COURT FILE NO.: FS-23-38320 DATE: 20240506

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Fern Barris, Applicant AND: Sheldon Cary Barris, Respondent

BEFORE: Madam Justice A.P. Ramsay

COUNSEL: Kristen Normandin, for the Applicant Gary Joseph, for the Respondent

HEARD: April 30, 2024

ENDORSEMENT

I. Introduction

[1] The parties divorced almost 30 years ago. They were married for nine years, from 1986 to 1995. The parties executed two domestic contracts almost 21 years apart: the first, a separation agreement executed 29 years ago in which the applicant wife released any claim for spousal support (the “Separation Agreement”), and the second, a without prejudice agreement, executed approximately 7 years ago, whereby the respondent husband agreed to pay spousal support without prejudice (the “Interim Spousal Support Agreement”). The parties were represented by counsel at the time each of the agreements were entered into.

[2] The applicant commenced this Application for spousal support. She is not seeking to set aside the Separation Agreement and, in fact, her Application makes no mention of it. The applicant contends that she brought an urgent motion for disclosure pursuant to the automatic order under r. 8.0.1 the Family Law Rules, O. Reg. 114/99 (the “Rules”), in order that she could quantify her entitlement for spousal support.

[3] The within motion is brought by the respondent.

II. Nature of the Motion

[4] The only Notice of Motion before the court is that of the respondent. The respondent seeks, among other things:

i. If necessary, an order abridging the time for service and filing of the Notice of Motion and related motion materials.

ii. An order setting aside or staying the automatic order made July 4, 2023 (the “Automatic Order”) pending a determination of the respondent’s summary judgment motion.

iii. In the alternative, an order varying the Automatic Order to limit present disclosure to the Respondent’s Notice of Assessment for the years 2021, 2022 and 2023, pending determination of the summary judgment motion.

III. The Pleadings and Proceedings

[5] The Application for spousal support was commenced in July 2023 in the Ontario Court of Justice and was subsequently transferred to the Superior Court of Justice. In her Application, the applicant requested disclosure under r. 13 of the Rules. One of the facts relied upon in her Application was as follows: “An Interim Spousal Support Agreement was entered into on September 21, 2016, without Shelden Barris providing his financial disclosure at that time.”

[6] Only the Application issued by the applicant is before the court. During oral submissions counsel indicated that no Answer was delivered by the respondent. However, this contradicts the sworn evidence of both parties.

[7] In her sworn affidavit before the court, the applicant says that when the respondent filed his Financial Statement with his Answer, he left the expenses section blank and did not include values of his assets or his debts. She says that he only provided his Notices of Assessment for the last three years, but no income tax returns, tax slips or any of the disclosure related to his self-employment.

[8] In turn, the respondent deposes that when he provided an Answer, he also provided a Financial Statement.

[9] Both counsel agreed that the respondent’s Notice of Motion in relation to the summary judgment motion has been delivered, seeking a dismissal of the Application. While no basis for the motion is set out, based on the materials filed and the submissions of counsel, it is abundantly clear that the applicant is aware that the respondent is relying on the Separation Agreement and the fact that this application is a prelitigation of the same issue.

IV. Background

[10] The parties have two adult children of the marriage. The applicant says it was a traditional marriage. She says she primarily took care of the children and the household.

[11] The parties executed the Separation Agreement on November 25, 1995. The respondent says that the Separation Agreement was signed after lengthy negotiations, expert reports, a forensic audit of his business undertaken by the applicant, and with the assistance of experienced family law counsel. Each received independent legal advice. While this is not the motion for summary judgment and I make no findings of fact, on the motion before me, the applicant does not challenge or contradict the respondent’s version of events. The Separation Agreement included a provision that that there would be no spousal support payable by the parties.

[12] The relevant paragraphs read:

7. SUPPORT 7.8. The Husband and Wife hereby unconditionally release one another from any claim whatsoever for spousal support.

8. EX GRATIA PAYMENTS The Husband or his personal representative may make any payment or payments to the Wife or children not provided for herein on an ex-gratia basis. No such payments shall be so construed as to oblige the Husband or his personal representative to continue them, nor shall they be pleaded, tendered, or given in evidence or raised by way of estoppel by the Wife in any legal proceeding between the parties.

[13] The Application does not deal with the Separation Agreement.

[14] In 2001, the applicant commenced an application seeking to set aside the release of spousal support in the Separation Agreement. The respondent says the litigation lasted five years, further extensive financial disclosure was disclosed, and the litigation was unsuccessful, an assertion not disputed by the applicant. The respondent contends that the applicant is relitigating the exact issues already litigated in the 2001 litigation. In turn, the applicant baldly denies that she is “relitigating” an issue but does not address the substance of the respondent’s assertion.

[15] The parties entered into a second domestic contract about ten years after the applicant’s first litigation ended.

[16] On September 21, 2016, the parties entered into the Interim Spousal Support Agreement. The document indicated that support was being paid without prejudice and that there would no financial disclosure prior to the execution of that agreement. The parties were represented by counsel.

[17] The Interim Spousal Support Agreement includes the following backgrounder information:

There have been multiple court proceedings and multiple agreements between the parties. The parties have agreed to enter this Agreement without prejudice to their rights and subject to the terms and provisions outlined at paragraph 4. Both parties acknowledge that they have entered into this Agreement without Financial Disclosure although requested by Ms. Barris, as Mr. Barris denies any liability to Ms. Barris with respect to spousal support or otherwise.

[18] Paragraph 4(b) of that agreement states:

This Agreement is without prejudice to Fern’s right to claim entitlement to continuing spousal support and/or that the amount of spousal support should be higher and adjusted retroactively and without prejudice to Sheldon’s right to claim that his obligation to pay spousal support is at an end and/or the amount should be lower and adjusted retroactively.

[19] Under the Interim Spousal Support Agreement, the respondent agreed to pay $7,200 a month to the applicant “without prejudice and with no admission of liability to Sheldon” on the terms set out in the Agreement.

[20] The Interim Spousal Support Agreement included a termination provision. Paragraph 5(a) states: “Either party may terminate the agreement on six (6) months written notice to the other” (emphasis in original). The respondent provided written notice of termination pursuant to paragraph 5(a).

[21] At a case conference on February 21, 2024, Shore J. granted leave to the respondent to bring a motion for summary judgment. The motion is returnable on May 23, 2024, less than three weeks away. The respondent was also granted leave to bring a motion for a restraining or non-contact order.

[22] The applicant then requested an urgent motion date before Diamond J. at a To Be Spoken to Court on March 25, 2024, and the within motion was scheduled. Justice Diamond did not vary the timetable for the summary judgment motion but scheduled this motion to be heard.

[23] The respondent says he paid child support from 1995 to 2015 and s. 7 expenses. He paid spousal support following the Interim Spousal Support Agreement. The parties dispute the duration of time that the respondent paid spousal support. The applicant contends that he has only paid spousal support for six and a half years. She says: “Sheldon unilaterally terminated his spousal support payments to me in June 2023, notwithstanding the fact that he promised to pay me support indefinitely, and his stated income is over $2,000,000.”

[24] On the other hand, the respondent says that he has been paying spousal support in some form, and I take from the record before me that both parties are actually in agreement on the start date for spousal support being after the Interim Spousal Support Agreement in September 2016, though they disagree on the quantum. In my view, that issue, and other issues, are left to be determined on the respondent’s summary judgment motion and, if bifurcated, entitlement to and quantum of support for the applicant, are best left to the judge hearing those matters.

V. Position of the Parties

A. The Respondent

[25] The respondent asks that the automatic order under r. 8.0.1 of the Rules be set aside or stayed because of the unique circumstances of this case. The respondent relies on the Separation Agreement and the subsequent Interim Spousal Support Agreement, among other things, as well as a pending motion for summary judgment to determine the enforceability of the Separation Agreement. The respondent argues that the parties entered into the Separation Agreement executed with the benefit of counsel, and the Agreement contained a waiver of spousal support.

[26] The respondent says that the threshold question of the enforceability of the Separation Agreement ought to be determined before he is required to make financial disclosure. He says that he has already provided a Financial Statement and notices of assessments for the past three years as required by the Automatic Order. The respondent relies on the primary objective under r. 2(2) of the Family Law Rules.

[27] The respondent says the applicant voluntarily, and with the assistance of independent counsel, waived her claims to spousal support, and only after extensive financial disclosure and a forensic audit. The respondent argues that the applicant subsequently commenced an application to set aside the Separation Agreement, which was ultimately unsuccessful. He says he made gratuitous payments, on a without-prejudice basis. The respondent says that he subsequently executed the Interim Spousal Support Agreement with the applicant, paid her spousal support under that Agreement, and subsequently paid her spousal support gratuitously after that Agreement ended.

B. The Applicant

[28] The applicant opposes the motion. She says that financial disclosure is necessary for her to be able to defend against the respondent’s pending motion for summary judgment. She deposes: “I have a claim for compensatory and needs based spousal support, and I require [the respondent’s] disclosure in order for me to put my best foot forward when presenting my case.” She further deposes that she cannot “lead trump or risk losing” in defending against the respondent’s motion for summary judgment. She says that the respondent has refused to provide the most basic financial disclosure required by the Automatic Order. The applicant submits that she requires compliance with the Automatic Order to quantify her entitlements.

[29] The applicant says that there was a lack of financial disclosure at the time they signed the Interim Spousal Support Agreement and deposes that she was taken advantage of due to an inequality of bargaining power and serious vulnerabilities. She further deposes that the support provisions in the Separation Agreement are unconscionable and do not meet the objectives of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.). She claimed she only received spousal support for six and a half years and is entitled to ongoing support.

VI. Analysis

[30] On this motion, the applicant primarily relied on the Automatic Order and on r. 8.0.1 of the Rules. During oral submissions, counsel for the applicant indicated that it would be unprecedented for the court to grant the order sought by the respondent. Both counsel indicated that there were no cases on point. The respondent, in turn, relied primarily on r. 2(2) of the Rules, which sets out the primary objective of the Rules.

[31] In my view, there is ample authority that address situations where a threshold decision ought to be made which is binding on the court. An automatic order is governed by r. 8.0.1 of the Rules and applies to a claim for support under the Divorce Act. The addition of the automatic order to the Rules came into force in December 2021, and not surprisingly, neither party can point to a case on point. As noted by the applicant, the Automatic Order requires the respondent to provide financial disclosure pursuant to r. 13 of the Rules.

[32] When the Application was served, the respondent would have been provided with an Automatic Disclosure order which sets out the financial disclosure required. The Automatic Order codifies the parties’ disclosure obligations at the commencement of the proceedings and applies to the person bringing a claim for the relief set out in r. 8.0.1. Such claims may be included in an issued application, an answer, motion to change a final order, or agreement under r. 15, or delivered as a response to a motion to change that contains a claim. In Manchanda v. Thethi, 2016 ONSC 3776, 131 O.R. (3d) 393, Myers J. provide a detailed and concise history of the rationale for the automatic disclosure order in family law proceedings. He noted, at para. 20:

Without enforcement of the primary objective, a party can frustrate the civil justice system's goals of efficiency, affordability, proportionality, and fairness, by making the process slow, expensive, and distressful. Without enforcement, 17 years into the piece, all of the important words recited above, written by so many experienced family law judges, amount to little more than spilled ink.

[33] Rule 8.0.1 applies to claims made on or after February 1, 2022, respecting:

(a) decision-making responsibility or parenting time; (b) net family property; (c) the matrimonial home; or (d) support.

[34] The applicant’s claim for spousal support is under the Divorce Act, and therefore r. 8.0.1 of the Rules presumptively applies. Form 8.01 mirrors the financial disclosure obligation in r. 13.

[35] In my view, having regard to the objective of the Rules and the nature of the information disclosed, and in the context of pending summary judgment motion to determine the validity and enforceability of the Separation Agreement and release clause, I would not order disclosure in accordance with r. 8.0.1 at this time. Let me explain.

[36] In Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, at para. 34, and Michel v. Graydon, 2020 SCC 24, the Supreme Court referred to comments made by the trial judge in Cunha v. Cunha (1994), 99 B.C.L.R. (2d) 93 (S.C.), at para. 9, wherein the judge referred to the failure to disclose in family law proceedings being a cancer:

Non-disclosure of assets is the cancer of matrimonial property litigation. It discourages settlement or promotes settlements which are inadequate. It increases the time and expense of litigation. The prolonged stress of unnecessary battle may lead weary and drained women simply to give up and walk away with only a share of the assets they know about, taking with them the bitter aftertaste of a reasonably-based suspicion that justice was not done.

[37] In the case before me, the respondent argues that there is a threshold issue to be determined by the court which may impact whether the disclosure requested by the applicant ought to be made. The respondent relies on the applicant’s release of spousal support in the Separation Agreement. There is some support for the respondent’s position, as will be explained below.

[38] In contrast, the applicant is insisting on the disclosure mandated by the Automatic Order which contemplates financial disclosure of the last three years, or disclosure which is decades beyond the date of separation. The applicant has provided no authority for her position. The cases relied upon by her in support of her request for disclosure are distinguishable. For example, in Sharif-Razi v. Etermadi, 2023 ONSC 1451, 92 R.F.L. (8th) 495, the issue before Shore J. was non-disclosure by the respondent in the face of court orders. In Cedeno v. Cedeno, 2023 ONSC 6686, Kristjanson J. was dealing with an uncontested trial. And Trotta v. Chung, 2023 ONSC 7080, 96 R.F.L. (8th) 7, is a motion to strike the respondent’s pleadings on the basis of non-disclosure of financial information.

[39] At the heart of the dispute between the parties is whether the Separation Agreement between the parties is binding on the applicant. That is the subject of the summary judgment motion. The outcome of that motion will squarely address the first hurdle, and that is the applicant’s entitlement to spousal support. This, in turn, will dictate the requirement for financial disclosure from the respondent to determine the quantum of spousal support.

[40] In the materials before me today, the applicant has not challenged the 1995 separation Agreement. She does say, however, that there was a lack of financial disclosure before the Interim Spousal Support Agreement was signed. The Agreement was without prejudice and was terminated under its terms in 2022 by the respondent. Both parties had counsel, though this is not determinative, and I make no finding on the merit of the applicant’s argument of inequality of bargaining power or otherwise. However, I note that in Hartshorne v. Hartshorne, 2004 SCC 22, [2004] 1 S.C.R. 550, the Supreme Court noted that the authorities generally agree that courts should respect private arrangements that spouses make for the division of their property on the breakdown of the relationship. It is up to the judge hearing the motion for summary judgment to determine if the Interim Spousal Support Agreement varied or replaced the 1995 Separation Agreement, or if either Agreement is enforceable. Under r. 16(6) of the Rules, the court “shall make a final order” if there is no genuine issue of a claim or defence requiring trial.

[41] I am mindful that the issue of disclosure on the summary judgment motion will be based on disclosure at the time the separation agreement was negotiated: Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303; Rick v. Brandsema, 2009 SCC 10, [2009] 1 S.C.R. 295; Quinn v. Epstein Cole LLP, 2008 ONCA 662, 92 O.R. (3d) 1; Simioni v. Simioni (2009), 74 R.F.L. (6th) 202 (Ont. S.C.); Quinn v. Keiper (2007), 87 O.R. (3d) 184 (S.C.); and Mantella v. Mantella (2006), 80 O.R. (3d) 270 (S.C.), at para. 64.

[42] The discretion of the court to relieve the respondent from this disclosure obligation should not be lightly exercised: Simioni, at para. 40. The respondent bears the onus of showing that he should be relieved from complying with his statutory disclosure obligation. The court must be satisfied that the respondent, who seeks to avoid disclosure, has met the burden of showing that the information “may become relevant” only after a determination is made on the effectiveness or validity of the agreement, and that the defendant would be seriously prejudiced if disclosure was made prior to that determination: Simioni, at para. 40; Walters v. Weinberg (1999), 44 R.F.L. (4th) 332 (Ont. Gen. Div.), at para. 8, per Cullity J.

[43] Therefore, while the authorities appear to be divided on whether there should be disclosure when a threshold issue such as the validity of a domestic contract is at issue, the caselaw is consistent, nonetheless, in establishing that there should be disclosures up to date of separation. Here the applicant does not challenge the respondent’s assertion that there was extensive financial disclosure and a “forensic audit” prior to the parties executing the first domestic contract, which is the one being relied upon by the respondent, that is the Separation Agreement with the spousal release. In fact, the applicant makes no mention of it in her Application (the originating process) which initiated these proceedings.

[44] In Mantella, Corbett J. stated, at para. 64:

There is a line of cases that severs “preliminary” or “threshold issues” of liability before requiring a spouse to make financial disclosure. See Robinson v. Kilby Inline, [1996] O.J. No. 423 (Ont. Div. Ct.); Johnson v. Johnson, [1986] O.J. No. 2506 (Ont. Master); Peters v. Peters (1970), [1971] 2 O.R. 246 (Ont. H.C.); Marton v. Marton, [1988] O.J. No. 1358 (Ont. H.C.). Those cases are apposite here: it is appropriate that, at least for now, Mr. Mantella not be required to file current financial information until the threshold issue of the validity of the separation agreement is determined. However, this “bifurcation” will not greatly limit Mr. Mantella's production obligations: he will be required to produce all documents in his possession, power or control that are relevant to the issues of equalization and support as of the date of the separation agreement. Events that have taken place since that time may well be relevant in assessing the position of the parties as of the date of separation, and this “bifurcation” does not impose a temporal cut-off point for production and discovery. In Simioni, at para. 36, Quigley J. commented that “it is inconceivable to me that the issue of validity could be determined in the absence of full financial disclosure by Denis, at least respecting his Separation Agreement date value.”

[45] In reviewing the competing interests against the factual background, and considering the issues of increased costs, complexity and prolonging the litigation process, Quigley J. commented, in obiter:

This economy and efficiency becomes evident when one considers the issues that fall away if the Separation Agreement is found to be valid. The actual date of separation of the parties will likely become irrelevant for all practical purposes or economic effects, there will likely be little need to determine whether Silvana held a trust interest of some kind in Ojon Corporation before it was sold to Estee Lauder, and any unhappiness experienced by Silvana arising out of the terms of the Agreement itself and the bargain she struck with Denis in the course of concluding the Agreement would likely fall to be determined at mediation. On the other hand, if the Agreement is invalid, all of these issues and the others previously outlined, and further issues that I have not specifically enumerated, will remain to be determined by this Court. [Emphasis added.]

[46] I agree with the respondent that the court must take into account the purpose of r. 2(3) of the Rules, though I disagree, as the examples above demonstrate, that the facts of this case are unique. The only unique factor is the codification of the parties’ disclosure obligations.

[47] Under r. 2(2), the primary objective of the Rules is to enable the court to deal with cases fairly and justly with a view to saving time and expense.

[48] Under r. 2(3), the court must take into consideration proportionality. Under r. 2(4), the court must apply the rules to promote the primary objective, and the parties and their lawyers are required to help the court in this regard. Lastly, the court is also required to promote the primary objective by actively managing its cases pursuant to r. 2(5). Rule 2(5) lists a number of means by which this should be done. The list is not exhaustive.

[49] A party’s disclosure obligations mandated by the Rules are the be considered in light of r. 2(3); Simioni, at para. 39; Boyd v. Fields, 2006 CarswellOnt 8675 (S.C.); Chernyakhovsky v. Chernyakhovsky.

[50] Here, the respondent’s evidence as to the extent of his financial disclosure at the time of separation is unchallenged. He has delivered a financial statement as part of these proceedings, though the fulsomeness of the disclosure is challenged, and he has delivered notices of assessments for the past three years. There is no indication as to how the disclosure of his recent financial disclosure is relevant to the threshold issue of the validity of a separation agreement entered into over 29 years ago.

[51] If I am wrong, I note that the applicant has not sought to set aside the Separation Agreement, and the existence of an agreement between the parties must be taken into consideration by the court. In making a spousal support order under s. 15.2(4) of the Divorce Act, the court must consider the condition, means, needs, and other circumstances of each spouse, including:

a. The length of time the spouses cohabited; b. The functions performed by each spouse during cohabitation; and c. Any order, agreement or arrangement relating to support of either spouse.

[52] Section 56(4) of the Family Law Act provides that a separation agreement may be set aside if either party did not make full and fair financial disclosure, or a party did not understand the nature and consequences of the agreement, or for any other reason that would otherwise vitiate a contract in accordance with the law of contract (including duress and undue influence). Section 33(4) of the Family Law Act makes it clear that support provisions may be set aside if they result in unconscionable circumstances. The parties cannot contract out of ss. 55(4) and 33(4).

[53] Pursuant to r. 16(6.1), the court may exercise special fact-finding powers in determining whether there is a genuine issue requiring a trial in a motion for summary judgment, and if the court were to come to that conclusion, the court must decide the issue and make a final order. Clause 7.8 of the Separation Agreement contains a release that says that no spousal support is payable, which is typically styled a Miglin waiver, after the seminal case from the Supreme Court. If the court finds that the 1995 separation agreement is valid, the court will have no jurisdiction to make disclosure orders. Given the proximity of the summary judgment motion, there is therefore some validity in the argument that it makes sense to stay the automatic disclosure requirement pending a determination of the validity of the separation agreement on the summary judgment motion.

[54] Having regard to the objectives of the Rules, the pending summary judgment motion, and the existing authority whereby disclosure orders may be dealt with by the summary judgment motion’s judge, in determining the validity of a domestic contract, I decline to make the order sought for disclosure. The summary judgment motion is three weeks away. The issue of disclosure, at this stage, should be dealt with, if need be, by the judge hearing the motion for summary judgment. In Shalaby v. Nafei, 2022 ONSC 5615, Price J. denied the respondent’s motion for summary judgment on the basis that the court required the respondent’s financial disclosure to apply the Miglin analysis, to determine whether the agreement was unconscionable, and to determine whether it complied with the objectives of the Divorce Act respecting spousal support and equalization of net family property. He made an extensive order for disclosure and set a timetable for disclosure.

Case Conference Brief

[55] I agree with the applicant that the excerpts from the respondent’s case conference brief and reference to discussions at this case conference are in violation of the Rules and should be struck. Reference to same are of serious concern to the court especially as the applicant was not represented by counsel at the time.

VII. Conclusion

[56] The respondent relies on the 1995 Separation Agreement with the release of spousal support. The applicant relies on the 2016 Interim Spousal Support Agreement, in which the respondent agreed to pay spousal support without prejudice. The applicant deposes that she did not have financial disclosure for the 2016 Agreement. She makes no such assertion with respect to the 1995 Agreement, which contains the spousal release.

[57] I agree with the respondent that his current financial circumstances are in no way connected to the parties’ marriage or their separation. As the respondent points out, each of the sub-categories under paragraph 5 of the Automatic Order requires documentary disclosure relating to the most recent three years, that is to say, more than 27 years after the parties’ divorce. The jurisprudence is consistent that disclosure is certainly relevant at the time of separation. In this case, the applicant does not contend that she requires disclosure in order for the court to undertake necessary Miglin analysis, but rather, that she requires disclosure in order for the court to determine her entitlement and quantum.

[58] In my view, on the facts of this case, the outcome of the validity of the Separation Agreement and whether the spousal support release is binding upon the parties may impact the extent of the post-separation disclosure. In this case the summary judgment motion is scheduled. Ordering the disclosure contemplated by the Automatic Order, beyond what has already been produced by the respondent, may derail the summary judgment motion, which is less than three weeks away. The disclosure will not impact the question to be determined by the court on the summary judgment motion. I note that Diamond J. did not disturb the schedule in scheduling this motion, though he was aware of the date. Having regard to the objective of the Rules enshrined in r. 2(3), any automatic financial disclosure triggered by r. 8.0.1 is best dealt with, if appropriate, by the judge hearing the summary judgment motion.

VIII. Costs

[59] I would strongly urge the parties to resolve the issue of costs as between themselves. If they are unable to do so, I am prepared to consider costs submissions on the following schedule:

i. The respondent shall deliver his costs submissions to the Trial Coordinator (limited to two pages double spaced but including attachments, i.e. offers to settle) and a Costs Outline within seven days of the date of this Endorsement. ii. The applicant shall deliver her costs submissions (on the same terms as paragraph (i) above) and a Costs Outline within seven days thereafter. iii. There shall be no reply submissions. iv. The costs submissions should also be uploaded to CaseLines in the correct bundle.

A.P. Ramsay J. Date: May 6, 2024