COURT FILE NO.: FC-22-00058209-0000 DATE: 23/01/2024

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jennifer Elizabeth Ellis, Applicant AND: Brian Keith Ellis, Respondent

BEFORE: The Honourable Justice D. Piccoli

COUNSEL: Anamaria Pasc, counsel for the Applicant Sean Cowan, counsel for the Respondent J.P.

HEARD: January 9, 2024

Corrected Decision: The original Endorsement was released on January 23, 2024. The correction was made on February 22, 2024. The reference to “2023” in the Citation on page 1 has now been Corrected to read “2024”.

ENDORSEMENT

[1] Both parties have motions before the court. The Applicant’s amended notice of motion is dated December 14, 2023. The Respondent’s notice of motion is dated December 1, 2023.

[2] The Applicant seeks:

(a) spousal support; (b) child support, including a retroactive and ongoing contribution towards section 7 expenses; (c) disclosure; (d) an order striking pleadings if the disclosure is not produced; (e) an order directing the Respondent to remit to the Applicant 50% of the monies he removed from the parties’ joint accounts post separation; (f) a certificate of pending litigation; and (g) access to the matrimonial home for the purposes of valuing same and costs.

[3] The Respondent seeks an order for disclosure and an order imputing an income to the Applicant.

[4] On January 8, 2024, the court was advised that the parties had resolved the issues of interim without prejudice child support and spousal support, as well as the Applicant’s access to the matrimonial home as it relates to having the home valued. At the commencement of the motion on January 9, 2024, the court was advised there were issues with the settlement reached. By the end of the day the issues were resolved, and an order was made as it relates to the consent issues.

[5] As such, the remaining issues for the court to decide are:

(a) Should a certificate of pending litigation (“CPL”) be registered against the property known as 23 Mansfield Drive, St. George, Ontario N0E 1N0 (“St. George Property”)? (b) Should the Respondent’s pleadings be struck outright or contingently? (c) Should the court make orders related to the disclosure requests made by both parties in their respective Requests for Information? (d) Should the Applicant be repaid the sum of $28,952.62 which represents 50% of the funds removed by the Respondent from the parties’ joint bank accounts post separation? (e) Costs.

[6] The court has been directed to read and has read:

(a) The Amended Notice of Motion of the Applicant dated December 14, 2023; (b) The Affidavits of the Applicant dated October 20, 2023, and December 11, 2023; (c) The financial statement of the Applicant dated October 25, 2023; (d) The factum of the Applicant dated December 13, 2023; (e) The Response to Request for Information dated June 26, 2023; (f) Compendium of the Respondent dated September 2023; (g) The Notice of Motion of the Respondent dated December 1, 2023; (h) The Affidavits of the Respondent dated December 1, 2023, and January 5, 2024; (i) The financial statements of the Respondent dated December 11, 2023, and January 5, 2024; (j) Factum of the Respondent dated December 13, 2023.

[7] The court also read the Application of the Applicant dated October 13, 2022.

BACKGROUND

[8] The parties were married on August 22, 2009, and separated on February 7, 2022.

[9] They have two children, namely, Maria Dawn Ellis, born April 16, 2014, and Emma Elizabeth Ellis, born February 23, 2016 (“the children”).

[10] The Applicant has been a stay-at-home parent since 2014, where she home schools the children; they have been home schooled their entire lives.

[11] The Applicant has since, on or about April 30, 2023, secured work as an independent contractor taking Minutes for Minutes Solution. The income from this remains modest.

[12] The Respondent is a real estate agent and is paid through his professional corporation, namely, Future Me Professional Corporation (“Future Me Corp”).

[13] More recently, the Respondent incorporated another company, namely 1000108817 Ontario Inc. In submissions, but not in evidence, the court was advised that this company was incorporated to facilitate the purchase of the St. George Property.

[14] The parties own the following properties jointly:

(a) The matrimonial home located at 33 Notchwood Court, Kitchener, Ontario which was purchased in 2018 (“matrimonial home”); (b) 123 Wilfred Avenue, Kitchener, Ontario which was purchased in 2016 and is the home where the Applicant currently resides (“Wilfred Ave. Property”); and (c) 313 Fennel Street, Plattsville, Ontario which is being rented to third parties, but which is the subject of an upcoming tribunal hearing as the Respondent’s evidence is that the tenants are not paying the rent (“Fennell St. Property”) .

[15] In the spring of 2022, the Respondent purchased the St. George Property in his sole name. It is the Respondent’s evidence that he made the downpayment for this property by using funds (approximately $210,000 to $259,000) in the Future Me Corp. account. This property is being rented to third parties for $3,500 a month.

[16] There is no dispute that the Respondent purchased the St. George Property without the foreknowledge or consent of the Applicant. It is this property against which the Applicant seeks to register a CPL. She asserts that it is possible that the monies the Respondent withdrew from the parties’ joint accounts, post separation, were used to purchase this property. She further asserts that despite her request, the Respondent has refused to advise her how he used the monies taken from the joint account.

[17] In or about November 2022, the Applicant and children moved into the Wilfred Ave. Property and the Respondent remained in the matrimonial home.

[18] The Applicant is responsible for the expenses in relation to the Wilfred Ave. property and the Respondent collects rent and is responsible for the expenses in relation to the other properties.

[19] The order that governs the parenting schedule is the consent interim, without prejudice, order of Justice Hilliard dated July 26, 2023. That order indicates among other things that on a without prejudice basis, the Applicant will continue to home school the children. The Respondent has the children in his care as follows:

Week one from Tuesday at 3:30 p.m. to Wednesday at 9:15 a.m. and Thursday from 3:30 p.m. to Friday at 3:30 p.m.; and Week two from Tuesday at 3:30 p.m. to Wednesday at 9:15 a.m. and from Friday at 3:30 p.m. to Sunday at 4:30p.m.

Should the Respondent be obligated to pay to the Applicant 50% of the funds he removed from the parties’ joint bank accounts?

[20] There is no dispute that following the separation the Respondent withdrew the sum of $57,905.24 from the parties’ joint bank accounts and then closed the accounts without the knowledge or consent of the Applicant.

[21] The Applicant asserts that the Respondent emptied all joint accounts in March and April 2022, callously. It is her evidence that the Respondent told her he did this because he did not want her to have funds to retain a lawyer. She states that in addition to emptying out the joint accounts, he cancelled the parties’ joint credit card, which she only discovered when she was unable to pay for a chiropractor appointment. She had no income at the time and the children were in her primary care. It is her assertion that the Respondent’s behaviour was intended to inflict financial harm and constitutes family violence. She has been asking for the return of these funds since June 15, 2022.

[22] The Applicant asserts that she desperately requires 50% of the funds removed from the joint accounts as she needs to repair the sewage (quote provided for $23,337.83) at the Wilfred Ave. Property where she and the children reside. She asserts that the Respondent has refused to pay for this repair despite listing it as an expense in his motion material.

[23] The Respondent acknowledges he withdrew the funds. He asserts that he needed to withdraw the funds to close the accounts. There is no dispute that in the 15 months following separation, he transferred to the Applicant approximately $100,000 in an uncharacterized amount. Despite never advising the Applicant of this, he states that part of those sums should be considered repayment of the funds taken from the joint accounts. He further argues that the withdrawal of funds from the joint account should be considered in the overall calculation of post separation adjustments.

[24] The Applicant replies that those funds, of approximately $100,000, were used for expenses for she and the children at a time when the Respondent was not paying any spousal support and an inadequate amount of child support. She also used those funds to pay for expenses related to the two jointly owned investment properties. She has claims for retroactive spousal and child support, having never received spousal support to the date of argument of the motion. She asserts that she is legally entitled to the return of 50% of the funds removed from the joint accounts.

[25] Given the lack of disclosure, the parties have been unable to determine how much support is owing . On an interim without prejudice basis, the parties have agreed that commencing October 1, 2023, the Respondent shall pay the sum of $3,400 per month in child support and $5,199 per month in spousal support.

[26] Both parties maintain they are not in a financial position to pay for the sewage repair.

[27] Although the court accepts that, in general, withdrawal from a joint bank account should be considered in the overall accounting of post separation adjustments, in this case, the actions taken by the Respondent were severe and not child focused. As such, he is required to pay to the Applicant the sum of $25,000 in an uncharacterized amount. It is in the children’s best interest to ensure the sewage is repaired.

Additional Disclosure Requests Made by the Parties

[28] The Respondent made requests for disclosure by way of a Request for Information dated June 6, 2023.

[29] The Applicant made additional requests for disclosure as set out in para. 6 of her amended Notice of Motion. It is her evidence that much of the disclosure detailed in para. 6 had been requested since April 2023.

[30] Rule 20 of the Family Law Rules, O. Reg. 114/99 (“the Family Law Rules”) deals with Requests for Information, questioning and disclosure. It states:

OTHER CASES -- CONSENT OR ORDER

(4) In a case other than a child protection case, a party is entitled to obtain information from another party about any issue in the case,

(a) with the other party's consent; or (b) by an order under subrule (5).

ORDER FOR QUESTIONING OR DISCLOSURE

(5) The court may, on motion, order that a person (whether a party or not) be questioned by a party or disclose information by affidavit or by another method about any issue in the case, if the following conditions are met:

1. It would be unfair to the party who wants the questioning or disclosure to carry on with the case without it.
2. The information is not easily available by any other method.
3. The questioning or disclosure will not cause unacceptable delay or undue expense.

[31] The onus is on the person requesting the disclosure to meet the criteria of Rule 20(5), See Tari v Darolfi, 2023 ONSC 5361, at paras. 53-66.

[32] The Respondent concedes that all of the Applicant’s requests (except for that at para. 6 (g)) of the Applicant’s notice of motion) are relevant. In fact, some of these requests are covered by the automatic order. As such, he requests that there be no timeline set out in the order for production of that information as he is unable to commit to timelines.

[33] Para. 6(g) of the Applicant’s notice of motion seeks:

A tracing of the funds removed by the Respondent from the following accounts following separation, with supporting statements showing where the funds were moved to, and where they are currently:

i. $11,226.81 removed from the joint Tangerine account ****2573 on April 12, 2022; ii. $21,678.43 removed from the joint CIBC account ****7038 on April 12, 2022; and iii. $25,000 removed from the joint CIBC account ****7038 on March 14, 2022;

[34] The Applicant asserts that if the funds were used to purchase the St. George Property, she may seek to amend her pleadings to include a trust claim as it relates to that property.

[35] The Respondent asserts that, as it relates to the funds from the joint account, the Applicant cannot have it both ways; she either wants the money returned or she wants a tracing. The request is not relevant if the funds are returned to her, however, he is not prepared to consent to return the funds to her.

[36] The court accepts that the information requested by the Applicant is relevant. She should not be put in a position to choose between claims without having the proper and necessary information. It would be unfair for the Applicant to proceed without the information and, as this information has been requested for a long period of time, the requirement to provide will not cause unacceptable delay or undue expense.

[37] Given the facts of the case, that the information requested by the Applicant in para. 6 of her Notice of Motion is all relevant. It has been outstanding for a significant period of time, is straight forward and should not be difficult to provide. The Respondent is ordered to produce the information within 30 days.

[38] As it relates to the Respondent’s Request for Information, during argument he indicated that he was seeking an order as it relates to pars. 6, 7, 9 and 12 of his Request for Information.

[39] Those requests are as follows:

6. A copy of all documentation showing any supplemental income or benefits received since separation.
7. In a sworn affidavit supported with all relevant and available documentation, an explanation detailing all payments the applicant receives or has received from family, relatives, or friends since separation.
8. A copy of all bank statements worldwide, including but not limited to statements for all bank accounts, investment accounts (both registered and non-registered), credit cards, mortgages and lines of credit, in which the respondent has or had an interest, directly or indirectly, from February 2019 to present.
9. A copy of all receipts, invoices, and bank statements to support the expenses listed by the respondent in her financial statement sworn 14 October 2022 and in any subsequent updated financial statement.

[40] The Applicant asserts that she has answered para. 6, that paras. 7 and 9 are overreaching and irrelevant and that para. 12 is exceptionally overreaching and only an attempt to drive up her legal fees.

[41] The court agrees that the substance of the information sought in paras. 6 and 7 are relevant. If the information has not already been produced, then the Applicant has 30 days to produce this information. The court order, as detailed in the orders section, is modified to ensure the order relates to relevant information.

[42] As for the request in para. 9, the Applicant has provided a certificate of financial disclosure with a complete brief. There is no suggestion that she earns cash income and as such, the request is overreaching. As it relates to para. 12 and the Respondent’s submission that this information is relevant to the factors set out in the draft spousal support advisory guidelines and the range of spousal support, the court finds the request overreaching. Had the Respondent pointed the court an expense or expenses listed on the Applicant’s financial statement that was unreasonable, then the request may be relevant, but the blanket request is onerous and unreasonable see Mawhinney v. Ferreira 2023 ONSC 1357 para 12.

Should the Court Strike the Respondent’s Pleadings?

[43] Rule 1(8) of the Family Law Rules states as follows:

Failure to obey order

1(8) If a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including,

(a) an order for costs; (b) an order dismissing a claim; (c) an order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party; (d) an order that all or part of a document that was required to be provided but was not, may not be used in the case; (e) if the failure to obey was by a party, an order that the party is not entitled to any further order from the court unless the court orders otherwise; (f) an order postponing the trial or any other step in the case; and (g) on motion, a contempt order. O. Reg. 322/13, s. 1.

Failure to follow rules

(8.1) If a person fails to follow these rules, the court may deal with the failure by making any order described in subrule (8), other than a contempt order under clause (8) (g). O. Reg. 322/13, s. 1.

Document that may delay or is inflammatory, etc.

(8.2) The court may strike out all or part of any document that may delay or make it difficult to have a fair trial or that is inflammatory, a waste of time, a nuisance or an abuse of the court process. O. Reg. 322/13, s. 1.

(8.3) Revoked : O. Reg. 69/15, s. 1 (2).

Consequences of striking out certain documents

(8.4) If an order is made striking out a party’s application, answer, motion to change or response to motion to change in a case, the following consequences apply unless a court orders otherwise:

1. The party is not entitled to any further notice of steps in the case, except as provided by subrule 25 (13) (service of order).
2. The party is not entitled to participate in the case in any way.
3. The court may deal with the case in the party’s absence.
4. A date may be set for an uncontested trial of the case. O. Reg. 322/13, s. 1.

[44] It is trite law that the duty to disclose is the most basic obligation in family law, and that the obligation is immediate and ongoing: see Roberts v. Roberts, 2015 ONCA 450, 65 R.F.L. (7th) 6, at para. 11; Manchanda v. Thethi, 2016 ONCA 909, 84, R.F.L. (7th) 374, at para. 13; Colucci v. Colucci, 2021 SCC 24, 458, D.L.R. (4th) 183; Leitch v. Novac, 2020 ONCA 257, 150 O.R. (3d) 587, at para. 44.

[45] The Applicant first sought disclosure by way of letter dated June 15, 2022, and prior to the commencement of the proceedings. She sought a sworn financial statement and information required by s.21 of the Child Support Guidelines, O. Reg. 391/97 (“the Child Support Guidelines”), which she detailed. She also sought supporting statements for all assets and liabilities at the date of marriage and date of separation. Finally, she sought full corporate disclosure including the corporate financial statements, returns, bank accounts and liabilities.

[46] The Applicant asserts that because the Respondent failed to provide disclosure, she had no option but to commence these proceedings. Her application also sets out the requests for disclosure.

[47] On April 4, 2023, the Applicant served the Respondent with a detailed Request for Information. She followed up with a detailed letter on May 15, 2023. She made it clear that the disclosure was required in advance of the case conference in order to have a meaningful case conference.

[48] On July 7, 2023, Justice Madsen made a detailed order for disclosure, not on consent of the Respondent. She ordered that the disclosure be produced within 60 days of the date of the order or by September 5, 2023.

[49] On July 7, 2023, the Respondent advised the court (as can be seen in para. 5 of Justice Madsen’s endorsement) that “income and property valuations are underway.”

[50] The Applicant asserts that despite the request, she was only made aware of the identity of the valuator on December 1, 2023. She attempted to contact the valuator to determine the status of the reports, as well as when he was retained. She made a number of requests on December 8, 2023, December 11, 2023, December 20, 2023, and January 3, 2024, seeking to be apprised of when the valuator was retained and when the valuations would be completed.

[51] As of argument of the motion, and despite Justice Madsen’s order, the valuations have not been provided and there is no information before the court as to when the valuations will be completed and provided.

[52] The Respondent asserts that he has provided some disclosure and that he was quick to disclose what was available to him as set out in para. 34 of his December 1, 2023, affidavit.

[53] On September 5, 2023, the Respondent provided a compendium of almost 600 pages. According to the Applicant, only four documents were relevant to the disclosure ordered. She asserts that the Respondent did a “document dump” which has increased her costs in that her lawyer had to review almost 600 pages of documents; most of which were irrelevant.

[54] The Respondent provided a second compendium of documents on January 5, 2024, with approximately 400 pages of documents. The Applicant asserts that the only relevant document was the document that provided proof of the value of the 2015 Mazda, some of the documents related to the CIBC account ending in 2018, and information as to when the numbered company was incorporated.

[55] The Respondent maintains that the information provided was not a document dump but an attempt to provide the Applicant with information that was relevant and what he believed she required when he could not fully comply with the court orders. He argues that he has provided significant information. The Respondent contends that there is nothing complicated about his professional corporation as he is the only employee. He has produced more corporate bank statements than he has been asked for and the valuation is not likely to show more value than what was in his professional corporate account.

[56] It is the Applicant’s position that the Respondent’s failure to comply with court orders should result in striking his pleadings. In the alternative, she asserts that he should be prohibited from receiving any further relief from the court until he has complied, that he should pay to her a penalty or fee for every day he is late and that he should pay her full costs. She asserts that he has not done anything to remedy the breach, or advise when the documents would be provided, and has provided no reasonable excuse for the delay.

[57] The Respondent does not deny that much of the disclosure ordered by Justice Madsen remains outstanding. He agrees, for example, that paras. (a) to (e) of her order have not been complied with and that he has not provided his certificate of financial disclosure or the valuation reports. He notes that he did provide his Agent Earning report for 2021 to 2023 on December 1, 2023, and that is a very important document. As pointed out by the Applicant, he has failed though to produce his expenses and much of the affidavit material focusses on that as it relates to calculating his income.

[58] In his affidavit dated December 1, 2023, the Respondent states:

(a) “I do not have financial statements available as I am waiting on my accountant”. (para. 30) (b) “I used to have a contractor for my corporation who took care of all the accounts and taxes and so forth. I first directed the disclosure requests to her, since she is the one who would know how to identify and produce the documents. Unfortunately, when I asked her for all these documents I had a hard time getting any cooperation from her in any reasonable amount of time. (para. 35) (c) My business relationship with that contractor broke down and I ultimately hired an accounting firm to replace her. They have received the boxes of materials from the contractor. I acknowledge this has been a slow process, but I believe I will receive a document package and information from them shortly to respond to the disclosure. (para. 36)

[59] In his affidavit dated of January 1, 2024, para. 7, the Respondent states “I am unable to provide certain corporate documents because my original accountant handling my taxes did not keep these records in any formal way.”

[60] Sometimes what is not said speaks volumes. In this case, none of the Respondent’s statements set out timing for when the relationship with his contractor broke down, when he hired the accounting firm, the identity of the accounting firm, when that firm received the boxes of materials, or when the accounting firm would produce the information. He has produced nothing from the Certified Business Valuator (CBV) to indicate the status of either the income or valuation report or why six months following his retention, the valuator has not completed his reports.

[61] If, as the Respondent states, his corporation is simply a professional corporation, and even if his previous tax preparer quit and has simply provided boxes to the new accountant, it should not take this long to complete the disclosure. The outstanding disclosure includes his 2022 corporate and person ITR and the financial statements for his business for the last 3 years. This is basic disclosure.

[62] Justice Madsen in her recent decision of Holden v. Ploj, 2023 ONSC 1287, at paras. 19-32, provides a summary of the legal analysis the court must undertake when deciding whether to strike a party’s pleadings:

[19] The primary objective of the Family Law Rules, O. Reg. 114/99 (the “Rules”) is to enable the court to deal with matters justly: see r. 2(2). That includes ensuring that the procedure is fair to all parties; saving expense and time; dealing with the case in ways that are appropriate to its importance and complexity; and giving appropriate court resources to the case while taking account of the need to give resources to other cases: see r. 2(3).

[20] To assist in dealing with matters justly, r. 1(8) provides the court with a range of options where a party fails to obey an order that it considers necessary for the just determination of the matter. Those options include, but are not limited to, an order striking out an Application, Answer, or other document filed by a party, and an order for costs.

[21] In appropriate cases, the court’s obligation to promote the primary objective will require it to dismiss claims, strike a party’s pleadings, or restrict the ability of a party to participate in the trial: see Ahmadi v. Heydari, 2018 ONSC 2682, at para. 118, per Price J. See also Vacca v. Banks (2005), 6 C.P.C. (6th) 22 (Ont. Div. Ct.), at para. 27.

[22] As Price J. held in Ahmadi, at para. 120, citing Manchanda v Theti, 2016 ONSC 3776 at para. 20, aff’d 2016 ONCA 909, leave to appeal refused, :

… “[w]ithout 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.” Such tactics cannot be condoned.

[23] However, particularly in family law cases, a party’s pleading should be struck only in exceptional circumstances, where no other remedy would suffice: see Kovachis v. Kovachis, 2013 ONCA 663, 311 O.A.C. 228, at para. 24, per Laskin J. See also Percaru v. Percaru, 2010 ONCA 92, 265 O.A.C. 121, at paras. 47-48. The basis for this principle is that without one side’s participation in the trial, there is a risk that the court will not have enough information or accurate information to reach a just result: see Kovachis, at para. 25.

[24] Before striking pleadings, the court must consider whether that step is proportionate to the breach(es). Thus, in Kovachis, at para. 34, for example, the court found that the decision below to strike pleadings for non-disclosure was not proportionate in a context where much disclosure had in fact been made.

[25] In Van v. Palombi, 2017 ONSC 2492 (Div. Ct.), at para. 30, the Divisional Court identified the three-prong test applicable to the determination of whether to strike pleadings, as follows:

a. Is there a triggering event justifying the striking of pleadings? b. Is it appropriate to strike the pleadings in the circumstances of this case? c. Are there other remedies in lieu of striking pleadings that might suffice?

See also Ferlaino v. Hoyes, 2019 ONSC 1261, at para. 21, per Jarvis J.; Mulik v. McFarlane, 2022 ONCJ 555, at para. 21, per Sherr J., citing Ferguson v. Charlton, 2008 ONCJ 1, at para. 64.

[26] In exercising discretion under r. 1(8), the court must consider the primary purpose of the Family Law Rules: see Mulik, at para. 24.

[27] Rule 1(8.4) sets out the consequences of striking out certain documents. Where pleadings are struck, a party is not entitled to any further notice of steps in the proceeding, is not entitled to participate in the case in any way, the matter may be set for an uncontested trial, and the court may deal with the case in the party’s absence, unless the court specifically orders otherwise.

[28] Striking pleadings and denying participation at trial is a drastic remedy. In some cases, it will be more appropriate to strike pleadings but to also exercise discretion to vary the participation rights of a party whose pleadings were struck out rather than to outright deny further participation: see Holly v. Greco, 2019 ONCA 464, at para. 10.

[29] In Mullin v. Sherlock, 2018 ONCA 1063, 19 R.F.L. (8th) 1, at paras. 54-55, the Ontario Court of Appeal varied the order below (while still allowing pleadings to be struck) to permit the husband to make an opening statement, cross-examine the wife and the wife’s witnesses, and make closing submissions, with any further participation only as permitted by the trial judge. As Pepall, J.A. explained, at para. 55, this would provide the court with a “richer record” on which to base its decision.

[30] Decisions about parenting arrangements for children must, in accordance with the Children’s Law Reform Act, R.S.O. 1990, c. C. 12, be made in the best interests of children. Numerous factors are set out under s. 24 for consideration by the court in determining what will promote those best interests. It is always preferable for the court to have before it the evidence of both parents when making that determination: see Khan v. Ramsingh, 2019 ONCA 623, at para. 20.

[31] It is for this reason that the Ontario Court of Appeal has instructed judges that utmost caution must used in striking pleadings where children’s interests are involved and that it is generally preferable to avoid using that sanction: see King v. Mongrain, 2009 ONCA 486, 66 R.F.L. (6th) 267, at para. 31; Haunert-Faga v. Faga (2005), 203 O.A.C. 388 (C.A.). See also Mulik, at para. 18, per Sherr J.

[32] In King v. Mongrain, the Ontario Court of Appeal held that it was an error for the court to strike Ms. Mongrain’s pleadings as it left the court virtually bereft of evidence required to make a proper determination of the factors applicable to a best interest’s determination. In that case, the children were young, had spent most of their life in the care of their mother (whose pleadings had been struck), and there were allegations of violence by Mr. King against her and against the children. Were the mother’s evidence in that case true, the court held, there was a reasonable basis for concern about the children’s safety and that of the mother. In that case, also, participation rights had not been varied by the judge below.

[63] In this case, it is clear that the Respondent has failed to comply with the order of Justice Madsen. Although para. 5 of the automatic order does not set out timelines for compliance, para. 6 does. As such, he has also failed to comply with para. 6 of the automatic order. Orders speak from the time that they are made. The disclosure is long-since overdue.

[64] Much of the disclosure ordered, and now requested, is basic disclosure which is dealt with in both the automatic order and in the order of Justice Madsen and s. 21 of the Child Support Guidelines.

[65] As set out in Sharif-Razi v. Etemadi, 2023 ONSC 1451 at paras. 13-14 and 17, if the Court fails to impose consequences for a failure to adhere to court orders regarding disclosure, or to enforce disclosure required by the Family Law Rules, then the Family Law Rules and Orders effectively become meaningless. The obligation to provide financial disclosure begins before even the first attendance at court, and an Order should not be required. A litigant should not have to bring a motion to get an order requiring a party to do something that has already been ordered. If there has been a breach, the appropriate step is to seek a remedy under Family Law Rule 1(8).

[66] The Ontario Court of Appeal in Mullin v. Sherlock 2018 ONCA 1063 at para. 45 provided guidance on how to address a party’s failure to obey a court order. The first step is for the court to satisfy itself that there has been non-compliance with the court order. Once satisfied, the judge may have recourse to the measures described in Family Law Rule 1(8). In assessing the most appropriate remedy, the court should consider the following factors:

(a) the relevance of the non-disclosure, including its significance in hindering the resolution of issues in dispute; (b) the context and complexity of the issues in dispute, understanding that an uncomplicated case should have little tolerance for non-disclosure, whereas a case involving extensive valuation of assets may permit some reasonable delay in responsiveness; (c) the extensiveness of existing disclosure; (d) the seriousness of efforts made to disclose, and the explanations offered by a defaulting party for the inadequate or non-disclosure; and (e) any other relevant factors.

[67] In this case, the disclosure ordered is relevant for the determination of support and property division. Due to the Respondent’s deliberate refusals to produce disclosure, even in the face of court orders, the Applicant has been unable to resolve these issues or even address the financial issues at the case conference or upcoming settlement conference. Even the consent order of January 9, 2024 is interim, without prejudice, as it relates to child and spousal support. It has been six months since Justice Madsen’s order and over seven months since the automatic order. The CBV has declined to indicate when the report will be ready (or if it has already been completed). The Respondent has not detailed any efforts he made in obtaining the disclosure himself, and seeks to cast blame on third parties, which is not appropriate. The extensive disclosure produced, although it is voluminous, does not amount to full compliance with the court orders.

[68] Rule 13(17) of the Family Law Rules states:

If a party has not served or filed a document in accordance with the requirements of this rule or an Act or regulation, the court may on motion order the party to serve or file the document and, if the court makes that order, it shall also order the party to pay costs. [Emphasis added]

[69] As the Applicant did not serve and file a bill of costs, the amount of costs that the Respondent will be ordered to pay will be determined following costs submissions.

[70] As it relates to the payment of a fine or penalty, I adopt the analysis of Justice Fieta in Altman v. Altman 2022 ONSC 4479 at para. 44 which states that:

There is express authority to order a person to pay fine or penalty under Rule 31(5) of the Family Law Rules if that person is found in contempt of the court for failing to comply with an Order. A finding of civil contempt requires proof of the following elements beyond a reasonable doubt: (1) the order alleged to have been breached must state clearly and unequivocally what should and should not be done; (2) the party alleged to have breached the order must have actual knowledge of it; and (3) the party allegedly in breach must have intentionally done the act that the order prohibits or intentionally failed to do the act that the order compels: Chong v. Donnelly, 2019 ONCA 799, para. 5 (C.A.). As noted in Carey v. Laiken, 2015 SCC 17, para .32, "[t]hese three elements, coupled with the heightened standard of proof, help to ensure that the potential penal consequences of a contempt finding ensue only in appropriate cases". These heightened requirements and the procedural safeguards provided by Rule 31 are avoided if Rule 1(8), which has no such requirements or procedural safeguards, is used to impose a penalty upon a party for non-compliance with an order.

[71] Despite the Respondent’s failure to comply with court orders for disclosure, his non-compliance has not yet reached a level that warrants the exceptional remedy of striking pleadings. The most reasonable outcome at this time to balance fairness and ensure compliance with court orders is to prohibit the Respondent from bringing any further motions on financial issues until he has fully complied with court orders relating to financial disclosure, see Derouin v Derouin, 2023 ONSC 2517.

[72] The Respondent has already stated his intention to bring a motion to require the Applicant to share the expenses of the jointly owned properties. However, as Justice Quinn wrote in Hughes v. Hughes, 2007 85 O.R. 3rd 505 (ONSC) at para. 19, “the husband cannot expect to come before this court and be given a voice in circumstances where he has thumbed his nose at the legal system by deliberately breaching an order.”

[73] The Respondent will not be entitled to any financial relief from the court until he complies with the automatic order, Justice Madsen’s order and this order. See Wong v. Wong 2021 ONSC 3689, Altman v. Altman 2022 ONSC 4479 leave to appeal refused and Sanvictores v. Sanvictores 2022 ONSC 5032.

Should a Certificate of Pending Litigation be Registered Against the St. George Property?

[74] The Applicant requests that the court register a CPL against the St George Property, which is owned solely by the Respondent. She asserts that she has a reasonable fear that the Respondent may be unable to pay an equalization payment which will be owing to the Applicant.

[75] Further, she argues that because of the Respondent’s actions as it relates to money including the withdrawal from joint accounts, cancelling their joint credit cards, purchasing St. George, attempting to sell Fennell Street, all without her consent or advance notice, as well as his failure to comply with court orders, the dissipation of his RRSP from $100,000 at the date of separation to zero, and the withdrawal of $600,000 from his professional corporation, an adverse inference should be drawn against him. In the alternative, she asks that there be a non-depletion order as it relates to the St George Property, and that the Respondent provide 90 days’ notice of his intention to sell the property, given the court delays in obtaining a motion date.

[76] The Respondent argues that there is no legal basis for either a CPL or a non-dissipation order. He has already indicated he does not plan to sell the St. George Property but that if he does sell it, he will give the Applicant ample notice of his intention to list the property for sale. Further, the Respondent argues that there are numerous properties from which an equalization payment can be paid. He makes this assertion despite his financial statement showing a decline in the value of all jointly owned real property from the date of separation to current, as well as his comments that he does not expect his business to be of any significant value as it is a professional corporation, and the majority of the funds were withdrawn from the account to purchase the St. George Property and to meet expenses.

[77] For the reasons that follow, the court declines to grant the relief sought by the Applicant and instead orders that the Respondent provide 90 days’ notice of his intention to sell the St. George Property and that if he does sell the St. George Property, the money must be paid into and remain in his professional corporate account unless there is advance written agreement between the parties or court order.

[78] The parties agree as it relates to the test for the registering of a CPL.

[79] The principles, which have application on a motion to discharge a CPL, were succinctly summarized by Master Glustein (as he then was) in Perruzza v. Spatone, 2010 ONSC 841 at para. 20 which states that:

(i) The test on a motion for leave to issue a CPL made on notice to the defendants is the same as the test on a motion to discharge a CPL (Homebuilder Inc. v. Man-Sonic Industries Inc., 1987 CarswellOnt 499 (Ont. S.C.) ("Homebuilder") at para. 1); (ii) The threshold in respect of the "interest in land" issue on a motion respecting a CPL (as that factor is set out at section 103(6) of the Courts of Justice Act, R.S.O. 1990, c. C. 43) is whether there is a triable issue as to such interest, not whether the plaintiff will likely succeed (1152939 Ontario Ltd. v. 2055835 Ontario Ltd., 2007 CarswellOnt 756 (Ont. S.C.J.), as per van Rensburg J., citing Transmaris Farms Ltd. v. Sieber, [1999] O.J. No. 300 (Ont. Gen. Div. [Commercial List]) at para. 62); (iii) The onus is on the party opposing the CPL to demonstrate that there is no triable issue in respect to whether the party seeking the CPL has "a reasonable claim to the interest in the land claimed" (G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 CarswellOnt 219 (Ont. C.A.) at para. 20); (iv) Factors the court can consider on a motion to discharge a CPL include (i) whether the plaintiff is a shell corporation, (ii) whether the land is unique, (iii) the intent of the parties in acquiring the land, (iv) whether there is an alternative claim for damages, (v) the ease or difficulty in calculating damages, (vi) whether damages would be a satisfactory remedy, (vii) the presence or absence of a willing purchaser, and (viii) the harm to each party if the CPL is or is not removed with or without security (572383 Ontario Inc. v. Dhunna, 1987 CarswellOnt 551 (Ont. S.C.) at paras. 10-18); and (v) The governing test is that the court must exercise its discretion in equity and look at all relevant matters between the parties in determining whether a CPL should be granted or vacated (931473 Ontario Ltd. v. Coldwell Banker Canada Inc., 1991 CarswellOnt 460 (Ont. Gen. Div.); Clock Investments Ltd. v. Hardwood Estates Ltd., 1977 CarswellOnt 1026 (Ont. Div. Ct.) at para. 9).

[80] In this case, the Applicant has not made any claim for an interest in land and, as such, she cannot meet the threshold issue. Her argument that she cannot claim what she does not know (the Respondent has refused to provide a tracing of funds from the joint account) does not refute that she has not met the threshold issue.

[81] Even if the Applicant had an interest in the land, she may not have met the test, see Yan v. Wan 2022 ONSC 1730.

Should the court make a non-dissipation order as it relates to the St. George Property?

[82] Justice Tzimas in Gerges v. Gerges 2023 ONSC 2662 para. 11 set out the principles as it relates to a non dissipation order citing that:

The court in Wright-Minnie v. Minnie, 2020 ONSC 5573, at paragraph 8 reviewed the authorities that have addressed the manner in which sections 12 and 40 of the FLA should be applied and distilled them to the following general principles:

a. The object of sections 12 and 40 of the FLA is the protection of a spouse’s interests under the FLA by helping to ensure that there will be assets available to satisfy the entitlements of a spouse who is successful in obtaining relief under the Act. Relevant to that exercise is an assessment of the risk that assets in existence prior to trial will be dissipated.[1] b. Drawing analogies to principles applied when considering granting interim or interlocutory injunctions, but without intending to lay down explicit and/or rigid formula or guidelines for the granting of such discretionary relief, courts applying sections 12 and 40 of the FLA frequently have regard to the following factors:

the relative strength of a claimant’s case; the balance of convenience or inconvenience; and the potential for irreparable harm.[2]

c. The court accordingly will consider how likely it is that the claimant will be entitled to an equalization payment and/or support, as well as the effect the granting or not granting of such orders will have on the parties.[3] d. Preservation and restraining orders generally should be restricted to specific assets, (as opposed to an all-encompassing order binding all of a party’s property in a general manner), and a claimant seeking such an order should show, on a prima facie basis, that he or she is likely to receive an equalization payment or support equal to the value of the specific assets.[4] e. Restraining orders granted pursuant to section 40 of the FLA usually are made when there is evidence that the party obliged to pay support is not complying with a support order or there is other evidence of blameworthy conduct. The recipient spouse cannot rely on bare allegations or assumed beliefs; i.e., there must be something more than an “unsupported concern”.[5]

[83] In this case, as a result of the lack of disclosure the net family properties (“the NFPs”) of the parties are not known. In reviewing the financial statements of the parties’, it is likely that an equalization payment will be owed by the Respondent to the Applicant given that he had the greater number of assets. For example, his corporate account, which he states totaled $354,512.49, and his RRSP, which was slightly higher, even considering his stated sole debts. It is true that there are 3 jointly owned properties. According to the Respondent, the value of those properties has declined since separation as a result of the real estate market declining.

[84] The behaviour of the Respondent as it relates to finances is concerning and his failure to comply with court order(s) is blameworthy conduct. The non-dissipation order is made as it relates to a specific asset.

Order

[85] 1. Within 30 days, the Respondent shall produce the following additional disclosure, in an organized electronic brief, to the Applicant’s counsel:

(a) 2022 personal Notice of Assessment; (b) Proof of retained earnings in Future Me Professional Corporation as at the date of separation and current; (c) Proof of all rental income earned to date, from the date of separation, from all properties including 313 Fennel Street, Plattsville and 23 Mansfield Drive, St. George; (d) Proof of the claim that the Respondent personally owes $100,000 to Canada Revenue Agency (“CRA”) as at the date of separation as set out in his Financial Statement sworn March 21, 2023, and particulars as to the current balance owing; (e) Full disclosure of all accounts held by the corporation. 1000108817 Ontario Inc., in addition to all account statements from the time that the accounts were opened (February 2022) to current; (f) Bank account details (with complete account numbers) regarding any and all accounts held by Future Me Professional Corporation as at the date of separation and current, including accounts held with CIBC (both Chequing and Savings), Tangerine, Primerica and AGF Investments Inc. Additionally, a customer profile summary listing with CIBC, Tangerine, Primerica, and AGF Investments Inc. confirming all accounts held by Future Me Professional Corporation with these financial institutions as of the date of separation and current; (g) A tracing of the funds removed by the Respondent from the following accounts following separation, with supporting statements showing where the funds were moved to, and where they are currently:

i. $11,226.81 removed from the joint Tangerine account ****2573 on April 12, 2022; ii. $21,678.43 removed from the joint CIBC account ****7038 on April 12, 2022; and iii. $25,000 removed from the joint CIBC account ****7038 on March 14, 2022

(h) A copy of the Respondent’s RRSP statement(s) as of the date of separation; and (i) Confirmation of whether the $259,000 removed on April 13, 2022 from the corporate account held with CIBC for Future Me Professional Corporation will be declared as income to the Respondent for 2022. In the event that the Respondent indicates that he has re-paid this sum to the corporation prior to the corporate year end, he shall produce proof of such repayment;

2. Within 30 days, the Applicant shall provide to the Respondent:

(a) If she has not already done so, an affidavit setting out any income she has received since separation. (b) An affidavit setting out any monies she may have received from family, relatives, or friends since separation, the date she received the money, and the amount received.

3. Until the Respondent complies with the automatic order, Justice Madsen’s order of July 7, 2023 and this order, he is prohibited from seeking any relief from any further motions without leave of the court as it relates to financial issues.

4. Within 30 days the Respondent shall pay the Applicant the sum of $25,000 in an uncharacterized amount.

5. The Respondent shall provide the Applicant with 90 days notice of his intention to sell the property known as the St. George Property. He is prohibited from further encumbering the property.

6. Should the Respondent sell the St George Property he is prohibited from dissipating the funds. Without consent of the Applicant or court order, the proceeds of sale of the St. George Property shall be deposited into his Future Me Professional Corporation and they shall remain in that account.

[86] I encourage the parties to resolve the issue of costs. If they are unable to do so:

(a) the Applicant shall have until February 12, 2024, to serve and file costs submissions; (b) The Respondent shall have until February 26, 2024 to serve and file responding submissions (c) The Applicant shall have until March 1, 2024 to serve and file brief reply submissions.

Submissions are not to exceed 10 pages double spaced, not including the bill of costs and copies of offers to settle, which must also be provided. Each party must serve and file a bill of costs. Reply submissions shall not exceed 4 pages double spaced.

If a party does not serve and file submissions respecting costs in accordance with these deadlines, there shall be no costs payable to that party, although costs may still be awarded against that party.

Cost submissions shall be sent to Kitchener.SCJJA@ontario.ca If no submissions are received on the schedule provided, the parties shall be deemed to have resolved costs on consent.

D. Piccoli J.