Court File and Parties

COURT FILE NO.: FS-17-40346 DATE: 2018-10-18 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LAUREN M. HOLLY, Applicant AND: FRANCIS G. GRECO, Respondent

BEFORE: Gibson J.

COUNSEL: James B.C. Edney, Counsel for the Applicant Matthew Fordjour, Counsel for the Respondent

HEARD: October 4, 2018

Endorsement

Endorsement

1In hockey, repeatedly “ragging the puck” will garner a penalty for delay of game. Ignoring the officials will also accrue negative consequences to the offending player. In family law litigation, some parties regrettably choose to engage in similar tactics. But family disputes are not a game. They involve the lives and vital interests of real people. This concern becomes particularly acute when there are children involved.

2The Family Law Rules are intended to promote fairness and efficiency in dealing with disputes that come before the Courts. The Parties are often given multiple chances to do what they ought to have done in the first instance. Sometimes failure to comply with orders of the Court arises because one of the parties struggles with very limited financial resources. In other cases, however, Parties who are possessed of financial means that would be the envy of the great majority of persons who come before the Court in family law cases choose to cynically game the system.

3Judges are (rightly) patient. They are slow to invoke the more drastic remedies provided for in Rule 1(8). The appellate jurisprudence understandably counsels patience and caution in this regard.

4However, there comes a time when judicial patience cannot be infinite. This is particularly so when it is evident that one of the parties is acting in cynical noncompliance with court orders, or is banking on judicial patience and indulgence to “rag the puck” and conduct a campaign of attrition against the other party. That is the case in this case.

Facts

Facts

5In her Notice of Motion dated September 21, 2018, the Applicant Lauren Holly requests an Order striking the Pleadings of the Respondent Francis Greco for his breach of the Order of Miller J. dated June 7, 2018; that the Respondent pay to the Applicant table child support for the three children of the marriage, in the amount of $15,947 per month, retroactive to June 1, 2018; and costs on a substantial indemnity basis.

6The parties were married on March 10, 2001, and separated on September 1, 2012. There are three children of the marriage: Alexander (“Azer”) Joseph Holly-Greco, born April 21, 2001; George Innes Holly-Greco, born August 2, 2002; and Henry Charles Holly-Greco, born December 2, 2003.

7The Applicant is a television and film actress, who resides in Oakville, Ontario. The Respondent is currently the Director of Business Development for Koch Industries Inc., based in Wichita, Kansas.

8Immediately after separation, the Respondent paid the Applicant small amounts of child support on a sporadic basis, before terminating the payments entirely. The Applicant commenced this proceeding on August 24, 2017.

9On June 7, 2018, Miller J. made an Order that the Respondent pay the Applicant child support in the amount of $12,365 per month, retroactive to January 1, 2018, as well as child support in the amount of $9,668 per month for the period of September 1, 2017 to December 31, 2017. The support payable by the Respondent was premised on a split custody arrangement, wherein two of the children were residing with the Applicant full-time in Oakville, Ontario, and one with the Respondent in Wichita, Kansas.

10On July 5, 2018, the Respondent advised the Applicant through counsel that he was not going to comply with the Order of Justice Miller. He said that he receives the bulk of his income in January of each year. Instead, he made the Applicant what he called a “counter-proposal” and advised that he would pay her $2,365 per month through to January 1, 2019, and any arrears owing by him on January 17, 2019.

11The Applicant rejected the Respondent’s attempt to renegotiate the terms of the Order of Miller J. The Respondent proceeded not to comply with the court order. He paid the Applicant only $2,365 in child support for the months of July, August and September 2018.

12The Applicant has consequently brought the motion argued before me on October 4, 2018.

Adjournment Request

Adjournment Request

13On the return of the motion on October 4, 2018, counsel for the Respondent requested an adjournment. Counsel for the Applicant vigorously opposed the adjournment request. The Respondent had not filed any material on the motion, notwithstanding that, as counsel for the Respondent confirmed, he had at least six weeks’ notice. The Respondent was advised in August that the Applicant would bring a motion, and on September 4, 2018 that the Applicant was bringing a Motion to Strike on October 4, 2018, as a result of his ongoing breach of Miller J.’s order. Counsel was not able to offer any valid or reasonable explanation as to why he had not filed material given such a period of notice and, in particular, that it was his client who appeared to be, on a calculated basis, in noncompliance with a court order.

14Whether or not to grant an adjournment is a discretionary matter for the motions judge.

15Ordinarily, a court will look with sympathy on a party’s initial request for an adjournment in order to file further materials, where the interval between being advised of the motion and the return date is short, or there are mitigating circumstances concerning either the Party or counsel. It is unquestionably usually better to have materials from both sides before the Court. But here, the interval was not short. Mr. Greco and his counsel had ample notice of the intention of the Applicant to bring the motion. And they knew from the start that his actions were not in compliance with a court order, and that he would likely have to account for that.

16All too often, parties will attempt to manipulate adjournments as a tactical tool for further delay. It is not open to a party to create a dilemma for the court by a deliberate choice not to do what they ought to have done (file materials on the motion), then having created the difficulty, request an indulgence from the Court whose purported necessity arises from their deliberate inaction. Manufacturing such a circumstance ought not to avail them.

17In considering the request for an adjournment, I assessed the considerations set out in Ariston Realty Corp. v. Elcarin, 2007 ONSC 13360, [2007] O.J. No. 1497 (S.C.J.), including particularly: the particular circumstances of the request for an adjournment and the reasons and justification for the request; the practical effect of consequences of an adjournment on both substantive and procedural justice; the competing interests of the parties in advancing or delaying the progress of the litigation; the need of the administration of justice to orderly process family and civil proceedings; and, the need of the administration of justice to effectively enforce court orders.

18It is often said that what we tolerate, we condone.

19Parties cannot take adjournments for granted. The Court will not indulge such requests where, as here, it is evident that the Party is merely “gaming” the system and dragging its feet for the purpose of attriting the other party. Parties should not presume on the indulgence of the court where there is no valid reason for not filing material. This is particularly so where, as here, there is a patent non-compliance with a court order. I considered that to grant the adjournment requested by the Respondent would unfairly benefit him and merely extend and facilitate what appeared prima facie to be an ongoing calculated non-compliance by the Respondent, without affording the Parties (and in the circumstances particularly the Applicant) a prompt hearing to address the issue.

20I also considered that, given the relative recency of the motion heard by Miller J. and the freshness of the financial information filed for that motion, there would be sufficient information before the Court to make a fair and prompt adjudication of the issues.

21Accordingly, I denied the Respondent’s request for an adjournment of the motion.

Non-Compliance with Court Order

Non-Compliance with Court Order

22What makes the non-compliance of the Respondent with the Order of Miller J. particularly egregious is that the Respondent is in receipt of a very substantial income. According to his sworn Financial Statement dated May 29, 2018, his income for support purposes in 2018 is $984,687 per year.

23The Respondent has received a substantial income for an extended period. The Respondent’s income for support purposes was $477,808.66 in 2012; $88,138.11 in 2013; $146,443 in 2014; $428,189.58 in 2015; $488,910.46 in 2016; and $832,634 in 2017.

24The quantum of table child support payable on $984,687, having regard to the split custody arrangement, is $12,365 per month.

25The Respondent’s claims of financial hardship are unsubstantiated, and inconsistent with his recent sworn financial statement.

26It does not lie in the mouth of the Respondent, with such an income, to say that he cannot afford to pay more than $2,365 per month. This is particularly so when the position he took on the matter before Miller J. a mere four months earlier was that his child support obligation should be fixed at $8,500 per month. Even if he was not immediately sufficiently liquid, he must reasonably be presumed to be readily able to make arrangements to access the requisite amount before January 2019. His financial statement indicates that his income exceeds his total amount of yearly expenses by $272,039. At a minimum, he should have demonstrated that he explored other options rather than unilaterally deciding how much of the amount he was ordered to pay in the Order of Miller J. he would actually pay.

27Moreover, if the Respondent considered that the Order of Miller J. was wrongly decided, he could have appealed. He did not do so. Neither did he move for an Order to vary the amount. Instead, he arrogated to himself the privilege of determining how much he would pay.

28The Court will not condone a game of “chicken” between Parties.

29There must be consequences to a decision of a Party who is eminently able to comply with a court order to not do so. An Order of the Court is not a suggestion. It is not an invitation to a further negotiation. The Respondent has no right to impose his own payment terms, because he is unhappy with the outcome of a motion.

30As Howden J. noted in Lee v. Chang, 2013 CarswellOnt 18085 at para. 36,

A court order is not some invitation to dance which can simply be ignored or excused. … Compliance with court orders is not optional. Non-compliance with court orders, absent circumstances beyond the party’s control, must have consequences. The court’s response to failure or refusal to comply without proper excuse must be strong and decisive.

31In Levely v. Levely, 2013 ONSC 1026, [2013] O.J. No. 753, at paragraphs 12 and 13, Chappel J. made the following comments:

Family Court proceedings are intended to be a means by which aggrieved parties can have their disputes arising after separation adjudicated upon by the court in a just, efficient and timely manner. Unfortunately, they all too often become a destructive tool which one party wields and manipulates in order to create further financial hardship for the other party. The frequency with which Family Law litigation degenerates into an abuse game of delay tactics, stonewalling, and dodging of judicial authority is a concern which must remain at the forefront of the judge’s mind in considering remedies for a party’s failure to participate as required in court proceedings or to comply with court orders. Family Law litigants who come to the court for assistance must come with a strong sense of assurance that the process will be an effective means of mending and stabilizing the family fabric, rather than a futile money pit of failed justice. The court has a critical responsibility and role to play in ensuring that proceedings which are intended to protect families and lead to a resolution of pressing and emotionally divisive issues are not hijacked by a party and transformed into a process for further victimizing the other party and children in their care.

The Rules referred to above are the main tools which a judge presiding over Family Law matters has in their toolbox to prevent a party from embarking on a game of litigation abuse. The scope of these Rules must be interpreted broadly in order to protect the integrity of the court process and the beneficial intention of Family Law proceedings, and to ensure that parties who do respect the court system are able to achieve justice in a timely, affordable and emotionally respectful manner. Judicial response to a party’s failure to respect the court process and court orders should be strong and decisive. The judge should be as creative as necessary in crafting remedies so as to ensure that the noncompliance identified and the resulting damage to the other party are addressed as fully, justly and quickly as possible.

32The Applicant requests that the Court strike the Respondent’s pleadings.

The Law regarding striking pleadings

The Law regarding striking pleadings

33The jurisprudence is clear that a court has broad discretion under Rule 1(8) of the Family Law Rules to deal with failure to obey a court order.

34Rule 1(8) of the Family Law Rules provides:

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.

35It is a “well-established principle that in a family law case, pleadings should be struck only in exceptional circumstances, and where no other remedy would suffice”: Kovachis v. Kovachis, 2013 ONCA 663, at para. 2; Wouters v. Wouters, 2018 ONCA 26, at para. 45.

36The Court in Chiaramonte v. Chiaramonte, 2013 ONCA 641, also emphasized that striking pleadings should only be used in limited and exceptional circumstances.

37In Kovachis, the Court allowed an appeal from an order striking the pleadings of a non-complaint party because the motion judge had failed to: (i) consider the substantial disclosure already made; (ii) itemize what disclosure the party had failed to provide; (iii) make a finding of willful disobedience of the order; and (iv) consider proportionality.

38However, in Nanchanda v. Theti, 2016 ONCA 909, the Court found that the conduct of the appellant had been egregious and exceptional. At para 13, it stated that: “Rule 1(8) provides the court with the authority to strike claims. Those who choose not to disclose financial information or to ignore court orders will be at risk of losing their standing in the proceedings as their claims or answers to claims may be struck.”

39In Roberts v. Roberts, 2015 ONCA 450, Benotto J.A. observed:

The power to strike out pleadings is to be used sparingly and only in exceptional cases. This is such a case. The appellants 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 judges discretion to strike his pleadings was reasonably exercised.

40In Carpenter v. Carpenter, 2016 ONCA 313, at paras. 19-20, van Rensburg J.A. observed:

I accept that an order to strike pleadings is an exceptional order that should only be made as a last resort, and that it is preferable that the court hear from both sides when determining matrimonial proceedings. See Chiaramonte v. Chiaramonte, 2013 ONCA 641, at paras. 31-32.

That said, the Family Law Rules, O. Reg. 114/99 provide for such a sanction, which is frequently exercised where there has been a repeated failure to comply with court orders, especially for disclosure. And a motion judge`s decision to strike pleadings and deny participation at trial is entitled to deference if exercised on proper principles: Chiaramonte, at para. 33.

This Case

This Case

41The Respondent has not advanced, either in the first instance to the Applicant or her counsel, or in counsel’s submissions on this motion, a valid reason why he has not complied with the Order of Miller J.

42I find that the conduct of the Respondent in the present case amounts to wilful, flagrant and calculated disobedience of a court order, intended to prolong the process and deprive the Applicant of the relief that the Court has ordered. In particular, it deprives the three children of their right to appropriate child support.

43Everyone is equal before and under the law. There is not one set of rules or standard of conduct for ordinary litigants in family law matters, and another for affluent ones such as the Respondent who may be financially capable of waging a tactical campaign of protracted litigation. In ignoring court orders and failing to follow the basic principles of family law litigation, the conduct of the Respondent has been egregious and exceptional, and should be considered to fall within the category of cases where striking his pleadings should be considered. I find that, on the facts of the present case, it would be appropriate and proportionate to do so.

Increase in child support

Increase in child support

44Given that Azer is now residing with the Applicant once again, and all three children are in her care, the Order of Miller J. dated June 7, 2018 (which was premised on a split custody arrangement that the parties employed previously) should be varied to account for this. The table amount of child support for three children, based on the Respondent’s income of $984,867, is $15,947 per month.

Order

Order

45The Court Orders that:

1. The Answer and the Respondent’s Claim dated October 10, 2017, shall be struck out;
2. The June 7, 2018 Order of Miller J. shall be varied such that the Respondent shall pay to the Applicant table amount child support for the three children of the marriage, namely Alexander Joseph Holly-Greco, born April 21, 2001, George Innes Holly-Greco, born August 2, 2002, and Henry Charles Holly-Greco, born December 2, 2003, in the amount of $15,947 per month, retroactive to June 1, 2018;
3. Unless this Order is withdrawn from the Director’s Office, it shall be enforced by the Director of the Family Responsibility Office and amounts owing under the Order shall be paid to the Director, who shall pay them to whom they are owed. Where sufficient deductions are not being made by support deduction order, payments may be remitted to the Director, Family Law Responsibility Office, P.O. Box 2204, Station P, Toronto, Ontario, M5S 3E9;
4. For as long as child support is paid, the support payor and recipient shall provide updated income disclosure to the other party each year, within 30 days of the anniversary of this Order, in accordance with s. 24.1 of the Child Support Guidelines; and,
5. This Order bears post-judgment interest at the rate of 3% per annum effective from the date of this Order. Where there is a default in payment, the payment in default shall bear interest only from the date of the default.

Costs

Costs

46The Parties are encouraged to agree upon appropriate costs. If the Parties are not able to agree on costs, they may make brief written submissions to me (maximum three pages double-spaced, plus a bill of costs). The Applicant may have 14 days from the release of this endorsement to provide her submissions, with a copy to the Respondent; the Respondent a further 14 days to respond; and the Applicant a further 7 days for a reply, if any. If no submissions are received within this timeframe, the Parties will be deemed to have settled the issue of costs as between themselves. If I have not received response or reply submissions within the specified timelines after the Applicant’s initial submission, I will consider that the Parties do not wish to make any further submissions, and will decide on the basis of the material that I have received.

Gibson J.