Court File and Parties
COURT FILE NO.: FC-21-00056844-0000 DATE: 2023/10/03 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: TAMMY LYN SUNDBERG, Applicant AND: KEVIN EDDY SUNDBERG, Respondent
BEFORE: The Honourable Justice L. Madsen
COUNSEL: Ryan C. Baker, Counsel for the Applicant Respondent is Self-Represented
HEARD: September 27, 2023
Endorsement
[1] The applicant brings a motion seeking an Order that the respondent not be permitted to take further steps in court until he provides a copy of his 2022 Income Tax Return; as well as an Order that a qualified business valuator be retained to quantify Mr. Sundberg’s income for support purposes.
[2] The following materials were before the court:
- Applicant’s Notice of Motion dated July 27, 2023
- Applicant’s Affidavit sworn July 27, 2023
- Respondent’s Affidavit sworn August 8, 2023
- Applicant’s reply Affidavit sworn August 11, 2023
- Confirmations from both parties
[3] The production of the respondent’s 2022 Income Tax Return was resolved on consent and is included in the Order below.
[4] I find that the relief sought with respect to the joint retainer of a CBV to assess the Respondent’s income is appropriate, for reasons including the following:
a. Clarity regarding the respondent’s income for support purposes is required for a fair and accurate determination of his support obligations;
b. The respondent’s income is comprised of employment income; income from rental of real estate holdings; and corporate income from a solely held corporation formed in 2021;
c. For support purposes, determination of the rental income and corporate income requires an understanding of the expenses claimed by the respondent against those income sources, and which of those may have a personal component that should be added into income;
d. On the evidence, the respondent’s responses to requests for financial information and documentation about claimed business expenses has been inadequate to arrive at an informed estimate of his income. For example, although the respondent claimed expenses against rental income in 2021 of approximately $16,000, receipts were provided for only half that amount, with no reconciliation establishing which expenses might have a personal component. Some of the receipts, on their face, appear personal (Golf Automotive, Spirit Halloween, and OurPonderosaResort, for example);
e. While some disclosure has been provided, such as bank statements, credit card statements and some receipts, I accept that these have not provided a clear picture of the respondent’s income;
f. The evidence is that no updated income information has been provided for 2022;
g. In any family law proceeding, the owner of property and the earner of income bears the burden of establishing the value of his or her assets and the quantum of his or her income. In some cases, this obligation extends to the creation and production of a formal written expert report, including an income analysis. Tonogai v. Tonogai, 2021 ONSC 2366 at 22-25, Michi v. Michi, 2008 CarswellOnt 118 at 55, Meeser v. Meeser, 2011 ONSC 6517 at 62.
h. Rule 20.2(10) of the Family Law Rules provides that the Court may, on motion, make an Order engaging a joint litigation expert for two or more parties. Rule 20.2(12) requires that where a joint litigation expert is engaged, parties shall cooperate in providing the information reasonably requested by the expert. See principles set out in Zantingh v. Zantingh 2021 ONSC 7959 at 72 – 76.
i. An income report will provide clarity about the respondent’s income for support purposes, assisting the trial judge in making a fair and just determination regarding support. There is thus a probative connection between the income report requested and the issues to be determined at trial.
j. This matter is on the November 2023 trial sittings. At this point, on what is almost the eve of trial, there is still insufficient clarity as to the respondent’s income for support purposes.
k. While an alternative (if sought by the applicant, which it was not) would have been to order the respondent to retain his own expert to quantify his income for support purposes, that would have required sufficient time not only for his report to be prepared, but for the applicant to have a critique prepared if she chose to do so. Time does not permit that lengthier process. No benefit will obtain by delaying the trial.
l. The approach which best implements the primary objective of the Family Law Rules in this case – namely, ensuring that the procedure is fair; saving expense and time; and dealing with cases in a manner appropriate to their complexity and importance, is the engagement of an expert on a joint basis as permitted by the Rules and as requested by the applicant.
m. Rule 20.2(11) requires that in making an Order under subrule (10), the court shall ensure that certain matters listed in Rule 20.3(2) are either set out or addressed, namely: the name of the expert to be appointed; the instructions to the expect; and the apportionment of the expert’s fees.
n. The Applicant has proposed that the expert be retained through Davis Martindale, on a joint basis. She proposes that the cost be paid from funds currently held in trust in relation to the sale of the parties’ property. She very reasonably proposes that the apportionment of fees be left to agreement or the trial judge. This means that she shares risk, and if it is found that the income report was an unreasonable expense, she may be asked to bear a higher share of the expense than the Respondent, or, potentially, all of it.
o. The Order below addresses the naming of the expert, and how fees shall be shared. The function of the expert shall be to assess the respondent’s income for child support purposes for the years 2021, 2022, and 2023 to date.
p. The expected fee of approximately $5,000 is not unreasonable in all of the circumstances. While I queried whether there is sufficient income to be “found” in the analysis to warrant the expense, I accept that in the absence of full disclosure “we don’t know what we don’t know”. I find that the retainer of a CBV in this case, with the unknowns about income, will provide clarity and is a proportionate and reasonable expense.
[5] Accordingly, I make the following Order:
On consent:
The Respondent shall provide a copy of his 2022 personal and corporate income tax returns as filed by October 6, 2023, to the Applicant’s counsel, as well as a copy of the Notices of Assessment upon receipt from the CRA;
The deadline for the Applicant’s service of the Request to Admit shall be extended as set out in the TSEF to October 9, 2023;
Not on consent
The parties shall forthwith jointly retain an agreed-upon qualified Chartered Business Valuator to provide a calculation of income with respect to the Respondent’s income for support purposes for the years 2021, 2022 and 2023 (YTD). The up-front cost of the calculation shall be paid from the proceeds of sale currently held in trust from the sale of the parties’ home. The final apportionment of the calculation costs shall be determined by the trial judge or by written agreement between the parties.
In the event that the parties do not agree on the identity of the CBV valuator by October 6, 2023, the issue may be remitted to me for determination of who the expert shall be, in Chambers. In that event, each party may, by October 13, 2023, file a two-page affidavit with a copy of the proposed expert’s CV and an estimate of fees for the service. I will then make that determination.
Both parties shall cooperate with the valuation process. The Respondent shall provide such documents for review as may be reasonably requested by the valuator.
The cost of the valuation shall not exceed $5,000 plus HST and disbursements, without the prior agreement of the parties or a further Court Order.
Costs
[6] The parties are encouraged to agree on the costs of this motion, in which the Applicant appears to be the successful party, subject to any Offers to Settle that may have been exchanged. If they are unable to agree, and appointment may be made before me at 9:30 through the Trial Coordination Office at which time I will hear submissions and rule on the issue. If I am required to determine the identity of the valuator, such appointment shall not be made until after my determination of that issue.
L. Madsen, J. Released: October 3, 2023