Lawyers sought evidence to show that Katona is clean, after reports revealed that she is suffering from alcohol and drug problems.
A source close to McFadden said that her refusal has proved that she is having a problem.
"Brian thinks her refusal is as clear as any test result," News of the World quoted the source as saying.
The kids are staying with the 'Westlife' star, who has refused to discuss the custody battle.
"I don't have any worry about the kids now because they are with me. But I can't speak about the custody battle for legal reasons," he said.