COURT FILE NO.: FC-04-18706-02
DATE: 20241001
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Marc James Carter
Applicant
– and –
Deborah Elizabeth Carter
Respondent
On his own behalf
John Cox and Johnnie Cox, for the Respondent
HEARD: May 31 and June 3, 27 and 28, 2024
Justice Alex Finlayson
PART I: OVERVIEW AND NATURE OF THIS PROCEEDING
[1] The Court heard an uncontested trial in this matter in May and June of 2024. This case concerns the Respondent wife’s (the “wife”)[^1] claims for an equalization of net family property, retroactive child support and special or extraordinary expenses pursuant to section 7 of the Federal Child Support Guidelines, S.O.R./97-175, as amended (the “Guidelines”), and retroactive and prospective spousal support. It also concerns the Applicant husband’s (the “husband”) contempt and various other claims in the nature of enforcement.
[2] The parties’ relationship was marked with the husband’s alcohol abuse, numerous criminal charges and convictions, and multiple incidents of family violence by him. This current round of the litigation has been pending for more than 14 years. Although the wife had previously commenced a proceeding following an earlier separation, the parties then reconciled. The husband initiated this current round of this litigation in mid-2010, after the parties’ final separation on December 12, 2009.
[3] Beginning before the date of the parties’ ultimate separation, the husband has engaged in a multi-year long pattern of deceit and obstruction respecting the true state of his financial affairs. His goal has been to keep all of the family’s wealth for himself, or as the wife says, to ensure that she and the children would leave the relationship penniless. His behaviour over the years since the litigation resumed has included chronic non-disclosure, the diversion of assets, the failure to value assets and income that required expert evidence, breaching various Orders of this Court, contempt, and fraud.
[4] During this matter, at least 97 Endorsement or Orders have been made. This number is exclusive of the proceeding in a foreign jurisdiction and all the Orders that have been made in related support enforcement proceedings. [^2] The husband’s problematic conduct is going to result in more enforcement proceedings, before all is said and done. This includes ongoing proceedings related to contempt.
PART II: THE PARTIES’ POSITIONS
[5] The wife tendered a multi-page draft Order at the conclusion of this uncontested trial. Her proposed Order contains her best effort to quantify her entitlements, based on the evidence that she was able to unearth over the years.
[6] In regard to property, while the wife’s draft Order does not contain a proposed number for the equalization payment owing to her, she plead such claim, called evidence about it, made submissions and she tendered a Net Family Property statement about it (as did the husband). According to her Net Family Property statement, the husband owes her $4,025,141.34.
[7] Regarding support, the wife seeks retroactive child support in the amount of $649,189.65, an additional amount of $191,183.00 for section 7 expenses, and a lump sum of $1,139,429.00 on account of retroactive spousal support. She seeks prospective child support of $2,727.00 per month commencing June 1, 2024, and ongoing spousal support of $6,848.00, also commencing June 1, 2024.
[8] In regard to enforcement, the wife asks the Court to find that the husband breached several costs Orders of this Court made between 2011 and 2020, by failing to pay them. It became clear to the Court early in the trial, that the wife was also pursuing a finding of contempt against the husband for different breaches of orders that did not require the payment of money. Although the wife has successfully proceeded by way of a contempt motion against him before, based on even further and different breaches, at this trial the wife seeks a finding that the husband is in contempt of the preservation order and the mareva injunction of Sutherland J. dated February 6, 2019, for operating various bank accounts, without seeking an exception from the Court.
[9] Relatedly, the wife asserts that the husband’s former counsel are complicit in this, as they benefitted from the receipt of legal fees between $45,000 and $65,000 per year, paid by the husband when the February 6, 2019 Order was in full force. She seeks leave to proceed with a contempt motion against former counsel for the husband as an adjunct to this trial.
[10] And the wife seeks further disclosure, preservation orders and an order continuing the mareva injunction, orders piercing the corporate veil of the husband’s Canadian corporations that either still exist or that may still exist, and a prohibition against the husband declaring bankruptcy or commencing a proposed proceeding again under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended, until the wife has been paid what she is owed and enforcement against the husband is completed. She also seeks prejudgment at 2%, and postjudgment interest.
[11] The husband’s essential position is that he does not owe the wife anything. His Net Family Property statement is manipulated to create the impression that the wife owes him an equalization payment. In regard to support, he says he no longer earns what he earned in the past. He asserts that, at best, the wife’s spousal support claim is non-compensatory and, if anything, he has over-paid both child support and spousal support. Consequently, he says the various otherwise unpaid costs Orders have in fact been paid through the overpayment of support.
[12] The husband is completely lacking in credibility. His evidence is largely unreliable. The husband’s positions and calculations are not supported by the evidence that was admitted at this uncontested trial.
PART III: THE CONDUCT OF THIS TRIAL
[13] This was an uncontested trial because the husband’s pleadings were struck over 10 years ago, in 2014.[^3] The wife presented her case through a combination of affidavit and oral evidence-in-chief, affidavits from other witnesses, and voluminous documentary evidence, which included many financial records that she was able to unearth. Although his pleading was struck, the Court received some evidence from the husband too, and he was cross-examined.
[14] Because of her request to find the husband in contempt, I directed counsel to serve the husband personally with a Notice of Contempt Motion, setting out the specific allegations. That was done on the first day of trial. I also instructed the husband to consult with counsel[^4] about whether he wished to testify on the contempt, or whether he wished to remain silent. He later agreed to be cross-examined on it. Consequently, the wife’s contempt motion was heard orally during the trial at the same time as the wife’s other claims.
[15] Just because the husband’s pleading had been struck does not automatically result in the Court granting all the wife’s requests. The wife still has to prove her claims: see Cedeno v. Cedeno, 2023 ONSC 6686 ¶ 3. What the wife has been able to prove emanated in large measure from a combination of her and her current counsel’s hard work and perseverance, and their use of prior Orders of this Court to obtain the production of documents from non-parties, including letters rogatory sent to a number of foreign jurisdictions. Most recently, the wife remembered the name of a former employee of the husband’s construction company. She tracked her down and obtained valuable corporate financial statements containing financial information for the year before, the year of, and the year after the separation.
[16] During closing submissions, the husband expressed, with some audacity, his surprise that a trial could proceed like this, on an uncontested basis, without his full participation. He expressed this surprise even though he had more than ample opportunity to cure his prior behaviour, to move to reinstate his pleading, and even though he was twice granted some participatory rights by Jarvis J. prior to the start of this trial. He made such statements even though this Court effectively expanded the participatory rights that Jarvis J. had previously given him (despite his failure to follow these directions of Jarvis J.).
[17] On November 29, 2022, Jarvis J. gave the husband permission to make opening and closing submissions. In the Trial Scheduling Endorsement Form of May 2, 2024 (“TSEF”) Jarvis J. differently permitted the husband to file some limited evidence, by way of an updated financial statement, and a net family property statement.
[18] The husband showed himself to be incapable of even complying with those two Orders, too. In violation of these indulgences, the husband prepared and filed, with the assistance of counsel, a lengthy, but unsworn, affidavit style Opening Trial Statement. It was 238 pages long. Attached to it were DivorceMate calculations. Also attached were two separate sworn affidavits that he delivered days before the start of this trial, from witnesses he was not entitled to call by affidavit or otherwise (pursuant to both the November 29, 2022 Order and the TSEF). One of the affiants provided medical evidence, purporting to prove an inability of the husband, on health grounds, to earn as much income as in the past, even though there had not been any prior Order, or discovery, about that medical evidence, nor did the TSEF address how that evidence would be received (i.e., whether pursuant to section 52 of the Evidence Act, R.S.O. 1990, c. E.23, as amended, or orally). The written Opening Statement also had attached to it various other documents.
[19] The husband prepared not one, but two updated Form 13.1 Financial Statements sworn May 3 and 15, 2024, in violation of the TSEF. They were delivered late. Counsel for the wife even told the Court that he had been served with a third one from April, that was then not tendered.
[20] The May 3, 2024 Form 13.1 Financial Statement was 134 pages long, with attachments (not just tax returns). The May 15, 2024 Form 13.1 Financial Statement was 58 pages long, also with attachments. Their length was not just due to the attachments. The husband squished into the columns of these financial statements pages and pages of notes purporting to provide various explanations about the corresponding assets and debts, and the other numbers he included on these forms. This was narrative that would have formed part of the husband’s evidence-in-chief had his pleading not been struck years ago, and if he still had full participatory trial rights.
[21] The husband even included as an attachment a business financial statement purporting to prove that one of the interests that he had in a particular investment on valuation date had decreased in value between the time he invested in it (the year before separation) and the valuation date. He did not, however, provide the expert evidence needed to explain the actual value of this, nor for that matter, a number of his other assets. I learned during the trial that the husband had access to this document years earlier. He then conceded, during closing submissions, that the Court could use the wife’s proposed value for that asset, as opposed to the alleged decreased value that he initially tried to assert.
[22] The husband’s Net Family Property statement was also lengthy (72 pages). It too contained many if not all the same notes squished into the columns, and it had documents attached to it.
[23] The husband did all this, citing (in his professionally prepared written Opening Trial Statement), the wife’s “very high duty” to make full and frank disclosure at an uncontested trial: see Irons v. Irons, 2020 ONSC 1471 ¶ 90. I accept that the wife must at least “alert the court” to material facts required to make a just determination, as that case indicates. However, what the professionally prepared Opening Trial Statement did not go on to cite are other statements in the Irons case, such as that the wife’s duty does not extend to making out the husband’s case for him. Nor does the duty extend to disclosing facts about which the wife was unaware due to the husband’s dilatory behaviour. Nor does it extend to testing the veracity, accuracy or reliability of that evidence. Nor does it require one to unearth other evidence that is within the husband’s power to disclose, that he did not previously disclose: see Irons v. Irons ¶ 97 and 98.
[24] So while it can never be appropriate to omit material facts or materially misstate evidence to the Court (see Irons v. Irons ¶ 99), the principle that the husband cites does not extend so far as to permit the husband to engage in a late disclosure exercise on the cusp of trial or mid-trial, dressed up in affidavits, or in other documents attached to financial statements that had not been previously produced, or that the wife did not have the time to consider and respond to, or that the husband was not otherwise entitled to file. This is especially so when these acts of trying to file more documents without prior permission were tantamount to more breaches of Orders by him.
[25] The husband through his trial conduct violated the spirit and intent of the permission that Jarvis J. gave him on November 29, 2022, and in the TSEF of May 2, 2024. At the outset of this trial, I nevertheless told the husband that I would consider both his Opening Trial Statement (to the extent that the statements contained therein were supported by evidence that would be properly tendered during the uncontested trial), and I said I would receive and consider his two Form 13.1 Financial Statements for trial (and his Net Family Property statement) provided he made himself available for cross-examination on them. He was also permitted to make closing submissions as originally contemplated. In the end, the Court effectively allowed him to file almost 200 pages of sworn statements about his financial circumstances, through receiving these financial statements.[^5]
[26] Incidentally, the husband did it again, after the conclusion of closing submissions. On the last day of this trial, I gave the husband leave to submit a case he referred to in argument by email to my attention through the judicial assistant. With his later email the husband attached further documentation, including a prior offer of employment and an updated tax bill, further pushing the boundaries of the indulgences that Jarvis J. (and then myself) had granted him.
PART IV: ADDITIONAL BACKGROUND FACTS
A. Background
[27] The wife is currently 57 years old; the husband recently turned 58 while this Judgment was under reserve. The parties have two children, E.C. and C.C., now ages 24 and 22. They were 9 and 7 at the time of separation.
[28] The parties were married for 10 years and 5 months, from July 3, 1999, until their ultimate separation on December 12, 2009. They lived together for 17 months before the marriage. The total length of this relationship was 11 years and 10 months. The parties are divorced by Order of Kaufman J. dated April 20, 2018.
[29] The wife has a high school education. She completed three years of university but did not graduate. At the time the parties met, the wife had been working as an executive assistant for CIBC Dominion Securities, for about 7 years. The husband was then employed by a construction company called Cloke Kirby Construction Limited (“Cloke Kirby”), which he would later acquire during the marriage.
[30] The wife testified that she could have progressed in her employment, but she became pregnant with E.C. about 2 months before the marriage. The parties decided that the husband then earned enough money such that the wife could stop working and stay home. The wife stopped working in November of 1999. The wife stayed at home thereafter and tended to the children and the household.
[31] Presently E.C. started teacher’s college in September of 2024. This is a 2-year program. E.C. worked full-time last year to cover her living expenses. She will be relying on OSAP to complete her education. She also borrowed for her previous university studies to date.
[32] C.C. just finished the second of a four-year university degree program. She lived away from home for the first year of that program, but she found it difficult due to her mental health, discussed below. She moved back home with her mother for the second year. She still lives there. I understood that to be the plan, at least until she graduates.
[33] Both parties have had subsequent relationships. In the husband’s case, I do not know the extent of it, but he referred to at least two different subsequent “girlfriends” during the trial. The wife began cohabiting with a man named James Richardson in 2019. They separated in October of 2023. By the time of this trial, they were still living together separate and apart under the same roof because the wife said she was not in a financial position to go anywhere else, and C.C. still has two years of school left. As set out on the wife’s Form 13.1 Financial Statement sworn May 16, 2024, Mr. Richardson is contributing towards some of the wife’s expenses still, despite that separation.
B. The Circumstances of the Parties’ Relationship
[34] The marriage was traditional in that the wife became E.C.’s, and later C.C.’s primary parent. The wife testified that she took on numerous parenting responsibilities, and duties within the household. For example, she handled the children’s morning routines, she put them to bed, she hosted children’s and family gatherings, she drove the children to and from school, she took the children to church, and she managed their extracurricular activities. The wife also volunteered at the children’s school, attended school trips and managed their medical and dental care.
[35] The husband worked. He was the only earner in this family. I was told that during the marriage, the husband worked long hours. The wife’s evidence was that the husband began earning “millions of dollars” after he acquired Cloke Kirby. The wife’s knowledge about this was based on the husband’s say-so at the time, and her own observations of their increased lifestyle. The wife says the acquisition of Cloke Kirby enabled the family to live an affluent lifestyle.
[36] The wife became a shareholder of a numbered company that held the shares of Cloke Kirby after the husband’s acquisition of Cloke Kirby. Despite that, she had little to no knowledge of the company’s affairs, or the parties’ finances, other than what the husband told her (and her lifestyle observations). The wife said she did not even have bank accounts or credit cards of her own. She had to ask the husband for money when she wanted to make purchases. This would later cause at least one significant incident of conflict culminating in an assault on the wife.
C. The Parties’ Lifestyle During the Marriage
[37] The wife testified about the family’s expanded lifestyle after the husband bought Cloke Kirby. For example, the parties moved twice during the marriage, each time into a larger home. They lived in three different homes over the course of the relationship.
[38] The wife described the eventual matrimonial home at the time of the separation as a private, 7000 square foot luxury home in the country. The wife testified that she was provided access to funds from the husband to purchase brand new furniture for the house, without any expense being spared.
[39] The wife also testified that the parties purchased a cottage property in 2004. She described it as a “tear down”. The parties then built a new cottage in replacement. The wife said that she and the children went to the cottage on weekends, with the husband joining them when he could.
[40] The wife explained that the cottage was sold in 2007, with approximately $500,000.00 of the proceeds of sale going into the purchase of the matrimonial home described above, and $200,000.00 being loaned to Cloke Kirby. This loan is discussed in more detail below, in the Court’s equalization analysis.
[41] The wife testified that the parties went on multiple trips each year to various destinations. This included both family trips, trips just taken by the two spouses, twice per year, and, in addition, the husband vacationed alone without either the wife or the children. The parties enjoyed nice meals out. They went to concerts and other like events. The wife testified that the family held boxed seat season tickets at the Air Canada Center.
[42] The wife testified about the parties’ vehicles. The wife leased a Lincoln Aviator, which she said she renewed every two years. Later, she had a “fully loaded” Ford Explorer. She said the husband had a Porsche.
[43] The wife also talked about recreational vehicles, like snowmobiles and seadoos, a 36-foot yacht, and a different boat that the parties had at different points in time. There is a dispute between the parties’ positions about the values of these vehicles on valuation date, and about who did what with certain of these items post-separation.
[44] The wife testified that when the children became school age, they began to attend a private Christian school associated with their church. The wife says it cost several thousand dollars per year.[^6]
D. The Husband’s Family Violence and Other Criminal Behaviour
[45] The husband abused alcohol during the marriage. He treated the wife and the children both harshly, and with violence.
[46] The reason that this case has a 2004 court file number, is a function one of three prior separations, followed by two reconciliations. The wife commenced a proceeding earlier on, following the first incident in a pattern of abuse that the husband inflicted upon the wife, and upon the children.
[47] Among others, the wife detailed the following incidents of family violence during the marriage:
(a) In early November 2004, the husband grabbed the wife by her arm and dragged her to the garage where he smashed her phone with a hammer to prevent her from calling the police. On this occasion, he was charged with mischief under the Criminal Code, R.S.C. 1985, c. C-46, as amended. The wife commenced a family law proceeding after this. Despite a later conviction, the parties reconciled when the husband pleaded for forgiveness, promised to change, and gave the wife a kitten as a gift;
(b) There was a second separation on July 27, 2007, after the husband assaulted the wife again. This time, the husband had been drinking and insisted that he was going to drive the children to the cottage. When the wife would not allow this to happen out of a concern for the children’s safety given the husband’s intoxicated state, he grabbed the wife several times by her arms, leaving marks on her. He again took the wife’s cell phone, but this time he went into the garage and smashed her car window. The wife tendered photographs of the car. The husband was charged with various offences relating to this incident, too;
(c) The wife says the parties reconciled again in or around January of 2008, again with the husband giving gifts to the wife. This time the husband proposed that the parties would live in a beautiful home in the country. The husband returned to reside with the family on weekends at first, and eventually full time by the fall of 2008; and
(d) The husband assaulted the wife again, on December 12, 2009, the ultimate date of separation. This time the parties had an argument over finances, in the presence of the children. Apparently, the husband made an expensive purchase and the wife told him that she needed some money to have some dental work done. For some reason this enraged the husband. The wife went into the bathroom and locked the door. The husband proceeded to punch or kick the door in, resulting in it hitting the wife. The husband then grabbed the wife by the arm, threw her up against the wall with his hands around her neck and said, “I should beat the shit out of you”. The wife escaped and called the police. The husband was later convicted relating to this incident, following a criminal trial in June of 2010.
[48] The wife described that the children were often the targets of the husband’s anger. She says he created an environment of fear and anxiety for the children.
[49] The wife testified about an occasion where the husband took a pair of scissors and cut a piece of C.C.’s hair off at the dinner table after he had instructed C.C. not let her hair get into her food, but it happened again anyway. The wife also described incidents of physical discipline towards the children. She testified about one occasion where the husband got so mad at E.C. that he dragged her up the stairs, hitting her so hard that he left a handprint on her backside. E.C. was pleading for her mother to intervene while this unfolded, but the husband would not allow it.
[50] Incidentally, Cloke Kirby’s former controller, Ruth Barnett, whose evidence I return to in some detail later in this Judgment, deposed that the husband was volatile and abusive towards her too in the workplace. She described times that he would swear at her. On two different occasions, he threw a cup at her, and a keyboard and mouse at her. The former throwing of the cup resulted in a cut to her lip.
[51] The husband had been convicted on other occasions, not only relating to his violent treatment of the wife, but for driving or vehicle offences associated with his consumption of alcohol (i.e., either driving after having consumed too much alcohol, having had care or control of a motor vehicle, or after failing to stop at the scene of an accident). The husband’s driver’s license was permanently suspended years ago in relation to his driving offences. The wife said that the husband drove contrary to that suspension. The husband’s passport has been twice suspended in relation to the non-payment of support. Although both remain suspended, the husband would later use the suspended passport and driver’s license to obtain financial products and to divert funds.
E. The Wife’s and the Children’s Post-Separation Circumstances
[52] The wife testified that on the night of the separation, the husband told her that she would never see a dime of money from him. She says that he then embarked on a pattern of behaviour to make this threat a reality.
[53] Below, I will provide additional detail about the difficult post-separation circumstances that the wife and children have endured. By way of overview here, that evidence consists of the wife and the children losing their housing, the wife losing her vehicle, the children having to stop going to a private school, and various other adverse financial and emotional impacts. This is in addition to adverse physical health consequences.
F. The Wife’s and the Children’s Physical and Mental Health
[54] The circumstances of this marriage and its breakdown have contributed to long term adverse health conditions that the wife and the children still experience.
[55] The wife has been diagnosed with generalized anxiety disorder and major depressive disorder. Additionally, the wife has several physical health concerns.
[56] The wife testified that she suffers from a heart condition known as Paroxysmal Supraventricular Tachycardia; she has had “a fib episodes” and arrhythmias. The wife wears a pacemaker. Her first pacemaker was installed in 2007. She later had a second one installed. She testified that she has 2 years left on her current pacemaker, before she will require another one.
[57] The wife testified that she had five ablations between 2007 and 2009. The wife testified that the husband assaulted her two weeks following the fifth ablation.
[58] The wife’s physical health has deteriorated since the separation. Most recently she is having problems with the functioning of one of her lungs. In 2020, the wife was diagnosed with osteoporosis and is at risk of bone fractures.
[59] In regard to the children, the wife says that E.C. was often the “peacemaker”, but she developed anxiety and fear. The wife says that C.C., who witnessed the wife suffer physical injuries because of the husband’s attacks, struggled with feelings of helplessness and trauma.
[60] An assessment had been undertaken during the prior proceedings in this case, to which the wife’s counsel referred the Court. More recently, and in regard to C.C. specifically, the wife also tendered the report of a psychologist, Dr. Nicole Law. Dr Law undertook a psycho-educational assessment of C.C. in 2019 when she was 17 years old.
[61] According to Dr. Law’s Report dated March 13, 2020, beginning in 2011 C.C. began presenting with high levels of sadness, anxiety, excessive worry, and ritualistic behaviours, which led to a psychiatric consultation with Dr. Jain. In early 2012 C.C. was diagnosed as having an obsessive compulsive disorder. A further psychological assessment through SickKids clarified that C.C. then had obsessive compulsive disorder, specific phobia, and major depression in partial remission. C.C. received 12 sessions of Cognitive Behavioural Therapy, some follow up sessions and more therapy in the years that followed.
[62] As of the time of C.C.’s 2019 assessment, Dr. Law concluded that C.C. continued to experience challenges in line with Obsessive Compulsive Disorder, Excoriation Disorder, and Generalized Anxiety Disorder, with panic attacks. As explained already, C.C. moved away for her first year of university, but she could not cope. She has resumed living with her mother and has two more years to go.
PART V: PRIOR PROCEEDINGS
[63] The husband commenced this current proceeding by way of Application dated April 23, 2010. The wife filed her Answer on or about July 14, 2010, giving the husband formal notice of her claims for both child and spousal support.
[64] The wife filed a 283-page compendium of the Orders and Endorsements that have been made in this proceeding, including in the prior proceedings started in 2004, and right up to the commencement of this trial. As set out earlier, there are 97 such Endorsements and Orders, not including those made in related proceedings or during the trial itself.
[65] What follows is my summary of several of the Orders and Endorsements that have been made, to which I will also refer back at times when analyzing the various claims before the Court.
A. The Governing Temporary Consent Order of Nelson J. dated January 26, 2011
[66] There was an early motion in this matter on January 26, 2011. It ended up being adjourned on terms. The terms of the adjournment included the parties’ consent that the husband would pay a minimal amount of uncharacterized support. That uncharacterized support Order has remained in place until now, and it has not been followed.
[67] In particular, the parties agreed that the husband would pay the wife the sum of $3,000.00 per month in combined child and spousal support, commencing February 1, 2011, to be characterized later. There is also a term about the husband allowing the wife to drive the Ford Explorer and requiring him to keep the vehicle insured. I come back to this term later when considering how the draft net family property statements tendered at this trial treat the vehicles that the parties owned on the valuation date.
[68] In addition, by this Order, the parties agreed that the wife would receive the sum of $27,000.00 from some funds that had been preserved, and that the husband would make a further payment of $9,000.00. Both amounts were to be paid to the wife’s former lawyer, in trust. Notably, the wife testified at this trial, that any equity she was entitled to from the sale of the matrimonial home and from another investment property they previously jointly owned went to her lawyer for legal fees. The husband claims not to have received any equity either, it all going towards support, or his unpaid taxes owing to the CRA.
B. The Costs Order of Edwards J. dated March 18, 2011
[69] This matter was again before the Court in February of 2011, this time to deal with parenting issues. What transpired in terms of the outcome of that does not impact my analysis. However, on March 18, 2011, Edwards J. ordered the husband to pay costs of that motion in the amount of $3,750.00 plus HST. This Order is one of several costs Orders that have been referred to me, which the husband has not paid.
C. The Consent Order of McGee J. on July 27, 2011
[70] The parties were before the Court on July 27, 2011, for a further interim motion. Once again, this motion settled. Aspects of the parties’ Consent addressed parenting issues, but there was also some indication in it that the husband was already failing to meet his financial and other obligations towards the family.
[71] For example, disclosure was outstanding; there is reference in the Consent to the husband providing the balance of his disclosure by September 2, 2011. A further example is that the parties agreed that the wife would receive another $10,000.00 from her share of the net sale proceeds being held in trust, and the husband would pay the costs Order of Edwards J., now by August 4, 2011. This extension appears to have been included in this Consent, since these costs were already overdue. And a further $6,000.00 from the net proceeds of sale being held in trust was ordered paid out to the wife for overdue support payments for the months March and July 2011.
D. The Endorsements dated December 5, 2011, April 12, 2012, and May 16, 2012
[72] Next, there are Endorsements dated December 5, 2011, April 12, 2012, and May 16, 2012, in the compendium. According to the latter two Endorsements, the sum of $13,000.00 was to be paid out of trust to the wife, this time for orthodontic services for E.C. The parties also agreed that the wife would have temporary sole custody of E.C. and C.C.
E. The Suspension of the Husband’s Passport
[73] In her written closing submissions, the wife highlights that in 2013, the husband’s passport was suspended by the FRO. It appears that the passport was re-instated at some point, only to be suspended for a second time in 2016.
[74] It is common ground that the husband has not had a passport for years. The husband’s own submissions at this trial focused in part on a request that if the Court would just reinstate it, he could make more money and pay the wife.
F. The Endorsements dated May 7, 2013, and December 4, 2013
[75] Another Endorsement, now from May 7, 2013, addressed several matters. Of note, disclosure remained an issue. The parties were to exchange updated disclosure lists by Friday, May 17, 2013.
[76] By the time of the December 4, 2013, Endorsement, disclosure remained an issue, yet again. Not unlike the extension that had already been granted respecting Edwards J.’s costs Order, this time the parties agreed that the husband would now comply with McGee J.’s earlier disclosure Order of July 27, 2011 (that had been made on consent), by January 31, 2014. This extension brought the due date to some 2.5 years after the husband had initially agreed to the disclosure. He also agreed to provide additional disclosure that had been asked for in a Request for Information, now by January 31, 2014.
[77] The parties once again agreed to release another $25,000.00 to the wife, payable to the wife’s former counsel, and a further $25,000.00 from the husband’s share to the credit of more support arrears, provided the CRA consented. The latter reference to the CRA is not explained in the Endorsement, but below I discuss the husband’s tax debt in more detail when considering the equalization payment owing to the wife in this case. In any event, this aspect of the Endorsement reveals to the Court that, yet again, the husband continued to be dilatory respecting his support obligations, three years into this case.
G. The Order of Douglas J. dated June 11, 2014
[78] Such behaviour would continue. There was a further motion before the Court on June 11, 2014. By this point, the husband was now acting on his own. He chose not appear on June 11, 2014.
[79] The draft Order that Douglas J. signed specifically notes that the husband was then in non-compliance with the consent Order of Nelson J. dated January 26, 2011, the costs Order of Edwards J. dated February 9, 2011, and various other orders, including the disclosure orders I have already referenced above. Douglas J. nevertheless gave the husband an extension until July 4, 2014, to provide the outstanding disclosure required by the Orders of July 17, 2011, May 7, 2013, and December 4, 2013, or an affidavit explaining his best efforts to comply and his reasons for any non-compliance. However, if the husband did not comply Douglas J. ordered that his pleading, regarding the financial issues only, would be struck.
[80] Douglas J. also ordered that the sum of $176,184.08 representing what I gather was then the wife’s remaining share of the funds being held in trust would be paid out to the wife’s lawyer. The husband was ordered to pay the sum of $10,200.00 to the wife towards more arrears of support accrued between December 2013 and June 2014, within 7 days. In light of this term, I infer that once again, the husband had continued to be in default of the consent support Order.
[81] The interpretation of the term respecting the striking of the husband’s pleading became the subject of some confusion. Over six years later, on September 29, 2020, Kaufman J. would later confirm that the husband’s pleading had been struck as a result of the husband’s failure to meet the conditions that Douglas J. imposed. In the meantime, for more than six years, the husband continued to enjoy full participatory rights in this case, during which he did not modify his behaviour, or get himself into full compliance.
H. The Order of Kaufman J. dated August 5, 2015
[82] There was another motion on August 5, 2015, now before Kaufman J. According to the Endorsement, this time the husband appeared. He blamed his former lawyer for not having filed any documents on his behalf over the past year since Douglas J.’s Order. According to the Endorsement, the husband claimed that there was apparently a Law Society investigation underway against a former lawyer. In any event, he claimed to be trying to obtain the files from that lawyer to meet his disclosure obligations.
[83] In his Endorsement, Kaufman J. found that to date, some seven Orders had been breached by the husband. He wrote, among other things, that the husband’s pleading was probably struck respecting the financial issues according to Douglas J.’s June 11, 2014 Order, although the uncertainty was not resolved by this Endorsement, yet. The Court nevertheless expressed skepticism about what the husband had reported as the reason for his non-compliance (blaming a lawyer) and about the steps he was taking to rectify the situation.
I. The Husband’s Non-Compliance Continued as Reflected in the Subsequent Endorsements and Orders Made Between 2015 and 2018
[84] The next Order in the file that documents the husband’s ongoing problematic behaviour is the final Order of Kaufman J. dated September 16, 2015, which resolved the parenting issues, on consent. The parties agreed that the wife would now have final sole custody of both children. This Endorsement also reveals that the wife began pursuing third party disclosure, in the absence of getting it from the husband.
[85] A second example is the Endorsement of McGee J. dated October 26, 2016, made on some kind of motion that the husband brought. It seems that the husband brought a motion within the family law matter to limit the enforcement of the January 26, 2011, consent support Order (or to ask that the Order be varied) while avoiding participating in the FRO enforcement proceedings.
[86] Regardless of what the husband then thought he was trying to achieve, he was very much in default of the support Order. In fact, the Endorsement states that it was not then contested that the husband had not made voluntary support payments in the last 2 ½ years at that point. The support arrears then stood at $41,844.00.
[87] McGee J. found, as Kaufman J. had already found before her, that the husband was in breach of the Order of Douglas J. dated June 11, 2014. This was the second finding, the consequence of which was that the husband’s pleadings on the financial issues were struck.
[88] In the analysis, McGee J. went on to find that there was then no reliable evidence to support the husband’s assertion that he was unable to earn an income without a passport, an argument he continued to advance at this trial. She noted that little was known about his income but for his sworn Financial Statement then before the Court that happened to omit his Notice of Assessment. Nor was there proper information about any benefits and expenses paid on his behalf by his corporations. Nor was it then known to the Court, just as it is still unknown to this Court after this trial, how the husband had amassed what the Court described as $1.8 million in tax arrears then owing.
[89] In the result, McGee J. dismissed the husband’s motion, and ordered the husband to pay costs in the amount of $1,200.00 plus HST to the wife, and a further $250.00 plus HST to the Director of the FRO. These costs to the wife have not been paid.
[90] A third example is the next Endorsement of February 22, 2017, which relates to a motion, this time brought by the wife, to transfer this matter to Bracebridge (the jurisdiction in which she was then residing at her parents’ house with the children). Kaufman J. noted that there was still some confusion as to whether the husband’s pleadings had been struck, but meanwhile the husband was still participating. In any event, Kaufman J. did not transfer the file to Bracebridge on that occasion, but instead ordered several terms in attempt to get this case back on track. In the subsequent conference Endorsement of January 20, 2018, the situation respecting the husband’s pleading came up again. The husband continued to be given chances to behave properly.
[91] A fourth example is contained in the Endorsement dated February 15, 2018, made in the support enforcement proceeding. On that date, Jarvis J. made a temporary default order that contained only a modest payment term. He ordered the husband just to pay a minimum of $360.00 per month towards child support commencing on March 1, 2018, failing which there would be a committal term for 3 days. I gather from the text of this Endorsement that the husband claimed on this day that his companies had been dissolved or ceased to operate in 2013. The Endorsement otherwise contained disclosure terms, including that the husband was to provide documents about this. The Court would later issue a warrant for the husband’s arrest at a further appearance on September 27, 2018 in the FRO matter when the husband did not appear.
J. The Preservation Order and Mareva Injunction of Sutherland J. dated February 6, 2019
[92] This history and backdrop culminated the significant Order of Sutherland J. being made on February 6, 2019. The wife had brought two ex parte motions following the years of the husband’s chronic non-disclosure and his non-payment of support. Sutherland J. granted both a preservation Order, and a mareva injunction. That Order has never been set aside, varied or appealed.
[93] Paragraph 4 of the Order reads:
The Applicant’s assets are frozen, including any corporations or subsidiaries in which the husband has interest or control of, inside or outside Canada, including any bank accounts, and any other assets, business interest, or investment platforms in which the Applicant has an interest or control, such corporations including but not limited to:
(a) Cloke Kirby Construction Ontario (Corporation);
(b) 699531 Ontario Ltd.;
(c) 2074811 Ontario Inc.;
(d) Any and all accounts and assets at Bank of Montreal, 86 Main St. North, Markham, Canada, L3P 1X8 (representative Franka Sriskandarajah (905) 294-4642) including but not limited to:
(i) Account number [ending in 766]; and
(ii) Chequing Account number [ending in 990];
(e) Any and all accounts, assets, and trusts at Cayman national Bank and Trust, 8 Hope St. Douglas, Isle of Man, United Kingdom, IM1 1AQ, including but not limited to:
(i) Account number [ending in 5001] (USD and CAD funds); and
(ii) MasterCard number [ending in 0001];
(f) Any and all accounts, assets, and trusts at Cayman National Bank and Trust, including but not limited to, the location of 200 Elgin Avenue, Peter A. Tomkins Building, PO Box 1097, Grand Cayman, KY1 1102, Cayman Islands, including but not limited to:
(i) Account number [ending in 5001] (USD and CAD funds); and
(ii) MasterCard number [ending in 0001];
(g) Allied Sovereign and Equitable Assurance Company Ltd. (ASEA), Venture Two, Dayrells Road, Christ Church, Barbados, BB14030;
(h) Capital Group International portfolio number NST0812 portfolio name ASEA Re: 46001 in Barbados;
(i) Standard Bank, Isle of Man;
(j) Foreign currencies traded at Dukascopy, including any and all Swiss trading accounts, and account number [ending in 0501] USD;
(k) Investors Europe account through Dukascopy, including any and all Swiss trading accounts, and account number [ending in 280];
(l) iWRAP Portfolio Bond portfolio management police number 26001.
[94] Paragraph 5 of the Order reads:
A mareva injunction against any corporations or subsidiaries in which the Applicant has interest or control of inside or outside Canada, and any other assets, business interests, or investment platforms in which the Applicant has an interest or control, such corporations or subsidiaries including, but not limited to:
(a) Cloke Kirby Construction Ontario (Corporation);
(b) 699531 Ontario Ltd.;
(c) 2074811 Ontario Inc.;
(d) Any and all accounts and assets at Bank of Montreal, 86 Main St. North, Markham, Canada, L3P 1X8 (representative Franka Sriskandarajah (905) 294-4642) including but not limited to:
(i) Account number [ending in 766]; and
(ii) Chequing Account number [ending in 990];
(e) Any and all accounts, assets, and trusts at Cayman national Bank and Trust, 8 Hope St. Douglas, Isle of Man, United Kingdom, IM1 1AQ, including but not limited to:
(i) Account number [ending in 5001] (USD and CAD funds); and
(ii) MasterCard number [ending in 0001];
(f) Any and all accounts, assets, and trusts at Cayman National Bank and Trust, including but not limited to, the location of 200 Elgin Avenue, Peter A. Tomkins Building, PO Box 1097, Grand Cayman, KY1 1102, Cayman Islands, including but not limited to:
(i) Account number [ending in 5001] (USD and CAD funds); and
(ii) MasterCard number [ending in 0001];
(g) Allied Sovereign and Equitable Assurance Company Ltd. (ASEA), Venture Two, Dayrells Road, Christ Church, Barbados, BB14030;
(h) Capital Group International portfolio number NST0812 portfolio name ASEA Re: 46001 in Barbados;
(i) Standard Bank, Isle of Man;
(j) Foreign currencies traded at Dukascopy, including any and all Swiss trading accounts, and account number [ending in 0501] USD;
(k) Investors Europe account through Dukascopy, including any and all Swiss trading accounts, and account number [ending in 280];
(l) iWRAP Portfolio Bond portfolio management police number 26001.
[95] In addition, paragraph 6 of the Order prohibits the husband from using the MasterCard ending in 0001 pending further Order of the Court. Paragraph 7 of the Order required the husband to bring to Court, upon the return of the motions, the bank statements referred to in paragraphs 4(d) and 5(d) of the Order, above, for the timeframe January 1, 2017, to February 15, 2019.
[96] The return of this motion was set for February 20, 2019. But in the meantime this Order became the starting point for the soon to be launched contempt proceedings over which Nicholson J. and then Jarvis J. presided. It is the starting point for the contempt proceedings before me at this trial as well. And it underpins part of the basis upon which the wife now seeks leave to proceed with a contempt motion against the husband’s former counsel, for their alleged role in the husband’s breaches and contempt.
K. The Wife’s Contempt Motion and the Various Orders of Nicholson J. and Jarvis J.
[97] Pending the return of this matter on February 20, 2019, the wife brought her first contempt motion. The contempt motion was then heard over the course of 5 different appearances.
[98] At the first return date of February 20, 2019, the husband sought an adjournment to obtain the BMO statements required by paragraph 7 of the Order. Nicholson J. adjourned the motions to April 3, 2019, peremptory to the husband, but ordered as a term of the adjournment that the husband was to sign directions to permit the release to the wife of documents and information pertaining to all of the entities listed in paragraph 5 of the February 6, 2019 Order, as well as from a person named Jeffrey Lipton (who I discuss in more detail later).
[99] Jarvis J. heard the subsequent attendances of this contempt motion. On April 3, 2019, Jarvis J. found that although the husband had signed the directions as ordered by Nicholson J., he immediately rescinded them, in particular a direction to the Cayman National Bank in the Isle of Man. I highlight this here, because the husband engaged in repeat behaviour of this kind on the cusp of this trial. In so doing, he misled Jarvis J. for the final time (prior to the start of this trial). I had to deal with that mid-trial.
[100] Returning to the contempt proceedings in April of 2019 though, at ¶ 11 of his Endorsement dated April 3, 2019, Jarvis J. had “no doubt whatsoever” that the husband intentionally breached the Order of Nicholson J. (of February 20, 2019), and by extension the prior Orders of Nelson J. (January 26, 2011), Ferguson J. (September 28, 2011), Rogers J. (May 7, 2013), Howden J. (December 4, 2013) and Douglas J. (June 11, 2014). He found the husband in contempt of those Orders.
[101] While Jarvis J. was of the view that the circumstances of this case cried out for a period of incarceration, he gave the husband one last opportunity to fully comply with the Orders of Nicholson J. and Sutherland J., and to ensure that there was a “robust response” from the Cayman National Bank by April 10, 2019. Once again, the husband was given indulgences by this Court.
[102] But when this matter returned before the Court on April 17, 2019, Jarvis J. determined that the husband had not purged his contempt, in particular with respect to production of records from the Cayman National Bank, Isle of Man, and Grand Cayman Island. Notably, there had been efforts by the wife’s counsel, and the Court, to secure the cooperation of banking officials with the Cayman National Bank, without success. Jarvis J. observed that some of what the husband had produced appeared to have been pasted or altered documents. I highlight this here because there was repeat behaviour of a similar kind by the husband in relation to documents presented at this uncontested trial as well.
[103] In the result, Jarvis J. found that there had been “too much cat and mouse” in this file, that the husband was a sophisticated businessman, that there was substantial documentation, although of an indeterminate amount, in the possession of the Cayman Bank (which was not being provided), and that the husband was responsible for non-compliance with the Court Order.[^7]
[104] Jarvis J. remanded the husband into custody until May 1, 2019, when the matter was to return to court to assess what further period of incarceration or order may be necessary to ensure compliance. He also directed the wife’s counsel to send a copy of his ruling to bank officers with the Cayman National Bank.
[105] By the return on May 1, 2019, documents had been received from the Isle of Man, but there were more productions still outstanding. So Jarvis J. granted letters rogatory respecting the Dukascopy Bank in Switzerland and respecting another financial institution in Barbados. He ordered the husband not to communicate with any of the financial institutions referenced in Sutherland J.’s Order of February 6, 2019, except to ensure full compliance with the terms of the Orders made on May 1, 2019. He ordered Bank of Montreal to provide full disclosure as ordered in paragraphs 4(d)[^8] and 5(d) of the Order of Sutherland J., and he extended paragraph 7 of that Order to apply to other accounts at Bank of Montreal, including those held by 699531 Ontario Limited. He otherwise adjourned the matter to June 5, 2019, to deal with any further contempt sentencing issues and costs.
[106] The fifth appearance on this contempt motion proceeded on June 5, 2019, as scheduled. Jarvis J. reserved. He later released lengthy written reasons on September 13, 2019. In the interim, there was another appearance in the support enforcement matter on June 13, 2019. On that date, Bennett J. ordered the husband to pay the sum of $2,145.00 by August 1, 2019, and then $3,100 per month commencing September 1, 2019.
[107] In his reasons dated September 13, 2019, Jarvis J. found that just two days after the husband signed directions in Court before Nicholson J. on February 20, 2019, the husband instructed his principal banker with the Cayman National Bank in the Cayman Islands to disobey it. Jarvis J. also noted that on May 29, 2019, a person named Catherine Butterworth (a banking officer) was examined in the High Court of Justice of the Isle of Man before Needham J., which resulted in the disclosure of some new evidence.
[108] Based on that evidence taken in the Isle of Man and the disclosure produced, Jarvis J. found:
(a) The husband became a director of Allied Sovereign and Equitable Assurance Company Ltd. (“ASEA”) in the Cayman Islands on or about February 4, 2014, until November 2017. He was the full-time managing director at the time of his departure from ASEA in November 2017;
(b) ASEA is a Barbadian insurance company specializing in international client insurance and investment needs. It had accounts with Cayman National Bank over which the husband had signing authority;
(c) ASEA appeared to have three sub-accounts with the Cayman National Bank that appeared to belong to the husband, in USD, CDN and GBP currencies;
(d) While the husband had previously deposed in an affidavit in the support enforcement proceeding that he had difficulties after September 2013 in finding employment, he did not make any disclosure with respect to ASEA or with respect to any bank accounts legally or beneficially owned by him, with or through ASEA, or the Cayman National Bank;
(e) On October 6, 2016, the husband made an assignment in bankruptcy in Ontario. He claimed debts more than $2 million, the majority of which related to tax arrears, while disclosing assets of just over $5,000.00. The husband was scheduled to be discharged from bankruptcy on July 6, 2017, but that was opposed, and a hearing was scheduled in December of 2017;
(f) Meanwhile, the same year, the husband transferred a total of $114,134.83 into the bank account of 699531 Ontario Limited, a company owned by him, which he used to pay for living expenses. In March of 2017, the husband contacted the Cayman National Bank in the Isle of Man inquiring about opening a personal account there. On October 12, 2017, the husband then filled out, and signed a personal bank application to the Cayman National Bank in the Isle of Man, in which he identified himself as a principal and managing director of ASEA and said that he intended to deposit $60,000 USD. He estimated that he would be making annual deposits totaling between 100,000 and 250,000 GBP and said that the source of his income was from ASEA. He said he had both equity in, and was entitled to compensation from, that company and he provided a copy of his passport and driver’s license to the bank, both of which had been suspended;
(g) The husband opened 5 accounts at the Cayman National Bank Isle of Man, for accounts in GBP, USD, Euros and CAD, as well as a MasterCard Security Deposit account in USD. These were personal accounts, although the GBP and Euro accounts do not appear to have been used;
(h) On October 30, 2017, the husband applied for, and was later given, a Cayman National Bank Gold Mastercard. On the application, the husband estimated the value of his property being $1,100,000.00 (likely expressed in USD), an annual salary of $150,000 USD, and monthly investment income of $7,000 USD. He said he paid nothing for child and spousal support (even though there was an Order in place since January 26, 2011). He also said that he was a partner in, and had been associated with ASEA, for 10 years;
(i) On November 15, 2017, the husband was removed as a signatory of ASEA. It appeared that he was no longer associated with ASEA after that date;
(j) On November 17, 2017, the husband deposited $9,260.40 and $70,976.11 into his USD and CDN accounts with the Cayman National Bank, Isle of Man. On December 12, 2017, the husband deposited $10,000 USD onto his Mastercard Security Deposit account;
(k) The December 15, 2017, hearing in the bankruptcy proceeding had been adjourned from July because, among other things, the husband failed to perform the duties required of him as a bankrupt. The trustee reported that the husband was “an unemployed construction contractor” who claimed “to be supported by friends”. The husband signed an unsworn declaration that he worked at odd jobs and earned about $500 to $800 per month, that he could not afford to pay spousal support and that he had no after-acquired property that he had not disclosed to his trustee. Yet between October and December 2017, the husband had deposited funds totaling $22,757.00 into the bank account for 699531 Ontario Limited. In total in 2017, the husband transferred $96,139.89 into this account. In 2018, he transferred a further $43,408.06 there, and between January 1, to April 30, 2019, the husband deposited a further $5,670.00. As in 2016, the funds in 2017 and 2018 were used to pay his living expenses, and deposits were made monthly. The husband’s bank records showed that he collected social assistance at the same time, which continued at least into April of 2019;
(l) The husband used his USD and CAD accounts to transfer funds from the Cayman National Bank and the Cayman National Bank Isle of Man to the 699531 Ontario Limited bank account to pay for living expenses. He also transferred funds to his MasterCard account to pay his credit cards, also mostly for living expenses. And he made transfers to other international financial institutions, and to the Dukascopy Bank in Switzerland;
(m) Dukascopy is a Swiss online bank headquartered in Geneva. On January 12, 2018, the husband instructed the Cayman National Bank, Isle of Man, to wire $7,000 USD to Dukascopy. Jarvis J. was unable to determine what other funds were transferred there, although he found it was likely that additional funds were in fact transferred;
(n) In an affidavit sworn June 4, 2019, the husband claimed that all his accounts were “demos”, except for one trading account which had a $0 balance. Unhelpfully, Switzerland declined this Court’s request for disclosure, thus depriving the Court of knowing the true state of affairs. But the husband himself was under an obligation to disclose, and he had not provided disclosure from Dukascopy contrary to paragraphs 5(j) and (k) of the February 6, 2019, Order of Sutherland J.;[^9]
(o) The sums that the husband transferred to his 699531 Ontario Limited account from offshore to pay for his living expenses between 2016 and 2018, totaled $260,029.19 or $86,676.40 per year, none of which was subject to tax, and none of which was voluntarily disclosed by the husband to the wife, to the trustee in bankruptcy, or to the Court; and
(p) On February 14, 2019, the Cayman National Bank froze all the husband’s accounts, including the Mastercard account, following receipt of Sutherland J.’s Order of February 6, 2019.
[109] Jarvis J. went on to find that it was impossible to reconcile the husband’s representations to the wife, the trustee, the Cayman National Bank, the FRO, and the Court about his financial affairs. He found that the husband sought to suppress disclosure of his offshore income and banking affairs. He found that the husband failed to comply with paragraphs 5(a) to (c) and (f) to (l) of the Order of Sutherland J. He found no evidence of steps taken by the husband to comply; it was the wife who obtained the husband’s banking records from the Bank of Montreal pursuant to paragraph 5(d), and it was the Cayman National Bank Isle of Man that produced its records to the Court (and the wife) to comply with paragraph 5(e) of the Order.
[110] Despite making all these findings, Jarvis J. nevertheless gave the husband yet another opportunity, until October 31, 2019, to file with the Court an affidavit that showed his compliance with paragraphs 5(a) to (c), and (f) to (l) of the Order of Sutherland J. dated February 6, 2019. He scheduled a further date for the husband to show cause why he should not be sentenced to not less than 30 days incarceration on such terms as may be appropriate.
[111] The parties next appeared before Jarvis J. on December 5, 2019. According to the Court’s written ruling of February 20, 2020, the husband produced during the hearing additional banking records for accounts he owned, now with Capital Security Bank Limited located in the Cook Islands, and stock trading records from one of the institutions located in the Ise of Man, called Capital International Group. This disclosure revealed that the husband transferred approximately $213,000 CDN into the Cook Islands accounts between February 1, 2015, and September 27, 2017, from “DGM Bank & Trust Inc.” and from “Comerica Bank for DGM”. The husband then made monthly transfers to his 699531 Ontario Limited bank account, until the transfers from the Cayman National Bank Isle of Man began, as noted in Jarvis J.’s September 2019 ruling.
[112] The husband told Jarvis J. that these funds originated from the sale of an Ontario residence he purchased after the separation located on Ramona Blvd. in Markham. He said they had been sent to Comerica Bank and used to fund the Cook Island deposits. But there had been no disclosure of account records for Comerica bank between the date of the funds transfer and the opening of the Cook Island accounts, no explanation as to how the Comerica deposit grew by almost $23,000.00,[^10] and no explanation about how or why DGM Bank & Trust Inc. was related to Comerica and the March 2015 Cook Island accounts deposit.
[113] Jarvis J. was also given further documentation suggesting that a wire transfer was made on March 16, 2017, of $33,750.63 from the Cook Island CDN account to the Dukascopy Bank in Switzerland. The husband would later wire another $7,000 USD there on January 12, 2018, from his Cayman National Bank Isle of Man USD account (as explained in ¶ 16 of the September 13, 2019 ruling). He continued to claim that he could not get records from Dukascopy. Yet he also attached some statements from Dukascopy showing a loss. There were further documents tendered showing that the husband’s ASEA account was funded by securities transfers from W.H. Ireland, which appeared to the Court to be a wealth management firm headquartered in London.
[114] The husband admitted that he had originally invested in ASEA in 2006, prior to the separation. In two affidavits sworn in early 2019, Mr. Lipton (who was also involved with ASEA) said that the husband’s initial investment was $677,086.00 USD, and it was followed in 2011 by a further investment of $1,345,766 CAD, into a portfolio policy bond (which the husband disputed making).[^11] Mr. Lipton told the Court that the husband’s investment had been depleted over time due to a deterioration in ASEA business and poor investment decisions by the husband, whereas the husband alleged that he was the victim of an “international ponzi scheme”.
[115] At ¶ 8 of Jarvis J.’s February 20, 2020 ruling, Jarvis J. found that while the scope of the husband’s financial affairs was clearer than it had been a year ago, there nevertheless remained no clear, credible narrative from the husband about his off shore business activities in various global tax-havens, or a clear tracing. That finding remained so at this uncontested trial. In the result, Jarvis J. ordered that the husband would be imprisoned for a period of 30 days, to be served on weekends, starting in March of 2020.
[116] In regard to costs, Jarvis J. found that the husband had behaved in bad faith. He ordered the husband to pay costs to the wife of $119,260.00, of which $59,630.00 would be enforceable as support. But he stayed enforcement of the costs, subject to the wife providing evidence of the husband’s non-compliance with any part of his Order, or until a final order made in these proceedings.
[117] Finally, Jarvis J. made a further disclosure Order for various documents, and scheduled another conference before Kaufman J. One of the goals of that conference was to determine the nature and extent of the husband’s future involvement in the proceedings, as the husband was still exercising full participatory rights, despite Douglas J.’s June 11, 2014, Order. Another goal of the next conference was to address what further disclosure would be required for the next steps in the case.
L. The Husband’s Bankruptcy
[118] The next events concerned the husband’s bankruptcy, once more. In late April 2020, the wife brought an urgent motion before this Court, to annul the husband’s bankruptcy. The motion was brought early on during the Covid-19 pandemic when the Court was operating on a reduced basis.
[119] On April 29, 2020, Jarvis J. prohibited the bankruptcy trustee from distributing any of the husband’s assets until further order of the Court. He ordered the trustee to provide all the husband’s creditors with a detailed accounting of the husband’s assets, including all assets received and realized, and disposition of funds, by May 29, 2020. He ordered the wife to serve upon the trustee, the Superintendent of Bankruptcy and the CRA, copies of all the orders and rulings that had been made in this matter from and after the Order of Sutherland J. dated February 6, 2019. In light of the state of the pandemic at the time and the Court’s reduced operations, Jarvis J. allowed that any party could seek further directions from him when the courts re-opened further, and when the range of permitted matters expanded, to include the relief sought by the wife in her motion.
[120] Issues respecting the husband’s bankruptcy came back on before Jarvis J. again, on August 26, 2020, and again on September 3, 2020. In the end, a motion date was set for the matter to be heard in writing, with Jarvis J. imposing a timetable for the exchange of materials for that motion.
[121] The husband did not participate in the motion respecting his bankruptcy. He did not file materials. The motion then settled amongst the other participants.
[122] On October 1, 2020, Jarvis J. granted a Final Order on consent that the bankruptcy was annulled. He directed that of the $18,350.52 then being held by the trustee, the wife would receive costs of $9,063.88, with the balance of the funds distributed otherwise. Notably, he also ordered that the husband could not, without leave of the Court, declare bankruptcy or commence a proposed proceeding until the final disposition of the wife’s equalization claim and enforcement against the husband. I highlight this aspect of Jarvis J.’s Order here because the wife asked me to make a similar order at the conclusion of this uncontested trial, but there is already a final Order of this kind in place.
M. The Order of Kaufman J. dated September 29, 2020, confirmed that the Husband’s Pleading Had Been Struck As A Result of the Husband’s Failure to Comply With Douglas J.’s Order of June 11, 2014
[123] On September 29, 2020, Kaufman J. confirmed that the husband’s pleadings on the financial issues were in fact struck. He made yet another disclosure Order and scheduled a further contempt motion for November 4, 2020. He also ordered the husband to pay costs of $5,500.00, by November 2, 2020.
[124] The wife’s second contempt motion came on before Jarvis J. on November 4, 2020. It was adjourned due to some issues with the filing of material. I do not believe that it ever came back on for a hearing on the merits.
N. The November 26, 2020 Appearance in the Support Enforcement Matter
[125] In the meantime, the matter came back before the Court on November 26, 2020, for a further support enforcement hearing. Sutherland J. made a Default Order (I am not entirely clear if this is a final Default Order or a temporary Default Order) that the husband would be incarcerated for 6 days unless he paid $4,180.51. The Court also required him pay $6,000.00 per month, representing $3,000.00 in support and $3,000.00 towards the support arrears. The husband would pay the $4,189.51 to avoid incarceration, but he otherwise continued his prior behaviour of not complying.
[126] On November 29, 2022 (discussed below), Jarvis J. later found that the husband had continuously breached the $6,000.00 monthly payment term.
O. Additional Proceedings Respecting the Husband’s Disclosure and Support Enforcement
[127] The wife brought further motions, trying again, to get clearer information about the husband’s financial affairs. On February 10, 2021, Jarvis J. granted further letters rogatory to seven jurisdictions, being Belgium, the Isle of Man, the British Virgin Islands, Monaco, Eire, the Cook Islands, and the state of Utah in the United States. On March 18, 2021, the wife brought ex parte motions to obtain production orders from various Canadian banks, specifically Tangerine Bank, TD Bank and RBC.
[128] Jarvis J. heard two more motions on August 26, 2022, that he ruled on in writing, on November 29, 2022. One motion was by the FRO for a Warrant of Committal for 45 days, or until the sum of $53,529.53 had been paid, and the second motion was from the husband to dismiss the FRO’s Motion for the Warrant and to set aside the Default Order of Sutherland J. dated November 26, 2020.
[129] Jarvis J. commented again that the husband had consistently demonstrated a pattern of deceit, referring back to his earlier findings and written reasons. He went on to make finding about some new evidence that the FRO case management officer had uncovered.
[130] Now, after receiving information regarding a potential income source, the case management officer issued a demand for information. On April 1, 2022, he had a telephone conversation with the HR Coordinator at a company called Coldbox Builders Inc. He determined the husband was a salaried employee there, holding the position of “Vice-President of Product Delivery”, with an annual income of $185,000.00. The case management officer sent a Support Deduction Notice for 50% of the husband’s net income. At this time, the husband had been claiming to the FRO that he was self-employed and earned only $69,765.24 annually.
[131] On May 11, 2022, the case management officer then learned from an employee at Coldbox Builders Inc., that the husband resigned his position, just three days after that April 1, 2022 phone call. His last day of work was supposedly on April 15, 2022. The FRO then received additional information, that the husband may still be employed there under a different “employment arrangement”. The case management officer was not able to obtain further information though.
[132] In response to all these revelations, the husband said in his affidavit of June 16, 2022, that the HR Coordinator was mistaken, that he was not a “Vice President”, but rather he was a “project executive”. He claimed to be trying to obtain supporting documentation. He filed some kind of email stating that he was hired as a “project director”. He also said that he was working for two different companies, but he would not disclose these, “due to privacy concerns and [the wife’s] interference with past employers.”
[133] In the end, Jarvis J. wrote that that the wife was no closer to concluding her family law litigation than she had been in 2011 when Nelson J. made the temporary support Order. He found that the litigation had to come to an end, and so he would be setting the matter down for trial during the May 2023 sittings. He adjourned the FRO’s motion for a Warrant of Committal, and the husband’s motion to set aside the Default Order, until after the conclusion of the trial. He ordered the husband to continue to pay the ongoing support, but suspended enforcement of arrears pending the trial, yet another indulgence given to the husband by this Court. He also made yet another disclosure Order and set a date for the Trial Scheduling Conference.
P. The Two Adjournments of the Trial, and the Wife’s Further Disclosure Motions
[134] The trial did not proceed during the May 2023 sittings. The wife brought an ex parte motion on March 8, 2023, for further letters rogatory to several jurisdictions, including some which had been previously ordered.
[135] Daurio J. granted the wife’s motion. She also made a further production order for disclosure from Tangerine Bank, TD Bank and RBC. She adjourned the trial to the fall 2023 sittings.
[136] The wife then had to bring two more ex parte motions. One was for a finding of contempt against Tangerine Bank, for numerous failures to comply with Daurio J.’s March 8, 2023, Order.[^12] The second ex parte motion was as against BMO, now to produce records pertaining to yet another newly discovered company, called Enigma Capital Corporation Ltd. (“Enigma”). Kaufman J. granted this motion.
[137] On October 24, 2023, Jarvis J. then granted a second adjournment of the trial, from the fall of 2023 to the spring of 2024 sittings. One of the reasons he did so was to allow for the husband to be questioned.[^13] In addition, Jarvis J. ordered Tangerine Bank to release the funds that it held in the husband’s account to the FRO and he ordered the husband to pay the $3,000.00 amounts owing on September 1, 2023 and October 1, 2023 by October 31, 2023, failing which the FRO could move for another Warrant of Committal. Finally, Jarvis J. ordered the husband to provide to the wife, all his financial statements that he had served to the FRO. Notably, the wife had to bring yet another 14B Motion to get these financial statements from the FRO directly when the husband did not comply with this Order either. Fraser J. granted that Order, on December 12, 2023.
Q. The Trial Scheduling Conference Before Jarvis J. on April 12, 2024
[138] The Trial Scheduling Conference to organize this uncontested trial proceeded before Jarvis J. on April 12, 2024. The TSEF was partially completed that day. Jarvis J. made provision for the wife to provide a further 14B Motion to deal with certain outstanding matters not yet resolved in the TSEF.
[139] Jarvis J. later signed the TSEF on May 2, 2024. The TSEF provided that the wife was to provide her evidence-in-chief by way of affidavit, with a further 3 hours of supplementary oral examination-in-chief. It indicated that she would be tendering various other affidavits, without cross-examination (i.e., from Mr. Lipton, Mr. Murray and Ms. Quinn from the Isle of Man, Ms. Butterworth from the Isle of Man). It provided that the transcript from the husband’s questioning held in January of 2024, with exhibits, could be introduced, too.
[140] The TSEF makes reference to the fact that the wife would be calling expert evidence respecting certain matters. As set out earlier, at the trial itself, I allowed the wife to introduce newly discovered affidavit evidence from Ms. Barnett.
[141] Notwithstanding that the husband’s pleading is struck, the TSEF made it optional for him to file an updated financial statement, and a net family property statement. While the TSEF no longer made reference to the husband’s ability to make an opening and closing statement, as Jarvis J. had endorsed that on November 29, 2022, I allowed him to do that too, as I described earlier.
R. The Wife’s Final 14B Motion for Additional Disclosure and the Husband’s Misleading Response to Jarvis J.
[142] After the attendance on April 12, 2024, the wife brought an additional 14B Motion, now for the release of all information and documentation about Enigma, and from DGM Financial Group and DGM Bank and Trust in Cambridge, United Kingdom and Barbados. She brought this motion in part based on a statement that the husband had made at his questioning, that he consented to the release of this information.
[143] But the husband then responded to the motion, claiming to have provided the authorizations and directions that the wife had requested he sign. On May 16, 2024, Jarvis J. dismissed the wife’s motion, believing it to be moot. In a separate Order of that day, Jarvis J. also denied the wife’s request for a sealing order, a restraining order and an order initializing the children’s names, subject to an order otherwise at trial.
[144] It was then revealed during the course of this uncontested trial, that the husband misled Jarvis J., when he responded to the wife’s 14B Motion, about Enigma and DGM. The husband had altered the direction he signed for the release of documents, falsely stating that he was not involved with Enigma, rendering it unhelpful to the wife. While he may have been removed as a director by this point, he was certainly involved in the past and as I explain below, he has continued to operate an Enigma bank account. This behaviour was reminiscent of his conduct after Nicholson J. ordered him to sign directions in Court on February 20, 2019, for which behaviour the husband was later found in contempt.
[145] To address this latest of the husband’s stunts, I made a mid-trial disclosure Order on June 27, 2024, and I compelled the husband to sign unaltered directions, in Court. Whether anything fruitful was obtained as a result of this exercise, I do not know (because of the timing of this Order, made on the penultimate day of this trial).
S. The Conduct Order Made At the Outset of the Trial, and the Wife’s Request for a Final Conduct Order and a Limited Confidentiality Order
[146] On the first day of the trial, I made an Order on a without prejudice basis, prohibiting the husband from posting anything on the internet or on social media about the parties’ two children, the wife or her subsequent partner. This Order was not opposed by the husband. I indicated I would address this request on a final basis later, along with the request to refer to the children by initials in any Judgment. I do so later in this Judgment.
[147] I heard evidence from the wife during this trial about the husband’s disturbing internet conduct, and about the children’s mental health. The Order I made on May 31, 2024, will be final, and I have agreed to refer in this Judgment to the children by their initials, for the reasons set out below.
PART VI: THE COURT’S APPROACH TO THE EVIDENCE AND THE QUANTIFICATION OF THE WIFE’S CLAIMS
A. Applicable Legal Principles Concerning the Drawing of Adverse Inferences
[148] The wife asks the Court to find the husband engaged in spoliation of evidence. She asks the Court to conclude, as Mossip J. did in Fox v. Fox, 2017 ONSC 6509, that a rebuttable presumption applies in that the husband destroyed records because they would serve to operate against his interest. Therefore, adverse inferences should be drawn against him for this.
[149] The husband’s conduct respecting his disclosure obligations is already accentuated throughout this ruling. He has provided various excuses for his behaviour over time, which he ultimately summarized in his lengthy Opening Trial Statement. They include that include records were left in the matrimonial home, the fact he was self-represented at various points, the misconduct of former counsel (which Kaufman J. expressed skepticism about) and even his alleged inability to obtain the complete copy of the Continuing Record. None of these excuses is either credible, or good enough.
[150] While I too have my suspicions, there are nevertheless challenges with the wife’s spoliation argument. I am not persuaded, on a balance of probabilities, that the husband necessarily destroyed evidence intentionally. It is equally, if not more plausible, that the husband knows full well what he transactions he engaged in after the separation, and that he has the relevant documents to prove it, or if he does not have them, then he can obtain them from the record-keepers. I view the situation to be one of chronic non-disclosure and obfuscation, but not necessarily the destruction of evidence. Some relevant documents may have also been lost because of the passage of time. That is not to excuse the husband’s prior non-disclosure, since he would have had documents, but withheld them at relevant times in the past when they were due.
[151] The best evidence suggesting spoliation seems to come from Ms. Barnett. In her affidavit sworn May 15, 2024, Ms. Barnett deposed that she worked as the controller for Cloke Kirby from October of 2007 to November of 2011. She then stayed on as a consultant until March 31, 2012. Ms. Barnett was hired by the husband and reported directly to him during this period. She says she has intimate knowledge of the financial workings of both the company, and the husband, during this time frame as a result.
[152] Ms. Barnett says that in May 2012, after her departure from Cloke Kirby, the company moved offices. She says that she “[has] knowledge” that the husband advised his staff to destroy certain documents during the process of the move, despite being advised that the documents required retention.
[153] While this evidence is undoubtedly additional context that explains why Ms. Barnett felt she had to keep records after she parted ways with Cloke Kirby,[^14] it does not identify the source of her “knowledge” of spoliation. As such, this evidence would not even be admissible hearsay for the purposes of an interim motion: see rule 14(19)(a) of the Family Law Rules, let alone at trial. Even if the source had been identified, it is inadmissible hearsay at trial.
[154] That said, it is not necessary for the Court to find spoliation for the Court to draw adverse inferences. The wife may resort to adverse inferences on other grounds.
[155] The obligation to produce relevant documents, fully and comprehensively, is a fundamental principle in family law, enshrined in both the Family Law Rules, O. Reg. 114/99, as amended, and the case law. This is well known to those who practice family law, and if it wasn’t evident to the husband at the outset of these proceedings, it certainly should be by now given what has gone on over the course of this 14 plus years’ long litigation. He has been told as much, over and over again by the Court.
[156] Rule 2(2) of the Family Law Rules provides that the primary objective of the rules is to deal with cases justly. What that means is defined in rule 2(3). It includes ensuring a fair process, saving expense and time, and allocating court resources appropriately with regard to the importance and complexity of a case, and the Court’s other commitments to other families. Pursuant to rule 2(4), the parties and their counsel are required to help the Court promote the primary objective. The Court is required to actively case manage a case, in various ways. Doing justice obviously entails ensuring that all of the disclosure needed to resolve an issue, is provided fully and in a timely manner.
[157] As early as 1978, well before the enactment of Rule 2, Galligan J. discussed similar principles in Silverstein v. Silverstein, 1978 1605 (Ont. H.C.J.), where he wrote that the legislature:
…intended to require that full, complete and up-to-date information be provided to the opposite party and to the Court at the earliest possible opportunity. Anyone who has had any experience with family litigation in this Province knows of the tremendous amount of time and expense that is often involved in establishing the financial circumstances of the spouses. This case is typical. I am certain that it was the intention of the Legislature to eliminate the waste of time and the expense involved in such inquiries by requiring early and complete financial disclosure.
[158] Another example of this principle, applied in context of the determination of a support payor’s income, is found in Kiteley J.’s decision in Reyes v. Rollo, 2021 28260 (Ont. S.C.J.). There, Kiteley J. was discussing the onus on a self-employed payor to prove his income. While she said that “audited statements” are not necessarily required, a comprehensive package, presented early and in a user-friendly way, to enable the other side to easily comprehend it, was.
[159] At ¶ 44, Kiteley J. wrote that where disclosure is inadequate and inferences are to be drawn, they should be favourable to the spouse who is confronted with the challenge of making sense of financial disclosure, and against the spouse whose records are so inadequate or whose response to the obligation to produce is so unhelpful that cumbersome calculations and intensive and costly investigations or examinations are necessary.
[160] In regard to property, one of the unsuccessful grounds of appeal in Leskun v. Leskun, 2006 SCC 25, was that the chambers judge erred in calculating the appellant’s net worth. Yet the chambers judge had commented that the appellant had been less than forthright in his evidence, so he resorted to drawing adverse inferences respecting his financial position. In rejecting this ground of appeal, at ¶ 34 the Supreme Court wrote, citing Cunha v. Cunha, 1994 3195 (B.C.S.C.):
Non-disclosure of assets is the cancer of matrimonial property litigation. It discourages settlement or promotes settlements which are inadequate. It increases the time and expense of litigation. The prolonged stress of unnecessary battle may lead weary and drained women simply to give up and walk away with only a share of the assets they know about, taking with them the bitter aftertaste of a reasonably-based suspicion that justice was not done.
[161] And continuing with this theme, at ¶ 59 of Virc v. Blair, 2017 ONCA 394, the Ontario Court of Appeal held:
…. Inherent in the duty to disclose is the duty of the titled spouse to fairly value the asset. This is a basic principle of disclosure. The onus is on the party asserting the value of an asset that he or she controls to provide credible evidence as to its value: Menage v. Hedges, 1987 5234 (ON SC), [1987] O.J. No. 1512, 8 R.F.L. (3d) 225 (Dist. Ct.), at para. 44; Homsi v. Zaya, [2009] O.J. No. 1552, 2009 ONCA 322, 65 R.F.L. (6th) 17, at para. 38.
B. Findings of Non-Disclosure and Analysis Respecting Adverse Inferences
[162] Therefore, I intend to draw adverse inferences, where necessary, to dispose of both the wife’s property and support claims in this litigation because:
(a) The husband failed to disclose financial information related to Cloke Kirby and its related group of companies. As already alluded to, just two financial statements for Cloke Kirby were provided late in the day by Ms. Barnett;
(b) The husband failed to obtain a valuation of Cloke Kirby and the related companies. Incredibly, by the time of this trial, over 14 years after the separation, the husband’s position about the value of Cloke Kirby on the valuation date was still TBD, as set out on both of his Form 13.1 Financial Statements for trial, sworn May 3 and 15, 2024. This contributed to the manufactured scenario that he advanced in his Net Family Property Statement, that it is the wife who owes him an equalization payment;
(c) The husband failed to disclose the existence of the numbered company, 699531 Ontario Inc., until he was caught through the Order of Jarvis J. dated May 1, 2019, ordering BMO to produce bank statements. I will have more to say about this when I come to the analysis about equalization and the determination of the husband’s income;
(d) The husband failed to disclose over $2 million in investments he made in the ASEA. This revelation came through the evidence of Mr. Lipton;
(e) The husband failed to disclose an interest he had in another entity called the Heathstone Trust, also discussed in more detail below. Mr. Lipton supplied documentation to aid the wife to prove this asset should form part of the husband’s Net Family Property;
(f) The husband failed to disclose various offshore accounts and investments in the Cayman Islands, the Isle of Man, the Cook Islands, Barbados, and Switzerland. Some information about this was revealed over time as the husband got caught;
(g) In the case of an account in Switzerland, this was only discovered after this Court granted letters rogatory, after the wife’s counsel attended proceedings in the Isle of Man, and after this Court received productions from there as a result. At his questioning on January 24, 2024, the husband claimed not to be able to recall whether he had an account there and suggested that, perhaps, Mr. Lipton had opened one. At this trial, the husband tendered documents about Dukascopy that I find he forged;
(h) The husband failed to disclose information about Enigma;
(i) The husband opened accounts at Tangerine Bank on February 8, 2019, and May 22, 2019. The first one was opened just two days after the date of Sutherland J.’s February 6, 2019 mareva injunction in an obvious attempt to circumvent that Order. The wife started to discover the existence of these accounts at Tangerine in or about June 2022 at a hearing in the related support enforcement proceeding;
(j) The husband continued to operate through Tangerine Bank, receiving deposits and using the account in the ordinary course to purchase items, transfer funds and pay his lawyer through wire transfers to “M. Abrams”. I will have more to say about this when discussing the husband’s income, and the current contempt issues before the Court; and
(k) In general, the husband failed to discharge the standard that is required of him respecting disclosure, and to prove his income, assets and liabilities.
C. The Court’s Other Findings and their Relevance to Drawing Adverse Inferences
(1) The Husband’s Credibility
[163] Previous judges have already, throughout the history of this case, written Endorsements or reasons, about what has gone on here over the past 14 plus years. Jarvis J. in particular, invested much time and energy into setting out the many steps the wife has taken to chase after disclosure, and to try to piece together some kind of picture of the husband’s true financial affairs. He set out many of the husband’s efforts to obfuscate and obstruct. I have repeated much of what Jarvis J. concluded already, and I have updated that history to the present in this Judgment.
[164] The wife has summarized, in her written closing submissions, several inconsistencies in the husband’s various sworn financial statements that he provided over time, too. While the wife has pointed these out, and a myriad of other reasons why the husband lacks credibility, and while I will address a number of the husband’s inconsistent statements in his various sworn financial statements below, little more needs to be said here. In short, the husband has no credibility in the eyes of the Court.
[165] To the extent that the Court has not already been crystal clear, let me be so here. The fact that the wife, and ultimately the Court, still do not have a complete and accurate picture of the husband’s financial affairs, is not the fault of the wife. The fault for that rests with the husband, and the husband alone.
(2) The Husband’s Non-Payment of Temporary Without Prejudice Support and Costs
[166] There is the fact that the husband abused the wife and the children during the marriage, followed by his threat (which I accept that he made) that the wife (and by extension the children) would never see any money. This hangs over him in the Court’s credibility analysis, especially since that has largely been borne out so far. Furthermore, although not rising to the level of contempt (because they are payment orders), the husband came into this trial in breach of Nelson J.’s support Order, and various costs Orders. According to the FRO Statement of Arrears (Ex 18), as of May 1, 2024 the husband now owes support arrears of $169,570.39 pursuant to the consent Order of Nelson J. dated January 26, 2011, alone, before the Court even finds the actual amount owing after this trial. This sum does not include the additional amount of $59,630.00, of the $119,260.00 in costs that Jarvis J. ordered on February 26, 2020, could be enforced through the FRO but for the stay. [^15]
[167] The husband involved at least one other person in his support breaches, after the separation. Ms. Barnett deposed that while she still worked for Cloke Kirby the husband specifically instructed her to withhold payments by way of cheques that she had prepared for the wife’s support, payable either to the wife or to the FRO. She says that the husband told her “…flatly that he would not be providing any spousal support or child support to [the wife] and would do whatever it took to avoid paying anything to [her].” She also recalled receiving emails from the husband from 2009, relating to credit cards and health insurance, asking for her assistance to obstruct the wife from being able to access the health care plan for herself and the children.
[168] The husband has not paid five different costs Orders totaling $134,210.00, exclusive of the HST that was ordered in relation to the first three Orders, and accrued interest on all of them. The costs Orders are:
(a) the Order of Edwards J. dated March 18, 2011, in the amount of $3,750.00 plus HST;
(b) the Order of Douglas J. dated June 11, 2014, in the amount of $4,500.00 plus HST;
(c) the Order of McGee J. dated October 26, 2016, in the amount of $1,200.00 plus HST;
(d) the Order of Jarvis J. dated February 26, 2020, in the amount of $119,260.00, referred to above, which may currently be stayed;[^16] and
(e) the Order of Kaufman J. dated September 29, 2020, in the amount of $5,500.00.
[169] Based on the Court’s findings, conclusions and calculations being made in this Judgment, I find there is no merit in the husband’s position that he effectively already paid these costs by overpaying support.
(3) The Husband’s Contempt
[170] There have already been two contempt motions, exclusive of the current one now pending, and the additional contempt motion the wife wishes to pursue against the husband’s former counsel. The husband has already been found in contempt of several Orders, and even incarcerated as a result.
(4) The Husband’s Fraud
[171] The husband has either actually engaged in, or attempted to engage in fraud, on more than one occasion.
[172] For instance, Ms. Barnett says that she had serious concerns about the fraudulent and dishonest activity that he engaged in as it related to the business, when she worked there. Ms. Barnett also deposed that she recalled the husband attempted to backdate a life insurance policy to include the wife. He initialed documentation on her behalf and forged her signature. She deposed that he fraudulently created “bonding documentation” for construction projects being provided to third parties, when he ran Cloke Kirby.
[173] There is the evidence of the husband altering documents submitted in this proceeding. In his Endorsement of April 17, 2019, Jarvis J. stated “…[i]n Ms. Carter’s affidavit she references what appeared to her, and to this court, seemed to be pasted or altered documents that were provided to Mr. Cox by Mr. Carter.” As I said earlier, there is now before this Court at this trial, a letter from Dukascopy Bank that the husband included with his Form 13.1. Financial Statement sworn May 3, 2014. This letter purports to be a letter from Dukascopy Bank to Mr. Cox dated July 11, 2019, that says that the husband is the holder of two trading sub accounts, one of which was “managed by a third party” and the other one had not been used. The current balances are said to be 0.
[174] But the wife testified that she was copied on all correspondence going in and out of Mr. Cox’ office, and she never received such a disclosure. I accept the wife’s evidence. I also accept that Mr. Cox’ office would not mislead the Court about the non-receipt of this letter prior to trial. I find on a balance of probabilities that this letter was never received because it is not a genuine document.
(5) The Husband’s Other Deceit
[175] Finally, the husband was also deceitful in both the support enforcement proceedings, and in a bankruptcy proceeding, as already summarized.
D. Summary and Additional Conclusions About the Drawing of Adverse Inferences
[176] In summary, I find the husband has been guilty of family violence, of threatening the wife and of financial control. He caused financial harm to his family. I find the husband has committed acts of chronic non-disclosure, of breaching court orders, he has been found in contempt, and he will be found in contempt again at the conclusion of this trial. I find the husband has also engaged in fraud, and forged documents. This entire pattern of conduct, in addition to the findings of non-disclosure already made by me, and prior judges of this Court, demonstrates an utter disregard for his former spouse, an utter disregard the children, and an utter disregard for the Court’s orders and process.
[177] For these additional reasons, the Court cannot trust the accuracy or reliability of anything the husband says. Where there is a conflict in the evidence between the wife and the husband, a conflict between something the husband has said and what is contained in a genuine document, or where there a gap in the evidence and a reasonable inference can be drawn, the Court intends to do so in the wife’s favour.
PART VII: EQUALIZATION OF NET FAMILY PROPERTY
[178] Among other statutory provisions in the Family Law Act, R.S.O. 1990, c. F.3, as amended, the wife’s equalization claim is governed by the definitions in section 4, and sections 5(1) and 7.
[179] For the calculations in this case, the date of marriage is July 3, 1999. The valuation date is the date of separation, i.e., December 12, 2009.
[180] Both parties’ draft Net Family Property Statements are less than ideal. Through no fault of her own the wife does not have all the disclosure and data that she needs to calculate the equalization payment with precision. The husband’s Net Family Property Statement, by contrast, is not reliable for the numerous reasons already expressed. Least of which is that it manufactures a scenario whereby his net family property is 0, and the wife owes him an equalization payment.
[181] In the troubling context of this case, the Court is left to calculate an equalization payment over 14 years after the valuation date. The Court’s best analysis based on the imperfect record put before it, follows next.
A. Assets
(1) The Formerly Jointly Owned Cedar Valley Matrimonial Home
[182] Both parties agree that the matrimonial home had equity on the valuation date. On her Form 13.1 Financial Statement sworn May 16, 2024, the wife states that this property was sold pursuant to a power of sale, and her final distribution was for $176,184.08 (pursuant to the Order of Douglas J. dated June 11, 2014). Like the previous distributions from her share, this final one went to her lawyer. Nonetheless, that is the value that she placed in her column on the valuation date. She did not place an amount for the corresponding mortgage as a debt owing on the valuation date, choosing instead to show her share of the equity in net dollars, based on what was finally distributed to her. She placed an unknown value in the husband’s column for the valuation date.
[183] On both his Form 13.1 Financial Statements for trial sworn May 3 and 15, 2024, and on his Net Family Property statement, the husband says that there were sale proceeds of $340,481.94 as at January 23, 2011. He says his share was half of that, i.e., $170,240.97. He did not place a mortgage balance as a valuation date debt either, as he too used net numbers. In a note, the husband says that he did not receive any share of the net sale proceeds because they were either paid to the wife for support, or to the CRA for his tax debt.
[184] I intend to treat this asset as follows in the equalization calculation:
(a) The matrimonial home was a joint asset. A value will be assigned to both parties on the valuation date;
(b) I am not certain that each party’s claim about the amount of equity is correct. Both parties have used different numbers, and their numbers are based what was available later on (either on the post-separation sale, or the post-separation final distribution by the Court);
(c) While strictly speaking the parties ought to have provided the actual value on the valuation date, less the mortgage and any other associated debts, as a joint asset this does not matter. Given that neither’s net family property is negative or zero, any discrepancy does not impact the bottom line, as long as equal values are placed in both sides’ ledgers;
(d) The fact that the wife paid some or all her distributions that she received from this asset to her lawyer is a post-separation event that does not impact the calculation. The fact that the husband’s equity went to the wife for prior support arrears, or to the CRA, are post-separation events, too. Had he paid support on time, and out of his income, this would not have happened. This does not impact the calculations. I will deal with the amounts that went to the CRA for unpaid taxes, below, when addressing the husband’s tax debt on the valuation date; and
(e) In the end, I do not need to try to go back and figure out the precise amount of equity that existed on the date of separation and divide it in half for each side’s respective ledger. The numbers which the parties have both included are close enough. For ease, I will use the wife’s number, provided that it is reflected as equity in each side’s column on the valuation date.
[185] Therefore, the Court’s calculations use the wife’s value of $176,184.08, representing 50% of the equity that she eventually received and paid to her lawyer. But this same amount needs to be reflected as asset to both parties, not just the wife, to undertake the equalization calculation correctly.
(2) The Formerly Jointly Owned Investment Property on Tyler Street in Stouffville
[186] The parties were also the joint owners of an investment property in Stouffville. Once again, they have both treated this asset differently, but in a similar fashion as they treated the matrimonial home, on their respective net family property statements and financial statements for trial. The husband estimates the net equity in this property at $334,127.17 and divides it equally, placing $167,063.58 in both parties’ columns at the valuation date. He repeats the same statement about having used his equity to pay support or taxes. The wife says the net equity was $252,184.08 when the property was foreclosed, and once again says her share all went to her lawyer. Unlike the matrimonial home though, the wife did not include half of what she says the equity was in either’s columns since she paid her lawyer with her share. Once again strictly speaking, this is a post-separation event.
[187] In the end though, whether a value is included in both parties’ columns as the husband did, or this asset is omitted entirely as the wife did, as equal owners, the inclusion or exclusion of a value for this asset does not impact the bottom line. The same reasoning as that expressed above when dealing with the former matrimonial home applies.
[188] I intend to adopt the wife’s value, as the husband says his number is an estimate. An equal sum is to be placed in both side’s columns on the valuation date, as the husband has done. In the husband’s case, this will be subject, once again, to my treatment of his tax debt, below.
[189] Therefore, I place the sum of $126,092.04 (i.e., 50% of $252,184.08) as an asset to both parties.
(3) General Household Items and Vehicles
(i) Vehicles
[190] The wife’s Form 13.1 Financial Statement sworn May 16, 2024, and her Net Family Property Statement, say that she had a Lincoln Aviator on the valuation date. On these documents, she says this car was ordered to be in her possession pursuant to the Order of Nelson J. dated January 26, 2011. But she places no value for this car because it was seized from her at her parent’s home in Bracebridge after the date of separation. The wife’s Net Family Property Statement also says that the husband had a 2009 Porsche, that she says was worth $112,600.00.
[191] The husband has not included any cars at the date of separation on either of his Form 13.1 Financial Statements for trial, or on his Net Family Property statement, or on his earlier Form 13.1 Financial Statements sworn April 23, 2010, or January 23, 2011, either, for that matter.
[192] These statements about these vehicles seem inaccurate to me. First, the wife testified that her Lincoln Aviators were leased. Even if the car was owned on the valuation date, I do not know its value. Moreover, the Order of Nelson J. dated January 26, 2011, says that the husband would permit the wife to drive the Ford Explorer, not a Lincoln Aviator. Perhaps this was after the seizure of a Lincoln Aviator, or perhaps it was the Ford Explorer that was seized, not a Lincoln Aviator; I do not really know.
[193] At ¶ 16 of Delongte v. Delongte, 2024 ONSC 3454, Fowler Byrne J. repeated the well-known principle, already articulated above, that the party who asserts a value has a duty to provide credible evidence as to its value. The Court is entitled to draw an adverse inference because of the failure to do so. In that case, the Court was dealing with the wife’s designer purses. There, the Court dealt with the issue by accepting the wife’s evidence about how many purses she owned (since she had the best evidence of what she owned) while adopting the husband’s (i.e., the opposing party) proposed values, given the wife’s failure to prove that.
[194] Following this approach in the case of the wife’s vehicles, I do not know what the wife had; her evidence was unclear. Neither side proposed a value on their net family property statements in any event.
[195] In regard to the husband’s Porsche, he didn’t say that he had one, but he is not reliable. On the other hand, I did not really hear any clear evidence from the wife that husband owned this at the date of separation. There was mention of a Porsche, but the details are confusing, and she otherwise said she lacked knowledge of the parties’ financial affairs during the marriage.
[196] I do not intend to include any values for either side’s vehicles in the Court’s calculations.
(ii) Jewelry
[197] The situation is somewhat similar respecting jewelry, art, tools, sports and hobby equipment.
[198] On her Net Family Property Statement, the wife says that she had assets of this kind worth $10,000.00, whereas the husband had $50,000.00. She did not swear to having $10,000.00 of these kind of assets on her Form 13.1 Financial Statement for trial sworn May 16, 2024, though.
[199] On his Net Family Property Statement, and on his two Form 13.1 Financial Statements for trial sworn May 3 and May 15, 2024, the husband says that he had a wedding ring and two valuable Breitling watches but placed a value of $0 because he says the wife kept these. He also places a value of $10,000.00 for the wife on his Net Family Property Statement. Perhaps the wife just accepted the value the husband ascribed to her for her jewelry. She does not, however, accept his position about his jewelry.
[200] Following again the approach taken in Delongte v. Delongte (i.e., that the husband best knows what he had), I cannot accept the husband’s claim about what he owned in terms of jewelry on the valuation date, or his statement that the wife kept his jewelry. In addition to his lack of credibility in general, his evidence has been inconsistent over time about this.
[201] For example, on his Form 13.1 Financial Statement sworn April 23, 2010, sworn much sooner after the date of separation, he estimated that he had assets of this kind worth $50,000.00. He said nothing about the wife having kept them. On his January 23, 2011, Form 13.1 Financial Statement, he now said that the wife was “in possession of all of our jewelry” but he referred to only one watch and a wedding ring, not two watches.
[202] I intend to place values of $50,000.00 for the husband, which he himself admitted on his first Form 13.1 Financial Statement of April 23, 2010. I will place $10,000.00 for the wife, as both sides seem to agree on this.
[203] In regard to the date of marriage, while the husband says on his Form 13.1 Financial Statements for trial sworn May 3 and 14, 2024, and on his Net Family Property Statement, that these assets were then worth $25,000.00 (in an attempt to claim a date of marriage deduction), these are estimates only. Notably, the husband has also made inconsistent statements about this jewelry at the date of marriage, too. He said they were worth $50,000.00 on his Form 13.1 Financial Statement sworn April 23, 2010. By the time of his January 23, 2011, Financial Statement, he changed his statement, and placed no value at all.
[204] It is not clear to me what the husband owned on the date of marriage. The wife does not place a value for jewelry at the date of marriage. Notably, the wife also testified that the parties’ wealth really began to be acquired after the marriage, after the husband purchased Cloke Kirby. There will be no date of marriage deduction for any jewelry.
(iii) Recreational Vehicles
[205] On her Net Family Property Statement, the wife says that the husband had a Seadoo and three Skidoos worth $55,000.00 on the valuation date. She places no value on the date of marriage for these.
[206] The husband says on his Net Family Property Statement, that “snowmobiles, tractors, dirt bikes” were divided, and he places a value of $5,000.00 as at the date of marriage. However, on his two Form 13.1 Financial Statements for trial sworn May 3 and 15, 2024, the husband says that he kept a trailer, whereas the wife “kept the rest”. On his Form 13.1 Financial Statement sworn April 23, 2010, the husband said he had “snowmobiles, tractors, dirt bikes” estimated to be worth $30,000.00 on the date of separation, and $5,000.00 on the date of marriage.
[207] Once again, I cannot accept as credible or reliable the husband’s statements about what he had, when, or the values. In regard to the husband’s claim that the wife kept these kinds of items, the wife testified that after the separation the husband surreptitiously returned to the home and took the snowmobiles, even though he was not supposed to be on the property without a police escort. In addition to preferring the wife’s evidence over the husband’s evidence in general, I find it equally hard to accept that the wife somehow kept these recreational vehicles when she would later essentially be evicted from the matrimonial home and have to move in with her parents. Even if she did, this would be a post-separation event and, at best, a post-separation adjustment. And I do not have evidence of the values at the time that this retention is said to have occurred for that adjustment to be made.
[208] I adopt the wife’s values for the husband of $55,000.00 at the valuation date and place no value on the date of marriage.
(4) Bank Accounts and Savings, Securities and Pensions
[209] Remarkably, except for a Duca Credit Union Chequing Account, both parties’ net family property statements respecting the husband’s assets in this category are identical, although this may be more a function of the wife just accepting the husband’s statements about these values and not pursuing these any further.
[210] The only discrepancy between the parties’ financial statements and net family property statements for trial is with respect to the Duca Credit Union account. Both parties seem to agree that it had a negative balance of ($43.87), but the husband places this negative value in both side’s columns at separation, whereas the wife places it in the husband’s column only.
[211] This negative balance on valuation date is a de minimus liability. The simplest thing to do is to remove it.
[212] After making that adjustment, both sides agree that the husband had savings and investments of $613,158.21 at the valuation date. Both parties’ net family property statements also agree to a notional deduction for tax of 25% on the components of these investments that were registered (RRSPs). The agreed-upon valuation date debt for these contingent taxes is $33,895.58. I adopt both sets of figures.
[213] The husband has placed TBDs for disposition costs for the non-registered investments. The Court cannot work with TBDs. It was incumbent upon him to provide evidence of this well before now.
[214] Finally, the husband’s Net Family Property statement also claims that the wife had another $126.03 in a bank account and $8,000.00 in an RRSP at the valuation date. The source of this information is said to be contained in a draft NFP statement attached to an affidavit of the wife’s sworn January 18, 2011. No such affidavit or draft NFP statement was tendered at this trial. The wife has not admitted in her Form 13.1 Financial Statement for trial to having these financial assets back then. Therefore, I do not include these values for the wife at the valuation date, nor do I include the corresponding deduction of 25% for tax on the wife’s alleged RRSP, that the husband included.
(5) Business Interests
[215] These are the most significant net family property issues.