COURT FILE NO.: FS-19-00096622-0000
DATE: 2022 05 30
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Micheline BOUTIN
Robert M. Halpern and Victoria Varro, for the Applicant
Applicant
- and -
Victor BOUTIN
Gary S. Joseph and Aria MacEachern, for the Respondent
Respondent
HEARD: May 11, 12, 13, 16, and 17, 2022.
REASONS ON CONTEMPT LIABILITY TRIAL
RSJ RICCHETTI
THE MOTION. 4
THE MARRIAGE, THE CHILDREN AND SEPARATION. 5
Jimmy Boutin. 6
THE COMMENCEMENT OF THIS PROCEEDING.. 6
THE FINANCIAL BACKGROUND. 7
THE PROCEEDING TO DATE. 9
Overview.. 9
The Hearings and Orders. 9
August 13, 2020 Hearing – J. Dennison. 9
February 26, 2021 Hearing – J. Barnes. 9
March 8, 2021 Hearing – J. Mandhane. 9
April 9, 2021 Hearing – J. Miller 9
May 25, 2021 Hearing – J. Barnes. 9
June 22, 2021 – Hearing J. Mandhane. 9
August 11, 2021 Hearing – J. Barnes. 9
November 18, 2021 – J. McGee. 9
The October 5, 2021 Motion by Mrs. Boutin. 9
December 22, 2021 – Hearing J. Ricchetti 9
December 31, 2021 Reasons of J. Barnes. 9
January 19, 2022 – Hearing Van Melle J. 9
Case Management Appointed – J. McGee. 9
April 28, 2022 – Hearing J. Ricchetti 9
May 11, 12 and 13, 2022 – Contempt Liability Trial J. Ricchetti 9
THE LAW.. 9
The Position of Mrs. Boutin. 13
The Position of Mr. Boutin. 13
What is Outstanding under the Disclosure Orders. 13
August 13, 2020 Dennison J. Order. 13
February 26, 2021 Barnes J. Order (which required disclosure of the items in a February 5, 2021 chart. 13
June 22, 2021 Mandhane J. Order 13
December 31, 2021 Barnes J. Order 13
COMMENTS ON THE EVIDENCE AND CREDIBILITY. 13
Mrs. Boutin. 13
Mr. Boutin. 13
Jimmy Boutin. 13
ANALYSIS. 13
Clear and Unambiguous and Breach not an issue. 13
Was a wilful and flagrant breach of the Disclosure Orders?. 13
Has Mr. Boutin’s wilful and deliberate breach established beyond a reasonable doubt?. 13
Other issues raised by Mr. Boutin. 13
Compelled to respond. 13
CONCLUSION. 13
The Motion
[1] The Applicant, Micheline Boutin, brought a long motion seeking orders:
a) That the Respondent, Victor Boutin, was in contempt (as well as a separate motion for contempt);
b) For the appointment of a receiver;
c) For the sale of various properties;
d) To encumber and deal with the Concession 11 net proceeds of sale;
e) To strike the Respondent’s pleading;
f) To order the Respondent to make certain disclosure; and
g) Leave to amend the Applicant’s Application and to seek production from third parties;
[2] At the first appearance before me on April 28, 2022, the court ordered that the contempt liability trial proceed first, based on the affidavits exchanged between the parties together with any cross-examination and additional evidence viva voce evidence in court (Contempt Trial).
[3] The court determined it would later hear the balance of the Applicant’s long motion (Receivership Motion). Counsel for JVSB Holdings Ltd. (JSVB) and Mr. Juan Speck (Speck), would participate in this hearing.
[4] The court upon completion of the Contempt Trial reserved its decision. These are my reasons for finding Mr. Boutin in contempt.
The Marriage, the Children and Separation
[5] The Applicant, Michelle Boutin, is 72 years old. The Respondent, Victor Boutin is 77 years old. The parties were married on July 15, 1972. The parties separated on November 1, 2019.
[6] There are two children of the marriage, Jimmy and Eric. Both are now adults.
[7] Mr. Boutin commenced his land development businesses in 1973. By the time of the separation, Mr. Boutin, was very successful in the real estate investment, development, construction businesses, along with other related businesses.
[8] Exhibit 1 at the Contempt Trial shows some of Mr. Boutin’s various corporate interests as at November 1, 2019 (Boutin Companies).
[9] In addition to his corporate interests, Mr. Boutin also held real estate properties in his name, some for personal use and others for investment/development purposes.
Jimmy Boutin
[10] Jimmy Boutin (Jimmy) is estranged from his mother, Mrs. Boutin.
[11] Jimmy has an engineering and accounting educational background.
[12] Jimmy works with Mr. Boutin. Jimmy is employed as the comptroller for all the Boutin Companies (according to Mr. Boutin but, most, not all, according to Jimmy). Based on his evidence and the evidence of Mr. Boutin, Jimmy has significant involvement in all of the Boutin Companies and had/has a major role in collecting and making the disclosure described herein.
[13] Jimmy also owns separate companies:
• Boutin Capital Ltd.(Boutin Capital);
• Boutin Investments Ltd. (Boutin Investments);
• Onbuild Construction Ltd.;
• E-Trackit Inc.; and
• Hybrid Form Sales Ltd or Inc.
[14] Mr. Boutin has no interest in these companies.
[15] Jimmy’s wife’s name is Audrey. They have two children, Hailey and Ethan (4 and 6 years old).
[16] Each of Jimmy, Audrey, Hailey and Ethan play a role in the financial affairs of Mr. Boutin and his various financial dealings post-separation.
The Commencement of this Proceeding
[17] Mrs. Boutin commenced this proceeding on November 6, 2019. The relief sought included:
a) A divorce,
b) Spousal support,
c) Equalization,
d) Freezing assets,
e) Possession of a jointly owned matrimonial home,
f) Continuation of Health Benefits and Life Insurance, and
g) Sale of family property.
[18] Mr. Boutin filed an Answer on March 2, 2020. In the Answer, the Respondent claimed that the parties were not separated “as at the date of filing” and then sought the same relief against Mrs. Boutin.
The Financial Background
[19] Prior to the separation, the parties had established a real estate and construction (and related) businesses, personally and through the multiple corporations described above. There were extensive land holdings, in person and through the various corporations. There were a number of construction projects before and after separation. For example, the Boutin Companies, in late 2021, completed a project in Chatham.
[20] There were corporate and property holdings in Canada and the US.
[21] Mr. Boutin and Juan Speck were and remain partners in some land investments and developments. Initially, this was done through a company called Sota Investments Limited but is now called JSVB Holdings Limited (JSVB). Mr. Boutin and Mr. Speck are equal shareholders through their respective holding companies. Mr. Boutin and Mr. Speck are the sole directors of JSVB.
[22] JVSB also has two wholly owned subsidiaries: 2131006 Ontario Ltd. and 2131754 Ontario Ltd. There was not much information regarding these two companies at the Contempt Trial.
[23] Mr. Boutin prepared a Personal Net Worth Statement on April 1, 2019, just 7 months prior to the separation (Net Worth Statement). The Net Worth Statement showed that Mr. Boutin held numerous real estate properties (34 parcels but to date only 28 property appraisals have been provided although Mrs. Boutin alleges there are many more properties in which Mr. Boutin has an interest). The “Market Value” of the 34 properties was $95,920,000 less liabilities of $21,031,200. In addition, the Net Worth Statement showed that Mr. Boutin had other non real estate assets valued at almost $3,000,000. In total, the Net Worth Statement showed Mr. Boutin’s net worth as $77,753,800.
[24] The properties were held, in some cases, in Mr. Boutin’s name or through the following corporations in which Mr. Boutin owned 100%:
a) Boutin Holdings Limited,
b) 2136615 Ontario Ltd.,
c) 879662 Ontario Inc.,
d) 2240523 Ontario Ltd.,
e) SQR Holdings Inc., and
f) Everlast Group Ltd.
[25] There is no dispute that Mr. Boutin was the sole shareholder of these corporations as of November 1, 2019. It is unclear what Mr. Boutin’s holdings in these companies (and other companies) are as of today (relevant to income for support purposes and any tracing of assets). This has been and is a part of the disclosure issues described below.
[26] And then there are other corporations owned by Mr. Boutin at November 1, 2019:
a) Amptek Electric Ltd.,
b) Everlast Group Ltd.,
c) Everlast Caulking & Waterproofing Ltd.,
d) ATS Biotech Inc., with a number of “ATS subsidiaries”.
[27] Despite all of the above, including the recent completion of the project in Chatham, an ongoing project in Gananoque, the sale of multiple properties in the many millions of dollars, Mr. Boutin currently alleges that his “income derives mainly from pensions” and he is forced to live in his office because he doesn’t have funds to rent a home.
The Proceeding to Date
Overview
[28] Full and frank disclosure is the most basic obligation in family law litigation. In Roberts v Roberts, 2015 ONCA 450 at paras. 11 and 12, the Court of Appeal wrote:
“The most basic obligation in family law is the duty to disclosure financial information. This requirement is immediate and ongoing. [...] 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.”
[29] This case demonstrates the unfortunate waste of considerable judicial resources when parties choose NOT to comply with their fundamental obligation on separation – disclosure of complete, and accurate financial information and documentation. The game of “hide and seek” of the party’s assets and income is to be discouraged in the strongest means possible.
[30] There have been numerous hearings in this matter over the past two years. At the heart of many of the hearings was the same: to obtain disclosure by Mr. Boutin. Without that disclosure, other motions had to be brought such as interim lump sum support, matrimonial home, motions to strike and now contempt motions.
[31] By any assessment, and for the reasons set out below, Mr. Boutin has not been transparent or provide complete disclosure of his personal and corporate assets or dealings with those assets despite the fact separation took place 2 ½ years ago.
[32] In summary, Mrs. Boutin continues to require full, accurate and complete disclosure from Mr. Boutin’s financial affairs including:
a) Listing and valuation of all properties and assets which Mr. Boutin has a direct or indirect interest, corporate or otherwise; and
b) A valuation of the various corporate interests which Mr. Boutin had/has a direct and indirect interest, corporate or otherwise to determine equalization and income for support purposes.
[33] In this case, because of the lack of disclosure, the sales, transfers and other dealings by Mr. Boutin with his corporate and personal assets post-separation, such transactions are reasonably viewed as a deliberate and flagrant attempt to avoid Mr. Boutin’s spousal obligations to Mrs. Boutin. Then when you add to the lack of disclosure, partial and piecemeal disclosure over several years in incremental, haphazard, the changing information, the suspicion turns to a reasonable inference of a deliberate and calculated plan to frustrate Mrs. Boutin’s claims. Lastly, repeated adjournment requests, numerous changes of counsel, multiple change of experts by Mr. Boutin, a clear and unquestionable conclusion emerges of a deliberate and flagrant refusal and failure to comply with court orders by Mr. Boutin to permit corporate reorganizations and other asset protection measures to be put into place to defeat Mrs. Boutin’s claims.
[34] Turning to the contempt issue before me, in this case, some disclosure, even significant disclosure, has been made, but not all the disclosure ordered. A very significant portion of the non-disclosure is Mr. Boutin’s failure to provide a report on the value his assets (personal and corporate assets) on the date of separation and the failure to provide an income post-separation which requires a detailed and accurate disclosure of his corporate affairs.
The Hearings and Orders
[35] Let me review the history of the hearings and orders in this proceeding:
August 13, 2020 Hearing – J. Dennison
[36] Both parties were represented by counsel. The parties agreed on a Consent Order requiring detailed and extensive disclosure by Mr. Boutin personally and his interests in his various corporations set out in the Request for Information dated July 21, 2020.
[37] Complete disclosure was not entirely forthcoming.
February 26, 2021 Hearing – J. Barnes
[38] Mrs. Boutin brought a motion to strike Mr. Boutin’s pleadings for failure to provide the disclosure ordered by the July 21, 2020 Dennison J. Order.
[39] Justice Barnes ordered Mr. Boutin to provide a proposed timetable for the August 13, 2020 Dennison J. Order disclosure and to also provide additional disclosure set out in a Letter from Tim Martin dated January 18, 2021 (the Applicant’s expert).
[40] Complete disclosure was not entirely forthcoming.
March 8, 2021 Hearing – J. Mandhane
[41] Mrs. Boutin brought this motion seeking exclusive possession of the matrimonial home (the parties were both residing in the matrimonial home at the time) and other financial relief (expenses for the matrimonial home and an interim disbursement order).
[42] The motion could not proceed because Mr. Boutin’s solicitor sought and was removed from as solicitor of record around the time of the motion and Mr. Boutin had not filed responding materials. The motion’s judge adjourned the motion to April 9, 2021.
April 9, 2021 Hearing – J. Miller
[43] When this came before Miller J., Mr. Boutin had still not filed responding materials and again sought another adjournment. Justice Miller acknowledged the delay in this proceeding also included Mr. Boutin’s failure to make disclosure pursuant to the August 13, 2020 Dennison J. Order, and proceeded to deny the adjournment.
[44] Justice Miller granted Mrs. Boutin exclusive possession of the matrimonial home, granted Mr. Boutin the right to retrieve his personal effects, ordered that Mr. Boutin pay the ongoing matrimonial home expenses; a lump sum payment to Mrs. Boutin of $500,000 within 30 days, and full recovery costs of $41,624.23 against Mr. Boutin.
May 25, 2021 Hearing – J. Barnes
[45] Mrs. Boutin brought a second motion to strike Mr. Boutin’s pleadings for failure to comply with the two disclosure orders (the August 13, 2020 Dennison J. Order and the February 26, 2021 Barnes J. Order). Mr. Boutin’s counsel acknowledged that “the outstanding disclosure and the additional disclosure request were reasonable” but sought additional time to comply with the orders.
[46] Justice Barnes ordered Mr. Boutin:
a) to “comply fully with the disclosure from” the August 13, 2020 Dennison J. Order by June 30, 2021;
b) Ordered that the additional production requested in Mrs. Boutin’s Notice of Motion be produced by July 15, 2021; and
c) If any of the disclosure was outstanding as of July 15, 2021, Mr. Boutin was to provide a sworn affidavit explaining why any disclosure remained outstanding and the efforts made to obtain the disclosure.
[47] The parties were ordered to attend before J. Barnes on July 30, 2021 to review Mr. Boutin’s compliance with disclosure.
June 22, 2021 – Hearing J. Mandhane
[48] Mrs. Boutin brought a motion to compel Mr. Boutin to comply with Miller J. Order as Mr. Boutin had not paid the lump sum payment.
[49] Justice Mandhane ordered that two-jointly-owned properties be sold and costs of $15,000 against Mr. Boutin.
[50] Justice Mandhane also ordered the valuations:
“The Respondent shall deliver to the Applicant an expert report valuing his corporate and trust interests at the parties’ valuation date and at present and determining his income available for spousal support from the date of separation (November 1, 2019) to the present, at his cost, by September 15, 2021.”
“an expert report valuing his corporate and trust interests at the parties’ valuation date and at present and determining his income available for spousal support from the date of separation (November 1, 2019) to the present, at his cost, by September 15, 2021.”
“The Respondent shall produce on or before July 15, 2021, an accounting of the proceeds from the transfer of all real property owned by him personally as at the date of separation and owned by any entity in which he held an interest at separation, and an accounting and tracing of those proceeds from the point of transfer to the present which shall include all supporting documents.”
August 11, 2021 Hearing – J. Barnes
[51] The scheduled July 30, 2021 hearing took place on this date.
[52] Mrs. Boutin’s expert provided an updated affidavit showing outstanding disclosure, including “real estate appraisals, the corporate organization charts were incomplete and fiscal information for 2020 was absent…”. The court concluded that “crucial disclosure remained outstanding” and the disclosure provided was “in a disorganized and haphazard manner”.
[53] Justice Barnes commented that, most troubling, was Mr. Boutin’s attempt to “renege on his commitment to provide new disclosure as describe in the February 26, 2021 and May 25, 2021 orders”.
[54] Mr. Boutin was given 45 days to provide the outstanding disclosure. Copies of the outstanding disclosure were attached as Schedules A and B to Justice Barnes’ endorsement.
[55] Barnes J. ordered costs against Mr. Boutin in the amount of $143,127.47.
November 18, 2021 – J. McGee
[56] Mrs. Boutin brought a motion seeking extensive financial and other relief considering Mr. Boutin’s lack of disclosure. This long motion was scheduled to be heard during the October Trial sittings. The long motion was not reached during the October Trial sittings. The long motion was scheduled for December 15, 2021.
The October 5, 2021 Motion by Mrs. Boutin
[57] Mrs. Boutin brought a further motion on October 5, 2021 for a preservation order and various other interim relief. This motion was scheduled to be heard with the long motion.
[58] Mrs. Boutin also brought a contempt motion arising from the alleged deliberate refusal or failure of Mr. Boutin’s compliance with the various Disclosure Orders.
December 22, 2021 – Hearing J. Ricchetti
[59] At the return of Mrs. Boutin’s long motion, Mr. Boutin once again sought an adjournment to give him more time to comply with the Disclosure Orders.
[60] Unfortunately, Barnes J. had not released his decision on Mrs. Boutin’s motion to strike. Justice Barnes was to release his decision imminently.
[61] The long motion was adjourned to January 19, 2022. As a term of the adjournment this court ordered a preservation order as sought in paragraph 1 of the October 5, 2021 Notice of Motion; allowing the registration of the preservation order against the properties in Schedule A of the October 5, 2021 Notice of Motion, and permitting Mr. Boutin to file responding materials by January 12, 2022:
The Respondent, Victor Boutin (“the Respondent”), shall preserve and be restrained from depleting, transferring, or otherwise dissipating any property in his possession or direct or indirect control, without the Applicant’s express written consent obtained in advance. This shall include, but not be limited to, the transfer of any monies or property between the various corporations which existed at separation, have existed since separation, and which will exist pending trial.
The Applicant is granted leave to register this Order on title to any and all real property owned by the Respondent in his personal capacity or owned by corporations in which the Respondent has a 100% interest, as set out in the attached Schedule A, based on the municipal addresses set out therein and their corresponding legal descriptions.
December 31, 2021 Reasons of J. Barnes
[62] Justice Barnes released his decision on December 31, 2021 dismissing, without prejudice, Mrs. Boutin’s motion to strike Mr. Boutin’s pleadings for failing to comply with the disclosure orders of August 13, 2020 Dennison J. Order, June 22, 2021 Mandhane J. Order and the February 26, 2021 and May 25, 2021 Barnes J. Orders despite the fact the court found that considerable disclosure from those orders remained outstanding that were set out in Schedule A and B to the endorsement. Mr. Boutin’s counsel had advised the court their business valuator would complete Mr. Boutin’s valuation and income reports within two months.
[63] Justice Barnes set out in his endorsement several attachments setting out the outstanding disclosure from the Disclosure Reports and giving Mr. Boutin 45 days to complete the disclosure.
January 19, 2022 – Hearing Van Melle J.
[64] On this date, Mr. Boutin submitted that, because of the new deadline set by J. Barnes in his December 31, 2021 endorsement, he was not yet in default of the disclosure order. Justice Van Melle rejected this argument.
[65] Justice Van Melle stated that “The Respondent’s position that his financial affairs are complicated and thus he has been unable to comply, is difficult to believe.”...”there is no credible explanation for the respondent’s delay in producing the disclosure.”
[66] Justice Van Melle ordered Mr. Boutin to pay Mrs. Boutin $1.5 million dollars toward interim disbursements and that “The order of Justice Miller and all previous orders remain in effect.” Justice Van Melle also ordered Mr. Boutin to pay costs of $160,118.07 all inclusive within 30 days.
Case Management Appointed – J. McGee
[67] Mrs. Boutin’s long motion remained outstanding. Mr. Boutin sought, at a case management hearing, an adjournment to permit questioning of Ms. Boutin. The adjournment was denied in favour of a viva voce hearing. Mrs. Boutin now brought a motion for the appointment of a Receiver over the assets of Mr. Boutin.
[68] Justice McGee ordered the long motions be heard on April 28, 2022.
April 28, 2022 – Hearing J. Ricchetti
[69] The parties appeared before the court to deal with Mrs. Boutin’s contempt motion and the long motions. On consent, Juan Speck and JSVB were added as parties to this proceeding.
[70] The court ordered that the contempt motion (liability portion only) would proceed viva voce commencing on May 11, 2022 and the receivership and other relief in the long motion would be heard commencing May 16, 2022.
May 11, 12 and 13, 2022 – Contempt Liability Trial J. Ricchetti
[71] The liability portion of Mrs. Boutin’s contempt motion was heard in person with viva voce evidence.
[72] The contempt motion is dated March 17, 2022 (re-filed) and alleges that Mr. Boutin is in contempt for failing to comply with the August 13, 2020 Dennison J. Order, the February 26, 2021 Barnes J. Order, the May 25, 2021 Barnes J. Order, the April 6, 2021 Miller J. Order, the June 22, 2021 Mandhane Order and/or the December 31, 2021 Barnes Order (the Disclosure Orders).
[73] Mrs. Boutin filed an affidavit (February 24, 2022) and a supplementary affidavit (March 17, 2022) in support of the long motion and the contempt motion.
[74] Mr. Boutin filed a responding affidavit dated April 1, 2022.
[75] Mrs. Boutin filed a reply affidavit dated April 13, 2022.
[76] At the contempt liability trial, the following witnesses testified: Mrs. Boutin testified. Mr. Boutin chose to testify and also called as witnesses, Jimmy Boutin. Mr. Mozessohn (Mr. Boutin’s new valuation expert at SLF). In reply, Mrs. Boutin called Mr. Martin (Mrs. Boutin’s expert).
The Law
[77] This motion alleges civil contempt. There are three essential requirements for a finding of civil contempt as set out by Blair J.A., in Prescott-Russell Services for Children and Adults v. G. (N.) et al. (2007), 2006 CanLII 81792 (ON CA), 82 O.R. (3d) 686 (C.A.):
[27] The criteria applicable to a contempt of court conclusion are settled law. A three-pronged test is required. First, the order that was breached must state clearly and unequivocally what should and should not be done. Secondly, the party who disobeys the order must do so deliberately and wilfully. Thirdly, the evidence must show contempt beyond a reasonable doubt. Any doubt must clearly be resolved in favour of the person or entity alleged to have breached the order.
[78] Courts should only invoke its contempt powers in the clearest of cases and with the greatest of caution. See R. v. Cohn (1984), 1984 CanLII 43 (ON CA), 48 O.R. (2d) 65 at 76 (C.A.). It is to be used sparingly and as a remedy of last resort where another adequate remedy is not available to seek to enforce this court’s order.
[79] Contempt findings in family law cases should be made only sparingly and as a last resort: Hefky v. Hefky, 2014 CarswellOnt 2986 (OCA).
[80] In Sweda Farms Ltd. (c.o.b. Best Choice Eggs) v. Ontario Egg Producers, 2011 ONSC 3650, [2011] O.J. No. 3482, Justice Lauwers (as he then was) summarized the applicable principles and purpose of contempt proceedings:
18 In a civilized society governed by the rule of law, such as ours, people are expected to and do comply with court orders. But in the rare cases that they do not, the court must take action. As Pepall J. stated: "Once an order has been obtained, it is imperative that it be obeyed, that the public understand that it must be obeyed, and that judges have the will and ability to ensure compliance." There are many other similar expressions of judicial resolve. See, for example, the following statement of Blair J.: "No society which believes in a system of even-handed justice can permit its members to ignore, disobey, or defy its laws and its courts, orders at their whim because in their own particular view it is right to do so."
19 The nature of the contempt may vary with the context, with slightly different considerations taken into account. Cumming J. noted that the court's authority over court orders includes orders relating to commercial matters:
The deliberate failure to obey a court order strikes at the very heart of the administration of justice. This includes court orders relating to commercial matters as seen in the case at hand. If someone can simply ignore or finesse his way around a court order it will tend to add uncertainties and risks, with consequential inefficiencies and additional costs, as well as causing unfairness, with consequential inequities and additional costs, to the commercial marketplace. Just as white collar crime is crime, white collar contempt is contempt.
20 I summarize briefly the relevant aspects of the law of civil contempt for failing to comply with a court order. Given the gravity of a finding that a person is in contempt and the exposure to penalties, the court should always exercise prudence and restraint before making such a finding.
21 The order "must state clearly and unequivocally what should and should not be done." It must be directive and not simply permissive. In terms of compliance, the alleged contemnor must have knowledge of the nature of the terms of the order, and, once having knowledge, must obey the order in letter and spirit with every diligence. A person who is subject to an order should not be permitted to "finesse" it or to "hide behind a restrictive and literal interpretation to circumvent the order and make a mockery of it and of the administration of justice."
22 The alleged contemnor's conduct must objectively breach the order. There is also a mental or subjective element, often expressed in the formula that the disobedience must be deliberate and wilful, or wilfully blind, indifferent or reckless. Actionable disobedience includes the deliberate failure of a person to make inquiries in circumstances where suspicion is or should be aroused. Further, "[i]f a party feels that the injunction is over-broad, its recourse is to apply to have the terms narrowed or made more explicit, not to resort to self-help by ignoring some or all of the terms."
23 There is some subtlety here. An element of the classical formulation is that "any act done or writing published calculated to obstruct or interfere with the due course of justice or the lawful process of the Courts is a contempt of Court." McIntyre J.A. noted, however, "The word 'calculated' as used here is not synonymous with the word 'intended'. The meaning it bears in this context is found in the Shorter Oxford English Dictionary as 'fitted, suited, apt'." Accordingly, the moving party does not need to prove that the alleged contemnor intended specifically to disobey the order: "The offence consists of the intentional doing of an act which is in fact prohibited by the order." The alleged contemnor need not be shown to exhibit "any particular aversion, abhorrence or disdain of the judicial system" despite the ordinary meaning of the word "contempt."
24 The moving party must prove contempt at the highest threshold -- that is, beyond a reasonable doubt. The quasi-criminal nature of the accusation engages principles and concepts more familiar in a criminal law context. For example, the onus of proof remains on the moving party throughout; it never shifts. Further, the alleged contemnor is not compelled to testify; but, if he chooses to testify, his evidence is subject to full scrutiny, and the court may draw adverse inferences from his evidence.
26 Any reasonable doubt must be resolved in favour of the alleged contemnor. A reasonable doubt is not to be an imaginary or frivolous doubt, nor may it be based on sympathy or prejudice. It must be based on reason and common sense, logically derived from the evidence or absence of evidence. But the court recognizes that it is virtually impossible to prove anything to an absolute certainty and the moving party is not required to do so.
(Emphasis added).
[81] As stated above, it is unnecessary to prove that the alleged contemnor intended to put himself or herself in contempt. However, it must be established that he or she deliberately or wilfully or knowingly did some act which was designed to breach of a court order. See R. v. Perkins (1980), 1980 CanLII 311 (BC CA), 51 C.C.C. (2d) 369 (B.C.C.A.); R. v. Barker, 1980 ABCA 75, [1980] 4 W.W.R. 202 (Alta. C.A.); and Rivard v. Proc. Gen. du Quebec, 1984 CanLII 2851 (QC CA), [1984] R.D.J. 571 (Que. C.A.). Simply put, one does not need to have the intention to disobey, one must only have the intention to commit an act which is designed to result in the breach of the order. See Carey v. Laiken, 2015 SCC 17.
[82] A court’s contempt powers cannot be used to enforce payment terms of an order. See Rule 26(4) of the Family Law Rules. While the court cannot find a person in contempt of the non-payment of a monetary order, all the circumstances, including repeated disregard for compliance with orders, monetary and otherwise, may lead to an inference being drawn that the alleged contemnor simply disregards the importance of compliance with court orders.
[83] Once having knowledge of the order, the party must obey the order in letter and spirit with every diligence.See Canada Metal Co. Ltd. et al. v. Canadian Broadcasting Corp. et al. (No. 2) (1974), 1974 CanLII 835 (ON SC), 4 O.R. (2d) 585 (H.C.) at p. 603, aff'd (1975), 1975 CanLII 544 (ON CA), 11 O.R. (2d) 167 (C.A.) and iTrade Finance Inc. v Webworx Inc. (2005), 13 C.P.C. (6th) 103, [2005] O.J. No. 1200 at para. 12 (Sup.Ct.)
[84] A person who is subject to an order should not be permitted to “finesse” it (see Sussex Group v. 3933938 Canada Inc., [2003] O.J. No 2906 (Sup. Ct.) or “hide behind a restrictive and literal interpretation to circumvent the order and make a mockery of it and of the administration of justice.”See Zhang v. Chau, (2003), 2003 CanLII 75292 (QC CA), 229 D.L.R. (4th) 298 at para. 32 (Qc. C.A.), leave to appeal dismissed [2003] S.C.C.A. No. 419.
The Position of Mrs. Boutin
[85] Mrs. Boutin’s counsel points to the Disclosure Orders which have not been fully complied with the disclosure outstanding for almost two years.
[86] In particular, Mrs. Boutin’s counsel submits the following:
a) The August 13, 2020 Dennison J. Order was on consent (and both parties were represented by counsel at the time). Yet, despite the consent, full disclosure has never been complied with.
b) Mr. Boutin has regularly advised the court, throughout the various hearings, that the ordered disclosure was imminent or forthcoming within a particular time period and, yet complete disclosure has never materialized.
c) Mr. Boutin did not appeal, seek to set aside or vary any of the Disclosure Orders.
d) While there was outstanding disclosure pursuant to the Disclosure Orders, Mr. Boutin engaged in various transactions the effect of which altered, disposed and transferred his assets and monies, including after the court made a specific non-dissipation order on December 22, 2021. And Mr. Boutin’s continuing failure to disclose his financial affairs, in light of these transactions, makes Mrs. Boutin’s claims difficult or impossible to establish and enforce.
e) Mr. Boutin continues to fail to provide the detailed disclosure ordered, breaching not only the Disclosure Order but also the intent behind the disclosure ordered.
The Position of Mr. Boutin
[87] Mr. Boutin’s position is set out in his factum:
Victor has been unable to comply with Court Orders as a result of a lack of financial resources, lack of adequate internal workforce for the demanded financial disclosure and lack of control over third parties, who were requested to prepare reports.
[88] Mr. Boutin’s counsel admitted that complete disclosure in accordance with the Disclosure Orders has NOT been made. In addition to various specified documents, it is admitted that Mr. Boutin has not provided either a business valuation report nor an income report but Mr. Boutin’s counsel states “Victor has no control over when these reports are completed by.”
[89] Mr. Boutin submits he has not and did not wilfully and flagrantly disregard the Disclosure Orders. Mr. Boutin points to the various efforts and partial disclosure he has made to date and efforts that Mr. Boutin will make to complete the ordered disclosure. Mr. Boutin testified that:
“When disclosure becomes available, I will continue to provide same to the Applicant in a timely manner such as the business valuation and income report.”
[90] As with respect to the sale of various properties, Mr. Boutin’s factum states:
Victor does not deny selling these properties, and Micheline was aware that the properties were sold. Victor was required to sell these properties due to ongoing financial difficulties, construction liens, lawsuits, and garnishments.
What is Outstanding under the Disclosure Orders
[91] Mr. Boutin’s counsel submits that the court should only consider and rely on, for the purpose of the contempt motion, the most recent disclosure order of December 31, 2021 because Mr. Boutin’s counsel submits it supersedes the prior orders by setting out a new deadline for compliance. I reject this submission. Unless expressly varied or set aside by a subsequent court order, each of the Disclosure Orders remain valid, enforceable and is a separate outstanding disclosure obligation of Mr. Boutin. To the extent ANY disclosure is outstanding under ANY of the Disclosure Orders, Mr. Boutin is in breach of those individual Disclosure Orders and, as such, remains subject to enforcement or penalties by this court. If Mr. Boutin could not comply with any of the disclosure orders, his remedy was to set to set aside, vary or appeal the particular disclosure order. He has not done so.
[92] In any event, Mr. Boutin did not comply with the latest and newest deadline for disclosure set out in the December 31, 2021 Barnes’ J. Order.
[93] I also reject Mr. Boutin’s counsel’s submission that the court should compare what is outstanding from Mr. Martin’s list dated February 22, 2022 with Mr. Martin’s list dated September 8, 2021 (attached as Schedule A to the December 31, 2021 Barnes J. Order) as evidence of significant compliance by Mr. Boutin. I accept that “some” or even a significant amount of disclosure has been made some 21 months after the August 13, 2020 Dennison J. Order. However, there is no dispute some disclosure remains outstanding under the Disclosure Orders. That is admitted. Set out below is some of the disclosure that has not been complete. Some disclosure has been vague. In my view, crucial disclosure remains outstanding. That includes the most significant two items, the valuation of Mr. Boutin’s personal and corporate assets and the assessment of Mr. Boutin’s income from separation to date. That is not to minimize that other crucial disclosure is required such as: what was the use of the proceeds of sale of the Florida properties?
[94] What is described below demonstrates that significant crucial disclosure remains outstanding. According to Mrs. Boutin’s expert (Mr. Martin) and, consistent with the evidence of Mr. Boutin’s expert (Mr. Mozessohn), Mr. Mozessohn continues to make “daily” requests for additional information/documentation from Mr. Boutin and Jimmy despite the fact Mr. Mozessohn received all the disclosure made to Mr. Boutin’s second expert except for one email.
[95] The difficulty with the outstanding disclosure is that it is all within Mr. Boutin’s control – not as he suggests within the control of third parties. True, the valuations and income reports must be done by third parties – but it is coming up to two and a half years after separation and this information is still not available. And the delay is clearly caused by Mr. Boutin and is within his control – he chose to terminate his second valuator after that valuator produced two draft reports. Now the third valuator is starting over. And the disclosure remains incomplete!
[96] It is not necessary to go through a line-by-line review of each item the court ordered to be disclosed. The concession that not all disclosure has been made pursuant to the Disclosure Orders avoids this. It is a concession that Mr. Boutin is in breach of the Disclosure Orders.
[97] But let me briefly review the Disclosure Orders:
August 13, 2020 Dennison J. Order.
[98] There remains outstanding the following (references are to the August 13, 2020 Dennison J. Order):
• To provide real estate appraisals for all properties held by him or companies in which he had an interest (#5, 7 and #12). Two remain outstanding. Then there is an inconsistency: Mr. Boutin showed 35 properties on his Net Worth Statement, Mr. Boutin has provided 28 real estate appraisals and Mrs. Boutin has identified 78 properties.
• To provide documentary support for the adjusted book values with real estate owned by Mr. Boutin (#6).
• To provide corporate information about the ATS Biotech Corp., ATS Consumer Product Inc., and ATS Industries Inc. (#14) since Mr. Boutin had an interest in these ATS companies as discovered recently.
February 26, 2021 Barnes J. Order (which required disclosure of the items in a February 5, 2021 chart.
[99] There remains outstanding the following:
• Details of and supporting documentation for the “use of funds received on the sale of real estate by Mr. Boutin or entities in which he holds an interest since the Date of Separation.” (#27). The completely unmeritorious position taken by Mr. Boutin is that he only has to disclose to whom the payment was made – that is what, he says, constitutes “use”. So, for example, Mr. Boutin’s position in this case is that disclosure has been made showing proceeds transferred or distributed to a Boutin Company is sufficient to satisfy the disclosure request to show “use” of the proceeds of sale. What happen to the monies after that are not disclosed. I categorically reject this. Allowing Mr. Boutin to simply say “I paid the money to one of my companies” or even a named third party as compliance with the Disclosure Orders would make the obligation to disclose the use of funds meaningless.
• Disclosure of information regarding Sota Investments Ltd, Sota Holdings Ltd and 21311006 Ontario Ltd, 2131754 Ontario Ltd. and ATS Manufacturing Inc. (#28, 30, and 32). It is important to note at the time of this order, only ATS Manufacturing had been disclosed as a company in which Mr. Boutin had an interest. In early 2022, it was discovered that Mr. Boutin also had interests in a number of other ATS companies. They are now set out in Exhibit #1.
June 22, 2021 Mandhane J. Order
[100] The following remains outstanding:
• The use of the funds from the sale of the three Florida properties. (Same as J. Barne’s Order).
• Documentary support for all monies advanced to Jimmy Boutin, Audrey Boutin, and their children from Mr. Boutin or his companies. (#2).
• Various information about Everlast Restoration Ltd. (#5). This repeats the disclosure requirement for corporate information for any corporate entities which Mr. Boutin had an interest.
• The valuation report of his corporate interests as at the date of separation.
December 31, 2021 Barnes J. Order
[101] There are disclosure items which J. Barnes identified as outstanding from the prior Disclosure Orders. J. Barnes ordered production of the disclosure/information set out in Schedules A and B within 45 days:
• Most of Mr. Boutin’s companies underwent a reorganization on February 24, 2020 (Boutin Holdings, 2240523 Ontario, 2136615 Ontario, 879662 Ontario, SRQ Holdings and Everlast Caulking & Waterproofing) where Mr. Boutin exchanged his common shares for a new class of shares. Then certain shares were issued to Mr. Brent Swanick, with Mr. Swanick gifting those shares to the “Everlast Trust”. No information has been provided about this reorganization or the Everlast Trust. Because this occurred after separation, Everlast Trust is not shown on Exhibit #1 to the trial.
• In September 2021 additional real estate in which Mr. Boutin held an interest was discovered. 2121006 Ontario owns rental property in Collingwood and JSVB Holdings owned lands in Halton Hills (possibly the same lands which were sold in December?). Mr. Boutin was required to provided certain detailed information regarding these lands.
COMMENTS ON THE EVIDENCE AND CREDIBILITY
Mrs. Boutin
[102] Mrs. Boutin gave evidence that was largely unchallenged. The reason – Mrs. Boutin knows very little of the financial details and affairs of Mr. Boutin. She testified she has little knowledge of Mr. Boutin’s business interests. I accept this evidence. Hence, the numerous disclosure requests.
[103] Mrs. Boutin relied heavily on her expert, Mr. Martin, for a description of the documents/information he needs to complete a valuation as at the Date of Separation of Mr. Boutin and his companies and to determine Mr. Boutin’s income for support purposes.
Mr. Boutin
[104] Mr. Boutin’s evidence is rejected in its entirety. Mr. Boutin’s evidence constituted bald denials, veiled and clear attempts to blame both of his prior counsel, his evidence was inconsistent and contained unbelievable explanations. For example, as for the August 13, 2020 Dennison J. Order, Mr. Boutin denied he agreed to the consent order (alleging he told his counsel about the unreasonable time frame but was ignored), that even the current time frame to produce the disclosure was unreasonable; and also blames his lack of funds to obtain the disclosure ordered.
[105] When confronted with details of about the disclosure, Mr. Boutin testified he delegated his responsibility for the disclosure to Jimmy, the very person Mr. Boutin has used to shield and transfer his business assets and is involved in many financial dealings with Mr. Boutin and the Boutin Companies. Jimmy’s dealings have resulted in loans payable or payments by Mr. Boutin (or his companies) to Jimmy and his family. Mr. Boutin testified that there are “loans back and forth through” Jimmy Boutin’s companies. And when confronted with his Net Worth Statement, Mr. Boutin testified that Jimmy Boutin prepared it, essentially trying to distance himself from it, despite the fact, Mr. Boutin, an experienced and successful developer of more than 45 years, signed the Net Worth Statement and presented it to a bank for financing in 2019.
[106] And Mr. Boutin’s last resort when confronted with missing disclosure is to say no such documents exist – but Mr. Boutin does not explain why this was not contained in an affidavit stating this (before his testimony) nor an explanation as to the efforts to obtain the disclosure as required by two of the Disclosure Orders.
[107] Let me provide some examples of Mr. Boutin’s testimony which leads me to this finding:
a) At one point during his testimony, when asked why Mr. Boutin’s company had “cut off” Mrs. Boutin’s health coverage – Mr. Boutin replied he was no longer married. When brought to his attention that he is still legally married to Mrs. Boutin, Mr. Boutin’s answers became very unclear eventually stating that health coverage is only for employees – and Mrs. Boutin is no longer an employee of Boutin Holdings – his own company of which he holds 100% of the shares. Petty? Yes, but consistent with Mr. Boutin having cancelled a particular favourite TV station at the home or sending Mrs. Boutin a photo showing Mr. Boutin with a grandchild showing Mrs. Boutin what she is “missing”.
b) Mr. Boutin was required to designate Mrs. Boutin as the beneficiary under his life insurance policy. Mr. Boutin responded he does not have a life insurance policy. However, Boutin Companies does have a life insurance policy payable to the company on his death. Given that Mr. Boutin is sole shareholder of the Boutin Companies, it is difficult to believe the designation could not be changed. Yet, again, the impetus appears to be to deny Mrs. Boutin everything Mr. Boutin can.
c) And what does Mr. Boutin say about his Net Worth Statement showing he had net assets of more than $77,700,000 and his current plea that he has no net worth and no money to rent a residence?
• “It was never intended that this statement would be used in the context of a family law litigation.”
• Then Mr. Boutin goes on to state that “cost overruns” have now “exceeded market values” to a point that he now has no net worth. Mr. Boutin’s sworn Financial Statement sworn December 6, 2021 shows that his net worth on the Date of Separation (just months after the April 2019 net worth statement) was nil. His counsel stated:
“Considering the secured and unsecured debts that the Respondent’s corporation had on the valuation date, there is a good possibility that the Respondent’s net family property will be zero” but the supporting documents to the Financial Statements were not included. Mr. Boutin testified that “right now nothing shows what I am worth” “should wait a few weeks”.
• Yet, as described below, substantial payments have been made from the Boutin Companies including to Jimmy’s wife through a refinancing, payment of a significant invoice in January 2022 to Jimmy, repayment of a substantial loan to Jimmy’s companies in March 2022.
• When questioned, both Mr. Boutin and Jimmy Boutin, about Mr. Boutin’s Net Worth Statement, both suggested that instead of the “market value” of the properties and assets, the statement showed the “cost” of the assets. There is a vast difference between “cost” and “market value” as a real estate developer or one with accounting experience would know.
d) And then there is the sale of the Concession 10/11 Halton Hills properties owned by JSVB.
• On the morning of December 22, 2021, this court made a non-dissipation order.
• On the same day, December 22, 2021, but later in the day, despite the fact that these properties had been sold with a closing date on March 31, 2022, the closing was moved up to the same date – December 22, 2021. Why? Mr. Boutin stated that this change was requested “by the purchaser at the last minute” and the transfer took place on the afternoon of December 22, 2022. Somehow the closing was able to happen very quickly on the day of the dissipation order. Mr. Boutin states he was not aware of the court’s non-dissipation order.
• The Agreement of Purchase and Sale was eventually disclosed to Mrs. Boutin’s counsel in January 2022 showing the March 31, 2022 closing date. However, neither Mr. Boutin nor his counsel disclosed that the closing had taken place on December 22, 2021.
• On February 8, 2022, Mr. Boutin’s counsel sought Mrs. Boutin’s consent to “close” the sale of these properties – without disclosing that the closing had taken place almost two months earlier. In my view, this is deliberately deceptive conduct that goes to Mr. Boutin’s intention to not comply with court orders and to not provide accurate financial information to Mrs. Boutin.
• When Mrs. Boutin’s counsel provided notice of the non-dissipation order, some of the proceeds were distributed to the other 50% shareholder of JSVB. BUT NOT QUITE. The real estate agent held back $1,130,000 on account of capital gains payable, distributed approximately $917,000 to JSVB or its shareholder and continues to hold and additional $917,000 “because of the non-dissipation order”. How or why a real estate agent would obtain an estimate of capital gains tax the seller might have to pay and hold those funds was never answered.
e) Mr. Boutin testifies he is a silent partner of JSVB. But the evidence is that his company, Boutin Holdings is a 50% shareholder and Mr. Boutin is one of the two directors of JSVB. Accordingly, as one of the two directors, Mr. Boutin has an equal say in the operation of the company. Besides, the sale agreement for the Concession 10/11 Halton properties was signed by Mr. Boutin, not the other 50% shareholder.
f) It took approximately 15 months after the August 13, 2020 Dennison Order for Mr. Boutin to produce appraisals on 28 properties. There was no explanation why such a simple task would take so long, when real estate appraisals can routinely take days or weeks.
g) In January 2022, Mr. Boutin, for the first time, disclosed he had corporate interests in a number of ATS companies. He had previously disclosed he had an interest in ATS Manufacturing Inc. but had not disclosed the parent company ATS Biotech Corp. nor its parent ATS Biotech Inc.
h) In March of 2022, when this motion was outstanding and scheduled to proceed, Mr. Boutin changed counsel, yet again. That is his prerogative. But, another adjournment was sought by Mr. Boutin.
i) Then there is Mr. Boutin’s expert valuators:
• Mr. Boutin initially retained Farley Cohen as his business valuator. Mr. Boutin states that this valuator worked for 8 months and quit.
• Mr. Boutin then retained Kalex to do the valuations.
• But while this motion was outstanding and scheduled, Mr. Boutin terminated the retainer of Kalex. Why? Mr. Boutin and Jimmy Boutin testified that Kalex “kept asking for more documents” and hadn’t specified a time frame for completion. Mr. Boutin’s earlier affidavit states that it was because the associate working on the file at Kalex left the company. Not the partner, the associate.
• Then the trial evidence showed that Kalex had produced a draft report in January 2022 which Mr. Boutin or Jimmy Boutin, provided to another valuator to critique.
• Then it came out at trial that Kalex had produced a further draft report in February 2022.
• Then, Kalex was fired and SLF was hired on March 1, 2022, to do the valuations. Why? Mr. Boutin testified “I want to have the valuations completed properly and in efficient manner, so I have hired a new firm SLF.”
• Mr. Mozessohn of SLF will require months to produce a new report. And he will be using an entirely different “structure and approach”. How long to produce the reports? Mr. Boutin testified he was advised “it will be completed in two months”. But, that is different from the evidence of Mr. Mozessohn at the trial – he never said or committed to this as Mr. Mozessohn is still asking for more documents and it will take until August or September – assuming that everything goes well including production of the documents he requires. Mr. Mozessohn estimates he is only 35% complete as of the time of his evidence.
• The result – more delay. The key position of Mr. Boutin that the business and income valuation is beyond his control is, in these circumstances, completely untenable and the delay is entirely of his doing.
j) Mr. Boutin did a “post separation shareholder restructuring in 2020” creating new shares and an Everlast Trust, but there are no details about this restructuring or the beneficiaries. Since it was done shortly after the separation, this restructuring and its impact is not shown on Exhibit #1 to the trial. This appears to be another attempt to either hide or make opaque Mr. Boutin’s true financial assets and income and make enforcement of Mrs. Boutin’s claims more difficult.
k) Mr. Boutin describes the disclosure timelines that “were initially set were unreasonable” despite the fact that the August 13, 2020 Order was made on consent while Mr. Boutin was represented by counsel. When asked about this at trial, Mr. Boutin, who was present, testified he didn’t agree to the consent order and that his counsel ignored him. But Mr. Boutin’s counsel admitted during the trial that Mr. Boutin’s prior counsel acted throughout with Mr. Boutin’s consent, knowledge and authorization.
l) In April 2020, Mr. Boutin withdrew essentially $10,000 from a joint account with Mrs. Boutin, because Mr. Boutin stated he “needed the money to buy a used car”. This was Mr. Boutin’s explanation for depleting almost all of the joint bank account – $10,000 to buy a used car by the same person who a year before had a net worth of over $77 Million, who owns multiple parcels of land, an expensive Florida home ($3,000,000 USD) and who is in the midst of constructing residential buildings.
m) There is rental income from a jointly owned property in Caledon, but none of the rental income has been paid to Mrs. Boutin. Mr. Boutin now claims that the property generates a loss, a substantial loss each year.
n) Mr. Boutin’s evidence was vague. For example, when asked about 2136625, his evidence was that he “believes” it owns property in Chatham and he is not 100% certain that it owns “something” in Woodstock.
[108] Mr. Boutin’s views on compliance with court orders was summed up by one statement, you must comply with a court order “but if you can’t, you can’t”.
[109] Lots of excuses. Lots of implausible and not credible explanations. One thing is certain, there has been and continues to be deliberate delay in producing all the disclosure that Mrs. Boutin is entitled to under the Family Law Act and the Disclosure Orders.
Jimmy Boutin
[110] Like Mr. Boutin, I accept none of Jimmy’s evidence. Jimmy’s evidence is self-serving and makes little sense. Besides, Jimmy is directly involved in shielding and dealing with Mr. Boutin’s personal and corporate assets for himself and his family.
[111] A few examples which lead me to this finding:
a) In March 2020 Mr. Boutin sold the first of three US properties. Two were personally owned by Mr. Boutin and one owned by SRQ Holdings. The other two properties were sold over the next year.
• The proceeds of sale of approximately $4.2 million USD were transferred to a lawyer.
• The lawyer released funds from time to time to Jimmy’s company, Boutin Capital.
• Boutin Capital lent the monies to 2136615 Ontario.
• 2136615 Ontario allegedly used the monies to pay Everlast Group’s invoices.
• Mr. Boutin and Jimmy explained that this circuitous route of money transfers, was necessary to “minimize the risk of exposure” to construction liens, lawsuits and garnishments in Mr. Boutin’s companies. These transfers ignore ownership of the funds, the spectre of fraudulent diversion of funds and the negative impact on the valuation of Mr. Boutin’s assets. It makes no sense that this was necessary given Mr. Boutin’s personal and corporate limited liabilities disclosed in his 2019 Net Worth Statement. Aside, from vague statements of debts, liens and garnishments, no supporting evidence was produced to justify this rationale.
• Then, when required to disclose the “use” of the Florida sale proceeds, Jimmy produced a statement that showed payments to various companies, many to Mr. Boutin’s companies with no explanation and no supporting documents as to the ultimate use of the funds. When questioned that this doesn’t show the actual use of the funds, his response was that the disclosure responded to the request and he “did not give a high level of explanation”. This left the use of the proceeds unclear.
b) Then there are a number of loans involving Jimmy’s family.
• Jimmy was involved in the re-financing one of Mr. Boutin’s companies (879662 Ontario) in January 2020 (several months after the separation) for $1.4 Million to repay an alleged $1.1 Million loan to Jimmy’s wife, Audrey. When asked to disclose supporting documentation for the loans, the response was: “Jimmy has provided the only item he has access to – retained earnings in his company, which supports the loans from his companies”.
• Mr. Boutin’s company then refinanced with a private lender to repay Audrey plus $300,000. When asked who the lender was - Jimmy said “third party”.
• Audrey used a portion of the funds and loaned $200,000 to their two children, who were 3 and 5 at the time.
• Audrey and Jimmy’s children each loaned $100,000 to their grandfather, Mr. Boutin’s companies, (to 2136615 and 2240523 according to Jimmy at the trial), thereby reducing Mr. Boutin’s net worth by increasing his liabilities.
c) Jimmy described additional financing for Mr. Boutin’s companies as “additional, unsecured, unregistered financing through promissory notes”. It is not credible that this kind of “loose” accounting was used for a development business worth close to $100,000,000. Besides, such untraceable financing becomes further suspicious of potentially fraudulent transactions.
d) In December 2020, the loans to Jimmy’s companies increased exponentially from the previous 2019 year – by millions of dollars. This despite the fact Jimmy Boutin’s net income is approximately $110,000 per year from Mr. Boutin’s companies, his sole employment.
e) Jimmy, after the December 22, 2021 order prohibiting Mr. Boutin or his companies from disposing of any assets, prepared an invoice on December 31, 2021 (for assisting Mr. Boutin to provide the disclosure in this case allegedly going back for some 15 months) for approximately $100,000.
• The invoice was paid by the Boutin Companies in 2022– despite the December 22, 2021 non-dissipation order!
• Despite the fact that Jimmy is already a paid employee of Mr. Boutin’s companies.
• And, despite the fact Mr. Boutin says he has no money and must live in his office!
f) Jimmy testified that 2136615 Ontario borrowed approximately $850,000 in 2019 from two of his companies (although none is explicitly shown in Mr. Boutin’s Net Worth Statement).
• In March 2022, despite the non dissipation order and while these hearings were scheduled 2136615 Ontario repaid those loans to Jimmy’s company - $850,000.
• But as Jimmy said – “he has the money available to give to Mr. Boutin when needed” for the business in the future.
ANALYSIS
Clear and Unambiguous and Breach not an issue
[112] There is no issue that the Disclosure Orders were not clear and unambiguous. In my view, they were clear and unambiguous.
[113] Mr. Boutin does not deny that he has not fully complied with the Disclosure Orders. Partial compliance with an order is not compliance with court orders. In addition to the various undisclosed items, including the valuations, one of the clear breaches of the August 13, 2020 Dennison Order was:
- The Respondent shall produce a sworn affidavit listing any documents that he was not able to obtain and the attempts he has made to obtain them.
[114] Mr. Boutin did not comply with this portion of the order.
[115] The Disclosure Orders were directed to Mr. Boutin. Mr. Boutin does NOT avoid liability for failing to comply with the Disclosure Orders by leaving it to Jimmy to provide the disclosure. The Disclosure Orders were directed to Mr. Boutin, not to Jimmy. Mr. Boutin cannot use this alleged delegation and abdication of his court ordered responsibility under the Disclosure Orders to now allege that he did not wilfully and flagrantly comply with the Disclosure Orders.
[116] That leaves the sole issues to be determined as: whether Mr. Boutin’s breach of the Disclosure Orders was a flagrant and deliberate breach and, if so, whether it was proven beyond a reasonable doubt.
Was a wilful and flagrant breach of the Disclosure Orders?
[117] In considering this issue, I did not rely on any findings made by the prior judges regarding Mr. Boutin or his failure to comply with the Disclosure Orders. It would be improper to do so in a contempt trial. I relied on the Disclosure Orders, the affidavits and the viva voce evidence on this Contempt Trial.
[118] Mr. Boutin’s bald testimony that he did not wilfully breach the disclosure orders does not end the analysis.
[119] In this case, I am satisfied that, when all the evidence at this trial is considered, Mr. Boutin wilfully and deliberately breached the Disclosure Orders. Without repeating much of the above findings of fact on Mr. Boutin and Jimmy’s credibility issues, I also relied on the following to come to this conclusion:
a) Rule 13(3.3) of the Family Law Rules, in force at the time the Application was commenced, provided as follows:
A party who is required under subrules (1) to (3) to serve and file a financial statement in relation to a claim under Part I of the Family Law Act shall, no later than 30 days after the day by which the financial statement is required to be served, serve on the other party the following information, unless the court orders otherwise:
- If the party had an interest in a sole proprietorship or was self-employed on the valuation date, for each of the three years preceding that date,
i. the financial statements of the party’s business or professional practice, other than a partnership, and
ii. a copy of every personal income tax return filed by the party, including any materials that were filed with the return.
- If the party was a partner in a partnership on the valuation date, a copy of the partnership agreement and, for each of the three years preceding the valuation date,
i. a copy of every personal income tax return filed by the party, including any materials that were filed with the return, and
ii. the financial statements of the partnership.
If the party had an interest in a corporation on the valuation date, documentation showing the number and types of shares of the corporation and any other interests in the corporation that were owned by the party on that date.
If the corporation in which a party had an interest was privately held, for each of the three years preceding the valuation date,
i. the financial statements for the corporation and its subsidiaries, and
ii. if the interest was a majority interest, a copy of every income tax return filed by the corporation.
If the party was a beneficiary under a trust on the valuation date, a copy of the trust settlement agreement and the trust’s financial statements for each of the three years preceding that date.
Documentation showing the value, on the valuation date, of any property not referred to in paragraphs 1 to 9 in which the party had an interest on that date.
Documentation that supports a claim, if any, for an exclusion under subsection 4 (2) of the Family Law Act.
The statements or invoices issued closest to the valuation date in relation to any mortgage, line of credit, credit card balance or other debt owed by the party on that date.
Any available documentation showing the value, on the date of marriage, of property that the party owned or in which he or she had an interest on that date, and the amount of any debts owed by the party on that date.
There is no doubt that Mr. Boutin, represented by counsel, knew or ought to have known in late 2019 when this proceeding was commenced that he was statutorily required to produce, within 30 days, the above disclosure, much of which was subsequently included in the August 13, 2020 Dennison Order and the subsequent Disclosure Orders.
b) Despite two prior motions to strike Mr. Boutin’s pleadings and extensive time and opportunities to make full disclosure, there was and continued to be a course of conduct of Mr. Boutin providing dates by which he would provide disclosure and then a failure to comply with those dates.
• Mr. Boutin does that again at this contempt trial where he states SLF would provide the valuations within 2 months, but Mr. Mozessohn of SLF denied he ever told anyone this. Mr. Boutin is misleading the court to obtain yet another delay.
• The August 13, 2020 Dennison Order was made on consent – during which Mr. Boutin was represented. But Mr. Boutin tried to resile from this by testifying that he “didn’t agree” and “had no choice but to it as best he could”, blaming his then lawyer, and then calling the August 13, 2020 Dennison Order “ridiculous and impossible to comply with”. This is evidence not of someone who wishes to comply with the order, but someone who seeks to avoid complying with his disclosure obligation and Disclosure Orders.
• Failure to comply with the August 13, 2020 Dennison Order by February 26, 2021, resulted in an order that Mr. Boutin provide a timetable for completion of the outstanding and new disclosure by March 5, 2021. That didn’t happen.
• On March 5, 2021 Mr. Boutin requested an extension to produce the disclosure by August 2021. Justice Barnes extended the deadline to comply with the August 13, 2020 Dennison Order to June 20, 2021 and the new disclosure to July 15, 2021. That didn’t happen.
• Then came the June 22, 2021 Mandhane J. Order to produce specified disclosure. That didn’t happen.
• On August 11, 2021 before J. Barnes and still complete disclosure by Mr. Boutin had not been made. Now, Mr. Boutin’s position was that he provided all the financial information he had and the rest was with third parties. The same argument that is made at this contempt hearing. According to J. Barnes, “crucial disclosure remained outstanding” and what was provided was “disorganized and haphazard manner”. Again, J. Barnes provided Mr. Boutin additional time to provide a sworn update on his disclosure progress. That didn’t happen.
• Then on December 30, 2021, J. Barnes gave Mr. Boutin until February 14, 2022 to provide the complete disclosure which was clearly specified in Schedule A and B. Again. that didn’t happen.
• May 11, 2022, one of the first submissions on behalf of Mr. Boutin was that there still remains outstanding disclosure under the Disclosure Orders.
• And not once did Mr. Boutin appeal or seek a variation to grant him more time to make the disclosure. Mrs. Boutin had to bring motion after motion and only then did Mr. Boutin state when the disclosure would be made, but the timeframes went by without the complete disclosure.
c) The only reasonable and rationale conclusion is that this conduct is and was a continuous, deliberate attempt to “buy more and more time”. This continued non-compliance with the Disclosure Orders can only be seen to buy time for a systematic re-organization of Mr. Boutin’s financial affairs to put them beyond the reach of Mrs. Boutin under the Application. Let me set out the most significant reason for my conclusion:
• There have been numerous, apparently clandestine and questionable transactions, such as the sale of the Concession 10/11 properties, completed on the same day as a non-dissipation order and deliberately hidden from Mrs. Boutin’s counsel through misleading letter in January 2022 and February 2022 without disclosing the closing and then requesting Mrs. Boutin's consent to an already completed transaction.
• Disposing of assets from his personal name or companies in which he had 100% interest and redirecting the proceeds to Jimmy and other companies. The net proceeds from the Florida properties did not go to Mr. Boutin or SRQ but were distributed by a law firm piecemeal to Jimmy’s company, and then from Jimmy’s company to 2136615 Ontario (which had no ownership interest in the properties). This is admitted by Mr. Boutin in the factum:
The sale proceeds were transferred to one of Jimmy’s bank accounts in order to minimize risk of exposure, attempt to assure continued operational visibility and preserve assets.
Then the money went to Everlast (which had no ownership in the properties). The exact/ultimate use of the funds has not been disclosed (See Exhibit #17).
• And then there is the loan by Audrey Boutin (Jimmy’s wife) to Boutin Holdings but the refinancing (the details of refinancing involving two properties remains unclear) resulted in proceeds going to another Boutin company and increased Mr. Boutin’s indebtedness to Jimmy’s grandchildren. The disclosure was to provide details of loans owing to Jimmy, his companies and family. Exhibit #4 to Mr. Boutin’s examination, the purported disclosure, is anything but complete. It states that Jimmy and his wife borrowed money to loan Boutin Holdings, but it does NOT show the flow of money to Boutin Holdings or what Boutin Holdings did with those monies IF indeed advanced to Boutin Holdings.
• And there is Mr. Boutin’s corporate re-organization done shortly after the separation in 2020 which altered his shareholdings. Mr. Boutin testified it was not a “restructuring” but just an estate freeze.
• Exhibit #1 in the examination of Mr. Boutin was his corporate holdings “as at November 1, 2019”. It does not describe his current corporate holdings or what has happened since the separation such as the corporate restructuring – an obviously relevant factor in determining Mr. Boutin’s income for support purposes. Producing the few current 2020 financial statements as part of the Disclosure Orders are meaningless without this current corporate information is useless or misleading. For example, during his testimony, Mr. Boutin testified that he set up an estate freeze to buy some properties. Details are unknown. Who is the beneficiary of the estate freeze is also unknown. Another example is that, while Mr. Boutin shows a number of ATS companies as at November 1, 2019, he testified at trial that ATS Biotech, ATS Industries and ATS Manufacturing, no longer exist.
• There is the ATS group of companies which only came to light recently despite the fact Mr. Boutin’s lawyer was advised of this in October 7, 2021 and of the corporate name change to Quatrek.
• There is the opportune timing of the termination of Kalex and retainer of SLF in early 2022. Mr. Boutin knowingly and deliberately took an act which would clearly and unquestionably result in non-compliance with the Disclosure Orders and in particular the December 31, 2021 Barnes J. Order by terminating Kalex in February 2022 and retaining SLF Valuations on March 1, 2022 to produce valuations using an entirely “different structure and approach”. The reason for terminating SLF was flimsy at best. Despite SLF having Kalex’s documentation, Mr. Mozessohn described the outstanding documents he requires as “somewhat of a lengthy list”. And Mr. Mozessohn testified he will be relying on 2021 Financial Statements finalized by Jimmy!
• While contempt cannot and I do not find arises from Mr. Boutin’s failure to comply with monetary payments, evidence of Mr. Boutin’s wilful disregard for court orders is apparent when he continuously refuses and fails to make payment orders to Mrs. Boutin and yet, while decrying a lack of funds, Mr. Boutin nevertheless pays Jimmy questionable invoice of approximately $100,000 in early 2022 and the “loan” he repaid to Jimmy’s company approximately $850,000 in approximately March 2022.
[120] Mr. Boutin’s disclosure has been piecemeal and continuous over the past 2 years and remains incomplete. Mr. Boutin’s testimony that he has supplied all the information he could find, wanted to comply, but “most he couldn’t find”, is simply not credible. And this is inconsistent with his position which is “give me more time” with a new counsel and a new valuator. It is too late for that.
[121] I am satisfied that Mr. Boutin wilfully and deliberately breached the Disclosure Orders.
Has Mr. Boutin’s wilful and deliberate breach established beyond a reasonable doubt?
[122] Clearly, the termination of Kalex in February 2022, by itself, was a deliberate and intentional act by Mr. Boutin that would breach the Disclosure Orders. On this alone contempt is established.
[123] However, as I stated above, there is also considerable crucial disclosure which has not been provided as required under the Disclosure Orders and which I have found was wilfully and deliberately not provided to Mrs. Boutin as a based for a contempt finding.
[124] The intention to wilfully and deliberately breach a court order can be inferred from all the circumstances and I so find. I accept that a finding of contempt, should only be drawn on an inference where it is, based on all the evidence and circumstances, the only reasonable inference to be drawn. I so find in this case.
[125] In my view, when all of the above facts and circumstances are considered, the only reasonable and rational conclusion is that Mr. Boutin acted in a deliberate manner to not comply with the Disclosure Orders so as to avoid disclosing his personal and financial information to Mrs. Boutin and to permit him time to deal with his personal and corporate assets in a manner that is prejudicial to the claims of Mrs. Boutin.
[126] I am satisfied that Mr. Boutin’s wilful and deliberate breach of the Disclosure Orders has been established beyond a reasonable doubt.
Other issues raised by Mr. Boutin
Compelled to respond
[127] Mr. Boutin raises the issue that he felt compelled to respond to Mrs. Boutin’s non-contempt motion whereas if the motions were heard separately, then he could rely on his right to silence.
[128] There are several problems with this submission. First, it is too late to raise this issue after Mr. Boutin filed an affidavit on April 1, 2022 to respond to the contempt motion. Then Mr. Boutin wanted an adjournment to question Mrs Boutin. Second, no submission was made by Mr. Boutin to hold entirely separate evidentiary hearings which could have permitted Mr. Boutin to remain silent on the contempt trial. Third, Mr. Boutin’s counsel expressly agreed during the contempt trial that the contempt trial evidence could be used in the “receivership motion”. Fourth, despite this submission, Mr. Boutin’s counsel’s factum stated, “Victor should be provided the opportunity to present viva voce evidence in some form on the relentless allegations”. That is exactly the opportunity Mr. Boutin was given at the Contempt Trial, if he chose to testify. And he did! Fifth, while raised in Mr. Boutin’s factum, this issue was no longer pursued during the trial or closing submissions.
[129] I find no merit to this submission.
Conclusion
[130] Mr. Boutin is found to be in contempt of the Disclosure Orders.
[131] Counsel shall arrange for a date in late June, 2022 for a sentencing hearing. If there is any delay in finding a mutually convenient date, I will simply advise the parties of this date. I am satisfied, given the above conduct, there is urgency in dealing with this matter. This date in late June 2022 will also give Mr. Boutin an opportunity to purge his contempt, if not fully, at least provide as much full, detailed and complete disclosure as he can prior to that date.
[132] On the same date in late June 2022, I will provide my decision and reasons for the Receivership and related relief sought on the long motion. In the interim, I remind Mr. Boutin that the non-dissipation order regarding all his personal and corporate assets, held directly or indirectly remains in force.
[133] I will deal with costs at the sentencing phase of this contempt motion.
RSJ Ricchetti
Released: May 30, 2022
COURT FILE NO.: FS-19-00096622-0000
DATE: 2022 05 30
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Micheline BOUTIN
Applicant
--and –
Victor BOUTIN
Respondent
REASONS ON CONTEMPT LIABILITY TRIAL
RSJ Ricchetti
Released: May 30, 2022