IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:	Laxton v. Coglon,
	2008 BCSC 955

Date: 20080722
Docket: S045940
Registry: Vancouver

Between:

Chandra Laxton

Plaintiff

And

Richard Luke Coglon, 629256 B.C. Ltd.,
656643 B.C. Ltd., Osoyoos Resort Development Corp.,
Deltec Worldwide Limited, and Benures Investment Ltd.

Defendants

Before: The Honourable Mr. Justice Kelleher

Reasons for Judgment

Counsel for the Plaintiff:	J.R. Shewfelt
Written Submissions Received:	July 4, 2008

[1]                On June 17, 2008, I published reasons for judgment addressing an application by Richard Coglon, a former defendant in these proceedings.  Mr. Coglon sought an order re-opening the trial as well as leave to present evidence.

[2]                That application was dismissed: Laxton v. Coglon, 2008 BCSC 772.

[3]                In my original judgment of January 14, 2008 (see: Laxton v. Coglon, 2008 BCSC 42, 49 R.F.L. (6th) 164), I had assessed damages against Deltec Worldwide Limited ("Deltec") at $2,561,409.  The reasons for this award are explained in the judgment.  Briefly put, the evidence established that Deltec was a party to a concealment by Mr. Coglon of family assets.  I decided to draw the inference that the value of undisclosed assets was at least equal to the value of the disclosed asset: Cunha v. Cunha (1994), 99 B.C.L.R. (2d) 93 (B.C.S.C.).  The plaintiff was therefore entitled to the entire value of the asset.

[4]                In the course of considering Mr. Coglon’s application to re-open the matter, I reconsidered whether it was appropriate to apply the principle in Cunha v. Cunha, supra, in the unusual circumstances of this case.  I stated at paras. 50 – 52 of that judgment:

[50]      I accept that Cunha v. Cunha is a correct statement of the law. The principle is that the non-disclosing spouse bears the onus of establishing that there has been complete disclosure.

[51]      Here, however, the plaintiff has entered into a consent order dismissing her claim against Mr. Coglon. He is, for the reasons explained above, no longer a party. As a non-party, he is unable to rebut any presumption.

[52]      This precise issue was not raised in the plaintiff's argument at the trial or by the court in the course of oral argument. I am therefore providing the plaintiff's counsel with the opportunity to address the matter by written submission. This should be received by the court by July 4, 2008.

[5]                I have now received and considered Mr. Shewfelt’s written submission.

[6]                Counsel argues that the principle in Cunha v. Cunha, supra, has been applied in circumstances involving a corporation owned by a spouse.  In Lombardo v. Lombardo, 2007 BCSC 284, the court concluded that Mr. Lombardo had siphoned off cash in the course of the marriage from the family business in order to start a new business.  The evidence satisfied the court that $200,000 had been funnelled into 581787 B.C. Ltd.  Mr. Justice McEwan stated at para. 353:

[353]    The only way I can see to deal with Mr. Lombardo’s claim is in the manner suggested in Cunha v. da Cunha, supra, that is to say that a “proper working inference” is to treat the value of what is undisclosed as at least equal to that which is known.  I think it is appropriate to approach the unknown amount of diverted in-house business in Lombardo's as approximating and setting off any possible amounts otherwise due to Mr. Lombardo.  This leaves the claim advanced by Mrs. Lombardo at $293,743.97.  The claim is credible, and is certainly conservative, in gross terms.  Rather than succumb to the temptation of false precision, I assess the amount owing at $290,000 of which $200,000 shall be joint and several between Mr. Lombardo and 581787 B.C. Ltd. and the balance is owed by Mr. Lombardo personally.

[7]                The distinction between Lombardo, supra, and this case is that the husband, Mr. Coglon, is no longer a party to this action by virtue of the consent dismissal order.  Mr. Lombardo was a party to the Lombardo matter.  However, counsel argues that Mr. Coglon while ceasing to be a potential party witness could easily have been a non-party witness.

[8]                In Cunha v. Cunha, supra, Mr. Justice Fraser observed at para. 13 that:

Once non-disclosure at any stage has been established, the onus of satisfying the Court that afterwards there has been full disclosure should be on the non-disclosing party.

[9]                Counsel argues that the onus could have been satisfied by Deltec.  It could have led evidence, including testimony from Mr. Coglon, to satisfy the court that full and complete disclosure had been made.

[10]            Moreover, the policy concerns raised in Cunha v. Cunha, supra, apply with equal force in the current context.  At para. 9, Mr. Justice Fraser stressed that the "non-disclosure of assets is the cancer of matrimonial property litigation".  Non-disclosure increases the time, expense and stress associated with matrimonial litigation.  As noted by Mr. Justice Fraser, also at para. 9, this increased costs discourages entitled litigants from pursuing their claims:

The prolonged stress of unnecessary battle may lead weary and drained women simply to give up and walk away with only a share of the assets they know about, taking with them the bitter aftertaste of a reasonably-based suspicion that justice was not done.  Non-disclosure also has a tendency to deprive children of proper support.

[11]            These concerns identified in Cunha v. Cunha, supra, are relevant here.  The deemed admissions make it clear that Deltec was a party to the non-disclosure of assets in matrimonial litigation.  This is precisely the wrong that the presumption identified in Cunha v. Cunha, supra, seeks to address.

[12]            I am satisfied that the principle in Cunha v. Cunha, supra, continues to apply.  I confirm that judgment will issue against Deltec Worldwide Limited in favour of the plaintiff in the amount of $2,561,409.

"Mr. Justice Kelleher"