Ontario Court of Appeal recognizes letters rogatory California court issued in divorce case

Information sought was relevant to issues in California proceedings, Ontario judge says

Ontario Court of Appeal recognizes letters rogatory California court issued in divorce case

The production of documents necessary to assess responsibility for family law obligations was a normal part of the disclosure process and was not a “fishing expedition,” the Ontario Court of Appeal said in a recent case.

Kerry and Edie Adler had divorce proceedings in California’s Superior Court for Los Angeles. Mr. Adler – the respondent in this case – was a sole or majority shareholder in four corporate appellants. He also had an interest in other corporations, including a 33-percent interest in SkyPower, a Toronto corporation.

For the divorce case, Ms. Adler made multiple attempts to get financial information about Mr. Adler’s financial interests in the corporations. She alleged that he used these corporations to shield his income and assets.

The California court made orders requiring disclosure, with which Mr. Adler did not comply. It also issued letters rogatory, which sought production from the corporate appellants and from Mr. Adler’s personal assistant. Ms. Adler filed an application with the Ontario Superior Court of Justice to enforce the letters rogatory.

The Superior Court judge ordered the recognition of the letters. The application judge found that the information sought was related to the nature, scope and extent of Mr. Adler’s business interests in the various corporations and was thus relevant to the issues in the California proceedings. Production of this information was consistent with Ontario family law, the judge said.

Letters rogatory rightly recognized

In Adler v. Deloitte Touche Tohamtsu, 2022 ONCA 855, the Ontario Court of Appeal dismissed Mr. Adler’s appeal.

Regarding the procedural aspects of the case, Mr. Adler argued that the application should not have moved forward since he was not a party. The appellate court ruled that, even though Mr. Adler was not a formal respondent in the underlying application, he had standing in California to make submissions on his own behalf and on behalf of the corporate entities and had standing in the Ontario application.

Next, Mr. Adler claimed that Skypower was not served with the application material. The appellate court rejected this argument. It noted that Skypower did not appeal the application judge’s order and that Mr. Adler, Skypower’s chief executive officer, was served with the application on the corporation’s behalf.

The Court of Appeal then tackled three substantive aspects of the case. First, the appellate court held that the information sought was clearly relevant and should be produced in Ontario. Second, the appellate court rejected Mr. Adler’s characterization of the application judge’s order as a “fishing expedition.”

Third, the appellate court determined that the application judge’s analysis did contradict the ruling in Actava TV, Inc. v. Matvil Corp., 2021 ONCA 105. According to the Court of Appeal, the judge carefully considered the record, found no public policy reason to refrain from showing deference to the California court, independently assessed whether the requests complied with Ontario’s legal requirements for enforcement, and meaningfully addressed the criteria for granting letters rogatory.

 

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