COURT OF APPEAL FOR ONTARIO
CITATION: Martin v. Watts, 2020 ONCA 406
DATE: 20200624
DOCKET: C67749
Rouleau, van Rensburg and Roberts JJ.A.
BETWEEN
Karen Enid Elaine Martin
Applicant
(Respondent)
and
David Blair Watts
Respondent
(Appellant)
Michael Rappaport, for the appellant
Gordon S. Campbell, for the respondent
Heard: in writing
On appeal from the order of Justice Mary A. Fraser of the Superior Court of Justice dated October 23, 2019 and from the costs order dated December 3, 2019.
REASONS FOR DECISION
A. Overview
[1] This appeal turns on whether the motion judge erred in striking out the appellant’s pleadings and foreclosing his participation in the trial of this family law proceeding because of his failure to comply with various court orders.
[2] The motion judge struck the appellant’s answer and amended answer about a month before the scheduled trial date because of the appellant’s ongoing failure to comply with several court orders to pay costs, as well as his share of household expenses for the matrimonial home, and to provide material financial disclosure. Her order provided the appellant the opportunity to bring a motion to determine whether he should be permitted to participate in some manner at trial, including the possibility of having his pleadings reinstated, if, within eight days of her order, he paid the outstanding amounts owing under the orders and provided the requisite disclosure. She also removed appellant’s counsel as his solicitor of record because of the possibility that he may have to appear as a witness at trial if the appellant reinstated his pleadings and was allowed to participate. The motion judge ordered that the appellant pay the respondent costs of the motion in the amount of $6,000.
[3] The appellant did not comply with the court orders and request reinstatement of his answer and amended answer. In this appeal, he continues his challenge to his obligations under the court orders requiring payment of costs and household expenses and maintains that he has materially complied with the court-ordered financial disclosure. He alleges the motion judge’s order striking his pleadings was “judicial retaliation”. He also submits that the motion judge erred in removing his counsel as solicitor of record and that MacLeod J. made errors of law in deciding an earlier motion.
[4] As we shall explain, we agree with the motion judge’s determination that the appellant failed to comply with the various court orders that formed the basis for her order striking the appellant’s answer and amended answer and that the appellant’s failure was wilful and egregious. We reject any suggestion of judicial retaliation. Since the appellant’s other grounds are contingent on the reinstatement of his pleadings or involve MacLeod J.’s April 19, 2018 order which is not under appeal, it is not necessary to deal with them. We dismiss the appeal.
B. Issues and Analysis
(1) The Motion Judge Did Not Err in Striking the Appellant’s Answer and Amended Answer
[5] The appellant submits that the motion judge erred in striking his answer and amended answer because, contrary to her findings, he had satisfied the outstanding court orders to pay costs and household expenses, and to make further financial disclosure. According to the appellant, the motion judge failed to apply the correct test for striking pleadings and to consider all relevant factors, including materiality and proportionality. This situation was not, the appellant argues, one of the exceptional and egregious cases which fits within the test for striking pleadings.
[6] We are not persuaded by these submissions.
[7] The motion judge correctly referenced and applied the relevant legislative provisions and legal principles. As the motion judge noted, r. 1(8)(c) of the Family Law Rules, O. Reg. 114/99, permits the court to strike out documents filed by a party for failure to comply with a court order. She further acknowledged that the exercise of the court’s discretion to strike pleadings and exclude trial participation is one that should be exercised sparingly, in exceptional cases, and only where no other remedy would suffice: Roberts v. Roberts, 2015 ONCA 450, 65 R.F.L. (7th) 6, at para. 15; Kovachis v. Kovachis, 2013 ONCA 663, 367 D.L.R. (4th) 189, at para. 24. Such an order is driven by the particular facts of each case, which the motion judge carefully reviewed in her decision.
[8] We see no error that would allow us to intervene. It was reasonable and appropriate for the motion judge to exercise her discretion to strike the appellant’s answer and amended answer in the circumstances of this case.
(a) The Court Orders Were Wilfully Breached
[9] We agree with the motion judge’s conclusion that the appellant’s failure to comply with these court orders was inexcusable, wilful and egregious.
[10] By October 2019, when the respondent’s motion to strike the appellant’s pleadings for failure to comply with court orders came before the motion judge, more than two years had elapsed from the commencement of the proceedings on September 8, 2017. The only real substantive issue in dispute in these proceedings was the equalization of the parties’ net family properties. This included the appellant’s challenge to a marriage contract that limits his share of the value of the matrimonial home. There had been at least nine court appearances, including four case management conferences. Most of them were instigated by the appellant’s unmeritorious motions and his failure to comply with court orders.
[11] The motion judge found that the appellant had failed to fully comply with the following orders and that his failure to do so was unjustified, wilful and egregious:
On May 18, 2018, MacLeod J. ordered the appellant to pay the costs of his unsuccessful motion in the amount of $5,500. On March 22, 2019, Aston J. ordered these costs payable within 30 days.
On December 12, 2018, Mackinnon J. ordered the appellant to pay forthwith the costs of his unsuccessful motion in the amount of $3,470.
On May 21, 2019, the case management judge, MacEachern J., ordered the appellant to pay, starting June 1, 2019, the monthly sum of $900 into the parties’ joint account for household expenses given he was continuing to reside in the matrimonial home. Since the appellant moved out of the matrimonial home in July 2019, his obligation to pay expenses was capped at $900.
On July 5, 2019, MacEachern J. ordered the appellant, among other things, to provide a complete and accurate financial statement within 14 days and to provide statements with respect to his BMO chequing or savings accounts within 30 days. While the appellant had filed another financial statement on June 26, 2019, MacEachern J. noted that it was materially deficient and did not address all the issues previously identified. She had ordered, on November 19, 2018, each party to serve and file an updated sworn financial statement, updated certificates of financial disclosure (Form 13A), and a comparison of net family properties statement. On February 22, 2019, MacEachern J. ordered the appellant to serve and file a sworn financial statement to update his 2017 financial statement within 15 days, noting that he was in breach of the November order. On May 21, 2019, she ordered the appellant to serve and file a complete and accurate financial statement by May 28, 2019.
[12] The appellant has not complied with these orders.
[13] First, there is no question that the appellant has not to-date satisfied the orders to pay costs by any payment.
[14] The appellant maintains that he has effectively paid the cost orders because he is entitled to set them off against the amounts under the mortgage and letter of credit that he says the respondent wrongly registered against title to the matrimonial home without his knowledge or consent.
[15] We agree with the motion judge’s conclusion that the appellant’s argument has no merit. As she explained:
While any issue of the responsibility for the use of and repayment of the parties’ joint line of credit may be an issue in the determination of the claim for an equalization of the net family properties … this [does not absolve the appellant] from making the payment of costs as expressly ordered.
[16] We note that the appellant did not raise this argument or otherwise request a set off at the time these orders were made. It appears that this or a similar argument was raised before the case management judge when the respondent signalled her intention to bring a motion to strike the appellant’s pleadings. On May 21, 2019, MacEachern J. clearly reinforced the appellant’s obligations to comply with the court orders notwithstanding his other claims:
The [appellant’s] obligation to comply with the existing court orders, and specifically the outstanding cost orders, was again specifically discussed at the case management conference on May 21, 2019. I repeat the wording included in my endorsement of February 22, 2019 - the cost orders are binding on the [appellant]. He is required to comply with those orders. The orders require him to pay $8,970 in costs to the [respondent]. Those orders are not discretionary. They are not a suggestion. They are not contingent on the [appellant’s] other claims in this matter, which will be determined at trial. The [appellant] is required to comply with the orders, and pay the costs forthwith. [Emphasis added.]
[17] Second, with respect to the outstanding household expenses, the appellant offered no explanation for his failure to pay them to the motion judge or on appeal. The order was not appealed or set aside. As the motion judge noted, the appellant’s failure to comply with the order is wilful and egregious.
[18] Finally, the appellant has not complied with the order for financial disclosure.
[19] The most basic obligation in family law proceedings is the duty to disclose financial information and this obligation is immediate and ongoing: Roberts, at para. 11; Manchanda v. Thethi, 2016 ONCA 909, 84 R.F.L. (7th) 374, at para. 13, leave to appeal refused, [2017] S.C.C.A. No. 29. As this court in Manchandastated, at para. 13, “after continual admonitions by the courts and the legislature that parties to a matrimonial proceeding must produce financial documentation, wilful non-compliance must be considered egregious and exceptional”, with the result that “[t]hose who choose not to disclose financial information or to ignore court orders will be at risk of losing their standing in the proceedings as their claims or answers to claims may be struck.”
[20] The motion judge correctly determined that this is the case here. Notwithstanding several admonitions and opportunities to produce basic financial information, the appellant has failed to meet his fundamental disclosure obligations as a party to family law proceedings. We reject the appellant’s submission that he has substantially complied with his statutory and court-ordered obligations. While he purported to file an updated financial statement on June 26, 2019, this was materially deficient. No updated sworn financial statement addressing the identified deficiencies was filed following the July 5, 2019 order. Nor did the appellant provide his BMO account statements as ordered.
[21] The significance of the appellant’s continuing and willful failure to produce material financial information was brought home to him on more than one occasion. As the case management judge noted in her July 5, 2019 endorsement:
[The appellant’s] failure to provide a complete and accurate financial statement almost 22 months after [the respondent] initiated this Application … prevents the parties, and this court, from focusing on the key issues in dispute …. This focus is not possible without [the appellant] first providing a complete and accurate sworn financial statement.
In other words, the appellant’s failure to comply materially interfered with the adjudication of the dispute and the administration of justice.
[22] In consequence, we find no error in the motion judge’s determination that the appellant failed to comply with the court orders and that his failure was wilful and egregious.
(b) The Motion Judge Properly Exercised Her Discretion to Strike the Answer and Amended Answer
[23] There is no basis to interfere with the motion judge’s conclusion that this was an exceptional circumstance in which it was appropriate to strike pleadings for failure to comply with court orders.
[24] The appellant must bear the consequences of his continued failure to comply with court orders; a consequence of which he had been repeatedly warned. The appellant’s failure to fully satisfy these outstanding orders, notwithstanding the many clear reminders, directions, and further generous opportunities to do so, can only be interpreted as his wilful disregard and flouting of the authority of the court. His failure to pay them and provide full and accurate financial disclosure caused further needless expense and delay and wasted judicial resources and those of the parties.
[25] This conduct has no place in family law proceedings, which are designed to promote the most expedient and least costly resolution and adjudication of disputes in the very difficult context of matrimonial breakdown. Pointed and continued disregard for legislative and court-ordered obligations undermines the orderly administration of justice and erodes the legitimate expectation of litigants and the public that these obligations will be respected. At a certain point, a party’s non-compliance with his or her most fundamental obligations may result in the imposition of limits on that party’s rights to participate. That is the case here. By his repeated failures to meet his basic responsibilities, the appellant has forfeited his right to participate in these proceedings.
(2) The Process was Fair
[26] The appellant contends that the motion judge’s order was in retaliation for his complaint to the Canadian Judicial Council about the motion judge’s judicial colleague, who had made one of the cost orders in issue against the appellant.
[27] The appellant’s suggestion is completely unfounded. The appellant bears the burden of rebutting the strong presumption of judicial impartiality. This kind of very serious allegation must be supported by cogent evidence. There is no basis on the record for this suggestion. The motion judge’s reasons disclose her fair and thorough consideration of the issues before her. As we have explained, her conclusions are correct in law and fact. Her order allowing the appellant yet another opportunity for compliance and her temperate cost order demonstrate the fairness of her disposition of this issue.
[28] Accordingly, this submission has no merit.
(3) Other Issues
[29] Other issues raised on appeal, such as the removal of the appellant’s counsel of record, are contingent on the appellant reinstating his pleadings or involved MacLeod J.’s April 19, 2018 order. As the appellant did not reinstate his pleadings within the time allotted by the motion judge and has been unsuccessful on his primary ground of appeal, and as MacLeod J.’s April 19, 2018 order is not the subject of this appeal, it is unnecessary for us to consider the other grounds raised by the appellant.
C. Disposition
[30] For these reasons, the appeal is dismissed.
[31] The respondent is entitled to her costs in the amount of $18,500, inclusive of disbursements and applicable taxes.
“Paul Rouleau J.A.”
“K. van Rensburg J.A.”
“L.B. Roberts J.A.”