ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: D-20761-14
DATE: 2015-10-29
BETWEEN:
Mindie Jane Mullen
Applicant
– and –
Craig John Terry
Respondent
Christopher D. McInnis, for the Applicant
George Fournier, for the Respondent
HEARD: October 27, 2015
RULING
GAUTHIER J.
Overview
[1] This matter was before me on October 27, 2015, for what was to be an uncontested hearing, in accordance with Rules 1(8.4) and 10(5).
[2] At that time, Mr. Fournier appeared on behalf of the respondent and requested an adjournment of the hearing, to permit the respondent to comply with his disclosure obligations and to thereafter participate in the process.
[3] Mr. McInnis, although prepared to proceed on October 27, 2015, did not strenuously oppose the request for adjournment, provided that the respondent be ordered to pay substantial costs.
Facts
[4] The parties commenced cohabitation in 1992, were married on July 11, 1998, and separated on October 1, 2009. There is one child of the union, Braxton Mullen, born June 19, 1999. The child is in secondary school and resides with the respondent. He had resided primarily with the applicant, from the time of the separation until November 2012.
[5] According to the material filed by the applicant, the respondent was controlling and intimidating, both during the marriage, and following the separation. The applicant, according to the material was reluctant to pursue spousal and child support given the respondent’s conduct toward her. She wished to avoid conflict with the respondent, and thus delayed commencing proceedings for support and other relief under the Family Law Act.
[6] The applicant was not employed outside the home until late 2009. She was supported by the respondent until the separation. She became employed in 2012. She then was in receipt of employment insurance benefits until the fall of 2013, at which time she began employment in a boutique clothing store, earning approximately $25,000 per year. That employment continues to this day.
[7] Since the fall of 2012, the applicant has been cohabiting with man in a spousal relationship.
[8] The respondent operated a car dealership. His reported annual income is set out in the applicant’s material and shows declared income of $151,127 in 2010, to $0 in 2013 and $7,786 in 2014.
[9] The application was issued on May 7, 2014. Among other things, the applicant sought a divorce, spousal support and equalization of the parties’ net family property.
[10] On July 21, 2014, the applicant brought a motion for an order for substitutional service on the respondent. On July 24, 2014, such an order was made, and service was deemed to be effective on July 28, 2014. At that time, there was evidence to suggest that the respondent had been attempting to evade service.
[11] On September 25, 2014, a case conference was held. The respondent was not present and no pleadings had been delivered by him. What is clear, however, is that no pleadings had been delivered by the respondent. The presiding judge made the following order:
The Respondent, Craig Terry shall not sell, dispose, transfer or encumber any RRSP’s, investments or any interest he may have personally or through a corporation in real property, including, without limiting the generality of the foregoing, properties known municipally as 725 Regent Street, Sudbury, ON and 1082 the Kingsway, Sudbury, ON.
The Respondent, Craig Terry shall serve and file the following documents on or before October 31, 2014:
a) Form 10: Answer, if so advised; and
b) Form 13B: Net Family Property Statement.
- The Respondent, Craig Terry shall serve the other party with and file a copy of the following documents with the court on or before October 31, 2014:
a) A Form 13.1: Financial Statement (Property and Support Claims);
b) The following documents as proof of income for each of the previous 5 years:
i) A copy of every personal income tax return with all schedules, attachments and information slips, filed with the Canada Revenue Agency (These documents must be served but should not be filed with the Court);
ii) If personal income tax returns have not been filed with the Canada Revenue Agency, a copy of all income slips (T4s, T4As, T5s, etc.) received for any of these taxation years; and
iii) Notices of assessment and, if any, notices of reassessment; or,
Where notices of assessment [or] reassessments are not available, a copy of the Income and Deductions printout provided by the Revenue Canada Agency.
c) Copies of three most recent pay stubs, statement of year-to-date income or a written return from the employer for the current calendar year.
d) A copy of all benefit information circulars or benefit booklets outlining all employee benefits for health care, dental care, prescriptions and life insurance. If no circular or booklet is available, a detailed statement from the employer or group plan insurer outlining all benefits the Respondent, Craig Terry is entitled to received.
e) The following documents from any businesses in which the Respondent, Craig Terry has an interest for the last 5 years:
i) Year-end financial statements for all businesses in which the Respondent, Craig Terry has an interest, including income and expense statements and lists of assets, liabilities and debts.
ii) A statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, the Respondent, Craig Terry or persons or corporations with whom the Respondent, Craig Terry does not deal at arm’s length.
iii) The most recent monthly or quarterly income and expense statements;
iv) A copy of any application made by or for the business for a loan, line of credit, credit card or mortgage, including any statement of income or net worth provided by or for the business.
v) A copy of any partnership agreement involving the Respondent, Craig Terry;
vi) Confirmation of the Respondent, Craig Terry’s income and draw from, and capital in, any partnership.
f) A copy of the following documents for any corporation that the Respondent, Craig Terry controls or in which the Respondent, Craig Terry has 10% or more of the voting shares for the last 5 years:
i) Every corporation’s provincial and federal income tax returns;
ii) A detailed statement of all personal expenses paid by a corporation for the Respondent, Craig Terry;
iii) A statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, the Respondent, Craig Terry and persons or corporations with whom the corporation does not deal at arm’s length;
iv) The year-end financial statements, including balance sheet and income statement or statement of profit and loss, of the corporation and of any related corporation or subsidiaries; and
v) A copy of any shareholders’s [sic] agreement.
Approval of the Order by the Respondent, Craig Terry is hereby dispensed with.
If the Respondent, Craig Terry does not file the material required by this Order by October 31, 2014, the Applicant, Mindie Mullen may proceed to an uncontested hearing without further notice to the respondent, Craig Terry.
If the Respondent, Craig Terry does file the material required by this Order, continuation of the Case Conference shall be held on a date to be set by the Trial Coordinator.
[12] Nothing was received from the respondent.
[13] On January 28, 2015, the applicant brought a motion for a contempt order, returnable on February 19, 2015. The notice of motion for contempt and the supporting affidavit were served on the respondent on February 6, 2015.
[14] The motion for contempt was adjourned to March 5, 2015, on consent. The court file discloses that Mr. Arsenault attended and indicated that he was representing the respondent. The respondent was ordered to file responding materials by February 27, 2015.
[15] On March 3, 2015, the respondent delivered an affidavit indicating that he had not received notice of the application or of any of the related proceedings until February 6, 2015.
[16] On March 5, 2015, the motion for contempt was addressed, and the presiding judge made the following order;
The Respondent shall have 30 days to comply with Cornell J.’s Order, or to indicate the efforts that he has made to do so if he is unable to comply in whole or in part.
[17] The matter was otherwise adjourned without a fixed date, and, the costs of the motion were “reserved to the court at the resumption of the motion, if any.”
[18] On March 17, 2015, Mr. Arseneau died in a plane crash. Shortly thereafter, the respondent wrote to the applicant’s counsel and provided a copy of a document indicating that he had made an assignment into bankruptcy.
[19] On September 4, 2015, the applicant was granted an order in the bankruptcy proceedings, lifting the stay and granting leave to the applicant to continue her application.
[20] Mr. Fournier was retained by the respondent in late August, 2015. The date for the uncontested hearing was set in August and Mr. Fournier was advised of the date. Mr. Fournier did request of Mr. McInnis that the uncontested trial scheduled for October 27, 2015 be adjourned. Mr. McInnis was not receptive to that request.
[21] The respondent, through his counsel, provided certain disclosure on October 23, October 25, and on October 27, 2015. The disclosure obligation remains partially unsatisfied.
[22] Issues
a. Should the respondent be permitted to deliver pleadings and now participate in the proceeding, having failed to comply with the provisions of Rule 10, and having failed to comply with the disclosure orders made on September 25, 2014, and March 5, 2015; and
b. If so, what costs consequences should be borne by him.
Applicant’s Position
[23] Mr. McInnis advised, at the outset of the proceeding on October 27, 2015, that he was ready to proceed, and that he had spent some four hours in preparation for the uncontested trial.
[24] He further advised that he was prepared to consent to the adjournment request, provided that the respondent paid costs in the amount of $12,500. He argued that all of the costs incurred by his client, up to today’s date, were essentially costs thrown away, occasioned by the failure of the respondent to discharge his obligations both under the Rules and pursuant to the disclosure orders made.
Respondent’s Position
[25] Mr. Fournier, on behalf of the respondent, acknowledged the delay, and acknowledged that some amount of costs was in order, however suggested that the amount requested by Mr. McInnis was excessive, particularly given the respondent’s limited financial resources, and given that such an order for costs would likely lead to the respondent being prevented from participating in the matrimonial litigation as a result of an inability to discharge it.
Analysis
[26] The first concern that arises is with regard to when the respondent became aware of the matrimonial proceedings. I have already referred to the respondent’s affidavit, sworn March 3, 2015, to the effect that he did not become aware of the proceedings until he was served with the materials relating to the contempt motion. The respondent did acknowledge however, having received Mr. McInnis’s letter of March 25, 2014, wherein counsel advised that (a) he would like to negotiate a resolution of the issues on behalf of the applicant, however, (b) absent a response within 21 days, his instructions were to commence legal proceedings against the respondent.
[27] The respondent then would have, at the very least, been aware of the potential legal proceedings, by the end of March 2014.
[28] Even if I accept that the respondent did not become aware of the proceedings, and thus of his obligations pursuant to both the Rules and the order of September 25, 2014, until February 6, 2015, and further, taking into account the untimely death of the respondent’s counsel in mid-March 2015, the fact remains that nothing of significance was produced, in compliance with the disclosure order, until three days before the date set for the uncontested trial.
[29] And again, notwithstanding the death of Mr. Arseneau, the respondent, having been made aware of his obligations, had a duty to take positive and timely steps to bring himself in compliance with the orders of September 25, 2014 and March 5, 2015. Mr. Fournier was not retained until the end of August, some five months following the order made in the contempt proceeding.
[30] There is no adequate explanation for the eight month delay between the time of having been made aware of the proceedings, and the first significant compliance with the respondent’s disclosure obligations.
[31] The applicant has incurred substantial legal fees to date. Much of her costs can properly be characterized as having been “thrown away”; certainly any costs incurred since March 5, 2015, and to a certain extent, the costs reflected in Mr. McInnis’s account of March 4, 2015, for services rendered from February, 2014.
[32] I conclude that the respondent should pay costs to the Applicant, fixed at $8,000 plus H.S.T.
Conclusion
[33] ORDER TO GO:
The respondent shall pay to the applicant costs fixed at $8,000 plus H.S.T.;
The respondent shall deliver his pleadings within 15 days of the date of this order, failing which a new date for an uncontested hearing can be obtained by the applicant, without notice to the respondent; and
The respondent shall be in full compliance with his disclosure obligations pursuant to the Family Law Rules, as well as the order of September 25, 2014, within 30 days of the date of this order, again, failing which the applicant may secure a new date for an uncontested hearing without notice to the respondent.
The Honourable Madame Justice Louise L. Gauthier
Released: October 29, 2015
COURT FILE NO.: D-20761-14
DATE: 2015-10-29
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mindie Jane Mullen
Applicant
– and –
Craig John Terry
Respondent
RULING
Gauthier J.
Released: October 29, 2015