ONTARIO SUPERIOR COURT OF JUSTICE
RE: Mary Beth Gallivan, Applicant
AND:
Ronald Rodgers, Respondent
BEFORE: Justice Mohan D. Sharma
COUNSEL: Melanie A. Larock, for the Applicant
Ronald Rodgers (self-represented) Respondent
HEARD: September 13, 2022
ENDORSEMENT
** This Endorsement has been edited for publication to initialize the name of the child and to delete certain personal identification information of the respondent.
1This is the return of the applicant’s contempt motion I heard on January 20, 2022, reported at Gallivan v. Rodgers, 2022 ONSC 475. On that date, I also dealt with the respondent’s motion to change.
2I struck the respondent’s motion under rule 1(8) of the Family Law Rules (“FLR”) because he failed to comply with a cost Order of Paisley J., made on September 19, 2019, and he failed to comply with an Order of Shore J., made on consent on January 22, 2019, requiring that he maintain a policy of life insurance with a face value of $100,000 with the applicant named as irrevocable beneficiary. I also found his motion was premature. I granted leave for him to bring this motion back in September 2023.
3The consent Order of Shore J., requiring the respondent to obtain life insurance with a face value of $100,000, was obtained following a trial before Gilmore J.: see Gallivan v Rodgers, 2018 ONSC 2902. The trial judgment (para. 268) ordered that $100,000 shall be paid into court from the respondent’s share of house sale proceeds as security for the payment of child support. If the respondent was able to obtain life insurance with a face value of at least $100,000, he could apply to the court to have the funds released. The Order of Shore J. released the $100,000 held in court upon the respondent proving he had life insurance coverage with a face value of $100,000 with the applicant as irrevocable beneficiary.
4With respect to the applicant’s motion for contempt, I noted that the respondent admitted in his motion to change that he ceased paying life insurance premiums and that he allowed the life insurance policy that was the subject of the Order of Shore J. to lapse. I found he was in breach of the Order of Shore J. I noted that before the court can make a finding of contempt and impose sanctions, the respondent must be provided with an opportunity to purge his contempt. The contempt motion was, therefore, adjourned to July 28, 2022 (It was adjourned again to September 13, 2022).
5In my Endorsement, I ordered the respondent to, within 60 days, take steps to secure life insurance with a face value of $100,000, naming the applicant as the sole, irrevocable beneficiary, and to provide proof to the applicant. If he was unable to do so, I provided him with a further option: within 75 days, he was to deposit with the Accountant of this Court the amount of $100,000, or such other amount to secure his child support obligations. I cautioned the respondent to adhere to all court Orders, that serious sanctions may be imposed if he fails to do so, and that he should take steps to retain counsel.
6On May 20, 2022, the applicant filed an Amended Amended Notice of Motion, seeking:
a. An Order that the respondent deposit with the Accountant of this Court the amount of $100,000
b. An Order that the respondent pay a penalty to the applicant in the amount of $20,000 within 30 days for the finding of contempt
c. An Order that the respondent pay costs of the respondent’s motion to change returnable on January 20, 2022 (which was struck), and this contempt motion.
7Since my January 20 2022 Endorsement, the respondent did not file any affidavit evidence to demonstrate his compliance with the Order of Shore J., or my Order made on January 20, 2022. He is a self-represented litigant. While he was able to cite case law and legal principles during the hearing, he did not file a factum.
8Given the seriousness of the potential sanctions, I provided the respondent with an opportunity to provide viva voce evidence to explain whether he complied with my Order, and if not, why. I also entertained preliminary oral motions he brought, which were not brought on notice and without any material filed, seeking an order that I recuse myself, and that the applicant’s contempt motion be dismissed.
9I dismissed the respondent’s preliminary motions that I recuse myself and that this contempt motion be dismissed.
Respondent’s Preliminary Motions
Recusal motion
11I declined to recuse myself. I am not satisfied that an informed person, viewing this matter realistically and practically, and having considered the respondent’s admissions and the way in which contempt matters are heard by this court, would conclude that I would not decide this matter fairly: see Yukon Francophone School Board, Education Area No. 23 v Yukon Territory (Attorney General), 2015 SCC 25, [2015] 2 SCR 282, at paras. 20 – 21.
12I made factual findings in my Endorsement on January 20, 2022 that the respondent was in breach of court orders based on the respondent’s own admission. As is regularly done with contempt motions, given the extraordinary remedy of a finding of contempt and the penalties, I provided the respondent with an opportunity to purge his contempt which I (or another judge) would consider when this matter returned.
13On January 20, 2022, there was no dispute about the respondent breaching the Order of Shore J. He admitted to allowing his life insurance policy to lapse. To conclude that I am biased and unable to hear the continuation of this contempt motion because I accepted the respondent’s admission ignores the reason why contemnors are provided with an opportunity to purge their contempt. Providing a contemnor an opportunity to purge the contempt does not negate the contempt; rather it goes to penalty: See Van De Mierden v Van De Mierden, Court File No. 29482/07, Ontario Superior Court of Justice, May 14, 2009.
14A reasonably informed member of the public, knowing the process for a contempt motion, would not conclude I was biased and unable to hear the continuation of the contempt motion because of my previous finding which was based on the respondent’s own admission.
Kienapple Principle
15The respondent, as I understood his oral arguments, argued that because of the quasi-criminal nature of civil contempt proceedings, the principle in Kienapple v R., 1974 14 (SCC), [1975] 1 S.C.R. 729 governs. That principle precludes an accused from being convicted of two offences where they both arise out of substantially the same facts. The respondent argued that because I struck his motion to change on January 20, 2022, he cannot also be subject to contempt proceedings.
16I disagree for the following reasons:
a. I struck the respondent’s motion under rule 1(8) of the FLR for several reasons: (a) he was in breach of the Order of Shore J. regarding life insurance, (b) he was in breach of the Order of Paisley J. for non-payment of a cost order; and (c) I was reluctant to provide the respondent relief when he was admittedly in breach of court orders; and (d) I found that his motion was premature. Therefore, there were several reasons, other than non-compliance with the Order of Shore J., that resulted in his motion being struck.
b. In any event, I did not deny the respondent the relief he sought in his motion indefinitely. I expressly granted him leave to bring his motion again in September 2023, when it was more timely.
c. Rule 1(8) of the FLR provides a non-exhaustive list of tools which this Court may exercise, including a contempt order, where a party fails to comply with orders. It is non-sensical and inconsistent with any interpretation of rule 1(8) to find that a court, after exercising one of the tools, is not able to exercise the power of contempt. When this Court makes an order to promote compliance with a previous order, as I did in this case, and the party fails to comply with the subsequent order, the power to make a contempt order has not been exhausted. To find otherwise, would make it impossible for this court to make successively serious orders in the hope of encouraging compliance. Instead, this Court would have to move to the more serious order of contempt each time there was a failure to comply with an order. Contempt should be a measure of last resort, and not the first avenue to promote compliance. It must be available after a litigant has been given every opportunity to comply with an order, but simply refuses to do so.
d. Finally, rule 31(1) of the FLR states that an order may be enforced by a contempt motion, “even if another penalty is available.”
17For these reasons, I dismissed the respondent’s motion seeking to dismiss the applicant’s contempt motion.
Finding of Contempt
Is this a payment order?
18I am mindful that an order, “other than a payment order”, may be enforced by a contempt motion (r. 31(1) FLR). However, an order to secure a support payor’s support obligations is not an order for the payment of money, because an order for security is not a fixed debt obligation from one party to the other. Therefore, the court can use its contempt powers for a breach of those orders: Dickie v Dickie, 2006 675 (ON CA) at para. 66.
19In addition to breaching my Order and the Order of Shore J., there was evidence that the respondent is also in breach of the Cost Order of Paisley J., dated September 19, 2019, for not having paid the outstanding amount of $2,314.26. As this is a payment order, I do not consider the breach of the Cost Order of Paisley J. in my assessment of whether the respondent is in contempt.
Elements for Finding of Civil Contempt
20I am satisfied, beyond a reasonable doubt, that the respondent:
a. Is in breach of para. 1 of the consent Order of Shore J., dated January 22, 2019, which required the respondent to keep a specific BMO insurance policy with the applicant named as the irrevocable beneficiary for as long as the child remained a child of the marriage, and for him to provide proof on or before August 1st of each year that the insurance policy remains in full force and effect.
b. Is in breach of paras. 1(b), 1(c), and 2 of my Order, dated January 20, 2022, which required the respondent to obtain a life insurance policy with a face value of $100,000, naming the Applicant as the sole, irrevocable beneficiary; to provide proof of said life insurance policy to the applicant; and if the respondent fails or is unable to secure a life insurance policy within 60 days, to deposit $100,000 with the Accountant of this Court, within 75 days of my Order.
c. Had actual knowledge of the terms of both Orders; and
d. Intentionally failed to do what he was compelled to do under the Orders.
21Therefore, the elements required for a finding of civil contempt have been made out: Chong v. Donnelly, 2019 ONCA 799 (Ont. C.A.).
22I make these findings for the following reasons:
a. There is no question the respondent was aware of the Order of Shore J. He consented to it, knowing he had an obligation to obtain life insurance so that he could obtain the release of funds held in court following the trial decision of Gilmore J.
b. The respondent also received a copy of my Order. If not from court staff when it was released, it was most certainly included in the applicant’s affidavit, sworn May 20, 2022 that was served on respondent.
c. The respondent’s viva voce testimony at the motion was that he was aware of his obligation to obtain life insurance. On cross-examination, he admitted that he took steps to obtain life insurance after my Order was issued and consistent with my Order. He further stated that he was approved for life insurance coverage, but that he chose not to get it.
d. There was evidence, adduced by the applicant in her May 20, 2022 affidavit, that the respondent did obtain an individual variable insurance contract through Manulife Investment Management which is administered by the National Bank as a self-directed Registered Retirement Income Fund (“RRIF”). The respondent argued it is a policy of life insurance.
The applicant argued the RRIF is not a life insurance policy as ordered by the court. The respondent did not obtain the applicant’s consent to secure a RRIF instead of a life insurance policy, nor did he bring a motion to vary the Orders.
While a statement from Manulife purports to show there is a death benefit guarantee, there was no evidence that the applicant has been named as an irrevocable beneficiary under the RRIF. At most, the respondent identified the applicant as the irrevocable beneficiary in his application for the RRIF, but the application clearly indicates the section identifying beneficiaries should not be completed if the RRIF is externally administered. In this case, there is no doubt that the RRIF is externally administered by the National Bank.
The Information Booklet regarding the RRIF makes clear that the RRIF is not an insurance contract.
In addition, the applicant argues the respondent is not restricted in his ability to make voluntary withdrawals from the RRIF, which would impact the death benefit guarantee. Furthermore, since the applicant is over the age of 71, the respondent is required to make mandatory annual withdrawals from the fund which depletes the value of the contract.
I am satisfied, beyond a reasonable doubt, that the RRIF is not a policy of life insurance with a face value of $100,000 naming the applicant as the sole, irrevocable beneficiary as ordered by this Corut. The respondent’s own viva voce evidence was that he qualified for a life insurance policy but chose not to get one and instead opted for a RRIF.
23Should I exercise my discretion to decline to make a finding of contempt? I am satisfied that a finding of contempt should be made, and that sanctions should issue for the following reasons.
a. During his testimony, the respondent sought to explain that it was financially unviable for him to obtain a life insurance policy because he was paying for expenses for the child. He stated that his primary source of income is from his investments. He explained, he has no actual income, just taxable income as he draws from his investments. He said he had to choose between paying insurance premiums or the support services that their child required. He said that the life insurance premium was $2,650, but according to his calculations based on his taxable income, the cost was actually $3,650.
While this court would be sympathetic to financial obstacles that prevent a litigant from complying with court orders, the respondent has not taken any reasonable steps to convince this court that he is unable to comply with the Orders made. He did not bring a motion to vary the Orders. He did not file an updated Financial Statement (his last one was sworn on January 4, 2022) to show any financial limitations. He did not provide updated evidence of the expenses he is incurring for the child that preclude him from paying insurance premiums. He did not provide any evidence of the cost of insurance, such as a quote from an insurer; his only evidence of this cost was what he reported in the witness box. He did not file any responding affidavit material on this motion. All of this suggests a disrespect for court processes, despite my caution to him in my January 20, 2022 Endorsement that he treat this matter seriously.
In any event, his inability to afford life insurance premiums is highly suspect. His January 4, 2022 Financial Statement shows he has yearly expenses of $74,000, a home worth $1.2 million, and investments in excess of $800,000. He testified that his Financial Statement had no material changes.
b. The respondent was given many opportunities to obtain life insurance and to comply with court orders.
Following the Order of Shore J., the applicant’s counsel wrote to the respondent five times between August 23, 2020 and October 24, 2022 for proof of his compliance. The applicant learned for the first time from the respondent’s motion to change in February 2021 that the court ordered life insurance policy lapsed. She then brought her contempt motion on April 22, 2021. Since then, the parties have appeared before a Dispute Resolution Officer on May 13, 2021, had a case conference before O’Brien J. on November 26, 2021, and the original motion before me on January 20, 2022. Notwithstanding these many opportunities spanning over 2 years, he remains non-compliant.
c. The respondent has demonstrated a pattern of disrespect for authority and court orders. At para. 196 of Gilmore’s trial judgment, she states:
“In this court’s view, the father’s refusal to pay court costs, his refusal to pay fees to Mr. Hurwitz when bound by a retainer agreement and court order to do so, and his refusal to reimburse the mother for fees paid on his behalf to Mr. Hurwitz, while at the same time insisting that the section 7 payment be made to him, demonstrate a shocking disrespect for authority, court orders and the mother.”
I have already commented on the respondent’s failure to file any material for this motion, despite him being cautioned about the serious consequences. He was given a further chance in January 20, 2022, had a choice to comply, took steps to comply, but then made the conscious decision not to comply without reasonable explanation. This demonstrates the respondent’s continued shocking disrespect for authority, court orders and court processes.
d. The respondent is 71 years old, and it is expected that he will continue to have child support obligations until he is at least 78. The Orders made ensure there is security for the respondent’s child support obligations. They are not trivial, and were made following trial.
24Contempt orders should be made sparingly and only where other attempts to enforce compliance have failed: Dephoure v. Dephoure, 2015 ONSC 2170 (Ont. SCJ). It is a remedy of last resort: Chong. A finding of contempt “transcends the dispute between the parties; it is one that strikes at the very heart of the administration of justice in this country and in this province.” (Ontario (Attorney General) v. Paul Magder Furs Ltd. (1992), 1992 7704 (ON CA), 10 O.R. (3d) 46 at p. 53).
25Having considered the above factors, there is no reason to exercise my discretion not to find the respondent in contempt. To decline to find the respondent in contempt, after every opportunity was provided to him to comply with the court Orders and to purge his contempt, would permit the respondent to escape the trial judge’s ruling that funds be held to secure the respondent’s support obligations. It would make a mockery of the trial and the administration of justice in this province.
26Accordingly, I find the respondent in contempt for his failure to comply with the Order of Shore J., dated January 22, 2019, and my Order, dated January 20, 2022.
Sanctions
27Parties provided their submissions on an appropriate sanction. This included, in response to my inquiry, submissions on the issuance of a preservation order for all of the respondent’s investment accounts that he holds with the National Bank.
28Sanctions imposed upon a finding of contempt must be significant and of such consequence as to ensure the administration of justice is not brought into disrepute: Cassidy v Cassidy, 2010 ONSC 2707 at para. 9.
29Sanctions should coerce compliance, and the court may fashion a sentence that will obtain compliance: Cassidy, para. 12, citing TG Industries Ltd. v Williams, 2001 NSCA 105 at para. 35. Other relevant considerations include the proportionality of the sentence, presence of mitigating and aggravating factors, deterrence, and the reasonableness of fines or penalties.
30While not requested by the applicant, I have considered a prison sentence and even a conditional sentence. I am not satisfied that this would coerce compliance. Even if it did, it may be a premature sanction given other available sanctions.
31Central to the respondent’s testimony and argument was his concern about affordability, the expenses he has, and his limited sources of income (e.g. his investments and income from government sources). Because of his concern over his finances, financial sanctions appear to be the most appropriate means to compel the respondent’s compliance.
32First, I order that the respondent shall, within 10 days, deposit with the Accountant of this Court the amount of $100,000.00 as security for his child support obligations for T, born 2006 (hereinafter “the child”), which funds shall remain with the Accountant until further Order of this Court.
33I am not inclined to order, once again, that the respondent obtain a policy of life insurance. There must be immediate security in place to secure the respondent’s support obligations. This Court should not provide the respondent with a further opportunity to provide this security through life insurance. Payment of security to the Accountant is consistent with Gilmore J.’s trial judgment. These funds should be available to the respondent. They were released to him in 2019 when Shore J. made her Order.
34Second, I order a penalty be paid by the respondent to the applicant. The applicant seeks a penalty of $20,000 to deter the respondent. General deterrence can also be achieved, with contempt decisions serving as a disincentive for litigants inclined to breach court orders. I am satisfied that a financial penalty, to deter this respondent and for the purposes of general deterrence, is necessary and appropriate. If the respondent deposits the $100,000 with the Accountant within 10 days as ordered, there would be no sanction for his breaches of court orders. Hence the necessity of ordering a penalty.
35In fixing the amount of the penalty, I am mindful that the applicant, aside from legal costs and annoyance with the respondent’s non-compliance, has not suffered injury because of respondent’s breaches. In my view, a penalty of $10,000 is an appropriate penalty to be paid by the respondent to the applicant, which shall be paid within 30 days.
36Third, I make further orders, with reasons that follow, should the respondent fail to deposit $100,000 with the Accountant of this Court within 10 days. Those orders are:
a. The respondent shall pay a further penalty to the applicant of $500 for each day that he fails to deposit $100,000 with the Accountant of this Court.
This financial disincentive is intended to further motivate compliance on a timely basis, and for the purposes specific and general deterrence. A continuing penalty responds to the potential of further non-compliance, which is a real potential given the respondent’s history of failing to act when ordered to do so, and his history of failing to act when given further opportunities to comply.
b. The respondent shall be restrained from transferring, alienating, mortgaging, or otherwise encumbering or dissipating his interest in his home, known municipally as 33 Buckley Crescent, Etobicoke, Ontario, M9R 3K4, and a copy of this Order shall be registered on title to this home.
The respondent’s home is his most significant asset. By restricting his ability to encumber or mortgage his home, the potential for the responding absconding the jurisdiction to avoid his support obligations and court orders is reduced. It also ensures that should he decease, there are assets of his estate to secure the respondent’s support obligations.
c. A preservation order shall issue, preserving all funds in any accounts held by the respondent, Ronald C. Rodgers, (date of birth, January 5, 1951, and SIN: XXX XXX XXX) at National Bank Financial, save and except funds he may hold in a Tax Free Savings Account. The applicant shall forthwith deliver a copy of this Order to the National Bank Financial. The respondent shall provide National Bank Financial with all of his account information to effect this preservation order. Either party may seek leave for an Order lifting this preservation order by way of a 14B motion to (a) allow for payment of the respondent’s financial obligations to the applicant; or (b) allow for payment of $100,000 to the Accountant of the Court as security of his support obligations.
The respondent’s argument was that his accounts with National Bank Financial should not be preserved because this is where all his investments are, and they are the primary source of his income as a retiree. For this reason, I am satisfied that a preservation order would motivate compliance. I accept that if his accounts at National Bank Financial are preserved, some funds ought to remain available to the respondent for his day-to-day living. Therefore, I have excluded funds held in his Tax Free Savings Account. According to January 4, 2022 Financial Statement, approximately $21,000 sits in his Tax Free Savings Account.
37Finally, the respondent indicated during the motion that he was Indigenous. I have turned my mind to whether this fact should be weighed in my consideration of sanctions. As I have not ordered that he be incarcerated, the Gladue principles have limited to no application. Furthermore, the respondent did not make any arguments linking his Indigenous heritage to his non-compliance with court orders.
Costs
38I invited parties to make brief submissions on costs. I also advised the parties not to address any Offers to Settle during their arguments, but to upload them to CaseLines that I would consider after I concluded my substantive consideration of this motion. I have now considered those offers. I need not recount them. I am satisfied the applicant achieved a result more favourable than the offers.
39The applicant seeks $62,744.15 in full indemnity costs (including disbursements). Those costs relate to:
(a) The respondent’s motion to change, and the applicant’s motion for contempt, dated April 22, 2021, totaling $17,510;
(b) An appearance before a Dispute Resolution Officer regarding the motions on May 13, 2021, totaling $900;
(c) A case conference before O’Brien J. on November 26, 2021, totaling $5,075;
(d) The motion returnable before me on January 20, 2022, totaling $12,894.50;
(e) The continuation of motion for contempt before me on September 13, 2022, totaling $18,040.00.
40Section 131 of the Courts of Justice Act provides that subject to the provisions of an Act or Rules of Court, costs are in the discretion of the court, which may determine by whom and to what extent the costs shall be paid. This section must be read in conjunction with Rules 24 and 18 of the Family Law Rules, which set out numerous principles to guide the court in the exercise of its discretion in the family law context.
41The modern rules respecting costs aim to foster the following four fundamental purposes: (a) to partially indemnity successful litigants for the cost of litigation; (b) to encourage settlement; (c) to discourage and sanction inappropriate behaviour by litigants; and (d) to ensure that cases are dealt with justly in accordance with the primary objective of the Family Law Rules set out in Rule 2(2). See: Ryan v. McGregor (1926), 1925 460 (ON CA), 58 O.L.R. 213 (Ont. C.A.), at p. 216; British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371 (S.C.C.); Fong v. Chan, 1999 2052 (ON CA), 1999 CarswellOnt 3955, 181 D.L.R. (4th) 614, 46 O.R. (3d) 330 (C.A.); Serra v. Serra, 2009 ONCA 395 (C.A.) and Mattina v. Mattina, 2018 ONCA 867 (C.A.)).
42Any cost award must be fair to the parties and reasonable in the circumstances (Murray v. Murray, 2005 46626 (ON CA), 79 O.R. (3d) 147 (Ont. C.A.)), including the reasonable expectations of the losing party (Boucher v Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), 71 O.R. (3d) 291 (Ont. CA)).
43The applicant’s position is that she should be entitled to full indemnity costs. The respondent’s position is that no cost order should be paid.
44I have reviewed the applicant’s Bill of Costs and find that the amounts claimed are reasonable. I have considered the conduct of the respondent. For reasons already given, his shocking disregard of court processes and court orders should not be condoned. The applicant should not bear the legal costs incurred as a result of the respondent’s conduct. This is an appropriate case for full indemnity costs to be awarded. However, I would reduce the quantum sought in responding to the respondent’s motion to change. While I struck the respondent’s motion and the applicant was therefore successful on this motion, I did grant leave for him to bring that motion again in September 2023. The time spent by the applicant may not be wasted should the respondent bring that motion back next year. Accordingly, I have reduced the quantum of costs sought by the applicant in responding to that motion by $5,000.
45For these reasons, I order the respondent to pay the applicant costs of the respondent’s motion to change and the applicant’s contempt motion in the amount of $57,744,16, inclusive of HST and disbursements.
Justice Mohan D. Sharma
Date: September 15, 2022