NEWMARKET COURT FILE NO.: FC-21-1584-00 DATE: 20240918

SUPERIOR COURT OF JUSTICE – ONTARIO – FAMILY COURT

RE: Maryna Chayka, Applicant AND: Sergiy Chayka, Respondent

BEFORE: The Honourable Madam Justice A.M. Daurio

COUNSEL: Applicant – Self-represented O. Bykov, Counsel for the Respondent

HEARD: September 16, 2024

Ruling on Motion

[1] There were two motions before the Court today. A motion filed by the Applicant seeking to strike the Respondent’s pleadings and a motion filed by the Respondent seeking to have the matrimonial home sold.

[2] This matter is scheduled to proceed to a Trial Scheduling Conference on September 20, 2024 and expected to proceed to trial during the November 2024 trial sittings, after numerous delays.

Procedural Issues

[3] The Respondent filed a new Notice of Motion in August 2024 with additional relief requested beyond the sale of the home. He sought Orders such as the removal of the temporary restraining Order and Orders related to parenting time. The Court declined to consider the additional relief as leave was not granted to add this relief, a trial is imminent, and it did not appear that those issues had been conferenced within the last 12 months as required by the current Practice Directions.

[4] Both parties filed material in excess of what was permitted in the Endorsements of Justice Himel and Justice Kaufman. The Applicant filed 23 pages of narrative and the Respondent filed the equivalent of 26 pages of narrative (equivalent because he did not comply with the Practice Directions and each Affidavit was 1.15 spaced instead of double spaced, despite being represented by Counsel).

[5] Each motion was a regular motion and they were subject to page restrictions.

[6] The Applicant wished to add additional Affidavits beyond the 23 pages already filed and the Court did not permit this.

[7] The Respondent filed an additional Affidavit in August 2024 and he should not have done so without leave.

[8] Both parties complained about the need to file more material because of the delays in these motions being heard, however, neither bothered to seek leave to address this issue in advance of the motion.

Brief Background

[9] The parties were married on January 21, 2012 and separated on June 22, 2021. There is one child of the marriage, namely, SRC.

[10] The parties jointly own the matrimonial home and the Respondent has not resided in the home since 2021.

[11] At the time of separation, the Respondent was self employed by a company he partially owned, called GTA Decks. It is the Respondent’s disclosure and financial circumstances involving this company which have been the primary source to delay in these proceedings.

Litigation History

[12] These motions were first scheduled to proceed on August 30, 2023 but were adjourned on consent.

[13] They were then set to proceed before Justice Lavine on February 16, 2024, however, Lavine J. found that they were both premature and she adjourned them to a conference before Justice Kaufman on February 22, 2024.

[14] Relevant highlights from Justice Lavine’s Endorsement include the following:

(a) Justice Lavine noted that the home had been appraised as of April 19, 2022 to have a value of $1.1 million and she noted that at the time this matter was before her, the mortgage owing was approximately $430,000;

(b) the parties jointly retained Steve Ranot, an expert valuator, on February 1, 2022 to value the Respondent’s ownership interests in GTA Decks and to calculate the Respondent’s income for 2020 and 2021;

(c) on September 7, 2023, the parties agreed that Mr. Ranot would prepare calculations under two scenarios, one to include unreported income and one that did not. Justice Lavine stated that “the parties requested a presentation of draft calculations before Mr. Ranot’s firm commenced further work. These draft calculations are still pending”;

(d) “…the scheduling of the trial, has been continually adjourned, in part as Mr. Ranot had not completed his work and has not been available during the trial sittings”;

(e) four trial management/trial scheduling conferences had been scheduled between April 2023 and February 2024. “Concern was expressed by Kaufman J. about the prolonged delay in the obtaining of the draft expert report, and, in the interim, the utilities and financing arrears, which the respondent had not paid”;

(f) after being Ordered to do so by Justice Kaufman on January 3, 2024, the Respondent brought the utility accounts up to date;

(g) “The respondent acknowledges that he has not made mortgage payments since June 2022, despite Czutrin J.’s order and directions of Himel J. and Kaufman J. that the respondent confirm that there are no financing arrears”;

(h) “The respondent acknowledges that his failure to produce disclosure to Mr. Ranot and pay him in a timely fashion contributed to the initial delay. The respondent consented to the terms of Czutrin J.’s November 14, 2022 order requiring him to produce disclosure requested by Mr. Ranot and pay his invoices within 30 days”; and

(i) “The respondent notes that Czutrin J. went on to make other orders at the conference, without a full hearing, which the respondent opposed.”

[15] When Lavine J. adjourned the motions, she directed the parties to “…advise the case management judge when Mr. Ranot’s pending income calculations will be available, in order to set a return date for the motions to be heard.”

[16] This matter is scheduled for its sixth Trial Scheduling Conference on September 20, 2024, and the expert report is still not done. And, apparently, Mr. Ranot is not available for the November 2024 sittings.

Motions Scheduled for Today

[17] While Mr. Ranot’s reports had not been completed (and, perhaps because they were still outstanding), the motions were scheduled to proceed together as a long motion during the May 2024 trial sittings, but they were not reached during those sittings.

[18] During submissions, the Court was advised that the parties were provided with draft reports by Mr. Ranot at the end of August 2024 (about two weeks before the motion date). The reports were non-disclosable and the email from Mr. Ranot attached to the draft reports was not put before the Court for the motion.

Motion to Strike

The Applicant’s Position

[19] The Applicant claims that the Respondent is playing games and manipulating the Court by failing to be forthcoming, transparent and diligent in providing disclosure.

[20] The Applicant alleged that the Respondent’s business, GTA Decks, was a thriving business at the time of separation, and after. The company owned new cars, there was a website, advertising and a company showroom.

[21] The Applicant stated that the parties agreed to retain a joint valuator when they signed a Minutes of Settlement on September 29, 2021, about three years ago. But the valuator was not selected until February 2022.

[22] On November 9, 2022 (about nine months after he was retained), Mr. Ranot wrote to the parties to advise that there was still disclosure outstanding, and that the Respondent was providing responses that were inconsistent and required clarification.

[23] When progress was not being made, the parties attended a conference before Justice Czutrin and he made Orders on November 14, 2022. Some of the terms in the Order were made on consent and some were not on consent. Justice Czutrin’s Orders were central to the Applicant’s case at this motion. Those Orders were as follows:

On consent:

1. The Respondent shall forthwith pay Mr. Ranot’s outstanding accounts and shall continue to make the payments to Mr. Ranot within one week of the invoices being rendered.
2. The Respondent shall produce all outstanding disclosure as requested by Mr. Ranot by December 30, 2022.
3. Any additional requests for disclosure made by Mr. Ranot shall be satisfied by the Respondent within 30 days of receipt of Mr. Ranot’s additional disclosure request.

Not on consent:

4. In the event that the Respondent fails to comply with his disclosure obligations herein, the Applicant is at liberty to bring a Motion seeking an Order striking the Respondent’s pleadings.
5. Within seven days, the Respondent shall bring into good standing the arrears of all utilities and home insurance with respect to the Matrimonial Home municipally known as 112 Lucena Crescent, Maple, Ontario. Within seven days, the Respondent shall provide the Applicant with confirmation that he has brought the utility arrears into good standing.
6. The Respondent shall continue to pay for all of the utilities and the home insurance with respect to the Matrimonial Home each month as they become due.
7. In the event that there are arrears of financing payments with respect to the vehicle that the Applicant is driving but which is registered in the Respondent’s name, within seven days the Respondent shall bring those arrears into good standing. Within seven days, the Respondent shall provide the Applicant with confirmation that he has brought the financing arrears into good standing.
8. The Respondent shall continue to make the monthly financing payments with respect to the vehicle the Applicant is driving each month as they become due.
9. Within seven days, the Respondent shall pay his outstanding 407 ETR bill so that the Applicant may renew the licence plate sticker for the vehicle that she is driving but which is registered in the Respondent’s name. Within seven days, the Respondent shall provide the Applicant with confirmation that he has paid the full amount of the outstanding 407 ETR bill.
10. An Order permitting the Applicant to service and repair if necessary the BMW vehicle she is driving but which is registered in the Respondent’s name without the necessity of the Respondent’s consent to the service and/or repairs.
11. Within five days, the Respondent shall execute whatever documents are necessary in order to change the current Matrimonial Home mortgage amortization period and to convert the current open mortgage to a fixed mortgage in order to decrease the monthly mortgage payments.
12. In the alternative to number 10, the Respondent shall contribute 50% towards the monthly current Matrimonial Home mortgage payments.

[24] The Applicant claimed that the Respondent did not convert the mortgage as Ordered by Justice Czutrin, nor did he begin to pay 50% of the mortgage payments. She claimed that the Respondent had not contributed toward the mortgage for their jointly owned home since June 2022.

[25] On January 11, 2023, Mr. Ranot wrote an email to the parties advising that he was still awaiting documentation and clarification from the Respondent. This was a breach of paragraph 2 of Justice Czutrin’s Order, which was made on consent.

[26] In an email dated March 1, 2023, Mr. Ranot wrote to the parties indicating that the “truth is difficult to discern here…” due to financial arrangements that apparently took place between the Respondent and his brother for which there was no paper trail, and which did not make sense.

[27] On April 20, 2023, Mr. Ranot emailed the parties again and expressed that he was receiving “excuses all over this matter” and that he had not received answers to his questions sent on March 1, 2023. This was in breach of paragraph 3 of Justice Czutrin’s Order, made on consent.

[28] On April 27, 2023, the Applicant was given leave to bring a motion to strike the Respondent’s pleadings by Justice Kaufman.

[29] In the midst of Mr. Ranot working with the parties, and despite the Order of Justice Czutrin, the Respondent attempted to make a change to the valuator involved in this matter through communication with the Applicant in June 2023. The Applicant viewed this as just another tactic for delay.

[30] On October 3, 2023, Justice Himel cautioned the parties about the importance of moving this matter forward and she Ordered the Respondent to confirm that he had paid all of the utilities and brought the financing into good standing by a specific date. Any failure to do so was a “basis to strike” his pleadings.

[31] The Applicant claimed that the Respondent did not comply with Justice Himel’s Orders and she received no communication from him, even after she followed up. This was also a breach of paragraph 5 of Justice Czutrin’s Order, not made on consent.

[32] The Applicant served a Request for Information on the Respondent on October 23, 2023, and she received no response.

[33] The Applicant alleged that the Respondent provided inconsistent and untruthful information regarding his financial dealings and situation, for example:

(a) the Respondent gifted a Mercedes to his girlfriend, after he claimed to have sold the vehicle;

(b) the Respondent purchased a BMW in 2021 with a cash deposit of $22,475 and he has not provided the Applicant with documentation to show the source of this money;

(c) the Respondent repeatedly provided Mr. Ranot with evasive and non-helpful answers;

(d) the information in the Respondent’s Financial Statements has been inconsistent with his claims, or he has failed to provide any documents to back them up. The Respondent claims to be in financial dire straits and taking out loans from friends and family; but no such loans are listed in his Financial Statement. Also, he says he pays rent in his Financial Statement, however, he has not provided any evidence to support this claim, despite the Applicant’s requests; and

(e) the Respondent has not provided the Applicant with a copy of his passport, as she requested. The Applicant believes that the Respondent has been travelling and a copy of his passport would confirm this.

[34] The Applicant acknowledged that there were draft reports now prepared by Mr. Ranot, however, she is concerned about the information that was provided to him. She believes that the Respondent and his colleagues/friends had manufactured and back-dated documents that “magically” became available after years of evasion.

[35] The Applicant stated that the reports are not final and that the parties would already have final reports if the Respondent had cooperated with the process and complied with the Orders of Justice Czutrin.

[36] The Applicant was concerned about the sudden existence of these “draft reports” just before the parties were to attend a Trial Scheduling Conference. This, she says, is an example of the Respondent engaging in game playing and delay tactics.

[37] In reply to the Respondent’s position that an award of costs should be considered by the Court before striking pleadings, the Applicant did not think that an award of costs would be a sufficient alternative because she believed that the Respondent has significant financial means and that a costs award will have little impact on him.

The Respondent’s Position

[38] The Respondent took the position that striking pleadings is an extraordinary remedy and he claimed that he has either complied with previous Orders, or he “did all he could” to comply.

[39] If he was found to be in non-compliance with Court Orders, he took the position that an Order of costs, or other less extreme options, should be the first step. He advised the Court that there had been no previous costs Orders made in this case.

[40] The Respondent complained that some of the terms in Justice Czutrin’s Order were not made on consent and they conflicted with a previous Order of Justice Jarvis.

[41] He denied being consistently non-compliant with Justice Czutrin’s Order, as he “did the best he could.” He complained that the Applicant “did not contribute a cent” to the cost of the joint valuator and that she has been living lavishly in the matrimonial home while driving his BMW, together with her new partner.

[42] With respect to disclosure, the Respondent stated that Mr. Ranot confirmed that all disclosure has been provided and that draft reports have been prepared. It was his submission that the draft reports could not have been prepared unless he had provided all of the disclosure that Mr. Ranot had asked for.

[43] The Respondent put the blame squarely on Mr. Ranot for the delay in the reports being prepared. The Respondent claimed that he had provided all that was asked for. Mr. Ranot is a busy professional and this, said the Respondent, was the cause of the delay.

[44] When the Court asked Counsel who had the burden of showing compliance with Court Orders, he acknowledged that it was the Respondent who had that burden.

Law

[45] Rule 13 of the Family Law Rules provides the parties with basic procedural requirements that they must comply with relating to financial disclosure. Relevant sub-sections are as follows (emphasis added):

Additional required financial disclosure, claim under Part I of the Family Law Act

(3.3) A party who is required under subrules (1) to (3) to serve and file a financial statement in relation to a claim under Part I of the Family Law Act shall, no later than 30 days after the day by which the financial statement is required to be served, serve on the other party the following information, unless the court orders otherwise:

1. The statement issued closest to the valuation date for each bank account or other account in a financial institution, pension, registered retirement or other savings plan, and any other savings or investments in which the party had an interest on that date.
2. A copy of an application or request made by the party to obtain a valuation of his or her own pension benefits, deferred pension or pension, as the case may be, if any, as of the valuation date.
3. A copy of the Municipal Property Assessment Corporation’s assessment of any real property in Ontario in which the party had a right or interest on the valuation date, for the year in which that date occurred.
4. If the party owned a life insurance policy on the valuation date, the statement issued closest to that date showing the face amount and cash surrender value, if any, of the policy, and the named beneficiary.
5. If the party had an interest in a sole proprietorship or was self-employed on the valuation date, for each of the three years preceding that date, i. the financial statements of the party’s business or professional practice, other than a partnership, and ii. a copy of every personal income tax return filed by the party, including any materials that were filed with the return.
6. If the party was a partner in a partnership on the valuation date, a copy of the partnership agreement and, for each of the three years preceding the valuation date, i. a copy of every personal income tax return filed by the party, including any materials that were filed with the return, and ii. the financial statements of the partnership.
7. If the party had an interest in a corporation on the valuation date, documentation showing the number and types of shares of the corporation and any other interests in the corporation that were owned by the party on that date.
8. If the corporation in which a party had an interest was privately held, for each of the three years preceding the valuation date, i. the financial statements for the corporation and its subsidiaries, and ii. if the interest was a majority interest, a copy of every income tax return filed by the corporation.
9. If the party was a beneficiary under a trust on the valuation date, a copy of the trust settlement agreement and the trust’s financial statements for each of the three years preceding that date.
10. Documentation showing the value, on the valuation date, of any property not referred to in paragraphs 1 to 9 in which the party had an interest on that date.
11. Documentation that supports a claim, if any, for an exclusion under subsection 4 (2) of the Family Law Act.
12. The statements or invoices issued closest to the valuation date in relation to any mortgage, line of credit, credit card balance or other debt owed by the party on that date.
13. Any available documentation showing the value, on the date of marriage, of property that the party owned or in which he or she had an interest on that date, and the amount of any debts owed by the party on that date. O. Reg. 69/15, s. 3 (2).

[46] In addition to Rule 13 of the Family Law Rules, section 21 of the Federal Child Support Guidelines sets out the obligations of parties to provide financial disclosure in cases involving support and the consequences for failing to provide that disclosure:

21 (1) A spouse who is applying for a child support order and whose income information is necessary to determine the amount of the order must include the following with the application: (a) a copy of every personal income tax return filed by the spouse for each of the three most recent taxation years; (b) a copy of every notice of assessment and reassessment issued to the spouse for each of the three most recent taxation years; (c) where the spouse is an employee, the most recent statement of earnings indicating the total earnings paid in the year to date, including overtime or, where such a statement is not provided by the employer, a letter from the spouse’s employer setting out that information including the spouse’s rate of annual salary or remuneration; (d) where the spouse is self-employed, for the three most recent taxation years (i) the financial statements of the spouse’s business or professional practice, other than a partnership, and (ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the spouse does not deal at arm’s length; (e) where the spouse is a partner in a partnership, confirmation of the spouse’s income and draw from, and capital in, the partnership for its three most recent taxation years; (f) where the spouse controls a corporation, for its three most recent taxation years (i) the financial statements of the corporation and its subsidiaries, and (ii) a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the corporation, and every related corporation, does not deal at arm’s length; (g) where the spouse is a beneficiary under a trust, a copy of the trust settlement agreement and copies of the trust’s three most recent financial statements; and (h) in addition to any income information that must be included under paragraphs (c) to (g), where the spouse receives income from employment insurance, social assistance, a pension, workers compensation, disability payments or any other source, the most recent statement of income indicating the total amount of income from the applicable source during the current year, or if such a statement is not provided, a letter from the appropriate authority stating the required information.

Obligation of respondent

(2) A spouse who is served with an application for a child support order and whose income information is necessary to determine the amount of the order, must, within 30 days after the application is served if the spouse resides in Canada or the United States or within 60 days if the spouse resides elsewhere, or such other time limit as the court specifies, provide the court, as well as the other spouse or the order assignee, as the case may be, with the documents referred to in subsection (1).

Failure to comply

22 (1) Where a spouse fails to comply with section 21, the other spouse may apply (a) to have the application for a child support order set down for a hearing, or move for judgment; or (b) for an order requiring the spouse who failed to comply to provide the court, as well as the other spouse or order assignee, as the case may be, with the required documents.

Costs of the proceedings

(2) Where a court makes an order under paragraph (1)(a) or (b), the court may award costs in favour of the other spouse up to an amount that fully compensates the other spouse for all costs incurred in the proceedings.

Adverse inference

23 Where the court proceeds to a hearing on the basis of an application under paragraph 22(1)(a), the court may draw an adverse inference against the spouse who failed to comply and impute income to that spouse in such amount as it considers appropriate.

Failure to comply with court order

24 Where a spouse fails to comply with an order issued on the basis of an application under paragraph 22(1)(b), the court may (a) strike out any of the spouse’s pleadings; (b) make a contempt order against the spouse; (c) proceed to a hearing, in the course of which it may draw an adverse inference against the spouse and impute income to that spouse in such amount as it considers appropriate; and (d) award costs in favour of the other spouse up to an amount that fully compensates the other spouse for all costs incurred in the proceedings.

[47] The Family Law Rules (FLR) provide the Court with the authority to deal with people who fail to obey Court Orders and who fail to comply with the Rules. Specifically, Rules 1(8) and (8.1) of the FLR provides a list of options for the Court that are not exhaustive, as follows:

Failure to obey order

(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; (a.1) an order to pay an amount to a party or into court as a penalty or fine; (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) a contempt order, if sought under rule 31. O. Reg. 322/13, s. 1; O. Reg. 261/24, 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.

[48] The wording of FLR 1(8) is also sufficiently broad to allow the grant of a stay of a claim, where it is necessary for a just determination of the case, and where there has been a willful failure to follow the Rules or obey an order in the case. Martin v. Martin, [2005] O.J. 4567 (Ont. S.C.J.); Wreggbo v. Vinton, 2013 ONCJ 250

[49] The caselaw is clear that a party, whose pleadings have been struck, are no longer able to participate in the case. Caldwell v. Caldwell, [2006] O.J. No. 1469 (OCA)

[50] In Roberts v. Roberts, 2015 ONCA 450, the Court of Appeal reinforced the notion that the most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing. Failure to abide by this fundamental principle impedes the progress of the action, causes delay and generally acts to the disadvantage of the opposite party. It also impacts the administration of justice. Unnecessary judicial time is spent, and the final adjudication is stalled. Financial disclosure is automatic. It should not require Court Orders – let alone three - to obtain production.

[51] In Ferguson v. Charlton, 2008 ONCJ 1, Justice Spence of the Ontario Court of Justice set out a three step process for the court to follow on a motion brought under Family Law Rule 1(8). This three-step process applies when deciding whether the evidence allows for a finding of non-compliance of an Order by one party, and whether the court should exercise its discretion to impose consequences if any breach is found. The three steps in the process set out in Ferguson are:

[64] ... First, the court must ask whether there a triggering event that would allow it to consider the wording of either subrule 1(8) or subrule 14(23). That triggering event would be non-compliance with a court order “in the case or a related case” [subrule 1(8)] or an order “made on motion” [subrule 14(23)].

Second, if the triggering event exists, the court should then ask whether it is appropriate to exercise its discretion in favour of the non-complying party by not sanctioning that party under subrule 1(8), or by ordering that subrule 14(23) does not apply. My review of the foregoing case law suggests that this discretion will only be granted in exceptional circumstances. In my view, the court’s decision whether or not to exercise its discretion in favour of a non-complying party, ought to take into account all relevant history in the course of the litigation and, more specifically, the conduct of the non-complying party.

Third, in the event that the court determines that it will not exercise its discretion in favour of the non-complying party, it is then left with a very broad discretion as to the appropriate remedy pursuant to the provisions of either subrule 1(8) or subrule 14(23).

[52] In Norris vs. Norris, 2019 ONSC 2795 at para 20, the court set out a three-step test governing the exercise of judicial discretion to strike a party's pleadings:

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

[53] In family law cases, pleadings should only be struck, and trial participation denied, in exceptional circumstances and where no other remedy would suffice. Purcaru v. Purcaru, 2010 ONCA 92, at para. 47. The exceptional nature of this remedy is rooted in the significance of the adversarial system, as recognized in Purcaru, at para. 49:

The adversarial system, through cross-examination and argument, functions to safeguard against injustice. For this reason, the adversarial structure of a proceeding should be maintained whenever possible. Accordingly, the objective of a sanction ought not to be the elimination of the adversary, but rather one that will persuade the adversary to comply with the orders of the court.

[54] Pleadings in a family law proceeding should only be struck in “egregious and exceptional circumstances” which includes willful non-compliance with a court order to provide financial disclosure. Manchanda v. Thethi, 2016 ONCA 909, paras. 7 & 9. In making this assessment a court must consider: (1) the disclosure provided; (2) an itemization of the disclosure that the impugned party has failed to provide; (3) whether there has been willful disobedience; (4) proportionality. Owen v. Owen, 2018 ONSC 1083

[55] Where late disclosure is provided, it is preferable to order costs, rather than strike the pleadings. Vogl v. Vogl, 2007 ONCA 303

[56] If the court determines it should not exercise its discretion in favour of the non-complying party, it is then left with the very broad discretion as to the appropriate remedy under Rule 1(8). Relevant considerations include:

i. The proportionality of the sanction to the wrongdoing; ii. The similarity of sanctions in like circumstances; iii. The presence of mitigating factors; iv. The presence of aggravating factors; v. Deterrence. K.M. v. J.R., 2024 ONSC 1338

[57] In C.J. v. E.J., 2021 ONSC 4853, the court set out that the onus is on the non-complying party to show, on a balance of probabilities that either:

a. Rule 1(8) is not applicable, or b. That the court should exercise its discretion in favour of the non-compliant party.

[58] Where children’s interests are involved, court should avoid that sanction or use utmost caution in striking pleadings because the trial court needs participation of both parties and information that each can provide about best interests of the child. King v. Mongrain, 2009 ONCA 486, [2009] O.J. No. 2466, C.A.

[59] The Court of Appeal noted in Haunert-Faga v. Faga (2005), 20 R.F.L. (6th) 293 (Ont. C.A.) at paragraph 7 that: Generally, it is preferable to avoid the sanction of striking pleadings where children’s interests are involved. The reason for that admonition is simple – in order to make custody and access decisions in the best interests of the child, the court needs the participation of both parties.

[60] Where financial disclosure orders are violated, courts have struck pleadings on financial issues and have permitted the parenting issues to continue. Sleiman v. Sleiman (2002) 28 R.F.L. (5th) 447 (Ont. C.A.)

Expert Reports

[61] Rule 20.2 of the Family Law Rules sets out the requirements for a party to call a litigation expert at trial, as follows (emphasis added):

Expert witness reports

(2) A party who wishes to call a litigation expert as a witness at trial shall, at least six days before the settlement conference, serve on all other parties and file a report signed by the expert and containing, at a minimum, the following:

1. The expert’s name, address and area of expertise.
2. The expert’s qualifications, including his or her employment and educational experiences in his or her area of expertise.
3. The nature of the opinion being sought and each issue in the case to which the opinion relates.
4. The instructions provided to the expert in relation to the case.
5. The expert’s opinion on each issue and, where there is a range of opinions given, a summary of the range and the reasons for the expert’s own opinion within that range.
6. The expert’s reasons for his or her opinion, including, i. a description of the factual assumptions on which the opinion is based, ii. a description of any research or test conducted by or for the expert, or of any independent observations made by the expert, that led him or her to form the opinion, and, for each test, A. an explanation of the scientific principles underlying the test and of the meaning of the test results, and B. a description of any substantial influence a person’s gender, socio-economic status, culture or race had or may have had on the test results or on the expert’s assessment of the test results, and iii. a description and explanation of every document or other source of information directly relied on by the expert in forming the opinion.
7. An acknowledgement of expert’s duty (Form 20.2) signed by the expert. O. Reg. 250/19, s. 8.

[62] 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.

Analysis

[63] Throughout this litigation the Respondent has dragged the Applicant through the mud and has played tricks with the Court, by repeatedly taking steps at the very last minute in order to avoid sanctions.

[64] So far, this approach has worked really well for the Respondent. He has not faced a recalculation of child support. He has not faced a motion for spousal support. He has avoided complying with some Orders of a financial nature because he claims that he is destitute, without providing any reliable evidence to support this claim.

[65] Further, despite the number of unproductive conferences that have occurred at the hands of the Respondent, he has never had a costs award made against him.

[66] The Respondent has been given chance after chance to comply with Order after Order. For three years.

[67] The Respondent claimed that he has now “fully complied” with the disclosure requirements. He provided no corroborating evidence to support this claim.

[68] In any event, this raises the question of what “compliance” means. Does compliance mean that a party can blatantly ignore deadlines set out in Court Orders and, as long as they eventually do what they are told, they can say that they are in compliance? This seems to be a preposterous proposition and suggests that Court Orders are meaningless.

[69] This Court finds that the Respondent has failed to comply with Justice Czutrin’s Order in spirit and in letter. This Court finds that the Respondent has engaged in an intentional, engineered litigation approach with the sole focus of wearing the Applicant down.

[70] The parties are on the verge of trial - again. In submissions, the Respondent seemed to be suggesting that the trial cannot proceed because Mr. Ranot is not available. The Respondent did not take any responsibility for this situation. In fact, he would like the Court to believe that the current problem was caused only by Mr. Ranot, and his busy schedule.

[71] The Respondent did not file any evidence for this motion to confirm that he had provided Mr. Ranot with all of the disclosure that was required of him. Despite the Respondent acknowledging that he is the party who has the burden of proving that he has complied.

[72] Proof would not be an uphill battle. A simple letter from Mr. Ranot stating that he had been provided with all of the required documents from the Respondent, and when this occurred, would have sufficed. When the Court asked if the Respondent had such a letter or an email, the Respondent acknowledged that he did not have one.

[73] The Respondent hoped that the Court could speculate that all the disclosure had been provided because Mr. Ranot has now apparently prepared draft reports. This Court does not engage in the practice of speculation. How is the Court to know whether or not Mr. Ranot prepared draft reports with full or partial disclosure? It is not outside the realm of possibilities that Mr. Ranot needed to make assumptions, or draw inferences, based on gaps in disclosure.

[74] This motion to strike has been on adjournment for many months and if the Respondent needed leave to file additional material in Order to demonstrate that he provided the required disclosure in a timely manner, it was incumbent upon him to do so.

[75] The Respondent is playing games. There is no question about this. Not only has he completely failed to provide disclosure within Court Ordered timelines (and extended timelines), he has failed to comply with the Family Law Rules regarding financial disclosure.

[76] According to the Rules, he should have provided the Applicant with all of his source documents within 90 days of serving his first Financial Statement. That deadline would have expired in late 2021 or early 2022. We are now in 2024, with 2025 fast approaching.

[77] The Respondent complained about Justice Czutrin’s Order. He did not appeal it. He did not bring a motion seeking to vary it, or to set it aside. As such, it is completely inappropriate for him to continue to engage in a collateral attack against that Order.

[78] Because the Respondent did not like Justice Czutrin’s Order (despite consenting to some of the terms), he simply ignored most of it until he was called out by various different judges. He has seen Justice Himel, Kaufman, Czutrin and Lavine. I am the fifth judge to touch this file.

[79] The Respondent’s game playing continued in this motion. The Respondent filed an updated Financial Statement dated August 13, 2024, as he wanted the Court to see how dire his financial circumstances were. But the Financial Statement was highly problematic and unreliable.

[80] For example:

(a) the Respondent included a debt for a car loan on his BMW, but he did not include the corresponding value of the car. This had the effect of increasing his total debts artificially;

(b) he misrepresented his half of the value of the matrimonial home (he used a total value of $845,000 when the last valuation valued the home at $1.1 million) and, in the debts section, he included the full mortgage balance, rather than just his half share, again increasing his total debts artificially;

(c) he listed significant debts that were attributed to the company GTA Decks in the amount of $616,833.27, which are not personal debts. Even if he could prove that these debts were a personal liability, he included the full value of the debts despite the fact that he is only a partial owner of the company. The inclusion of these debts gave the false appearance of a significant increase in debt load since separation;

(d) he did not include any value for GTA Decks at the date of separation. Just “TBA.” This had the effect of reducing the value of his assets;

(e) the Respondent stated he had earnings of $84,000 per year, but he listed $88,779.12 in annual living expenses (in after tax dollars). These expenses did not include any legal fees. The Respondent would require before tax funds in excess of $125,000 to pay these expenses; and

(f) there are no loans listed to support his claims that he has been borrowing funds to survive and his claim that his personal debt had increased by $18,322.98 since separation would be insufficient to cover the almost $40,000 annual shortfall set out elsewhere in his Financial Statement.

[81] The Respondent has a lawyer. He is not a self-represented litigant who may not understand how to complete a Financial Statement. He cannot pretend to be confused about the numbers. Further, this has been a pattern of his, wherein the evidence he presents does not match his words.

[82] It is inconceivable to me that the trial of this matter be delayed any further. The reality is that the trial must proceed without the expert report. And the responsibility for that failure falls squarely on the Respondent.

[83] The Court can draw adverse inferences against the Respondent for his failure to provide the required valuation reports.

1. Is there a triggering event justifying the striking of pleadings?

[84] There have been several triggering events that justify striking the Respondent’s pleadings.

[85] He has failed to comply with the very basic disclosure rules as set out in the Family Law Rules. As a result of this failure, he has had several Orders made against him in an effort to compel his compliance (unsuccessfully).

[86] The Respondent never complied with disclosure Orders as they were written. He always missed the deadline. That is not compliance.

[87] The missed deadlines have resulted in years of delay and wasted Court resources. Everyone, including the Applicant, the Court and Mr. Ranot, have been chasing the Respondent down for three years to get him to provide documentation that he has been obligated to provide from the outset.

[88] No meaningful steps could be taken to resolve the financial issues because of the Respondent’s failure to take Court Orders seriously. The absence of the reports have prevented the parties from engaging in any meaningful settlement discussions around spousal support entitlement, quantum or duration, child support and retroactive calculations.

[89] To compound the situation, the Respondent, even at the motion before me, provided financial information that made little sense and misrepresented his financial circumstances.

[90] The Respondent swore to the truth of a Financial Statement under oath which included numbers that were grossly inaccurate and some that should not have been included at all (the GTA Decks debts). I find that the numbers were set out in this way in an effort by the Respondent to misrepresent his financial circumstances to this Court and to falsely support his claim that he is financially struggling.

[91] Close scrutiny of the document revealed that the numbers did not support his claim. In fact, all the Respondent was able to achieve by filing this document was to raise significant concerns about the Respondent’s credibility, in addition to reinforcing the Applicant’s narrative that the Respondent is inconsistent and evasive.

2. Is it appropriate to strike the pleadings in the circumstances of the case?

[92] Based on the foregoing, it is appropriate to strike pleadings in the circumstances of this case. The Respondent has demonstrated a wanton disregard for the Rules of this Court and Court Orders.

[93] The apparent existence of “draft reports” does not help the Respondent. The reports are incomplete as a direct result of his lacklustre cooperation with the process. This is an absolute failure of the Respondent to comply with the Family Law Rules.

[94] The Respondent has egregiously missed the deadline for filing an expert report and a draft report at this late stage of the litigation is simply insufficient.

[95] The Court is very concerned about the Respondent’s behaviour and a message must be sent to make it clear that the Court does not condone his actions and that he will not simply get away with taking this approach.

[96] To do otherwise would bring the administration of justice into disrepute.

3. Are there other remedies in lieu of striking pleadings that might suffice?

[97] As noted in the caselaw included in this decision, the Court has a wide array of discretion available to it when deciding whether or not to strike pleadings, including Orders that dismiss claims, limit the Respondent’s participation in the process, costs awards, fines and penalties, etc.

[98] The Respondent took the position that a costs award should be the first step. I am not convinced that a costs award on its own would be sufficient enough to send a message.

[99] It is clear to this Court that the matter must proceed to trial in November 2024, with or without Mr. Ranot. The Court can draw adverse inferences against the Respondent at trial for his failure to provide the required valuation reports.

[100] The Court is of the view that the Respondent’s participation in the trial will be valuable in assisting the Court to make findings regarding his income and the value of his business (or businesses). Counsel for the Respondent correctly pointed out that this Court has other options available to address non compliance with Court Orders and the discretion to choose from those other options.

[101] In this case, the Court will be using my discretion to make several procedural Orders against the Respondent, as well as Ordering that he pay a penalty. Any failure on his part to strictly comply with those Orders will result in his Answer being struck on the financial issues.

[102] In making a penalty Order against the Respondent, the Court must send a clear and unequivocal message that Court Orders are meaningful, they are to be followed and that this Court will not tolerate a lacklustre approach to compliance. Unlike the Respondent, this Court does not play games.

[103] The Court must uphold the administration of justice in a case where removing the badly behaving Respondent from the litigation is not the answer at this time (not as a favour to him, but because the Court will be in a much better position to make findings at trial with his involvement).

[104] The Family Law Rules have been updated to specifically include the Court’s discretion to impose penalties and fines against parties who disobey Orders and the Rules.

[105] Given that striking pleadings may just make this case more difficult to resolve, it is appropriate to impose both a penalty and potential fines against the Respondent with the goal of deterrence and with the hope that real consequences will convince the Respondent that Court Orders are to be taken seriously.

[106] When the Court is considering a penalty, it must be proportionate and effective. In my view, any penalty less than $10,000 would not be sufficient in this case. The Respondent has been told, repeatedly, to comply with Court Orders and to cooperate with Mr. Ranot in a diligent and efficient manner so this litigation could move forward. For almost two years the Respondent has delayed progress and manipulated the situation to make it seem as though others were responsible for the delay, avoiding sanctions.

[107] The penalty must be significant enough to have a real impact. When the Court considers the factors in this case, and the Respondent’s egregious behaviour, a lower penalty would not be proportionate to the damage he has done.

[108] Finally, and very briefly, the Applicant indicated that she wanted the Respondent’s Answer struck regarding the parenting issues in this matter, however, the Court was not provided with any evidentiary basis upon which to make such a drastic Order. As such, it is not appropriate to include the parenting issues in my Order.

Motion for Sale of Matrimonial Home

The Respondent’s Position

[109] The Respondent is seeking to list the matrimonial home for sale in Order to access his equity.

[110] The Respondent claimed to be in financial dire straits and that without access to $100,000 of equity, he will not be able to meet his financial obligations, he may become homeless and he will not be able to afford to go to trial.

[111] As joint owner of the property, the Respondent has a prima facie right to its sale under the Partition Act.

[112] The Respondent stated that he had been open to the Applicant buying him out, however, she did not make any proposals.

[113] He recognized that the Applicant and the parties’ young daughter currently reside in the home and that the Applicant is unlikely to qualify for a mortgage and be able to purchase a new home once this home is sold. However, he was agreeable to the Applicant receiving half of the net proceeds, while the balance of the net proceeds remain in trust.

[114] The Respondent repeated a number of times that he is suffering financially while the Applicant and her boyfriend enjoy the luxury of his BMW and the joint home.

[115] In support of his position, the Respondent filed the Financial Statement referred to above.

[116] According to his Financial Statement, the current equity in the home is approximately $422,500 before costs associated with the sale are included (such as legal fees, commissions, etc.).

[117] Approximate deductions for the sale of a home with the value of $845,000 would be $50,000, leaving each party with about $186,250 in net proceeds of sale. Using his numbers, the Respondent wished to have more than half of his share released to him, leaving $86,250 in trust to cover equalization, post-separation adjustments and any retroactive support Ordered.

[118] As noted above, the actual valuation of the home in 2022 valued it at $1.1 million, however, this was not the evidence presented at the motion by the Respondent, who undervalued the home by $255,000 in his Financial Statement. Using valuation amount, and slightly higher disposition costs, each party would be entitled to about $304,750 in net proceeds of sale.

The Applicant’s Position

[119] The Applicant did not believe it was in the best interests of their child to remove her from her home.

[120] Without the valuation reports, the Applicant stated that she has been unable to do any calculations of what she may be owed in an equalization payment, retroactive support and an accounting of post-separation adjustments will be required given the Respondent’s failure to pay his share of the mortgage over a long period of time.

[121] It is possible, said the Applicant, that the Respondent will not be entitled to any of the net proceeds.

[122] The Applicant stated that the home is the only major asset left between the parties. It was her position that the Respondent has systematically run GTA Decks into the ground to ensure that it has no value and, as a result, the company value is potentially unavailable to secure her claims.

[123] It was her position that if the home is sold, the Respondent should not receive any of the net proceeds given the absence of financial information. If he cannot access the net proceeds, the sale of the home at this stage will not assist him in alleviating his fabricated financial needs, according to her.

Analysis

[124] The Court agrees with the Respondent, that as joint title holder, he has a prima facie right to seek a sale of the property under the Partition Act. However, when a home is part of family law litigation, many other factors must be considered.

[125] I will not go into an exhaustive review of the law for the purposes of this motion and I am dismissing it, for the following reasons:

(a) the trial of this matter is imminent;

(b) the Respondent has failed to establish any financial need as his Financial Statement is unreliable;

(c) the Court is unable to estimate the Applicant’s family law claims as a result of the Respondent’s failure to provide valuation reports in a timely manner;

(d) the net proceeds of sale would be held in trust, and only the Applicant’s half released to her, which would not alleviate the Respondent’s unsupported claims of financial need;

(e) there is no spousal support determination and the Respondent is underpaying child support (based on his most recent Financial Statement he should be paying child support in the amount of $783 per month, he is paying $418 per month), as such, the sale of the home at this time would leave the Applicant and the parties’ very young daughter in a difficult position given the current housing crisis in Ontario;

(f) it is possible for the Court to Order transfer of title to the Applicant following trial as a remedy to satisfy her yet to be determined family law claims. It would be highly prejudicial to the Applicant to remove this possibility by Ordering the sale on the verge of trial; and

(g) if the Respondent was serious about selling the home, he should have complied with Court Orders and taken his disclosure obligations more seriously over the past three years. He chose to play games and the Court highly suspects that his motivation for seeking the sale on the verge of trial is to put additional pressure on the Applicant and, this is partially due to his displeasure that the Applicant may have a new partner who spends time with her in the home.

Order

Motion to Strike

1. This is a temporary Order made pursuant to the Courts of Justice Act.
2. The Respondent shall pay the Applicant a penalty in the amount of $10,000 within 30 days of this Order being released [pursuant to Rule 1(8)(a.1) of the Family Law Rules].
3. For each day that the payment of the penalty is late, the Respondent shall pay a fine to the Applicant in the amount of $50 per day until full payment is made [pursuant to Rule 1(8)(a.1) of the Family Law Rules].
4. If payment of the penalty in full (along with any accumulated fines) is not made within 45 days of this Order being released, the Respondent’s Answer shall be struck as it relates to the financial issues in this case [pursuant to Rule 1(8)(c) of the Family Law Rules].
5. The Respondent shall not be permitted to use the income and business valuation reports prepared by Steven Ranot, unless the Applicant consents [pursuant to Rule 1(8)(d) of the Family Law Rules].
6. The Respondent is not entitled to bring any further motions in this proceeding without leave [pursuant to Rule 1(8)(e) of the Family Law Rules].
7. The trial of this matter is peremptory on the Respondent and shall be scheduled to proceed in November 2024.
8. The Respondent shall not be permitted to request an adjournment of the trial on the basis that Steven Ranot is not available to testify [pursuant to Rule 1(8) and 1(8.1) of the Family Law Rules].
9. This Order bears interest at the post-judgment interest rate set out in the Courts of Justice Act of 7% per year effective from the date of this Order. A payment in default bears interest only from the date of default.

Motion for Sale of Home

10. The Respondent’s motion seeking an Order for the sale of the matrimonial home is dismissed.

Costs

11. If the parties are unable to reach an agreement on the issue of costs, the Court invites written submissions on the issue, as follows:

(a) the Applicant may file written submissions not exceeding three pages within 15 days of the release of this decision;

(b) the Respondent may file written submissions not exceeding three pages within 25 days of the release of this decision;

(c) submissions shall be double spaced, using 12 point font;

(d) the page limits do not include Offers to Settle or Bills of Costs, which should be attached; and

(e) cost submissions shall be sent to my Judicial Assistant by email at nurit.suzana@ontario.ca and uploaded to Caselines.

12. If costs submissions are not received in accordance with the above timelines, no costs shall be payable to the applicable party.

The Honourable Justice A.M. Daurio

Date: September 18, 2024