27 July 2013

Important Supreme Court Decision Addresses Penalties for Nondisclosure

Mr. Justice Punnett of the Supreme Court has released his judgment on an application for a fine under s. 213 of the Family Law Act for failing to make proper financial disclosure in the timely manner required by the rules of court. The judgment in this caseJ.D.G. v. J.J.V., is the first decision on the nondisclosure provisions of the new act.

The background facts relevant to the application are these: 
  • Under SCFR 5-1 the application respondent's financial statement (an important court form used to describe a party's income, assets, expenses and debts) was due on 7 December 2012. It was not produced. 
  • It was not produced at a Judicial Case Conference heard on 8 January 2013, contrary to SCFR 7-1
  • It was not produced by 18 Janaury 2013, contrary to an order made at the JCC. 
  • In fact, it was not produced until 10 April 2013, two days before the application was heard.
This is how the court summarized the applicant's position at the hearing:
"[8] The [applicant] notes that at the date of hearing of this application the [application respondent] was 124 days past the date that the Rules required for production of his financial statement and 84 days after the date set by the JCC order. She argues that last minute production should not be countenanced and notes no evidence was given in support of the [application respondent's] excuse for the delay. As a result she seeks costs thrown away in the sum of $1,500 and a fine in the sum of $2,500."
Fair enough. In the oft-quoted case of Cunha v. Cunha, a 1994 case of our Supreme Court, cited again my Mr. Justice Punnett in his introduction to J.D.G., nondisclosure is the "cancer of matrimonial property litigation."

Section 213(2) of the new act says that where a person has failed to comply with a disclosure requirement of the rules of court, the court may:
(a) make [another disclosure] order under section 212; 
(b) draw an inference that is adverse to the person, including attributing income to that person in an amount that the court considers appropriate, and make an order based on the inference; 
(c) require a party to give security in any form that the court directs; 
(d) make an order requiring the person ... to pay
(i) a party for all or part of the expenses reasonably and necessarily incurred as a result of the non-disclosure of information or the incomplete, false or misleading disclosure, including fees and expenses related to family dispute resolution, 
(ii) an amount not exceeding $5,000 to or for the benefit of a party, or a spouse or child whose interests were affected by the non-disclosure of information or the incomplete, false or misleading disclosure, or 
(iii) a fine not exceeding $5,000;
(e) make any other order the court considers appropriate.
This is a better and much expanded version of s. 92(2) of the old Family Relations Act, which said this:
If a person fails to comply with rules respecting disclosure information in proceedings under this Act that are made under the authority of the Court Rules Act, the court may order an amount not exceeding $5,000 for the benefit of the spouse, parent or child on whose behalf the request was made.
In considering s. 213, the court firstly observed that in the Attorney General's 2010 White Paper on Family Relations Act Reform (PDF), the government says that fines under s. 92 are "seen as ineffective and is rarely used, even though securing adequate disclosure can be an extremely time consuming and costly exercise for a party." The court then cites the explanatory materials on the new act provided by the Ministry of Justice, which say that s. 213 "provides both courts with a broad spectrum of measures to compel disclosure, including making an order based on attributed income, ordering payment of security or a fine, or payment to the other party for expenses incurred as a result of the non-compliance," and that "the wide range of remedies will ensure both courts may effectively compel adequate disclosure and will deter parties from delaying full disclosure." The court then cites the comments of the Attorney General in the debates leading to the enactment of the Family Law Act, expressing the government's hope that the act "will encourage full and truthful disclosure very early in the process so that it promotes settlement and ensures that people have all the information that they need."

Clearly, then, the broadened provisions of s. 213 beyond the old s. 92 were meant to achieve the Ministry's stated objectives of (1) more effectively compelling disclosure and (2) deterring parties from delaying disclosure. As Mr. Justice Punnett put it,
"[19] Section 213 expands on s. 92(1). Firstly it makes it clear that the remedy for non-disclosure is now available under a wide range of circumstances including situations where a party has provided incomplete, false or misleading information. Secondly the range of remedies available is broader. Some were already available such as the ability to draw an adverse inference. What is new is the ability to order a party to give security to the court, to pay a fine (although previously available if a contempt finding was made), to make any other appropriate orders and to award expenses beyond what would normally be considered costs. The circumstances under which the $5,000 can be paid for the benefit of another party also differs in that instead of being paid on behalf of whom it is requested it can be paid to any child, spouse or party 'whose interests were affected'. It also expands the remedies available to the Provincial Court and provides some consistency in the remedies available in both the Provincial and Supreme Courts. ...

"[21] Section 213 recognizes that non-disclosure is a barrier to the speedy and inexpensive determination of cases. In many cases considerable resources, both private and public, are expended on pre-trial disclosure. This before any consideration of the real issues can be carried out. It is a barrier that should not be countenanced. Private and public resources are better spent on resolving the real issues between the parties rather than being depleted on such matters. 
"[22] Section 213 ... should be read in the context of the FLA's regime of encouraging earlier disclosure. Section 5 of the FLA provides:
(1) A party to a family law dispute must provide to the other party full and true information for the purposes of resolving a family law dispute. 
(2) A person must not use information obtained under this section except as necessary to resolve a family law dispute. ...
"[30] The court in my view should approach the application of the rule so that the significance of timely disclosure is brought home. It should not be taken lightly. Proper and timely disclosure will be enforced."
Having reached this conclusion, the application respondent's goose was cooked. The court held that:
"[33] In my view there should be some penalty imposed in order to make clear the importance of providing financial disclosure in a timely manner. The [application respondent] should have been aware of the obligation from the inception of his claim. Given the circumstances of this case the [applicant] is entitled to her costs thrown away. I fix those costs, inclusive of disbursements and taxes at $1,500.00. Pursuant to s. 213 there shall also be a penalty of $500 imposed payable to the [applicant]. The costs and the penalty are to be paid to the [applicant] within 30 days of the date of this judgment."
This excellent, and very well written, decision is important for two reasons. Firstly, it demonstrates the court's willingness to consider, as I suspected it would, all of the material made available by the government in connection with the Family Law Act, including the white paper and the explanatory materials. (This approach is relevant to the court's interpretation of all of the act, not just the provisions relating to disclosure.) Secondly, the court has taken up the gauntlet thrown by the government and accepted that a more rigourous, proactive approach to disclosure is demanded by the new act and must be applied by the court. Nondisclosers take heed; Cunha has come home to roost.

My thanks to my colleagues Thomas Wallwork and Todd Bell for bringing this important case to my attention.

23 July 2013

Law Commission of Ontario Releases Report on Access to Justice

Today the Law Commission of Ontario has released an important new report, "Increasing Access to Family Justice through Comprehensive Entry Points and Inclusivity." The report provides an important assessment of the strengths and weaknesses of the family law justice system in Ontario and the barriers faced by those who must proceed in court without the benefit of counsel, and makes a number of recommendations as to how the system could be reformed, including an multidisciplinary, holistic approach to family law problems.

Here's the summary from the Commission's press release on the report.
The family law system has been the subject of much comment in recent years and many reports recommending changes to the system. Since 2010, there have been reforms in relation to procedures to address domestic violence against women, provision of information, methods of resolving disputes other than the courts, changes in the courts and other efforts to improve the system. Yet persons facing family disputes still find the system complex and difficult to navigate. The LCO’s Final Report focuses on the initial stages of the system, notably the provision of information, ways of providing initial advice and the interrelationship of legal problems with other kinds of problems.  
The Report emphasizes the need for the system to respond to the evolving pluralist nature of Ontario’s population, and addresses how factors such as literacy levels, cognitive disabilities and, geographic location, among other characteristics, affect how easily people can access and use information, the affordability of legal representation and the degree to which legal problems are affected by other kinds of problems. It recommends the creation or enhancement of multidisciplinary, multifunctional centres or networks that link with “trusted intermediaries” such as cultural centres. “Tinkering with the family law system is not sufficient,” says LCO Board Chair Bruce Elman, “There needs to be comprehensive reform if it is to be made more accessible and effective for those who need it”.
This report adds to the growing number of reports calling for fundamental reform of the family law justice system and is well worth a read.

02 July 2013

Provincial Court Releases Important Decision on Relocation in Polyamorous Relationship

Judge Saunders of the Provincial Court has just released her judgment in the as-yet-unpublished case of Graf v. Beaudoin, giving us what I believe is the court's second ever decision on the relocation provisions of the new Family Law Act.

In a nutshell, the mother of the parties' two children sought an order that she be allowed to take the children and move from British Columbia to Alberta. However, there are a number of factors that distinguish this case from a vanilla interprovincial relocation dispute. First, the parties' eldest child was born during their relationship, while they were living together, and the younger child was born after they had separated. Second, the father had a more or less equal amount of time with the eldest child and a much lesser amount of time with the younger. Third, the parties were involved in a polyamorous relationship with another woman, with whom the father had also had a child, and who resided with them. Finally, the father had earlier had a fourth child with another woman, who had also lived with him and the other woman, and who he continued to parent. As you can guess, this would have made for a pretty complicated set of facts.

The first point, about the timing of the children's births, raises some interesting problems as s. 39 of the Family Law Act would have made both parties the guardians of their eldest child and neither party the guardian of their youngest child. As a result, the relocation provisions of the act would have applied in respect of the first child and not in respect of the second, since only a guardian has standing to prevent a guardian from relocating under s. 68 of the act.

The second point, about the father's time with the parties' two children, means that even if he were a guardian of both children, two different tests might apply to determine the application to relocate under s. 69 as that section prescribes one test where the guardians have a "substantially equal" amount of time with the children and another where they do not. Where guardians do not have substantially equal parenting time, the relocating guardian must prove that:
  1. he or she proposes to relocate in good faith; and,
  2. he or she has proposed "reasonable and workable arrangements" to maintain the children's relationship with the other guardian.
Where the guardians do have substantially equal parenting time, the relocating guardian must prove that:
  1. he or she proposes to relocate in good faith;
  2. he or she has proposed reasonable and workable arrangements to maintain the children's relationship with the other guardian; and,
  3. the relocation is in the best interests of the child.
The third and fourth points, which require a chart to figure out, means that the parties' two children had very close relationships with their two half-siblings and with two other adults who also played parent-like roles in their upbringing.

As I understand the judge's summary of the parties' positions, counsel for the mother argued that the father was the guardian of the eldest child but should not be the guardian of the youngest child, apparently overlooking the fact that the mother wasn't a guardian of that child either. (I  pause for a moment to reflect on how difficult it would be for the youngest child to grow up knowing that he had the same father as his sister, yet had such an unequal status. The mind boggles.) Counsel also took the view that the mother should have all parental responsibilities in respect of the eldest child, effectively leaving the mother as the sole decision-maker for both children. Counsel for the father, on the other hand, argued that the parties should be the guardians of both children and should have "shared parenting."

In any event, the judge held that the mother should not be allowed to move with the children, holding that:
  • the eldest child had been "equally parented by both parents;"
  • the father had "considerable" but not "substantially equal" parenting time with the youngest child;
  • the youngest child's "considerable exposure" to the father was enough that the relocation test for guardians with "substantially equal" parenting time was the test appropriate test to apply in respect of both children;
  • the mother's proposal to relocate was not made in good faith as her motivation was to reduce contact between the children and their father, and by extension reduce the children's contact with their half-siblings and the other women with parenting roles in their lives;
  • the mother's proposed arrangements for the children's continuing relationship with the children were not reasonable (Skype is not the best medium for a nine month old child); and,
  • the children's best interests would not be advanced by the move as the father is a "hands on and committed father."
After engaging in this analysis, the court determined that the parties should be the guardians of both children, should share parental responsibilities in respect of the children and should have equal parenting time with the children. The parties were both guardians of their eldest child as a result of the presumption of parental guardianship under s. 39(1) of the act, and could only have been appointed as the guardians of the youngest child under s. 51.

Apart from the technical issues arising under the Family Law Act as to who is and isn't a guardian, this case is of primary importance in respect of the issue that wasn't an issue. The fact that the children's parents were involved in a polyamorous relationship had no bearing at all on the court's conclusions, except as to the negative effect of the mother's proposed move in taking the children away from their half-siblings and the other adults involved in their family unit. The parties' choice of a polyamorous lifestyle was a non-issue in the decision, which is precisely as it should be. 

My thanks to my colleague Joanna Recalma for bringing this very interesting case to my attention. I will post a link to the case when it is available from an electronic resource.