Hum v. Hum, 2014 NSSC 428

SUPREME COURT OF Nova Scotia FAMILY DIVISION Citation: Hum v. Hum , 2014 NSSC 428 Date: 2014-11-18 Docket: 1201-068011 ; SFH-D 091961 Registry: Halifax Between: Debra Frances Hum Petitioner v. Norman George Hum Respondent LIBRARY HEADING Judge: The Honourable Justice Elizabeth Jollimore Heard: November 13, 2014

Summary: Application for disclosure of corporate materials and to compel husband to generate information and encourage couple’s children to cooperate in the production of materials to wife. Relevance challenged. Corporate records and documents provided to company required to be produced. Costs of $750.00 in the cause in any event awarded to the husband. Key words: Costs, Civil Procedure Rules (2009) – Rule 15, Family law, Matrimonial Property Act , disclosure, relevance Legislation: Matrimonial Property Act, R.S.N.S. 1989, c. 275, subsection 2(a), clauses 4(1) (

d) and (

e) Nova Scotia Civil Procedure Rules

(2009) Rules 59.28(1), Rule 59.19(4), Rule 15 Federal Child Support Guidelines , SOR-97/175, subsections 3(2)(

a) and (

b) THIS INFORMATION SHEET DOESN’T FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET . SUPREME COURT OF Nova Scotia FAMILY DIVISION

Citation: Hum v. Hum , 2014 NSSC 428 Date: 2014-11-18 Docket: 1201 - 068011 ; SFH-D 091961 Registry: Halifax Between: Debra Frances Hum Petitioner v. Norman George Hum Respondent Judge: The Honourable Justice Elizabeth Jollimore Oral Decision: November 18, 2014 Written Release: December 2, 2014 Counsel: Kay L. Rhodenizer, for Debra Hum Sheree L. Conlon and Leah Grimmer for Norman Hum By the Court (orally): Introduction [ 1 ] This is a motion by Debra Hum for disclosure from Norman Hum, Pamela MacIntyre, and for costs. Ms. Hum filed her motion two months ago. [ 2 ] Ms.

MacIntyre has agreed to disclose the information requested of her. [ 3 ] Mr. Hum’s counsel has itemized more than forty different items (information, documents or statements) requested in this motion. Many of the requests were never made prior to this motion being filed. He has already agreed to disclose much of the information requested of him. [ 4 ] At the conclusion of the half day hearing, it appeared that Mr. Hum was contesting only five of Ms. Hum’s requests:

a) the request for copies of all Newtech’s bank and investment account statements from May 1, 2008 and January 1, 2008, respectively, forward;

b) the request that he swear an affidavit setting out all vehicles (other than the Jetta driven by Ms. Hum) that he or any of the couple’s children drove from September 2007 up to the current date, whether such vehicles were leased or owned, wholly or partially paid for by Newtech, attaching documents to show everything Newtech has paid for each vehicle including, but not limited to, purchase cost, lease cost, license, insurance, registration and repairs;

c) the request that he provide all receipts that he has or can access to establish what he paid for new appliances which are referred to in Exhibit C to an affidavit he swore on June 4, 2014 and, if no receipts are available, excerpts from any warranty, operation or

instruction booklets which show the model years of these appliances;

d) with regard to a debt owed by Mr. J. Manders, information to show the dates of the debts owed by Mr. Manders or any companyassociated with him, that were forgiven by Newtech in exchange for renovations done to the matrimonial home, all bankruptcydocuments sent to Newtech or Mr. Hum in connection with the bankruptcy of Mr. Manders or any company associated with him, and allknown contact information for Mr. Manders; and

e) the request that he advise the couple’s children that he does not object to any of them producing information of any kind related totheir financial circumstances from January 1, 2007 up to the date Debra Hum makes this request of them. Disclosure in family law - generally [5] The Supreme Court of Canada has spoken strongly in condemning non-disclosure.

In Leskun, 2006 SCC 25 at paragraph 34, thecourt quoted the comments of Justice Fraser in Cunha, (BC SC), describing the non-disclosure of assets as “thecancer of matrimonial property litigation”: discouraging settlement, promoting inadequate settlement, increasing the time and expense oflitigation, prolonging the stress of battle that may lead parties to capitulate “with only a share of the assets they know about, taking withthem the bitter aftertaste of a reasonably-based suspicion that justice was not done.” These remarks came in response to Mr.

Leskun’sobjection that the chambers judge erred in calculating his net worth: the chambers judge had drawn adverse inferences against Mr.Leskun, based on apparent contradictions in the financial information Mr. Leskun had provided. On behalf of the Supreme Court,Justice Binnie described these circumstances as a “poor platform from which to launch an attack against the trial judge’s conclusionregarding his assets and liabilities”. [6] In Rick v.

Brandsema, 2009 SCC 10 at paragraph 47, on behalf of the Supreme Court, Justice Abella described a “duty to makefull and honest disclosure of all relevant financial information”, saying that this is necessary to protect the integrity of agreementsnegotiated in the “uniquely vulnerable circumstances” following the breakdown of a family. [7] In addition to these authorities, Ms. Hum referred me to Terry v.

Francis, 2004 NSCA 118 and Cameron, 2014 NSSC 224. [8] In the former, the Court of Appeal addressed an application to vary child support in December 2003 which was based on Mr.Francis’s April 2003 Statement of Financial Information, which did not have attached any income tax information for 2002, or astatement of earnings or a statement from his employer, or documentation relating to his student loan.

At paragraph 9, Justice Cromwellsaid that “only in rare circumstances should a party applying to reduce a child support obligation be heard absent that party making fulldisclosure.” He noted that the absence of disclosure was unfair to Ms. Terry because it prevented her from responding fully to thevariation application.

Justice Cromwell adopted Justice Goodfellow’s comment in MacLean, 2002 NSSC 5 at paragraph 9, that, “Failureof a party to [disclose] will, in most circumstances, result in adverse consequences.” [9] In Cameron, 2014 NSSC 224 at paragraph 20, Justice Forgeron drew attention to the consequences of a party’s failure todisclose: “deeming of income and assets, and significant cost awards”. [10] In each of these decisions, and many others, the failure to disclose carries significant consequences for the party who does notmeet this obligation.

The Civil Procedure Rules [11] In the Family Division, Civil Procedure Rules 59.19 to 59.28 speak specifically to disclosure. These Rules identify the particulardocuments that each party, and others, must disclose when particular claims are made. These Rules also explain the procedural optionsfor obtaining disclosure from parties and non-parties, in response to a direction and an order. [12] Rule 59.28(1) provides that

Part 5 – Disclosure and Discovery applies to proceedings in the Supreme Court (Family Division),with certain exceptions. One such exception is found in Rule 59.28(1)(a), which repeats the explicit language of Rule 59.19(4): that is,Rule 15 - Disclosure of Documents and Rule 16 - Disclosure of Electronic Information do not apply, unless a judge orders otherwise. Excluding Rules 15 and 16 of

Part 5, leaves me to consider Rule 14 – Disclosure and Discovery in General, Rule 17 – Discovery of OtherThings, Rule 18 – Discovery, Rule 19 – Interrogatories, Rule 20 – Admission and Rule 21 – Medical Examination and Testing. [13] The focus of the parties’ submissions has been relevancy. Mr. Hum’s primary argument is that the requests are for materialswhich are not relevant. In some cases, he challenges the form of the request, such as the request that he be ordered to advise the childrenthat he doesn’t object to any of them producing information requested by their mother. The test of relevance [14] Rule 14.01(1)(

a) and (

b) require determination of the relevancy of the document, electronic information, other things orinformation by “assessing whether a judge presiding at the trial or hearing of the proceeding would find [it] relevant or irrelevant.” InBrown v. Cape Breton Regional Municipality, 2011 NSCA 32, Justice Bryson affirmed the reasons of Justice Moir in Saturley v.

CIBCWorld Markets Inc., 2011 NSSC 4 at paragraph 46, that the determination of relevancy “must be made according to the meaning ofrelevance in evidence law generally” saying “the determination is made on the pleadings and evidence known to the Judge when theruling is made.” [15] I now turn to each of the five requests. Newtech’s bank and investment account statements from May 1, 2008 and January 1, 2008, respectively, forward

[ 16 ] Mr. Hum is employed by a company, Newtech, in which he is the sole shareholder. According to the bank records Ms. Hum has seen, her husband sometimes used company funds to pay for items which benefited their family, such as memberships at the Waegwoltic Club and the Ashburn Golf Club. Mr. Hum’s testimony at an earlier interim motion showed that the company has provided at least one vehicle for Mr. Hum’s personal use. [ 17 ] There are claims for retroactive and prospective child and spousal support. The prospective child support claim will be determined on the basis of subsection 3(2) of the Federal Child Support Guidelines , SOR-97/175 . Both clause 3(2)(

a) and (

b) make the determination of Mr. Hum’s income relevant, bringing

section 18 into consideration. Clause 3(2)(

b) requires me to look at his financial ability to contribute.

The prospective spousal support claim requires considering his means and ability to pay. “Means” are greater than earnings or income and may include the ability to have personal expenses paid by another entity or on a tax-deferred basis through shareholder loans. [ 18 ] Additionally, a company’s investment accounts, if in excess of the company’s operating needs, may provide means to finance spousal support payments. [ 19 ] A claim for retroactive child support includes consideration of the child’s circumstances at the time support ought to have been made and the current time.

His means are relevant to all these considerations. [ 20 ] This divorce includes an application to divide property. The Matrimonial Property Act , R.S.N.S. 1989, c. 275 presumptively excludes business assets from division in clause 4(1) (e). “Business assets” are defined in subsection 2 (

a) in such a way that money in an account which is “ ordinarily used for shelter or transportation or for household, educational, recreational, social or aesthetic purposes” is a matrimonial asset. A review of Newtech’s bank accounts is relevant to determining whether the accounts are matrimonial assets. [ 21 ] I conclude that Newtech’s bank account statements from May 1, 2008 forward and Newtech’s investment account statements from January 1, 2008 forward are relevant and shall be disclosed. An affidavit detailing information about the vehicles [ 22 ] Mr.

Hum did not dispute that information about the vehicles is relevant. He said that the company’s general ledger, which he has volunteered to provide in electronic form, will provide information about the vehicles, and he argues that Rule 15.02 requires him: to make diligent efforts to become informed about relevant documents he has; to search for relevant documents he actually possesses, sort them, and disclose them or claim privilege for them; and to acquire and disclose relevant documents he controls but doesn’t possess. He argued that this request by Ms.

Hum exceeds the duty imposed on him by the Rule . [ 23 ] The information Ms. Hum seeks is contained in materials I have already ordered Mr. Hum to provide, and I do not order him to prepare such an affidavit. Receipts for appliances referred to in his June 4, 2014 affidavit or excerpts from any warranty, instruction or operating booklets showing the appliances’ model years [ 24 ] The Hums separated in 2007. Mr. Hum and the children remained in the matrimonial home, which he renovated a few years ago, following the separation.

There has been an interim division of property, but a final division has not been effected. One issue in this division will be the value of the home. Ms. Hum intends to have the home appraised and says her appraiser will be trying to fix the current value of the home, as if it had not been renovated. This approach reflects the exclusion of real and personal property acquired after separation from a division of assets, as required by clause 4(1) (

d) of the Matrimonial Property Act . [ 25 ] Ms. Hum was unable to explain how knowing the date on which the appliances were purchased (shown on the receipts or determined by the date of their make and model) would assist her appraiser in valuing the home. Certainly, the value of the matrimonial home is relevant, but the requested information has not been shown to assist in determining this piece of relevant information. Mr. Hum is not ordered to provide these documents. The J. Manders’ debt and bankruptcy [ 26 ] Ms. Hum sought information about a debt owed by Mr. J. Manders or a company associated with him.

She wanted to know the date the debt (or debts) were incurred, when Mr. Manders’ bankruptcy occurred and his contact information. She wanted to know about renovations done to the matrimonial home in exchange for repayment or writing off this debt. She wanted copies of the bankruptcy documents provided to Mr. Hum or his company. She wanted to know, for example, whether the renovations were posted to the Newtech ledger as a repayment. [ 27 ] Ms. Hum argued that this information was relevant because this was a circumstance where Mr.

Hum had derived a personal benefit from Newtech: renovations were done to the matrimonial home at no cost since Mr. Manders owed money to Newtech. [ 28 ] Mr. Hum said that Mr. Manders’ company owed Newtech between $17,000.00 and $18,000.00. He said that Mr. Manders, who was a friend, felt badly when his company declared bankruptcy and this debt was included in the bankruptcy. Because he felt badly, according to Mr. Hum, Mr. Manders agreed to help with the renovations on the Hums’ matrimonial home. Mr. Hum paid for the materials and has provided Ms. Hum with those receipts he retained and has been able to locate.

Mr. Hum believed the value of Mr. Manders’ services did not reflect the amount owed to Newtech and said the company did not forgive the debt, but the bankruptcy made this debt uncollectible. Mr. Hum said he could recall no circumstance where he received personal services in exchange for forgiving money owed from a third-party to Newtech. [ 29 ] I understand that Newtech’s financial statements and general ledgers are being provided to Ms. Hum. They will disclose the debt and how it was recorded by Newtech. Mr. Hum shall provide a copy of the bankruptcy documents which Newtech received from Mr. Manders’ company.

No other information or documents is required.

Mr. Hum advise the couple’s children that he doesn’t object to any of them producing information in response to their mother’s request [ 30 ] Mr. Hum doesn’t dispute the relevance of information from the children. Ms. Hum has not shown that the children are unwilling to provide information to her. Her evidence is that she asked only one child for documents and these documents were not in the child’s possession. The child had given the documents to her father already, and Mr. Hum disclosed them through his counsel. If Mr. Hum has any of the documents belonging to the children that Ms.

Hum seeks, I order him to disclose those, but I do not require him to communicate to the children with regard to their mother’s requests. [30] All disclosure pursuant to this decision shall be provided within forty-five days of today’s date. Costs [ 31 ] Of the five contested requests, Ms. Hum was – at very best - successful in three and then not to the extent that Ms. Hum requested in two of them. The motion required a half day hearing. It would be generous to describe success as “mixed” in these circumstances. Ms.

Hum asks me to give particular weight to her success in obtaining disclosure of Newtech’s bank accounts, saying they are “very important”. At this point, I have concluded those documents are relevant to the pleadings based on the evidence I have before me. I cannot conclude that they are “very important”. Their importance will be weighed at trial. Mr. Hum was the more successful party. I award him costs of $750.00 payable in the cause in any event. _________________________________ Elizabeth Jollimore, J.S.C.(F.D.) Halifax, Nova Scotia