SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: FS-02-2286-0001
DATE: January 22, 2014
RE: Terry Lynn Veres and Donald John Ellison
BEFORE: The Hon. Mr. Justice R.J. Nightingale
COUNSEL:
Howard E. Staats, for the Applicant
Cindy M. Ebben, for the Respondent
ENDORSEMENT
[1] The applicant brings this motion for a finding that the respondent is in contempt of court for failing without reasonable excuse to comply with the order of Mr. Justice Arrell made September 6, 2013. That order required the respondent to serve and file a financial statement, including complete income tax returns and notices of assessment for the years 2005, 2006, 2007, 2008, 2009, 2010, 2011 and 2012 and documentary confirmation of his income to September 1, 2013 on or before September 27, 2013 pursuant to Family Law Rule 13 (1) (b). The contempt motion was brought under Rules 31 (5) (f), 13 (16) and 14 (23) (c).
[2] The motion also asks that the respondent serve and file the documents referred to in Arrell J.’s order within 10 days.
[3] The applicant brought a motion in July 2013 to change the order of Milanetti J of January 23, 2004 wherein she ordered the respondent to pay child support for his two children in the applicant’s custody in the amount of $211 per month based on his then stated annual income of $14,000.
[4] That order required the respondent to serve the applicant with annual copies of his income tax return and notice of assessment on or before August 31 of each year. Her affidavit stated that the respondent failed or refused to provide any such documentation since the date of that order.
[5] The respondent was served with the motion to change documentation on July 19, 2013 but did not serve and file his financial statement by the required date of August 19, 2013.
The applicant then brought a motion before Arrell J. who made his order as indicated above on September 6, 2013 including the requirement that the respondent pay the applicant her costs of that motion of $750 within 30 days. The respondent was not present in Court on date and that order was served by regular mail by the applicant’s lawyer on the respondent with a letter of September 18, 2013 demanding the documentation and payment of the costs.
[6] When the respondent did not respond and provide the documents, the applicant brought this contempt motion initially returnable on November 22,2013. On that date, the applicant appeared in person seeking an adjournment with the assistance of duty counsel. The motion was adjourned to December 13, 2013 by Kent J. to permit the respondent to file his required tax returns, notices of assessment and financial statement on or before December 9, 2013 to comply with the order of Arrell J.. Kent J. also orders the respondent pay the costs of the attendance that date and costs thrown away fixed in the amount of $750 payable forthwith.
[7] The respondent paid both the costs in compliance with the original order of Arrell J. of $750 in September and the order of Kent J at $750 in November.
[8] The respondent then wisely retained his present counsel and the respondent immediately completed and forwarded to the applicant his financial statement dated December 4, 2013 by courier on December 5. That financial statement provided the required documentation with respect to his 2013 income to date from his employers and WSIB and the summaries of his income tax returns that the respondent had obtained from the Canada Revenue Agency for the years 2005 to 2012.
[9] He then swore an affidavit of December 20, 2013 confirming the details of his historical income for those years as indicated in those tax returns, the particulars of his WSIB injury, his being laid off work in December 2013 due to a shortage of work, his anticipated receipt the employment insurance benefits commencing January 2014 and his not having prospects of employment in the concrete finishing industry or his inability to become self-employed because of his state of mental health.
[10] The applicant’s responding affidavit of December 31, 2013 essentially addressed the issues of the merits of the applicant’s motion to change but not any specific issues with respect to her contempt motion.
[11] When the motion was originally returnable before me on January 3, 2013, the applicant’s position was that the respondent had not complied with the order of Arrell J in its entirety. In particular, her position was that he had failed to provide the notices of assessment and his actual income tax returns which allegedly could be significant as he was self-employed through his own private concrete company for the years 2005 to 2007.
[12] On the original hearing of the motion, respondent’s counsel submitted that the respondent had asked CRA for the notices of assessment and his income tax returns and that he provided what he had received from them believing he had complied with the order of Arrell J.
[13] I then adjourned the contempt motion hearing for one week to permit the respondent to attempt to produce his actual tax returns from 2005 at 2012 and notices of assessment or provide an explanation as to why they haven’t been produced. Even though it was not specifically required by the order of Arrell J, the respondent agreed and I ordered that he provide the financial statements for his private concrete company for the years 2005 to 2007. The respondent was advised and I ordered that he take all reasonable steps to obtain all of these records if necessary from his former accountants and produce them to respondent’s counsel by January 9, 2014 with the contempt matter being determined on January 10, 2014.
[14] The respondent’s affidavit of January 8, 2013 confirmed his counsel’s earlier submissions that although he asked CRA in late November 2013 to provide his income tax returns and notices of assessment in 2005 to 2012, he was advised that they could not provide him with the tax returns but that he would be provided with the documents ordinarily provided and generated by Revenue Canada confirming his tax information which he did receive a few days later and immediately provided to the applicant.
[15] He explained that he had never prepared his own income tax returns relying on his accountants, bookkeepers and tax specialists some of whom allegedly did not properly complete his tax returns resulting in problems with CRA. After the last court hearing, he did a further search and determined that he had none of his tax returns from 2005 to 2012 in his possession but as required by my order and his agreement, he did obtain and provide to the Applicant as required by my order, his 2005 Notice of Assessment and copies of his 2006 to 2012 income tax returns he obtained from his former accountant Mr. Renna including the attachments with the exception of the 2010, 2011 and 2012 years as his former bookkeepers no longer have them nor does he.
[16] His sworn evidence was that he was unable to find or obtain copies of his corporate 2005 income tax return or the 2005 to 2007 Notice of assessment of the Corporation as neither he nor his former accountants have them in their possession and which he must order directly from CRA.
Analysis:
[17] This contempt motion proceeded on the basis of the affidavits of the parties and without the benefit of any questioning of the parties thereon.
As indicated in Prescott-Russell Services for Children and Adults v. G. (N.) et al. (2007) 2006 81792 (ON CA), 82 OR (3d) 686, the test for a finding of contempt of court is:
The criteria applicable to a contempt of court conclusion are settled law. A three-pronged test is required. First, the order that was breached must clearly state and unequivocally what should and should not be done. Secondly, the party who disobeys the order must do so deliberately and willfully. Thirdly, the evidence must show contempt beyond a reasonable doubt. Any doubt must clearly be resolved in favor of the person or entity alleged to have breached the order.
I am not satisfied that the applicant has established that the respondent should be found in contempt of court for the following reasons.
[18] Although the order of Arrell J was obtained on September 6, 2013 in the absence of the respondent although he was served with the motion material, the order was not served on him personally but was not sent out to him by ordinary mail until September 18, 2013 and was not effectively served at the earliest under the Rules until September 23. The order required compliance by September 27. Although it may have been reasonable to allow respondent an extension of time to comply with the order on those facts, he did not do so until and this contempt motion was brought because of that failure. On November 22, 2013, the first return date, Kent J. adjourned the motion to permit the respondent to comply with the order of Arrell J.
[19] As indicated above, the respondent complied with both orders regarding the costs payable by him. He obtained the benefit of counsel to assist him and immediately obtained all relevant tax returns summaries he could from CRA and provided them to the applicant but could not obtain the notices of assessment from them and he no longer had them in his possession. The 2008 to 2012 tax returns obtained from CRA did show his employment income which quite often would suffice. He immediately obtained from his former accountants and bookkeepers what was available to them regarding his complete tax returns when he understood that was expected of him by me on January 3,2013 and also immediately provided additional financial documentation from his private concrete company from 2005 at 2007 even though that had not originally been ordered by Arrell J.
[20] Although the respondent breached the order of Arrell J. by not providing his tax information and financial statement by September 27, 2013 or within a reasonable period after that date, I am not satisfied based on his evidence and his behavior that he disobeyed the order deliberately and willfully and that the evidence has shown that his contempt is established beyond a reasonable doubt.
[21] This case is unlike the facts in Hobbs v. Hobbs 2000 and 80 ONCA 598 where the respondent husband was found to be in contempt of two court orders of February 13, 2007 and April 26, 2007 to make full financial disclosure which continued significantly even as of the date of the hearing of the contempt motion of October 1, 2007. Mr. Hobbs perceived he had a tactical advantage in delaying his spouse’s application and running up her costs of which there is no evidence in this case.
[22] The evidence does not establish beyond a reasonable doubt a persistent, deliberate and willful failure by the respondent to comply with the original court order of Arrell J. and his financial disclosure requirements or any attempt to delay these proceedings.
[23] I am also mindful that the civil contempt remedy is one of last resort. It should not be sought or granted in family law cases where other adequate remedies are available to the allegedly aggrieved party. Contempt findings in family law proceedings should be made only sparingly or as a last resort where motions for enforcement have failed. Hefkey v. Hefkey 2013 ONCA 44.
The applicant’s motion for contempt against the respondent is dismissed.
[24] Although the respondent’s conduct did not constitute civil contempt beyond a reasonable doubt, his failure to respond in a reasonable and timely fashion to the applicant and her counsel with disclosure of his financial documentation once the order of Arrell J. came to his attention in my view constitutes unreasonable conduct disentitling him to any costs of this motion and in fact entitling the applicant, despite dismissal of her contempt motion to an order for costs under Rule 24 (4) and (5) of the Family Law Rules. Leonardo v. Meloche 2003 74500 (ON SC), [2003] O.J. No. 1969.
[25] As indicated, he has already paid costs of $1500 for costs of the contempt related orders. The balance of his responsibility for the applicant’s costs will be dealt with and included in the costs order of my decision on the merits of the applicant’s motion to change the order of Milanetti J released contemporaneously with this decision.
NIGHTINGALE, J.
DATE: January 22, 2014
COURT FILE NO.: FS-02-2286-0001
DATE: 2014/01/17
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Terry Lynn Veres and Donald John Ellison
BEFORE: The Hon. Mr. Justice Nightingale
COUNSEL: Howard E. Staats, for the Applicant
Cindy M. Ebben, for the Respondent
ENDORSEMENT
NIGHTINGALE, J.
DATE: January 22, 2014