Evasive Spouse Delays Court Proceedings
A common theme in the Family Law cases we’ve covered over the years, is that separated and divorcing spouses have an entrenched obligation to provide full financial disclosure to each other. In fact, this principle is one of the cornerstones of the Canadian Family justice system.
When a spouse is evasive about their finances, it delays the proceedings and hinders the court’s ability to properly determine spousal and child support. This often prompts courts to take extraordinary measures to get to the truth.
This was precisely the scenario in a recent case called Boutin v. Boutin. The wealthy 77-year-old husband and 73-year-old wife had separated after a 47-year marriage. But nearly three years post-separation, their divorce was still being held up because the husband was refused to provide accurate and complete information about his finances. They had been to court about 15 times over the issue, and the husband had ignored at least six orders directing him to give information about his business, real estate, corporate reorganization, and alleged loans to family members.
(His initial story about his financial picture had also changed dramatically: Seven months before separating, he prepared a net worth statement stating he was worth about $77 million. Shortly after separation, he claimed to have no net worth, and said he was forced to live in the office he used for his land development business, because he could not afford to rent a home).
In these circumstances, the court readily declared the husband to be in contempt of the earlier orders. It concluded he was playing “hide and seek” with his assets, and wasting precious judicial resources by being uncooperative.
When it came time to impose a penalty for contempt, the court considered the aggravating factors. The husband’s motivation was to “hide and defeat the claims of [the wife] of her fair share of family assets and her spousal support claim.” He showed no remorse. Not even contempt motions were enough to spark his compliance with prior disclosure orders.
With this in mind, the court considered the available penalties – including imprisonment. But after noting the husband’s evasive approach was “to be discouraged in the strongest means possible”, it decided to take what it called “an extraordinary and intrusive remedy”: The appointment of an Investigative Receiver over the husband’s businesses.
Judge Appoints Investigative Receiver
This Investigative Receiver would be a neutral, independent third party who would have non-possessory control all or part of the husband’s business matters – with the husband paying the full fee. The court clarified the purview of the Receiver’s mandate:
The foundation for this contempt finding is anchored in [the husband’s] failure to make complete and accurate financial disclosure. In my view, a penalty of appointing a non-possessory Investigative Receiver with all the powers and rights that [the husband] has, including his rights as owner, shareholder, director, officer, tax payer, debtor, and creditor, to seek, request, and obtain possession of all relevant financial documentation and information relating to the financial issues in this case for the purpose of preparing a report to this court regarding [the husband’s] assets, properties, financial transactions, and income from November 1, 2019, until the Receiver is discharged, is appropriate and necessary in the circumstances of this case (the “Investigative Receiver”). …
This will, in essence, permit the Investigative Receiver to put before the court what [the husband] could have done, should have done, but failed to do.
The court issued a pointed final warning:
And the consequences of [the husband’s] actions may very well be the undoing of his life’s work.
For now, the Investigative Receiver would not have possession of the businesses, but rather would focus on disclosure and reporting. However, if the husband inter-meddled with that work, or continued to frustrate the disclosure process, the court would grant the Receiver full possession of the husband’s entire property and business as a next step.
Full text of the decision: Boutin v. Boutin, 2022 ONSC 4776 (CanLII)
