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Civil Litigation - Civil procedure - Appeals - Contempt of court - What constitutes - Judgments and orders - Disobedience of or non-compliance with

Thursday, January 26, 2017 @ 7:00 PM  

Appeal by the plaintiffs from the dismissal of their motion to find the defendant in contempt of court for failure to comply with court orders. In 2013, plaintiffs obtained judgment against the defendant for approximately $3.5 million in relation to an investment that the defendant failed to return. The plaintiffs attempted to enforce their judgment. The defendant failed to provide any financial disclosure so that a meaningful examination in aid of execution could take place. The plaintiffs obtained orders to compel the defendant to produce documents, attend for examination, and to pay costs. The defendant had not complied with the orders to produce documents, claiming he could not do so because his financial documents had been seized by the police in the course of a criminal prosecution for fraud. The plaintiffs had moved for contempt for non-compliance with court orders on four occasions, including the motion resulting in the order under appeal. The defendant was found in contempt once and sentenced to 15 days in prison. He was also ordered to comply with earlier orders for production. After serving his sentence, the defendant failed to comply with the outstanding orders, and the plaintiffs brought another motion for contempt. The judge found that the defendant had purged his contempt, but ruled that he remained liable to perform his obligations as a judgment debtor. He was ordered to attend an examination in aid of execution and to provide an accounting. The defendant did not provide the required accounting and the plaintiffs brought another motion for contempt. At the hearing, the defendant made oral submissions that he had attempted to provide an accounting, but that the records he received from the Crown were inadequate to do so. The judge dismissed the motion for contempt and ordered the defendant to complete a judgment debtor questionnaire. He also discharged the defendant from his obligations under the prior orders. The judge concluded that the contempt motion failed all three prongs of the test for contempt. He found that contempt proceedings should not be used to enforce payment of debts and that while the defendant’s performance was not perfect, his failures regarding production were not flagrant or contumelious. The plaintiffs appealed arguing that the motion judge erred in law in refusing to find the defendant in contempt of various orders, in accepting the defendant’s unsworn submission at the contempt motion as evidence, in ordering that the defendant complete a particular form of judgment debtor questionnaire, and in discharging the defendant from any obligations under various orders made in the course of these proceedings.

HELD: Appeal allowed. The motion judge’s order dismissing the contempt motion was set aside and the matter of the defendant’s contempt was remitted back to the Superior Court for determination. The motion judge erred in finding that the test for contempt was not made out. The orders were clear and unambiguous and the defendant had actual notice of their requirements. The defendant failed to produce documents and to provide an accounting. Furthermore, the judge erred in accepting the defendant’s oral submissions as evidence without so informing the plaintiffs. It was not wrong for the judge to order the defendant to complete the judgment debtor questionnaire; however, he erred in discharging the defendant from compliance with the prior orders.