Zagdanski v. Zagdanski
[Indexed as: Zagdanski v. Zagdanski]
55 O.R. (3d) 6
[2001] O.J. No. 2886
Docket No. ND 166822/89
Ontario Superior Court of Justice
Lane J.
July 12, 2001
Family law–Property–Equalization of net family property
–Advance on equalization payment–Order for advance against expected equalization payment may be made in appropriate cases
–Husband had withheld information about his assets for decade–Wife had reasonable need for advance of funds to enable her to carry on litigation–No realistic chance existed that advance of half of anticipated minimum equalization plus interest would exceed ultimate payment due from husband to wife
–Husband ordered to make payment to wife as advance against equalization.
The husband was alleged by the wife and their daughter to have used his power as the directing mind of his financial empire and as trustee of certain trusts to treat the wife and daughter unfairly in breach of family, fiduciary and corporate law. The wife and daughter had brought actions against the husband in addition to the wife’s divorce action. The degree of success which the daughter achieved would impact directly on the husband’s assets and so upon his net family property statement, and the wife’s claims in her other action, if successful, would reduce the husband’s net family property and commensurately increase hers. To cover the possibility that the daughter would succeed in her actions against the husband and the equalization due to the wife would be less, the wife and the daughter had entered into an agreement that any overpayment to the wife could be deducted by the husband from any amount awarded to the daughter. To cover the possibility that the wife might succeed in her other action, she had filed an undertaking to consent to giving full appropriate credit to the husband. In her divorce action, the wife brought a motion for partial summary judgment or alternatively for an order for interim disbursements out of matrimonial property.
Held, the husband should make a payment to the wife as an advance against equalization.
Summary judgment under Rule 20, Rules of Civil Procedure, R.R.O. 1990, Reg. 194 is available in family cases, but this was not an appropriate case for partial summary judgment. There were genuine issues for trial as to the assets of both parties. There was no calculable minimum amount that must inevitably be due from the husband in equalization of the parties’ net family property. There would be no shortening of the trial if partial summary judgment were granted. If it were true, as the wife asserted, that the husband had systematically delayed the resolution of outstanding issues in an effort to prevent the truth about his assets from becoming known and running up costs that she would have difficulty in meeting, this factor alone would not allow the court to expand the scope of Rule 20. The obtaining of an advance payment is not part of the purpose of Rule 20.
An order for an advance against the expected equalization payment may be made in appropriate cases. The Family Law Act, R.S.O. 1990, c. F.3 creates a right in the spouse with the lesser NFP to a payment and grants the court specific authority by s. 7(1) to “determine any matter respecting the spouses’ entitlement”. While s. 9(1) of the FLA does not refer specifically to interim orders, neither does it rule them out. If the authority in s. 7(1) is for any reason (other than a specific statutory limitation) not broad enough, the court has an inherent jurisdiction on which to rely in making the order which justice requires. In the circumstances of this case, a substantial equalization payment would be due to the wife. If she recovered from the husband in her other litigation, she would obtain the funds this way and would give the appropriate credit. If the daughter recovered from the husband, the agreement would come into play. There was no realistic chance that an advance of half the antic ipated minimum equalization, plus interest, would exceed the ultimate payment due from the husband to the wife in these actions in any event. The husband had been stonewalling on disclosure of his assets for a decade. The wife had a reasonable need for an advance of funds to enable her to carry on the actions. In the circumstances, fairness required that the wife be granted some relief. The husband was ordered to make a payment to the wife, as an advance against equalization, in the amount of $700,000.
Cases referred to
Allan v. Allan (1998), 171 Nfld. & P.E.I.R. 48, 525 A.P.R. 48 (P.E.I.T.D.); Fisher v. Fisher (1990), 28 R.F.L. (3d) 324 (Ont. H.C.J.); Ford Motor Co. of Canada Ltd. v. Ontario Municipal Employees Retirement Board (1997), 36 O.R. (3d) 384, 153 D.L.R. (4th) 33, 37 B.L.R. (2d) 207, 18 C.P.C. (4th) 189 (C.A.), revg (1996), 32 O.R. (3d) 124, 34 B.L.R. (2d) 156 (Gen. Div.); Fraser v. Fraser, [2000] O.J. No. 650 (S.C.J.); Harris v. Harris (1988), 19 R.F.L. (3d) 27 (Ont. H.C.J.); Ingles v. Watt (2000), 13 R.F.L. (5th) 399 (Ont. S.C.J.); Kleinman v. Kleinman (1998), 38 O.R. (3d) 740, 37 R.F.L. (4th) 1 (Gen. Div.); Lebovic v. Lebovic, [2001] O.J. No. 1305 (S.C.J.); Pawluk v. Pawluk (1990), 25 R.F.L. (3d) 41 (Ont. Dist. Ct.); Posner v. Posner, [2000] O.J. No. 109 (Div. Ct.); R. v. Osborn, [1971] S.C.R. 184, 12 C.R.N.S. 1, 1 C.C.C. (2d) 482, 15 D.L.R. (3d) 85, revg [1969] 1 O.R. 152, 5 C.R.N.S. 183, [1969] 4 C.C.C. 185, 1 D.L.R. (3d) 664 (C.A.); Ravida v. Ravida (1990), 74 O.R. (2d) 101, 27 R.F.L. (3d) 106 (U.F.C.); Rawluk v. Rawluk, [1990] 1 S.C.R. 70, 71 O.R. (2d) 480n, 38 O.A.C. 81, 65 D.L.R. (4th) 161, 103 N.R. 321, 36 E.T.R. 1, 23 R.F.L. (3d) 337; Walters v. Walters (1997), 28 R.F.L. (4th) 94, [1997] O.J. No. 1808 (Gen. Div.); Woodman v. Deremo, [1994] O.J. No. 2419 (Gen. Div.), affd [1996] O.J. No. 2619 (C.A.)
Statutes referred to
Family Law Act, R.S.O. 1990, c. F.3, ss. 5(1), 7(1), 9(1), 34
Family Law Act, 1986, S.O. 1986, c. 4 Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 20, 51.06
MOTION for partial summary judgment or for other relief.
A. Burke Doran and Jacqueline Mills, for moving party. Philip Epstein, Q.C., and Richard Greene, for respondent.
[1] LANE J.:– This is a motion by the plaintiff, Johanna Klein, formerly the wife of the respondent, for partial summary judgment in their divorce action or alternatively for an order for interim disbursements out of the matrimonial assets.
[2] This is one of five actions that have been ordered tried together because all of them involve issues as to the manner in which the respondent handled the business affairs of companies and other entities in which the plaintiffs, Johanna, his former wife, and Debbie Cohen, his daughter, have or claim an interest. Henry has amassed a considerable fortune, mostly in property, held in a bewildering array of interlocking companies and trusts. There are allegations that he used his power as the directing mind of this empire and as Trustee of certain trusts, to treat the plaintiffs unfairly in breach of family, fiduciary and corporate law.
[3] Debbie claims, inter alia, for the restoration to her of assets allegedly wrongfully removed from entities in which she had an interest and converted to his own use by Henry. The degree of success that she achieves will impact directly upon Henry’s assets and so upon his NFP statement. Johanna claims for equalization, which therefore depends upon the resolution of Debbie’s claims. In addition, in her other action, Johanna asserts claims against Henry that, if successful, would reduce his NFP and commensurately increase hers.
[4] The group of actions are still at the discovery stage after over a decade. The reasons for this regrettable state of affairs are not germane to this summary judgment motion, except that the delay is a significant motive for bringing it.
[5] The parties are at odds as to the effective date of their separation. For the purposes of this motion, Johanna is prepared to accept the date proposed by Henry, June 30, 1989.
[6] In her original, and only, Financial Statement, Johanna estimated her NFP at $1.115 million (I will round all figures for convenience). Since then additional assets have been identified and, according to the report of Cole & Partners, Henry’s valuators, the amended figure should be $3.022 million. Again, for this motion only, Johanna accepts that figure. Similarly, she accepts Henry’s NFP at his figure of $6.121 million although maintaining it is actually much larger. Her Factum makes it clear that these concessions are without prejudice to the position to be put forward at the trial.
[7] Using these figures as Henry’s best position, Johanna would be owed an equalization payment of $1.330 million, with interest from June 30, 1989.
[8] To cover the possibility that Debbie would succeed in her actions against Henry and the equalization due to Johanna would be less, Johanna and Debbie have entered into an agreement that any overpayment to Johanna may be deducted by Henry from any amount awarded to Debbie. To cover the possibility that Johanna may succeed in her other action, she has filed an undertaking to consent to giving ‘full appropriate credit’ to Henry in those circumstances.
[9] When the possibility was raised that, under some possible outcomes of these various actions, Johanna could owe Henry an equalization, her counsel noted that Henry had not made any claim for an equalization payment from Johanna.
[10] Counsel for Johanna submitted that there was no reason why Rule 20, Rules of Civil Procedure, R.R.O. 1990, Reg. 194 should not apply to family law cases. Counsel for Henry stated that he did not argue that anything in the Family Law Act, R.S.O. 1990, c. F.3 prevented a summary judgment in a proper case. I agree with the proposition that summary judgment under Rule 20 is available in family cases, as in any other.
[11] It is clear that there are genuine issues for trial as to the assets of both parties. In large measure, their assets depend upon the outcome of four other lawsuits. The measures adopted to try to protect Henry from any overpayment illustrate the fact that there is no calculable minimum amount that must inevitably be due from him in equalization of the parties’ NFP.
[12] Further, counsel for Henry submitted that since a judgment would make that minimum amount res judicata, no partial judgment is appropriate.
[13] During his submissions, Mr. Doran candidly said there would be no shortening of the trial as a result of the order he sought. I add that there would be no issue removed from the trial judge’s consideration, either. Mr. Doran submitted that, nevertheless, this was an appropriate case for the grant of summary judgment. The rule should be available to be used, he said, in ‘dog in the manger’ cases, such as this one. By that he meant in cases where the wealthier party has systematically delayed the resolution of outstanding issues in an effort to prevent the truth about his assets becoming known and running up costs that the weaker party will have difficulty in meeting. Accepting that Mr. Doran’s characterization of Henry’s approach to these actions might be correct, I am not persuaded that this factor alone would allow the court to expand the scope of Rule 20.
[14] In Ford Motor Co. of Canada v. Ontario Municipal Employees Retirement Board (1997), 36 O.R. (3d) 384, 153 D.L.R. (4th) 33 (C.A.), the Court of Appeal pointed out, at p. 400 O.R., that the existence or absence of a genuine issue for trial is central to the operation of Rule 20. Access to summary judgment was intended to remove from trial issues that would otherwise require a trial. In that case, summary judgment was sought by shareholders dissenting from an offer for their shares. They asked for partial summary judgment for the amount of the offer they had rejected, contending that such sum was the least that they could expect to recover. They would then proceed to trial to ascertain the remaining amount.
[15] The Court of Appeal reviewed a number of cases where partial summary judgment had been granted and some where it had been refused. At p. 399 O.R., the court spoke of its “reluctance to further expand Rule 20 into a payment in advance of trial rule, based on need or minimum claim value, at least where there is no admission in the pleadings, or elsewhere, that would provide a basis for summary judgment for part of the plaintiff’s claim . . .”.
[16] At p. 400, the court noted that the minimum amount that the plaintiffs might recover was not even an issue at trial: there the issue would be fair value, not minimum value. The summary judgment motion introduced a new issue with consequent added cost without an offsetting benefit such as shortening the trial. The only benefit was to the dissenting shareholders who got an advance payment, which was not the intended result of the rule.
[17] Ford makes it clear that Rule 20 does not contemplate summary judgments merely on the basis of the probable minimum award to be obtained, although the case allows for some exceptions. Where there are relevant admissions in the pleadings, or elsewhere, upon which a judgment could be based, one is possible, either under Rule 20 or rule 51.06. Are there such admissions in the present case?
[18] As noted earlier, the two parties have filed statements of their respective NFP and Johanna has accepted both Henry’s statement, as presented, and his valuator’s additions to her own. The result is an equalization payment due to her on Henry’s own figures of some $1.3 million to which, presumably, would be added interest for some 12 years. The average annual rate of pre-judgment interest from 1989 to the end of 2000 exceeds 8 per cent so that the amount will nearly double. In my view, while there is no formal admission as to these figures, they are what Henry is putting forward as his case.
[19] Matters become more complex when the lawsuits brought by Johanna and Debbie are considered. Certainly they will impact upon Henry’s NFP should they be successful. Henry’s counsel submits that this makes it impossible to calculate the parties’ NFPs and therefore what the equalization payment would be. But the bottom line is this: Henry is either going to pay Johanna by way of equalization, or he is going to pay her and, perhaps, also Debbie, by way of a judgment for his breaches of duty in handling their assets. So the funds are likely to come to Johanna in the end, no matter what they may be called. There would thus seem to be admissions that could bring this case within Rule 20 or rule 51.06.
[20] Nevertheless, there are still problems with the summary judgment procedure. There are triable issues; there is no saving of time or removal of an issue from the trial; the obtaining of an advance payment is not part of the purpose of Rule 20. There is also the possible application of res judicata as to at least the portion of the case directly involved. I do not find that summary judgment is never available in circumstances like these, but only that because of the complexities to which I have referred, it would be preferable to proceed on a different basis. In my view, case law shows that a different basis exists.
[21] Section 9(1) of the Family Law Act provides:
9(1) In an application under section 7, the court may order,
(a) that one spouse pay to the other spouse the amount to which the court finds that spouse to be entitled under this Part;
(b) that security, including a charge on property, be given for the performance of an obligation imposed by the order;
(c) that, if necessary to avoid hardship, an amount referred to in clause (a) be paid in installments during a period not exceeding ten years or that payment of all or part of the amount be delayed for a period not exceeding ten years; and
(d) that, if appropriate to satisfy an obligation imposed by the order,
(i) property be transferred to or in trust for or vested in a spouse, whether absolutely, for life or for a term of years, or
(ii) any property be partitioned or sold.
[22] There have been numerous cases where orders for advances against the expected equalization payment have been made in family cases in this court. In Harris v. Harris (1988), 19 R.F.L. (3d) 27 (Ont. H.C.J.), Granger J. allowed an appeal from a Master’s award of interim support that had mistakenly included capital receipts in the husband’s income. The interim award was reduced from $1,750 to $1,350 but, because the wife would have a shortfall, Granger J. said [at p. 32 R.F.L.]:
As the wife’s additional needs include the needs of a child, the husband shall pay an additional $400 per month to his wife but as such payment will be made out of capital the husband should receive a credit of $400 per month against any equalization payment.
[23] In effect, the order required the husband to make monthly advances on his ultimate equalization obligation to top up support payments.
[24] In Pawluk v. Pawluk (1990), 25 R.F.L. (3d) 41 (Ont. Dist. Ct.), the husband conceded that he would owe to the wife an equalization payment. J. deP. Wright D.C.J. said that the case law showed that there was inherent jurisdiction in the court to award interim disbursements although they are not mentioned in the Family Law Act. Where the wife had an asset in the form of her illiquid equalization claim, there was no reason not to make it partially liquid by court order where it was necessary to do so. He said at p. 43 R.F.L.:
In my opinion in property matters as opposed to support matters, there is little if any justification for the award of interim disbursements. In my opinion an order should go directing the husband to pay to the wife the sum of $2,000, but also directing that the wife credit the husband with this sum in the equalization of net family property.
[25] Here again, the effect of the order was to require the husband to make advance payments upon his equalization obligation.
[26] Pawluk was relied upon by Wallace J. in Ravida v. Ravida (1990), 74 O.R. (2d) 101, 27 R.F.L. (3d) 106 (U.F.C.), where she refused to order interim disbursements and fees, but directed that the husband advance money to the wife to be credited against the equalization payment.
[27] In Fisher v. Fisher (1990), 28 R.F.L. (3d) 324 (Ont. H.C.J.), the husband maintained an artificially high lifestyle by borrowing from his companies, i.e. using up his capital. The Master ordered payments at a level that required the husband to continue expending capital for support. Granger J. reduced the support on the basis that the support awarded would effect a double recovery for the wife. He said at p. 329 R.F.L.:
If it was the intent of the master to require Mr. Fisher to pay the support order from capital assets, some indication should have been made in the order to allow Mr. Fisher to seek credit for such payment on equalization: see Harris v. Harris . . .
[28] In Woodman v. Deremo, [1994] O.J. No. 2419 (Gen. Div.), affd [1996] O.J. No. 2619 (C.A.), a $50,000 advance against equalization was made pursuant to court order in lieu of a motion for interim support. In the Court of Appeal, a brief endorsement noted: “Nor was the trial judge’s failure to order interim support a bar to the subsequent order of support, particularly having regard to the ordering of an advance of the equalization payment in the amount of $50,000.” While there was no analysis of the point, the advance payment was passed over without comment.
[29] Walters v. Walters (1997), 28 R.F.L. (4th) 94, [1997] O.J. No. 1808 (Gen. Div.), was a motion by the wife for interim spousal support and other relief. Given the parties’ relative financial positions, it was likely that the husband would be required to make a substantial equalization payment to the wife. As to support, the husband argued that the wife would be unable to show economic disadvantage as a consequence of the marriage or its breakdown. Vogelsang J. dismissed the motion for interim support. However, he ordered that the husband pay the wife $500 per month as a pre-payment of his obligation with respect to equalization. At paras. 10-18, Vogelsang J. outlined the case law, including those cited above, and also considered cases in Manitoba and British Columbia where orders for advance payments of equalization had been made. He concluded that no bar existed to an interim order for prepayment of part of an equalization claim. In his analysis, he noted the distinction between summary judgment and an interim order for prepayment.
[30] In Kleinman v. Kleinman (1998), 38 O.R. (3d) 740, 37 R.F.L. (4th) 1 (Gen. Div.), the wife moved for an order that the husband pay $50,000 for expert’s fees as “an advance of equalization” and for “partial summary judgment (advance on equalization)” of $100,000. The parties’ NFP statements showed, and it was conceded, that the husband would owe the wife between $400,000 and $500,000. The husband submitted that there was no jurisdiction to make an order for an advance on the equalization payment or an interim order for equalization.
[31] Kiteley J. observed that the wife had met the requirements of s. 5(1) of the Family Law Act in that the spouses were separated, there was no reasonable prospect of resumption of co-habitation and she had the lesser NFP. She was therefore entitled to equalization. The court can determine any matter respecting entitlement under s. 5: see s. 7(1); and may order that one spouse pay to the other the amount to which that spouse is entitled: see s. 9(1). Counsel for the husband submitted that there could only be one equalization payment ordered; there was no express authority for interim orders and Rule 20 (summary judgment) could not confer a substantive right to an interim payment because the Courts of Justice Act did not allow rules that altered substantive law. Kiteley J. did not agree. She held [at pp. 746-47 O.R.] that:
Just because the Family Law Act does not specify that an interim order for an equalization payment, or an advance on the equalization payment, or summary judgment is available, does not mean that it is not available. The Act is silent, not prohibitory. If I apply Rule 20 to this motion, that does not constitute a “change in the substantive law”. Nor does it “conflict directly with section 66 of the Courts of Justice Act”. The fact that interim support orders are specified [in s. 34 of the FLA] does not mean that interim equalization orders are prohibited.
[32] Kiteley J. went on to observe that the authority to order payment of the amount the court finds the payee is entitled to does not mean that there can only be one such amount. She ordered the husband to pay an equalization advance of $53,000. Although to some extent, at least, she relied upon Rule 20, the reasoning in the passage quoted would equally support an order for an advance on equalization based upon the court’s inherent authority, as will be seen.
[33] In Fraser v. Fraser, [2000] O.J. No. 650 (S.C.J.), the wife moved for an advance against equalization. The husband resisted, arguing that there was no jurisdiction to do so. Benotto J. ruled that there was authority to do so not only because of the summary judgment procedure, but also: “Moreover, an advance against equalization has been ordered in Ontario and by courts in other provinces.” She cited Kleinman, Ravida and Woodman, supra, as well as Allan v. Allan (1998), 171 Nfld. & P.E.I.R. 48, 525 A.P.R. 48 (P.E.I.T.D.). Advance payments have also been ordered in Ingles v. Watt (2000), 13 R.F.L. (5th) 399 (Ont. S.C.J.), where $30,000 was ordered in reliance on Kleinman and also in Lebovic v. Lebovic, [2001] O.J. No. 1305 (S.C.J.), where $1.3 million was ordered. Greer J. stated that the evidence established that the wife would receive more than that amount as an equalization payment and needed the funds to close h er purchase of replacement living quarters.
[34] In Posner v. Posner, [2000] O.J. No. 109 (Div. Ct.), a husband applied for leave to appeal from an order allowing further inspection of his financial circumstances and fixing an advance of interim disbursements at $73,500. The husband was a successful businessman who owned at least five corporate entities and numerous investments. He filed a financial statement that showed his net worth at $3.22 million. The financial statement contained few details and some inconsistencies. The wife brought a motion for an order for an evaluation of the husband’s assets and for interim disbursements. Mazza J. made the order.
[35] The husband moved for leave to appeal. The argument before O’Driscoll J. revolved around the correctness of Pawluk, Ravida and Kleinman, supra. O’Driscoll J. dismissed the application for leave, observing that the motions judge had exercised his inherent jurisdiction and had ordered what was fair in the circumstances. On the issue of inherent jurisdiction, O’Driscoll J. wrote at paras. 21-22:
In 80 Wellesley Street East v. Fundy Bay Builders Ltd. et al., [1972] 2 O.R. 280, 282, (Ont. C.A.) Brooke J.A. (for the court) said:
As a Superior Court of general jurisdiction, the Supreme Court of Ontario has all of the powers that are necessary to do justice between the parties. Except where provided specifically to the contrary, the court’s jurisdiction is unlimited and unrestricted in substantive law in civil matters. In Re Michie Estate and City of Toronto et al., [1968] 1 O.R. 266 at pp. 268-9, 66 D.L.R. (2d) 213 at pp. 215-6, Stark J., after considering the relevant provisions of the Judicature Act and the authorities, said:
It appears clear that the Supreme Court of Ontario has broad universal jurisdiction over all matters of substantive law unless the Legislature divests from this universal jurisdiction by legislation in unequivocal terms. The rule of law relating to the jurisdiction of superior Courts was laid down at least as early as 1667 in the case of Peacock v. Bell and Kendall (1667), 1 Wms. Saund. 73 at p. 74, 85 E.R. 84:
. . . And the rule for jurisdiction is, that nothing shall be intended to be out of the jurisdiction of a Superior Court, but that which specifically appears to be so; and, on the contrary, nothing shall be intended to be within the jurisdiction of an Inferior Court but that which is so expressly alleged.
In Cook v. Ip et al. (1985), 52 O.R. (2d) 289 (Ont. C.A.); leave to appeal to S.C.C. refused: 55 O.R. (2d) 288n, Cory J.A. said that a Superior Court judge has all the powers that are necessary to do justice between the parties. Except where provided specifically to the contrary, the court’s jurisdiction is unlimited and unrestricted in substantive law in civil matters.
[36] Similar reasoning is found in Rawluk v. Rawluk, [1990] 1 S.C.R. 70, 65 D.L.R. (4th) 161, where Cory J., writing for the majority on the question of whether the court’s jurisdiction to apply the constructive trust remedy continued under the Family Law Act, 1986, said at para. 55 [p. 97 S.C.R.]:
The Family Law Act, 1986 does not constitute an exclusive code for determining the ownership of matrimonial property. The legislators must have been aware of the existence and effect of the constructive trust remedy in matrimonial cases when the Act was proposed. Yet neither by direct reference nor by necessary implication does the Act prohibit the use of the constructive trust remedy.
[37] In my view, these authorities are a complete answer to the submission that this court cannot make an order for an advance payment of equalization when justice requires it. The cases cited earlier show that such a power has been felt to be necessary to do justice in many cases decided in our court. Nothing in the Family Law Act explicitly rules out such orders, and the jurisdiction of a superior court can be divested only by express words and not by “mere implication”: R. v. Osborn, [1969] 1 O.R. 152, [1969] 4 C.C.C. 185 (C.A.) at pp. 156-57 O.R., p. 190 C.C.C.
[38] The Act creates a right in the spouse with the lesser NFP to a payment and grants the court specific authority by s. 7(1) to “determine any matter respecting the spouses’ entitlement”. While s. 9(1) does not refer specifically to interim orders, neither does it rule them out. If the authority in s. 7(1) is for any reason (other than a specific statutory limitation) not broad enough, the court has an inherent jurisdiction on which to rely in making the order which justice requires. There is therefore no need to seek authority in Rule 20, which, as noted earlier, is problematic at best.
[39] Having determined that there is jurisdiction to award an advance against equalization in a proper case, I turn to the question of whether this is such a case. Such a case will have certain characteristics of which the following seem reasonable, based on the cases cited above and what I hope is common sense:
— there will be little or no realistic chance that the amount of the contemplated advance will exceed the ultimate equalization amount;
— there will, therefore, be some considerable degree of certainty about the right to, and likely minimum amount of, an equalization payment;
— there will be need, not necessarily in the sense of poverty, but a reasonable requirement for funds in advance of the final resolution of the equalization issue, including funds to enable the continued prosecution or defence of the action;
— there may be other circumstances such that fairness requires some relief for the applicant; frequently, but not necessarily, there will have been delay in the action, deliberate or otherwise, prejudicing the applicant by, for example, running up the cost.
[40] There are cases which have held that such expenses as legal fees, or past expenses, are not appropriate matters for which interim disbursements may be ordered. One must remember, however, that what is happening here is simply an advance of the applicant’s own money. Provided the safeguards as to amount are observed, there is no reasonable objection to the use of the funds to pursue the action itself. Where, as there often is, there is a great disparity in the resources controlled by the parties, there can be no justification in withholding from the weaker party a portion of the equalization which would enable the field of battle to be levelled.
[41] In the present case, the evidence I have reviewed as to the parties’ respective NFP statements, the potential impact of the several litigations, the agreements between Debbie and Johanna and the undertaking from Johanna, satisfy me that there will be a substantial equalization, of some 1.3 million dollars at least, due to Johanna. If Johanna recovers from Henry in the other litigation, she will obtain the funds that way and will give the appropriate credit. If Debbie recovers from her father, the agreement will come into play. I have already observed that the pre-judgment interest will nearly double the amount. It appears to me that there is no realistic chance that an advance of half the anticipated minimum equalization, plus interest, would exceed the ultimate payment due from Henry to Johanna in any event of these actions.
[42] It was submitted that Johanna has not demonstrated need. She has not been able to state what she has done with substantial funds received by her over the past ten years, apart from funding her daughter Debbie in an amount of perhaps $300,000. But Johanna has spent nearly a million dollars on these litigations. Some of that has come by loans from her son- in-law, Debbie’s husband, who no doubt has also contributed to his wife’s costs. There are several hundred properties in Henry’s portfolio and the plaintiff needs to value them to arrive at her version of Henry’s NFP. Unquestionably there will be enormous expense involved in that exercise and the further discoveries and other preparation that will take place leading up to trial. She should not have to depend upon her son-in- law’s resources. The situation is not analogous to a shareholder funding the litigation of his company. I am satisfied that Johanna has a reasonable need for an advance of funds to enable her to carry on these actions and relieve the burden her son-in-law is carrying for her.
[43] These former spouses separated in 1988 or 1989, depending on whose pleadings you read. It is now 2001. In earlier reasons I have described Henry as ‘stonewalling’ on disclosure of his assets. If there is uncertainty as to the true scale of his assets after all those years, it can be traced directly to his failure to disclose from the outset, a decade ago, what those assets were. He has been able to continue to control and benefit from most of Johanna’s share of their family assets for over a decade. Not only have the resources available to the parties been hugely unbalanced, but the situation has given Henry an incentive for delay in making disclosure and moving toward the ultimate resolution of the property issues. In my view, these are circumstances such that fairness requires some relief to Johanna at this time.
[44] Accordingly, it is ordered that Henry make a payment to Johanna, as an advance against equalization, in the amount of $700,000. In view of the lengthy withholding of information involved, and the consequent delay in quantifying the equalization amount, there should be interest at 8 per cent from January 1, 1990 until payment. The rate and start date for interest are for the purposes of this order only and are subject to adjustment by the trial judge. As a condition of this order, Johanna and Debbie will undertake in writing to the court that they will not alter or terminate the agreements and undertaking referred to herein without the consent of the court on notice to Henry.
[45] In view of the order as to equalization, it is not necessary to consider the submissions made in the alternative as to an order for interim disbursements.
[46] Johanna will have her costs of this motion. Submissions as to these may be made in writing.
Motion granted.