A man who hid assets and attempted to deceive the judges in his divorce case has been ordered to pay $1-million to cover his ex-wife’s legal costs, an unusually large financial penalty upheld by Ontario’s top court that signals no tolerance for bad behaviour in family disputes.
It took six years, several judges, 40 court orders, 35 separate appearances by lawyers in court, six offers to settle the dispute in its entirety from the former spouse, more than 20 motions (requests for a judge to consider an issue and make an order) and, finally, a 12-day trial to achieve a court ruling in the case of Vineet Mehra and his ex-wife Jyoti Lakhtakia.
Ontario Superior Court Justice Andrew Pinto ultimately ordered Mr. Mehra last month to pay his ex-wife’s legal tab of $950,000 within 21 days. Losers usually must pay some of the winners’ legal costs in lawsuits, but courts in family disputes rarely order complete costs to be recompensed.
The Ontario Court of Appeal acknowledged that a million-dollar legal tab in a family dispute is a steep price for the losing side to pay. But it had no qualms about promptly upholding that amount, in a ruling this month.
Mr. Mehra “misled the court and engaged in fraudulent activity and bad faith and unreasonable conduct over a period of years. We do not accept that it would be appropriate to parse the details of [his] conduct on the basis that not all of it was motivated by bad faith,” the appeal court said in a 3-0 ruling from an all-male panel of Justice Ian Nordheimer, Justice Grant Huscroft and Justice Bradley Miller.
The court’s denunciation of bad behaviour was clear, said Lorna Yates, a family-law lawyer not involved in the Mehra case. “You pay to play. If you’re going to play dirty, you’re going to pay for it.”
In her estimation, egregious misconduct accounts for just 1 per cent of cases, but takes up 90 per cent of court time. Ms. Yates has worked closely with judges and members of the family-law bar on committees, and has chaired the Ontario Bar Association’s family-law section.
She said she calls such exercises of bad faith the “personality-disorder cases” – not in a clinical sense, but in a litigant being “hellbent on getting this to a point of chaotic spending and trial time.”
The main issue in the dispute was what Mr. Mehra’s income was, and therefore how much child support he would have to pay.
Mr. Mehra, who owns businesses outside of Canada, said just before the dispute went to trial that his annual income was $219,000. During the trial, he said it was at most $430,000. And he hired a financial expert to prove it.
But the expert withdrew, and Mr. Mehra told the court that the expert had a reputation as a quitter. Then the expert came to court and testified he had an ethical obligation not to present false, misleading or incomplete information.
Justice Pinto found Mr. Mehra’s annual income to be more than $7-million, based on documents from foreign courts and other sources unearthed by Ms. Lakhtakia’s own financial expert. He said the ex-husband had “flagrantly breached” orders from six other judges involved in various stages of the case for financial disclosure.
Ms. Lakhtakia’s financial expert billed her at $430 an hour, a rate the judge found reasonable; the cost of the expert made up $275,000 of the $950,000 tab.
The appeal court added another $80,000 for Ms. Lakhtakia’s legal costs in the appeal itself, representing partial, rather than complete, recovery.
Justice Pinto, at the lower court, also ordered Mr. Mehra to pay $20,000 a month in child support plus $20,000 a month in spousal support to cover the five-year period that began in 2015. And it said his visits to his child must be supervised, because of a concern he will take the child out of the country. The appeal court upheld it all.
Steven Benmor, a lawyer for Ms. Lakhtakia, said Mr. Mehra “could have easily corrected himself, because there were so many orders for financial disclosure.” The appeal-court ruling affirms that “people who are required to pay child support will be found to be in bad faith and will pay ... full reimbursement of costs if they don’t make financial disclosure.”
Adam Black, a lawyer for Mr. Mehra, did not respond to requests for comment.