



COURT OF APPEAL FOR ONTARIO

CITATION: Mullin v. Sherlock, 2018 ONCA 1063

DATE: 20181221

DOCKET: C64644

Pepall, Roberts and Miller JJ.A.

BETWEEN

Katherine Ann Mullin

Applicant (Respondent)

and

John Sherlock

Respondent (Appellant)

Heather Hansen, for the appellant

Robert M. Halpern and Jessica Brown, for the respondent

Heard: April 11, 2018

On appeal from the order of Justice David Price of the
    Superior Court of Justice, dated November 10, 2017, with reasons reported at
    2017 ONSC 6762.

Pepall J.A.:

[1]

This appeal addresses the recurring issue of striking out pleadings in
    family law proceedings in the face of incomplete disclosure. The appellant,
    John Sherlock, appeals from an order striking his pleadings and ordering him to
    pay the costs of the proceedings.

[2]

For the reasons that follow, I would dismiss the appeal but would vary the
    order to augment the husbands trial participation rights.

Background

[3]

The appellant, John Sherlock, and the respondent, Katherine Ann Mullin,
    cohabited for approximately 13 years commencing in November 2000. They married
    in September 2012 and separated less than one year later on June 28, 2013.
    There are no children of the marriage.

[4]

The husband is the sole officer, director and shareholder of GS Medical
    Packaging Inc. (GS Medical), a company that sells medical supplies to doctors
    and dentists. He owned and operated the company before the parties met. The
    wife was employed by GS Medical during the parties relationship and received a
    salary in an amount up to $78,000 per year. Her employment was terminated
    following the parties separation.

[5]

As of the date of their separation, the parties jointly owned real
    property consisting of a matrimonial home in Mississauga and a condominium in
    Florida. They also jointly owned a boat.

Wifes Application

[6]

On September 13, 2013, the wife commenced an application against the
    husband. Amongst other things, she claimed spousal support and equalization of
    net family property, asserting a joint family venture and an entitlement to the
    value of 50% of GS Medical Packaging and other businesses that the husband had
    operated during their relationship. On October 11, 2013, the husband was
    ordered by Herold J. to pay spousal support of $3,000 per month.

[7]

On October 29, 2013, the wife served a detailed Request for Information
    on the husband, seeking extensive personal and corporate disclosure.

November 25, 2013 Order

[8]

On November 25, 2013, the parties agreed to the terms of a consent order
    which was granted by Sproat J. The order incorporated the requests made in the
    wifes Request for Information. The husband was to provide the disclosure
    requested by the wife on or before January 9, 2014, or explain why it was
    either unavailable or arguably not producible. The very extensive disclosure
    ordered is described in Schedule A, attached to these reasons.

[9]

In addition, the parties were to list for sale both the matrimonial home
    and the Florida condominium as soon as practicable with agents and on terms to
    be agreed. The wife continued to live in the matrimonial home in the meantime.

June 12 and August 11, 2014 Orders

[10]

On
    March 14, 2014, the wife served another Request for Information based on
    information now sought by her forensic accountant, Jeffrey Feldman. On May 23,
    2014, the wife brought a motion to strike the husbands pleadings for failure
    to provide that information. She subsequently amended the motion to seek
    additional disclosure. Further extensive corporate and personal disclosure was
    ordered by Trimble J. on June 12, 2014 and August 11, 2014, both on consent. The
    June 12, 2014 order required the husband to deliver responses to Mr. Feldman's March
    2014 Request for Information by June 24, 2014. The August 11, 2014 order required
    additional disclosure to be provided within 60 days. The details of both Orders
    are described in Schedule B.

September 1, 2015 Order

[11]

On
    September 1, 2015, Emery J. made another order on consent. The husband was to
    allow the wifes forensic accountant to re-attend at the offices of GS Medical
    at a date and time of his choosing and to provide him with certain disclosure
    by October 1, 2015. The details of this disclosure are described in Schedule C.

January 26, 2017 Questioning of Husband

[12]

The
    husband attended for questioning by the wifes lawyer on January 26, 2017.

April 3, 2017 Order

[13]

Both
    parties brought motions returnable April 3, 2017. The husband asked that the
    matrimonial home be sold pursuant to the November 25, 2013 order of Sproat J.
    The wife sought an order compelling the husband to provide answers to his
    undertakings given at his questioning of January 26, 2017 within 15 days, and
    directing him to return to questioning within 30 days to answer the questions that
    he had refused to answer at that questioning, including those that were taken
    under advisement.

[14]

In
    his April 3, 2017 order, the motion judge ordered the husband to answer all
    questions asked at his questioning of January 26, 2017 by April 26, 2017,
    including undertakings and refusals. There were 32 outstanding undertakings and
    12 refusals. The husband was also ordered to re-attend at his own expense on
    May 23, 2017 to answer questions arising from the answers that were to be
    provided by April 26, 2017. The April 3, 2017 order provided that if the
    husband did not fully comply with the answers to the undertakings and refusals,
    his pleadings would be struck.

[15]

Given
    their significance to this appeal, paragraphs 5 and 7 of the motion judges
    April 3, 2017 order are reproduced below:

[5] The Respondent shall answer all questions asked at his
    examination of January 26, 2017, by April 26, 2017, including undertakings and
    refusals. With regard to the request for journal entries and petty cash
    vouchers, he shall provide an explicit and detailed statement in an Affidavit
    by that date setting out the following:

a.

whether the
    documents ever existed and whether they were in his possession, power or
    control;

b.

if they were but
    no longer are in existence or in his possession, power or control, when they
    ceased to be and under what circumstances;

c.

if they are in the possession of a non-party, who that is, including
    contact information.

[7] In the event the Respondent does not comply fully with item
    #5 above, his pleadings shall be struck.

July 5, 2017 Motion

[16]

On
    May 15, 2017, the wife brought a motion returnable June 15, 2017 asking that
    the husbands pleadings be struck for non-compliance pursuant to para. 7 of the
    motion judges order.

[17]

Ultimately,
    the motion was heard by the motion judge on July 5, 2017. The motion judge
    characterized the outstanding issue on the return of the motion as whether the
    husband had failed to provide necessary disclosure and to answer the questions
    he undertook or refused to answer on January 26, 2017, and if so, what remedy
    the court should impose.

Motion Judges Reasons

[18]

In
    his reasons dated November 10, 2017, the motion judge itemized the documents
    that the husband had failed to provide, and noted that there continued to be certain
    refusals and undertakings that had not been answered.

[19]

The
    two outstanding refusals asked the husband to: a) provide a list of all travel
    done for business and pleasure since the date of separation, and b) provide
    documents confirming the purchase or sale of the jointly owned boat.

[20]

Regarding
    the first refusal, the husbands response was: All business trips: Dubai,
    China, Taiwan, Korea, Germany, England, and numerous cities within the United
    States. In his reasons, the motion judge concluded that the husband had failed
    to respond to the refusal because he was obliged to provide particulars of the
    trips dates and purposes. He also found that the husband had not responded to
    the second refusal.

[21]

As
    for the undertakings, the motion judge noted that:

·

The husband undertook to provide copies of the requests he made
    to three law firms to obtain a copy of any wills prepared on his behalf and to
    also provide the firms responses. He had provided a copy of a will and
    indicated that it was the only will but failed to provide copies of the requests
    made and the responses received.

·

The husband was to ask Ms. Fan, the accountant for the husband
    and GS Medical, about the source of the estimates for the balances of the loans
    from GS Medical in his first three financial statements as at the date of
    marriage and the date of separation, and to ask her how the loans to him from
    GS Medical were reflected in the companys financial statements. The motion
    judge found that the husband had failed to ask about the source of the
    estimates and had responded that there were no further loans. The husband was
    also to ask Ms. Fan about the purpose and her knowledge of a letter bearing her
    signature and on her letterhead, describing the husbands income from GS
    Medical in 2011 as being $454,500. The husband responded that Ms. Fan had not
    prepared or signed the letter. The husband was also to ask Mr. Peter Jarvis, another
    accountant, about the purpose and his knowledge of a comparable letter. The
    husband responded that Mr. Jarvis had no recollection of ever signing or
    preparing it. The motion judge found that the husband had failed to elicit
    either of the individuals knowledge of the letter.

[22]

Moreover,
    the motion judge noted the husband had undertaken to provide any documents within
    his possession, power, or control that supported the values contained in his
    Financial Statements. He had failed to produce:

·

bank statements supporting the value of his Capital Bank, U.S.
    chequing account as of the date of marriage and the date of separation;

·

bank statements showing the balances of two additional U.S.
    chequing accounts at Capital Bank on the date of separation, as identified in
    his November 4, 2014 Financial Statement;

·

bank statements supporting the value of his Scotiabank RRSP
    account as of the date of marriage;

·

proof of the personal loan of $200,000 that he claimed to owe third-parties
    as of the date of marriage; and

·

documentation showing the amounts he claimed GS Medical paid for
    the advance for the purchase of the boat and for the purchase of the parties
    Florida condominium, and which the husband claimed he owed GS Medical as of the
    date of separation.

[23]

The
    motion judge struck out the husbands pleadings on terms. He concluded that it
    would be highly unfair to require the wife to proceed to trial without
    information that served to reconcile the differing amounts shown for the loans
    from GS Medical as of the date of marriage and the date of separation found on
    the husbands various financial statements. In his view the wife required this
    information to quantify the husbands income and net family property and to
    establish her claims to spousal support and an equalization payment. Moreover,
    he found at para. 69 that the husband sought to frustrate the courts process
    by providing deliberately ambiguous and misleading answers to the questions he
    was asked and by failing to produce documents that he was ordered to produce as
    long ago as November 25, 2013.

[24]

The
    motion judge consequently gave the wife leave to proceed to an uncontested
    hearing.  Although he did not elaborate, he gave the husband limited
    participation rights. The husband would have the right to:

·

attend at and participate in a settlement conference,

·

receive notice of any step in the proceeding taken by the wife,

·

attend any step in the proceeding (including the trial) as an
    observer; and

·

make closing submissions at the trial with leave of the trial
    judge.

[25]

The
    motion judge ordered that in the remaining proceedings, the husband would not
    have the right to:

·

bring any motion or application;

·

question the wife or any other person;

·

seek disclosure from her or any other person;

·

participate in any step in the proceeding except as described.

[26]

In
    addition, the husband was required to pay costs to the wife in the amount of
    $55,365.73 for the motions to and including April 3, 2017.
[1]


Positions of Parties

[27]

The
    husband appeals from the motion judges November 10, 2017 order.

[28]

His
    position is that striking a pleading is an order of last resort that should
    occur only in the most exceptional and egregious of circumstances, and that
    this was not such a case. He relies on this courts analysis in
Kovachis v.
    Kovachis
, 2013 ONCA 663, at para. 34. He argues that, as in that case,
    before striking pleadings, consideration ought to have been given to the
    importance or materiality of the items of disclosurenot produced, and to the
    principle of proportionality.

[29]

The
    husband argues that the motion judge failed to consider appropriate alternative
    remedies to striking pleadings and failed to give effect to the objective of a
    sanction under subrule 1(8) of the
Family Law Rules
,
O. Reg.
    114/99. Moreover, the order made impedes the just determination of the case
    which requires a factual inquiry that necessarily involves the appellants
    participation.

[30]

Lastly,
    he submits that the motion judge either mischaracterized or misapprehended the
    evidence:

·

in characterizing the husband as not answering outstanding
    undertakings and refusals;

·

in failing to consider that the wife did not give the husband an
    opportunity to clarify his answers in advance of serving her motion to strike;

·

in failing to consider that of the 32 answers to undertakings
    provided, only 8 were claimed to be unsatisfactory by the wife, and of the 12
    answers to refusals provided, only 2 were considered unsatisfactory; and

·

in finding that the husband had repeatedly breached the orders
    of this court for disclosure including that relating to the boat proceeds and
    that he had done so willfully, in a deliberate attempt to frustrate [the wifes]
    efforts to establish her claims.

[31]

It
    is the wifes position that the husband has breached every order made by the
    court in these proceedings. She argues that the motion judge properly
    considered other available alternatives and made an appropriate order in the
    circumstances.

Analysis

(a)

Legal Framework

(i)

Jurisprudence

[32]

In
Roberts v. Roberts
, 2015 ONCA 450,
    at
paras. 11 and 12, Benotto J. A. wrote:

The most basic obligation in family law is the duty to disclose
    financial information. This requirement is immediate and ongoing.

Failure to abide by this fundamental principle impedes the
    progress of the action, causes delay and generally acts to the disadvantage of
    the opposite party. It also impacts the administration of justice. Unnecessary
    judicial time is spent and the final adjudication is stalled.

[33]

Traditionally,
    striking pleadings has been considered to be a remedy of last resort. In
Purcaru
    v. Purcaru
, 2010 ONCA 92, Lang J.A. stated at para. 47 that in family law
    cases, pleadings should only be struck and trial participation denied in
    exceptional circumstances and where no other remedy would suffice. The same
    principle was reiterated in
Chiaramente v. Chiaramente
, 2013 ONCA 641,
    at paras. 31-33. Laskin J.A. described the relevant considerations in
Kovachis
,

at para. 34:

Before striking Kovachis pleadings,
consideration ought to
    have been given to the importance or materiality of the items of disclosure
    Kovachis has not produced
. Although full and frank disclosure is a
    necessary component of family law litigation, exhaustive disclosure may not
    always be appropriate. The courts and parties should consider the burden that
    disclosure requests bring on the disclosing party, the relevance of the request
    of disclosure to the issues at hand, and the cost and time to obtain the
    disclosure compared to its importance. [Emphasis added]

[34]

In
    a family law case, as the resulting judgment may provide for continuing
    obligations that can only be varied on proof of a change in circumstances, the
    striking of pleadings has added significance. If pleadings are struck, a change
    in circumstances may be difficult to establish if the initial judgment is based
    on incorrect assumptions, thus perpetuating injustice.
Purcaru
,
at para. 48.

[35]

In
Manchanda v. Thethi
, 2016 ONCA 909, this court was satisfied that the
    motion judge had complied with the requirements of
Kovachis
in
    striking the appellants pleadings, stating that he had properly assessed the willful
    non-compliance to be egregious and exceptional, and it was not a situation of
    overreaching by the wife. The motion judge had expressly considered proportionality
    by examining the disclosure made in comparison with the disclosure still
    outstanding. The motion judge scrutinized both the quantity of disclosure, which
    had been significant, and the quality, which was deficient in that it omitted basic
    documents such as income tax returns, financial statements, and credit card
    statements.

(ii)

Family Law Rules

[36]

Rule
    1(8) of the
Family Law Rules
provides direction to the court on the
    types of orders that may be made when a person fails to obey an order:

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

(a) an order for costs;

(b) an order dismissing a claim;

(c) an order striking out any application, answer,
    notice of motion, motion to change, response to motion to change, financial
    statement, affidavit, or any other document filed by a party;

(d) an order that all or part of a document that
    was required to be provided but was not, may not be used in a case;

(e) if the failure to obey was by a party, an
    order that the party is not entitled to any further order from the court unless
    the court orders otherwise;

(f) an order postponing the trial and any other
    step in the case; and

(g) on motion, a contempt order.

[37]

Rule
    1(8.1) provides that if a person fails to follow the rules, the court may make
    an order under Rule 1(8) other than a contempt order under clause (8)(g).

[38]

Rule
    1(8.4) provides that:

If an order is made striking out a partys
    application, answer, motion to change or response to motion to change in a
    case, the following consequences apply unless a court orders otherwise:

1. The party is not entitled to any further notice
    of steps in the case, except as provided by subrule 25 (13) (service of order).

2. The party is not entitled to participate in the
    case in any way.

3. The court may deal with the case in the partys
    absence.

4. A date may be set for an uncontested trial of
    the case.

[39]

Rule
    2(2) of the
Family Law Rules
provides that the primary objective of
    the rules is to enable the court to deal with cases justly. Rule 2(3) states
    that dealing with a case justly includes:

(a) ensuring that the procedure is fair to all
    parties;

(b) saving expense and time;

(c) dealing with the case in ways that are
    appropriate to its importance and complexity; and

(d) giving appropriate court resources to the case
    while taking account of the need to give resources to other cases.

[40]

In
    2015, Rule 13 of the
Family Law Rules
was amended to emphasize a
    partys financial disclosure requirements. So, for instance, specified
    disclosure is required for a claim for support (Rule 13 (3.1)) or a claim under
    Part 1 of the
Family Law Act
(Rule 13 (3.3)). Under Rule 13(11), if a
    party believes that the financial disclosure is insufficient, the party shall
    first ask for the additional information and, if it is not provided within
    seven days, the court may order its production. Rule 19(1) addresses the need
    to provide an affidavit of documents 10 days after being requested to do so by
    the other party.

[41]

Judges
    presiding over family law disputes are frequently faced with mounds of
    material, a busy court docket and pressure to process files expeditiously.
    Repeated and frequent motions for disclosure are often necessary, though they
    should not be. As stated by Benotto J.A. in
Roberts
,

at para. 12, delinquencies add
    significant expense to proceedings and consume substantial judicial time and
    resources. Counsel and their clients should not expect that repeated
    adjournments and indulgences will be given to instances of non-disclosure. Furthermore,
    an effective remedy for inadequate or non-disclosure should be available.

[42]

At
    the same time, a litigation strategy that involves repetitive motions for disclosure
    untethered from the disclosure already made may give a false impression of the extent
    of the non-disclosure. It must be recognized that given the size and complexity
    of some estates, it may be easier to ask the question than to give the answer.

[43]

Given
    the ongoing challenges presented by inadequate disclosure in family law
    proceedings and the need to provide a workable remedy while ensuring that the
    procedure is fair to all parties, a decision-making framework for the
    application of Rule 1(8) is required.

(iii)

Decision-making Framework

[44]

First,
    when faced with an allegation of failure to obey a disclosure order, before
    granting a remedy, the judge must be satisfied that there has been
    non-compliance with the court order.

[45]

Second,
    once satisfied, a judge may have recourse to the alternatives described in Rule
    1(8). In assessing the most appropriate remedy, a judge should consider the
    following factors:

·

the relevance of the non-disclosure, including its significance
    in hindering the resolution of issues in dispute;

·

the context and complexity of the issues in dispute, understanding
    that an uncomplicated case should have little tolerance for non-disclosure,
    whereas a case involving extensive valuation of assets may permit some
    reasonable delay in responsiveness;

·

the extensiveness of existing disclosure;

·

the seriousness of efforts made to disclose, and the explanations
    offered by a defaulting party for the inadequate or non-disclosure; and

·

any other relevant factors.

[46]

Having
    considered these factors, the judge will then determine the best remedy. The
    orders identified in Rule 1(8) are not exclusive. Other approaches may be
    appropriate. For example, one option might be to invite the moving party to
    seek at trial an adverse inference from the failure to disclose and for the
    motion judge to memorialize this invitation in reasons for decision.  Parties
    frequently rely on another option, namely a request for an adjournment to allow
    for more time to effect disclosure.  Occasionally this may be appropriate
    especially in a complex case, but an adjournment should not be considered to be
    automatic. Fully compliant disclosure is the expectation, not the exception.

[47]

If
    the judge decides to strike, as in the case under appeal, Rule 1(8.4) becomes
    applicable. As mentioned, this subsection provides that certain consequences
    apply unless a court orders otherwise.  Accordingly, a party is not entitled to
    participate in a case in any way unless the court orders otherwise.  This
    provision gives the judge the ability to frame the procedural consequences to a
    party in default. In making this determination, consideration should be given
    to whether the consequence is responsive to the breach and whether it achieves a
    just outcome.

[48]

If
    the judge decides to strike, Rule 1(8)(c) does not refer to striking
    pleadings. Instead, it specifically distinguishes amongst striking out an
    application, answer, notice of motion, motion to change, response to motion to
    change, financial statement, affidavit, or any other document filed by a party.
    Rule 1(8.4) addresses the consequences if an order is made striking an application,
    answer, motion to change or response to a motion to change.  Ideally, when
    making an order under this subsection, the judge should specify what is being
    struck.

[49]

The
    decisions to strike a document and to determine the parameters of trial
    participation are discretionary in nature, and as stated by Lang J.A. in
Purcaru
,
at para. 50, are entitled to deference
    on appeal when exercised on proper principles. The exercise of discretion will
    be upheld where the motion or trial judge fashions a remedy that is appropriate
    for the conduct at issue.

(b)

Application of Legal Framework to this Appeal

[50]

Turning
    to this case, the motion judge did not strike the pleadings based on paragraph 7
    of the April 3, 2017 order. Rather, he identified the issues on the motion as
    being whether the husband had failed to provide necessary disclosure and had answered
    the questions he undertook or refused to answer on January 26, 2017, and if so,
    whether the court should strike his pleadings, order him to comply with his
    undertakings, order him to attend for further questioning, or adjourn the
    motion until he had complied and finished being questioned. Contrary to the
    husbands contention, the motion judge did consider other possible remedies. In
    addition, although he did not use the words exceptional or egregious, he
    expressly stated that a remedy striking a pleading is a serious one that was
    available for unusual cases.

[51]

In
    my view, the motion judge properly concluded that the husband had failed to
    comply with his April 3, 2017 order. Although the husband provided the
    affidavit required by paragraph five of that order, he did not answer all of
    the undertakings and refusals ordered to be answered and, although the
    opportunity for further questioning of the appellant was available, the wife
    was not required to resort to further questioning of the husband to obtain
    those answers.  In having recourse to Rule 1(8), the motion judge assessed
    whether the non-disclosure was relevant and determined that it was. The
    information ordered was required to assist in establishing spousal support and
    the wifes equalization of net family property claim. The motion judge was
    familiar with the complexity of the case and the disclosure made, but found that
    the husband had repeatedly breached court orders for disclosure and had done so
    willfully in a deliberate attempt to frustrate the wifes efforts to establish
    her claims.

[52]

The
    husband submits that the evidence did not support an inference of intentional
    breach.  The motion judge was obviously not satisfied with the explanations
    offered by the husband for the failure to comply with his disclosure
    obligations.  The repeated orders and the repeated non-compliance readily
    permitted such a conclusion. The motion judge did not err in resorting to the
    strike out provision found in Rule 1(8)(c).

[53]

Having
    said that, in his reasons, the motion judge did not advert to what he was
    striking out. I would therefore vary the order to specify that the husbands
    Answer is struck out, pleadings not being a defined term in the
Family Law
    Rules
. In addition, all other documents filed by the husband are struck
    subject to the discretion of the trial judge as to whether any are relevant and
    ought to be admitted, for example possibly Form 13 and Form 13.1 financial
    statements.

[54]

Secondly,
    the motion judge did decide that the husband would be entitled to participate
    in the case and thus invoked the unless a court orders otherwise language of
    Rule 1(8.4). However, the motion judge erred in his determination of the
    parameters of trial participation given the husbands breach. As stated in
Purcaru
at paras. 49 and 50, the exercise of discretion required the motion judge to
    fashion a remedy that was appropriate for the conduct at issue. Here, there
    had been extensive disclosure and the outstanding undertakings and refusals
    were few. In the interests of achieving a proportionate and just outcome, I
    would vary the order to delete paragraph two which provides for an uncontested
    hearing.  I would augment the husbands trial participation rights described in
    paragraph 3 to permit him to make an opening statement, cross-examine the wife
    and the wifes witnesses at trial and make closing submissions without the need
    for leave of the trial judge. Any additional participation would only be as
    permitted by the trial judge.

[55]

The
    husbands Answer contains his claims against the wife.  Striking out his Answer
    appropriately deprives him of the ability to pursue his claims.  My proposed
    variation of the order permits the husband to test the wifes claims and also
    operates to provide the court with a richer record on which to base its decision. 
    In the face of the extensive disclosure on the one hand, and the willful
    non-compliance on the other, such an order serves to discourage non-compliant
    behaviour but is also proportionate to the husbands actual non-disclosure and
    allows for a fair adjudication of the issues. Lastly, while the husband is at
    liberty to now comply with the provisions of the April 3, 2017 order, this would
    not operate to reinstate his Answer.

[56]

In
    conclusion, I would dismiss the appeal but would vary the terms of the order as
    described in Schedule D attached hereto.

Costs

[57]

The
    motion judge ordered the husband to pay costs to the wife in the amount of
    $55,365.73 on a substantial indemnity scale for the motions heard May 29, and
    September 1, 2015, December 22, 2016, and March 1 and April 3, 2017. The wife
    had claimed $90,763.41.

[58]

The
    husband argues that the cost award was unreasonable given the divided success
    of the parties and his offers to settle.  I disagree. An appellate court will
    only set aside a costs award if it is plainly wrong or there is an error in
    principle:
Hamilton v. Open Window Bakery Ltd.
, 2004 1 S.C.R. 303 at
    para. 27. The motion judge considered the degree of success achieved by the
    parties and the offers to settle.  I see no basis on which to interfere.

Disposition

[59]

For
    these reasons, I would dismiss the appeal but vary the November 10, 2017 order
    as reflected in Schedule D attached hereto.  I would order the husband to pay
    the wife $13,500 in costs of the appeal on a partial indemnity scale inclusive
    of disbursements and applicable tax.

Released: S.E.P. December 21, 2018

S.E. Pepall J.A.

I agree. L.B. Roberts J.A.

I agree. B.W. Miller J.A.


Schedule A


Disclosure required by Sproat J.s Order dated
    November 25,

2013


Personal disclosure

1.

Proof of the husband's current
    income;

2.

Copies of personal income tax
    returns including all attachments to the returns, T4 slips, and any Notices of
    Assessment or Re-assessment for the past five tax years.

3.

Copies of all personal credit
    card statements for any credit card held directly or indirectly by the husband for
    the past five years; and

4.

Copies of all personal bank
    statements for any and all bank accounts held in the husband's name solely or
    jointly with anyone else, or held directly or indirectly for the past five
    years.


Corporate Disclosure

5.

All requests below apply to any
    corporations/ businesses in which the husband has an interest, either solely or
    jointly with others, in Ontario or elsewhere including but not limited to GS
    Medical Packaging Inc., Arkle Medical Group Inc., Beacon Supplies Limited;
    950392 Ontario Limited, Colin Andrews Brokerage, and Andrews Yachts Sales
    ("the corporations"):

a.

Complete copies of the federal
    and provincial corporate income tax returns including all related schedules and
    attachments to the returns for the five most recent taxation years;

b.

Copies of corporate Notices of
    Assessment (or Re-assessment if any) issued by the Canada Revenue Agency for
    the five most recent taxation years.

c.

Copies of the corporate
    Financial Statements (formal or informal) for the five most recent fiscal years
    including for 2013, interim financial statements (monthly or quarterly);
    balance sheets and income statements for every quarter until the conclusion of
    this action;

d.

Copies of any projections
    prepared in the five years ended fiscal 2013;

e.

Copies of the Minute books or
    other corporate documents including the Articles of Incorporation and Share
    Registers;

f.

Confirmation of the husbands
    ownership in the corporations and if more than one shareholder, a copy of the
    Shareholder Agreement;

g.

Detailed breakdown of
    owner-management remuneration, including but not limited to salaries, bonuses,
    expense allowances, car allowances, golf clubs, yacht clubs, and other club
    dues and expenses, entertainment including sports events and other emoluments
    provided to management, directly, indirectly, or in any manner whatsoever;

h.

Copies of detailed general
    ledger accounts for the five fiscal years ended fiscal 2013 for the office,
    general, travel, and entertainment accounts;

i.

Copies of any and all bank
    statements for any and all corporate bank accounts held in the name of any
    corporation in which the husband has an interest, in Ontario or anywhere else
    for the past five years;

j.

Copies of any credit cards or
    lines of credit statements held in the name of the corporations or paid for by
    the corporations in which the husband or anyone not at arm's length to him
    including Luan Avram has signing authority whether in Canada, the United
    States, or anywhere else for the past five years;

k.

Schedule of all related
    entities and non-arm's length entities;

l.

Details of all significant
    third party and non-arm's length part loans, advances, payments, and
    transactions within the immediately preceding five years;

m.

Details of all non-recurring and unusual
    expenses during the immediately preceding five fiscal years;

n.

Copies of any business
    insurance policies, if any;

o.

Copies of the rental agreements
    for the premises upon which the corporations operate;

p.

A list of all cars leased by
    the husband or any corporations including but not limited to the 2006 Ferrari
    and 2012 BMW.


Other Disclosure

6.

Copies of any loan applications
    made by the husband in the past five years;

7.

A copy of the rental agreement
    and application for the husband's current residence;

8.

A detailed accounting of all
    the funds withdrawn from the joint line of credit that is registered against
    the matrimonial home in favour of the National Bank of Canada, from inception
    to date;

9.

A detailed accounting of all
    funds and benefits paid by the corporations to or on behalf of Luan Avram;

10.

Supporting documentation regarding all
    items in the husband's Financial Statements sworn October 9, 2013, including
    assets on the date of marriage and date of separation;

11.

A sworn Affidavit that the husband does
    not have any other accounts or assets aside from those set out in his sworn
    financial statements sworn October 9, 2013; and

12.

Any other financial disclosure which may
    arise from the production of the above.




Schedule B


Disclosure required by Trimble J.s consent Order

dated June 12, 2014, based on the information
    request of the wifes forensic accountant, Jeffrey Feldman


Beacon Supplies Limited

a.

Financial Statements for Beacon
    Supplies Limited ("Beacon Supplies")

GS Medical Packaging Inc.

b.

Details of payments (dates and
    amounts), which comprised the T4 issued from GS Medical Packaging Inc.
    ("GS Medical") to the wife for 2013;

c.

Details of payments (dates and
    amounts), which comprised the management bonus paid to the husband in 2013 and
    2009, if any;

d.

Detailed general ledger
    accounts for the following for 2009 to 2013, which reconcile to the amounts per
    GS Medical's financial statements:

i.

Due to related parties; and

ii.

Advertising and promotion.

e.

Reconciliation of the detailed
    general ledger accounts provided for office and general and travel and
    entertainment to GS Medical's financial statements for 2009 to 2013;

f.

Confirmation as to the nature
    of records and support, if any, that was retained for transactions described as
    "petty cash" in the detailed general ledger for office and general
    and travel and entertainment for the past year;

g.

Year-end adjusting journal
    entries for 2009 to 2013;

h.

Details of the arrangement with
    Obstrukt Media and a copy of the related contract, if any;

i.

Lease and/or purchase agreement
    for vehicles leased by GS Medical from 2009 to 2013 (not including the 2012 BMW
    650i X Drive Coupe or the 2006 Ferrari F430 F1), to the extent not previously
    provided;

j.

Deposits (cash or trade-in
    value) paid in connection with vehicles leased by GS Medical from 2009 to 2013
    and confirmation of an accounting for the deposits;

k.

Insurance premiums paid by GS
    Medical in connection with the vehicles identified above and a cop of the
    insurance policies for the period prior to 2013;

l.

Journal entries, if any, which
    recorded the reimbursement of business related expenses charged on the personal
    CIBC visa credit cards of the wife and the husband from 2009 to 2013 for a
    breakdown of the reimbursement of the business expenses;

m.

Details of payments from GS Medical set
    out in Tab B attached to the wife's Notice of Motion and confirmation about
    whether the highlighted payments were paid to the husband;

n.

Details of any expenses related
    to the condominium at 403-A Emma Street, Key West, Florida, which were paid by
    GS Medical;

o.

Details of the life insurance
    policies paid by GS Medical from 2009 to 2013, including the summary of
    insurance coverage and the related premium;

p.

Missing statements for the
    following, if retrieved;

BMO Mosaik MasterCard

i.

2010: January, March, April,
    June to December;

ii.

2011: January to April, June,
    July, September

iii.

2013: July & November

Personal Accounts

iv.

CIBC Bank Account 82-30595:
    November 2013 & December 2013

v.

CIBC Aventura Visa statements
    (CAD): November 2013 & December 2013

2.

The husband shall immediately
    provide the following additional disclosure to the wife to be provided no later
    than June 25, 2014:

a.

Copy of purchase and/or lease agreement
    regarding the Porsche Cayenne;

b.

Updated credit card and bank
    statements (both personal and corporate) from November 2013 to the present;

c.

Summary of all business trips
    from the date of separation (June 28, 2013) to the present;

d.

All missing credit card
    statements for his personal and business related credit cards and bank
    statements including but not limited to the following statements, if retrieved:

*

Bank of Montreal Mosaik
    MasterCard, account number 5560...6616, January, March-April, June-December 2010;
    January-April 20111; June-July 2011; September 2011; July and November 2013;

*

Any credit cards held in the
    name of Beacon Supplies Limited; and

*

CIBC account #82-30595 for
    December 2010 and January-February 2011.

e.

Details regarding the rental of
    the jointly owned condominium municipally described as 403A Emma Street, Key
    West, Florida, 330140, since the date of separation (June 28, 2013) to the
    present, including the following:

*

Names of the renters;

*

Copies of any rental
    agreements;

*

Details regarding the rent
    received

Additional disclosure and steps
    regarding obtaining such disclosure required by Trimble J.s consent Order
    dated August 11, 2013

a.

To use best efforts to make
    inquiries of Ann Fan and/or Peter Ryan Jarvis, to obtain a reconciliation of
    the detailed general ledger accounts provided for office and general and travel
    and entertainment to GS Medical Packaging Inc.'s ("GS Medical")
    financial statements for 2009 to 2013;

b.

To make available whatever
    documentation is available from GS Medical that was retained for transactions
    described as "petty cash" in the detailed general ledger for office
    and general for the past year regarding GS Medical and to keep any further
    petty cash vouchers or other records, including those for travel, until this
    case is settled or tried. Should the wife's accountant wish to attend at the
    offices of GS Medical, he may review such documents for the four previous
    years;

c.

Confirmation of the drivers of
    each of the vehicles leased and/or purchased by GS Medical from 2009 to 2013 if
    possible;

d.

Written confirmation that GS
    Medical did not pay any deposits in connection with vehicles it leased from
    2009 to November 1, 2013, except with regard to the Ferrari vehicle;

e.

Written confirmation of the
    insurance breakdown per vehicles for all vehicles leased by GS Medical for 2009
    to 2013;

f.

Details of the life insurance
    policies paid by GS Medical from 2009 to present, including the summary of
    insurance coverage including but not limited to details related to the husband's
    life insurances policy with ARCA Financial Group, policy number 2795321
    (Manulife) with coverage of 1 million dollars;

g.

Best efforts to provide:
    details of dates of all business trips taken by the husband from the date of
    separation (June 28, 2013) to the present;

h.

Make best efforts to obtain
    from rental agent, Kevin McGinty, copies of any rental agreements regarding the
    rental of the jointly owned condominium municipally described as 403A Emma
    Street, Key West, Florida, 33040, from the date of separation (June 28, 2013)
    to the present and any other documents available regarding such rentals. Such
    documents to include but not be limited to the names of the renters; details
    regarding the rent received; details of the payment of commission of the agent
    (which the husband represents is approximately 20%); accounting of the rent
    charged and collected (which the husband represents is approximately $7,200.00
    net amount); and any documents regarding any repairs that the husband claims
    that he completed to the property and any expenses incurred for the property
    that have been paid for using the rental income.

2.

The husband shall provide to
    the wife the following disclosure in accordance with the Supplementary
    Information Request of Jeffrey Feldman dated June 9, 2014 (as explained/expanded
    in his letter of June 20, 2014) and other additional disclosure requested by
    the wife as set out in the wifes Amended Notice of Motion returnable June 27,
    2014, within sixty (60) days:

a.

Copies of bank statements, if
    any, for P & J Gill Holdings Ltd. for 2012 and 2013. If the husband claims
    that he no longer possesses bank statements for the company for those years, he
    shall provide the last bank statements for the company in his possession power
    and control. If the husband claims that P & J Gill Holdings Ltd. never held
    any bank accounts, he shall provide written confirmation of that fact;

b.

Written confirmation from the
    accountant for P & J Gill Holdings Ltd., Royal Peter Jarvis that there are
    no financial statements for the corporation for 2011-2013 and that no tax
    returns were filed with the Canada Revenue Agency for this corporation for
    these years;

c.

Copies of bank statements, if
    any, for 950392 Ontario Limited for 2011 to 2013. If the husband claims that he
    no longer possesses bank statements for the company for those years, he shall
    provide the last bank statements for the company in his possession power and
    control. If the husband claims that the company never held any bank accounts,
    he shall provide written confirmation of that fact;

d.

Written confirmation from the
    accountant for 950392 Ontario Limited that there are no financial statements
    for the corporation for 2011-2013 and no tax returns were filed with the Canada
    Revenue Agency for this corporation for these years;

e.

Whether and the manner in which
    the long term investments set out in the balance sheets of P & J Gill
    Holdings Ltd. and 950392 Ontario Limited relating to the years in which the
    long term investments were reflected on the financial statements for these
    companies in 2010 and 2011 were the fixed assets of GS Medical and any
    reconciliation and or explanation that he may be able to provide;

f.

Written confirmation in regard
    to any charge back by GS Medical to the husband regarding vehicle related
    expenses for 2011 to 2013 including details of the categories to which they are
    charged (e.g. lease or insurance) and a copy of any detailed general ledgers
    for the accounts in which the vehicle expenses were recorded, if available;

g.

The manner in which the
    business related expenses charged on the personal CIBC Visa credit cards of the
    wife and the husband from 2012 and 2013 were recorded by GS Medical;

h.

Copies of the husband's 2008
    and 2009 Notices of Assessment (personal) and 2008 Income Tax Return with all
    attachments, and if the husband does not possess them, obtain notices of
    assessment and income tax return information statement if available from CRA;

i.

Written confirmation from Ryan
    Peter Jarvis that no financial statements have been prepared and that no
    corporate tax returns have been prepared or filed for Beacon Supplies Limited
    (and no corporate Notices of Assessment received) after 2010 other than what
    has been produced to the wife;

j.

A sworn updated Financial
    Statement of the husband confirming his property interest as of the date of separation
    and the date of the statement;

k.

A copy of the Record of
    Employment for the wife from GS Medical Packaging Inc. regarding her
    employment, and if not available, a new Record of Employment for the wife; and

l.

Details of the sale of the
    husband's Bob Seger boat (2009 Beneteau first 40 Yanmar 41.27 ft.) and a copy
    of all documents related to the sale.




Schedule C


Disclosure required by Emery J.s Order dated
    September 1, 2015

1.

The husband is to allow the
    forensic accountant, Jeffery Feldman (or an employee of SLF Valuations Ltd. to
    attend on his behalf), to reattend at the offices of GS Medical at a date and
    time of his choosing and that he be provided with the following by October 1,
    2015:

a.

A copy of the GS Medical
    detailed general ledger for John's draw account for 2012, 2013, 2014, and 2015,
    as well as;

b.

Samples of the journal entries,
    which reduced the account to reflect the business expenses John charged on his
    personal credit cards;

c.

If so requested by Jeffery
    Feldman, after a review of those samples copies of all the journal entries of
    that period.

d.

The GS Medical petty cash
    sheets prepared for the years 2012-2015





Schedule D

Varied Order of Price J. Dated November 10,
    2017, paras. 1-4

1.

The husbands
pleadings are
Answer
    is struck out. All other documents filed by the husband are also struck out,
    subject to the discretion of the trial judge.

2.

The wife shall have leave to proceed to an
    uncontested hearing.

3.

The husband shall have the right to:


i.

attend and participate in a settlement
    conference on the conditions set out below;


ii.

receive notice of any step in the
    proceeding taken by the wife;


iii.

attend any step in the proceeding
    (including the trial)
as an observer
;


iv.

make an opening statement at the trial;


v.

cross-examine the wife and witnesses called
    to testify at trial by the wife;


vi.

make closing submissions at the trial, and
with
    leave of the trial Judge;.


vii.

any additional participation as permitted
    by the trial judge.

4.

In the remaining proceedings, the husband
    shall not have the right to:


i.

bring any motion or application;


ii.

question the wife or any other person;


iii.

seek disclosure from the wife or any other
    person;


iv.

participate in any step in the proceeding
    except as described above.





[1]

The costs
    order relating to the November

2017 order was not before this court.


