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Civil Procedure - Contempt

Business Development Bank of Canada v. Cavalon Inc. (Ont CA, 2017)

Here the Court of Appeal briefly states the elements of civil contempt, and principles applicable to sentencing for the same:
[17] The elements of contempt, which must be established beyond a reasonable doubt, are the following: (a) the order alleged to have been breached must state clearly and unequivocally what should and should not be done; (b) the party alleged to have breached the order must have had actual knowledge of it; and (c) the party allegedly in breach must have intentionally done the act that the order prohibits or intentionally failed to do the act that the order compels: see Carey v. Laiken, 2015 SCC 17 (CanLII), [2015] 2 S.C.R. 79, at paras. 32-35.

.....

[74] At the penalty phase of a contempt hearing courts have a wide discretion. Rule 60.11(5) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that the court may make such order as is just, including that the judge may order the contemnor:

(a) be imprisoned for such period and on such terms as are just;

(b) be imprisoned if the person fails to comply with a term of the order;

(c) pay a fine;

(d) do or refrain from doing an act;

(e) pay such costs as are just; and

(f) comply with any other order that the judge considers necessary, and may grant leave to issue a writ of sequestration under rule 60.09 against the person’s property.

.....

(a) Purpose and guiding principles in sentencing for civil contempt

[76] A deliberate breach of a court order may constitute either a civil or a criminal contempt. A criminal contempt requires, in addition to a deliberate violation of a court order, an element of public defiance calculated to lessen societal respect for the courts: see U.N.A. v. Alberta (Attorney General), 1992 CanLII 99 (SCC), [1992] 1 S.C.R. 901, at para. 21. The choice of penalty for contempt must recognize the important distinction between civil and criminal contempt.

[77] It is well recognized that the purpose of a sentence for criminal contempt is primarily punishment, whereas the purpose of a sentence for civil contempt is primarily about coercion, designed to protect and enforce the rights of a private party: see Korea Data Systems Co. v. Chiang, 2009 ONCA 3 (CanLII), 93 O.R. (3d) 483, at para. 11.

[78] However, while gaining compliance with the court’s orders is the primary aim of sentencing in civil contempt proceedings, courts have also recognized that acts of civil contempt, like criminal contempt, undermine the authority of the courts and diminish respect for the law: see Mercedes-Benz Financial v. Kovacevic (2009), 2009 CanLII 9423 (ON SC), 308 D.L.R. (4th) 562 (Ont. S.C.), at para. 11; Niagara Regional Police Services Board v. Curran (2002), 2002 CanLII 49405 (ON SC), 57 O.R. (3d) 631 (S.C.), at para. 35; Sussex Group Ltd. v. 3933938 Canada Inc., [2003] O.T.C. 664 (S.C.), at para. 12.

[79] The Supreme Court of Canada noted in Vidéotron Ltée. v. Industries Microlec produits électriques Inc., 1992 CanLII 29 (SCC), [1992] 2 S.C.R. 1065, at para. 16, that the public law aspects of contempt of court have moved it somewhat beyond the realm of private law, and the public law aspects of contempt of court should be reflected in the sanctions which are imposed. The court stated, at para. 14:
The penalty for contempt of court, even when it is used to enforce a purely private order, still involves an element of "public law", in a sense, because respect for the role and authority of the courts, one of the foundations of the rule of law, is always at issue. In United Nurses of Alberta v. Alberta (Attorney General), 1992 CanLII 99 (SCC), [1992] 1 S.C.R. 901, McLachlin J. established a direct connection between contempt of court and the rule of law, at p. 931:
The rule of law is at the heart of our society; without it there can be neither peace, nor order nor good government. The rule of law is directly dependent on the ability of the courts to enforce their process and maintain their dignity and respect. To maintain their process and respect, courts since the 12th century have exercised the power to punish for contempt of court.
[80] Epstein J.A. noted in Boily v. Carleton Condominium Corp. 145, 2014 ONCA 574 (CanLII), 121 O.R. (3d) 670, at para. 79:
The purpose of a penalty for civil contempt is to enforce compliance with a court order and to ensure societal respect for the courts. [Citation Omitted.] The remedy for civil contempt is designed not only to enforce the rights of a private party … but also to enforce the efficacy of the process of the court itself.
[81] Because civil contempt engages issues of public law and the need to condemn acts which undermine the authority and dignity of the court, punishment has been recognized as a secondary purpose for sentencing in such cases. Watt J.A. stated in College of Optometrists (Ontario), at para. 106: “The underlying purpose of contempt orders is to compel obedience and punish disobedience.” The Alberta Court of Appeal similarly noted, in Builders Energy Services Ltd. v. Paddock, 2009 ABCA 153 (CanLII), 457 A.R. 266, at para. 13, that “[t]he purpose of contempt proceedings is twofold: to ensure compliance with court orders and to punish the contemnor.” As well, decisions of the Superior Court of Justice have recognized the dual purpose of sentencing in civil contempt. In 2363523 Ontario Inc. v. Nowack, 2016 ONSC 2518 (CanLII), aff’d 2016 ONCA 951 (CanLII), 135 O.R. (3d) 538, at paras. 68-72, leave to appeal to S.C.C. refused, 37376 (June 1, 2017) Dunphy J. stated:
There are two primary purposes to be served in sentencing, and I must have regard to both in this case. First – and usually primarily, the objective of sentencing is to coerce the contemnor to comply with the orders in question.

A second objective of sentencing is punishment. Punishment serves to denounce conduct that requires denouncing and thereby deter the contemnor specifically and others more generally who might contemplate breaches of court orders at will. If a party has disagreements or issues with an order that has been made, it must nevertheless be complied with unless validly stayed or reversed on appeal in accordance with the rules. There is no self-help after an order has been issued.
See also Law Society of Upper Canada v. Fingold, 2016 ONSC 5684 (CanLII), at paras. 38-43.

(b) Imposing a jail sentence in cases of civil contempt

[82] In civil cases, incarceration is rare. Ordinarily, a finding of contempt, together with a fine or some other order in relation to the litigation, is sufficient to gain compliance and restore the authority of the court. In Chiang, this court observed, at para. 90:
Custodial sentences for civil contempt are rare. Lengthy custodial sentence are even rarer. Canadian courts have tended to punish contempt of court leniently. Ordinarily the mere conviction for contempt together with a modest fine suffices to obtain compliance and to protect the court’s authority. Ordinarily incarceration is a sanction of last resort. [Citation omitted.]
[83] With respect to the observation that Canadian courts have tended to punish contempt of court leniently, Brown J. (as he then was) stated in Mercedes-Benz Financial, at para. 10:
I suspect this observation was based on the commentary contained in the document published in May, 2001 by the Canadian Judicial Council entitled, "Some Guidelines on the Use of Contempt Powers", where, at page 40, the following statements are found:
In Canada punishment for contempt has been quite moderate, reflecting the courts' usual view that a conviction for contempt and a modest fine is usually sufficient to assert the courts' authority, to protect their dignity or to ensure compliance. Often these sentences are imposed after the contemnor has apologized and purged his or her contempt which substantially mitigates any punishment that might otherwise be imposed.
[84] I would add that, in cases of serious breaches of court orders, the Canadian Judicial Council recognized that jail was an appropriate sanction. At page 39 the Council stated:
If the contempt has not been purged and the contempt is a serious one, or if there has been a deliberate disobedience of a court order accompanied by violence or other flagrant misconduct then imprisonment or heavy fines become more likely, but care must be taken to ensure that the disposition of the proceedings does not appear to be bullying or vengeful. [Citation omitted.]

Imprisonment should be imposed only in cases of serious deliberate disobedience, violence or wilful interference with the course of justice. Repeated breaches of a restraining order would justify imprisonment, as would a single breach of an order if the breach were a serious one. [Emphasis added.]
[85] More recently, Belobaba J. commented in Ceridian Canada Ltd. v. Azeezodeen, 2014 ONSC 4162 (CanLII), 69 C.P.C. (7th) 29, aff’d 2014 ONCA 656 (CanLII), 69 C.P.C. (7th) 40, at para. 24:
This court has imposed jail sentences ranging from five days to one year in cases of civil contempt. Each of the custodial cases have two things in common: one, the defendant’s breach, like here, was knowing and deliberate; and two, the length of the jail term was a function of the continuing nature of the contempt discounted by the degree of remorse or apology on the part of the defendant…. In my view, where the breach of a court order is knowing and deliberate, continues over several days, and the only response from the defendant is defiance without remorse, a jail sentence is appropriate.
[86] Ordinarily, the period between a finding of contempt and the penalty hearing gives the contemnor an opportunity to purge his or her contempt. At the penalty hearing, if the contemnor has purged his or her contempt, as Belobaba J. noted, this is a significant mitigating factor with respect to the penalty imposed. Where, as here, the impossibility of purging the contempt is a situation of the contemnors’ own making, it is not a mitigating factor: see Echostar Communications Corp. v. Rodgers, 2010 ONSC 2164 (CanLII), 97 C.P.C. (6th) 177, at para. 45.

[87] A wilful flagrant breach of a single court order that shows a callous disregard for the court’s authority, or that causes significant prejudice to the other party may attract a jail sentence: see Mercedes-Benz Financial, at para. 35.

[88] While each case is fact specific, incarceration has been imposed in numerous cases for failure to produce documents or corporate records: see Sussex Group Ltd. v. Sylvester (2002), 2002 CanLII 27188 (ON SC), 62 O.R. (3d) 123 (S.C.), at para. 85 (6 months); Nelson Barbados Group Ltd. v. Cox, 2010 ONSC 569 (CanLII), at para. 35 (3 months and a fine of $7500); Cellupica v. Di Giulio, 2011 ONSC 1715 (CanLII), 105 O.R. (3d) 687, at para. 49 (90 days); Sussex Group Ltd. v. 3933938 Canada Inc., 2003 CanLII 49334 (ON SC), [2003] O.T.C. 683 (S.C.), at para. 15 (2 months); Nowack, at para. 114 (1 month).

[89] As noted above, serious violations of court orders – even if only one order or one instance – can warrant a jail sentence. In determining whether a jail sentence is needed to adequately vindicate the due administration of justice, the context in which the contempt occurs is an important consideration: see Langston v. Landen, 2011 ONCA 242 (CanLII), at para. 1. Because incarceration is ordinarily a penalty of last resort, the court must also consider whether any other penalty short of incarceration would be a sufficient sanction for the gravity of the contempt, taking into consideration the sentencing principles applicable to civil contempt.
(c) Sentencing principles applicable to civil contempt

[90] The factors relevant to a determination of an appropriate sentence for civil contempt were set out by Epstein J.A. in Boily, at para. 90. The factors can be summarized as follows:
(a) Proportionality of the sentence to the wrongdoing – a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender: see also Chiang, at para. 86; Mercedes-Benz Financial, at para. 12.

(b) Presence of aggravating and mitigating factors: see also Chiang, at paras. 50-51, 87-89; Sussex Group Ltd. v. Fangeat, [2003] O.T.C. 781 (S.C.), at para. 67.

(c) Deterrence and denunciation – the sentence should denounce unlawful conduct and promote a sense of responsibility in the contemnor, and deter the contemnor and others from defying court orders: see also Chiang, at para. 91; Fangeat, at para. 67.

(d) Similarity of sentence in like circumstances.

(e) Reasonableness of a fine or incarceration: see generally Chiang.

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