope of information and documentation to be reviewed and analyzed by Davis Martindale. In other words, I think the evidence provided to justify the Rule 24(18) relief sought in relation to the past and/or anticipated fees of Davis Martindale is sufficient, (and as detailed as it reasonably can be), in the present circumstances.
b. I nevertheless also am mindful of the Respondent’s repeated assertions that the underlying financial matrix in relation to his business and corporate affairs is much less complicated than it may appear on the surface; e.g., insofar as the income of all of the indicated corporations essentially rolls up into one corporation, not all of the corporations have generated the types of documentation and information requested by Davis Martindale, and there effectively may be no documentation and information relating to certain areas of intended examination. In short, while Mr Martindale reasonably has based his fee estimate on assumptions that the work to be done by his firm will be complex, and correspondingly require certain amounts of time, the situation may turn out to be much more simple and straightforward, resulting in considerably less expense to the Applicant.
c. I also bear in mind that the fee quote provided by Davis Martindale attempts to provide an estimate of the charges to be incurred if the firm provides assistance up to and including trial of this matter. In that regard, I note the reality that many bitter litigious disputes obviously do settle short of trial, and this matter may be one of them. If so, a significant component of the fee estimate provided by Mr Martindale, (i.e., $40,000 to $100,000 relating to preparation for and attendance at trial), may never be required.
d. The above considerations make me reluctant to require an immediate Rule 24(18) payment, from the Respondent to the Applicant, sufficient to cover all of the potential estimated expense to be incurred by the Applicant in relation to fees charged by Davis Martindale; i.e., a potential expense estimated to be as high as $333,350. Moreover, I see little to be gained by a Rule 24(18) order requiring entire payment of that entire potential expense “up front”, well before Davis Martindale has completed the contemplated work that would entitle it to charge such fees to the Applicant. To the contrary, such an order seems likely to tie up a sizeable amount of funds in a trust account maintained by Applicant counsel, bearing little or no interest for an indefinite period, until such time as Davis Martindale has done the work entitling it to the payment of such fees. Restricting the amount of such a Rule 24(18) payment to a portion of the estimated total potential fees addresses that concern, while simultaneously tempering any suggestion that the Applicant is being given funding providing an unbridled “licence to litigate”.
e. For the above reasons, I think it appropriate for the time being to order the Respondent’s payment of $150,000 to counsel for the Applicant, to be held in trust for the purpose of paying the past and/or anticipated fees of Davis Martindale in relation to this matter, without prejudice to the ability of the Applicant to make a request for further relief in that regard pursuant to Rule 24(18) of the Family Law Rules, and subject to further terms and conditions whereby:
i. appropriate records of receipts, disbursements and accounts rendered by Davis Martindale shall be kept to facilitate a full accounting in relation to those funds; and
ii. any portion of those funds not paid to Davis Martindale, for services duly rendered to the Applicant in relation to this litigation, shall be held in trust for the benefit of the Respondent pending further order of the court.
[72] As for the quantum of Rule 24(18) relief sought in relation to the past and/or anticipated legal fees charged or to be charged to the Applicant by her lawyers:
a. I do not doubt that the Applicant has incurred and will incur significant legal fees in relation to this matter, and believe that she should be entitled to Rule 24(18) relief in that regard for the reasons outlined above.
b. In my view, however, the evidence offered in support of the Applicant’s request for Rule 24(18) in relation to her past and/or anticipated legal fees is deficient, having regard to the authorities noted above. In particular:
i. As noted above, the only evidence provided in that regard is a short paragraph, in an affidavit sworn by a law clerk working with counsel for the Applicant, indicating that the Applicant had incurred approximately $150,000 in legal fees as of December 16, 2022; i.e., the date on which Ms Golden swore her affidavit.
ii. I accordingly was provided with no affidavit from counsel, (who inherently have a greater ability to provide more detailed information about the timing of and justification for past legal fees, and the reasons why further legal fees are anticipated), no “plan of attack” or outline of contemplated future steps needed to bring the matter to trial, (even if such information necessarily requires speculation at this early stage of the litigation), and no corresponding summary of the estimated legal expense associated with the taking of such steps.
iii. In the circumstances, I think it inappropriate to grant the Applicant Rule 24(18) relief in relation to her past and/or anticipated legal fees to the extent that might otherwise have been appropriate had such information been provided. Doing so would ignore the policy considerations emphasized by the authorities, in terms of the court’s need to control its process, and seem perilously close to ordering the payment of funds providing a “licence to litigate” without appropriate justification.
iv. Having said that, I have little doubt, (e.g., having regard to history of this matter, and the time and effort obviously directed to preparation and attendance in relation to the hearing before me), that the Applicant has incurred significant legal expense to date, and no doubt may continue to incur significant legal expense as this litigation moves forward to trial. Given the wide divergence in income and assets currently available to the parties, I think some “levelling of the playing field” clearly is required in that regard.
v. For the time being, I think that need can be addressed to some extent, without any risk of injustice or undermining of the relevant policy considerations identified in the authorities, by way of an order whereby the Respondent will be required to pay the further sum of $75,000 to counsel for the Applicant, to be held in trust for the purpose of paying the past and/or anticipated fees of Applicant counsel in relation to this matter if and as needed, without prejudice to the ability of the Applicant to make a request for further relief in that regard pursuant to Rule 24(18) of the Family Law Rules.[^68]
Conclusion
[73] Collating the relief to be granted for the reasons outlined above, an order shall issue whereby:
a. The following evidence shall be and hereby is struck from the record:
i. paragraphs 12, 26, 35 and 36 of the Respondent’s affidavit sworn on January 11, 2023;
ii. the entire affidavit sworn by Ameer Abdulla on January 30, 2023;
iii. the entire affidavit sworn by the Respondent on February 2, 2023; and
iv. the entire affidavit sworn by Mr Martindale on January 30, 2023.
b. The Respondent shall disclose and produce to the Applicant, to the extent he has not already done so, the documents and information described in:
i. paragraph 10 of the Applicant’s notice of motion dated June 10, 2022; and
ii. the letter from Davis Martindale to the Applicant dated December 12, 2022, addressing “Document Disclosure”, and attached as Exhibit “B” to the affidavit sworn by Pamela Golden on December 16, 2022.
c. The Respondent, if the documents and information identified in the preceding sub-paragraph are not in his immediate possession and control, but in the possession and control of non-parties, shall request such documents and information from those non-parties in writing, and thereafter:
i. provide copies of such written requests to the Applicant; and
ii. provide the Applicant with documents and information provided to the Respondent by such non-parties.
d. Without any derogation from the obligation of the Applicant and her agents to abide by Rule 20(24) of the Family Law Rules, the disclosure provided by the Respondent to the Applicant shall not be shared with anyone other than the Applicant, her counsel, and experts retained by the Applicant in relation to this dispute.
e. On an interim interim basis, effective July 1, 2023, and without prejudice to the ability of either party to request further retrospective or prospective variations and adjustments in the Respondent’s child and/or spousal support obligations having regard to further evidence and developments, the Respondent shall be required to pay child support in the amount of $7,207 per month, and spousal support of $9,023 per month, based on an annual income of $458,825.
f. The Order made by Justice Nicholson dated July 14, 2022, is hereby amended so as to delete the provisions of paragraph 9 of that Order.
g. Pursuant to Rule 24(18) of the Family Law Rules, the Respondent is hereby ordered to pay the sum of $150,000 to counsel for the Applicant, to be held in trust for the purpose of paying the past and/or anticipated fees of Davis Martindale in relation to this matter, without prejudice to the ability of the Applicant to make a request for further relief in that regard pursuant to Rule 24(18) of the Family Law Rules, and subject to further terms and conditions whereby:
i. appropriate records of receipts, disbursements and accounts rendered by Davis Martindale shall be kept to facilitate a full accounting in relation to those funds; and
ii. any portion of those funds not paid to Davis Martindale, for services duly rendered to the Applicant in relation to this litigation, shall be held in trust for the benefit of the Respondent pending further order of the court.
h. Pursuant to Rule 24(18) of the Family Law Rules, the Respondent is also hereby ordered to pay the further sum of $75,000 to counsel for the Applicant, to be held in trust for the purpose of paying past and/or anticipated fees of Applicant counsel in relation to this matter if and as needed, without prejudice to the ability of the Applicant to make a request for further relief in that regard pursuant to Rule 24(18) of the Family Law Rules.
Costs
[74] Because my decision was reserved, the parties were unable to make cost submissions having regard to the substantive outcome of the motion issues I was called upon to address.
[75] As both parties profess to have little or no funds readily available to engage in this ongoing litigation, I urge them to resolve the cost issues raised by the motion proceedings before me without expending yet more time and money in that regard.
[76] However, if the parties are unable to agree on an appropriate cost disposition in that regard:
a. the Applicant may deliver written cost submissions limited to five pages in length, (not including any attached bill of costs and/or settlement offers), on or before July 24, 2023;
b. the Respondent thereafter may deliver independent or responding written cost submissions similarly limited to five pages in length, (not including any attached bill of costs and/or settlement offers), on or before August 7, 2023; and
c. the plaintiff thereafter may deliver reply written cost submissions, (if any), limited to two pages in length, on or before August 14, 2023.
[77] If no written cost submissions are received by August 7, 2023, no costs of the motion issues addressed by me shall be awarded.
Justice I.F. Leach
Date: July 10, 2023
[^1]: See John Sopinka et al., The Law of Evidence in Canada, 2d ed. (Toronto and Vancouver: Butterworths, 1999), at paragraphs 14.201, 14.203 to 14.206, and the authorities cited therein. [^2]: Ibid., at paragraphs 14.207 to 14.215. [^3]: In her supplementary notice of motion dated December 15, 2015, the Applicant also indicated her intended reliance on each party’s respective Financial Statement and/or updated Financial Statement; e.g., that sworn by the Applicant on November 22, 2022, that sworn by the Respondent on November 24, 2022, and the Updated Financial Statement sworn by the Applicant on January 31, 2023. However, the parties’ service and filing obligations in that regard are governed independently by the provisions of Rule 13 of the Family Law Rules. There accordingly was no need for Justice Heeney to address those obligations in the timetable he set for the delivery of motion material. Nor, in my view, is there anything preventing a party, in the context of arguing a contested motion, from relying upon such evidence already properly before the court pursuant to those independent service and filing obligations. [^4]: For example, following the Respondent’s late delivery of further affidavits, the Applicant and her counsel were able to prepare, serve and file a further brief affidavit from Mr Martindale, in an attempt to address the sworn evidence of Mr Abdulla. However, one is left to wonder whether that response would have been more fulsome and detailed, and whether the Applicant could and would have addressed the further affidavit sworn by the Respondent, had the Respondent and his counsel complied with the timetable set forth in the Order made by Justice Heeney. [^5]: In the course of oral submissions made during the special appointment hearing before me, counsel for the Respondent expressed concern in passing that the factum of the Applicant was not delivered until two days before the hearing, (i.e., on February 6, 2023), such that some of the argument set forth therein accordingly took him somewhat by surprise. In that regard: a. I note that any concern in that regard was raised from a figurative glass house, in that the factum of the Respondent also was not delivered until two days before the hearing. b. The reality is that each party should have filed his or her factum a minimum of four days before the special appointment hearing, in compliance with paragraphs 12 and 23 of the Consolidated Practice Direction for the Southwest Region. (The timetable set by Justice Heeney did not include express filing deadlines for delivery of facta because the aforesaid provisions of the region’s Consolidated Practice Direction effectively makes that unnecessary.) c. In this case, consideration of the factum filed by each party therefore did nothing to place the parties on an unequal footing, insofar as both parties were equally delinquent in that regard. Disregarding the facta made no practical sense in any event, as counsel effectively advanced the same submissions in the course of their oral submissions, and both could and would have done so even if their facta had been rejected. Moreover, parties obviously cannot be prevented from relying on applicable law. [^6]: As a specific example, counsel for the Applicant noted the request for disclosure of information relating to the post-separation purchase of an expensive Tesla automobile now being used by the Respondent as his principal vehicle; i.e., a purchase which the Canada Revenue Agency might regard as a permissible expense deductible in the calculation of income, but which may very well be taken into account for determination of the Respondent’s ability to pay child and spousal support. [^7]: In that regard, the Respondent emphasized that his personal expenses are always put on his personal credit card and not expensed through any company. Moreover, since December of 2022, (prior to which he used one credit card to cover both personal expenses and occasional work-related expenses that were later reimbursed), he is said to have “split” his use of credit cards “for better reporting”. [^8]: In that regard, the Respondent noted that his bank had felt it sufficient to rely on the same net worth statement format; i.e., with the Respondent thereby suggesting that the Applicant and her experts should be content with the same information. [^9]: For example, it was said that use of SEDAR would enable access to the financial statements and other documents of D2L extending back to three years before the public offering. [^10]: See, in particular, Rules 13(1) to 13(3) of the Family Law Rules. I note, in particular, that the same obligation of complete and accurate financial disclosure applies to proceedings in which there are claims for support, regardless of whether or not a property claim also is being advanced. [^11]: See, for example, Rules 13(12), 13(12.1), 13(12.2), 13(15) and 13(16) of the Family Law Rules. [^12]: See Rules 19(1) and 19(2) of the Family Law Rules. [^13]: See Rule 19(6) of the Family Law Rules. [^14]: See Rule 19(8) of the Family Law Rules. [^15]: See Rule 13(11) of the Family Law Rules. [^16]: See Rule 19(10) of the Family Law Rules. [^17]: Again, see Rules 1(8) and 1(8.1) of the Family Law Rules, as well as Rule 2(3) thereof, which indicates that “dealing with a case justly” includes, inter alia, ensuring that the procedure is fair to all parties, saving time and expense, and dealing with a case in ways that are appropriate to its importance and complexity. [^18]: See Roberts v. Roberts, 2015 ONCA 450, at paragraph 11. [^19]: See Sickinger v. Sickinger, 2018 ONCA 526, at paragraph 36. [^20]: See Shinder v. Shinder, 2017 ONSC 4177, [2017] O.J. No. 3703 (S.C.J.), at paragraph 31, reversed in part on other grounds, 2018 ONCA 717. [^21]: See Boutin v. Boutin, 2022 ONSC 4776, at paragraph 3. [^22]: See Roberts v. Roberts, supra, at paragraph 12; Sickinger v. Sickinger, supra, at paragraph 36; and Boutin v. Boutin, supra, at paragraphs 5-6. [^23]: See Cunha v. Cunha (1994), 1994 3195 (BC SC), 99 B.C.L.R. (2d) 93 (S.C.), at paragraph 9; Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, at paragraph 34; Michel v. Graydon (2020), 45 R.F.L. (8th) 1 (S.C.C.), at paragraph 33; and Boutin v. Boutin, supra, at paragraphs 7-9. [^24]: See Roberts v. Roberts, supra, at paragraph 13; and Sparr v. Downing, 2020 ONCA 793, at paragraph 4. [^25]: See Itrade Finance Inc. v. Webworx Inc., [2005] O.J. No. 3492 (S.C.J.), at paragraph 20; and Boutin v. Boutin, supra, at paragraph 10. [^26]: See S.(D.B.) v. G.(S.R.), 2006 SCC 37, [2006] 2 S.C.R. 231, at paragraph 4; and Spettigue v. Varcoe, 2011 ONSC 6004, [2011] O.J. No. 4914 (S.C.J.), at paragraph 19. [^27]: The volume of all such disclosure was said to encompass many thousands of pages of material. [^28]: Although no curriculum vitae for Mr Martindale was included in the motion material filed by the Applicant, I believe I am entitled to take a degree of judicial notice that the letters set forth after Mr Martindale’s name in his sworn affidavit indicate that he has a Bachelor of Applied Science (“BASc”) degree, is a Certified Public Accountant (“CPA”), a Chartered Accountant (“CA”), a Licenced Public Accountant (“LPA”), and a Chartered Business Valuator (“CBV”), and is Certified in Financial Forensics (“CFF”). The Respondent also did not challenge Mr Martindale’s expertise in relation to such matters. [^29]: See Peerenboom v. Peerenboom, supra, at paragraph 31. More generally, the Supreme Court of Canada repeatedly has emphasized that the financial ability or “means” of a family law litigant to pay support includes all of his or her pecuniary resources, capital assets, income from employment or earning capacity, and any other source from which gains or benefits are received. A party’s ability to pay support also may include money that he or she does not have in possession, but that is available to him or her. See Strang v. Strang, 1992 55 (SCC), [1992] 2 S.C.R. 112, at p.119; and Leskun v. Leskun, supra, at paragraph 29. [^30]: Again, see Leskun v. Leskun, supra, at paragraph 34. [^31]: See, for example, Di Luca v. Di Luca (2004), 2004 5044 (ON SC), 1 R.F.L. (6th) 162 (Ont.S.C.J.), at paragraphs 12-15; and Peerenboom v. Peerenboom (2018), 16 R.F.L. (8th) 451 (Ont.S.C.J.), at paragraph 30. [^32]: In the course of oral submissions, counsel for the Respondent indicated his view that such a term would suffice; e.g., as opposed to requiring more extensive provisions similar to those found in more detailed non-disclosure agreements. [^33]: DivorceMate calculations to that effect were submitted by Applicant counsel during the course of the hearing before me. [^34]: In that regard, it was not disputed that the Applicant’s reported annual income over the course of the parties’ marriage has been negligible; e.g., less than $1,000.00 per year. For example, her reported Line 15000 income in 2021 was a mere $593.88. [^35]: DivorceMate calculations to that effect were submitted by Respondent counsel during the course of the hearing before me. [^36]: Ibid. [^37]: See the Divorce Act, supra, ss.15.1(1), (2), (3) and (4). A similarly broad jurisdiction allowing courts to order a person to provide support for his or her dependents may be found in section 33 of the Family Law Act, R.S.O. 1990, c.F.3, which provides for enforcement of the child support obligation set forth in section 31 of that legislation. [^38]: See Francis v. Baker, 1999 659 (SCC), [1999] 3 S.C.R. 250, at paragraphs 32-40. As emphasized at paragraph 40 of that decision, courts accordingly have the discretion to both increase and reduce the amount of child support prescribed by strict application of the Guidelines in cases where the paying parent has an annual income exceeding $150,000. In relation to the latter, it was noted at paragraph 41 that, while standard of living may be a consideration in assessing need, at a certain point, support payments will meet even a wealthy child’s reasonable needs, that need is but one of the factors courts must consider in assessing whether Table amounts are appropriate, and that courts must have the discretion to remedy situations where Table amounts are so in excess of the children’s reasonable needs so as no longer to qualify as child support. [^39]: See Sections 16-20 of the Federal Child Support Guidelines, supra; Bak v. Dobell, 2007 ONCA 304, [2007] O.J. No. 1489 (C.A.), at paragraph 30; and Plese v. Herjavec, 2015 ONSC 7572, at paragraph 54. (I note that, while older authorities refer to “Line 150” of the T1 General Form, changes made to the relevant form now identify the relevant line as “Line 15000”.) Of the numerous permissible deviations and adjustments addressed by sections 17-20 of the Guidelines, I note in particular, for present purposes, the following: a. Section 17 of the Guidelines includes provisions permitting a court, if it is “of the opinion that the determination of a spouse’s annual income under section 16 would not be the fairest determination of income”, to have regard to the payor spouse’s income over the previous three years and determine an amount that is “fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years”. In that regard, our Court of Appeal has emphasized, in Punzo v. Punzo, 2016 ONCA 957, [2016] O.J. No. 6533 (C.A.), at paragraph 24, that section 17 does not require an average of three years’ income. It instead permits a departure from Line 15000 income based, in part, on “any pattern of income, fluctuation of income or receipt of a non-recurring amount” evident in the preceding three years, and an average is one pattern of income but not the only one. b. Section 18 of the Guidelines includes provisions permitting the court, in situations where a spouse is a shareholder, director or officer of a corporation, and the court is of the opinion that the amount of the spouse’s annual income as determined under section 16 does not fairly reflect all the money available to the spouse for the payment of child support, to consider the situations described in section 17 and determine that a spouse’s annual income should include: i. all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or ii. an amount commensurate with the services that the spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income. [^40]: See the Divorce Act, supra, s.15.2. A similarly broad jurisdiction allowing courts to order a person to pay support to his or her spouse may be found in section 33 of the Family Law Act, supra, which also provides for enforcement of the spousal support obligation set forth in section 30 of that legislation. [^41]: For the time being, the standard of living enjoyed by the parties prior to their separation remains in dispute; e.g., with the Applicant asserting that the family enjoyed a lavish lifestyle, while the Respondent denies this and contends the family’s pre-separation expenditures were nowhere near the level suggested by the Applicant – particularly after the family relocated their primary residence to Bayfield. In my view, it is not possible to make any reliable or precise determinations about such matters in the present context, particularly when evidence of pre-separation expenditure is incomplete and/or has been ruled inadmissible. However, many of the Applicant’s assertions in that regard did not seem to be contested, (e.g., in relation to the parties enjoying an engagement during a lavish trip to Paris, a similarly lavish wedding in Hawaii, and an extensively renovated, furnished and landscaped five bedroom “cottage” on a lakefront property in Bayfield which became the family home, and the Respondent admittedly spending more than $225,000 on jewels for the Applicant), and together with the Respondent’s admitted business success and extensive assets, suggest the strong likelihood of family expenditure and lifestyle well beyond those enjoyed by most Canadian families. [^42]: I note that such negligible annual income is entirely consistent with the Applicant’s reported “Line 15000” incomes in the three previous years; i.e., $479 in 2018, $524 in 2019, and $566 in 2020. [^43]: In his affidavit sworn on February 2, 2023, the Respondent attempted to undermine the Applicant’s asserted financial needs; e.g., through presentation of credit card statements to suggest that family expenditure prior to separation, and the Applicant’s expenditure following separation, were demonstrably lower than the Applicant’s professed needs in that regard. Again, I have found that evidence to be inadmissible, for the reasons set forth above. However, beyond that fundamental impediment to considering such evidence in the present context, it seems to me that such credit card statements are not a reliable indicator of current and future expenditure and/or need in circumstances where the evidence suggests access to other sources of funding prior to separation and following separation, including access to at least one joint bank account and at least one line of credit facility. Moreover, expenditure in relation to the parties’ children was and is bound to become progressively more expensive as they grew and grow older; e.g., consuming more food, requiring more expensive clothing, and engaging in more social activity, hobbies and other pursuits. [^44]: Again, our Court of Appeal has emphasized, in Bak v. Dobell, supra, that Parliament sought to maximize predictability and consistency by providing a definition of income that was clear and unambiguous, and which significantly narrowed the scope of judicial discretion in that regard. In my view, consistency with that approach requires courts to stay within the strict parameters of the expressly identified permissible exceptions to strict application of section 16 of the Guidelines; a section which is to be applied subject only to sections 17 to 20 of the Guidelines. [^45]: In applying section 17 of the Guidelines, I accordingly do not intend to consider the Respondent’s indication of having received $381,000 in 2022; a year in respect of which no reported Line 15000 income for the Respondent was available at the time of the hearing before me. Beyond the wording of section 17, (effectively requiring use of a payor’s three most recent reported Line 15000 incomes as the appropriate starting point for determining an appropriate deviation from the strict operation of section 16), I am not inclined to rely upon the Respondent’s sworn indication in that regard prior to his making proper financial disclosure. [^46]: See footnote 39 of these reasons. [^47]: The Applicant’s formal request for such relief was set forth in paragraph 11 of her original notice of motion dated June 10, 2022, and effectively was repeated, (albeit with a supplementary request), in paragraph 2 of her supplementary notice of motion dated December 15, 2022. [^48]: The Applicant’s request for expanded relief in that regard, (i.e., the Respondent’s payment of interim disbursements related to lawyer fees incurred by the Applicant), was set forth in paragraph 2 of her supplementary notice motion dated December 15, 2022. [^49]: See sub-paragraph I.B. and paragraph 42 of the Applicant’s factum. [^50]: In providing that correspondence and “fee quote” Mr Martindale expressly and necessarily makes a number of assumptions, (reflecting the reality that requested disclosure of needed information and documentation has not yet been provided by the Respondent), assigns fee estimates to anticipated stages of review, analysis, trial preparation and trial participation to be carried out by Davis Martindale on the Applicant’s behalf, and concludes by indicating total estimated fees (including applicable HST) ranging from a “Low” of $248,600 to a “High” of $333,350. [^51]: Evidence quantifying and/or estimating the legal fees incurred and to be incurred by the Applicant seems limited to paragraph 9 of that affidavit sworn by Ms Golden, which reads in its entirety as follows: “To date, the Applicant has incurred legal fees in the amount of approximately $150,000 related to this litigation”. [^52]: See Rule 2(3)(a) of the Family Law Rules; Stuart v. Stuart, 2001 28261 (ON SC), [2001] O.J. No. 5172 (S.C.J.), at paragraphs 8-9; Ludmer v. Ludmer, 2012 ONSC 4478, [2012] O.J. No. 3681 (S.C.J.), at paragraphs 14-16; Rea v. Rea, 2016 ONSC 382, at paragraph 14; and Romanelli v. Romanelli, 2017 ONSC 1312, at paragraphs 15-16, 19 and 41. [^53]: See Stuart v. Stuart, supra, at paragraph 9; Ludmer v. Ludmer, supra, at paragraph 15; Rea v. Rea, supra, at paragraph 14; and Romanelli v. Romanelli, supra, at paragraph 15. [^54]: See Stuart v. Stuart, supra, at paragraph 14; Ma v. Chao, 2016 ONSC 585 (Div.Ct.), at paragraph 10; Rea v. Rea, supra, at paragraph 14; and Romanelli v. Romanelli, supra, at paragraphs 19 and 42. As emphasized in Stuart v. Stuart, supra, at paragraph 14, leveling of the playing field “should not be limited to those with an expected equalization payment”. As emphasized in Romanelli v. Romanelli, supra, at paragraph 41, a party whose only meritorious claim is spousal support still cannot pursue settlement or consider settlement offers without knowing where he or she stands; something which may very well require valuations of the property and income of the opposing spouse, and an order for payment of interim disbursements and fees pursuant to Rule 24(18). That was found to be the case in Romanelli v. Romanelli, supra, where the business affairs of the spouse facing a claim for spousal support were complex and involved numerous corporations. Ibid., at paragraphs 37-41. [^55]: See Romanelli v. Romanelli, supra, at paragraphs 18-20. [^56]: See Stuart v. Stuart, supra, at paragraph 11; Ludmer v. Ludmer, supra, at paragraph 16; and Rea v. Rea, supra, at paragraph 14. In that regard, it has been emphasized that such necessity may be based not only on the complexity of legal issues to be litigated in a case, but also on indications the litigation will be hard fought; e.g., in cases where there are few if any admissions and extensive denials, such that proof of a claim will require the retention of counsel engaged in time-consuming effort, and a claimant is likely to be completely lost without the ongoing assistance of counsel. See Romanelli v. Romanelli, supra, at paragraphs 34, 36 and 42. [^57]: See Stuart v. Stuart, supra, at paragraph 11; and Ludmer v. Ludmer, supra, at paragraph 58. Having said that, courts also recognize that provision of precise information and cost estimates in that regard may not be possible in situations where the litigation is at an early stage and a disbursement in question relates to the expert analysis of documentation and information that has yet to be provided and/or which is the subject of a disclosure dispute. See Rea v. Rea, supra, at paragraph 18-19; and Romanelli v. Romanelli, supra, at paragraph 49 and 58. The general circumstances may suffice to make it sufficiently clear that the matter is complicated and that an expert’s analysis necessarily will be involved and time-consuming. However, that does not mean that it is reasonable or necessary for the full amount of such an anticipated expense to be advanced “up front”. See Rea v. Rea, supra, at paragraph 19. [^58]: See Rosenberg v. Rosenberg, [2003] O.J. No. 2193 (S.C.J.), at paragraph 19; Ludmer v. Ludmer, supra, at paragraphs 59-62; Rea v. Rea, supra, at paragraphs 15 and 26; and Romanelli v. Romanelli, supra, at paragraphs 48-51. Requiring the provision of such information, to justify such awards, is a reflection of the court’s ongoing concern about controlling the process, particularly in current times where costs of litigation, including lawyers and experts have become prohibitive. See Rosenberg v. Rosenberg, supra, at paragraph 19; and Rea v. Rea, supra, at paragraph 15. Having said that, the court also recognizes that exact estimates of future legal costs inherently are speculative, difficult or impossible at the early stage of litigation, and that a party seeking a Rule 24(18) order in relation to future legal fees effectively may be limited to providing a general “plan of attack” and an outline of the future steps contemplated to bring a matter to trial; i.e., a summary of anticipated legal steps and the estimated expense of those steps, without providing a formal bill of costs. See Harbarets v. Kisil, [2014] O.J. No. 4239 (S.C.J.), at paragraph 5; Rea v. Rea, supra, at paragraphs 27 and 33; and Romanelli v. Romanelli, supra, at paragraphs 46, and 49-51. [^59]: See Hall v. Sabri, [2011] O.J. No. 4178 (S.C.J.), at paragraphs 73 and 78-79; Ludmer v. Ludmer, supra, at paragraph 62; and Romanelli v. Romanelli, supra, at paragraphs 44, 61, 63 and 65. [^60]: See Stuart v. Stuart, supra, at paragraph 12; Ludmer v. Ludmer, supra, at paragraph 16; and Rea v. Rea, supra, at paragraph 14. In that regard, it nevertheless also has been noted that a spouse with significant assets but little income, (especially in comparison with the other spouse), should not be required to deplete his or her resources, however substantial, in order to advance a claim. See Hughes v. Hughes (2009), 2009 ABQB 154, 68 R.F.L. (6th) 119 (Alta.Q.B.), at paragraph 25. [^61]: See Ludmer v. Ludmer, supra, at paragraphs 34 and 51-56; and Rea v. Rea, supra, at paragraph 31. In that regard, while a responding party similarly should not be required to erode capital in order to satisfy an award of interim disbursements, in the absence of exceptional circumstances, doing so may be considered reasonable and necessary in situations where there is a wide disparity between the parties’ respective financial positions and/or where the party has a demonstrated history of eroding capital or using it to finance past expenditure. See Rea v. Rea, supra, at paragraph 31. [^62]: See Stuart v. Stuart, supra, at paragraph 13; and Ludmer v. Ludmer, supra, at paragraph 16. [^63]: See Rea v. Rea, supra, at paragraph 24; and Romanelli v. Romanelli, supra, at paragraph 26. [^64]: See Rea v. Rea, supra, at paragraph 24; and Romanelli v. Romanelli, supra, at paragraphs 24-25. [^65]: See Stuart v. Stuart, supra, at paragraph 10; Ludmer v. Ludmer, supra, at paragraph 16; and Rea v. Rea, supra, at paragraph 14. [^66]: See Gold v. Gold, [2009] O.J. No. 4000 (S.C.J.), at paragraphs 43-45; and Romanelli v. Romanelli, supra, at paragraphs 59-60. [^67]: Again, see Rea v. Rea, supra, at paragraph 31. [^68]: Having regard to Ms Golden’s evidence that the legal fees already incurred by the Applicant are well in excess of $75,000, and considering what I regard as the near certainty of further legal fees being charged to the Applicant as this litigation moves forward, as well as concerns relating to solicitor-client privilege, I see no immediate need to impose a further accounting requirement in relation to that $75,000. Moreover, the prospect of any portion of that sum remaining for the benefit of the Respondent, after use of that sum to address legal fees incurred by the Applicant, seems non-existent; i.e., such that the imposition of terms and conditions in that regard seems unnecessary.