CITATION: Majeed v. Chaudhry, 2015 ONSC 6014
COURT FILE NO.: FC-13-1556
DATE: 2015/10/06
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: UMNA MAJEED, Applicant
AND
JAVAID IQBAL CHAUDHRY, Respondent
BEFORE: Shelston J.
COUNSEL: Sonia Smee, counsel for the Applicant
Cheryl Hess, counsel for the Respondent
HEARD: September 15, 2015 (at Ottawa)
ENDORSEMENT
[1] The applicant moves to strike the respondent’s Answer and Claim for non-compliance with the order of Justice Mackinnon, dated November 13, 2014. In the alternative, the applicant seeks the following orders:
(i) The respondent shall not be allowed to proceed with any action in this matter prior to payment of $32,000 as security for costs.
(ii) $10,000 of the above security shall be designated for payment of the business valuation.
(iii) The respondent shall pay the above security for costs (2.i & ii) no later than 14 days from the date of this order, failing which his Answer shall be struck and any claim that he has made shall be dismissed on an ex parte basis.
(iv) The respondent shall provide the information requested by Steve Pittman, the applicant’s business valuator, on April 20, 2015 by 5 p.m., 7 days from the date of this order failing which his Answer shall be struck and any claim that he has made shall be dismissed on an ex parte basis.
(v) The court may impute income to the respondent based on all financial documents disclosed by 5 p.m., 7 days from the date of this order and the subsequent recommendation of the applicant’s business valuator.
Costs that were awarded on November 13, 2014 in the amount of $1,500 and post judgment interest shall be enforceable by the Family Responsibility Office.
The respondent shall pay costs for this motion on a full recovery basis enforceable by the Family Responsibility Office.
Background
[2] The parties were married in Lahore, Pakistan on April 2, 1993, and separated on June 1, 2011. There are no children of the marriage.
[3] The respondent at the time of the marriage was a doctor of veterinary medicine. In 2002, the respondent immigrated to Canada. He sponsored the applicant’s immigration to Canada and she joined him in Ottawa in February 2004. From 2004 to 2010, the respondent studied to be qualified as a veterinarian in Ontario and New York State and worked in various jobs, including in Buffalo, New York. The applicant worked as a beautician.
[4] The respondent moved to British Columbia in December 2010 to pursue a career as a veterinarian. The plan was that he would move, obtain employment then the applicant would move to join him. The respondent invested in a veterinarian practice in British Columbia. In March 2011, they agreed that the applicant would not move out until the business was stable.
[5] By June 2011, the parties agreed to separate. The respondent remained in British Columbia where he remains today. The applicant never moved to British Columbia.
[6] The applicant commenced proceedings on July 4, 2013, seeking a divorce, spousal support, equalization of the net family property and other relief, including financial disclosure.
[7] The respondent filed an Answer dated March 28, 2014, disputing the date of separation, opposing any liability for spousal support and indicating that there are very few assets requiring equalization.
[8] The parties had an initial case conference on March 7, 2014, before Justice Mackinnon, who extended the time for the respondent to file an Answer as well as initial disclosure.
[9] A second case conference was held on April 16, 2014, before Justice Parfett, where she dealt mainly with disclosure.
[10] A motion for temporary support was heard on November 13, 2014. Justice Mackinnon ordered the respondent to pay to the applicant $650 per month as spousal support commencing November 1, 2014, as well as further disclosure and ordered that the respondent pay costs of $1,500 to the applicant.
[11] After the motion, the applicant sought the respondent’s compliance with the order. He was not paying the support, did not pay the costs and by the end of June 2015, still had not complied with the disclosure. On July 3, 2015, the applicant served her notice of motion returnable September 15, 2015, based on the following grounds:
(a) Despite being ordered to pay $650 per month commencing November 1, 2014, the respondent has paid a total of $1,250 in support.
(b) The respondent did not provide the financial disclosure. Specifically, the order of Mackinnon, J. ordered that the respondent provide to the applicant’s business valuator, any disclosure requested within 60 days of the request. On April 20, 2015, the applicant’s valuator, Mr. Pittman, requested the financial information. The financial information was to be provided within 60 days, in other words, no later than June 19, 2015. As of July 3, 2015, the applicant’s valuator had not received any information.
(c) As of July 3, 2015, the respondent had not paid the costs ordered by Justice Mackinnon.
Events after service of this motion
[12] The respondent paid the costs on September 4, 2015, by borrowing the funds.
[13] On August 31, 2015 and September 1, 2015, the long overdue replies to Mr. Pittman were provided from the respondent’s accountants.
[14] The respondent has not paid the spousal support arrears.
Parties’ Positions
[15] The applicant’s position is that the respondent must be penalized for his default and his Answer must be struck. In the alternative, she seeks security for costs of $32,000.
[16] The respondent’s position is that he cannot afford to pay the arrears or the full ongoing support, that he has complied with the cost award and that he has complied with the disclosure order arguing any delay was caused by the accountants.
[17] Regarding support, the respondent alleges that the applicant does not require spousal support as her health is good; she is young and capable of working on a full time basis as she has been a beautician since 2005 and can find work. The respondent says he can only pay $250 per month and that currently the Family Maintenance Enforcement program in British Columbia is enforcing the arrears and the ongoing support. Despite this apparent change in circumstances, he has not brought a motion to vary the spousal support order.
[18] His position regarding the issue of costs is that he did not have the resources to pay the costs but he borrowed the $1,500 and paid the costs on September 4, 2015, 11 days before this motion.
[19] With respect to the delay in providing information to Mr. Pittman, the respondent indicates that his accountants had assured him that by July 2015 the information would be provided. The applicant indicates that as a result of receiving the documentation so late, Mr. Pittman was not able to provide any further insight before the motion as to what disclosure he has received, what is missing and any follow up questions arising from the disclosure.
The Law
[20] Sections 1.(8) and 1.(8.4) of the Family Law Rules, O. Reg. 114/99 read as follows:
Failure to Obey Order
1(8) If a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including,
(a) an order for costs;
(b) an order dismissing a claim;
(c) an order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party;
(d) an order that all or part of a document that was required to be provided but was not, may not be used in the case;
(e) if the failure to obey was by a party, an order that the party is not entitled to any further order from the court unless the court orders otherwise;
(f) an order postponing the trial or any other step in the case; and
(g) on motion, a contempt order.
Consequences of striking out certain documents
1(8.4) If an order is made striking out a party’s application, answer, motion to change or response to motion to change in a case, the following consequences apply unless a court orders otherwise:
The party is not entitled to any further notice of steps in the case, except as provided by subrule 25 (13) (service of order).
The party is not entitled to participate in the case in any way.
The court may deal with the case in the party’s absence.
A date may be set for an uncontested trial of the case.
[21] In family law cases, pleadings should only be struck and trial participation denied in exceptional circumstances where no other remedy would suffice as set out in Purcaru v. Purcaru, 2010 ONCA 92, at para. 47.
[22] The Ontario Court of Appeal in Chiaramonte v. Chiaramonte, 2013 ONCA 641 has described the striking of pleadings as a remedy of last resort and that it is a drastic remedy that should be only applied in exceptional circumstances. If granted, the respondent would not be entitled to participate in the case in any way or be entitled to notice of further proceedings.
[23] The respondent has made efforts to comply with the disclosure albeit very late and in face of this motion. The documents that were requested are important to determine the value of the respondent’s business and his income. Until Mr. Pittman reviews the disclosure, there currently is no request for further disclosure. However, once reviewed, Mr. Pittman may have further questions and require further disclosure.
[24] After considering all of the factors, on a temporary basis, I will not strike the respondent’s Answer at this time. I order that the applicant’s expert, Mr. Pittman, provide a letter to the respondent arising from the most recent disclosure of August 31 and September 1, 2015, and that the respondent shall reply within 30 days. Failing compliance with the order made herein, a motion on notice shall be scheduled before me for the purpose of my determination of the respondent’s compliance.
Motion for Security for Costs
[25] In the alternative, the applicant seeks an order that the respondent not be allowed to proceed with any action in this matter prior to the payment of $32,000 as security for costs and that $10,000 of the security be designated for the payment of the business’ valuation.
[26] Rule 24(13) of the Family Law Rules, read as follows:
ORDER FOR SECURITY FOR COSTS
(13) A judge may, on motion, make an order for security for costs that is just, based on one or more of the following factors:
A party ordinarily resides outside Ontario.
A party has an order against the other party for costs that remains unpaid, in the same case or another case.
A party is a corporation and there is good reason to believe it does not have enough assets in Ontario to pay costs.
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.
A statute entitles the party to security for costs.
[27] Rule 24(13) grants the court the discretion in awarding security for costs. The question of whether it is just in a particular case is determined based on the record before the court considering the claims being made.
[28] In this case, the respondent makes no claims before the court. He is defending a claim for spousal support and an equalization claim. He resides in British Columbia and has no assets in Ontario. The applicant seeks spousal support, an equalization payment and costs.
[29] In submissions counsel for the applicant sought $32,000 as security for costs based on the estimate of legal fees for a three day family law trial and $10,000 for Mr. Pittman’s services.
[30] The only ground that is applicable is Rule 24(13) (1) in that the respondent resides outside of Ontario. The respondent has paid the costs, has satisfied the disclosure order and the case is not a waste of time or a nuisance. However, the respondent took a significantly long period of time to comply with the cost award and the disclosure. Timely compliance is also a factor that I have considered.
[31] Non-compliance with court orders cannot be condoned. Timely disclosure and compliance with courts order must be enforced by the court failing which the system will simply fail.
[32] The respondent’s most recent financial statement dated September 3, 2015, shows a monthly income of $4,908.33 and monthly expenses of $5,804.31 which includes a monthly mortgage payment of $2,852.84, and monthly debt payment of $500. He has a home valued at $584,000 with a mortgage of $566,000. He has significant debt so that he has currently a negative net worth.
[33] However, due to the lateness of the disclosure, the applicant’s expert could not complete a business valuation or an income report. Consequently, the respondent’s financial situation is still unclear.
[34] The applicant’s most recent financial statement dated June 22, 2015, discloses a monthly income of $3,112 and monthly expenses of $3,152 of which $776 is rent and $545 is debt payment. Her net worth is also negative. She requires the completion of the business valuation and the income report as it affects the equalization calculation and spousal support issues before the court. She does not have the resources to pay for it all by herself.
[35] In the circumstances, in my view, an order for security for costs is appropriate as follows:
(a) The respondent shall register on title no later than October 29, 2015, a security interest in favour of the applicant against his property located at #11-5988 Blanshard Drive, Richmond, British Columbia, V7C 5W6 at his cost in the amount of $28,000. The legal description of said property shall be attached as a schedule to my order; and
(b) The respondent shall pay to the applicant the sum of $5,000 on or before November 6, 2015, for interim disbursements.
Costs
[36] If the parties are unable to resolve the costs issue, then, the applicant shall provide her written submissions by October 21, 2015. The respondent shall provide his submissions by November 6, 2015 and the applicant shall provide any reply submissions by November 13, 2015. The costs submissions to be no longer than three pages attaching offers to settle and their cost outlines.
Shelston J.
Released: October 6, 2015
CITATION: Majeed v. Chaudhry, 2015 ONSC 6014
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: UMNA MAJEED, Applicant
AND
JAVAID IQBAL CHAUDHRY, Respondent
BEFORE: Shelston J.
COUNSEL: Sonia Smee, counsel for the Applicant
Cheryl Hess, counsel for the Respondent
ENDORSEMENT
Shelston J.
Released: October 6, 2015