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by Daniel Gloade on January 6, 2014

In Fleming v Fleming 2013 ONSC 7634 the Husband and Wife signed a Separation Agreement.  They agreed that each of them would have equal shares in the four corporations they owned.  Both parties needed to sign off on all major decisions.  In the Separation Agreement, it states that one would buy out the other if they could not get along.  The Separation Agreement did not provide details on how the “buy-out” would work, however.

During a Settlement Conference, the Honourable Mr. Justice Tausendfreund ordered that the matrimonial proceeding be adjourned until the issues of the corporate buy-out could be resolved  The buy-out would be decided by the parties  bringing a new, separate Application under the Ontario Business Corporations Act.

The Husband brought a motion to to the Divisional Court of Justice appeal this interlocutory (temporary) Order.  He argued that the Order prevented him from having his “day in court”.  The Honourable Justice J. M. Johnston, of the Divisional Court, held that the Family Law Act and the Divorce Act did not have the proper tools to determine the best method of dividing the corporations.  Also, the matrimonial proceeding was delayed but not dismissed so the Husband did not lose his right to a day in court.  Justice Tausendfreund was simply providing a format to determine the issues quickly and property.

Would it be better if Family law and non-family law issues were tried together?  The Honourable Madame Justice Kiteley J. revealed several practical considerations in the case of Kozicki v. Kozicki, 2013 ONSC 8005. Her comments are quoted in full:

 “As indicated above, the Applicant had started an action against the Respondent, her sister, and her mother as estate trustee for her father as a result of transactions involving the former matrimonial home. On November 7th, counsel in the divorce action agreed that the civil action and the matrimonial action should be “tried together”. In the course of hearing submissions from counsel, it was apparent that they had not considered the logistics associated with that agreement such as: would the two actions proceed independently with respect to examinations for discovery or questioning, other disclosure and motions, if any, and be joined only at trial? Would the pleadings in both actions remain intact or would fresh pleadings be created that incorporated all of the allegations? What would the timetable be for completing the pleadings since, as of November 7, 2013, the Applicant had not yet filed a Reply to the Amended Answer? Were the other defendants in the civil action represented? Was it necessary that they be consulted before finalizing the order that the actions be “tried together”? Would the civil action be heard first or would all of the evidence be heard relevant to all of the issues?”

Perhaps the best solution is to have two concurrent proceedings.  To combine the proceedings causes many procedural problems.  To hear the issues consecutively could cause considerable delay.  If necessary, the judge in the matrimonial dispute could set the trial date far in advance so that the other issue are resolved.  In the meantime, the parties can have an Order in place for issues such as support and the preservation of assets.

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