Court File and Parties

COURT FILE NO.: FC-18-1652 DATE: 2024/09/03 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Adele Cummings, Applicant AND: Stephen Horwitz, Respondent

BEFORE: Somji J.

COUNSEL: Cecil Lyon, for the Applicant Shawn Duguay Counsel, for the Respondent

HEARD: August 27, 2024, oral decision given August 30, 2024

RULING ON LEAVE APPLICATION

Introduction

[1] The Applicant Ms. Cummings seeks leave to bring a motion to access funds in the amount of $140,000 from her anticipated equalization payment for the purpose of financing her trial scheduled for November 2024. The Respondent Stephen Horwitz opposes the leave application arguing that leave to bring a motion should only be granted after a settlement conference has taken place and prior to trial in exceptional circumstances.

[2] For several reasons related to the communications between the parties’ counsel, Mr. Horwitz was not in a position on the motion date set earlier this week to address the substantive issue of whether Ms. Cummings should be granted access to proceeds from her equalization payment. Mr. Horwitz’ materials addressed only the leave application. If leave is granted, Mr. Horwitz’ counsel indicates he requires additional time to prepare materials to respond to Ms. Cumming’s request for access to funds. Consequently, I offered the parties the option of adjourning both the leave and substantive issue to another motion date or having me rule, at minimum, on the leave issue. The parties agreed to the latter. Consequently, the only issue I am deciding today is whether leave should be granted for Ms. Cummings to bring a motion to seek access to potential funds from equalization to pay for the costs of her upcoming trial.

Factual and Procedural Background

[3] Adele Cummings is 71 years of age. She was married and cohabited with Stephen Hortwitz for 42 years. Ms. Cummings supported Mr. Horwitz through law school and the start of his legal practice. While she earned a commerce degree, she never developed a career in her field of study. She worked occasionally as an event’s coordinator for adults with disabilities but was otherwise a stay at home parent and the primary caregiver to the parties’ four children. Mr. Horwitz is a sole legal practitioner and has managed his own family’s extensive Horwitz property holdings. According to Ms. Cummings, Mr. Horwitz controlled all the finances, paid all the bills, and gave her an allowance for groceries and the children’s needs.

[4] On January 1, 2017, the parties separated. Ms. Cummings moved out of the matrimonial home. Her net family property as of February 28, 2023, is approximately $79,000. Her assets are principally a TFSA, RRSPs, and a car ($5,000) valued at $75,000. Ms. Cummings lives on a monthly income of $5,000 consisting of her CPP, Old Age Security pension, and a support payment from the Respondent of $3,500/month. She uses almost half her monthly income ($2200) to pay for a rental unit.

[5] In contrast, Mr. Horwitz lives in the parties’ mortgage free matrimonial home registered in his name, earns income, and has potential access to significant family funds as he enters his retirement. The matrimonial home was appraised at $870,000 in October 2021. He earns pension and dividend income of $70,000/year according to his Financial Statement of March 2, 2023. At the time of writing her affidavit of May 16, 2024, and six years after this litigation commenced, Ms. Cummings still did not have all of Mr. Horwitz’s tax information for the years 2020, 2021, 2022, and 2023 to assess income. She has since received. Mr. Horwitz’s Net Family Property (“NFP”) as per his Financial Statement is $769,588, ten times that of Ms. Cummings.

[6] Unlike Ms. Cummings, Mr. Horwitz has access to the Horwitz family holdings which he manages with his brother. Those holdings included, for example, Capital Hill Hotel and Suites in Ontario which sold for $28 million on July 10, 2018, a year and a half after the parties separated. Ms. Cummings understands from the expert she retained, David Clarke, that Mr. Horwitz is believed to have received 1/9 share of those proceeds which would be $3.1 million.

[7] Both parties each received a recent inheritance of $71,000 from the Respondent’s aunt after their separation.

[8] Ms. Cummings anticipates being able to establish at trial that her equalization should be $645,291 if her constructive trust claim over the matrimonial home is allowed and even higher at $1,295,355 if the Respondent’s alleged exclusions including of the Hortwitz family holdings are disallowed. However, based solely on Mr. Horwitz’ estimated NFP on March 2, 2023 of $769,588, Ms. Cummings anticipates a minimal equalization payment of $345,291 and seeks that $140,000 be advanced to her to adequately prepare for trial.

[9] After seven years of separation, Ms. Cummings has no idea what her financial security will be in her senior years. This matter has been winding its way through the court system for six years. Ms. Cummings has already incurred $100,000 in costs for legal and expert fees. Ms. Cummings alleges Mr. Horwitz’ lack of cooperation in providing financial disclosure required her to retain David Clarke to trace the Respondent’s income and property. She anticipates that she will incur, at the very least, an additional $126,500 in legal fees for an 8-day trial, possibly a further disclosure motion, a further settlement and trial management conference, and fees for Mr. Clarke to finalize his expert reports for trial. Mr. Clarke’s expert opinion is necessary to determine the extent of Mr. Horwitz’ access to funds and dividends from the Horwitz property holdings which is relevant to the trial issues Mr. Horwitz’ income, Ms. Cummings’ entitlement to spousal support, and equalization of property.

Analysis

[10] Rule 48.04(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 states that motions should not be heard after a party has set an action down for trial without leave of the court. In Smith v Smith, 2000 OJ 4563, the Honourable Mackinnon J addresses the interpretation of this Rule in the context of family proceedings and finds that courts should only entertain a motion after a settlement conference or after a case is placed on the trial list in exceptional circumstances. The rationale cited by Her Honour is that to allow motions to proceed after these steps are taken is to encourage a practice of scheduling settlement conferences or placing matters on the trial list prematurely when in fact, those steps should occur only after the parties have completed the necessary requirements of disclosure and are in a position to address a final resolution of the case in a serious comprehensive way: Smith at paras 9-10.

[11] For the following reasons, I find that this is an exceptional circumstance in which leave should be granted for Ms. Cummings to bring her motion requesting access to funds.

[12] First, Ms. Cumming’s motion is about access to justice. At her age, she has limited if any earning capacity, and the issue to be decided at trial will significantly determine her future financial security. Her litigation costs when all is said and done are approaching $250,000. Even when one includes her current assets and the gift she received of $71,000 (after the separation) totalling $140,000, she is still $110,000 short of being able to finance this litigation to its full completion. Her monthly support payments go to paying rent and basic needs. I fail to see how, as suggested by counsel, her assets and income can sufficiently finance this litigation.

[13] Furthermore, Ms. Cummings’ request to access funds should not come as any surprise to Mr. Horwitz. Her counsel wrote to Mr. Horwitz’ counsel as early as July 25, 2023, when the matter failed to resolve at a settlement conference seeking his consent to a partial advance from her equalization payment to avoid an unnecessary motion.

[14] Second, while the issue of Mr. Horwitz’ true net worth (from which equalization is owed to Ms. Cummings) will be a core issue at trial, I disagree with Mr. Horwitz’ counsel that addressing the same issue as part of the motion will adversely affect his client’s position at trial. Motion judges’ routine make temporary without prejudice orders on a variety of issues, including child and spousal support, for the purpose of providing parties with financial relief pending trial with an understanding that parties may present more comprehensive evidence at trial that will result in a different outcome. Furthermore, Ms. Cummings is relying on her claim for access to funds on the minimum amount of equalization she is owed without consideration of her principal arguments at trial for constructive trust and disallowance of exclusions claimed by Mr. Horwitz.

[15] Third counsel for Mr. Horwitz suggests that Ms. Cummings has inflated the amount of her potential equalization. He argues that the Horwitz property are corporate funds and therefore entirely excluded from equalization. He argues the trial is about entitlement to support and not equalization. He intends to present evidence at the motion that Ms. Cummings will only be entitled to potential equalization of $80,000. However, I do not have that evidence before me, and even if I did, the amount of funds available to Ms. Cummings from equalization is a matter to be determined at the motion and is not determinative of whether leave should be granted.

[16] For all these reasons, Ms. Cumming’s is granted leave to bring her motion for access to funds from her anticipated equalization payment. Given the trial is scheduled for November 2024 and sufficient time is necessary to allow Mr. Clarke to finish his expert reports, the motion will proceed on an urgent basis. The parties will contact Trial Coordination to obtain an urgent date.

Costs

[17] Ms. Cummings’ is the successful party on the leave application and presumptively entitled to costs. The parties are encouraged to resolve the issues of the costs. If unable to, they may file brief written submissions not exceeding two pages exclusive of Bills of Costs. The Applicant shall file her submissions by September 17th and the Respondent shall file his submissions by October 1, 2024. Costs submissions are to be sent to scj.assistants@ontario.ca and to my attention.

Somji J. Date: September 3, 2024