Superior Court of Justice – Ontario
Court File No.: FC-21-450-00
Date: 2025-05-16
RE: E.L.R., Applicant
AND: D.M.S., Respondent
AND: E.C.M. and E.W.C., Added Parties
Before: J.P.L. McDermot
Counsel:
- Joan Cushion, agent, for the Applicant (not present)
- D.M.S., Self-represented
- R. Goddard and T. Lee, for the Added Parties, E.C.M. and E.W.C.
Heard: 2025-04-30
Endorsement
Background
[1] These parties separated sometime between November 2017 and January 2018 (the parties disagree on the date of separation) after about 20 years of cohabitation. E.L.R. is the Applicant Wife; D.M.S the Respondent Husband. The parties had one daughter, E.G.D., who is now over 18. The Added Parties, E.C.M. and E.W.C. are the Applicant’s parents who are involved in this litigation by way of their equitable claims against the matrimonial home which was a farm owned by the parties jointly.
[2] The parties’ names are initialized in this proceeding by order of Kaufman J. made on November 17, 2020. This was done because the Applicant is a lawyer practicing in Oshawa. For this reason, as well, the venue for this matter has been Barrie rather than in Durham region, where the parties resided.
[3] On July 26, 2024, after hearing an 18 day trial concerning a claim, inter alia, regarding the Respondent’s failure to comply with a disclosure order, I ordered his pleadings struck pursuant to rule 1(8) of the Family Law Rules . [1] I gave the Respondent a final chance to comply with the disclosure order and, if he did, I allowed him to bring a 14B motion to set aside the order striking his pleadings. This was a hearing of that 14B motion to reinstate the Respondent’s pleadings so that he can continue to participate in this acrimonious litigation.
[4] I struck the Respondent’s pleadings because he was in breach of disclosure orders made earlier in the proceedings by Justices Eberhard and Jain. In my July 26, 2024 endorsement, I had given the Respondent a chance to comply with the order and reinstate pleadings in the hope that this might change the Respondent’s behaviour. Sad to say, as discussed below, that was not the case.
[5] D.M.S. filed a 14B motion as directed in my endorsement. However, the material filed was quite extensive; the Respondent’s affidavit was 1,300 pages (more or less) long. Three more 14B motions followed filed by the Applicant, the Respondent and the Added Parties. Pursuant to a 14B motion filed by the Added Parties, I ordered this matter set down for a long motion for argument. I did not accede to the suggestion that this would require two days for argument although, as it ended up, argument took a full day.
[6] For the reasons set out below, I have dismissed the Respondent’s 14B motion for reinstatement of his pleadings. In light of that result, the remainder of the relief claimed in his second 14B motion is dismissed as well. The issues raised by the Applicant in her 14B motion, a preservation and vesting order, were not argued and I have given her leave to set that issue down by way of a short-argued motion. I am not seized with that issue. In light of the dismissal of the Respondent’s motion, that motion date may not be needed.
Reinstatement of Pleadings: The Test
[7] There is no jurisdiction in rule 24(19) to set aside the within order striking pleadings; No fraud is alleged; no order was made in the absence of the Respondent and there is no new evidence being provided to the court other than the Respondent’s alleged compliance since then with the disclosure order of Justice Eberhard.
[8] However, the jurisdiction to change the order can be found in the terms of the order itself combined with the inherent jurisdiction of the court to set aside the order.
[9] Therefore, the Respondent must satisfy the court that he has provided the disclosure that he had previously failed to provide and for which I ordered his pleadings to be struck. If he has not complied with the disclosure orders, that ends the inquiry; his pleadings would not be reinstated. Even if, however, he is compliant, the court must also determine whether it should exercise its inherent discretion to do equity and to reinstate the Respondent’s pleadings.
[10] The first part is therefore obvious. The second part is less so.
[11] The court will therefore firstly consider whether the Respondent has actually complied with the disclosure order as outlined in my endorsement of July 26, 2024. Thereafter, the court will determine whether, even if so, it is in the interests of justice to exercise its discretion to permit D.M.S.’s continued participation in the litigation.
Has D.M.S. Complied With the Disclosure Order?
[12] The first issue is whether D.M.S. has now complied with the orders of Eberhard J. dated February 17, 2022 and Jain J. (largely repeating and extending the time limits in the earlier order) dated March 28, 2022. In the focused hearing, both the Applicant and Added Parties had moved to strike the Respondent’s pleadings due to non-compliance with both of those orders. In my endorsement of July 26, 2024, I outlined the items of disclosure that the Respondent had and had not complied with.
[13] The Respondent says that he has now fully complied with the orders in question. I had directed that both parties file disclosure charts showing their particular versions of disclosure compliance. Unsurprisingly, there are significant differences between the parties as to whether D.M.S. has complied with the disclosure orders.
[14] I will address these issues in the order that they were addressed in the July 26 endorsement.
(a) Medical Files of Respondent from January 1, 2018 to April 18, 2020
[15] The finding of the Respondent’s failure to disclose this item was founded upon a Request to Admit served on the Respondent by the Applicant on September 1, 2022 which provided that, other than disclosure from 4 of the 13 doctors that the Respondent had seen during the time period set out in the orderthe, the Respondent had not complied with the order for medical records. During trial, the Respondent only provided emails purporting to attach medical records from a further 11 of the 13 doctors; he failed to provide the disclosure itself.
[16] Again, and during argument, the Respondent complained about the order made by Eberhard J. for medical disclosure. The Respondent claims to have never put his mental health in issue in his claim to set aside the agreements. In his factum, he called the mental incapacity challenge by the Applicant “gas lighting on an astonishing scale.” I repeated to D.M.S. what I had previously said in my July 26 endorsement; the issue is not the correctness of the order, which is not for me to question. In light of the fact that the order was never appealed or set aside, the only issue is compliance.
[17] D.M.S. did not have a family doctor, but he appears to have had several health issues. He attended a number of doctors, 13 in total, during the relevant time period, making the collection of this evidence difficult. The physicians involved with D.M.S. were set out in an OHIP summary covering the time period in question. E.L.R. says that there are omissions in the records and that records of the consultations with Drs. Patel, Verma and Wassef are missing. She also said that there were no notes of a meeting with a fourth doctor, Dr. Moncrief, who performed an endoscopy procedure.
[18] D.M.S. has provided a lengthy set of records from all but one of the physicians consulted with during the regular time periods. A review of the records shows that where there were brief consultations (described in the records as being partial assessments for emergency or weekend situations), there were no records kept. However, there were notes of the full consultations performed by Drs. Patel and Verma contained in the record. There was no full consultation noted in the OHIP records for Dr. Wassef, who appears to have ordered a battery of tests in 2019. As the consultations were only brief, I do not expect there to be notes of those meetings.
[19] Dr. Moncrief, another doctor who did not provide notes, appears to have acted as an endoscopist on December 19, 2019. She appears to have performed an endoscopy procedure for D.M.S. (specifically a gastroscopy) and the doctor’s observations and test results were provided in the physician notes which were supplied. There is no evidence that the physician’s file would have contained more than the test results which were contained in the notes.
[20] I find that the Respondent provided the records he was provided with (which he failed to do at the focused hearing) and that these records are substantial compliance with the disclosure ordered by Justice Eberhard.
(b) Personnel file from the Respondent’s employer, General Motors of Canada
[21] This material was not obtained by D.M.S. because General Motors had demanded a court order for the release of the file, and he refused to do that. I directed that he do so. It is uncontested that D.M.S. has now obtained the court order that his employer demanded for the release of his personnel file.
[22] That file can be found at Ex. A of the Respondent’s supplementary affidavit sworn September 25, 2024.
[23] The Added Parties complain that there is nothing in that file from 2020 even though the cut-off date for this disclosure was April 18, 2020. However, the file largely consists of the year end employee review for each year that D.M.S. provided disclosure for. There does not appear to be anything else between those year end reviews in the personnel file that was obtained. Because the cut-off date in the disclosure order was April 18, 2020, that year end review was not included in General Motors file as ordered.
[24] Because of the wording in the order, the year end review would be an item of disclosure which arose from the original disclosure as no one could foresee the structure of the personnel file until it was actually produced. That would be the subject matter of a further request (which would probably not be made as D.M.S. did not rely upon his mental health at the focused hearing in attempting to set aside the agreements and that issue has been resolved). Therefore, this item of disclosure, the personnel file from General Motors between the dates in issue, has now been complied with.
(c) Accounting of the $200,000 received through Minutes of Settlement signed on May 23, 2019
[25] In answer to this disclosure item, the Respondent originally provided the parties and the court with some account statements for the bank accounts into which these funds were deposited. My criticism was that this was not an accounting, but some of the raw data which might support an accounting. An explanation of where the money went had to be provided.
[26] D.M.S. has attempted to provide that information. He has provided some spreadsheets supported by raw data which he says explains the use of those funds. However, during argument, he had difficulty explaining how they did. He did not seem to be aware of what each of the various columns meant or were intended to explain. He says that he had hired “experts” to assist him in this, and there were no notes from these experts explaining each spreadsheet.
[27] In any event, D.M.S. has provided his bank statements along with two spreadsheets which appear to be the following:
a. A summary of his transactions in his Scotiabank chequing account no. ending with *725 (into which the funds were initially deposited) from May 29, 2019 to August 6, 2021 (“Spreadsheet No. 1”).
b. A summary of his transactions in his Scotiabank Day to Day account ending with *9887 (into which the funds were transferred from the account ending with *725) from May 31, 2019 to January 1, 2022 (“Spreadsheet No. 2).
[28] Unfortunately, the accounting that is provided continues to leave unanswered questions. D.M.S. did not answer what type of expert assisted him although at one point he said he had sought legal advice as to the preparation of the accounting. Certainly, D.M.S. has gone beyond the raw data which constituted his original attempt to provide the accounting. He made efforts to comply. However, there are the following concerns remaining outstanding:
(i) Commingling of Funds
[29] The intention of the accounting was to determine what happened to the $200,000 that was released to D.M.S. under the consent arbitral award made on February 24, 2020. However, D.M.S. deposited these funds (reduced to $162,877.86 by disbursements payable under the consent arbitral award and legal fees owing to Nathans Seigel) into his chequing account into which other deposits were made over the years, including his pay from General Motors. This is reflected by the fact that the monies spent from both of the accounts ending with *725 and *9887) were $411,140.39 and $125,046.32 respectively, well over the $162,877.86 that he received. Presumably, the latter figure is included in the first figure as the funds for account no. *9887 came almost exclusively from account no. *725. However, this still means that for the period of time in issue, just over $411,000 was spent by D.M.S. which is more than double the amount for which D.M.S. had to account for.
[30] The difficulty is that D.M.S. commingled the funds he received through the arbitral award with other income that he had including his General Motors net pay received between May, 2019 and August, 2022. That commingling of funds makes it almost impossible to trace those funds to expenditures made by D.M.S. as required by the order of Eberhard J. Presumably, D.M.S. would have known about this when the order was made and could have made submissions before Eberhard J. when the disclosure order was made, but this was not done. He was the only one who knew when that order was made of the extensive commingling of funds made apparent by the account statements and Spreadsheets nos. 1 and 2. No one else knew about the state of the accounts and the extensive mixing of funds that took place after the funds were received.
[31] Moreover, D.M.S. is alone responsible for this state of affairs. As was brought to my attention during argument, the consent arbitral award of Perkins J. was never complied with by D.M.S. on several different fronts. He failed to obtain the $650,000 in support life insurance that he was ordered to provide; he admitted this during argument, stating that the insurance amount was excessive. He has allegedly failed to provide direct access by E.L.R. to his medical and dental insurance ordered for the benefit of E.L.R. and E.G.D. Further, the Minutes provided that, “all of the terms of these Temporary Minutes of Settlement affect [D.M.S.] such that all of the terms of these Temporary Minutes of Settlement are inextricably connected and not severable in connection to him.”
[32] This clause means that it was reasonably foreseeable that D.M.S. might have to account for the funds being released to him because the litigation was not over, and he may have to return funds or not depending upon the result. His breaches of those Minutes make this doubly so. He ought to have placed the funds in a separate account so that he could provide a meaningful accounting for the funds if necessary, and he is responsible for the difficulties in now providing a meaningful accounting.
(ii) Credit Cards
[33] In my decision, I noted that there had been payments to credit cards made from the bank accounts according to the raw data filed at the focused hearing. In fact, the bank accounts and spreadsheets show that one of the first things that D.M.S. did with his money when he received it was to pay off his credit cards. I noted in para. 172 of my decision that “There was no accounting of what these credit card debts were in relation to, which an accounting would have addressed.” As far as I could see, there was an attempt to explain the expenditures from the two accounts that were examined and summarized by D.M.S. or his “experts”, but there was no review of the expenditures were on the credit cards that were paid from both of those accounts. The accounting is therefore incomplete concerning the credit cards that the Respondent paid from his bank accounts as summarized in Spreadsheets Nos. 1 and 2. This was an issue outstanding from the July 26, 2024 endorsement that was never addressed.
[34] There were also $9,403 in cash ATM withdrawals over the period of time covered. No attempt is made to account for these expenditures.
(iii) Confusion Abounds
[35] I am not the only one confused by the accounting provided by the Respondent. Both the Applicant and the Added Parties reviewed the accounting and came to different results.
[36] The Applicant says that, largely related to the concerns noted above, there remains $222,559.94 unaccounted for. She provides a lengthy spreadsheet indicating what remains unaccounted for.
[37] The Added Parties also reviewed the accounting in detail. They complain about $85,154.96 in accounted credit card payments (again other than providing the statements for those cards) and $ 9,403 in ATM cash withdrawals which are also not accounted for. The total that the Added Parties say are unaccounted for is $94,557.96.
[38] The point is not the actual response by these parties to the accounting; it is the differences between the responses. The accounting is confusing and does not provide an adequate explanation as to the use of the funds.
(iv) Conclusion re Accounting
[39] The Respondent’s actions in commingling his funds made it extremely difficult to prepare and provide an accurate accounting for the funds released pursuant to the February 24, 2020, consent arbitral award. The Respondent ought to have known better and failed to advise Justice Eberhard as to the difficulties in providing the accounting that she ordered. He also breached the award which contained a clause inextricably intertwining the release of the funds to the remaining clauses in that award. He is responsible for the difficulties in providing that accounting.
[40] Moreover, the accounting fails to explain credit card payments and cash withdrawals.
[41] As a result, the Respondent remains in breach of the order to provide an accounting for the funds released to him under the February 24, 2020, consent arbitral award.
(d) Credit Card Statements
[42] Much of the Respondent’s material consisted of his credit card statements that he failed to provide for the focused hearing or had provided statements which were illegible.
[43] Both the Applicant and the Added Parties acknowledged that the Respondent was in compliance with this item of disclosure and had provided all of his credit card statements.
(e) Details re Purchase of 220 Townhouse Crescent in Brampton, ON
[44] Under para. 7(d) of the order of Justice Eberhard, the Respondent was ordered to produce, “any notes or title instruction, full details of the source of the funds (i.e. cancelled cheques or lawyer’s trust statement) in the amount of $91,000 deposit and the reporting letter from the real estate lawyer’s file for the purchase of the property known municipally as 220 Townhouse Crescent…”
[45] All that had been provided was a heavily redacted trust statement. There was no evidence tracing the funds that Wendy Baker allegedly paid towards the down payment of the home purchased by both D.M.S. and Wendy Baker. This has become increasingly relevant considering the transfer by D.M.S. to Wendy Baker of the majority of the equity in that home as well as D.M.S.’s explanation that there was an agreement to do so partly because most of the down payment allegedly came from Wendy Baker.
[46] The item of disclosure required disclosure of “full details of the source of the funds.” The examples given by Eberhard J. were cancelled cheques or lawyer’s trust statement. The information provided by D.M.S. for this motion included both trust statements from the sale of Wendy Baker’s matrimonial home showing the receipt of $250,156.89 on December 16, 2019, as well as the purchase of the Town House Crescent home. The disclosure contains proof of the withdrawal of the cash to close (plus the cost of the bank draft) of $90,048.96. The small discrepancy between the amounts noted in my July 26 endorsement has been explained by the cost of the bank draft. The copy of the bank draft itself is attached.
[47] E.L.R. says that this disclosure is inadequate as the bank statements between the time that Ms. Baker received the funds (December 16, 2019) and the purchase of the Town House Crescent home (April 30, 2020) were not provided. She says that the funds used to close could have come from anywhere in light of the failure of the Respondent to provide a full accounting of the funds received from the sale of the farm. She says that the failure of Wendy Baker in declaring interest income on her tax return shows some question as to the destination of the funds that she received from the sale of her matrimonial home.
[48] Unlike the previous head of disclosure for D.M.S., it was not incumbent on Ms. Baker to provide a full accounting of the funds received from the sale of her home. She and D.M.S. had to show the source of the funds for the purchase of Town House Crescent and she has done so, explaining the amounts, and showing the source of the funds to be her chequing account. There may be further disclosure that arises from this disclosure, but that would be for another day. The Respondent has complied with this item of disclosure as ordered by Eberhard J.
(f) Proof of $28,472 Loan from Wendy Baker to D.M.S.
[49] Eberhard J. ordered that D.M.S. provide “details of each advance and the source of the funds with copies of bank statements or cancelled cheques to support same, detailing the loan and documents for the loan to the Respondent from Wendy Michelle Baker for $28,472 shown in his Financial Statement sworn January 6, 2022”. The Respondent had provided heavily redacted bank statements which did not satisfy this disclosure order. In my July 26 endorsement, I pointed out a number of questions left unanswered by the Respondent’s response.
[50] The Respondent has still not answered several of those questions. He has not explained, as I requested, that he explain how the whole mortgage payment is a debt to Wendy Baker when only one half is her obligation. He has also not explained or detailed what verbal agreements there were; he has filed as an exhibit a written agreement regarding payment of household expenses but that is not a “verbal agreement” and is inconsistent with what he said originally.
[51] Taking into account that written agreement, I am again confused. That agreement provided that the Respondent would accumulate equity in the property by way of “principle” paid on the mortgage. If the Respondent is not paying the mortgage and Wendy Baker is, what happens to the principle portion of the payment that she made on his behalf? Does he not accumulate equity in the property when he misses payments, and if so, why is there also a debt to Wendy Baker? He cannot have it both ways.
[52] The disclosure does not detail the loan itself or documentation regarding the loan or the advances taking into account the questions that remain outstanding. He says that the loan is based upon verbal agreements, but there are no particulars of those agreements. I can understand why he would owe Wendy Baker funds advanced to his criminal lawyer, but as explained above, I do not understand why he owes her the money paid on the mortgage. He says that he was “unable” to pay the mortgage, but does not explain why he could not pay it. I do not understand from what has been provided how the loan would be calculated. I do not find that the Respondent has provided sufficient clarity on the loan from Wendy Baker in the disclosure provided and the evidence in the Respondent’s affidavit. That item remains outstanding.
(g) Failure by Respondent to Report Cohabitation with Wendy Baker in his 2020 Income Tax Return
[53] The issue for this item of disclosure was that the Respondent says that he commenced cohabitation with Wendy Baker in 2019 and then failed to report it to the Canada Revenue Agency. Justice Eberhard ordered the Respondent to explain this discrepancy.
[54] The answer to this by D.M.S. was two-fold. Firstly, he said that he reported that he was “separated” even though he was cohabiting with Wendy Baker; that was not correct at law as pointed out in my endorsement.
[55] Secondly, he said that his accountant told him he could do that. I simply found that unbelievable considering the obligation of a tax preparer to report marital status under the Income Tax Act . [2]
[56] D.M.S. has simply provided the same answer that I found unsatisfactory in my July 26, 2025, endorsement, except now he has included his lawyer in the professionals who he says told him to disobey the reporting requirements under the ITA . Again, I find that unbelievable; as pointed out by E.L.R., a professional’s failure to report to the Canada Revenue Agency puts that professional in jeopardy under s. 163.2(4) of the ITA .
[57] Moreover, D.M.S. cannot answer the order for disclosure of “why… he failed to report that cohabitation” by saying that someone told him that he could do it. In light of my endorsement, D.M.S. at least had an obligation to go back to those professionals and ask them why they gave him that advice. He did not do so. I do not find that the Respondent has explained his misreporting to CRA in any more of a meaningful fashion than he did at the focused hearing. That item of disclosure therefore remains outstanding and unfulfilled for much of the same reasons outlined in my July 26, 2024, endorsement.
(h) Income Tax Returns and Notices of Assessment for Wendy Baker for the 2019, 2020 and 2021 Tax Years.
[58] Justice Eberhard ordered that the Respondent obtain and produce the T1 returns for Wendy Baker along with her Notices of Assessment for 2019, 2020 and 2021. All that was produced were two heavily redacted Notices of Assessment for 2019 and 2020. He said that Ms. Baker refused to provide anything more. As this was not a direction that D.M.S. request the returns and NOAs from Ms. Baker but an actual production order, I determined that D.M.S. had failed to comply with this part of the disclosure order.
[59] This disclosure appears to have been fully complied with as set out in Ex. L of the Respondent’s affidavit sworn September 24, 2024.
(i) Child Support Payable to Wendy Baker
[60] Under para. 7(j) of the Eberhard J. order, D.M.S. was to provide both “documentation of any support obligation and all support received by Wendy Michelle Baker for the years 2019, 2020, 2021 and 2022…” Unfortunately, D.M.S. only provided proof of support for only part of the time period ordered by Eberhard J. He provided no documentation as to the child support obligation in favour of Wendy Baker.
[61] In Para. 17 of his September 24, 2024, affidavit, D.M.S. says that he has attached as Ex. M both Wendy Baker’s child support order as well as an accounting of the support received over the relevant time period. The order purports to be a final order of Richetti J. of the Brampton Superior Court of Justice dated October 1, 2018 ordering her former partner to pay $175.77 per month.
[62] All appeared to have been in order. However, when E.L.R. had her process server attend at the Brampton courthouse to review the order of Richetti J. (which was heavily redacted), that individual was told that the Richetti J. order was not the final order and that this order was set aside by Justice Dennison on November 26, 2018. A new final order was negotiated and made by Justice Barnes on September 12, 2019.
[63] Throughout all three orders, the child support essentially remained the same, being set by Dennison J. at $175 per month, and continued at the same rate by the Barnes J. consent order.
[64] This piece of disclosure exposed bad behaviour of both the Applicant and the Respondent, typical of this matter. The Applicant appears to have breached r. 1.3 of the Family Law Rules , insofar as there is no evidence that she gave notice to the parties to Wendy Baker’s litigation as required under r. 1.3(2), thereby giving those parties an opportunity to obtain a restricted access order under r. 1.3(6). She had provided details of the Wendy Baker matrimonial litigation in her affidavit sworn November 29, 2024. D.M.S. demands that this evidence be excluded as a result. However, it is Wendy Baker and not D.M.S. who has the right to complain about this breach; D.M.S. has no standing and the only issue relevant to this disclosure item is whether he has provided documentation concerning Wendy Baker’s child support entitlement.
[65] On the other hand, E.L.R. accuses D.M.S. of concealing the actual final order and notes that he could hardly have been unaware of the actual final order made on September 12, 2019. The Added Party, E.C.M., says that the failure to provide the actual final order “confirms [D.M.S.] intentionally sought to mislead the Court and that his non-compliance was willful and intentional.”
[66] The intention of this item of disclosure was to determine the child support being received by Wendy Baker in order to address the Respondent’s household income and the support claims then before the court as well as the intended summary judgment motion. The support changed from the Richetti order to the Dennison set aside order through to the final consent order of Barnes J. by a matter of pennies, $175.77 per month to $175 per month. Throughout, there is no issue as to the amount of support and payment of that support has been confirmed. Although the actual documentation of the support obligation was not initially produced, the support obligation is clear from the evidence. The only intention to deceive was, most likely, the desire of Ms. Baker to avoid disclosing to E.L.R. and the Added Parties the actual terms of her final settlement, but that was not what the item of disclosure was intended to achieve. It was intended only to disclose the support entitlement of Wendy Baker and whether that support was being paid. That has been done. There is no outstanding disclosure outstanding under this provision in the order.
[67] This does not take away from the fact that a document was submitted purporting to be the support order outlining Wendy Baker’s child support entitlement. That was a false statement as there was another order that both Ms. Baker and D.M.S. had to be aware of which was her final obligation. It appears that the Respondent misstated the evidence in para. 17 of his September 24, 2024 affidavit and that he and Wendy Baker attempted to intentionally mislead the court as to the final order setting out the support.
[68] I note that the Respondent had brought a further 14B motion to sanction E.L.R. for her breach of r. 1.3 of the Family Law Rules . The breach affects Wendy Baker and her former common law spouse (although his identity was unredacted in the Statement of Adjustments for the sale of their common residence in 2018). They are the only ones who have standing to complain about the failure to notify them as to the file being obtained by E.L.R. Any motion brought by the Respondent to sanction the Applicant regarding her obtaining the file is dismissed.
(j) Details of Respondent’s Business
[69] The Respondent had claimed a modest business loss in 2020. Justice Eberhard ordered in para. 7(k) of her order that the Respondent provide “full details” of the Respondent’s “self employed business” reported in his 2020 tax return.
[70] In his affidavit, D.M.S. deposed that the business never got off the ground because of COVID and the demands of this litigation. He says that the modest loss in 2021 was a result of his depreciation of the equipment purchased for the business. He says that there was never any business income. He provides no further documentation to back this up.
[71] The obligation under the order was to provide full details of the Respondent’s self-employed business. The Respondent’s statement in his affidavit is not supported by documentation and E.L.R. says that she has never been provided with the Respondent’s full income tax returns for 2021 including his Statement of Business Affairs which would set out the depreciation of the items and any business income. [3] D.M.S. says that he provided his accountant with the information concerning the business for his 2021 return; he did not provide that information as part of his material on this motion. The Respondent did not address his failure to provide his 2021 T1 income tax return in his reply affidavit, and I assume he is therefore confirming that he failed to provide his Statement of Business Affairs attached to that return.
[72] I do not find that I have sufficient clarity as to the Respondent’s self employed losses as ordered by Justice Eberhard and that this disclosure item remains unsatisfied by the Respondent.
Conclusion re Disclosure
[73] The disclosure provided by the Respondent is a great improvement over that which had been provided previously and which was examined by the court at the focused hearing. However, there are still holes in the disclosure. There is no full accounting of the $200,000 advanced to the Respondent under the arbitral award; we know what the Respondent spent from his account between 2019 and 2022 but not what the credit cards paid off with those funds consisted of or the cash advances. The Respondent did not segregate the funds permitting a clear accounting of those funds. Moreover, the Respondent has failed to explain the $28,472 loan that he claims on his financial statement or why he declared that he was cohabiting with another individual while filing as “separated” in his 2019 and 2020 income tax returns. He has failed to provide full details of his self employed income.
[74] His disclosure remains outstanding in part, and he still remains non-compliant of the order made by Justice Eberhard in this matter. On these grounds alone, and pursuant to the terms of my order, this would be sufficient to refuse D.M.S.’s motion to set aside my order striking his pleadings.
Exercise of Discretion
[75] The courts have found that there is an inherent jurisdiction in the court, apart from the rules, to set aside an order: see West v. West , [2001] O.J. No. 2149 (S.C.J.) at para. 23 where Perkins J. said:
The jurisdiction to set aside or change an order to prevent a miscarriage of justice is ancient. It goes back to the old common law writ of audita querela: see Holmested and Gale on the Judicature Act of Ontario and Rules of Practice, r. 529 § 2; Blackstone, William, Commentaries on the Law of England (1765), vol. 3, pp. 405-6. It forms part of the inherent jurisdiction of the court.
[76] There are a number of cases which discuss how the court should exercise that jurisdiction. The factors brought to my attention in this case are as follows:
a. In West v. West , supra, Perkins J. noted that the test was a “stringent test” whereby the discretion should only be exercised to prevent a “miscarriage of justice”.
b. The setting aside of the order striking pleadings must be in the interests of justice, balancing the prejudice to the party whose pleadings are struck as against the prejudice to the litigants remaining in the proceeding. The court must have regard to the effect of any order “on the overall integrity of the administration of justice”: see Oelbaum v. Oelbaum , 2010 ONSC 4874 at para. 23 .
c. The court being asked to make the order must have regard to the claimant’s compliance with court orders in the proceeding. “Special consideration” should not be granted to a party who is in breach of other orders in the proceeding: see Higgins v. Higgins , 2007 ONCA 663 at para. 18 .
d. Although it is suggested that the court should “be generous rather than overly strict in granting indulgences”, that does not apply where the indulgence is prejudicial to other blameless parties or where a party has not complied with the directions of the court: see Adler v. Adler , 2015 ONSC 7806 at para. 19 – 20 , per Kitely J.
[77] Therefore, in sum, the court must return to the primary objective of the rules, set out in r. 2(2) of the Family Law Rules , to “determine cases justly.” In exercising its discretion to set aside the order in issue, therefore, the question is not only whether the disclosure order has been complied with; the court must also balance the interests of having all parties being able to tell their respective sides of the story against the prejudice to the administration of justice and the integrity of the litigation from allowing the offending party back in. In making this inquiry, the court must have regard to that party’s litigation behaviour in addition to his compliance with other orders in the proceeding.
[78] Mr. Goddard for the Added Parties made impassioned submissions concerning this particular issue. He did not mention, during those submissions, compliance with the disclosure orders, relying upon the work that E.L.R. did in addressing the particular items of disclosure. Mr. Goddard preferred to rely upon the Respondent’s behaviour in advocating that his motion should be dismissed. He asked me to go back to my original endorsement outlining the Respondent’s behaviour in this litigation.
[79] I can’t say that I disagree with this. The parties have just been put through an 18-day hearing that was supposed to be focused on two issues, the setting aside of agreements entered into shortly after separation and during the arbitration process. My endorsement arising from that focused hearing addresses what these parties have been through. Although no one is blameless, it is clear that the D.M.S. was largely responsible for the length of the focused hearing and for its result.
[80] D.M.S.’s litigation behaviour was largely the cause of much of the length of the hearing. Although he denied this in his materials, he arrived with his documents unorganized leaving court staff with the job of making exhibit books and copies for the parties and court. He attempted to enter surreptitious recordings into evidence necessitating a voir dire of more than two days, taking additional court time. He was unresponsive and inconsistent as a witness, resulting in a lengthy cross-examination and difficulty in getting to the truth of the matter. He withdrew a substantive claim halfway through the hearing, resulting in costs thrown away. He obtained transcripts of the trial in secret, surprising the other parties during final submissions. His claims to set aside the agreements were a waste of time and dismissed because those agreements were largely irrelevant today. He attempted to prove parental alienation for his own purposes even though he had previously abandoned his parenting claims in the litigation.
[81] All that litigation behaviour is reflected in the costs award made for the focused hearing; he was ordered to pay costs of $200,000 to the Applicant and $175,000 to the Added Parties. He was also ordered by me to pay costs thrown away of $2,500 to the Applicant and $3,000 to the Added Parties because of his secretly obtaining transcripts of the trial, necessitating the adjournment of submissions to another date.
[82] After the final order was made in July 2024, D.M.S. appealed that order. He did this late, and he blamed court staff for this. His motion to extend the time for appeal was dismissed with costs of $6,000 to the Applicant and $4,000 to the Added Parties.
[83] None of these costs have been paid, either in whole or in part. While I would not have expected the Respondent to write a cheque for the entire amount of costs, D.M.S. has paid nothing towards the costs awards. He has made no attempt to do so. During submissions he complained about the $400,000 in costs that he had incurred at the hands of the Applicant and Added Parties but failed to recognize that the courts have ruled that the other parties have incurred costs as well, and that the responsibility for these costs lies at the Respondent’s feet. He has paid nothing towards the costs while complaining of his own costs at the same time. He is unrepentant in any way.
[84] The fact that he has learned nothing was made obvious when it was raised that he was non-compliant with the requirement in the consent arbitration award that he provide life insurance of $650,000 to secure support (that is now a court order made during the focused hearing when he abandoned his claim to set that award aside). In response, D.M.S. said that the award of life insurance was “excessive”, and he was therefore not complying with that provision. After all of this, he still justified his breach of that award without ever applying to change it, and in fact wasting the court’s time in litigating that issue and then withdrawing it after nine days of the focused hearing.
[85] I expect that if the Respondent is allowed back into the litigation, the same pattern will present itself; D.M.S. will continue his poor litigation behaviour and breaches of the rules. He will continue to breach court orders and then make excuses for this behaviour, saying that the orders were unjust. Costs will be ordered which will then not be paid. The net effect will be that nothing will be left for anyone, in particular, the parties’ daughter, other than scorched earth; in the meantime, the Respondent’s only major asset, his equity in his home owned by Wendy Baker, remains out of reach due to his transfer of that equity to her after the purchase of that property.
[86] I note that there are no longer any parenting issues before the court; they are financial only. There are no interests involving the best interests of a child, which requires that both sides be allowed to tell both sides of the story. In fact, on the best interests front, there was evidence that the Respondent may have indirectly contacted E.G.D. through his mother, the paternal grandmother, contrary to a restraining order preventing contact between D.M.S. and E.G.D. The Respondent says in his material that this may have been justified as he is paying support and needs to know about whether E.G.D. is attending a post-secondary institution. If he needed that information, he should have obtained it through E.L.R. rather than by breaching the restraining order.
[87] The Respondent is undeserving of the exercise of the court’s inherent discretion to change the order and set aside the striking of the Respondent’s pleadings. It would not be in the interests of justice to allow the Respondent back into the litigation. If I allowed him to have standing in the litigation, it is foreseeable that the parties will continue to sustain excessive and additional costs through the Respondent’s poor litigation behaviour and that those costs will also not be paid by the Respondent. That is clearly prejudicial to the other parties to this litigation.
[88] The Respondent’s motion to reinstate his pleadings is therefore dismissed.
[89] There were other motions brought by the parties. I have addressed the Added Parties’ motion to set this matter down for an argued motion as well as the Respondent’s motion to sanction E.L.R. for her breach of r. 1.3 . I have adjourned E.L.R.’s motion for a preservation order to a date to be set. Any other motions are dismissed with prejudice.
Costs
[90] The Applicant and the Added Parties are entitled to the costs of this long motion as they are the successful parties in this motion. I asked the parties to quantify their respective costs claims for the motion at the end of the hearing; the Added Parties claim costs of $23,500 and the Applicant claims costs of $18,000 including assistance receive from Ms. Cushion, who was not present at the hearing.
[91] Those costs amounts are reasonable in light of the quantity of the materials, the factums that were filed as well the 14B motions brought prior to the proceeding and the argument of the motion which took an entire day. Mr. Goddard was clear that the costs that he claimed were for himself alone and not counsel assisting him, Mr. Lee.
[92] Costs to the Applicant in the amount of $18,000 and to the Added Parties of $23,500 payable by the Respondent, D.M.S. within 60 days.
Justice J.P.L. McDermot
Date: May 16, 2025
[1] O. Reg. 114/99
[2] R.S.C. 1985, c. 1 (5 th Supp.).
[3] In his Certificate of Financial Disclosure, D.M.S. says that he provided E.L.R. with his 2021 tax return, but did not address this issue in his reply affidavit filed for this motion.