T.G. v. J.G. Date:, 2016 BCPC 63

Citation: T.G. v. J.G. Date: 20160307 2016 BCPC 0063 File No: F13128 Registry: Chilliwack IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Family Division IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: T.G. APPLICANT AND: J.G. RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE ASSOCIATE CHIEF JUDGE G.S. GILL Counsel for the Applicant: F. Nudel

Counsel for the Respondent: S. Gorner Place of Hearing: Chilliwack , B.C. Date of Hearing: October 21, 2015 Date of Judgment: March 7, 2016 [ 1 ] At the hearing of her application for child and spousal support the applicant, T.G., sought an order pursuant to

section 213 of the Family Law Act, S.B.C. 2011, c. 25 , for the imposition of a financial penalty on the respondent, J.G., on the basis of his failure to provide sufficient financial disclosure to enable the proper assessment of his income for that purpose. [ 2 ] The lack of financial disclosure resulted in T.G.’s application and resulting order, unopposed, to adjourn the hearing. As of the date of these reasons the matter has not yet, to my knowledge, had a further hearing.

These reasons address matters up to and including October 21, and not any disclosure issues that may or may not have arisen thereafter. [ 3 ] Having adjourned the October 21 hearing, but reserving my decision on the application for a penalty, this is that decision. Background [ 4 ] The applicant filed for child and spousal support on October 16, 2014 and served the respondent. He filed a reply on November 20. The first appearance was on February 25, 2015. No financial disclosure was made at that time. [ 5 ] In May, a hearing date was fixed for September 24, 2015.

No financial disclosure was made at that time. [ 6 ] At a pre-trial conference held August 12, 2015, counsel attending on behalf of the respondent explained his absence on that day due to his employment as a long haul truck driver having taken him out of town. [ 7 ] On the subject of financial disclosure, counsel for T.G. mentioned numerous requests for financial disclosure had already been made to J.G., but that he had not yet complied.

J.G.’s counsel was unable to explain why, despite the matter having been commenced approximately ten months earlier, he had not yet made financial disclosure as required. [ 8 ] Counsel sought an extension of time to file the necessary financial statement with the prescribed documentation. An extension was granted by the Court in the form of an Order requiring compliance by August 26.

At the time of making the order, the presiding Judge emphasized that J.G. risked the payment of a financial penalty if he did not comply. [ 9 ] There is nothing before me indicating what, if anything, transpired on the August 26 deadline, other than I believe it undisputed that the aforementioned financial disclosure did not occur. [ 10 ] At the next appearance on September 9, 2015 new counsel appearing on behalf of J.G. advised that due to a conflict in her

schedule she would not be available to attend the September 24 date for the hearing of T.G.’s application for spousal and child support. Counsel also advised the Court that no financial disclosure had as yet been made despite the earlier order.

This prompted a fresh warning from the Court that the respondent was getting to the stage where he was at risk of a financial penalty for non-compliance. [ 11 ] Following a further explanation by counsel regarding efforts more recently made by her client, the Court noted the advisability of J.G. obtaining a letter from his accountants explaining the reasons for any additional delay, raising the prospect of a $3,000 fine in the event of any further non-compliance. The Court set a new disclosure deadline of September 30.

The hearing of T.G.’s application for spousal and child support was re-scheduled for October 21. [ 12 ] At the October 21 hearing date before me, counsel for J.G. confirmed that he had provided some financial disclosure on September 22, in advance of the September 30 deadline, but it was incomplete. For example, the income

section of the Form 4 financial statement was left entirely blank. [ 13 ] Also, J.G. failed to provide his income tax returns and assessment notices for the past three years, which he said were still in the hands of his accountants who were said to be very busy with other work in addition to his own. [ 14 ] J.G. did provide numerous pages of general ledger statements reflecting his work as an independent long haul truck driver. Although these general ledger statements were very detailed, they were difficult to make any sense of on their own.

The reason advanced by J.G. for their complexity was that his work as a truck driver involved income, offsetting expenses, personal expenses, indebtedness to his employer for advances, and the use of a credit line. [ 15 ] As a result of the insufficient disclosure to assess J.G.’s income, T.G. sought an adjournment of the hearing, as well as the imposition of a financial penalty against him. [ 16 ] J.G. did not oppose the adjournment but he disputed the imposition of the penalty on the basis of his partial compliance and his explanation.

In this regard, he provided additional viva voce testimony to supplement his counsel’s earlier submissions. [ 17 ] J.G. testified that T.G. had his financial papers needed for filing of his income taxes until he obtained them from her sometime in the spring of 2015. He did not suggest she was in any way withholding the documents from him.

He could not recall exactly when, after obtaining the papers, he took the papers to his accountants, however, it is clear that he also did not attend to that task in a timely way because when asked during his testimony what efforts he had made to promote timely financial disclosure J.G. replied: "I - nothing. I went on the road and didn't get around to it until I was actually pressed to."

Law [ 18 ] The authority of a Court to order financial disclosure in these circumstances is provided for in s. 212 of the Family Law Act, S.B.C. 2011 c. 25 : Orders respecting disclosure 212

(1) A court may at any stage of a proceeding make an order to disclose information in accordance with the Supreme Court Family Rules or the Provincial Court (Family) Rules. [ 19 ] Remedies for non-compliance are set out in s. 213 : Enforcing orders respecting disclosure 213

(1) This

section applies if a person (

a) fails to comply with (

i) an order for disclosure made under

section 212 [orders respecting disclosure], or (ii) a requirement to disclose information in accordance with the Supreme Court Family Rules or the Provincial Court (Family) Rules, within the time or in the manner required by the order or Rules, or …

(2) In the circumstances set out in subsection (1), the court may do one or more of the following: (

a) make an 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 described in subsection (1) 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 $5000 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 $5000;

(

e) make any other order the court considers appropriate. [ 20 ] In H. v. H ., 2015 BCSC 2196 , Harris, J. imposed a $2,000 fine against the respondent pursuant to

section 213 for his failure to make financial disclosure, despite there having been a number of court orders over a span of 14 months requiring that he do so. The circumstances of the non-disclosure were set out in paragraphs 38 to 40 of the decision: 38 While the respondent deposed in January of 2015 that he had not filed his income tax returns for four years, there was no reasonable explanation from him as to why he failed to file his income tax returns or why he was unable to attend to their filing after the order of Madam Justice Power.

I note that his counsel stated in his July 3, 2014 letter that the respondent’s income is “complicated” as his company was sold and he was working “on contract.” I do not accept that this is a sufficient reason for failing to file his tax returns and providing copies to the claimant. 39 Despite the further orders of Mr. Justice Myers and Madam Justice Ross, the respondent did not provide notices of assessment or pay statements. Further, despite the order of Mr. Justice Myers to provide a Form F8 Financial Statement within 30 days of August 18, 2014, it was not provided until January 6, 2015.

The respondent only partially complied with the order of Madam Justice Ross. 40 Additionally, the respondent has not filed the information with respect to his 2014 income, which is required under s. 21 of the Guidelines by virtue of the claimant’s current application. [ 21 ] In considering the matter, Harris, J. cited G. (J.D.) v. V. (J.J.) , 2013 BCSC 1274 to summarize the guiding principles of s. 213 : 58 Mr. Justice Punnett in G. (J.D.) v. V. (J.J.) , 2013 BCSC 1274 (B.C. S.C.) reviewed s. 213 of the Family Law Act .

He noted that a remedy for non-disclosure is now available under a wide range of circumstances and that the range of remedies is broader than under the previous legislative scheme. In considering how s. 213 should be applied, he outlined a number of guiding principles at paras. 21 to 30, which I summarize as follows: i.

Section 213 recognizes that non-disclosure is a barrier to the speedy and inexpensive determination of cases. ii.

Section 213 should be read in the context of the Act ’s regime of encouraging earlier disclosure, including s. 5 of the Act which requires a party to a family law dispute to provide to the other party full and true information for the purpose of resolving a family law dispute. iii. The goal of proper disclosure is to enable the parties to resolve their dispute.

Section 213 is to be used to secure proper disclosure in a timely and cost efficient way. iv.

Section 213 requires a robust application to accomplish that end. It should be used creatively in a manner sensitive to the issues of a particular case. v. While an application to hold a party in contempt is still available, in all but the most egregious cases an application under s. 213 should be made initially. [ 22 ] In G. (J.D.) v. V. (J.J .), supra , the husband failed to make the required financial disclosure in December of 2012. An order was made in January 2013 setting a new disclosure deadline of February 2013, which was also missed.

When the applicant sought remedies, including imposition of a s. 213 penalty, the husband made the required disclosure, but only two days before the date for the hearing of the application for the penalty. [ 23 ] In deciding to nonetheless impose a penalty, Punnett, J. set out factors at paragraphs 28 to 33 inclusive, that are instructive in the present case: 28. Both the issue of non-disclosure and the severity of any order made under s. 213 will, as was the case under s. 92 of the FRA , depend on the facts.

It should depend on the circumstances of the case, the degree of non-disclosure, the reasons for the late disclosure and when it is made. Likewise the need for the information in order to resolve the matter may be a factor. In addition, while in most cases disclosure may not be either complex or onerous there will be such cases where disclosure is. That should be recognized as well. 29. If for example an application is brought under s. 213 and the responding party makes disclosure prior to the hearing that may justify a lesser penalty.

That said, the fact that the applicant had to bring the application should, notwithstanding the late production, be addressed both because of the expense incurred but as well the delay itself. The latter impedes the timely resolution of proceedings. In such a case the remedy brought might be a fine. If however production does not occur until after an application then an order for costs thrown away may be appropriate and depending on the circumstances, imposition of a penalty as well.

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. 31. In the case at bar the explanation for late disclosure was only offered through counsel. In my view an affidavit should have been filed. The explanation given was that the complexity of the claimant’s financial employment income made disclosure more difficult and time-consuming. In addition there was a change of counsel.

While I accept the explanation given, without evidence, it cannot be properly assessed. 32. It is clear that the production required was not a simple matter of producing personal tax returns and filling in the financial statement. The claimant’s financial statement reveals income from self-employment, other employment income (stock options), rental income and dividends. His financial statement including personal and corporate tax returns as well as corporate financial statements totalled 257 pages.

The complexity of his financial circumstances as revealed in his financial statement raises an inference that time beyond the norm was required to acquire and organize the information. However the lack of affidavit evidence makes assessment of the delay problematic. 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 claimant should have been aware of the obligation from the inception of his claim. Given the circumstances of this case the respondent 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 claimant. The costs and the penalty are to be paid to the respondent within 30 days of the date of this judgment. Analysis [ 24 ] In the present case the respondent, J.G., knew as early as October of 2014 of his requirement to make full financial disclosure. For reasons unknown to me, he did not obtain the needed papers from the applicant until the spring of 2015, but even after then he was less than diligent in having his financial statements prepared.

By his own admission, he did not responsibly attend to that until he was pressed to do so. [ 25 ] The limited financial disclosure made on August 22 did not in any way assist in advancing the proceedings. Two months later, by the time of the October 21 hearing, a date presumably set with his consent, the information had still not been provided.

As a result of the non-disclosure, the hearing was ordered to be further adjourned to a new date yet to occur. [ 26 ] Regarding the complexity of the information alleged by J.G. in contributing to the delay in disclosure, his finances as a truck driver may well require some untangling but they are not so inordinately complex that his income tax papers could not have been prepared in the ample time available to him.

On the basis of the information before me, I conclude the primary cause of the delay is not complexity of the disclosure but rather J.G.’s own delay in attending to having it prepared. [ 27 ] J.G.’s late and incomplete disclosure of his financial information, in the face of his indifference to comply until pressed to do so, and in the absence of better information explaining the role of the alleged complexity of the information, has added cost and significantly delayed the resolution of these proceedings, which include the rights and interests of children.

This conduct falls precisely within the goals and objectives of s. 213 . [ 28 ] No one is suggesting the respondent intended by his non-disclosure to purposely delay the proceedings, which would be an aggravating factor in the assessment of any penalty. However, his neglect has nonetheless delayed the proceedings. [ 29 ] J.G. has failed to comply with his obligations pursuant to s. 213(1). His partial compliance, explanation and more recent efforts do not amount to a reasonable excuse for the resulting delay.

Under all of the circumstances, I order that he pay a penalty pursuant to s. 213(2)(d)(ii), in the amount of $600, to the applicant by not later than July 31, 2016. The Honourable Associate Chief Judge G.S. Gill Provincial Court of British Columbia