Tuesday, July 10, 2012

Contempt Orders

The test for contempt is well-known.     The three essential requirements for a finding of contempt are set out in Prescott-Russell v. G. (N.) (2006), 29 RFL (6th) 92.  The test requires:

(i)         The order breached must clearly and unequivocally state what should and should not be done;
(ii)        The breach of the order must be deliberate and willful; and
(iii)       The evidence must show contempt beyond reasonable doubt.

One issue that is seldom considered is what limits are placed on the order breached by the underlying statutory basis of that order.  In Davydov v. Kondrasheva, 2012 ONCA 488 that basis limited the order so that the breach alleged could not be proven.

The Court made an order for the non-dissipation of assets in a family law context – a very common type of family law order.  The order was pursuant to the Family Law Act.

Sections 12 and 40 of the Family Law Act, allow for orders regarding non-dissipation of assets.

Section 12 provides as follows:

In an application under section 7 or 10, if the court considers it necessary for the protection of the other spouse’s interests under this Part, the court may make an interim or final order,

(a) restraining the depletion of a spouse’s property; and

(b) for the possession, delivering up, safekeeping and preservation of the property.

Section 40 provides that:

The court may, on application, make an interim or final order restraining the depletion of a spouse’s property that would impair or defeat a claim under this part.

A limitation implicit in the statute is that orders are to restrain depletion that would impair or defeat an equalization claim.  Accordingly, even though an order may not expressly say so, if a payment is made that does not impair or defeat such a claim there is no contempt.

In Davydov the husband paid a vast sum to an off-shore individual and said it was to pay a debt existing before the marriage.   The lower court found contempt but the Court of Appeal set aside the order because, if properly made to pay a debt existing before marriage there was not impairment or defeating of the equalization claim.  The Court of Appeal did say that, following trial and determination of the validity of the payment, the contempt motion could be renewed.

 While arising in the family context the reasoning is applicable widely.

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