CITATION: Chiaramonte v. Chiaramonte, 2016 ONSC 7328
COURT FILE NO.: FS-10-7411-M
DATE: 2016 11 24
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
ANNA CHIARAMONTE
L. Wolfson, A. Black, for the Applicant
Applicant
- and -
ROSARIO CHIARAMONTE
K. Maurina, for the Respondent
Respondent
- and -
DIRECTOR, FAMILY RESPONSIBILITY OFFICE
D. Edwards, for the Director
HEARD: November 10, 2016
REASONS FOR RULING ON VARIOUS MOTIONS
Justice Thomas A. Bielby
Introduction
[1] Both parties have motions before the court. I am hearing these motions as the case management judge. The matter is set for trial, in Owen Sound, in March, 2017, for five weeks.
[2] The applicant seeks the following relief:
(a) an order finding the respondent in contempt;
(b) an order striking the respondent’s pleadings;
(c) an order declaring the respondent is not entitled to bring any motions before this court as a result of his failure to comply; and
(d) an order staying the respondent’s motion or any future motion without first obtaining leave of the court.
[3] The applicant relies, in part, on Family Law Rule 1(8).
[4] The respondent seeks a refraining order and an order staying the enforcement of the outstanding child and spousal support order and any arrears thereunder, pending the trial. The respondent also re-asserts his claim for exclusive possession of the matrimonial home.
[5] The Director, Family Responsibility Office (“FRO”) appears in response to the motion for a refraining order.
[6] The applicant submits that the respondent has failed to comply with my order of September 15, 2015, wherein I ordered the respondent to pay spousal support of $17,747.00 per month and child support of $2,949.66 per month. The enforcement of arrears in regards to past orders was stayed as part of that ruling but any arrears which accrued thereafter were enforceable.
[7] The applicant was obligated to pay, from this support, most of the expenses of the matrimonial home.
[8] The applicant submits that the total arrears stand at $1,368,124.24 and the arrears which have accrued since October 1, 2015 are $203,926.76.
[9] The respondent argues that in reality the arrears are much less because he should be given credit for the third party payments he has made in relation to the household expenses of the matrimonial home. He re-asserts his argument that his income is much less than determined within the order.
[10] The applicant also submits that the respondent has failed to comply with other orders in relation to financial disclosure. In response the respondent submits he has made reasonable efforts to disclose and continues to do so.
[11] In that regard I note that on the morning the motions were heard the respondent’s counsel delivered further significant disclosure to counsel for the applicant.
Background
[12] In a motion, heard on December 11, 2014, the applicant sought a number of heads of relief, including an order striking the respondent’s pleadings on the grounds that the respondent was in breach of a number of orders.
[13] This motion originally sought a finding of contempt against the respondent but this head of relief was, on consent, adjourned sine die.
[14] In my ruling, dated January 8, 2015, I declined to strike the respondent’s pleadings. I made an order which included the following:
The respondent was to produce an income analysis and business valuation of his dental practise and corporate holdings and property on or before February 28, 2015.
The respondent was to provide, on or before January 31, 2015, a complete set of both his individual and corporate tax returns.
All investment properties, both in the United States and Canada, were to be listed for sale and documents confirming sale produced on or before January 21, 2015.
[15] On August 10, 2015, both parties had motions before the court which resulted in my decision of September 15, 2015. The respondent sought a variation of child and spousal support on the grounds that his income was much less than determined by Snowie J. The applicant brought motions for compliance and sought relief for non-compliance.
[16] By my September, 2015 order, the applicant’s contempt motion was adjourned sine die, returnable on 14 days’ notice. In regards to the current issues before me, the applicant served a notice to return the contempt motion. The fourteenth day was the day I heard the current motions and I find there is no issue as to short service.
[17] The applicant had before the court another motion to strike pleadings and it was adjourned sine die, returnable on seven days’ notice. At that time I was of the opinion that the respondent had made significant disclosure and that the respondent should be allowed to participate in the trial.
[18] In my September 15^th^ ruling, I noted that the respondent was ordered in 2012 and again in 2014, to provide a business valuation and income analysis. He did not comply with these orders. He argued that he had not filed personal and corporate tax returns for a number of years and the completion of the tax returns were necessary to complete such analysis. He was relying on his own default as the reason he could not comply.
[19] In regards to ongoing disclosure I ordered the applicant to provide to the respondent within 30 days, a written list of remaining disclosure sought and the respondent was to reply within 15 days.
[20] In regards to support, when before me on August 10, 2015, both parties provided income analysis. However, I was not persuaded that the respondent had an income of less than $714,000, based on competing income analysis. The issue as to the acceptance of one or the other income reports was left to the trial judge. I did relieve the respondent of the obligation to maintain the expenses of the matrimonial home.
[21] On November 9, 2015, I ordered:
Both parties were to exchange fresh financial statements and net family property statements providing values for all assets and debts owned at the date of separation and owned as of November 9, 2015. The documents were to be exchanged on or before January 10, 2016.
The respondent was to provide details of a 4.5 million dollar debt shown in his personal corporation financial statement and described as a “related party debt”. This disclosure was to be provided on or before January 10, 2016.
Proper valuations of all investment properties owned by the respondent were to be provided on or before January 10, 2016. The respondent was also to provide values for the mortgages on the properties and proof of same.
The respondent was to provide (on consent) the necessary authorization to the applicant’s income and business valuator, to allow the valuator to speak with the respondent’s valuators and accountants.
In regards to the investment properties owned by the LLC’s, the respondent was to disclose whether he is the owner of the said LLC’s or if they are owned by other corporate entities. This disclosure was to be completed by January 10, 2016. The respondent was to provide copies of the Articles of Incorporation.
Outstanding undertakings were to be completed by January 10, 2016.
The parties were to take all reasonable steps to convey the payment of the matrimonial home’s mortgage and expenses to the applicant in order to comply with my ruling of September 15, 2015.
The respondent was to provide an accounting of the $1,250,000 which was received by way of mortgage on the matrimonial home four months before separation. The respondent was also to provide an accounting of the $1,000,000 removed from the joint bank account as of the date of separation.
Further questioning of the parties was to take place by the end of February, 2016, after disclosure was made.
[22] By motion, returnable February 17. 2016, the respondent sought exclusive possession of the matrimonial home and an order varying support on the grounds that the applicant had purchased a home in Amherstburg and was living therein. The motion was dismissed.
[23] Further, the respondent was ordered to provide values for the assets for which he had not yet provided valuations, and he was to do so within 30 days.
[24] The applicant sought a finding of contempt and a stay of the respondent’s motion. The request for a stay was dismissed and the contempt motion adjourned.
[25] On July 25, 2016, pursuant to a settlement conference conducted via teleconference, I ordered the parties to exchange undertakings and disclosure within 60 days. If a compliance issue(s) arose I could again be consulted via teleconference, however, the compliance issues were heard with this argument.
Applicant’s Argument
[26] The applicant argues that not only is there non-compliance, more financial information is required to allow for the preparation for trail and to prepare an offer of settlement.
[27] The failure to comply relates to the breach of previous orders, failure to complete undertakings, and the failure to respond to the inquiries of the applicant’s valuator.
[28] The applicant submits that the respondent is in breach of my order of November 9, 2015, because while the respondent filed a financial statement, it was incomplete. In relation to twenty assets included therein, the value of each of those assets was noted as TBD (to be determined). Further, the respondent did not file a net family property statement.
[29] In regards to the respondent’s obligation to disclose the details of the $4,500,000 debt, said disclosure was not provided until the morning these motions were heard. The disclosure included a spread sheet which the applicant’s counsel had little time to review and which he described as, “incomprehensible”.
[30] In regards to the valuations provided for the investment properties owned by the respondent or by corporations owned by the respondent, counsel for the applicant submits the disclosure is unsatisfactory. The qualifications of those providing values are unknown, and many of the valuations were with respect to dates other than the date of separation (January, 2010). Some mortgage information remains outstanding.
[31] It is submitted that the articles of incorporation for the LLC’s were not disclosed.
[32] It is submitted that undertakings have not been completed. At Tab H, paragraph 110 of the Continuing Record, Volume 16, is the applicant’s list of outstanding undertakings. Again some answers were provided on the day of my hearing of these motions but it is submitted many undertakings remain outstanding (undertakings, 51, 52, 57, 58, 59, 63, 64, 66, 67, 69, 73, 75, 76, and 77).
[33] In Volume 16 of the Continuing Record, paragraph 110, Tab E is a letter authored by the applicant’s business valuator, dated October 12, 2016, in which the valuator sets out the information required. A response to this letter was provided on the morning of these motions and took the form of a letter from the respondent’s counsel, dated November 10, 2016. The letter purports to provide the requested information and includes the spreadsheet referenced previously.
[34] The applicant’s valuator’s letter found at Tab E seeks much more disclosure including, among other things, financial statements with respect to the various corporate entities owned by the respondent as well as the 2014 and 2015 personal tax returns of the respondent. In this regard the applicant also relies on Rule 13 of the Family Law Rules.
[35] Counsel for the applicant submits that the respondent has a history of failure to comply or late compliance, whether intentionally or negligently.
[36] The question is asked by the applicant’s counsel is, when is “enough, enough?”
[37] In regards to support, the applicant points to the respondent’s failure to comply with support orders over a period of years. The first support order was on consent and was made by Eberhard J. on April 1, 2010 by which the respondent was to pay spousal support of $4,500 per month and child support of $2,572 per month on an estimated income of $200,000. The respondent was also required to maintain the expenses on the matrimonial home.
[38] As noted previously, the matter then went before Snowie J. who on August 2, 2012 made an order significantly increasing the amount of support.
[39] From that point forward the respondent has remained in arrears. He continued, until recently, to pay spousal support of $4,500 per month. No effort has been made otherwise.
[40] The applicant submits that the respondent stopped paying any support whatsoever after July, 2016. It is further submitted that the applicant has been unable to pay the expenses on the matrimonial home because of the respondent’s failure to pay the support as ordered.
[41] The applicant disputes the respondent’s claim that since my order of September 15, 2015, he has paid $74,000 to third parties such as the mortgagee, and argues, in any event, it does not relieve the respondent’s obligation to pay support.
[42] The applicant notes that with respect to the respondent’s claim that the Canadian Revenue Agency will not allow him a deduction for spousal support paid, no evidence of the refusal has been disclosed. Counsel submits that the applicant continues to disclose, on her tax returns, the support paid to her and pays income tax on it.
[43] In his submissions counsel for the applicant submits that his client purchased the Amherstburg property to provide the parties’ daughter, Nadia, a place to live while she attends school in Windsor. Nadia, it is said, graduates next month and the applicant submits the property will be put on the market thereafter.
[44] In that regard I noted that in February, 2016, the submission was made that the applicant bought the property in Amherstburg to allow her to live in it and be close to both children who were in school in Windsor. In a previous submission the court was advised the Amherstburg property was already listed for sale.
[45] In any event, the applicant submits that her mother now resides in the Amherstburg property and that she relies on her mother financially. The applicant submits she has exhausted all of her credit and cannot carry both properties without the payment of support as ordered.
[46] In response to the submissions of counsel for the respondent, the applicant submits that the letter dated November 10, 2016 does not fully answer the information sought in the applicant’s letter of October 16, 2016, as it lacks detail.
[47] In regards to the issue of contempt, it is submitted that on the material before me, and without the need of a hearing, I can find the respondent in contempt.
Respondent’s Argument
[48] The respondent submits that the motion for contempt ought to be adjourned to the trial judge. The return of this motion was not the subject of the last case management conference. The notice or return was not served personally and the respondent’s lead counsel was not able to attend today and would be the respondent’s choice to respond to the contempt allegations.
[49] The respondent seeks exclusive possession of the matrimonial home. It is submitted that the applicant is misleading the court when she says she still resides in the Georgian Bluffs property. The respondent submits that the applicant’s home is in Amherstburg and submits the following indicia to support this claim:
The applicant in her material indicates that on two occasions she had gone to some type of food bank in Windsor.
The parties’ son was hospitalized in Windsor.
The Township of Georgian Bluffs, the municipality in which the matrimonial home is located, in June, 2016, put the parties on notice that that weeds had to be cut down. The property was not being maintained.
Two phone books delivered to the matrimonial home were left lying in the driveway suggesting no one had been to the house for some period of time.
[50] The respondent submits that the applicant delayed in having the mortgage payments transferred to her account. Once that step was taken, for each of these months, April, May and June, 2016, he paid to the applicant spousal support of $9,709.94. Thereafter the respondent became aware of the fact that the mortgage was significantly in arrears. In September, 2015, the respondent had to pay $15,000 towards the mortgage arrears.
[51] The respondent submits that exclusive possession of the matrimonial home is required so the house will not remain vacant and to allow him to take care of it pending its sale.
[52] In regards to the applicant’s motion to strike pleadings, the respondent submits that arguments of the applicant are only the repetition of past arguments and motions. The respondent relies on the remarks I made in my September 15, 2015 ruling.
[53] It is submitted that the respondent has made tremendous efforts to disclose and comply with orders. The disclosure, it is argued is enough to get the matter to trial.
[54] Counsel for the respondent submits that in fact his client has provided valuations for his assets and the corresponding debts (mortgages).
[55] It is submitted that in regards to the request for Articles of Incorporation, the respondent has provided what he had in his possession and/or control which took the form of membership certificates.
[56] It is further submitted by the respondent that their letter of November 8, 2016, and the attached schedule is a complete answer to the applicant’s letter, dated October 16, 2016, and in regards to the information sought by the applicant’s valuator.
[57] In regards to the outstanding undertakings, it is submitted that all have been answered. It is stated that certain tax returns have not been completed but copies will be provided when received.
[58] In regards to his own motions, the respondent submits that the support order ought to be stayed as well as the enforcement of arrears. The respondent submits his income is substantially less than the levels imputed in past orders. There are competing income valuations, the acceptance of which is to be left to the trail judge. Accordingly, pending a full income determination, support ought to be stayed.
[59] Further, it is submitted that the trial judge will be required to determine what third party payments were made by the respondent in relation to the matrimonial home and what amount should be credited against the support arrears, and cites this as another reason why support ought to be stayed.
[60] The respondent seeks a refraining order against the suspension by FRO of his driving privileges, arguing he needs his car for work and a suspension of his licence will impact on his ability to work and earn an income.
[61] The respondent submits that he has a prima facie claim to a variation such as to allow a stay of support and relies on the income analysis prepared by his expert.
[62] The respondent also requires the release of his passport and submits if a stay is granted the passport should be released.
Argument of the Director, Family Responsibility Office
[63] Counsel for FRO submits that there has been no material change in circumstances established or even argued to suggest a prima facie argument to vary support.
[64] Counsel for the Director submits that she would support a refraining order that requires the respondent to pay on-going support at the level as per my order of September 15, 2015, and requires a reasonable monthly payment against the arrears, pending the trial.
[65] It is submitted that the Family Responsibility and Support Arrears Enforcement Act 1996, S.O. 1996, c. 31, Part 1, section 1, does not consider third party payments to be payments towards support.
[66] In regards to the suspension of the respondent’s passport it is submitted that at law no refraining order can be made with respect to the passport and that to release the passport a variation of support order is required.
[67] The statement of arrears, as provided by FRO, reflect that since July, 2016, no support payments have been made. The court was advised by counsel for the Director that a payment of $4,500 was made in October, 2016, but has yet to be posted.
Analysis, The Law And Rulings
Motions Brought by the Respondent
[68] I will first address the motions of the respondent. While, as discussed below, the respondent remains in breach of a number of court orders, I permitted the respondent to proceed with his motions notwithstanding the applicant’s submission that pursuant to section 1(8) of the Family Law Rules I should not permit the respondent to file or argue any motions in the face of his non-compliance. I declined to exercise my authority in that regard.
The Law in Regards to Orders Staying Proceedings
[69] The remedy of a stay or proceedings is a discretionary one. The remedy was discussed in my September 15, 2015 ruling and reference was made to the Courts of Justice Act R.S.O. 1990 c. C.43, section 106 which states,
“A court, on its own initiative or on a motion by a person, whether or not a party, may stay any proceeding in the court on such terms as are considered.”
[70] With respect to a stay of support and the enforcement of arrears, both counsel rely on the case of Yip v. Yip 1988 CanLII 4472 (ON SC), [1988] O.J. No. 2784. In that case, it was determined that the husband had not satisfied the court that he had a prima facie case for a variation in support (para. 12). Further, at paragraph 13, MacFarland J. wrote,
“He comes to this court seeking equitable relief without clean hands himself. He has not paid until very recently filed a proper financial statement and has paid his wife absolutely nothing since 1st December 1987.”
[71] The case is authority for the proposition that to obtain a stay of proceedings in regards to the payment of support the party seeking the stay must show a prima facie case and come before the court with clean hands. (Also see Marok v. Marok 2003 CanLII 9094 (ON SC), [2003] O.J. No. 2531.)
[72] In Ethier v. Ethier 2008 CarswellOnt 5101, P. Kane of the Ontario Superior Court of Justice, at paragraph 9, wrote,
“I find that I do have jurisdiction to and hereby order that the Director of the FRO refrain from suspending Mr. Ethier’s driver’s licence.”
[73] FRO was prohibited from taking any proceeding to enforce child support arrears against Mr. Ethier until determination by this court of whether any such arrears exist.
Analysis of the Request For a Stay or Proceedings
[74] In my September 15, 2015, ruling I stayed the enforcement of the arrears which had accrued to the end of September, 2015. I noted however, that any arrears which accrued thereafter were enforceable. In that ruling I also relieved the respondent of having to pay the expenses of the matrimonial home (with two exceptions which were to be shared).
[75] The respondent now asks the court to stay the enforcement of any support, current or arrears. He does not suggest the payment of any amount of support pending the trial, as a condition of any stay order. The applicant would have no income.
[76] With respect to the need to establish a prima facie case for a variation, the respondent has not put before the court any additional evidence in regards to his income other than the material before me in August, 2015. Now, as then, the court had before it two conflicting income analysis.
[77] The support I ordered paid in my order of September 15, 2015, was based on an annual income of the respondent of $714,000, the amount of the respondent’s income determined by Snowie J. in her 2012 interim support order. I concluded that, given the conflicting income reports, I was not persuaded that his income was any less.
[78] The arrears are substantial without taking into account section 7 expenses.
[79] Then, as now, the respondent seeks relief because FRO has given notice of its intention to suspend the respondent’s driver’s licence.
[80] In effect, by requesting a stay of support, the respondent is asking me to re-consider my ruling and find he has a prima facie case for a variation. Had I thought so in September, 2015, my order was likely to have been much different.
[81] I conclude that there is, on the material before me, no prima facie case for a variation of support that would favour the respondent.
[82] Further, the respondent does not come before the court with clean hands. He continues to be in non-compliance of a number of orders.
[83] The respondent’s motion for a stay of support payments and enforcement is dismissed.
Analysis of the Request for a Refraining Order
[84] The respondent seeks a refraining order and argues that FRO ought to be refrained from suspending his driving privileges, and that no support be paid pending trial. This is presumably premised on an order staying the enforcement of support.
[85] Given my ruling in regards to a stay, the issue then becomes what amount of support ought to be paid on a go-forward basis and with respect to arrears as a condition of any refraining order.
[86] In regards to the terms of a refraining order I agree with the submissions of Ms. Edwards, on behalf of FRO.
[87] The respondent needs to show a willingness to comply with court orders relating to support. If his licence is a necessity, then I expect the respondent will make every effort to comply with the terms of the refraining order and I believe he has the ability to do so taking into account his income and asset base.
[88] These amounts are not to be set off by any third party payments. The support, in its entirety, is to be paid to FRO to the benefit of the applicant and the children. I reiterate that assuming the support is paid as ordered, the applicant is responsible for the matrimonial home expenses.
[89] I will issue a refraining order but it will require the respondent to pay his current support obligation, that is, a monthly spousal support obligation of $17,747.00 and child support of $2,949.66 and for the purposes of the refraining order, the first payment is due December 1, 2016.
[90] I have considered what a reasonable amount would be appropriate in regards to a monthly payment on the arrears. Given that the trial is only a few months away, I will order the arrears to be paid at the rate of $1,000 per month pending the decision of the trial judge. The payment has to be more than a token amount.
Analysis of the Request for Exclusive Possession
[91] In regards to the respondent’s claim for exclusive possession, I am unsure why the applicant would want to pay expenses on two properties. It seems to me that the applicant wishes to live in Amherstburg and clearly spends a great amount of time there. Her current argument that she acquired the property for somewhere for Nadia to live while at school is disingenuous, based on her past declarations.
[92] However, pursuant to Rule 1(8)(e), given the non-compliance of the respondent both with respect to support and non-disclosure, I will not consider a change in possession of the matrimonial home.
[93] Further, the parties have been separated since 2010 and at this point the trial is only three months away. I am not persuaded of any need for a change.
[94] The respondent’s motion for exclusive possession is dismissed.
Motions of the Applicant
[95] I now turn to the issues regarding the relief sought by the applicant.
The Law Relating to Contempt
[96] In Vigneault v. Massey [2014] O.J. No. 1535, the Ontario Court of Appeal addressed the issue of contempt. At paragraph 11 the Court stated,
“Civil contempt is a quasi-criminal proceeding and the following elements must be proven beyond a reasonable doubt:
The order that was breached must state clearly and unequivocally what should and should not be done.
The party who disobeys the order must do so deliberately and wilfully.
The breach must be proven beyond a reasonable doubt.
[97] In Surgeoner v. Surgeoner [1992] O.J. No. 299, Blair J., at the top of page 2 stated,
“The need for the sanction of contempt proceedings is of significant importance in the field of family law. There is an undertow of bitterness and sense of betrayal which often threatens to drown the process and the parties themselves in a sea of anger and “self-rightness.” In this environment it is all too easy for a spouse to believe that he or she “knows what is right.” Even after a matter has been determined by the Court and to ignore, disobey or defy that determination.
Those who choose to take this tack must know that it will not be tolerated.”
[98] The procedural requirements in relation to contempt, as set out in Family Law Rule 31, must be met without exception (Ludmer v. Ludmer Endorsement of Rivard J., dated March 14, 2006 ).
[99] Rule 31 of the Family Law Rules states, “An order, other than an order for the payment of money, may be enforce by a contempt motion made in the case in which the order was made, even if another penalty is available.”
[100] Rule 1(8)(g) also permits me to make a contempt order.
[101] In Hefkey v. Hefkey 2013 ONCA 44, at paragraph 3, the Court of Appeal stated,
“The civil contempt remedy is one of last resort. It should not be sought or granted in family law cases where, as here, other adequate remedies are available to the allegedly aggrieved party. The courts have repeatedly stressed that great caution must be exercised when considering contempt motions in family law proceedings. Contempt findings in such cases should be made only sparingly and, as we have said, as a last resort where conferences to try to resolve access problems or motions for enforcement have failed.”
[102] Van De Mierden v. Van De Mierden [2009] O.J. No. 2865, is a ruling of my own. I ruled that I could make a contempt finding without holding a hearing and I agreed with the dicta of Lemon J. in the decision of Brar v. Dhisna [2008] O.J. No. 1282, in which he stated,
“It seems to me, that where the respondent has been given ample opportunity to respond to the motion or purge the contempt and where the underlying facts for the basis of the contempt allegation can be resolved by me on the affidavit evidence it is clear, I am entitled to proceed without viva voce evidence.”
[103] In Manchanda v. Thethi [2016] O.J. No. 3006, F.L. Myers J., at paragraph 1, queried,
“When is enough, enough? It has been clear for over 15 years that financial disclosure – early, voluntary, and complete financial disclosure – provides the factual foundation for the resolution of financial issues in family law proceedings.”
[104] Myers J. reviewed the primary objective of the Family Law Rules as set out in Rule 2, and at paragraph 4 wrote,
“Early, voluntary and complete disclosure of financial information is essential to family law proceedings. This has been said and written by judges over and over again. It is the duty of parties to produce documents to establish their incomes, expenses, assets, and liabilities as at various valuation dates depending on the specific relief that is claimed in the proceeding. Even where valuing one’s property may be inconvenient or expensive, the duty to obtain all necessary valuation expertise required to do so lies on the party who owns the particular property.”
[105] In this regard Myers J. relied on the decision of Czutrin J. in Blaney v. Blaney 2012 ONSC 1777.
The Law Related to the Striking of Pleadings
[106] Turning now to the law in regards to striking pleadings, Rule 1 (8) of the Family Law Rules states:
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 of 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.
[107] Rule 2(4) of the Family Law Rules provides that the court is required to apply these rules to promote the primary objective, and parties and their respective lawyers are required to help the court to promote the primary objective which is to deal with the case justly.
[108] Rule 1(8) was amended in 2013, and Rule14(23) was repealed. This amendment must be kept in mind in reviewing the authorities decided prior to the amendments.
[109] In Gordon v. Starr 2007 CanLII 35527 (ON SC), [2007] O. J. No. 3264, J. W. Quinn J. of the Ontario Superior Court discusses Rule 14 (23). From paragraph 23 I quote,
“Subrule 14(23) should not be taken lightly. It means what is says. It recognizes the offensiveness of allowing a party to obtain relief while in breach of a court order. Court orders are not made as a form of judicial exercise. An order is an order, not a suggestion. Non-compliance must have consequences. One of the reasons that many family proceedings degenerate into an expensive merry- go –round ride is the all-too-common casual approach to compliance with court orders.”
[110] Grenier v. Grenier [2012] O.J. No. 6512 is a decision of S. M. Rogers J. of the Ontario Superior Court of Justice, at paragraph 21 discusses the remedy of striking pleadings. I quote,
“The remedy of striking of pleadings has the most drastic impact for a party that is not in compliance with court orders and should only be imposed in the most egregious of circumstances. To determine if said sanction is appropriate in situations of non- disclosure, the court should consider the following issues…”
[111] Rogers J. then sets out 12 questions that ought to be considered in deciding whether or not to strike pleadings.
[112] In Richichi v. Richichi [2012] O.J. No. 1705 T. Minnema J. of the Ontario Superior Court of Justice had to deal with the lack of compliance with court orders and the delay and frustration resulting therefrom. At paragraph 11 she found the lack of compliance on the part of the father to be persistent, deliberate, and dismissive of the court process.
[113] Oliveira v. Oliveira [2008] O. J. No. 2886, stands for the principle that then Rule 14(23) is not ousted by the enforcement provisions in the Family Responsibility and Support Arrears Enforcement Act (para. 13).
[114] The same principle was noted in Chickee v. Chickee [2000] O. J. No. 2769, wherein the respondent was in arrears of paying support and was given time to pay the arrears and in default of which his counter-application would be struck (para. 11).
[115] In Myles v. Reed [2003] O. J. No. 848, Agro J. concluded that the applicant had wilfully ignored orders of the court and had frustrated the respondent’s ability to have a timely trial of the issues. The respondent’s ability to properly and thoroughly prepare for trial had been compromised by the withholding of financial information and the fulfillment of undertakings (para. 16). The applicant’s pleadings with respect to financial issues were struck.
[116] From Molina v. Molina 2011 ONSC 3030, [2011] O.J. No. 2287, paragraph 34, I quote,
“This is a case in which the court is justified in striking pleadings, and I so order. Mr. Molina’s actions in failing to provide disclosure and in dissipating funds has impeded the course of justice. He has abused and ignored the processes of the court repeatedly even when given several chances to remedy his non-compliance. He has given the court false evidence under oath in his affidavit. Allowing him to continue to advance claims before this court would bring the administration of justice into disrepute.”
[117] In Cook v. Cook 2011 CarswellOnt 3230, Backhouse J., stated, at paragraph 7,
“This case has all the hallmarks of a party who has adopted a scorched earth policy and is seeking to run the other party out of money in order to force her to give up her claims. I find that the father’s answer (other than his claims regarding custody/access) shall be struck pursuant to Rule 14(23) of the Family Law Rules.”
[118] Hughes v. Hughes 2007 CanLII 10905 (ON SC), [2007] O. J. No. 1282, is another decision of J.W. Quinn J., who at paragraphs 18 and 19, wrote,
“Where a party has failed “to obey an order in the case”, the court is entitled to make “any order that it considers necessary for a just determination of the matter”. The words “just determination” are sufficiently wide to include protecting the integrity of the administration of justice, and that is what is at stake if a party wilfully disobeys an order.
The husband cannot expect to come before this court and be given a voice in circumstances where he has thumbed his nose at the legal system by deliberately breaching an order.”
[119] In the matter before me, Snowie J., in her August 2, 2012 order, struck the respondent’s pleadings for failure to comply with disclosure requirements. The matter, on that issue, was successfully appealed to the Ontario Court of Appeal. The appeal court’s decision can be found at, Chiaramonte v. Chiaramonte 2013 ONCA 641.
[120] At paragraph 31, Tulloch J. A., speaking for the appeal court wrote,
“In family law matters pleadings should only be struck, and trial participation denied, in exceptional circumstances and where no other remedy would suffice.”
[121] Continuing at paragraph 32, I quote,
“Striking a party’s pleadings is a drastic remedy that should only be applied in exceptional circumstances. The rules authorizing this remedy must be interpreted in light of the draconian effect of rule 10(5) (b). That rule provides that a respondent whose answer has been struck is not entitled to participate in the case in any way.” (now Rule 1(8.4))
[122] From paragraphs 37 and 38, I quote,
“In my view, the motion judge clearly mischaracterized the husband’s disclosure. The efforts made by the husband to comply with the court orders were more than just token attempts at compliance. Keeping in mind that the husband’s financial situation is considerably more complex than that of the average family law litigant, it is apparent from the record that the husband has been making serious efforts to comply with his disclosure obligations.
I do not mean to suggest that the husband’s disclosure is perfect… Justice would be best served by allowing the husband to participate at trial. The extent of the husband’s disclosure may well lead a trial judge to conclude that his income or assets exceed the figures disclosed. That determination is best left to the trial judge, based on all the evidence, including such further evidence as the husband may provide to substantiate his position.”
[123] From paragraphs 47, 48 and 49 of Purcaru v. Purcaru 2010 ONCA 563, I quote,
“I wholly accept Mr. Purcaru’s argument that pleadings should only be struck and trial participation denied in exceptional circumstances and where no other remedy would suffice.
This is particularly so in a family law case where the resulting judgment may provide for continuing obligations that can only be varied on proof of a change in circumstances. A change in circumstances may be difficult to establish if the initial judgment is based on incorrect assumptions, thus perpetuating injustice…
The adversarial system, through cross-examination and argument, functions to safeguard against injustice. Accordingly, the objective of a sanction ought not to be the elimination of the adversary, but rather one that will persuade the adversary to comply with the orders of the court. As this court said at p. 23 of Marcoccia v. Marcoccia (2008) 2008 ONCA 866, 60 R. F. L. (6^th^) 1 (Ont. C.A.) the remedy of striking pleadings is a “serious one and should only be used in unusual cases”. The court also explained at p. 4 that the remedy imposed should not go “beyond that which is necessary to express the court’s disapproval of the conduct in issue.” This is because denying a party the right to participate at trial may lead to factual errors giving rise to an injustice, which will erode confidence in the justice system.”
[124] Menchella v. Menchella is an endorsement of Rogers J., dated August 28, 2013. From paragraph 7 I quote,
“The court must be exceptionally cautious in striking pleadings. Litigants should have their day in court except under the most egregious circumstances. In the case at bar, the respondent says his non-compliance us because he cannot afford to pay. If his pleadings are struck, he cannot try to show the court that he should be paying a different amount. He is caught in the proverbial catch twenty-two.”
[125] In Azimi v. Mansoury-Tehrany [2012] O.J. No. 751, McDermot J. found that the applicant had wilfully failed to comply with disclosure orders. The applicant’s pleadings were struck however the order striking pleadings was stayed for 30 days in order to allow the applicant an opportunity to complete disclosure and seek an order re-instating his pleadings.
[126] In Gottfired v. Rosen, an endorsement of Kiteley J., dated August 2, 2012, the husband’s conduct was characterized as unreasonable but was found not to meet the high threshold required to strike pleadings. The justice set a date by which disclosure was to be completed and made a significant cost order against the husband.
[127] The failure to disclose certain documents or values provides the court with the option of drawing an adverse inference (Goodnough v. Goodnough 2008 CanLII 25058).
[128] The Courts must, however, be clear that the disclosure process cannot be used to cause delay or to reap tactical advantage (Chernyakhovsky v. Chernyakhovsky 2005 CanLII 6048 (ON SC), [2005] O.J. No. 944).
[129] From paragraph 12 of Boyd v. Fields 2006 CarswellOnt 8675 I quote,
“Full and frank disclosure is a fundamental tenet of the Family Law Rules. However, there is also an element of proportionality, common sense, and fairness built into these rules. A party’s understandable aspiration for the outmost disclosure is not the standard. Fairness and some degree of genuine relevance, which is the ability of the evidence to contribute to the fact finding process are factors. I can also observe that just as non-disclosure can be harmful to a fair trial, so can excessive disclosure be harmful because it can confuse, mislead or distract the trier of fact’s attention from the main issue and unduly occupy the trier of fact’s time and ultimately impair a fair trial.”
Analysis of Non-Compliance and the Appropriate Remedy
Contempt/Striking Pleadings in the Face of Support Arrears
[130] The case law provides that an order finding a party in contempt is a remedy of last resort and is to be used sparingly. It is a drastic remedy and is only to be used in exceptional circumstances.
[131] I will not find the respondent in contempt with respect to his non-compliance with the support orders. I have two reasons for reaching this conclusion. The first is, while I have the authority to do so, FRO is actively involved in the enforcement of the outstanding support orders and I will leave this issue with FRO.
[132] The second relates to the wording of Rule 31 which states a contempt proceeding can be brought for non-compliance with orders, the exception being orders for the payment of money.
[133] Nor will I strike the respondent’s pleadings with respect to the issue of support.
[134] The remedy of striking pleadings is to be used where there is no other appropriate remedy, which hopefully will persuade a party to comply with orders.
[135] Further, the respondent has, since 2012, argued his income is less than determined by both myself and Snowie J. It is a matter of judicial fairness that he be allowed to put that argument before the trial judge. If the respondent’s pleadings were struck, he would be prevented from arguing that his income is less than the amount imputed which, if successful, would result in the reduction of the amount of support to have been paid and thereby reduce the arrears. How can the respondent argue he has overpaid support if his pleadings are struck for the non-payment of support?
Contempt/Striking Pleadings for Non-Compliance
[136] However, the remedies of contempt and the striking of pleadings are in play in regards to the respondent’s alleged failure to comply with disclosure and undertaking orders.
[137] Motions for these remedies have been before the court on previous occasions. The issue of contempt has always been adjourned. In regards to the striking of pleadings, previous motions have been dismissed or adjourned, the court being reluctant to prevent the respondent from participating. Further, such a remedy may preclude efforts for further and needed disclosure.
[138] However, as noted in the case law and by counsel for the applicant, when is, “enough, enough?”
[139] I think we have reached that threshold.
[140] The respondent has, over the course of this application, consistently ignored orders and/or responded to them within his own time frame. For example, he was ordered to list for sale his various investment properties. For a period of time the properties were not listed because the respondent unilaterally choose not to, for market reasons, as he perceived them. He wilfully and deliberately chose to disregard a court order.
[141] As noted above, with respect to an income/business analysis, the respondent was ordered to prepare such a report in a 2012 order and again by an order made in the spring of 2014.
[142] In my order of January 8, 2015, the respondent was required to file a complete set of tax returns, both personal and corporate, on or before January 31, 2015. The respondent did not comply with the January 31^st^ deadline.
[143] However, when facing the first notice from FRO that his driving licence would be suspended, the respondent decided to bring a variation motion (Hearing August 10, 2015/Release of ruling September 15, 2015) after he had prepared and filed the necessary tax returns and an income/business analysis.
[144] This is an example of how respondent has only complied with court orders when he perceived it to be in his best interests.
[145] As noted in the Surgeoner case, it would appear the respondent believes he knows, “What was right.” As stated, “Those who choose to take this tack must know that it will not be tolerated.”
[146] Such an attitude can be seen in the respondent’s historic practise to only pay spousal support of $4,500 per month in accordance with the original order to which he consented. Until very recently he never attempted to increase the amount to show some effort to comply.
[147] Currently the respondent remains in non-compliance with a number of orders.
[148] The respondent has not complied with my order of November 9, 2015, to provide values for his investment properties. The values are required as of the date of separation, which was in January, 2010.
[149] In Volume 16 of the Continuing Record, at Tab 110(E) is a schedule/spread sheet, prepared by the respondent in regards to the valuations of his investment properties. That is, properties owned by him or companies controlled by him. Therein 37 properties are listed. All were owned or controlled by the respondent at the date of separation.
[150] One of the columns, is entitled, “Effective Opinion Date”, which ought to be the date of separation. Only six of the entries show a date of January, 2010, the month in which the parties separated. Seven properties note the opinion date of simply, 2010. Two entries reflect an opinion date of 2016.
[151] Further, by order dated November 9, 2015, as noted, “proper valuations” are required. Nothing in the schedule permits me to conclude whether the opinions arise from “proper” valuations.
[152] Personal and corporate financial statements remain outstanding for at least 2015, if not 2014 as well, contrary to my order of November 9, 2015. A response that said documents have not been completed is not, in my opinion, a satisfactory answer. This information is required for the trial.
[153] By my order of November 9, 2015 the respondent was to complete a fresh financial statement providing values of all assets and debts. He was also to produce a net family property statement. The financial statement filed did not provide all such values, with a number of values for assets noted as TBD, that is to say, to be determined. No net family property value has been produced by the respondent.
[154] By letter, dated, October 12, 2016, sent to counsel for the respondent, Ms. Harris, the applicant’s business/income analyst, requested further disclosure and better disclosure. In part, as noted above, this request was responded to by letter, dated November 10, 2016. Included in the response was an answer to a request for details in regards to a $4,500,000 loan (Volume 16, Tab 110(e), p. 3, para. (a)).
[155] This disclosure was also the subject of a court order, dated November 9, 2015 and was to be provided by January 10, 2016, not a year later. Whether sufficient detail was provided remains to be seen. Clearly counsel for the applicant could not determine the reasonableness of the answer given the lack of notice and the inability to review it with his valuator.
[156] The letter of October 16^th^, also requested disclosure which has been the subject of court orders. Much of it relates to the production of corporate and individual tax returns for the respondent personally, R.A. Chiaramonte Dentistry Professional Corporation, 1298443 Ontario Ltd., Montchiara Investments Ltd., Titan Services Ltd. and the respondent’s U.S. Limited Liability Corporations (LLC).
[157] In my order of January 8, 2015, as noted already, the respondent was to provide on or before January 31, 2015, a complete set of both his individual and corporate tax returns.
[158] It would appear from the October 16^th^ letter that other tax returns remain outstanding, almost two years after they were due.
[159] In my order of November 9, 2015, the respondent was to provide the necessary authorization to the applicant’s valuator to allow her to speak with his valuator and accountants. This portion of the order was on consent. Some of the disclosure requested in the letter of October 16^th^ were not the subject of an order but is the type of material contemplated when it was agreed to provide the authorization.
[160] I turn now to undertakings given by the respondent during his examinations for discovery.
[161] By order dated, July 25, 2016, the parties were to exchange undertakings and disclosure within 60 days. This was the second order in regards to undertakings, the first dated, November 9, 2015.
[162] At Volume 16, Tab 11(H) is the applicant’s list of unsatisfied undertakings, as of October 20, 2016. The respondent has provided a corresponding list of the undertakings and, from his perspective, their status.
[163] Undertakings 47 and 48 relate to the Letters of Opinion relied upon by the respondent to establish the values of his investment properties. The applicant sought details in regards to this evidence and the respondent undertook to advise the applicant in regards whether the letters would be produced before trial and when he would ask the authors of the letters to provide valuation date values.
[164] Given the time left before trial, and given that such valuations would involve expert evidence, these questions need to be answered.
[165] Undertakings 49 and 50 remain outstanding. The respondent has advised he has asked Mr. Seagle for the information. We do not know when the request was made and when an answer might be expected. Again this information must be received in a timely fashion.
[166] Undertaking no. 52, requires the respondent to make best efforts to provide documentation for income earned and expenses paid in regards to the property in the Turks and Caicos. It would appear this undertaking is outstanding. No information has been provided to show if any effort has been made.
[167] In undertaking no. 57, the respondent is to provide copies of his 2014 and 2015 income tax returns. In response to this undertaking the respondent advises he has not yet filed the returns. The respondent has a history of not filing tax returns in a timely way. I am presuming the returns are past due. It seems to me that the undertaking must be answered shortly given the upcoming trial. It is not enough to say in answer, the returns have yet to be filed.
[168] Undertaking 58 is similar in nature. The respondent undertook to provide copies of his 2015 corporate tax returns for all the corporations he has an interest in. The only answered provided was the returns have not been filed. Cleary such disclosure is relevant and necessary. The answer is unsatisfactory.
[169] In regards to undertaking 59, the court was told the respondent has reviewed the corporate organization chart prepared by the applicant’s counsel and has advised the information is accurate. If I am wrong then the undertaking is outstanding.
[170] In regards to undertaking no. 63, the applicant submits the answer remains outstanding. The respondent in his undertaking chart simply notes in answer, “to be advised/provided”. This answer is unsatisfactory. If any part of this undertaking has not been answered, the answer must be provided forthwith.
[171] The same answer was provided for undertaking no. 64, and my comments in regards to no. 63 are to be applied.
[172] Undertaking no. 66 in relation to producing a general ledger remains admittedly, outstanding. No explanation is provided as to why it was not provided within the deadline.
[173] Undertakings no. 67, 69, 73, 75 and 76, remain outstanding. Answers are required. The respondent indicates either “to be advised” or “to be provided”.
[174] The respondent has not provided any answer whatsoever to undertaking no. 77.
[175] Clearly, a number of undertakings remain outstanding notwithstanding the submissions of counsel for the respondent.
[176] Deadlines for legal obligations are part of any litigation. Such deadlines are to be taken seriously, especially those imposed by the courts.
[177] Yet again and true to form, the respondent shows little regard for deadlines.
[178] Serious consideration has to be given to the remedies of contempt and the striking of the respondent’s pleadings. Given the history of the respondent’s breach of court orders, his continued breach of court orders and the fact that a trial date is looming early in the new year, enough is enough.
[179] The remedies of contempt and the striking of pleadings are items of relief to be considered as a last resort. A party who fails to comply with various orders ought to be the subject of relief that will persuade him to comply.
[180] I will not strike the respondent’s pleadings with respect the disclosure and undertakings issues, at this time. Such a remedy cannot be considered persuasion. Such an order would prevent the respondent from participating in the trial and, given my ruling with respect to the pleadings related to support, the respondent is going to participate in the trial of this matter.
[181] Further, I believe that by not striking pleadings more control can be applied in regards to what disclosure is needed and remains outstanding.
[182] I do say that the respondent is only avoiding an order striking his pleadings with respect to non-compliance by the slimmest of margins.
[183] I am also taking into account my considerations in regards to striking pleadings addressed in my ruling dated September 15, 2015.
[184] Whether the remedy of striking pleadings can be revisited depends a great deal with the respondent’s efforts to comply with this ruling.
[185] The motion to strike the pleadings of the respondent will be adjourned indefinitely, returnable on 7 days’ notice.
[186] I am not prepared to adjourn the contempt motion despite the representations of the respondent’s counsel. The respondent has had ample opportunity to comply. He has chosen not to. The trial is just a few months away and it is time to make a finding on the motion for contempt which has been before the court previously occasions and adjourned.
[187] Given my findings, and the history of this litigation and the actions and/or inactions of the respondent, I find the respondent in contempt of court.
[188] Given the findings I have made in regards to disclosure, a hearing and viva voce evidence is not required to make a finding of contempt.
[189] I find the non-compliance to be wilful and not as a result of mistake, misunderstanding and/or negligence. Without a doubt the respondent has always been aware of his obligations under the various orders and his non-compliance.
[190] The wilfulness can be inferred from the fact that orders are made and time limits for compliance expire without explanation. As noted repeatedly, this matter is only a few months to trial and the disclosure in issue is required for a just and fair trial.
[191] Before considering the proper sentence I will give the respondent one more opportunity to purge his contempt by providing, in a timely way, the disclosure required.
[192] Accordingly, the respondent shall comply with all the outstanding disclosure whether by court order or undertaking as determined by me in this ruling. He has until January 20, 2017, to do so.
[193] Outstanding tax returns must be filed. It will not be enough to say the returns have not yet been filed, or are being prepared.
[194] Advising the information has been sought from a third party will not be considered compliance. Follow up and documentation is required.
[195] The respondent must comply with all orders and not only the ones he agrees with. He must show full compliance.
Rulings
[196] The contempt motion is adjourned to a date to be arranged with my office, to review and consider the respondent’s efforts to purge his contempt.
[197] Order to issue in accordance with paragraphs 83, 89, 90, 94, 185, 187, and 192.
[198] An order is to issue that the disclosure referenced in paragraphs 148, 152, 153, 156, 157 and 158, of this ruling is to be made on or before January 20, 2017.
[199] The following undertakings are to be answered: 47, 48, 49, 50, 52, 57, 58, 59, 63, 64, 66, 67, 69, 73, 75, 76, and 77 on or before January 20, 2017.
[200] The respondent is to comply with the disclosure requested by letter dated October 12, 2016, from the applicant’s valuators, Fuller Landau, on or before January 20, 2017.
[201] With respect to costs, I will accept written submissions of no more than three pages in length, double spaced together with a bill of costs. Submissions to be made within 21 days of the release of this ruling.
Bielby J.
Released: November 24, 2016
CITATION: Chiaramonte v. Chiaramonte, 2016 ONSC 7328
COURT FILE NO.: FS-10-7411-M
DATE: 2016 11 24
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
ANNA CHIARAMONTE
Respondent
– and –
ROSARIO CHIARAMONTE
Respondent
– and –
DIRECTOR, FAMILY RESPONSIBILITY OFFICE
REASONS FOR JUDGMENT
Bielby J.
Released: November 24, 2016