COURT FILE NO.: 04-FD-301191FIS

DATE: 20131015

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jason Garnet, Applicant

• and -

Jennifer Garnet, Respondent

BEFORE: Justice S. M. Stevenson

COUNSEL: The Applicant, Appearing in Person Jack M. Straitman, for the Respondent

DATE HEARD: September 30, 2013

E N D O R S E M E N T

Introduction

[1] Both parties brought contempt motions alleging the other is in contempt of the Divorce Order of Paisley J. dated March 14, 2008.

[2] The respondent commenced her motion on June 28, 2013. She contends that the applicant has breached terms of the order of Paisley J. (the "order”) with respect to income disclosure, post-dated cheques, life insurance, endorsement of reimbursement cheques for health expenses for the parties' child, Logan, and failure to maintain the level of child support required.

[3] The respondent seeks a finding of contempt and various relief with respect to disclosure and payment of child support. She also seeks a penalty of $1,000 per week until the applicant complies with the order. Additionally, she seeks the appointment of a mediator/arbitrator and costs.

[4] The applicant also brought a contempt motion dated August 2, 2013. He contends that the respondent has breached the provisions of the order. He sets out in his Notice of Motion that the respondent has not complied with the parties' Parenting Plan which is attached as a schedule to the Separation Agreement of the parties and referred to in the order. No particulars of the alleged breach are set out in part 1 a) of the applicant's Notice of Motion.

[5] The applicant also contends that the respondent has not complied with paragraph 5 of the order regarding the pickup and drop off of Logan, she has not shared information with the applicant concerning Logan, the respondent has not complied with income disclosure or consultation regarding section 7 expenses under the Child Support Guidelines (the "Guidelines"), there has been no life insurance disclosure and medical coverage has not been provided, contrary to the order.

[6] The applicant seeks a finding of contempt against the respondent and other relief, including specific performance of all provisions in the order and payment of $1,000 per week until the respondent complies with the order and costs.

The Test for a Finding of Contempt

[7] As set out in the Ontario Court of Appeal decision of Prescott-Russell Services for Children and Adults v. G. (N.), 2006 CanLII 81792 (ON CA), [2006] O.J. No. 2488, 82 O.R. (3d) 686 (C.A.), in order for the court to make a finding of contempt, a three-pronged test must be met as follows:

i) The order that was breached must state clearly and unequivocally what should and should not be done;

ii) The party who disobeys the order must do so deliberately and wilfully; and

iii) The evidence must show contempt beyond a reasonable doubt. Any doubt must clearly be resolved in favour of the person or entity alleged to have breached the order.

1) The Respondent's Motion

[8] During the course of the hearing of the motion, the Court was advised that the applicant has provided the respondent with post-dated child support cheques for the remainder of the calendar year 2013. Also, prior to the hearing of the motion, the applicant agreed to the mediation/arbitration process (as was set out in the order). At the commencement of the hearing of the motion, the applicant indicated that he wanted the Court to choose the mediator/arbitrator from the two names remaining that had been put forward by the parties. Originally four names were put forward; however, there was a conflict with two of the individuals suggested. During the course of the hearing, the parties agreed to use Mr. Paul McInnis as their mediator/arbitrator.

[9] Additionally, the Court was advised that the applicant has provided his income tax returns as set out in the respondent's Notice of Motion along with Notices of Assessment, with the exception of his 2012 Notice of Assessment which the applicant has ordered, but has not yet received from Canada Revenue Agency.

[10] The Court was also advised that the applicant has life insurance in place as per the terms of the order, but that he had not yet named a lawyer or accountant as trustee of the policy as per the order.

[11] Counsel for the respondent submits that a finding of contempt should be made against the applicant given his breach of many terms of the order. These breaches include the applicant's failure to provide disclosure in accordance with section 21 of the Guidelines as referred to in the order. In particular, he submits that the applicant has failed to provide financial statements for his business and any other necessary documents for the determination of child support. He further submits that the applicant has failed to reimburse the respondent for medical expenses for Logan, has failed to pay child support at the same level as he was obligated to pay until the order was adjusted by a further order and he has failed to name a lawyer or accountant as trustee of his life insurance policy.

a) Does the order that was breached state clearly and unequivocally what should and should not be done?

[12] At paragraph 14 of the order, it is clearly stated that every year, by May 15th, each party will provide to the other tax returns and all attachments; Notices of Assessment or Re-Assessment forthwith upon receipt; and any other information needed to recalculate child support and all information not previously provided under section 21 of the Guidelines. With respect to this requirement of income disclosure, reference is made in the order specifically to section 21 of the Guidelines which provides that where a spouse is self-employed, for the three most recent taxation years, the financial statements of the spouse's business and a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the spouse does not deal at arm's length must be provided to the other spouse.

[13] Pursuant to paragraph 20 of the order, by December 1st in each year, the applicant is to provide the respondent with post-dated cheques for the following year. Also, pursuant to paragraphs 39 and 43 of the order, the applicant is to immediately endorse any reimbursement cheques from the insurer for Logan's benefit to the respondent.

[14] I find that all of these clauses meet the first part of the test as they are clear and unequivocal. There is no question as to what should have been done by the parties.

[15] However, the respondent’s Notice of Motion specifies that the applicant has failed, pursuant to paragraph 32 of the order, to provide proof that he has maintained life insurance in accordance with paragraph 27 of the order. Those paragraphs of the order require the applicant to obtain and maintain a life insurance policy or policies on his life in the amount of $500,000 and to provide proof that he has paid the premium within 14 days. The Court was advised that the applicant provided proof prior to the hearing of the motion that he has a policy in effect. As the Notice of Motion did not allege that the applicant was in contempt of paragraph 29(d) of the order which was to maintain a lawyer or accountant as trustee, I am not prepared to determine on this motion whether there should be a finding of contempt regarding that issue.

[16] The respondent also argues that the applicant has breached paragraph 15 of the order as he was paying $2,700 per month for child support, but unilaterally lowered it as of May 1, 2013. Pursuant to paragraph 15 of the order, “until the support as set out in the order is adjusted by an amending agreement, court order or arbitration award, the applicant is to continue to pay the child support and his contribution to special and extraordinary expenses under the parties' most recent written agreement, court order or arbitration award”. The respondent contends that this paragraph is clear and unequivocal and that the applicant should continue to pay pursuant to the original amount of $1,306 per month which has been adjusted over the past several years without dispute. The respondent contends that $2,700 per month was the last adjusted rate where there was no dispute between the parties and which was based on the original order. She contends that the applicant is in breach of that part of the order and he should be required to continue to pay $2,700 per month.

[17] I do agree with the submissions of the respondent that this paragraph states clearly and unequivocally what should be done; however, I am not prepared to make a finding of contempt against the applicant with respect to this paragraph of the order. This provision of the order deals with support payments. The applicant cannot be found in contempt for breach of that provision of the order as this is a payment of money. (see Dickie v. Dickie, (2006), 2006 CanLII 576 (ON CA), 78 O.R. (3d) 1 (C.A.) per Laskin J.A. whose dissenting opinion was affirmed by the SCC at 2007 SCC 8, [2007] 1 S.C.R. 346). Additionally, the applicant is to pay child support under the parties’ most recent written agreement, court order or arbitration award. There is no written agreement that has been put forward and there has been no change to the order of Paisley J. I do not accept that the changes made over the years reflect a court order. The order itself has not been formally changed by either party. As such, I also decline to order that the applicant pay child support in the amount of $2,700 per month. The appropriate quantum of support will be the subject of mediation/arbitration.

b) Did the applicant, in disobeying the order, do so deliberately and wilfully?

[18] The applicant has not provided the disclosure as set out in the order nor has he complied with the provisions of the order outlined above; however, I must determine whether in disobeying the order the applicant did so deliberately and wilfully in order to meet the second part of the test for a finding of contempt.

[19] I have already indicated that the applicant has provided, since the commencement of the respondent's motion, his complete income tax returns as requested and Notices of Assessment for those same periods, with the exception of his 2012 Notice of Assessment which he has agreed to provide upon receipt to the respondent's counsel. As such, I decline to make a finding of contempt with respect to this relief sought by the respondent concerning the applicant’s failure to provide his income tax returns and Notices of Assessment in her Notice of Motion.

[20] However, the applicant has failed to provide further disclosure as required, including financial statements and other information pertaining to his self-employment and his business. I find that he has deliberately and wilfully disobeyed the order in that he has not provided financial statements and other information required pursuant to section 21 of the Guidelines with respect to his business. The applicant deposes that he has the information available but that the information was never requested until May 2013 and he wants a third party to attend at his office to review the documents. He has not agreed to provide the respondent or her counsel with copies of his financial statements and other business documentation pertinent to determining appropriate child support.

[21] The applicant submits that he has concerns with the respondent’s father, who is an accountant, reviewing his documentation and that the respondent's family in the past has disclosed information to the public. He is also not prepared to release any of this information without the applicant signing a non-disclosure agreement.

[22] The applicant has the financial disclosure available, but he refuses to release the disclosure except on his own terms. There is no evidence before the Court on this motion of the respondent or any of her family members disclosing the applicant’s financial information to a third party. There are no Affidavits sworn by any third party in support of this allegation by the applicant. There is also no mention of the necessity of having a non-disclosure agreement completed prior to the release of this financial disclosure to the respondent in the order, nor is there any requirement that a third party review the information and not the respondent and her counsel.

[23] The applicant has not brought a motion to seek a sealing order or any other relief with respect to his business disclosure. Rather, the applicant has chosen to withhold the information despite his obligation under the order to produce this information to the respondent. As such, I find that the applicant is wilfully and deliberately breaching the order.

[24] With respect to the reimbursement of medical expenses for Logan, the Court was advised by the respondent's counsel that the applicant has failed to sign reimbursement cheques from his medical insurer over to the respondent for expenses that she has incurred. In total, the amount of $607 has not been reimbursed to the respondent. The applicant submits that he is owed money from the respondent for the respondent’s use of his health plan without his consent. He contends that the respondent used his health plan for her own benefit. However, the issue of the respondent’s use of the applicant’s health plan is not an issue to be determined on these motions and this can be further addressed at mediation/arbitration if necessary. Given the applicant's refusal to sign the reimbursement cheques over to the respondent for monies owed to the respondent for expenses that she has personally paid for Logan and which is clearly to be reimbursed to her pursuant to the order, I find the applicant has wilfully and deliberately disobeyed the order with respect to this issue.

c) Does the evidence show contempt beyond a reasonable doubt?

[25] I find that the evidence does show contempt beyond a reasonable doubt. The applicant acknowledges that he has not provided the disclosure and he refuses to do so unless a non-disclosure agreement is signed. Additionally, he will only disclose to a neutral third party and not to the respondent. The applicant also acknowledges that he has not signed the reimbursement cheques over to the respondent for Logan’s medical expenses. All of this is contrary to the order. The evidence shows that the applicant is well aware of his obligations under the order but he has chosen not to comply.

Finding

[26] Given all of these factors, I find that the respondent has met the three part test for a finding of contempt against the applicant and that the applicant is in contempt of paragraph 14 of the order. In particular, the applicant has failed to provide income disclosure and to produce any other information needed to re-calculate child support, including all information not previously provided under Section 21 of the Guidelines. This includes, where a spouse is self-employed, for the three most recent taxation years, the disclosure of the financial statements of all corporations in which he has an interest and a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the spouse does not deal at arm's length.

[27] Additionally, I find the applicant in contempt for his failure to comply with paragraphs 39 and 43 of the order by not endorsing reimbursement cheques from his health care provider to the respondent for expenses for the parties’ child, Logan.

2) The Applicant’s Motion

[28] The applicant submits that a finding of contempt should be made against the respondent given her many breaches of the order. These breaches include as indicated, that the respondent has not complied with the parties' Parenting Plan, the respondent has not complied with the order regarding pickup and drop off of Logan, she has not shared information with the applicant concerning Logan, the respondent has not complied with disclosure and consultation regarding section 7 expenses under the Guidelines, there has not been income disclosure and life insurance and medical coverage has not been provided contrary to the order.

a) Does the order that was breached state clearly and unequivocally what should and should not be done?

[29] With respect to the applicant’s claim that the respondent has not complied with Schedule A of the Parenting Plan that formed part of the order, the applicant has failed to set out any particulars in his Notice of Motion and Affidavit. He states that the respondent has not complied with the Parenting Plan, but he does not set out which paragraphs the respondent has not complied with or any particulars so that the respondent may answer the claim. As such, I decline to make a finding of contempt given this lack of particulars, as I cannot determine the first step of the test without the reference to specific paragraphs.

[30] Paragraph 5 of the order states that the applicant is to pick up and return Logan to and from her mother’s home. This paragraph is clear and unequivocal as to which parent is responsible for picking up and returning Logan.

[31] Paragraph 8 of the order clearly and unequivocally sets out that the parties shall share special and extraordinary expenses in the ratio of 70% payable by the applicant and 30% payable by the respondent, irrespective of what their actual income might be.

[32] With respect to paragraph 9 a) and b) of the order, it states clearly and unequivocally that with respect to special and extraordinary expenses, before an expense is incurred a party is to provide the other as much notice as possible, except in the case of medical emergencies. Additionally, it is also clearly stated that where reasonable, as in the case of a health expenditure, the other party shall be permitted to obtain a second opinion. All of these special or extraordinary expenses, save for medical emergencies, are not be incurred without the consent of the other party, which consent is not to be unreasonably withheld.

[33] Paragraph 12 of the order states that each year, commencing January 2009, following the delivery of income information by May 15 as set out further in the order, the parties are to recalculate child support pursuant to paragraph 5.3 based on income information for the preceding calendar year. The effective date for the new amount of child support is to be January 1st of the year in which child support is to be recalculated. This paragraph is not clear and unequivocal as there is no paragraph 5.3 set out in the order. As such, this does not meet part one of the test for a finding of contempt.

[34] As set out above with respect to the respondent’s motion, paragraph 14 of the order is clear and unequivocal. It is clear what income disclosure had to be produced and exchanged between the parties and by a deadline of May 15th each year.

[35] Paragraph 42 of the order obligates the respondent once she is employed, to maintain Logan as the beneficiary of her extended health insurance through the respondent’s employment. It is clear and unequivocal what the respondent should do in this paragraph.

[36] Paragraph 45 obligates the respondent to obtain and maintain a life insurance policy or policies on her life in the total face amount of $165,000. The terms and conditions mirror the terms and conditions applicable to the applicant. This paragraph is clear and unequivocal.

b) Did the respondent, in disobeying the order, do so deliberately and wilfully?

[37] There are significant difficulties with the applicant’s claim for contempt as I find that there are no breaches of the order by the respondent as alleged by the applicant. With respect to paragraph 5, I find that the respondent has not breached the order as it is the applicant’s obligation to pick up and return Logan, not the respondent’s obligation. There are no particulars of any breach by the respondent of this provision set out in the evidence.

[38] With respect to paragraph 8 of the order, there are no particulars provided by the applicant with respect to an alleged breach of this provision. Additionally, it appears as though this relates to a payment of money for which a contempt finding cannot be made. Subparagraphs 9 a) and b) of the order do not appear to have been breached by the respondent. The applicant provides e-mails between the parties which for the most part show that the parties were cooperating with coordinating activities for Logan and choosing appropriate activities. I cannot conclude, based on the evidence provided, that the respondent has breached subparagraphs 9 a) and b) of the order. Any alleged payments owing by either party for special and extraordinary expenses should be addressed in the mediation/arbitration after receipt of the applicant’s disclosure.

[39] The evidence before me is that the respondent misunderstood that she too was obligated under the order to provide income information to the applicant on a yearly basis. The Court was advised that all of the income information of the respondent required to be provided to the applicant as set out in paragraph 14 of the order was provided to the applicant in May 2013 and well prior to the commencement of the applicant’s motion for contempt. The respondent immediately provided the information once she retained her lawyer and realized that she was obligated to produce the information set out in paragraph 14 of the order.

[40] With respect to paragraph 42 of the order, the evidence before me is that the respondent does not have full time employment and as such she does not have an obligation to name Logan as a beneficiary under her extended health insurance through her employer as set out in the order.

[41] With respect to paragraph 45 of the order, the applicant has acknowledged that the respondent has provided him with her life insurance particulars. The applicant does not outline in his Affidavit that any other life insurance information is required, only that he requested this information a few years ago and only recently received the information.

[42] Given there has not been a breach of any of the provisions of the order by the respondent as set out by the applicant in his Notice of Motion, I decline to make a finding of contempt against the respondent.

Order

[43] I order the following:

i) There shall be a finding of contempt against the applicant for failure to comply with paragraph 14 of the order of Paisley J., dated March 14, 2008, specifically for his failure to provide income disclosure and to produce any other information needed to re-calculate child support, including all information not previously provided under Section 21 of the Guidelines. This includes, where a spouse is self-employed as the applicant is, for the three most recent taxation years, the disclosure of the financial statements of all corporations in which he has an interest and a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the applicant does not deal at arm's length.

ii) There shall be a finding of contempt against the applicant for his failure to comply with paragraphs 39 and 43 of the order of Paisley J. dated March 14, 2008 by not endorsing reimbursement cheques from his health care provider to the respondent for expenses for the parties’ child, Logan, paid for by the respondent.

iii) The applicant shall be provided with an opportunity to purge his contempt by providing the disclosure as set out in subparagraph 43 i) of this endorsement to the respondent’s lawyer within 30 days and by providing to the respondent within 30 days, the sum of $607 for his failure to endorse reimbursement cheques from his health care provider to the respondent.

iv) The respondent’s motion shall be adjourned to November 19, 2013 at 10:00 am to determine if the applicant has purged his contempt, failing which appropriate remedies shall be determined on that date. The issue of costs shall also be addressed on that date.

v) The applicant's motion for contempt is dismissed.

Stevenson J.

DATE: October 15, 2013