Stiff Financial Penalty For Party’s Refusal To Disclose
Most people would (correctly) assume that when a court orders someone to do something, it’s important to follow through. As we’ve seen in many of the cases we’ve written about, parties involved in family law disputes may be hesitant to cooperate with each other or the courts. A recent decision from the Ontario Superior Court of Justice highlights just how risky such an attitude can be.
A refusal to comply
The husband and wife started their divorce proceedings in January 2015. Since that time the mother ran into numerous difficulties obtaining disclosure from the husband. In 2019 the court ordered the husband to take the following steps:
(a) to comply with various life insurance terms including designating the applicant as the irrevocable beneficiary of an insurance policy in the total amount of $1,141,666.00;
(b) to bring into good standing all expenses associated with various Florida condominium properties including but not limited to property insurance and taxes;
(c) to provide proof that (a) he had formally retained a certified business valuator (“CBV”), who was to produce an income report and business valuation of the respondent’s business interests, and (b) he had supplied the CBV with all necessary information/documentation required to prepare the report and valuation; and,
(d) to comply with various disclosure requests of the applicant’s lawyers dated February 27, 2019.
While the husband delivered some of the information and documentation required, he was still in breach of the order (as well as prior orders) by the time this trial came around. The mother sought for the courts to apply a financial penalty on the husband for his failure to comply.
Analyzing the husband’s refusal
After going through the materials filed by both parties, the court found that “Most if not all of the above disclosure obligations have been outstanding for approximately four years… and find that the respondent is indeed in breach of Justice Moore’s consent order.”
The court determined that some penalty would be appropriate, and set out to determine what it should be.
The court noted that the most basic obligation in family law is the duty to disclose financial information. A 2016 decision from the Ontario Court of Appeal stated,
“A party should not have to endure order after order after order being ignored and breached by the other side. A refusal to disclose one’s financial affairs is not just a mis-step in the pre-trial tactical game that deserves a two minute delay of game penalty. Failure to disclose is a breach of the primary objective. Especially if it involves breach of a court order, a party who fails to disclose evinces a determination that he or she does not want to play by the rules. It is time to oblige such parties by assessing a game misconduct to eject them from the proceeding.”
The court then noted that it has jurisdiction to monitor and police its own case management process, and that “a just determination of any family proceeding is rooted in the protection of the administration of justice as a whole, and when a party chooses to consistently disobey a court order, the administration of justice itself is called into question.”
The court then stated that a monetary penalty, should one be imposed, should not be interpreted as a punishment, but rather in doing so the court is simply “enforcing its own process by ordering a stake in or cost of the proceeding due to that party’s own conduct.” That said, the court also wrote that a remedy of a fine or monetary payment should be reserved for exceptional and/or egregious circumstances.
The court looked at the husband’s behaviour as well as the wife’s request and held,
“The (wife) requests an order compelling the (husband) to comply with his outstanding obligations by a specified date, failing which he should pay the applicant a penalty of $500.00 per day for each day of non-compliance. In my view, such a proposal is reasonable. As previously stated, costs orders have been made against the (husband), and while he has complied with those costs orders, their impact has not resulted in compliance with his duty to disclose financial information/documentation.”
The family law practice of Jason P. Howie encompasses separation, divorce, child custody and all other family law issues. To discuss your legal needs with a Windsor divorce lawyer, call 519.973.1500 or contact us online. We serve clients in Windsor, Essex County and throughout the region.