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Rare Remedies for Big Money Cases

by Daniel Gloade on August 3, 2016

The case of Foulidis v Foulidis, 2016 ONSC 4819 deals with a matrimonial dispute involving millions of dollars.  You can read the details here.

In this case, the Mother had virtually no income and cared for the remaining “child” of the relationship.  The other offspring were now adults and lived outside of the home.  She resided in the matrimonial home and had no job or transferrable job skills.

The Father claimed that he was earning about $70 000.00.  He recorded a debt of approximately $3 million to Revenue Canada but had no documents from that agency confirming this allegation.

The Mother wanted several things  First, she wanted the Court to appoint a Receiver to control and preserve the Father’s assets.    She cited section 101 of the Courts of Justice Act.  You can read it here.

She argued that she would lose the value of the matrimonial property to Revenue Canada otherwise.

The Honourable Justice C. Horkins reviewed the law regarding appointing Receiver.  Essentially it states

  1. This requested remedy should be granted rarely;
  2. there must be strong evidence that the [Requester’s] right to recovery is in serious jeopardy;
  3. when deciding to grant this remedy, consider both the conduct of, and effect on the parties;
  4. the judge must also consider the nature of the property and the rights and interests of all parties in relation;
  5. Balance the harm to the Requester in not granting the request to the harm of the Defender in granting the request;Generally the balance is in favour of the requestor if
    1. there is a strong case of fraud
    2. the Requester’s right of recovery is in serious jeopardy.
  6. the test for granting a Receiver is as follows;
    1. Make a preliminary assessment if there is a credible argument for this remedy;
    2. Would the requestor suffer irreparable harm if the Receivership is not granted?  Irreparable harm means

the nature of the harm, not the magnitude of the harm;

the harm must be clear and not speculative;

 

Justice C Horkins held that there was no real proof that the Father owed Revenue Canada so much money and declined to appoint a Receiver at this time.

Justice Horkins appointed one expert to review the Father’s financial situation and provide better evidence of the Father’s assets and debts.  He sited, as his authority, section 20.1(3) of the Family Law Rules.

You can read it here.

Since the Father had access to money he was ordered to pay the expert’s retainer but was free to claim 1/2 of the amount back at the end of the trial.

Finally, Justice Horkins ordered the Father to pay $25 000 towards the payment of the Mother’s lawyer.  He used section 24(12) of the Family Law Act.  You can read it here

The test for deciding whether such an Order is appropriate is as follows:

  1. The discretion should be exercised to ensure all parties can equally provide or test disclosure, make or consider offers or possible go to trial. Simply described, the award should be made to level the playing field.
  2. An order under section [sic] 24(12) should not immunize a party from cost awards. The order is to allow the case to proceed fairly and should not be such that a party feels a license to litigate.

Certainly the proof of the necessity of interim disbursements would be critical to the successful claim. The claimant must clearly demonstrate that the disbursements are necessary and reasonable given the needs of the case and the funds available. In particular, if an expert is the subject of a requested disbursement, the claimant must demonstrate there is a clear need for the services of said expert.

The claimant must demonstrate that he or she is incapable of funding the requested amounts.

The claim or claims being advanced in the case must be meritorious as far as can be determined on the balance of probabilities at the time of the request for disbursements.

Justice Horkins felt that the Mother’s case seemed to have merit.  It was a highly complex case and the Father controlled all of the money.  This partial payment of the retainer was to level the playing field.

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