Harsh but fair punishment in Hobbs v. Hobbs 2008 Ont. C.A.

Hobbs v. Hobbs highlights the importance of complying with court orders that request financial disclosure. In this case, the Court of Appeal upheld the decision of Justice Sproat of the Superior Court of Justice where he found the husband in contempt of court proceedings as a result of his failure to produce documentary disclosure. Justice Sproat had ordered that the husband pay costs of over $26,000.00. The Court of Appeal upheld this cost order and ordered that he pay another $12,500.00.

Carol Hobbs and Duncan Hobbs were married on January 12, 1980. They separated in the spring of 2005. There were two adult children of the marriage who at the time of the proceedings were engaged in educational pursuits. Mr. Hobbs was a sole shareholder of a family holding company. In 2006 his annual income was admitted to be $466,598.00. Issues concerning the valuation of Mr. Hobbs’ corporate interests and his annual income surfaced early in the litigation. Ms. Hobbs brought a motion on February 13, 2007 seeking the production of various documents and information. An Order was granted mandating that Mr. Hobbs cooperate in all respects with the disclosure requests and provide the disclosure within 30 days of the Order.

In April, 2007, the parties were back before a motions judge because of Mr. Hobbs’ lack of financial disclosure. Mr. Hobbs provided a number of excuses for the lack of disclosure including that he was busy travelling. The court did not accept these excuses and concluded that court orders must be followed. Mr. Hobbs was again ordered to provide financial disclosure.

Mr. Hobbs again failed to provide the requisite disclosure. In September 2007, Ms. Hobbs launched a motion against Mr. Hobbs for contempt of the court orders. Mr. Hobbs made more excuses for the delay, claiming that the delay was not intentional and out of his control. The motion judge rejected Mr. Hobbs’ explanation and found him in contempt of court.

Mr. Hobbs appealed the decision concerning his contempt. The Court of Appeal applied the criteria with respect to contempt of court laid out in G.(N).) c. Services aux enfants & adultes de Prescott-Russell (2006) Ont. C.A.

‘A three-pronged test is required. First, the order that was breached must state clearly and unequivocally what should and should not be done. Secondly, the party who disobeys the order must do so deliberately and wilfully. Thirdly, the evidence must show contempt beyond a reasonable doubt. Any doubt must clearly be resolved in favour of the person or entity alleged to have breached the order.’

Having applied the three-pronged test, the court concluded that Mr. Hobbs was in contempt of court and dismissed his appeal. Mr. Hobbs’ failure to make disclosure was disastrous for him. Not only was a large cost order awarded against him in the lower court but also in the Court of Appeal. The courts thereby highlighted the necessity of complying with court orders.

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