Court File and Parties

COURT FILE NO.: FS 20-008 DATE: 2024/01/09 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

SHELLEY DARCY Applicant

• and -

MARC RANCOURT Respondent

BEFORE: The Honourable Mr. Justice David J. Nadeau

COUNSEL: Stephania Sikora, for the Applicant William Abbott, for the Respondent

HEARD: December 22, 2023

Endorsement

[1] The Respondent brought a motion seeking:

1. An Order varying the Order dated September 7, 2022 by removing paragraph 12 which states: Rancourt Consulting Services Incorporated and the 6582818 Canada Limited should be amalgamated and into CMCI and closed.
2. An Order that the following paragraph be inserted in place of paragraph 12 of the September 7, 2022 Order:
   12. The corporations shall be dealt with as follows: a. The Applicant’s name shall be removed from Rancourt Consulting Services Incorporated (“RCSI”) and the Respondent shall assume sole ownership and close the corporation; and b. The Applicant’s name shall be removed from 6582818 Canada Limited and the Respondent shall assume sole ownership and close the corporation.

[2] The Applicant then brought their own Motion seeking:

1. An Order dismissing the Respondent’s motion.
2. In the alternative to the above, an Order as follows: a. An Order varying the Order dated September 7, 2022 by removing paragraph 12 which states: Rancourt Consulting Services Incorporated and the 6582818 Canada Limited should be amalgamated into CMCI and closed. b. An Order that the following paragraph be inserted in place of paragraph 12 of the September 7, 2022 Order: i. The corporations shall be dealt with as follows: ii. The Respondent’s name shall be removed from Rancourt Consulting Services Incorporated (RCSI) and the Applicant shall assume sole ownership and amalgamate the corporation into CMCI. iii. The Respondent’s name shall be removed from 6582818 Canada Limited and the Applicant shall assume sole ownership and amalgamate the corporation into CMCI. iv. The Respondent’s name shall be removed from CMCI and the Applicant shall assume sole ownership.
3. In the furthest alternative, if the Respondent’s relief is granted, an Order as follows: a. Half of CMCI’s income from 2019 to date shall be allocated to the Applicant. b. Half of the 2019 shareholder amounts due and payable to the Applicant as codified in the Applicant’s sworn evidence; c. An award of such other lump-sum amounts as this Honourable Court deems just.

[3] In addition to their supporting Affidavits, I have been provided with the Factum of the Respondent and the Brief of Law for the Applicant. Subsequent to these parties and their Counsel agreeing to my conducting the Binding Judicial Dispute Resolution hearing which resulted in my Order dated September 7, 2022, I also conducted a further Binding Judicial Dispute Resolution hearing on March 3, 2023. I have also delivered the Addendum on Costs dated November 25, 2022 as well as the Addendum on Costs dated May 29, 2023.

[4] Significantly, in the Respondent’s Closing Submissions from the Binding Judicial Dispute Resolution I conducted on August 8 and 9, 2022, a Draft Order was attached requesting the various relief sought by him from the evidence presented, which included that I should make the Orders that “The Rancourt Family Trust shall be wound up and closed” and also that “Rancourt Consulting Services Incorporated and the 6582818 Canada Limited should be amalgamated and into CMCI and closed”. In making my determinations resulting in my Order dated September 7, 2022, I agreed in paragraphs 11 and 12 that both of these requested relief by the Respondent were appropriate in light of the evidence presented.

[5] The Respondent now seeks that I vary my Order dated September 7, 2022 by removing paragraph 12 and replacing it with different relief. The Applicant then countered with their own motion for relief as indicated in paragraph 2 of this Endorsement. However, during oral submissions for the motions on December 22, 2023, Counsel for the Applicant confirmed that her principal position is that the Respondent’s motion be dismissed and that I should refuse to vary or remove paragraph 12 of my Order dated September 7, 2022. With respect to the alternative relief being claimed by the Applicant’s motion, that is being sought only if I decide to vary or remove paragraph 12. Furthermore, at the December 22, 2023 hearing Counsel for the Respondent submitted their own alternative request suggesting that I could resolve the dispute of these motions by simply adding the following to paragraph 12 after the words “… be amalgamated into CMCI and closed”; as follows “ , and Shelley Darcy shall have no interest in CMCI” or “, and Shelley Darcy shall not be an owner of CMCI”.

[6] A central issue in this dispute is whether the Applicant has any interest in CMCI, either as a shareholder or by being owed to her with shareholder loans from the various corporations operated by these parties over the years. A further issue is whether the Applicant can establish the value of any such interest that she can prove that she still has in these various corporations including CMCI. The evidence establishes that Collective Minds Consulting Inc. (or CMCI) was incorporated by these parties during their marriage, and that it was subject to an amalgamation in 2018 prior to their separation. The evidence also establishes that there were significant joint assets and funds advanced to their various corporations, including CMCI, during their marriage. After the amalgamation in 2018, and after their separation, there is much contradictory evidence from these parties of their resulting shareholdings and their respective interest in outstanding shareholder loans due to them from their various corporations including CMCI. This divide between these parties was obvious to me after my initial Binding Judicial Dispute Resolution when I was requested by the Respondent to make, and therefore I ordered, paragraphs 11 and 12 of my Order dated September 7, 2022. However, in paragraph 10, my Order makes it clear that “the Applicant remains free to bring an oppression remedy against these Corporations and the Respondent”.

[7] After these parties agreed to Mark Lucenti acting as their corporate lawyer to give effect to paragraphs 11 and 12 of my Order dated September 7, 2022, and even when he advised Counsel for the parties that it was executable as worded even if it involved amalgamating a federal numbered corporation, an impasse occurred over the interpretation of my Order. The Respondent did not agree that the Applicant would end up with a shareholding interest in CMCI, and Mark Lucenti advised that he “cannot proceed with the work if one party is not going to sign.” Instead, these motions were brought by the parties.

[8] For reasons as outlined in detail in the Factum of the Respondent, Counsel for the Respondent submits that there was no value to the companies as noted in the business valuation completed by Joe Hilton of BDO, and that paragraph 12 of my Order cannot mean that the amalgamation into CMCI makes the Applicant an owner of CMCI since multiple documents filed demonstrates that she never was an owner of CMCI, the ownership of the companies was taken into consideration when determining the equalization payment, paragraph 10 of my Order has not been exercised to bring a claim against CMCI, among other reasons indicated. The Respondent therefore claims that paragraph 11 and more specifically paragraph 12 of my Order cannot be complied with nor carried out since these litigious parties will not agree that Shelley Darcy becomes an owner of CMCI. The argument is that if these paragraphs of my Order have the effect that Shelley Darcy would receive an interest in the amalgamated CMCI, then that would create an “unworkable and untenable situation” between these litigious parties.

[9] Counsel for the Applicant responds with the Respondent’s shifting narrative of the Applicant’s corporate ownership over the years, and that the Respondent has produced nothing to indicate that the Applicant relinquished or signed away her rights in any of their corporations including CMCI. It is further submitted that there are significant shareholder loans, due and payable to the Applicant from all three corporations being amalgamated, including CMCI. As well, Counsel for the Applicant points out the significant joint assets and funds advanced to their various corporations, including CMCI. Essentially, Counsel for the Applicant submits that removing or varying paragraph 12 of my Order would call into question the balance of my Order from the initial Binding Judicial Dispute Resolution and may engage appeal consequences from my Order.

[10] As I questioned to both Counsel on December 22, 2023 during the hearing, there is no specific evidence of the value of the Applicant’s interest being amalgamated into CMCI by paragraph 12 of my Order. Mark Lucenti in his emails mentioned that the parties must agree to an accountant, but I am provided with no other details of how such a valuation may determine whether the accounting would result in quantifying the Applicant’s potential interest, by ownership or by other means, in the amalgamated CMCI. It would have been extremely helpful, and is almost necessary, to have been provided with more detail from Mark Lucenti and these Counsel of the specific terms of the amalgamation into CMCI in order for me to identify her entitlement and the quantum of the Applicant’s potential interest in CMCI upon the amalgamation that I ordered at the request of the Respondent. Due to the very contradictory evidence presented from these parties which resulted in my finding that it “was obvious from his testimony that his position about her corporate ownership changed significantly over time”, combined with the challenges this Court has with the testimony and credibility of the Respondent as previously indicated in part for the 2018 amalgamation that he orchestrated, I still cannot conclude whether the Applicant never had any ownership interest in CMCI.

[11] Additionally this Court is normally functus, with no jurisdiction to make changes to a final order once made. The Respondent submits that I should change my Order on the basis of facts discovered after the order was made. I disagree. This is clearly not a case for me to exercise my inherent jurisdiction at common law to set aside or change my Order to prevent a miscarriage of justice where new facts have arisen or been discovered. It is also submitted that I change my Order pursuant to Rule 25(19) of the Family Law Rules because it “contains a mistake” or that it “needs to be changed to deal with a matter that was before the court but it did not decide”. The essential argument is that paragraph 12 of my Order creates an “unworkable and untenable situation” if these parties are to become joint owners of CMCI. After I considered the evidence presented by these parties at the initial Binding Judicial Dispute Resolution hearing and the closing submissions, I agreed with the Respondent’s request for relief by including paragraphs 11 and 12 in my Order dated September 7, 2022. This was not a matter that was before the Court but that I did not decide, and I have not been satisfied by the Respondent that I made a mistake to include their requested relief in my Order. The effect of my Order is therefore that these parties will be required to negotiate and to create a workable and tenable cooperative agreement within their amalgamated CMCI. And as indicated by Mark Lucenti in his emails dated July 18, 2023 and September 6, 2023, he will “complete the work that the Accountant will tell me to do” on his joint retainer once both Counsel “have agreed on exactly what is happening” in his executing paragraph 12 of my Order dated September 7, 2022 for these parties.

[12] As a result, I have clearly not been satisfied by what has been presented on these motions to either remove paragraph 12 or vary it in any way, except to now correct the obvious typographical error (by deleting the second “and”). Paragraph 12 of my Order dated September 7, 2022 should be corrected to now read as follows; “Rancourt Consulting Services Incorporated and the 6582818 Canada Limited should be amalgamated into CMCI and closed.” The Respondent’s motion to remove paragraph 12 is dismissed, and I will not add anything to paragraph 12 as was submitted by Counsel for the Respondent as indicated in the last sentence of paragraph 5 of this Endorsement since I remain unable to conclude on this evidence what ownership the Applicant may still have in CMCI. As such, I need not consider the alternative relief claimed in the Applicant’s motion.

[13] If the parties cannot agree on the issue of costs for these motions, this Court will entertain written submissions dealing with all aspects of the award of costs. Any party claiming costs shall serve and file written submissions and a bill of costs not later than 20 days from the date of this Order. Any responding submissions shall be served and filed within 15 days thereafter.

Released: January 9, 2024 The Honourable Mr. Justice David J. Nadeau