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Civil Litigation - Enforcement. Curtis v. McCague Borlack LLP
In Curtis v. McCague Borlack LLP (Ont CA, 2024) the Ontario Court of Appeal considered an appeal, here involving a lawsuit brought against opposing counsel in a prior proceeding involving the appellants. The prior proceeding was dismissed on grounds of 'absolute privilege'.
Here the court notes the important enforcement principle that the non-liable joint title-holder bears no duties to the judgement creditors:[7] The appellants included Mr. Turkienicz’s wife, Michelle Turkienicz, as a defendant in this action even though she had no association with McCague Borlack LLP. They included her only because she jointly owns assets with Mr. Turkienicz and wanted to prevent him from transferring his assets to his wife to avoid judgment. The motion judge did not err in finding that the claim against Ms. Turkienicz should be struck because, as he noted, “[t]he simple fact that spouses hold joint title to assets cannot, without anything more, form the basis of a claim against a spouse who is in no way otherwise involved in the allegations on which the action is based.” . Kanata Utilities Ltd. v. 1414610 Ontario Inc. (MAG Eastwood Construction)
In Kanata Utilities Ltd. v. 1414610 Ontario Inc. (MAG Eastwood Construction) (Ont CA, 2024) the Ontario Court of Appeal considered an appeal of "an order striking their Statement of Defence for failing to comply with interlocutory orders and failing to comply with their documentary disclosure and production obligations":[2] The respondent previously brought a motion compelling the appellants to produce an affidavit of documents and Schedule A documents, and for an order that they attend examinations for discovery. On September 3, 2020, and on the consent of the parties, Master Kaufman (as he then was) granted the relief requested and fixed costs in the sum of $1,000.
[3] The appellants did not comply with any aspect of the order of Master Kaufman. Counsel for the respondent wrote to counsel for the appellants on January 5, 2021 and in June 2021, seeking compliance with the order. There was no reply. In April 2023, a full 2.5 years after the order of Master Kaufman, the respondent initiated the motion to strike the appellants’ Statement of Defence.
[4] The motion judge considered and rejected the explanations for the delay advanced by the appellants. She applied r. 30.08(2) of the Rules of Civil Procedure, R.R.O. 1998, Reg. 194 (dealing with failure to comply with documentary disclosure) and r. 60.12 (dealing with failure to comply with a court order) and struck the Statement of Defence. She awarded costs of the motion to the respondent in the amount of $3,000, and $5,000 for the action. . Allen v. Kumar
In Allen v. Kumar (Div Court, 2023) the Divisional Court considered (and dismissed) an appeal of an associate judge's order striking a statement of defence for non-payment of outstanding cost orders [it was not a contempt order, which would have required a judge's order: R60.11(1)]:[1] The Appellant, Brian Anish Kumar (the “Appellant”), appeals the order of Associate Justice Robinson dated July 22, 2022 (the “Decision”) striking his statement of defence under subrules 57.03(2) [SS: 'Costs of a Motion - Contested Motion'] and 60.12 [SS: 'Enforcement of Orders - Failure to Comply with Interlocutory Order'] of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The basis for the order was the Appellant’s failure to pay an outstanding costs order and his history of non-compliance with other court orders.
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[18] ... The Associate Judge did not strike the defence solely on the basis that it lacked merit. However, taking seriously the Court of Appeal’s view that striking a defence ought not to be a remedy of first resort, the Associate Judge looked to the merits of the defence to determine whether there was some basis for giving the Appellant a further chance to comply, despite the pattern of non-compliance that he had found.
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[20] In addition, given the Appellant’s pattern of non-compliance and the absence of any indication that the Appellant intended to pay the Costs Order, the Associate Judge found that there would be no point to providing a further opportunity to comply. As noted in by the Court of Appeal in Falcon Lumber Ltd. v. 2480375 Ontario Inc., 2020 ONCA 310, at para. 52:... although a court may also consider the merits of a party’s claim or defence, as it does under r. 60.12 dealing with the failure to comply with an interlocutory order, this factor may play only a limited role where breaches of production obligations are alleged as one would reasonably expect a party with a strong claim or defence to comply promptly with its disclosure and production obligations. ....
Did the Associate Judge Find the Appellant in Contempt?
[26] The Appellant submits that the Associate Judge erred in making a finding of contempt against him despite no motion for contempt having been brought and without applying the proper test.
[27] I reject this ground of appeal. In deciding to strike the defence, the Associate Judge relied on the Appellant’s “ongoing pattern of non-compliance with court orders and procedural obligations[.]” The Associate Judge did not find that the Appellant was in contempt of a court order. Non-compliance, or even a pattern of non-compliance, is not a finding of contempt. . Steinberg v. Adderley
In Steinberg v. Adderley (Ont CA, 2023) the Court of Appeal considers a contempt order that dismissed the appellant's action [under R60.12: 'Failure to Comply with Interlocutory Order']:[1] The appellant, Rudolph Steinberg, appeals an order finding him in contempt and dismissing his action. The appellant claims that the motion judge erred by failing to treat contempt as an order of last resort and by failing to accept that he had a legitimate excuse for not complying with the court’s previous orders.
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[6] ... Ultimately, on November 26, 2021, Shaw J. made an order requiring the appellant to attend medical examinations in Toronto. ...
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[11] The motion judge granted the respondent’s motion for contempt, on the basis that all requirements for contempt were made out beyond a reasonable doubt. The motion judge further decided that the appropriate remedy in this case was to dismiss Mr. Steinberg’s action with costs. In making this order, the motion judge relied on Rule 60.12 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides that when a party fails to comply with an interlocutory order, the court has the power to dismiss the proceeding. The motion judge decided that this was an appropriate remedy for several reasons, including that the appellant “will never travel to the GTA as ordered to attend defence medicals no matter how many more chances he is given to purge his contempt” and that his “paradoxical behaviour” of seeking a large monetary award while refusing to comply with the court’s clear orders was contemptuous conduct that should not be rewarded.
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[14] First, we see no error in the motion judge’s finding of contempt. It is clear from the record that the appellant deliberately failed to comply with two previous court orders. We agree with the appellant that contempt orders are not to be made routinely and they are meant to be orders of last resort: Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79 at para. 36. However, in this case, the motion judge’s finding of contempt was well-supported by his finding that the appellant’s conduct showed that he was aware of the orders, that their terms were clear, that he deliberately chose not to comply with them and that he had no intention of complying with them in the future. While the motion judge did not explicitly state that contempt is a remedy of last resort, it is evident from his decision that he did not make this finding lightly. Rather, he based the finding of contempt on the appellant’s persistent refusal to comply with the orders, including on the motion where he maintained his refusal to do so.
[15] Notably, at the argument of the appeal, we gave the appellant the chance to advise whether he would now be willing to travel to Toronto for the medical examinations if he was given one last chance to do so. After consulting with the appellant, his counsel advised the appellant would be willing to travel to Toronto for the medical examinations if the respondent arranged special medical air transportation and paid for someone to look after his animals during his absence. There was no evidence below or before us that special air travel arrangements were required. More importantly, the opportunity to purge a contempt does not include an entitlement to seek changes to the original terms of the order at issue. Through this response, the appellant demonstrated his persistent refusal to comply with the court’s previous orders.
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[17] Finally, we see no error in the motion judge’s decision that the appropriate penalty in this case was to dismiss the action. The penalty for a finding of contempt is discretionary and entitled to deference: Susin v. Susin, 2014 ONCA 733, at para. 53. As noted by the motion judge, the penalty in this case is consistent with the court’s powers under Rule 60.12 of the Rules of Civil Procedure. The motion judge was well placed to determine that, in the circumstances of this case, which again included the appellant’s persistent refusal to attend medical examinations in Toronto, it was appropriate to dismiss the action without giving the appellant another opportunity to attend the medical examinations. In other cases, it may be appropriate for the court to impose a lesser punishment or to give a contemnor an additional chance to comply. But in this case, the motion judge made an express finding that it would be futile to do so. This was confirmed before us. We see no reason to interfere with his decision. . Goguen v. Baptiste
In Goguen v. Baptiste (Ont CA, 2022) the Court of Appeal upheld orders that recognized a California judgement and allowed it to be enforced at an Alberta bank branch:[7] The second reason for not accepting the appellants’ submission is that, in our view, the motion judge was correct to conclude, in her enforcement reasons and draft order, that the Ontario court had in personam jurisdiction over both Baptiste and CIBC – Baptiste because of the factual background that the motion judge outlined in her recognition endorsement and CIBC because of its head office in Ontario. Against this backdrop, it was irrelevant that, apparently, Baptiste had transferred some or all of her funds to a CIBC branch in Alberta.
[8] In our view, the motion judge identified and correctly applied Chevron Corp. v. Yaiguaje, 2015 SCC 42, in reaching her decision. In Chevron, Gascon J. said at paras. 56, 57 and 69:Requiring assets to be present in the jurisdiction when recognition and enforcement proceedings are instituted is also not conducive to order or fairness. For one thing, assets such as … bank deposits may be in one jurisdiction one day, and in another the next.
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In today’s globalized world and electronic age, to require that a judgment creditor wait until the foreign debtor is present or has assets in the province before a court can find that it has jurisdiction in recognition and enforcement proceedings would be to turn a blind eye to current economic reality.
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Facilitating comity and reciprocity, two of the backbones of private international law, calls for assistance, not barriers. [9] In our view, the motion judge’s reasoning and decision are closely aligned with the Chevron framework. She concluded:The Defendant’s insistence on registration of the judgment in Alberta would impose a needless administrative burden on the Plaintiff given the jurisdiction this Court has over the Defendant and the Bank, the notice given and the consent of the institution (whose head office is in Ontario).
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