Court File and Parties

Milton Registry No.: 301/03 Date: 2013-03-05 Ontario Court of Justice

Between: Tara Hodgins, Applicant

— And —

Clint Buddhu, Respondent

Before: Justice Sheilagh M. O'Connell

Heard on: 15 February 2013

Reasons for decision released on: 5 March 2013

Counsel:

• Mr. Rasim (Sam) Misheal, for the Applicant/Moving Party
• Mr. Clint Buddhu, on his own behalf

JUSTICE S.M. O'CONNELL:

INTRODUCTION

[1] Ms. Tara Hodgins, the applicant mother, seeks an order for security for costs against Mr. Clint Buddhu, the respondent father, in the amount of $7,500.00. This matter is scheduled to proceed to trial before Justice Zisman during the trial week of March 18, 2013.

[2] The main issues for trial are the determination of the father's income for child support purposes and the father's access to the child. Ms. Hodgins is seeking to change the access arrangements set out in the order of Justice Theo Wolder, dated October 28, 2003, and to impute income to Mr. Buddhu so that child support is increased.

BACKGROUND AND HISTORY OF PROCEEDINGS

[3] The parties started living together in 1998 and separated in 2002. They have one child together, Jonathan James Buddhu, born December 13, 2000 ("Jonathan"). Jonathan is now 12 years old. On October 28, 2003, the parties consented to a final order of Justice Theo Wolder that granted custody of Jonathan to Ms Hodgins and alternating overnight weekend access to Mr. Buddhu. The order also provided that Mr. Buddhu pay child support to Ms Hodgins in the amount of $100.00 per month, based on an income of $12,000.00 per annum.

[4] Mr. Buddhu did not pay the child support ordered by Justice Wolder and the Family Responsibility Office commenced default proceedings against Mr. Buddhu in December of 2011. The first appearance on the default hearing was February 14, 2012. At that time, Mr. Buddhu owed child support arrears of approximately $10,000.00.

[5] After the Family Responsibility Office commenced the default hearing, Mr. Buddhu commenced a motion for contempt against Ms Hodgins regarding the access provisions in Justice Wolder's order. The contempt proceedings were resolved and the parties entered into temporary minutes of settlement regarding access on February 9, 2012.

[6] On June 11, 2012, I heard a temporary motion regarding child support and access brought by Ms Hodgins in response to the contempt motion. After hearing submissions and reviewing the evidence, I made a temporary order that Mr. Buddhu pay child support to Ms Hodgins in the amount of $200.00 per month, based on an imputed income of $25,000.00 per annum, without prejudice to a review of this amount at trial. I further ordered that access between Mr. Buddhu and Jonathan be changed to alternate Sundays from 9:00 a.m. to 7:00 p.m. and every Friday after school until 7:00 p.m. The matter was adjourned for a case conference on August 3, 2012 to review the issue of overnight access, among other issues.

[7] Ms Hodgins then commenced a motion to change the access and child support provisions of Justice Wolder's order. She is seeking an order for child support in the amount of $303.00 per month, based on an income imputed to Mr. Buddhu of $35,000.00 per annum. She further seeks to change the access provisions as follows, according to her trial management conference brief:

(a) An order that the father shall exercise access to Jonathan on alternating Thursdays from 4:00 p.m. to 7:00 p.m. and on alternating Sundays from 9:00 a.m. to 6:00 p.m.

(b) An order that the Thursday access visit shall be exercised in Ms Hodgins' neighbourhood;

(c) An order that the Sunday access visit be exercised in Mr. Buddhu's parents' home and that Mr. Buddhu shall need Ms Hodgins' written permission to change the access visit to an alternate location;

(d) An order that Mr. Buddhu be responsible for arranging transportation for the child to his parents' home for access and Ms Hodgins shall arrange transportation of the child returning to her home;

(e) An order that Mr. Buddhu shall not walk on Ms Hodgins' property at any time and that he shall send a text message when he arrives to pick up the child for access;

(f) An order that all communication between the parties be done by way of e-mail or text messages only.

[8] Mr. Buddhu did not commence a motion to change, nor has he filed a response to Ms Hodgins motion to change. He wishes to continue to pay child support at the rate under the current order of June 11, 2012 and to exercise access to Jonathan every Sunday from 11:00 a.m. to 6:00 p.m. and on alternate Fridays from 4:00 p.m. to 7:00 p.m. Ms Hodgins is seeking an increased order for child support based on an imputed income of $35,000.00 to Mr. Buddhu.

[9] At a settlement conference on October 1, 2012, the issues of support and access could not be resolved and a trial management conference was scheduled before Justice Zisman on October 31, 2012.

[10] On January 29, 2013, Mr. Buddhu and the Family Responsibility Office entered into a final default order in which he agreed to pay ongoing child support pursuant to the temporary order of June 11, 2012, in addition to the sum of $100.00 per month towards the arrears owing. He further agreed to pay two lump-sum amounts towards the arrears totalling $1,837.34, to be paid by April 30, 2013. In the event of default, the Family Responsibility Office is at liberty to bring a future motion for a warrant for committal with further notice to Mr. Buddhu by ordinary mail at his last known address. The amount of child support and arrears are obviously subject to adjustment depending on the outcome of motion to change hearing.

[11] Throughout the proceedings, I made a number of court orders regarding Mr. Buddhu's legal obligation to provide complete and adequate financial disclosure to determine child support. A history of those orders is as follows:

(a) On February 9, 2012, Mr Buddhu was ordered to serve and file an updated sworn financial statement and his three most recent income tax returns or notices of assessment and T-4 slips on or before April 20, 2012. The matter was then adjourned to May 2, 2012 for a case conference.

(b) On May 2, 2012, Mr. Buddhu attended and was not prepared to proceed. He had not served and filed a case conference brief, nor had he complied with the order for financial disclosure dated February 9, 2012. Given the failure to comply with my previous order and the wasted appearance, I ordered that Mr. Buddhu pay the costs of the case conference to Ms Hodgins in the amount of $500.00, to be payable no later than May 15, 2012;

(c) On August 3, 2012, Mr, Buddhu had still not complied with the court order dated May 2, 2012, regarding costs, which were due on May 15, 2012. Further, he had still not provided his 2009, 2010, and 2011 notices of assessment. I ordered that Mr. Buddhu be prohibited from taking any further steps in the proceedings until he paid the costs order and provided his notices of assessment. I further ordered that, if Mr. Buddhu did not pay the costs award or provide disclosure before the next court appearance, then Ms Hodgins was entitled to renew her motion for security for costs.

[12] On February 15, 2013, when this motion for security for costs came before me, Mr. Buddhu had still not complied with the orders for financial disclosure made nor had he paid the costs order.

THE PARTIES' POSITIONS

[13] Mr. Misheal, on Ms Hodgins' behalf, submits that an order for security for costs should be made against Mr. Buddhu for his failure to comply with the court orders for financial disclosure and costs. He submits that there is good reason to believe that this case is "a waste of time or a nuisance". Had Mr. Buddhu provided any of the financial disclosure ordered, then it is very likely that the issues could have been resolved and the parties would not be going to trial. Mr. Misheal further submits that Ms Hodgins will be successful at trial and she will therefore need to secure her costs prior to proceeding, given Mr. Buddhu's history of non-compliance with costs orders.

[14] Mr. Buddhu submits that he cannot afford to pay $7,500.00 in security for costs. He states that he has just started working as a chef with Swiss Chalet, having previously worked for another restaurant after being laid off by his former employer. He states that he is earning $18,000.00 per annum and that his wages are being garnished at a rate of fifty percent by the Family Responsibility Office to enforce the current child support order and arrears. Mr. Buddhu advised the court that he had not filed any of his income tax returns since 2004 and that he is currently trying to prepare his returns. He further submits that he has never earned $35,000.00 per annum and that income should not be imputed to him.

THE LAW AND ANALYSIS

[15] Subrule 24(13) of the Family Law Rules, O. Reg. 114/99, provides the authority for a court to make an order for security for costs, if certain criteria have been met. The order must be just and one or more of the following factors must apply:

Order for security for costs. A judge may, on motion, make an order for security for costs that is just, based on one or more of the following factors:

1. A party ordinarily resides outside Ontario.

2. A party has an order against the other party for costs that remains unpaid, in the same case or another case.

3. A party is a corporation and there is good reason to believe it does not have enough assets in Ontario to pay costs.

4. There is good reason to believe that the case is a waste of time or a nuisance and that the party does not have enough assets in Ontario to pay costs.

5. A statute entitles the party to security for costs.

[16] The effect of an order for security for costs is set out in subrule 24(15) of the Rules:

Effect of order for security. Until the security has been given, a party against whom there is an order for security for costs may not take any step in the case, except to appeal from the order, unless a judge orders otherwise.

[17] Under subrule 24(16), if a party does not give the security as ordered, then a judge may, on notice, dismiss the party's case or strike out the party's answer or any other document filed by the party.

[18] The mere satisfaction of one or more of the criteria under subrule 24(13) is not sufficient to entitle Ms Hodgins to security for costs. It also must be just for such an order to be made. Generally, courts do not wish to see the merits of a case determined by a party's inability to post security for costs. Justice Heather Katarynych described the rationale for the rule as follows in McGraw v. Samra, 2004 ONCJ 164 (emphasis added):

[24] . . . The "security for costs" remedy is but one of a number of remedies provided by the rules to stop a case in its tracks until the party veering outside of the rules brings himself or herself into line with them. It is a control on a blithe pursuit of another person in the courts without attention to the merits of the pursuit and the legal costs likely to be incurred by the respondent to defend the case. It is a remedy built on the principle that court proceedings are expensive and time consuming and not to be launched frivolously or without due regard to the impact on the responding party.

[25] . . . As a brother judge has recently pointed out, court proceedings are not designed to given individual litigants a forum for carrying on in whatever manner they may choose, oblivious to the impact of that conduct on the other side and oblivious to the mounting costs of the litigation. See Heuss v. Surkos, 2004 ONCJ 141, per Justice Robert J. Spence.

[19] In cases involving custody and access, where the best interests of the child are the paramount consideration, it has been held by a number of courts that security for costs should only be granted in exceptional circumstances. As Justice Peter B. Hambly states in Schumilas v. Porter-Schumilas at paragraph [30] of that decision, while it is true that a party's position in a custody and access case may be unreasonable and lacking merit, "it can never be a waste of time or a nuisance for a court to concern itself with the custody of a young child." Justice A. Thomas MacKay states the following in Bragg v. Bruyere, 2007 ONCJ 515:

[5] Courts are justifiably cautious in ordering security for costs in family litigation where the best interests of the children are paramount. The court does not wish to see the merits of the case determined by a party's inability to post security for costs. However, in appropriate circumstances, the court may make such an order.

[20] Only one of the factors set out under subrule 24(13) need apply before a court can consider making an order for security for costs. In this case, Mr. Buddhu has not complied with the order for costs that I made on May 2, 2012, and thus, subrule 24(13).2 applies. However, in my view, this is not an appropriate case for security for costs for the following reasons.

[21] First, Mr. Buddhu is not pursuing this litigation. The purpose of an order for security for costs is to control and curtail people from commencing litigation and pursuing another person in the court system in a frivolous and wasteful manner. As Justice Katarynych aptly states in McGraw v. Samra, supra, an order for security for costs is "a control on a blithe pursuit of another person in the courts without attention to the merits of the pursuit and the legal costs likely to be incurred by the respondent to defend the case." [paragraph 24]

[22] Here, Mr. Buddhu is the respondent who is defending the motion to change that Ms Hodgins is pursuing against him for increased child support and a restriction of his access. In fact, Mr. Buddhu is not even defending it because he has not served and filed a response to the motion to change. Although this matter initially started pursuant to Mr. Buddhu's contempt motion, the parties acknowledge that the issue of contempt was resolved in February of last year, more than twelve months ago. The case that is going to trial is Ms. Hodgins' motion to change which she commenced after the contempt motion was resolved.

[23] Mr. Buddhu is not pursuing any motion to change and he is content with the current order for child support. He wishes to pay child support and arrears owing pursuant to the final default order that he entered into on consent with the Family Responsibility Office. It is true that Mr. Buddhu has failed to provide adequate financial disclosure. However, even if Mr. Buddhu had complied with the orders for financial disclosure made, it is very likely that this case would still have proceeded to trial. It is not disputed that Mr. Buddhu is working at Swiss Chalet, where it is unlikely that he is earning $35,000.00 per annum. Previous to that employment, the court received income information directly from Mr. Buddhu's former employer at Leon's Furniture Limited, in response to a court order for information that indicated, according to the payroll records department at Leon's, that Mr. Buddhu earned $20,198.68 in 2011 and $8,884.50 in 2012.

[24] It is Ms Hodgins' firm belief that Mr. Buddhu is either hiding income or intentionally underemployed and that he is capable of earning a minimum of $35,000.00 per annum, far more than the minimum wage he appears to have earned over the past few years. This may very well be true and proven at trial.

[25] Further, it is in Jonathan's best interests that the issue of access be determined on its merits. In my view, Mr. Buddhu's position with respect to access is not unreasonable, nor a waste of time or a nuisance. If security for costs were ordered in the amount of $7,500.00, then it is very unlikely that the court would have the opportunity to hear from Mr. Buddhu to make a proper determination of what access order is in Jonathan's best interests. The case law is clear that an order for security for costs in cases involving custody and access should be made cautiously and in exceptional cases.

[26] There is no question that Mr. Buddhu has failed to comply with orders for financial disclosure and with the order for costs made against him. In my view, he should be properly sanctioned for such conduct. As Justice Clayton J. Conlan has recently stated in Kropf v. Kropf, 2012 ONSC 6634, "A Court Order is not an invitation to dance or an offer to negotiate or a request to debate. For so long as it remains valid, it is a directive that shall be complied with." [Paragraph one].

[27] However, an order for security for costs is not the appropriate remedy in the circumstances of this case. It is the trial judge's role to determine what inferences should be drawn from Mr. Buddhu's failure to provide financial disclosure. I further leave it to the trial judge to determine whether Mr. Buddhu should be entitled to participate in a hearing of the child support issue at trial if he has not complied with the cost order that was made against him or filed a response to the motion to change.

ORDER

[28] For the above reasons, Ms Hodgins' motion for security for costs is dismissed.

COSTS

[29] Regarding the costs of this motion, subrule 24(4) of the Family Law Rules, O. Reg. 114/99, provides that a successful party that has behaved unreasonably during a case may be deprived of costs or required to pay the costs of the unsuccessful party. In this case, Mr. Buddhu has failed to comply with previous court orders for financial disclosure and costs. Mr. Buddhu's conduct in disregarding court orders cannot be condoned or rewarded by awarding him costs. Although Mr. Buddhu was the successful party in this motion, he will not be awarded costs.

Released: 5 March 2013

Signed: "Justice Sheilagh M. O'Connell"