What’s a Body to Do?

by David Debenham

In many cases those facing litigation or disciplinary proceedings are required to make some form of disclosure.  What if they choose not to do so, even if it means facing a fine or jail time?   One answer is to appoint an investigative receiver.  In Boutin v. Boutin, the husband refused to make the appropriate financial disclosure to his wife during the course of family law proceedings.   He was held in contempt and an investigative receiver was appointed to investigate his financial affairs. 

The court appointed receiver is an officer of the court. The Receiver does not, and cannot act, as the agent of either party. The Receiver is in a fiduciary capacity to all interested parties. As such, the Receiver and the terms of the Receiver’s appointment must maintain the court’s neutral and impartial position in the litigation as well as that of the Receiver. [58]  While Receivers commonly take control of a party’s specified property, Receivers can also be appointed to investigate personal or business affairs or to investigate certain transactions to protect a party’s interest pending trial.  The idea of appointing a receiver or monitor with investigative powers — and sometimes, with only those powers — has emerged in recent years. The appointment of a Receiver is an extraordinary and intrusive remedy.  A Receiver should be appointed only after a careful balancing of the need for such an order and the effect of such an order on all parties and others who may be affected by the order.  

The court has broad powers to impose terms as a penalty where a person is found in contempt. In addition, the court has jurisdiction to make an appropriate order under its inherent jurisdiction to control its own process and maintain the integrity of its own process.  In this case the foundation for the finding of  contempt was anchored in Mr. Boutin’s failure to make complete and accurate financial disclosure.  A penalty of appointing a non-possessory Investigative Receiver with all the powers and rights that Mr. Boutin 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 Mr. Boutin’s assets, properties, financial transactions, was 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 Mr. Boutin could have done, should have done, but failed to do.  This was one of those situations where the appointment of a receiver to investigate the affairs of a debtor or to review certain transactions — including even, in proper circumstances, the affairs of and transactions concerning related non-parties – was a  a proper exercise of the court’s “just and convenient” authority under s. 101 of the Courts of Justice Act.  It was also a fair penalty as a term of sentencing for contempt.

Most administrative tribunals have no contempt powers.  These are reserved for the courts.  In Ontario, s. 13(2) of the Statutory Powers Procedure Act contemplates proceedings for contempt of a tribunal order be brought in the Divisional Court.  If the Tribunal in question does not have authority to appoint an investigative receiver in order to enforce a duty to cooperate, it can go to the Divisional Court and ask for that remedy if it can satisfy that court that the member is contempt of a tribunal order to cooperate with a regulator investigating allegations of professional misconduct.