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What’s Considered ‘Bad Faith” in Family Law?

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What’s Considered ‘Bad Faith” in Family Law?

Everyone has stories about divorces-gone-bad:  High levels of conflict over trivial matters, under-reporting income or hiding assets, and other forms of generally bad behaviour by former spouses towards each other.

Divorce being the emotionally complex process that it is, it’s hard to draw the line between straightforward “asserting your legal rights” versus outright “bad faith” behaviour.

This leads to an interesting question:

Does Canadian Family Law have a test for what is tantamount to “bad faith” conduct?

It turns out, it does.  This was confirmed in an Ontario Court of Appeal decision called Scalia v. Scalia where the court said:

The legal test for bad faith in the family law context … is that the impugned behaviour must be shown to be carried out with “intent to inflict financial or emotional harm on the other party or persons affected by the behaviour, to conceal information relevant to the issues or to deceive the other party or the court.” In short, the essential components are intention to inflict harm or deceive.

As against this stated test, courts are sometimes called upon to evaluate a Family litigant’s behavior. They don’t always do so correctly.

For example, in a recent case called Turk v. Turk, a court found that an earlier judge on an application had failed to properly identify and apply the “bad faith” test to an acrimonious property and custody dispute between spouses.   The results at trial had been mixed, and both parties were now seeking their legal costs from the other.  However, the wife added that she should get full costs from the husband because of his “egregiously bad faith behaviour”.

The court considered the evidence on this point, and reviewed the application judge’s findings that the husband had:

  • Failed to comply with this disclosure obligations;
  • Had been dishonest about the status of one of his corporate ventures, claiming that it was in its “infancy”, when in reality – according to a public statement the wife’s lawyer  found on the internet — the corporate launch was imminently due; and
  • Failed to disclose, and offered no credible explanation for, his interest in another corporate venture.

The reviewing court chronicled these shortcomings of the husband, and said:

… It is possible that [the husband] consciously and deliberately concealed his interest in [the companies] when the Separation Agreement was being negotiated. When I consider the totality of his non-disclosure conduct, I prefer a different characterization of [the husband’s] behaviour that is just as serious. [The husband] does not care if he is complying with his disclosure obligation. He has made this clear through his repeated non-compliance with this important obligation. He is dismissive of the documentary disclosure process and the Family Law Rules. His chronic non-compliance reveals incomplete sworn financial statements and a failure to follow court orders.

Simply put, [the husband] remembers what is beneficial to his position in this litigation.

Indeed, the court found that the husband’s conduct “created an atmosphere of distrust and unnecessarily contributed to the cost of this litigation.”  He also took numerous unreasonable stances in the proceedings, disputed non-essential points, and needlessly drove up the time and costs to untangle the couple’s issues.

Still, previous application judge’s conclusion that the husband had acted in “bad faith” could not stand, since it did not meet the established Family Law-specific legal test on these facts.  In short – and while finding that “there was good reason to criticize Stuart for his unacceptable and unreasonable conduct” – the court ultimately concluded that it did not “rise to the level of wrongdoing, dishonest purpose or moral iniquity the test for bad faith requires.”

The court went on to allocate litigation costs between the parties, accordingly.

For the full text of the decisions:

Turk v. Turk

Scalia v. Scalia

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders.  For more information, visit us at RussellAlexander.com