Court File and Parties

Court File No.: FS-08-12109-00DA Date: 2017/02/22

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

Theresa Ann Mary Wouters George McFadyen, for the applicant Applicant

- and -

Eddy Daniel Jules Wouters Unrepresented Respondent

HEARD: February 1, 2017

HOCKIN J.

[1] This case is marked by a tortuous history.

[2] The parties married August 24, 1996 and separated December 19, 2007. An application was issued under the Divorce Act, February 5, 2008. When this matter came before me February 1, 2017, the Continuing Record was twelve volumes and filled three banker’s dispatch boxes.

[3] The recent history is as follows.

[4] There was to have been a trial September 12, 2016 but it was adjourned to November 7, 2016, peremptory on the respondent. Justice Raikes required the respondent to provide updated financial disclosure within thirty days, failing which the applicant could move to strike the respondent’s pleadings and move for summary judgment.

[5] Sometime before November 7, 2016, the respondent discharged his solicitor. On November 7, 2016 he appeared without representation and on consent the trial was adjourned to a date to be set by the trial coordinator.

[6] There followed a number of motions by both sides which gathered themselves after the December 8, 2016 order of Justice Raikes and the December 22, 2016 order of Justice Campbell, in the special appointment I heard February 1, 2017.

[7] In time, Mr. McFadyen for the applicant and Mr. Wouters delivered factums. Mr. Wouters, however, chose to deliver on January 30, 2017 a long, complicated document described as a Reply Factum. For these reasons, it is struck. There are no provisions in the Family Law Rules dealing with factums and so by analogy the Rules of Civil Procedure govern. Each party may deliver on a motion a factum but there is no provision for a so-called Reply Factum. In any event, it includes a great number of references to facts without support by affidavit. As well, it was delivered out of time.

[8] One of the motions delivered by the respondent is a motion for an order that Mr. McFadyen pay from his trust account $50,000.00 to Mr. Wouters. This is the motion at tab 142 of the Continuing Record. Tab 144 is the respondent’s motion for leave to call his accountant, Richard Hamilton to give viva voce evidence on the respondent’s claim to that sum. Tabs 142 and 144 came before Justice Campbell, December 22, 2016 when he adjourned the relief requested under the tab 142 motion to the special appointment. Leave was granted to call Mr. Hamilton on the condition that he delivered to Mr. McFadyen a letter outlining his evidence. That did not happen and I ruled that argument on the motions should proceed without his evidence.

[9] The relief sought by the respondent in his motion records at tabs 132 and 140 is the same. The relief sought at tab 142, the order for payment of $50,000.00, follows along. The relief sought by the respondent on his three motion records is described usefully in the applicant’s factum as follows:

a. An accounting of funds that had been paid out of the monies held in trust by the Applicant’s solicitor since the sale of the family farm; b. Production of documents to support the accounting; c. An order finding that the solicitor for the Applicant is “guilty of fraud, breach of trust and breach of professional fiduciary duty” to the Respondent on the basis of misappropriation of trust funds resulting in a claim for damages against the solicitor.

[10] It is not in dispute that about December 10, 2012, mistakenly, Mr. McFadyen’s accountant paid to the applicant $67,292.50. That identical sum had been paid from the law firm’s trust account on December 6, 2012 pursuant to a consent order agreed to by Mr. McFadyen and Ms. Suzor, Mr. Wouters solicitor at the time. The consent was acted upon by Justice Patterson. Once the order was entered, the accountant paid to Mrs. Wouters $67,292.50 and to each law firm for fees, $15,000. The mistake which followed is described at paras. 12, 13 and 14 of the affidavit of the accountant, Anita Burling, as follows:

12. By way of the December 6, 2012, Court Order of The Honourable Mr. Justice Patterson, a payment of $67,292.50 was to be made and that order broke down the payment. Attached hereto and marked as Exhibit “H” to this my affidavit is a copy of that order.
13. Under the circumstances, I was of the belief that there was a second Court order of December 10, 2012 requiring a payment to the Applicant, Mrs. Wouters, of $67,292.50. The second Court order was primarily a compilation of some of the previous payouts plus an additional payout for compensation for municipal taxes that had to be paid at the close of the real estate deal of $13,296.31. The Order of December 6, 2012, was a consent order. It was designed to confirm the payout of the previous payments but because it displayed different totals, it created a confusion in my mind. As a result, I was mistakenly of the view that a second order had been made. I disbursed $67,292.50. Previously, I had disbursed $53,996.13. Therefore, there was an overpayment to the Applicant, Mrs. Wouters of $53,996.13.
14. I disbursed those funds to the Applicant, Mrs. Wouters, as well. This was done mistakenly by me but was recorded on the trust statement and it is clearly evident on the face of the document.

[11] The mistake was not discovered for four years. When it was, a letter was forwarded to Ms. Suzor by Mr. McFadyen which explained the mistake. It is explained at paras. 15-24 of the Burling affidavit. The exhibits at “J”-“Q” document the mistake. It was an innocent mistake. I accept Ms. Burling’s explanation as factual, reliable and true. There has been a complete accounting of the overpayment. There was an overpayment to Mrs. Wouters of $53,996.13.

[12] The total payment of child and spousal support to November 1, 2016 from joint trust funds is $154,742.19 or $77,371.10 by Mrs. Wouters to herself for the support Mr. Wouters is obliged to pay. I agree that the simple solution is to credit or set off the overpayment of $53,996.13 against the figure owing for support, $77,371.19 to leave owing by Mr. Wouters to Mrs. Wouters to November 1, 2016, $23,375.06.

[13] The last issue is the applicant’s motion under r. 1(8) of the Family Law Rules to strike the respondent’s pleadings for his failure to obey court orders and his duty to disclose financial information, the “most basic obligation in family law”. Roberts v. Roberts, 2015 ONCA 450 per Bennotto J.A. at para. 11.

[14] As I pointed out at the start of these reasons, there are 12 volumes in the Continuing Record. The Cumulative Table of Contents is 17 pages. I count the names of 16 judges who have been involved in this case.

[15] Rule 1(8) of the Family Rules provides:

(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;

[16] I am instructed by Bennotto J.A. again in Roberts, supra at paras. 11, 12, 13 and 15 as follows:

11. The most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing.
12. Failure to abide by this fundamental principle impedes the progress of the action, causes delay and generally acts to the disadvantage of the opposite party. It also impacts the administration of justice. Unnecessary judicial time is spent and the final adjudication is stalled.
13. Financial disclosure is automatic. It should not require court orders – let alone three – to obtain production.
14. The power to strike out the pleadings is to be used sparingly and only in exceptional cases. This is such a case. The appellant’s conduct in ignoring court orders and failing to follow the basic principles of family law litigation put him in the exceptional category of cases where the judge’s discretion to strike his pleadings was reasonably exercised.

[17] There are children of the marriage but there is a final order granting Mrs. Wouters sole custody and there is no access for the respondent.

[18] The affidavit of Mrs. Wouters dated November 22, 2016, delivered on this motion, sets out in detail many examples of the respondent’s effort to stand in the way of the progress of the application and act to the disadvantage of the applicant.

[19] In this case, there have been four orders requiring disclosure:

1. The September 12, 2016 order of Raikes J. as follows: a) No Financial Statement in 5 years. Order of Raikes J. of September 12, 2016 to file within 30 days. Not filed. Result, trial adjourned. b) No Net Family Property Statement with a document brief. In breach of September 12, 2016 order of Raikes J. c) By September 12, 2016, not file personal tax returns from 2010 to 2015. d) No statement of gross earnings from all sources in 2016. Breach of order of Raikes J.
2. January 30, 2014 order of Heeney J. at a settlement conference undertaking to set out attempts to find employment. Nothing provided despite his representation to a Michigan court of criminal jurisdiction that he assisted with his mother’s farm.
3. August 25, 2011, Campbell J. ordered answers to his undertakings. Some still outstanding.
4. Breach of Donohue J.’s August 30, 2012 order to produce a life policy.

[20] Mr. McFadyen has tried a number of times to move this matter onto a trial list but the lack of financial disclosure has stood in his way to end this litigation.

[21] This case is now at the 9 year mark. This is about 7 years too long.

[22] The administration of justice must not suffer, beyond this date, further delay. In fairness to Mrs. Wouters, she should be able to move ahead to finalize what is left to be done and without Mr. Wouters continuing to stand in her way. His pleadings are struck. This case is one of those cases which requires this exceptional response to the behaviour of Mr. Wouters.

[23] The consequences, which are set out at Rule 1(8.4) of the Family Law Rules, apply to Mr. Wouters.

[24] Mr. McFadyen’s costs will be reviewed and fixed May 19, 2017 at 10:00 a.m. in Sarnia. The order will be settled at the same time. Mr. Wouters is entitled to be present for this.

[25] Mr. McFadyen asks that the order of Justice Raikes of September 12, 2016 be amended to add the clause “and Notices of Assessment” to para. 2(a) of the order. So ordered.

[26] These reasons to Mr. Wouters, as he asked, at spruce@xcelco.on.ca.

“Justice P. B. Hockin” Justice P.B. Hockin Released: February 22, 2017