Superior Court of Justice - Family Court Branch
161 Elgin Street, Ottawa, Ontario K2P 2K1
Endorsement
Applicant:
Gloria Janet Freedman
Present
Counsel:
Sean Jones
x
Present
Duty Counsel
Respondent:
Joel Freedman
x
Present
Counsel:
Bryan Delaney
x
Present
Duty Counsel
COURT DATE :
February 13, 2014
BEFORE :
Madam Justice Bonnie R. Warkentin
E N D O R S E M E N T
[1] This case has been before the court many times in the past 5 plus years. This is the fourth motion seeking to find Mr. Freedman in contempt of a court order. The first three contempt motions resulted in either findings of contempt or Mr. Freedman purging his contempt.
[2] Mr. Freedman has a long history of attempting to avoid his obligations under prior court orders. At the present time he is in arrears of support of in excess of $150,000.00.
[3] Mrs. Freedman is 63 years of age, does not work outside of the home and her entire income is composed of CPP benefits of $606.00 per month and spousal support. The current spousal support order requires payments of $6,908.00 per month; however, Mr. Freedman is only paying a fraction of this sum.
[4] Mr. Freedman is 54 years of age. He owns his own real estate firm, Metro Suburban Realty Ltd. and reports income of over $200,000.00 per annum.
[5] The first two contempt motions were brought in 2011 when Mr. Freedman failed to comply with terms of a consent order dated November 23, 2010 requiring that he maintain life insurance as security for his support obligations and to provide proof of that insurance within 14 days. Mr. Freedman was found to be in contempt of that order by Justice Annis on June 13, 2011 and then in contempt again on September 27, 2011when he failed to purge his earlier contempt.
[6] On September 28, 2011, in a separate motion to enforce costs owed by Mr. Freedman of $70,000.00 and to require that Mr. Freedman attend and answer questions at a judgment debtor examination, Justice Abrams commented that Mr. Freedman’s “conduct was unreasonable and perhaps bordering on contemptuous of the entire process.” There was no finding of contempt in that instance because Mr. Freedman made the required payment.
[7] The current contempt motion stems from an order made by Mr. Justice Maranger on January 2, 2013, after Mr. Freedman lost a Motion to Change the quantum of his spousal support obligation. Mr. Justice Maranger included the following terms at paragraphs 6 and 7 of his order:
The Applicant’s, Gloria Freedman’s, Motion seeking security for support is granted. The Respondent, Joel Freedman, is prohibited from receiving any income other than salary income from any corporation or business in which he holds an interest when the Respondent is in default of any support order.
Without limiting the generality of paragraph 6 above, the Respondent, Joel Freedman, is prohibited from declaring or receiving any dividend income, receiving shareholder loans, receiving any commission income or receiving any other benefits from any corporation or business in which he has an interest when the Respondent is in default of any support order.
[8] Mr. Freedman appealed this order. On October 15, 2013 the Court of Appeal dismissed the appeal and made the following comments at paragraphs 6 and 7 of their reasons:
Finally, the history of the appellant’s relentless efforts to avoid his financial obligations to his family justified the order limiting the way in which the appellant can obtain income, while he is [in] default of support obligations.
We agree with the motion judge that the inconvenience of the order providing security is of the appellant’s own making.
[9] On October 29, 2013, in support of yet another Motion to Change (a motion that is currently before the court), Mr. Freedman filed a financial statement in which he claimed his car, extended medical and life insurance benefits and his cell phone as benefits paid on his behalf by his company.
[10] In this motion for contempt, Mrs. Freedman alleges that these items are benefits from Mr. Freedman’s corporation in violation the order of Mr. Justice Maranger that prevented Mr. Freedman from receiving “any other benefits” from any corporation or business in which he has an interest while in default of any support order.
[11] Mr. Freedman, through his counsel argued that he requires a car and cell phone in order to conduct his commercial real estate business in the same fashion as he requires an office, pens, paper and other “benefits” that are paid for by his business. Counsel also noted that Mr. Freedman is required to maintain both the extended health benefits as well as the life insurance for Mrs. Freedman.
[12] It was Mr. Freedman’s position that these are not benefits from his corporation as contemplated by Mr. Justice Maranger because they are necessary for the operation of his business. They differ dramatically from the dividends, shareholder loans, commission income, etc. that were specifically prohibited by Justice Maranger’s order.
[13] I have reviewed both parties’ positions and the case law they have provided. I agree with counsel for Mr. Freedman that by having his corporation pay for his car and cell phone, items that counsel for Mrs. Freedman acknowledged he required for the operation of his business, does not violate the provisions of Justice Maranger’s order.
[14] Similarly, Mr. Freedman is required to maintain the extended health benefits and life insurance and as such it would be a bit of a farce to declare that he has violated the terms of the order by obtaining the benefit of these items through his business, particularly in light of the prior contempt orders regarding the maintenance of life insurance.
[15] On Mrs. Freedman’s behalf, her counsel argued that all of these items should be paid by Mr. Freedman personally, not through his business. By obtaining a business deduction for them, he is in effect lowering his business income for the purposes of calculating support.
[16] Again, I disagree. There may be some reduction in his income as a result, however, courts are certainly capable of reviewing the business expenses and ascertaining which business deductions should be included in income for the purposes of calculating spousal support. It was also noteworthy that Mr. Freedman did not include car, insurance and cell phone expenses in his regular budget portion of his financial statement, and as such his monthly disposable income is not reduced by double counting these expenses as so often happens with business deductions and personal budgets.
[17] I therefore dismiss Mrs. Freedman’s motion for contempt. Costs of this motion are reserved to the judge hearing the Motion to Change.
Justice Bonnie R. Warkentin
RELEASE DATE: February 21, 2014