Court File and Parties
COURT FILE NO.: 41909/19
DATE: 2021-07-08
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: C.J., Applicant
AND:
E.J., Respondent
BEFORE: Conlan J.
COUNSEL: Michael Kril-Mascarin, for the Applicant
Frank E. Mendicino, for the Respondent
HEARD: July 7, 2021
ENDORSEMENT
I. Introduction
[1] The Applicant wife, C.J., moves for an Order striking the Answer filed by the Respondent husband, E.J. The Motion was heard via Zoom on July 7, 2021.
[2] It is alleged by the wife that the husband has breached four provisions of two Orders made by Justice Kurz on July 4, 2019. Specifically, these are the relevant provisions, all set out below: clause 7 of the Final Order made on that date (regarding the two children as beneficiaries of the husband’s life insurance policy), clause 3 of the Temporary Order made on that date (regarding Golf Club disclosure), clause 4 of that same Temporary Order (regarding monies received by the husband from the Golf Club), and clause 6 of that same Temporary Order (regarding the husband’s loans). Note that all references to the names of the parties in the operative paragraphs of the two said Orders have been replaced below with initials.
Final Order
- The Respondent shall name the Children as equal beneficiaries of a policy of life insurance with a face amount of no less than $100,000 and maintain such policy until the last of the two Children has completed her post secondary education.
Temporary Order
Within 30 days of the date of this Order, the Respondent will provide the Applicant, C.J. with full disclosure relating to the value of his interest in the York Downs Golf and Country Club (the “Club”) including without limitation a copy of the 2014 Purchase and Sale Agreement, and shall direct and authorize the Club to provide copies of all correspondence directed to the Respondent to the Applicant as well and to provide her directly with any information that she may request from time to time. The Respondent’s obligation to make full disclosure with respect to his interest in the Club is ongoing such that he shall immediately provide the Applicant with a copy of any document or correspondence relating to his interest in the Club as it is received by him.
Upon receipt of any monies from the Club, the Respondent shall immediately advise the Applicant of his receipt of such monies and pay to her one half of the amount received by him within 10 days. Without limitation, the Respondent shall pay to the Applicant one half of any and all monies he receives from the Club or from Sixteenth Land Holdings Inc. with respect to the sale of the Club lands and the 2014 Purchase and Sale Agreement.
Within 30 days of the date of this Order, the Respondent shall provide the Applicant with details and an accounting of any loans he made during the parties’ marriage and any documents related to such loans. The details of the loans shall include but are not limited to the identity of the borrower, the amount of the loan, the repayment and interest terms, the source of the funds loaned, and details of any payments made.
[3] It should be noted that both Orders were made on consent.
[4] The husband denies that he has failed to comply with any of the said provisions.
II. Analysis
The Law
[5] I find instructive the following guidance from our Court of Appeal, at paragraphs 11 through 16 of its decision in Roberts v. Roberts, 2015 ONCA 450.
[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] Rule 1(8) of the Family 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. O. Reg. 322/13, s. 1.
[15] 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.
[16] There are no children and thus no children’s issues here.
[6] I also agree with the following summary of the basic legal principles on this type of motion as outlined by Justice Starr of the Ontario Court of Justice in Price v. Putman, 2018 ONCJ 86, at paragraphs 32 through 45 (although the last part of the commentary deals more with contempt motions, which this is not).
[32] Subrule 1(8) of the Family Law Rules, (“the Rules”) sets out the pallet of remedies available to the court to address non-compliance by a party with court orders. It reads as follows:
Failure to Obey Order
1(8) If a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including,
(a) an order for costs;
(b) an order dismissing a claim;
(c) an order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party;
(d) an order that all or part of a document that was required to be provided but was not, may not be used in the case;
(e) if the failure to obey was by a party, an order that the party is not entitled to any further order from the court unless the court orders otherwise;
(f) an order postponing the trial or any other step in the case; and
(g) on motion, a contempt order.
[33] What follows are some of the legal principles gleaned from the jurisprudence Counsel referred me to and which have guided me in reaching my decision in this case.
[34] First, subrule 1(8) is available where there is “a failure to obey an order in the case.” There is no requirement that the order be made on motion; and it matters not who obtained the order. As long as the judge is satisfied that there has been a failure to obey an order “in the case or a related case,” subrule 1(8) is triggered [see Hughes v. Hughes, supra, at paragraph 17].
[35] Second, the failure to follow a court order should not be taken lightly. I arrive at this based on the language of subrule 1(8) and Justice Quinn’s comments in Gordon v. Starr, supra. As he notes, the mere existence of subrule 1(8) and the language used coupled with the wide array of sanctions available, makes it very clear that failure to follow a court order should not be taken lightly. The rational for this is evident from Justice Quinn’s comments found in paragraph 23. That paragraph reads in part as follows:
23 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.
[36] Third, discretion in favour of the noncompliant party will only be granted in exceptional circumstances. Put another way, it would take an extraordinary event to cause a court to exercise its discretion not to apply the rule in favour of the complainant. [See Mollina, supra at paras 5 and 6 and Wellman v. Robert, supra].
[37] Fourth, in deciding whether or not to exercise its discretion in favour of a non-complying party the court ought to take into account all relevant history in the course of the litigation and, more specifically, the conduct of the non-complying party. [See Mollina, paragraphs 5 and 6 and Wellman v Robert]
[38] Fifth, the words in subrule 1(8) “just determination” are sufficiently wide to include protecting the administration of justice, as that is what is at stake if a party wilfully disobeys an order. In Hughes v Hughes, supra Justice Quinn was forced to look beyond subrule 14(23) to deal with noncompliance in part because the technical requirements of that rule could not be met. He turned to subrule 1(8) and at paragraph 18 sets out the rational for this principle:
18 Where a party has failed “to obey an order in the case”, the court is entitled to make “any order it considers necessary for a just determination of the matter”. The words “just determination” are sufficiently wide to include protecting the administration of justice, and that is what is at stake if a party willfully disobeys an order.”
[39] Sixth, the onus is on the non-complying party to show, on a balance of probabilities that subrule 1(8) is not applicable or that the court should exercise its discretion in favour of the noncompliant party. Both this principle and its rationale are also articulated by Justice Quinn in Gordon v Starr, supra, at paragraph 16: Why should any litigant be spared from obeying a court order?
[40] The decision in Molina and the court’s subsequent decision in Wellman v Robert both adopt the 3 step approach to dealing with noncompliant parties in the context of subrule 1(8) and 14(23), as outlined in the 2008 case of Ferguson v Charles, supra. I too adopt that approach.
[41] Restated to accord with the most recent incarnation of those sub rules now reflected in subrule 1(8), the three step approach is as follows:
The court must ask whether there is a triggering event that would allow it to consider the wording of sub-rule 1(8). That triggering event would be non-compliance with a court order in the case or a related case.
If the triggering event exists, the court should then ask whether it is appropriate to exercise its discretion in favour of the non-complying party by not sanctioning that party under sub-rule 1(8).
In the event the court determines that it will not exercise its discretion in favour of the non-complying party, it is then left with the very broad discretion as to the appropriate remedy pursuant to the provisions of sub-rule 1(8).
[42] I would add a further guiding principle to the third step. That is that the court ought to ensure the sanction imposed upon a party found to have failed to obey a court order must be of significance. That is, of such consequence as to ensure the administration of justice is not brought into disrepute.
[43] As with sentences in civil contempt proceedings, the primary objective of the remedies available under subrule 1(8) is to coerce the offender into obeying the court judgment or order [see See Kopaniak v. MacLellan (2002), 2002 CanLII 44919 (ON CA), 27 R.F.L. (5th) 97, (Ont. C.A.)]. General deterrence is the second objective. As noted by the court in the case of Itrade Finance Inc. v. Webworx Inc., 2005 CanLII 24776 (ON SC), [2005] O.J. No. 3492 at para. 20 (ON S.C.), “…others who may be tempted to flout an Order of this Court and frustrate its process must appreciate that they cannot benefit from such conduct.”
[44] Thus, as with sentencing in contempt proceedings, particularly in family law proceedings, the sanction should be comprised of two components. It should be restorative to the victim of the breach and punitive to the noncompliant party. To accomplish the former requires the sanction to correlate to the conduct that produced the failure to follow the court order and to accomplish the latter requires the sanction not to reflect a marked departure from those imposed in like circumstances.
[45] To this end, I adopt a modified version of the considerations that are often relied on to guide the court in sentencing in contempt proceedings as set out in the case of Cassidy v. Cassidy, 2010 ONSC 2707. Thus, in determining whether the remedy sought under subrule 1(8) is appropriate to achieve a fair and just determination of the case, the considerations may include the following:
(a) the available remedies under the subrule;
(b) the proportionality of the sanction to the wrongdoing;
(c) the similarity of sanctions in like circumstances;
(d) the presence of mitigating factors;
(e) the presence of aggravating factors; and,
(f) deterrence.
[7] Finally, I agree with my colleague, now Regional Senior Justice Ricchetti, when His Honour stated the following at paragraphs 68-69 of the decision in Giavon v. Giavon, 2020 ONSC 21.
[68] It is important to ensure that the party in default is clearly given one last chance to comply with the court order(s) and is aware of the consequences, that might be ordered if the party in default continues to wilfully disregard compliance with the court order (s). that was clearly done in this case. Despite knowing that his pleadings might be struck, the Respondent continued to disregard his financial disclosure ordered by the court and required under the Family Law Rules.
[69] In Van v. Palombi, 2017 ONSC 2492, at para. 30, the Divisional Court stated the three-pronged test to be applied when striking pleadings:
(a) Is there a triggering event justifying the striking of pleadings?
(b) Is it appropriate to strike the pleadings in the circumstances of the case?
(c) Are there other remedies in lieu of striking the pleadings that might suffice?
The Law as Applied to the Evidence Filed in our Case
Clause 7 of the Final Order (Children as Beneficiaries of the Husband’s Life Insurance Policy)
[8] This provision has clearly not been complied with by the husband. In assessing whether the husband has named the two children as beneficiaries and has maintained the policy to date, it is not sufficient for the husband to simply file a copy of a Beneficiary Designation Form signed by the husband and a couple of Canada Post receipts. That is what he has done. The only practical way for the husband to have complied with the provision was to obtain a copy of the current policy. He has had two years to do so. There is no excuse. The welfare of the children is paramount, and this Court takes seriously the husband’s apparent laissez-faire approach to compliance with a Court Order for their benefit.
Clause 3 of the Temporary Order (Golf Club Disclosure)
[9] Likewise, this provision has clearly not been complied with by the husband. The Order does not say to provide as many details as possible about the sale of the Club, which appears to be what the husband now says he has done by disclosing the documents that were attached to his counsel’s correspondence dated October 15, 2019. No, the Order states, in part, that a copy of the 2014 Purchase and Sale Agreement must be provided. It has not been provided. The husband states that he cannot obtain it because he was simply a member of the Club. Well, then he should not have consented to the Order in the first place.
Clause 4 of the Temporary Order (Monies Received by the Husband from the Club)
[10] Again, this provision has clearly not been complied with by the husband. The husband has deposed that he received two cheques from the Club on June 21, 2021 (paragraph 13 of his affidavit). As of July 7th, more than ten days after June 21st, the wife has not received her share of the funds. That the husband has a bank draft all ready to go to give to her is better than nothing but not compliance. If he thought that bank delays and financial straightjackets would impair his ability to meet a ten-day deadline, then he should not have consented to the Order.
Clause 6 of the Temporary Order (Loans Advanced by the Husband)
[11] I am of the view that the husband’s evidence at paragraphs 17 through 20 of his affidavit sworn on 30 June 2021, including the exhibits referred to therein, now satisfies the husband’s obligations under the said provision. But there was still non-compliance because the satisfaction of the Court-ordered disclosure came months late – far after thirty days from the date of the Order. It is yet another example of the husband’s “I will comply when I get around to it” approach to mandatory Court directives.
Remedy
[12] Notwithstanding the husband’s habitual and protracted non-compliance with two Court Orders, and even though there are no children’s issues remaining to be decided (equalization of net family property is that which is outstanding), I have decided that there is another course of action that will meet the interests of justice in this case. That other course of action, which I find to be responsive and reasonable, will avoid this Court’s resort to the hammer of striking a pleading. Counsel for the wife was wise to ask for the Answer to be struck, and his arguments on the Motion were persuasive, but, respectfully, I think that I will take another route.
[13] There is an upcoming Settlement Conference. This Court orders as follows:
(i) the husband shall, within five calendar days of the date of this Endorsement, requisition from the insurer, with a copy of the requisition to counsel for the wife, a complete copy of his current life insurance policy, and he shall provide that complete copy of the current life insurance policy to counsel for the wife within five calendar days of his receipt of it;
(ii) the husband shall, within five calendar days of the date of this Endorsement, requisition from someone in charge at the Golf Club, with a copy of the requisition to counsel for the wife, a complete copy of the 2014 Purchase and Sale Agreement, and he shall provide that complete copy of the said Agreement to counsel for the wife within five calendar days of his receipt of it;
(iii)in the event that the Golf Club fails or refuses to provide to the husband the document requested, then the husband shall forthwith disclose to counsel for the wife anything in writing that he receives from anyone at the Golf Club in response to his requisition;
(iv) the husband shall, immediately, pay half of every dollar received by him from the Golf Club since July 4, 2019 to date and beyond, including but not limited to the two cheques that he received from the Golf Club in June 2021; and
(v) the husband shall, by the commencement of the Settlement Conference scheduled for July 22, 2021, pay costs to the wife in the total amount of $10,000.00.
[14] If counsel for the wife wishes to pursue costs in an amount greater than what has been ordered herein, then he may contact the trial office in Milton to schedule a brief Zoom attendance to hear oral submissions in that regard. If that occurs, it does not absolve the husband from his obligation to pay the $10,000.00 prior to the start of the Settlement Conference.
[15] Order accordingly.
(Original signed by)
Conlan J.
Date: July 8, 2021