Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20210914 DOCKET: M51957 (C68764)

Lauwers J.A. (Motion Judge)

In the Matter of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended And in the Matter of a Proceeding in the Hong Kong Special Administrative Region Re: James Henry Ting (in Bankruptcy) Application of Cosimo Borrelli and Jacqueline Walsh of Borrelli Walsh Limited under Section 272 of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, as amended

Counsel: Andrew Rogerson and Arash Jazayeri, for the moving party, Andrew Henry Ting Ilan Ishai and Adam Zur, for the responding parties, Cosimo Borrelli and Jacqueline Walsh

Heard: September 7, 2021 by video conference

Reasons for Decision

[1] This is an application for leave to appeal under s. 193 (e) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, r. 31(2) of the Bankruptcy and Insolvency General Rules, C.R.C., c. 386, and r. 61.03.1 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The order sought to be appealed found the applicant, Andrew Henry Ting, in contempt of court for failing to attend at an examination as required by the order of Penny J. dated January 15, 2019, in aid of the foreign bankruptcy of his father, James Henry Ting. For the reasons that follow, the motion is dismissed.

The Factual Background

[2] The background facts were set out by the motion judge who dismissed Andrew Henry Ting’s request for a stay of the bankruptcy proceeding dated October 5, 2020 (2020 ONSC 5955). The Superior Court recognized the bankruptcy proceeding in Hong Kong against Andrew Henry Ting’s father, James Henry Ting, as the “foreign main proceeding" under s. 268 of the BIA. The recognition order was granted on October 6, 2017 and it recognized the Trustees as “a foreign representative" under s. 268 of the BIA.

[3] On August 18, 2018, the Trustees moved to enforce a letter of request from the Hong Kong Court requesting assistance to require Andrew Henry Ting to be examined and to produce documents. Penny J. made the requested order on January 15, 2019. The order required Andrew Henry Ting to produce certain documents within 14 days and to attend at any examination. He unsuccessfully attempted to appeal Penny J.’s order to this court.

[4] The contempt proceeding that is the subject of this proposed appeal (2020 ONSC 5976) was heard immediately after the stay motion, and the reasons for both matters were issued on the same day.

The Motion for Leave to Appeal

[5] The parties agree that the test for leave to appeal under s. 193 (e) of the BIA was set out by Blair J.A. in Business Development Bank of Canada v. Pine Tree Resorts Inc., 2013 ONCA 282, 115 O.R. (3d) 617. The three-part test is whether: the proposed appeal raises an issue that is of general importance to the practice in bankruptcy/insolvency matters or to the administration of justice as a whole, and is one that the court should therefore consider and address; it is prima facie meritorious; and it would not unduly hinder the progress of the bankruptcy/insolvency proceedings.

[6] Andrew Henry Ting raises two substantive issues to be pursued in the proposed appeal: the refused recusal motion; and personal service of the contempt proceedings on him.

The Refused Recusal Motion

[7] Andrew Henry Ting argues that the motion judge erred in failing to recuse herself after hearing damning descriptions of the conduct and character of the bankrupt, James Henry Ting, during argument. Counsel for the Trustees referred to the bankrupt as a “thief”, and someone who engaged in “fraudulent” and “criminal” activity and who demonstrated a “consistent pattern of disobedience.” Counsel for Andrew Henry Ting expressed the concern, as he did to the motion judge, that she would be unable to avoid imputing his father’s alleged conduct and character to him.

[8] To this suggestion, the motion judge responded:

[16] The basis for the responding party’s request for my recusal is his subjective view on how I could be influenced. He perceives that what he sees as emotive language and exaggerations regarding the Bankrupt’s character, which could deny him safeguards that would protect him from wrongful conviction, could lead to an unfair result for him.

[17] In my view, no informed person, viewing the matter realistically and practically, would conclude that a judge would impute to the son a negative description of his father’s character, which is irrelevant to the determination of the issue at hand. The issue to be determined on the Contempt Motion is straightforward: is the responding party in breach of the January 15, 2019 Order and if so, should he be found to be in contempt? This question can be determined, objectively, on the record.

[9] There is no merit to the suggestion that the motion judge would be unable to disabuse herself of the prosecutor’s rhetorical flourishes. We routinely expect this disposition from judges. The motion judge properly instructed herself, and counsel raised nothing in her reasons to suggest that she did not meet this expectation.

The Contempt Proceeding

[10] The second substantive issue is whether the motion judge erred in law at paras. 38-39 of her decision by dispensing with the requirement of r. 60.11(2) that requires personal service on the alleged contemnor and not by an alternative thereto, unless the court orders otherwise.

[11] The parties agree that the test for civil contempt was set by the Supreme Court in Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79 at paras. 32-35. The moving party must prove beyond a reasonable doubt that: 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 the order prohibits or intentionally failed to do the act the order compels. The governing precedent from this court on the issue of personal service, which dovetails with the Carey test, is Susin v. Susin, 2014 ONCA 733, 379 D.L.R. (4th) 308 per Blair J.A. at paras. 28–32 and 33–36. At para. 28, Blair J.A. noted:

Procedural protections on motions for civil contempt are generally strictly enforced. This includes the requirement that the materials be served personally on the party sought to be found in contempt: see Rules of Civil Procedure, r. 60.11(2). However, procedural protections that are meaningless in a particular case ought not to trump substantive compliance where the purpose of personal service has been met in the circumstances and there has been no substantial wrong or miscarriage of justice.

[12] In considering the Carey test, the motion judge noted, at para. 32:

I am also satisfied that the second prong of the test is met. The responding party had actual knowledge of the January 15, 2019 Order. Though the responding party may not have been served with the January 15, 2019 Order, actual knowledge may be inferred from the circumstances. The responding party’s counsel assisted in the drafting of the Order and consented to its form and content.

[13] She added, at para. 37: “Further, based on the email exchanges between counsel to the responding party and counsel to the Trustees, I am satisfied that the responding party had no intention of attending the examination, regardless of the pandemic.”

[14] Finally, the motion judge noted, at para. 39:

The Contempt Motion came to the attention of the responding party and he responded to it. Rule 60.11 is aimed at ensuring that the alleged contemnor has notice of the contempt proceeding. The rule does allow for an alternative to personal service by court order. Such court order was not obtained, but I am satisfied that the responding party had adequate notice of the Contempt Motion. [Emphasis added.]

[15] The motion judge knew, as she noted in para. 40, that the burden on the Trustees was to prove contempt beyond a reasonable doubt. To paraphrase Blair J.A. in Susin, there was substantive compliance here because the purpose of personal service has been met in the circumstances and there has been no substantial wrong or miscarriage of justice.

[16] There is nothing in this matter that rises to the level required for leave to be granted as specified in Pine Tree Resorts. The proposed appeal does not raise an issue that is of general importance to the practice in bankruptcy/insolvency matters nor to the administration of justice as a whole, and is not one that the court should therefore consider and address; there is no prima facie merit to the proposed appeal; and giving leave to appeal in these circumstances would unduly hinder the progress of the bankruptcy/insolvency proceedings.

[17] It is time for this tiresome cat and mouse game to end.

[18] Costs to the responding parties in the agreed amount of $7,500, inclusive of HST and disbursements.

“P. Lauwers J.A.” Released: September 14, 2021