Court File and Parties

COURT FILE NO.: FS-17-419990 DATE: 20230621 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Yuan Xiang Ding, Applicant AND: Hang Chen, Respondent AND Toronto Employment & Social Services (“TESS”), Assignees of Support Order AND Ministry of Children, Community and Social Services (“MCCSS”), Assignees of Support Order

BEFORE: M. Kraft, J.

COUNSEL: Victor Pilnitz, for the Applicant No one appearing for the Respondent Jean Hyndman, for the Assignees of Support Order, in writing

HEARD: June 20, 2023

Endorsement

Nature of the Motion

[1] This was the second part of a contempt motion heard on June 8, 2023 by Czutrin, J., namely, for me to determine the penalty to be imposed on the respondent, Hang Chen (“the husband”), given that he was found in contempt of court. The applicant, Yuan Xiang Ding (“the wife”) seeks an order that the husband pay her a penalty of $10,000 and her costs of today’s motion in the sum of $10,324.75.

Issue to be Decided

[2] The only issue before me today is to determine whether the penalty sought by the wife is appropriate since the husband has been found in contempt.

Dismissal of the Husband’s Motion to Change

[3] On June 1, 2023, I made the following order:

a. I dismissed the husband’s Motion to Change the order of Paisley, J., dated November 25, 2017. b. I ordered the husband to seek leave of the court before he brings any further Motions to Change and prior to seeking leave, he is to pay the outstanding costs orders made by this court and deliver the court ordered financial disclosure. c. I ordered the husband to pay costs of the Motion to Change to the applicant (“the wife”), fixed in the sum of $17,8753.85, to be enforceable by the Family Responsibility Office (“FRO”) as a support order. d. I ordered the husband to pay costs to the MCCSS and TESS in the fixed sum of $500, to be enforceable by the FRO as a support order.

[4] The husband did not attend the wife’s motion to dismiss his Motion to Change on June 1, 2023, despite having been duly served.

Contempt Motion

[5] On June 8, 2023, the wife’s contempt motion was heard by Czutrin, J. The husband did not attend the contempt motion despite having been served with the motion material and my Endorsement/Order dated June 1, 2023. Czutrin, J. found the husband to be in contempt of court on account of his non-compliance with the orders of Bingham, J., dated February 1, 2023 and my order, dated June 1, 2023. The husband was ordered to pay the wife all outstanding costs to date, and, within 30 days, he was to serve and file:

a. A form 13.1 Financial Statement with all required attachments; b. His 2017, 2018, 2019, 2020, 2021 and 2022-Income Tax Returns; c. His 2021 and 2022 Notices of Assessment and Reassessment, if any; d. Proof of his annual income from all sources for 2022; and e. His most recent record of employment. [1]

[6] Czutrin, J. gave the husband until July 10, 2023, to purge his contempt by complying with the orders of Bingham, J., dated February 1, 2023 and my order, dated June 1, 2023, and to attend at court today. The parties were ordered to return before me today, to update the court and to make further orders as may be required. Costs of the motion before Czutrin J. on June 8, 2023 were reserved.

Background Facts

[7] Since a finding of contempt against the husband has already been made, I need not go through the facts of his breaches of court orders in significant detail. However, a brief review is necessary for context.

[8] The litigation history can be summarized as follows:

a. On April 7, 2022, the husband brought a Motion to Change the order of Paisley, J., dated November 29, 2017 (“the 2017 order”). b. The 2017 order required the husband to pay the wife retroactive child support in the sum of $801 a month; retroactive spousal support of $1,195 a month; and an equalization payment of $129,757. The 2017 order was based on the husband having an imputed income of $90,000 a year. c. The husband appealed the 2017 order which was dismissed by the Court of Appeal on April 3, 2019. He was ordered to pay costs to Legal Aid Ontario, fixed in the sum of $5,000. d. On June 27, 2022, the wife served the husband with a Request for Information, seeking financial disclosure that ought to have been served with his Motion to Change. e. On July 5, 2022, the first conference for the Motion to Change took place before a Dispute Resolution Office (“DRO”). f. Both parties were represented at the DRO conference, as was Ms. Hyndman, as counsel for TESS and MCCSS. g. The Endorsement of the DRO confirms that the husband’s support arrears arising from the 2017 order exceeded $142,000 as at February 2022; the husband had not complied with several costs’ orders totalling almost $20,000; and he had not paid the equalization payment to the wife of almost $130,000. The DRO specifically commented that basic disclosure remained outstanding from the husband (i.e., Income Tax Returns) and that the husband had failed to produce evidence to explain why he had not paid the support he owes pursuant to the 2017 order, or the costs and the equalization payment he owed to the wife. h. The Endorsement of the DRO also sets out that it was discussed with the husband that since it was his Motion to Change, he had the onus to provide adequate evidence to establish that the relief he was seeking is justified; the obligation to provide financial disclosure was automatic; and that it was problematic that basic disclosure remained outstanding from him since it prevented the parties from being able to engage in meaningful settlement discussions during the case conference. i. The Screening Report from the DRO provides that the husband agreed to provide responses to the wife’s Request for Information by July 8, 2022 and to provide an offer to settle to the wife and the Assignees by August 15, 2022. A case conference before a Judge was scheduled for October 14, 2022. j. The husband failed to provide the answers to the wife’s Request for Information by July 8, 2022; k. On July 13, 2022, the wife’s counsel wrote to the husband’s counsel, Mr. Nandre, seeking disclosure from the husband. Mr. Nandre promised the disclosure by July 18, 2022. On July 18, 2022, Mr. Nandre wrote to Mr. Pilnitz, making an offer to settle and advised that the purpose of the Motion to Change was to bring the facts of the husband to light and let a court decide whether a change was warranted. The husband did not produce the disclosure on July 18, 2022. l. On July 25, 2022, the wife’s counsel wrote to Mr. Nandre confirming that the test for a Motion to Change was for the husband to demonstrate that a material change in circumstances had occurred since the 2017 order was made, justifying a change in the order. Mr. Pilnitz asked the husband to produce a Form 13.1 Financial Statement, since he had only produced a Form 13 Financial Statement, along with a copy of the husband’s resume, his job search records, his income tax filings from 2017 and 2021 and to explain why he was being supported by social assistance. m. The October 14, 2022 case conference did not take place. It was adjourned to February 1, 2023. n. On February 1, 2023, the parties attended a case conference before Bingham, J. The wife and her counsel were present, as was Mr. Nandre and Ms. Hyndman. The husband was not present. At this conference, the wife asked for the husband’s Motion to Change to be dismissed with costs on a full indemnity basis since he had failed to provide disclosure with his initial materials and failed to abide by his undertaking at the DRO conference to provide disclosure by July 8, 2022. He had also ignored three Requests for Information served on him by the wife. o. Bingham, J. ordered the husband to a) serve and file a Form 13.1 Financial statement, with all required attachments; b) serve and file his 2017, 2018, 2019, 2020 and 2021 income tax returns; c) serve and file his 2021 Notice of Assessment and Notice of Reassessment; d) provide proof of his annual income from all sources for 2022; e) to produce his most recent record of employment; and f) pay costs of the conference to the wife in the sum of $1,000, and costs to the TESS and MCCSS in the sum of $250, to be paid within 14 days. The husband did not comply with this disclosure order, nor did he pay these costs. p. In early March, 2023, the wife brought a motion to dismiss the husband’s Motion to Change. Mr. Nandre served the husband with the motion materials by email and Xpress post. q. On April 13, 2023, Mr. Nandre brought a motion to be removed as the husband’s solicitor of record. Kristjanson, J. adjourned the motion to April 20, 2023 and ordered Mr. Nandre to serve the sealed affidavit setting out the basis for the relief he sought on the husband. The wife’s motion to dismiss the husband’s Motion to Change was adjourned to be heard on or after June 1, 2023. r. On April 25, 2023, I made an order to remove Mr. Nandre as the husband’s solicitor of record. I ordered him to serve the motion materials to dismiss the husband’s Motion to Change and the Contempt Motion brought by the wife (returnable on June 8, 2023) on the husband by email and registered mail. Mr. Nandre served these materials on the husband along with a copy of my Endorsement, dated June 1, 2023. Ms. Hyndman appeared on the motion on June 1, 2023 and supported the wife’s motion to dismiss the husband’s Motion to Change. s. As indicated above, on June 1, 2023, I dismissed the husband’s Motion to Change and on June 8, 2023, Czutrin, J. found the husband to be in breach of the orders of Bingham, J., dated February 1, 2023 and my order, dated June 1, 2023. As such, the husband was found to be in contempt of court. The husband was given until July 10, 2023 to purge his contempt. He did not do so. The second part of the contempt motion was adjourned to July 19, 2023. t. On June 13, 2023, a corrected Endorsement of Czutrin, J. was released, changing the motion date to June 20th, 2023 and not July 19, 2023, and providing that Ms. Hyndman’s position was to be presented to the court in writing. u. On June 15, 2023, the position of the Assignees on the wife’s Motion for Contempt, was served and filed. Given the outcome of the wife’s motion to dismiss the husband’s Motion to Change, the Assignees take no position on the Contempt motion, since the dismissal of the Motion to Change resulted in no change in the arrears owing to the Assignees; the payor being required to provide the disclosure and pay costs prior to bringing and further Motions to Change. As a result, the Assignees seek no relief on the contempt motion.

The Law

[9] Rule 31 of the Family Law Rules, O. Reg. 114/99 (“FLRs”) governs motions for contempt of court orders in family law proceedings.

[10] Given that Czutrin, J. made a finding of contempt, the only issue before me is to determine what the appropriate penalty is arising from his contempt.

[11] Rule 31(5) of the FLRs provides that if the court finds a person in contempt of the Court, it may order that the person,

a. Be imprisoned for any period and on any conditions that are just; b. Pay a fine in any amount that is appropriate; c. Pay an amount to a party as a penalty; d. Do anything that the Court considers appropriate; e. Not do what the Court forbids; f. Pay costs in an amount decide by the Court; and g. Obey any order.

[12] The wife seeks an order that the husband pay her a penalty of $10,000 and her costs of $10,324.75, which includes the time spent before Czutrin, J.

[13] In Cassidy v. Cassidy, 2010 ONSC 2400, Price J. at paragraph 9 states:

[9] Courts have stated that the sanction imposed upon a finding of contempt must be significant and of such consequence as to ensure the administration of justice is not brought into disrepute. As noted in Itrade Finance Inc. v. Webworx Inc., “others who may be tempted to flout an Order of this Court and frustrate its process must appreciate that they cannot benefit from such conduct.”

[10] Sentencing in contempt proceedings, particularly in family law proceedings, should be comprised of two components. It should be restorative to the victim of the contempt and punitive to the contemnor. To accomplish the former requires the sentence to correlate to the conduct that produced the contempt and to accomplish the latter requires the sentence not to reflect a marked departure from those imposed in like circumstances. See Germia v. Harb.

[14] In Cassidy, Price, J. summarized the applicable sentencing principles in contempt motions as follows at paragraph 13:

[13] In determining an appropriate sentence in the present case, my considerations have included the following:

(a) the available sentences; (b) the proportionality of the sentence to the wrongdoing; (c) the similarity of sentences in like circumstances; (d) the presence of mitigating factors; (e) the presence of aggravating factors; (f) deterrence; (g) the reasonableness of a fine; (h) the reasonableness of incarceration.

i) Available Sentences

[15] The available remedies when a litigant has not purged his contempt are a suspended sentence, a fine or incarceration. Of the sentencing options, the wife seeks a fine and, in the circumstances, I find that that is the most appropriate sentence.

ii) Proportionality

[16] For the sentence to be appropriate it must be proportionate to the gravity of the wrongdoing. In this situation, the husband brought the Motion to Change on April 27, 2022. He did not provide the appropriate financial disclosure when he initiated the Motion and despite agreeing to do so at the DRO conference, he did not do so. This resulted in the wife having to make four court attendances, as well as the Assignees. He has never paid the wife the equalization payment of close to $130,000 ordered in 2017. His support arrears are more than $150,000 and he is in costs arrears of close to $20,000. His breaches total close to $300,000. Having initiated the Motion to Change, he then withdrew from the process, thereby causing the wife significant legal fees due to his failure to meet his onus or provide basic financial disclosure.

iii) Similarity of sentences

[17] A sentence imposed on account of contempt should not be a marked departure from those imposed in like circumstances. As Price, J. stated in Cassidy, unfortunately, in the area of sentencing for contempt, the reported and unreported decisions are scarce.

[18] In Boucher v. Kennedy, Ferrier, J. imposed a fine of $30,000 after finding that the respondent had knowingly breached an order on numerous occasions over a two-year period. In that case, Ferrier, J. found the contempt to be “flagrant” and at paragraph 69 of his Reasons, he listed factors which the Court may consider when determining what sanction should be imposed, including:

a) whether the contemnor had admitted the breach; b) whether the contemnor has demonstrated a full acceptance of the paramountcy of the rule of law, by tendering a formal apology to the Court; c) whether the breach was a single act or part of an ongoing pattern of conduct in which there were repeated breaches; d) whether the breach occurred with the full knowledge and understanding of the contemnor that it was a breach rather than as a result of mistake or misunderstanding; e) the extent to which the conduct of the contemnor displayed defiance; f) whether the Order was a private one, affecting only the parties to the suit or whether some public benefit lay at the root of the Order; g) the need for specific and general deterrence; and the ability of the contemnor to pay.

[19] The husband has not admitted his contempt in this matter, nor did he offer an apology to the Court. Rather, he has refused to attend at Court despite knowing of the attendances. His contempt involved a multitude of breaches in terms of not paying the support ordered; not paying the equalization payment ordered; not paying costs ordered against him; not providing necessary and appropriate financial disclosure. I find that the husband’s breaches were deliberate, wilful, and not based on a misunderstanding or mistake concerning the various orders breached by him.

[20] The order was a private one, affecting the wife and their children.

[21] I agree with R.A. Blair, J. in Surgeoner v. Surgeoner, when he commented on the necessity of sanctioning contempt in family law proceedings in paras. 5-7 as follows:

5. No society that believes in a system of even-handed justice can permit its members to ignore, disobey, or defy its laws and its court’s orders at their whim because in their own particular view, it is right to do so. A society that countenances such conduct is a society tottering on the precipice of disorder and injustice.

6. The need for the sanction of contempt proceedings is of significant importance in the field of family law. There is an undertow of bitterness and sense of betrayal that often threatens to drown the process and the parties themselves in a sea of anger and “self-rightness”. In this environment it is all too easy for a spouse to believe that he or she “knows what is right”, even after a matter has been determined by the court, and to decide to ignore, disobey or defy that determination.

7. Those who choose to take this tack must know that it will not be tolerated.

[22] In Brar v. Dhinsa a wife was found in contempt for failing to file a financial statement and a summary of the carrying costs for the matrimonial home by a specific date. The court found that neither the wife nor her counsel took the production order seriously and she was fined $5,000 plus an additional $1,000 per month for every month she continued to delay, with costs of $4,000.

[23] In Heath v. Heath, DiTomaso, J. imposed a fine on the wife of $5,000 for her contempt of the Court’s order by entering the home and removing contents when the husband was away.

[24] Paragraph 31(5)(d) of the FLRs allows the court to “do anything else that it decides is appropriate” when a person is found in contempt. I agree with Vogelsang, J. in Roby v. Roby, when he said:

“This seems to me to confer on the court the broadest discretion and, in my view, would allow the court to order that a payment be made by the person found in contempt to the other party without there being any basis in restitution for such an order.”

iv) Mitigating Factors

[25] There were no mitigating factors put forward in this case.

v) Aggravating Factors

[26] There are many aggravating factors. The husband’s conduct was flagrant since the 2017 order. He did not comply with the 2017 order in any fashion. Support arrears accumulated and he did not bring a Motion to Change until 2022. When he did so, he failed to provide the necessary financial disclosure and he failed to meet his onus of demonstrating that a material change in circumstances had occurred. He gave a false undertaking to the DRO that he would provide disclosure and then failed to do so. As a result, four court appearances were necessary and the wife was put to tremendous legal fees while the husband has chosen to hide from the very proceedings he commenced.

vi) Deterrence

[27] The punishment or remedy for contempt is to serve as a disincentive to litigants who breach court orders. Accordingly, the sentence must attempt to repair the injury and denounce the conduct. Our legal system is impaired when court orders are ignored: Cassidy, at para [34].

vii) A fine

[28] The ability to pay a fine is a crucial consideration in determining its size. I am aware that the husband is in serious arrears of child and spousal support as well as having not paid the equalization payment to the wife or comply with costs orders. In this case, I am satisfied that the fine sought by the wife is a sufficient penalty of 10,000.

viii) Incarceration

[29] Incarceration is a sanction of last resort. The wife now is the person most affected by the husband’s contempt and the wife did not seek incarceration as a penalty.

ix) Conclusion

[30] In these circumstances, I am persuaded that a fine of $10,000 ought to be imposed on the husband for his contempt of court.

Costs

[31] Mr. Pilnitz has filed a Bill of Costs for the time period from March 6, 2023 to and including June 17, 2023, which totals $10,324.75, including of HST and Disbursements. The Bill of Costs removed the time for the conference before Bingham, J. where costs were ordered against the husband of $2,000 as well as the court attendances before Kristjanson J. when Mr. Nandre sought to be removed as solicitor of record for the husband. The Bill of Costs did include the 4.37 hours before Czutrin, J. on June 8, 2023, when the contempt motion was argued since Czutrin, J. reserved the costs of the attendance before him to today.

[32] Rule 24(1) of the Family Law Rules, O. Reg. 114/99 (“FLRs”) creates a presumption of costs in favour of the successful party, subject to the factors set out in r. 24: Beaver v. Hill, 2018 ONCA 840, at para. 10.

[33] Subject to the provisions of an Act or the rules of court, costs are in the discretion of the court, Courts of Justice Act, R.S.O. 1990, c. C.43., s.131.

[34] Modern costs rules are designed to foster four fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement, (3) to discourage and sanction inappropriate behaviour by litigants; and (4) to ensure that cases are dealt with justly under Rule 2(2) of the FLRs: Mattina v. Mattina, 2018 ONCA 867.

[35] While a successful party in a family law case is presumptively entitled to costs, an award of costs is subject to the factors listed in r. 24(11), the directions set out under r. 24(4) (unreasonable conduct), r. 24(8) (bad faith), r. 18(14) (offers to settle), and the reasonableness of the costs sought by the successful party: M. (A.C.) v. M. (D.), at paras. 40–43; Berta v. Berta, 2015 ONCA 918 at para. 94.

[36] The touchstone considerations of costs awards are proportionality and reasonableness: Beaver v. Hill, at para. 12. In Boucher v. Public Accountants Council (Ontario), at paras. 28-29, 37, the court held that costs must be fair and reasonable, and consistent with the reasonable expectations of the parties.

[37] To come within the meaning of bad faith in subrule 24(8), behaviour must be shown to be carried out with intent to inflict financial or emotional harm on the other party or other persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court. A misguided but genuine intent to achieve the ostensible goal of the activity, without proof of intent to inflict harm, to conceal relevant information or to deceive, saves the activity from being found to be in bad faith. The requisite intent to harm, conceal or deceive does not have to be the person’s sole or primary intent, but rather only a significant part of the person’s intent. At some point, a party could be found to be acting in bad faith when their litigation conduct has run the costs up so high that they must be taken to know their behaviour is causing the other party major financial harm without justification. S.(C.) v. S. (M.), at para. 17.

[38] On June 1, 2023, I found that the husband had engaged in “bad faith” conduct, as intended by rule 24(8). He continues to do so by deliberately not obeying court orders in this case, including orders to which he consented. His conduct led to the wife’s costs and the Ministry’s costs being increased, as they required multiple attendances and correspondence which was not properly answered. The way he has conducted himself in his Motion to Change has to have been known by him as causing the wife financial harm without justification.

[39] In these circumstances, I have no hesitation in finding that the wife is entitled to full recovery of her costs associated with this Contempt Motion, provided her costs were reasonable and proportionate.

[40] Mr. Pilnitz bills out at a rate of $600 per hour. I find the hours spent and the rates change reasonable in the circumstances. I find that the husband shall pay the wife’s costs of the Contempt motion in the sum of $10,324.75 and that these costs to be enforceable by the FRO as a support order within the meaning of s.1(1)(g) of the Family Responsibility and Support Arrears Endorsement Act, S.O. 1996, c.31.

ORDER

[41] This court makes the following order:

a. In accordance with Rule 31(5) of the Family Law Rules, the respondent shall pay the applicant a penalty of $10,000 on account on his contempt of the Court, payable within 30 days. b. In accordance with Rule 24(12) of the Family Law Rules, the respondent shall immediately pay the applicant her full indemnity costs associated with the contempt motion in the fixed sum of $10,324.75 and these costs to be enforceable by the FRO as a support order within the meaning of s.1(1)(g) of the Family Responsibility and Support Arrears Endorsement Act, S.O. 1996, c.31.

Date: June 21, 2023

M. Kraft, J.

[1] This was the disclosure ordered by Bingham, J. on February 1, 2023.