Boily et al. v. Carleton Condominium Corporation 145 et al.

[Indexed as: Boily v. Carleton Condominium Corp. 145]

Ontario Reports

Court of Appeal for Ontario,

Epstein, Lauwers and Pardu JJ.A.

August 6, 2014

121 O.R. (3d) 670 | 2014 ONCA 574

Case Summary

Contempt of court — Liability — Group of condominium owners opposing directors' plan for new exterior landscaping following garage repairs — Owners wanting to restore original landscaping — Motion judge ordering directors to reinstate original landscaping and inviting parties to contact him if they required supplemental reasons — Directors authorizing installation of landscaping containing some elements of new design — Motion judge finding condominium corporation and directors in contempt of court — Appeal from finding of liability dismissed — Terms of motion judge's endorsement clear and unambiguous — Directors willfully violating terms of endorsement — Directors not authorized under Condominium Act to deviate from original design notwithstanding endorsement — Condominium Act, 1998, S.O. 1998, c. 19.

Contempt of court — Penalty — Group of condominium owners opposing directors' plan for new exterior landscaping following garage repairs — Owners wanting to restore original landscaping — Motion judge ordering directors to reinstate original landscaping — Directors authorizing installation of landscaping containing some elements of new design — Motion judge finding condominium corporation and directors in contempt of court — Motion judge ordering that landscaping be restored to original design and ordering directors to personally bear substantial costs of restoration — Financial penalty unfit — Penalty varied to individual fines of $7,500.

As a result of extensive garage repairs, the landscaping outside a condominium complex required restoration. The board of directors of the condominium corporation proposed a new landscaping design. Several owners opposed the suggested new design and wanted the area restored to the way it was before the garage was repaired. The dispute led to litigation. The motion judge ordered that the landscaping be restored to its original design. No order reflecting the motion judge's endorsement was issued and entered. The directors authorized the installation of landscaping which contained some elements of the new design. The opposing owners complained and, when the directors forged ahead, retained counsel, who approached the directors about a possible resolution. The directors stood firm and attempted to justify the deviations from the original design. The owners brought a motion for contempt. The motion judge found that the condominium corporation and the directors were in contempt of court. He ordered that the area be restored to the original design and also ordered the directors to personally bear the substantial costs of the restoration. The condominium corporation and the directors appealed the finding of contempt, and the directors appealed from the penalty imposed.

Held, the appeal from the finding of contempt should be dismissed; the penalty appeal should be allowed in part.

Per Epstein J.A. (Lauwers J.A. concurring): The motion judge's endorsement, which required the appellants to "reinstate the Courtyard as it existed after the [page671] repairs to the garage", was clear. Since the conduct in issue took place during a period of time when no order had been taken out from the endorsement, the court had to assess the clarity of the terms in the context of the entire endorsement. The directors had conducted themselves as though they had no difficulty understanding the endorsement. They had not sought clarification of the endorsement, and when challenged by the owners, their initial response was not to express confusion over what the endorsement required of them but to attempt to justify the changes they had authorized. The record supported the motion judge's finding that the appellants clearly understood the obligations imposed on them by the endorsement. The directors wilfully violated those obligations. They did not have authority under the Condominium Act, 1998 to deviate from the original design.

The motion judge had the authority to order the area to be restored to the original design. There was no reason to interfere with that aspect of the remedy.

There was no evidence that the directors' contemptuous conduct was motivated by anything other than their belief that the original design was not optimal for the owners. On the other hand, their intransigence and failure to seek legal advice until there was a pending motion for contempt were aggravating factors. In sanctioning the directors as he did, the motion judge erred in principle in focusing on the costs that his restoration order would impose on the unit owners rather than on deterrence. Moreover, each individual director was required to pay approximately $100,000 in the absence of evidence that would have enabled the motion judge to assess the impact of having to pay such a significant amount of money. The financial penalty imposed on the directors was unfit and should be set aside. Each director should be fined $7,500. They were not entitled to indemnification under s. 38 of the Condominium Act, 1998.

Per Pardu J.A. (dissenting): The contempt power is to be used cautiously and only as a last resort. The motion judge's endorsement was neither clear nor unequivocal. Where an order is open to more than one reasonable interpretation, contempt proceedings are not the least intrusive means of ensuring that parties comply with the purpose and spirit of that order. A less restrictive means of achieving that goal would be to vary the order so as to make its terms clearer.

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Statutes referred to

Canadian Charter of Rights and Freedoms

Condominium Act, 1998, S.O. 1998, c. 19, ss. 17, (1), 37, (1), (3)(b), 38, 45, (4), 46(1), 97, (1), (2) (b), (4), (5), (6)

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 59.03(1), 60.11(5), (6)

Authorities referred to

Law Reform Commission of Canada, Contempt of Court: Working Paper No. 20: Offences Against the Administration of Justice (Ottawa: Minister of Supply and Services, 1977)

Miller, Jeffrey, The Law of Contempt in Canada (Scarborough, Ont.: Carswell, 1997)

APPEAL from the judgment of Beaudoin J., [2013] O.J. No. 1015, 2013 ONSC 1467 (S.C.J.).

Janice B. Payne, for appellants Dan Litchinsky, Avis Miller, Jean-Guy Bourgeois and Carol Smale.

Antoni Casalinuovo and Patricia Elia, for appellant Carleton Condominium Corporation 145.

Rodrigue Escayola and Jocelyn Duquette, for respondent Juan Escudero. [page674]

EPSTEIN J.A. (LAUWERS J.A. concurring): —

Introduction

[1] Directors of a condominium corporation may believe they know the best course of action for the corporation. However, as reasonable as that belief may be, it does not give them the right to act in defiance of a court order. The central issue in this appeal is the appropriate sanction for a condominium corporation and its well-intentioned, but ultimately contemptuous, board members.

[2] In 2011, as a result of having to perform extensive garage repairs, the landscaping outside a condominium complex that was built in the mid-1970s required restoration. The board of directors of the condominium corporation proposed a new landscaping design with features different than the design in place prior to the garage repairs. Several condominium owners opposed the suggested new design. They wanted the area restored to the way it was before the garage was repaired. A dispute arose. The dispute lead to litigation and a court order that the landscaping be restored to its original design. In defiance of the order, the directors authorized the installation of landscaping containing some elements of the previous design and some elements of the design they had selected. As a result of the violation of the court order, the condominium corporation and directors were found in contempt of court. In sanctioning the contempt, the motion judge ordered that the area be restored to the original design and also ordered the directors to personally bear the substantial costs of the restoration.

[3] The condominium corporation and the directors appeal the finding of contempt (the "contempt order"). In the alternative, the directors appeal from the penalty the motion judge imposed and, in particular, the order that they personally bear the costs of the restoration.

[4] For the reasons that follow, I would dismiss the appeal from the finding of contempt and the order that the landscaping be restored as it was immediately prior to the garage repairs. I would, however, allow the portion of the sanction in which the motion judge ordered the directors to pay the costs of restoration. I would set aside that part of the sentence and replace it with a fine to be paid by each director to the condominium corporation.

The Factual Background

[5] The appellants are the four members of the board of directors at the material time (the "individual appellants") and the condominium corporation, Carleton Condominium Corporation 145 ("CCC 145") -- collectively, the "appellants". The respondent [page675] is [the] sole remaining member of the group of owners who opposed the appellants' recommended design. I will refer to the respondent in the plural (the "respondents") in order to be consistent with the history of this proceeding.

[6] The condominium development consists of two multi-toned red and brown brick towers that house a total of 144 residential condominium units. As originally designed and built, the exterior of the condominium buildings, known to the residents as the "podium", provided a barrier that shielded the residences from the two busy streets fronting the complex.

[7] The podium has two parts. The inner area, referred to by the residents as the "courtyard", was enclosed by multi-level planters and contained a traffic circle with planters in the centre. Numerous planters, made of aggregate concrete with a ceramic red and brown brick finish, filled with flowers and various forms of mature trees and shrubs, formed a significant part of the barrier the podium provided between the streets and the complex.

[8] As a result of slight modifications and the maturing of vegetation, the original landscaping changed somewhat in the 30 years from when the complex was first completed. However, the essentials of the original design remained. I will therefore refer to the landscape design in place immediately prior to the start of the garage repairs, as the "original design".

[9] By 2007, it became clear that the nine-storey garage below the complex required extensive repairs. The repair work was carried out in 2010 and 2011 at a cost of over $2 million. In order to conduct the repairs, the podium landscaping had to be removed. The appellants retained an architectural firm, Artistic Landscape Design, to develop a landscape design and planting plan. Artistic Landscape Design prepared a report for the appellants (the "Artistic design") that contemplated changes from the original design, including additional parking spaces, less vegetation, a modified traffic circle, differently designed planters and address sign, and grey limestone veneer courtyard walls in place of the previous multi-toned red and brown brick. In addition to being somewhat different aesthetically, the Artistic design was less costly to install and maintain than the original design.

[10] To inform the owners of the proposed new design and solicit feedback, the appellants put the Artistic design plan and site drawings on display in the lobby of the condominium complex from early March through late April 2011. On May 4, 2011, in order to respond to owner feedback, the appellants held an information session to allow the owners to meet with the design consultants. [page676]

[11] At the information session, the respondents expressed opposition to the Artistic design and took the position that its implementation would constitute a "substantial change" to the common elements. In order to make a substantial change, in accordance with s. 97(4), (5) and (6) of the Condominium Act, 1998, S.O. 1998, c. 19 (the "Act"), the corporation must have the approval of 66 and 2/3 per cent of the owners at a meeting called for the purpose of voting on the proposed change.

[12] The individual appellants did not view the landscaping restoration as a substantial change. They were of the view that the necessary landscaping work amounted to repairs and maintenance and therefore, under s. 97(1) of the Act, they could proceed with the Artistic design without notice to the owners.

[13] However, in an attempt to further address the respondents' concerns, the individual appellants put on display in the lobby a selection of three of the materials the consultants proposed to use for the planters. The appellants also sent out a notice that, pursuant to s. 46(1) of the Act, if 15 per cent of the owners requisitioned a meeting, the Artistic plan would be put to a majority vote of owners before being implemented.

[14] The respondents tried to work with the individual appellants to resolve the dispute. The group ultimately attempted to requisition a "special owners meeting"[^1] at which to submit the Artistic design to a 66 and 2/3 per cent vote. Concerned that delays would lead to increased costs and potentially damage the repairs that had been completed, the individual appellants ignored this requisition and authorized the start of the landscaping work in accordance with the Artistic design. The individual appellants also called a meeting under s. 45(4) of the Act that allows the board of directors to call a meeting for the transaction of any business, to be held on June 22, 2011. The stated purpose of the meeting was to submit the Artistic design to a simple majority vote of the condominium owners who attended the meeting.

[15] These actions prompted the respondents to bring an application, issued June 22, 2011, coupled with an urgent motion for an order enjoining the appellants from authorizing any work and from holding the owners' meeting scheduled for that evening. [page677]

[16] That day, the motion judge, Beaudoin J., granted an order enjoining the appellants from holding its proposed meeting and from proceeding with any landscaping until further order. The balance of the application for relief, including a determination of whether the changes to the "courtyard/podium" constituted a "substantial change", was adjourned to the following week.

[17] Later that day (June 22, 2011), the parties came to an agreement resolving all issues raised in the application, with the exception of costs. This agreement, incorporated into minutes of settlement, provided, among other things, that "the question of whether to keep the existing hard landscape configuration or go with the Artistic design will be put to a 66 2/3% of all owners vote".

[18] In accordance with the minutes of settlement, a meeting was held that night. The Artistic design received the support of 60.5 per cent of the condominium owners -- 11 votes short of the number needed for approval.

[19] After the vote, the individual appellants challenged the minutes of settlement, arguing that as neither design had received the requisite 66 and 2/3 per cent support of the owners, the parties were not bound by the agreement. The individual appellants sought to have the Artistic design approved on a simple majority vote.

[20] The respondents moved to enforce the minutes of settlement.

[21] In his endorsement of June 29, 2011, the motion judge, again, Beaudoin J., ruled that the terms of the minutes of settlement were clear and, given the outcome of the vote, ordered the appellants to [at para. 10] "reinstate the Courtyard as it existed after the repairs to the garage". The motion judge also provided that [at para. 10] "[i]f the parties require supplemental reasons, they are to contact me". I will refer to this decision as the "2011 Endorsement" because, for reasons that will later be explained, no order reflecting this endorsement was issued and entered.

[22] In subsequent reasons, the motion judge awarded the respondents their costs fixed on a substantial indemnity basis in the amount of $32,515.84. The motion judge ordered the individual appellants to personally pay $12,000, being his assessment of the portion of the costs related to the motion to enforce the settlement.

[23] The restoration of the podium proceeded. However, various aspects of the work differed from the original design. In September 2011, one of the respondents wrote to the individual appellants reminding them of the appellants' court-ordered obligation to restore the podium to the original design. [page678]

[24] The restoration work that resumed in the spring of 2012 revealed additional deviations from the original design. These changes included features found in the artistic design, including a new street sign, a differently designed traffic circle containing a new lamp post, and a round instead of hexagonal centre planter area. The respondents again complained but the individual appellants continued to forge ahead with work that, in various ways, reflected their own views (incorporating some components of the Artistic design) of how the podium should be restored. For example, different pavers were used in the traffic circle, different planters were installed and different types of vegetation were planted.

[25] The respondents retained counsel who approached the appellants about a possible resolution of the dispute. The individual appellants resisted, prompting counsel for the respondents to advise the appellants, by letter dated June 8, 2012, that he had instructions to proceed with a motion for contempt. It was at this point that the appellants sought legal advice.

[26] On July 4, 2012, counsel for the appellants wrote to counsel for the respondents and attempted to justify the deviations from the original design. For example, counsel for the appellants explained that the alterations to the turning circle were necessary to comply with municipal by-laws, the differences in the planter boxes were necessary to prevent water damage to the parking garage and exterior walls, and the newly designed address sign was necessary as the old sign had been damaged in the construction work and the new design was more visible from the street.

[27] The respondents proceeded with their motion for contempt and, to that end, sought to issue and enter the order arising out of the 2011 endorsement. The appellants refused to approve the draft order on the basis that it was "'impossible' for CCC 145 to 'reinstate the courtyard landscape . . . to the configuration and appearance that existed prior to the commencement of the repairs to the garage once such repairs have been completed". Counsel for the appellants requested that counsel for the respondents seek an appointment with Beaudoin J. to "discuss[] and resolve[]" the impossibility of his order. Counsel for the respondents took the position that it was "too late for [the appellants] to attempt to retroactively tweak the language of the order in order to cure [their] obvious breach".

[28] The respondents moved, again before Beaudoin J., to settle the terms of the order, for an order holding the appellants in contempt of the June 2011 endorsement and for related relief. [page679]

The Reasons

(1) Preliminary argument as to jurisdiction

[29] The motion judge rejected the appellants' initial technical argument that since no order had been taken out to give effect to his 2011 endorsement, there was no basis upon which to find contempt and therefore the motion could not proceed. The motion judge held, relying on rule 59.03(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and Jeffrey Miller, The Law of Contempt in Canada (Scarborough, Ont.: Carswell, 1997) ("Miller"), at p. 88, that an order exists from the time it is made and therefore conduct in violation of an order is contempt whether the order is issued and entered or not. The motion judge also noted that the appellants were responsible for the fact that the order had not been issued and entered.

(2) Contempt -- liability

[30] After reviewing the history of the matter, of which he was, for obvious reasons, well aware, the motion judge observed that the appellants' failure to rebuild the podium as directed in his 2011 endorsement was not seriously in dispute.

[31] The motion judge, at para. 13, referred to the photographs filed as exhibits, acknowledged that "new planting materials cannot be expected to replace the mature vegetation that existed prior to reconstruction" and found the following changes to be "evident":

The traffic circle

The prior traffic circle consisted of seven modular hexagonal-shaped concrete planters, made of exposed aggregate concrete. The new traffic circle is different in terms of shape, size and colour and its facade consists of limestone veneer. A lamp post was installed in the center of the courtyard where none ever existed before. The Artistic Design provided for the replacement of the hexagonal-shaped traffic circle with a round one, covered with lime stone veneer, similar to what has been installed.

The removal of trapezoidal-shaped planters and significant reduction of the vegetation

The previous configuration presented three distinct transitional levels of vegetation around the property (at street level, in trapezoidal-shaped planters and in the brick planters). The former trapezoidal-shaped peripheral concrete planters had been replaced with different, much smaller rectangular standalone planters. They are different in shape and size and hold significantly less vegetation. There is no longer any vegetation at the street level, and there is significantly more interlock pavement on Queen and Albert Streets. These changes are the most dramatic in terms of the appearance of the courtyard and podium. The vegetation differs substantially in colour, shape, quantity, size and species from the prior design. [page680]

This new configuration resembles the Artistic Design previously promoted by the Board.

The address sign

The prior address sign was a copper-on-black metal and glass neon sign that sat above the brick wall. It was featured in the Corporation's letterhead. The new sign is a white-on-black sandstone sign that is embedded into the brick wall. This was also an element of the Artistic Design.

[32] The motion judge then analyzed whether the respondents had proven each element of the three-part test for civil contempt; namely, that (a) the order that is said to have been breached must be clear and unequivocal; (b) the party who is alleged to have breached the order must be found to have done so deliberately; and (c) the evidence must prove contempt beyond a reasonable doubt: Prescott-Russell Services for Children and Adults v. G. (N.) (2006), 2006 CanLII 81792 (ON CA), 82 O.R. (3d) 686, [2006] O.J. No. 2488 (C.A.).

[33] The motion judge first considered the appellants' argument that the respondents could not satisfy the first part of the test as the 2011 endorsement was unclear in two respects -- whether it applied only to the courtyard or to the entire podium area and whether it applied only to "hard landscaping" -- meaning the construction materials used in landscape design, or to "soft landscaping", meaning vegetation as well. Relying on Sweda Farms Ltd. (c.o.b. Best Choice Eggs) v. Ontario Egg Producers, [2011] O.J. No. 3482, 2011 ONSC 3650 (S.C.J.), affd [2012] O.J. No. 2214, 2012 ONCA 337, leave to appeal to S.C.C. denied [2012] S.C.C.A. No. 291, and Power v. Jackman, [2008] N.S.J. No. 581, 2008 NSSC 389, 278 N.S.R. (2d) 31 (S.C. (Fam. Div.)), the motion judge allowed that the interpretation of a court order should be approached contextually with a view to achieving the order's objective.

[34] With this approach in mind, the motion judge noted that at all times, both before and after the commencement of litigation, the parties had treated the issue as being over the design, including the vegetation, of the entire exterior -- the podium. The motion judge observed that the wording in various documents attributable to the individual appellants -- such as the notice of the June 22, 2011 "special owners meeting", the proxy on the proposed podium reinstatement plan, Mr. Litchinsky's evidence in his cross-examination and the contents of the condominium's newsletter of September 7, 2011, describe the dispute as involving the design of the podium.

[35] The motion judge also observed that he had provided in his 2011 endorsement that if the parties needed clarification, they should contact him. The appellants had plenty of time, including during the costs hearing, to seek clarification if they [page681] genuinely believed the decision was unclear. The appellants did not avail themselves of that opportunity.

[36] Against this background, the motion judge concluded, at para. 31:

The parties' obligations pursuant to the Decision were clear and unequivocal: submit the podium configuration to a vote and, absent a 2/3 vote in support of the Artistic Design, the podium was to remain in its prior configuration and appearance. The [appellants] lost that vote and tried to avoid the enforcement of the Minutes of Settlement. Having lost that decision when I addressed the issue of costs on February 24, 2012, the parties made no distinctions between the inner courtyard and the podium. The [appellants] knew what [they] had to do.

[37] The motion judge then turned to the second part of the test for contempt and held that the appellants had breached the 2011 endorsement wilfully and deliberately. He found the evidence of the wilfulness of the breach to be strong -- the individual appellants had, in fact, admitted that their actions were deliberate when they offered various explanations for why they deviated from the original design -- explanations such as those contained in the affidavit sworn by Mr. Litchinsky, the president of the board of directors of CCC 145, in his affidavit of October 4, 2012.

The access ramp part of the Courtyard needed to be widened to conform to accessibility regulations. He explained that the old turning circle had been damaged in a fire at the off-site storage facility where it was housed during the repairs, requiring creation of a new turning circle. The new turning circle had to conform to zoning bylaws, resulting in a somewhat different design.

The planter design had to be modified to prevent water damage to the Podium, and to dissuade homeless people from entering the courtyard and sleeping in plant material at street level.

The lighting arrangement in the Courtyard had to be modified to improve visibility and security for those entering and exiting the condominium complex.

[38] The motion judge rejected the appellants' arguments that restoring the podium to the original design was impossible and/ or ill-advised. He accepted the evidence of the respondents' experts, which was not contradicted by any other expert evidence.

[39] In any event, relying on authorities such as Sussex Group Ltd. v. 3933938 Canada Inc. (c.o.b. Global Export Consulting), [2003] O.J. No. 2906, 124 A.C.W.S. (3d) 274 (S.C.J.) ("Sussex"), Miller and Garley v. Gabai-Maiato, [2006] O.J. No. 416, 2006 ONCJ 28, the motion judge held that in circumstances in which the underlying order is considered "ineffective", the appropriate course of action is not disobedience. The appropriate course of action is either to move for directions as soon as the problem [page682] becomes apparent, as the motion judge had expressly invited the parties to do, or appeal. The appellants did neither.

[40] The motion judge also rejected the individual appellants' independent arguments in defence of the contempt finding against them. These arguments were based on ss. 37, 97 and 17 of the Act, which set out some of the powers and duties of condominium corporation directors. Section 17(1) empowers the corporation to "manage the property and the assets . . . on behalf of the owners". Section 37(1) requires a director, while carrying out his or her responsibility pursuant to s. 17(1), to act honestly and in good faith and exercise the care diligence and skill of a prudent person in like circumstances. Section 37(3)(b) excuses a director from liability for breach of a duty if the breach arises as a result of the director's reliance in good faith on a professional opinion. Section 97(2) (b) establishes that the board may make alterations to the common elements without notice to the owners where necessary to ensure the safety or security of persons using the property.

[41] The individual appellants argued that they had conducted themselves honestly and in good faith and exercised the care, diligence and skill of a prudent person in like circumstances.

[42] The motion judge disagreed. He summarized the appellants' conduct, in para. 48 of his reasons, as follows:

I conclude that the [appellants] acted neither honestly and in good faith, nor as a reasonably prudent person. In the spring of 2011, the parties disagreed as to whether the proposed Artistic Design constituted a substantial change requiring a 66 2/3 percent vote from the owners. When faced with an injunction that stopped them from proceeding with their meeting and from demolishing the podium, the [appellants] entered into Minutes of Settlement by way of which they would submit the question of the reinstatement of the entire podium to a 66 2/3 percent vote of approval by the owners. When the [appellants] lost the vote, they immediately denied there was an agreement forcing the [respondents] to bring a motion to enforce the Minutes of Settlement. The [appellants] lost that motion and I ordered that the vote to reinstate the existing podium be respected. When, according to the [appellants] themselves, it became apparent that the parties disagreed as to what needed to be reinstated, the [appellants] chose not to communicate with the [respondents] or with their lawyer, nor to seek directions from the court despite my invitation to do so. The [appellants] adopted a narrow and self-serving interpretation of my order and chose to reinstate elements that they preferred, despite the decision of this Court.

[43] The motion judge concluded that the fact that experts had prepared the Artistic design did not afford the appellants with a defence pursuant to s. 37(3)(b). The conduct in issue was the breach of the court order, not the merit of the Artistic design. There was no expert upon whom the appellants relied to inform their decision to disobey the 2011 endorsement. [page683]

[44] The motion judge also held that the appellants could not rely on s. 97(2)(b) of the Act as the record did not support a finding that safety or security issues justified any of the deviations from the original design.

[45] Finally, the motion judge concluded that, since the impugned decisions involved violation of a court order, the individual appellants' conduct was not authorized by s. 17(1). As the motion judge observed, at para. 55, "[t]o grant the deference sought by the [individual appellants] would be to allow Boards to disregard court orders, regulations and legislation".

[46] The motion judge therefore found the appellants to be in contempt of his 2011 endorsement.

(3) The remedy

[47] After concluding that the respondents had proven beyond a reasonable doubt that the appellants were in contempt of the 2011 endorsement, the motion judge turned to the issue of remedy. He acknowledged the wide range of remedies available under rule 60.11(5) of the Rules of Civil Procedure and noted that rule 60.11(6) expressly provides that, "[w]here a corporation is in contempt, the judge may also make an order under subrule (5) against any officer or director of the corporation . . .".

[48] The motion judge held that, given the nature of the individual appellants' conduct that caused CCC 145 to be in contempt of the 2011 endorsement, an order pursuant to rule 60.11(6) was appropriate. He stated, at para. 56 of his reasons, that the individual appellants took "a narrow and self-serving view of the court's order, and [failed] to seek advice from their counsel or further direction from the court before going ahead with their reinstatement plan". The motion judge, relying on Sussex, at paras. 56-57, concluded that the individual appellants were personally in contempt.

[49] The remedy the motion judge imposed on the appellants was compliance with his 2011 endorsement to the extent that it ordered them to restore the podium to the original design. The motion judge went further and set out the specific steps necessary to give effect to this part of the endorsement.

[50] The motion judge then dealt with the financial impact of the contemptuous conduct. He singled out the individual appellants to personally bear the costs of restoring the podium to the original design, reasoning, at para. 56, as follows:

If the [individual appellants] were not held accountable for their contempt, the result would be to impose on all of the owners, through their common element fees, all of the costs of the work to be redone. Section 37(1) of the Act is of limited application. Directors of a Condominium Board of [page684] Directors can be held personally liable for their actions when they do not act honestly or in good faith, or when they fail to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. I have already concluded that the [individual appellants] did not act in good faith and by taking a narrow and self-serving view of the court's order, and by failing to seek advice from their counsel or further direction from the court before going ahead with their reinstatement plan, the [individual appellants] did not exercise the care, diligence and skill of a reasonable person.

Issues

[51] The appellants raise the following issues in this appeal:

(i) The motion judge erred by concluding that the terms of his 2011 endorsement were sufficiently clear and unequivocal to justify a finding of contempt.

(ii) The terms of the contempt order are overbroad because they order the appellants to undertake repairs that go beyond the scope of repairs required in the 2011 endorsement.

(iii) The terms of the contempt order are incapable of performance.

[52] The Individual appellants also separately appeal the sanction. They submit that the motion judge erred by ordering them to personally pay the cost of restoring the podium to the original design.

Analysis

A. Liability

(1) Did the motion judge err in concluding that the terms of his 2011 endorsement were clear and unequivocal?

[53] For the first part of the test for contempt to be satisfied, the parties must clearly understand what has to be done to comply with the order: Bell ExpressVu Ltd. Partnership v. Torroni (2009), 94 O.R. (3d) 614, [2009] O.J. No. 356, 2009 ONCA 85, at para. 22.

[54] A review of the jurisprudence reveals that courts tend to find an order unclear on one of three possible bases:

(1) the order is missing an essential term about where, when or to whom the order applies;

(2) the order employs unclear or overly broad language;

(3) the external circumstances obscure the meaning of the order. [page685]

See, for example, Laiken v. Carey (2013), 116 O.R. (3d) 641, [2013] O.J. No. 3891, 2013 ONCA 530, 367 D.L.R. (4th) 415, at para. 48; Culligan Canada Ltd. v. Fettes, [2010] S.J. No. 735, 2010 SKCA 151, 326 D.L.R. (4th) 463, at para. 21.

[55] The appellants argue before this court, as they did before the motion judge, that the order that they "reinstate the Courtyard as it existed after the repairs to the garage" incorporates unclear language and is therefore ambiguous. The problem was created by the motion judge's use of the words "courtyard" and "landscaping".

[56] The appellants contend that their interpretation of the endorsement was reasonable. They interpreted the word "courtyard" as encompassing just the inner courtyard not the entire podium, and legitimately believed that the motion judge's reference to "hard landscaping" excluded soft landscaping.

[57] The appellants further submit that the motion judge himself acknowledged a degree of uncertainty about the clarity of his reasons by suggesting the parties may need to return to him for further elucidation and by resorting to parole evidence to explain his 2011 endorsement.

[58] I find no merit in this ground of appeal. In my view, by submitting that the 2011 endorsement is unclear, the appellants are attempting to do what Lauwers J. refused to allow the contemnor to do in Sweda Farms, quoting from Beaudouin J.A. in Zhang c. Chau, 2003 CanLII 75292 (QC CA), [2003] J.Q. no 8071, 229 D.L.R. (4th) 298 (C.A.), at para. 32 -- to "hide behind a restrictive and literal interpretation to circumvent the order and make a mockery of it and of the administration of justice".

[59] I start by noting an unusual factor in this case -- that the contempt in issue is defiance of a directive contained in an endorsement rather than one that has been formalized through an issued court order. In my view, since the conduct in issue took place during a period of time when no order had been taken out in relation to the 2011 endorsement, this court must assess the clarity of the term in issue (that the courtyard be restored to the original design) in the context of the entire endorsement. I find support for this proposition in the authorities that have arisen out of situations in which allegedly contemptuous conduct takes place after reasons have been released but before a formal court order is issued. One such case is Baxter Travenol Laboratories of Canada Ltd. v. Cutter (Canada) Ltd., 1983 CanLII 30 (SCC), [1983] 2 S.C.R. 388, [1983] S.C.J. No. 79, in which, at p. 398 S.C.R., Dickson J. held that "[o] nce reasons for decision have been released, any action which would defeat the purpose of the anticipated injunction undermines that which has already been given judicial approval. Any [page686] such action subverts the processes of the Court and may amount to contempt of court."

[60] In authorizing certain aspects of the restoration that deviated from the original design, the appellants undermined the purpose of the 2011 endorsement -- to force the appellants to restore the exterior of the condominium complex to its original design.

[61] From beginning to end, the dispute, as the motion judge observed, concerned the entire property, including the vegetation. As the motion judge noted [at para. 22], "[t]hat is why there was an issue of whether the proposed reinstatement plan constituted a 'substantial change'".

[62] The record reveals that the parties at no point distinguished between the podium and the courtyard. The motion that gave rise to the 2011 endorsement was brought to enforce the minutes of settlement that required the Artistic design to be subject to the approval of a 66 and 2/3 per cent vote of all owners. The Artistic design covered the entire outdoor area and included both hard and soft landscaping. Moreover, the minutes of the owners' meeting that took place further to the settlement demonstrate that everyone treated the matter as an all or nothing situation -- either the entire exterior would be returned to the original design or the Artistic design would be implemented. Mr. Litchinsky himself, in his affidavit in response to the motion to enforce the minutes of settlement, described the owners meeting of June 22, 2011 as "necessary to determine the podium hard and soft landscaping".

[63] The only reasonable interpretation of the provision in issue that the appellants "reinstate the Courtyard as it existed after the repairs to the garage", is that the appellants were required to restore the Podium landscaping, both hard and soft, to its state prior to the garage repairs. To suggest that the 2011 endorsement might reasonably be interpreted as limiting the appellants' restoration obligations to a certain limited part of the exterior of the complex -- the courtyard -- and to a certain type of landscaping, is, in my view, not supported by the record and not logical.

[64] While interpreting the restoration provision in the context of the 2011 endorsement as a whole is sufficient to satisfy me that the obligations it imposed on the appellants are clear and unambiguous, I add the following.

[65] Until the appellants were advised that the respondents were bringing a motion for contempt, the appellants conducted themselves as though they had no difficulty understanding the 2011 endorsement. As the motion judge noted, the appellants did not seek clarification of the decision -- neither during the [page687] subsequent costs hearing nor at any other time, despite his explicit offer that the parties could return to him in the event they had any questions.

[66] Furthermore, when challenged about their deviations from the original design, the appellants' initial response was not to express confusion over what the 2011 endorsement required of them but to attempt to justify the changes they had authorized.

[67] Finally, in refusing to approve the draft order arising from the 2011 endorsement, the appellants did not take the position that the decision was unclear. Rather, they took the position that it was not possible to reinstate the landscape to its appearance prior to the garage repairs.

[68] In any event, it is important to note that even on the basis of the appellants' narrow interpretation of the 2011 endorsement, they admit to having authorized work in violation of that decision. I refer to changes that were to hard landscaping inside the courtyard, such as those made to the traffic circle.

[69] The record supports the motion judge's finding that the appellants clearly understood the obligations imposed on them by the 2011 endorsement -- to restore the entire exterior, including both hard and soft landscaping, to the original design. In his words, in assessing the clarity of his decision arising out of circumstances in which he was involved, he held that the appellants "knew what they had to do".

[70] The motion judge's interpretation of his own decision is entitled to considerable deference. I see no reason to interfere with the motion judge's conclusion that his 2011 endorsement was clear and unambiguous.

(2) Did the motion judge err in finding that the remaining parts of the test for contempt were met?

[71] The appellants also challenge the motion judge's conclusion that the respondents met the two remaining parts of the test for contempt -- that the party who is alleged to have breached the order must be found to have done so deliberately and that the evidence must prove contempt beyond a reasonable doubt.

[72] I do not find it necessary to address these submissions as they are premised on a finding that the 2011 endorsement is ambiguous -- a premise I have rejected.

[73] In my view, the motion judge's finding that the appellants wilfully violated the clear obligations imposed on them under the terms of the 2011 endorsement is unassailable. [page688]

(3) Notwithstanding the 2011 endorsement, did the appellants have authority under the Act to deviate from the original design?

[74] The individual appellants submit that the motion judge erred by failing to take into account various powers they, collectively as the board, had under the Act. Specifically, the individual appellants argue that their statutory authority under s. 97 of the Act to make non-substantial changes and repairs to the common elements cannot be displaced by court order. They contend that they respected the 2011 endorsement by not implementing the Artistic design. Beyond that, the individual appellants maintain that, as a board, they had authority to authorize deviations from the original design -- such as adding a lamppost, installing a different entrance sign, altering the turning circle by using limestone instead of concrete pavers, installing rectangular instead of trapezoidal planters, and planting different vegetation -- as these items did not individually amount to substantial changes to the common elements.

[75] I would not give effect to this argument essentially for the reasons set out above. I have concluded that the 2011 endorsement mandated the restoration of the exterior of the complex to its original design. While the individual appellants' authority, as a board, to manage the common elements in accordance with the Act was otherwise unfettered, they had to comply with the 2011 endorsement. That decision was clear. It obligated the appellants to restore the podium to the original design.

B. Penalty

[76] The motion judge, at para. 57, found the appellants to be in contempt of his 2011 endorsement. There are two parts to that decision. First, the motion judge explicitly ordered the appellants to restore the podium to the original design. Second, since the motion judge made no mention of the financial obligations associated with the restoration costs, it was implicit in the endorsement that the costs would be borne by the condominium owners.

[77] The sanction the motion judge imposed in his contempt order focused on securing performance of his 2011 endorsement. The motion judge ordered the appellants to return the landscape of the complex to the configuration and appearance in place prior to the 2011 demolition and provided details of what that would entail. He also ordered the individual appellants to personally bear the costs.

[78] The motion judge's determination of the appropriate penalty for contempt must be given considerable deference. The role [page689] of an appellate court in reviewing a sentence for contempt should be limited to intervening only where there has been an error in principle in arriving at the sentence or the sentence is clearly unfit. See British Columbia Forest Products Ltd. v. Lawson, [1988] B.C.J. No. 1619 (C.A.), per McLachlin J.A. (Ch'rs).

[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: Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc., 1992 CanLII 29 (SCC), [1992] 2 S.C.R. 1065, [1992] S.C.J. No. 79, at p. 1075 S.C.R. The remedy for civil contempt is designed not only to enforce the rights of a private party (see Poje v. British Columbia (Attorney General), 1953 CanLII 34 (SCC), [1953] 1 S.C.R. 516, [1953] S.C.J. No. 25, at p. 517 S.C.R.; Frontenac Ventures Corp. v. Ardoch Algonquin First Nation (2008), 91 O.R. (3d) 1, [2008] O.J. No. 2651, 2008 ONCA 534, at para. 37), but also to enforce the efficacy of the process of the court itself. Justice McLachlin powerfully expressed this broader purpose in United Nurses of Alberta v. Alberta (Attorney General), 1992 CanLII 99 (SCC), [1992] 1 S.C.R. 901, [1992] S.C.J. No. 37, at p. 931 S.C.R., stating:

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] It is in the light of these two objectives -- enforcing the rights of parties and respecting and preserving the process of the court, that I turn to the issue of remedy in the circumstances of this case.

(1) The order that the appellants restore the podium to the original design

[81] First, I observe that the order requiring the appellants to restore the podium to the original design was actually not necessary. The motion judge had mandated that in his 2011 endorsement and that decision was not appealed.

[82] The only arguments the appellants advance in relation to this aspect of the remedy are as follows.

[83] First, they submit that the motion judge exceeded his jurisdiction in his contempt order by ordering completion of restoration work that was outside the scope of the 2011 endorsement since the order directed work to be performed that went beyond the "hard landscaping" and "courtyard" referred to in the decision.

[84] The primary reason why, in my view, this argument must fail is that I have concluded that the 2011 endorsement covers the entire podium and includes both hard and soft landscaping. [page690]

[85] Moreover, the appellants, in their response to the contempt motion, asked the motion judge to provide "very specific directions about the steps [they were] required to take to correct the situation". The motion judge did exactly that. And he had the jurisdiction under rule 60.11(5) to do so.

[86] Second, the appellants argue that the contempt order includes a requirement that the motion judge explicitly acknowledged was incapable of performance. The appellants refer to the order that they [at para. 57] "[r]einstate the three-levelled [sic] vegetation, using the same kind, species, size and quantity on multiple level, including the grade-level vegetation which has now been replaced with interlocking pavement, as it existed prior to the 2011 demolition". The difficulty, the appellants submit, arises out of the motion judge's recognition, at para. 13 of his reasons, that "it is obvious that new planting materials cannot be expected to replace the mature vegetation that existed prior to the reconstruction". The appellants take this statement as an acknowledgement of the impossibility of reinstating the vegetation to its precise form in the original design.

[87] I reject this argument. No one realistically expected that compliance with the 2011 endorsement would require restoring the exterior of the complex to the identical state it was in just prior to the commencement of the garage repairs. Everyone understood that the decision required the appellants to use judgment and common sense and, to the extent reasonably feasible, restore the landscaping to the original design. I note that the motion judge, both in his 2011 endorsement and in his contempt reasons, referred to the appellants' awareness that restoring the podium to the original design would involve using materials that were "the closest match".

[88] In my view, the contempt order did not mandate the appellants to perform the impossible. And, as previously indicated, in circumstances in which compliance with an order is impossible, the remedy is to appeal, not ignore the order.

[89] As previously noted, rule 60.11(5), which expressly permits the court to make any order "as is just", gives the court broad powers in responding to a finding of contempt. The motion judge had authority to order the podium to be restored to the original design. I see no reason to interfere with this aspect of the remedy.

(2) A fit sentence

[90] The following are the factors relevant to a determination of an appropriate sentence for civil contempt:

(a) the proportionality of the sentence to the wrongdoing; [page691]

(b) the presence of mitigating factors;

(c) the presence of aggravating factors;

(d) deterrence and denunciation;

(e) the similarity of sentences in like circumstances; and

(f) the reasonableness of a fine or incarceration.

Echostar Communications Corp. v. Rodgers, [2010] O.J. No. 2088, 2010 ONSC 2164 (S.C.J.); Sussex Group Ltd. v. Fangeat, [2003] O.J. No. 3348, [2003] O.T.C. 781 (S.C.J.), at para. 67; Builders Energy Services Ltd. v. Paddock, [2009] A.J. No. 411, 2009 ABCA 153, at para. 13, Megill, at pp. 7-8.

(i) Proportionality

[91] The principle of proportionality requires that the punishment fit the wrongdoing: York (Regional Municipality) v. Schmidt, [2008] O.J. No. 4915, 2008 CanLII 63236 (S.C.J.), at para. 16. As Jeffrey Miller wrote in his leading textbook, The Law of Contempt in Canada, at p. 131: "[t]he fundamental principle in all sentencing, including sentencing for contempt, is that the sentence must be commensurate with or 'fitted to' the gravity of the offence".

[92] In order to put the individual appellants' conduct into context it is important to recall how this dispute began. The podium needed to be restored once the garage repairs had been completed. A landscape architect was retained to provide expert assistance. The appellants received a proposal, the Artistic design, and, for legitimate reasons, preferred it.

[93] As previously set out, the appellants took appropriate steps to give the condominium owners full opportunity to examine, and provide feedback, on the Artistic design.

[94] The proposal was not embraced by all owners. The respondents took a stand in favour of restoring the podium to the original design. The settlement the parties entered into soon after the dispute arose demonstrates that, at least to that point, the individual appellants were prepared to co-operate. The individual appellants did not give in happily. That much is clear. But they did agree to proceed on the basis proposed by the respondents.

[95] When the Artistic design did not receive the support of 66 and 2/3 per cent of the owners, the individual appellants started to veer off course. In my view, they were ill-advised to question the settlement. As a result, they found themselves faced with the 2011 endorsement.

[96] At this point, the individual appellants' conduct went from ill-advised to contemptuous. They authorized landscaping [page692] work in deliberate defiance of the clear intent of the 2011 endorsement. The individual appellants ignored communication from the respondents reminding them of their court-ordered obligations. Stubbornly, they continued to try to have their own way. Recklessly, they continued to add aspects of the Artistic design to the newly created podium. Even after respondents' counsel contacted the individual appellants with a view to persuading them to honour their obligations under the endorsement, they persisted in their contemptuous conduct.

[97] Clearly, the individual appellants thought they knew what was best for CCC 145. Before the motion judge and this court, they attempt to justify their conduct by pointing to evidence that their decisions were made in the best interests of the owners. They say that there is less risk that the new planters will leak. The driving circle is more maneuverable. The street sign is more visible. The costs of installation and maintenance of the landscaping, in general, are less.

[98] The evidence may support these arguments. However, the law does not. As well-intentioned as the individual appellants may have been, demonstrating that their contemptuous conduct is in the best interests of CCC 145 is no defence. See, for example, 1984 Enterprises Inc. v. Strider Resources Ltd., [2013] M.J. No. 381, 2013 MBCA 100, 25 C.L.R. (4th) 219, at para. 54.

[99] I summarize my view of the gravity of the individual appellants' conduct as follows.

[100] After having obtained and accepted a recommendation by experts as to the optimal landscaping design, the Individual appellants simply could not accept being put in a position in which they had to implement a design they believed was not optimal for the condominium owners. They therefore took matters into their own hands and, albeit for reasons they considered valid, defied a court order. The individual appellants' arrogance led them to reckless and ultimately unlawful conduct.

[101] Any contempt is serious. This is no exception. However, in my view, the individual appellants' contemptuous conduct must be considered in the light of the fact that there is no evidence that it was motivated by personal gain, vengeance or any reason other than that they felt they knew best.

(ii) Mitigating and aggravating factors

[102] In terms of mitigating factors, I note that there is no evidence that the individual appellants had previously defied any court order.

[103] I consider as aggravating the individual appellants' unremitting intransigence in conducting themselves in defiance [page693] of the 2011 endorsement. They were simply unable to understand that their belief in the wisdom of following the Artistic design and then their belief that they could get away with acting on that conviction would put them in breach of court-imposed and statutory obligations.

[104] In addition, I consider the individual appellants' failure to seek legal advice until they were told about a pending motion for contempt, as an aggravating factor. They could and should have retained counsel as soon as the individual appellants opposed the Artistic design.

(iii) Deterrence

[105] As set out above, deterrence, specific and general, is the most important objective of a contempt penalty. Justice Quinn, in Niagara (Regional Municipality) Police Services Board v. Curran (2002), 2002 CanLII 49405 (ON SC), 57 O.R. (3d) 631, [2002] O.J. No. 179 (S.C.J.), expressed the purpose of sentencing in contempt proceedings as follows [at para. 35]:

The primary purpose of sentencing in contempt proceedings is deterrence: both general and specific. The punishment for contempt should serve as a disincentive to those who might be inclined to breach court orders. Our legal system is wounded when court orders are ignored. The sentence must be one that will repair the wound and denounce the conduct.

See, also, Cornwall (Public Inquiry) v. Dunlop (2008), 2008 CanLII 10382 (ON SCDC), 90 O.R. (3d) 524, [2008] O.J. No. 957, 290 D.L.R. (4th) 699 (Div. Ct.), at para. 48; Tilco Plastics Ltd. v. Skurjat, 1966 CanLII 235 (ON SC), [1966] 2 O.R. 547, [1966] O.J. No. 1018, 57 D.L.R. (2d) 596 (H.C.J.), affd 1966 CanLII 517 (ON CA), [1967] 1 O.R. 609n, 61 D.L.R. (2d) 664n, [1967] 2 C.C.C. 196n (C.A.), leave to appeal to S.C.C. refused [1967] 1 O.R. 609.

[106] In considering the issue of deterrence in the unique circumstances of this case, context is of particular importance. This case engages the broader issue of the governance needs of condominium corporations.

[107] The individual appellants are volunteer board members of a not-for-profit corporation. It is clear that the penalty imposed in response to conduct that defies the authority of the court must be sufficient to deter those involved and other similarly situated individuals from like conduct. However, in the condominium context, the penalty should not be so onerous that it deters unit owners from serving on condominium boards. Owners who voluntarily assume the often onerous and thankless duties as directors of condominium corporations are essential to the functioning of a growing residential population -- those who live in condominiums. [page694]

(iv) Range of sentences

[108] The individual appellants correctly point out in their factum that, in general, awards for civil contempt in Canada range between $1,500 and $5,000. In Chiang (Trustee of) v. Chiang, 2007 CanLII 12203 (ON SC), [2007] O.J. No. 1409, 31 C.B.R. (5th) 19 (S.C.J.), partially revd on other grounds (2009), 93 O.R. (3d) 483, [2009] O.J. No. 41, 2009 ONCA 3, at para. 20, this court observed that custodial sentences are rare and that Canadian courts tend to be lenient in their contempt sentences. Even in cases where contempt has involved the loss or misuse of substantial amounts of money, the fines imposed on individuals have remained low. See, for example, Chicago Blower Corp. v. 141209 Canada Ltd., 1987 CanLII 7042 (MB CA), [1987] M.J. No. 32, 44 Man. R. (2d) 241 (C.A.); Baxter Travenol Laboratories of Canada Ltd. v. Cutter (Canada) Ltd., 1987 CanLII 8946 (FCA), [1987] F.C.J. No. 205, [1987] 2 F.C. 557 (C.A.).

[109] The few instances in which fines have been imposed at $100,000 or higher have been against unions with large membership (see British Columbia (Health Employers Assn.) v. Facilities Subsector Bargaining Assn., [2004] B.C.J. No. 1195, 2004 BCSC 762; United Nurses of Alberta v. Alberta (Attorney General), supra) or against large corporations in egregious circumstances (Apotex Fermentation v. Novopharm). It should be noted that in Apotex, the corporate entity of Novopharm had its fine reduced to $100,000 on appeal and no individual contemnor (the officers of the corporation) was fined more than $10,000.

[110] Significant fines have been imposed only in particularly egregious cases and/or where the contemptuous conduct was motivated by personal gain (see, for example, Imax Corp. v. Trotum Systems Inc., [2013] O.J. No. 446, 2013 ONSC 743 (S.C.J.), at paras. 12-14 (fine of $50,000)).

[111] However, I also note the observation of Brown J. in Mercedes-Benz Financial v. Kovacevic, 2009 CanLII 9423 (ON SC), [2009] O.J. No. 888, 74 C.P.C. (6th) 326 (S.C.J.) that some recent decisions in this province have shown a willingness to impose more substantial penalties for contempt, particularly in cases in which there has been a lengthy course of disobedience and where the contemnors have not purged their contempt.

[112] In the end, the sentence imposed must be reasonable.

(3) The fitness of the order made

[113] Before addressing the merits of the financial penalty imposed by the motion judge's sanction, I will first deal with two preliminary matters: (1) the individual appellants' motion to adduce fresh evidence and (2) issues resulting from the procedure followed at the contempt hearing. [page695]

(i) The fresh evidence motion

[114] The individual appellants' proposed fresh evidence provides specific information about the financial burden that paying the restoration costs would impose on each of them. The proposed evidence estimates the cost of restoring the podium from the state it was in at the time of the contempt hearing back to the original design to be in excess of $350,000.

[115] The criteria for the admission of fresh evidence on appeal are well established. The evidence (1) should not be admitted if, by due diligence, it could have been adduced at trial; (2) must be relevant in that it bears upon a decisive or potentially decisive issue; (3) must be credible in that it is reasonably capable of belief; and (4) must be such that if believed, it could reasonably be expected to have affected the result: R. v. Palmer, 1979 CanLII 8 (SCC), [1980] 1 S.C.R. 759, [1979] S.C.J. No. 126, 50 C.C.C. (2d) 193, at p. 205 S.C.R.

[116] I find it unnecessary to deal with the first three Palmer criteria, as, in my view, the motion fails on the fourth ground.

[117] The cost of restoring the podium to the original design is relevant to the penalty part of the contempt order. It puts the financial impact on the individual appellants in sharp focus. However, the motion judge did not order the individual appellants to pay the restoration costs, unaware of the magnitude of the burden of his order. In the course of the hearing of the contempt motion, it was understood that the restoration costs would be in the range of several hundred thousand dollars. I do not accept the individual appellants' argument that had the motion judge "known the size of the financial penalty . . . [he] would never have made the order he did". In my view, the detailed estimates the individual appellants now seek to put before this court add nothing but specific evidentiary support for information of which the motion judge was aware when he made the order he did.

[118] It follows that, in my view, the proposed fresh evidence could not reasonably be expected to have altered the motion judge's decision to order the individual appellants to pay the restoration costs.

[119] I would therefore dismiss the motion to adduce this fresh evidence.

(ii) The conduct of the contempt hearing

[120] I make several observations about the procedure followed at the hearing.

[121] There is no formally mandated process for contempt proceedings. The procedure followed may vary. However, contempt [page696] proceedings typically have two stages -- the liability hearing and a subsequent hearing to determine penalty: College of Optometrists of Ontario v. SHS Optical Ltd. (c.o.b. Great Glasses) (2008), 93 O.R. (3d) 139, [2008] O.J. No. 3933, 2008 ONCA 685, at paras. 73-75, per Watt J.A.; Echostar Communications Corp. v. Rodgers, supra, at paras. 34-36. If a contempt finding is made, the matter is adjourned to provide the contemnor an opportunity to purge the contempt and prepare for the sentencing portion of the process. Any action undertaken by a contemnor to purge his or her contempt may serve as a mitigating factor in sentencing: Echostar, at para. 35.

[122] There is good reason to bifurcate contempt hearings. As in criminal prosecutions, in contempt hearings, liability and penalty are discrete issues. In a hearing in which liability and penalty are dealt with together, there is a risk that evidence relevant, material and admissible to liability will be improperly applied to penalty or vice versa (R. v. B.E.S.T. Plating Shoppe Ltd. and Siapas (1987), 1987 CanLII 4056 (ON CA), 59 O.R. (2d) 145, [1987] O.J. No. 165 (C.A.)).

[123] In this case, liability and penalty were combined into a single hearing.

[124] I agree with the comments of Watt J.A. in Great Glasses where he said, at para. 74, that "a proceeding that considers both liability and penalty in the same hearing, may cause unfairness or be infected with legal error to such an extent to require a new hearing". I also agree with his comments at para. 76, that the extent to which fairness is affected varies from case to case.

[125] In my view, contempt proceedings should be bifurcated for the simple reason that bifurcation avoids risking the need for a new hearing.

[126] I have come to the conclusion that in this case the motion judge's failure to bifurcate caused or contributed to unfairness as (a) the evidence relevant to liability appears to have been considered in the penalty phase; (b) the appellants had no opportunity to take steps to attempt to purge their contempt, steps that may have been relevant to mitigation (Great Glasses, at para. 102); and (c) the parties had no opportunity to prepare for the sentence hearing.

[127] But, as Watt J.A. pointed out in Great Glasses, this error is not necessarily fatal. In this case, I would not interfere with the financial aspect of the remedy on this basis alone. I say this as there is no evidence that the individual appellants requested a bifurcated hearing or, at any time during the process, drew the problems associated with a combined hearing to the motion judge's attention. Moreover, the failure to bifurcate was not advanced as a ground of appeal. [page697]

[128] It does, however, affect the degree of deference that this court should pay to the financial penalty the motion judge imposed.

(iii) The fitness of the financial penalty

[129] In civil contempt, it is critical that the penalty respond to the conduct being sanctioned. The relevant conduct is the wilful disregard of the authority of the court. The court must assess the seriousness of the disrespect of the court, not the severity of any resulting harm.

[130] Civil contempt proceedings do not have "and must not appear to have the function of a civil action in tort or for breach of contract": Royal Bank of Canada v. Yates Holdings Inc., 2007 CanLII 23601 (ON SC), [2007] O.J. No. 2529, 33 C.B.R. (5th) 268 (S.C.J.), at para. 19. As MacKay J. stated in Merck & Co. v. Apotex Inc., [2001] F.C.J. No. 953, 2001 FCT 589 (T.D.), at para. 11, vard [2003] F.C.J. No. 837, 2003 FCA 234, 227 D.L.R. (4th) 106: "[a]ny concern of the plaintiffs about injury to them caused by those activities ought to be recoverable in damages or profits claimed. The concern of the Court, in a case of civil contempt such as this is, must be the failure to respect the Court's process."

[131] I begin with the purpose behind the motion judge's order that the individual appellants pay the costs of restoration.

[132] The reasoning behind the motion judge's decision to order the individual appellants to pay the restoration costs is found in para. 56, set out above. As I read that paragraph, the motion judge imposed this sanction on the basis of his view that it would be unfair to make the condominium owners bear the costs of the appellants' contempt of the 2011 endorsement. The motion judge sought to prevent the unit owners from having to bear the expense associated with the incremental costs of changing the podium from the amalgam of the original design and the Artistic design, to the original design. In effect, the motion judge, in sanctioning the individual appellants the way he did, focused on the costs that his restoration order would impose on the unit owners rather than on deterrence. With respect, I am of the view that in doing so, he erred in principle.

[133] Furthermore, the jurisprudence has established factors to be taking into account in deciding upon a fit sentence for civil contempt. One such factor is the particular contemnor's ability to pay lest the amount either be trivial or unduly punitive: Niagara (Regional Municipality) Police Services Board v. Curran, supra, at para. 36. Where fines are imposed above an amount necessary to reflect the public interest in the matter, an appellate court will be justified in intervening to reduce the [page698] amount: Apotex Fermentation Inc. v. Novopharm Ltd., 1998 CanLII 4886 (MB CA), [1998] M.J. No. 297, 162 D.L.R. (4th) 111 (C.A.), at paras. 319-21.

[134] Here, each individual appellant was fined approximately $100,000 without evidence that would have enabled the motion judge to assess the impact of having to pay such a significant amount of money. The lack of evidence on this important factor severely interfered with the motion judge's ability to assess the fitness of the sentence he imposed.

[135] In the result, I conclude that the financial penalty imposed on the individual appellants was unfit and must be set aside, leaving it to this court to determine an appropriate penalty for the individual appellants' contempt.

(iv) A fit sentence

[136] Based on my assessment of the gravity of the individual appellants' contemptuous conduct and the mitigating and aggravating circumstances, set out above, a reasonable penalty that would achieve the necessary degree of deterrence, in the unique circumstances of this case, would be the imposition of a fine on each individual appellant of $7,500 to be paid to CCC 145.

(v) Indemnification

[137] The individual directors submit that, pursuant to s. 38 of the Act, CCC 145 ought to indemnify them for any financial penalty imposed. Section 38 allows a condominium corporation to indemnify a director unless the director "is adjudged to be in breach of the duty to act honestly and in good faith". The Individual appellants, relying on Bennett v. Bennett Environmental Inc. (2009), 94 O.R. (3d) 481, [2009] O.J. No. 853, 2009 ONCA 198, argue that the motion judge erred in concluding that they were not entitled to be indemnified.

[138] I do not agree.

[139] First, in Bennett, this court dealt with the issue of indemnification in an entirely different context -- proceedings before the Ontario Securities Commission to which entirely different statutory language applied. Bennett has no application to this case.

[140] Second, the motion judge's adjudication that the individual appellants failed to act in good faith is unassailable. How could their deliberate violation of a clear court order be accurately described other than as a failure to act in good faith?

Conclusion

[141] This is a particularly unfortunate case. I say this because if the appellants had sought legal advice at the first sign [page699] of a dispute, needless consumption of time and money and needless acrimony could have been avoided. Certainly, the use of the blunt instrument of contempt would not have been necessary.

[142] The individual appellants, well-intentioned as they were, made the mistake not only of failing to retain counsel until it was too late but also of overstepping their bounds. They appeared not to appreciate that in doing so they breached their obligations to act in the best interests of CCC 145.

[143] Of more significance, they appeared not to appreciate the serious implications of breaching a court order. These implications have been forcefully described many times. The rule of law requires that courts maintain their dignity and respect. Simply put, it comes to this. To maintain respect, courts must enforce their process. If court orders can be ignored, our system of justice, the foundation of our society, breaks down.

Disposition

[144] For these reasons, I would dismiss the appeal from the contempt finding.

[145] I would allow, in part, the appeal as to penalty. I would not interfere with the order that the podium be restored to the original design but would set aside the order that the individual appellants pay the costs of the restoration and replace it with an order that each individual appellant pay a fine in the amount of $7,500 to the credit of CCC 145.

[146] This disposition would result in the following. The order that the appellants restore the podium to the original design would remain in effect. The current board of directors must guide CCC 145's compliance with that directive. CCC 145 has $30,000 to apply toward the costs of compliance.

[147] With the flow of time, the movement of owners in and out of the condominium, the extended opportunity to live with the amalgam of the original design and the Artistic design, the maturing landscaping, and the changed composition of the board of directors, the circumstances are different. I remind the parties that at any stage of the proceedings, even in the face of an outstanding finding of civil contempt, they have the power to settle their differences on their own terms.

[148] I would order CCC 145 to pay the costs of the motion before Cronk J.A. to the respondents, fixed in the amount of $2,500, including disbursements and HST.

[149] Given the divided success, I would make no order as to costs of the appeal. If the parties wish to make submissions concerning the costs of the contempt motion, they may do so in submissions not to exceed eight pages. Any such submissions [page700] must be submitted to Mr. John Kromkamp within 14 days of the release of these reasons.

[150] PARDU J.A. (dissenting): -- I would allow the appeal and set aside the motion judge's contempt finding. A finding of contempt can be justified only if the order alleged to have been breached was "clear and unequivocal": Bell ExpressVu Limited Partnership v. Torroni (2009), 94 O.R. (3d) 614, [2009] O.J. No. 356, 2009 ONCA 85, at para. 21. The motion judge's handwritten endorsement, which was never embodied in an issued order, included a sentence, "the Board is required to reinstate the Courtyard as it existed after the repairs to the garage". This was neither clear nor unequivocal.

Contempt is a Quasi-Criminal Matter

[151] A finding of contempt is a quasi-criminal matter. A conviction for contempt places an individual's physical liberty in jeopardy. Contempt proceedings thus engage rights and interests protected by the Canadian Charter of Rights and Freedoms.

[152] This is why the elements of contempt must be proven beyond a reasonable doubt. This is why it is not permissible in this context to rely on the factual matrix of an order to try and repair an order that "incorporates overly broad and unclear language" (Culligan Canada Ltd. v. Fettes, [2010] S.J. No. 735, 2010 SKCA 151, 326 D.L.R. (4th) 463) or that creates "too much scope for confusion" (Bell ExpressVu, at para. 28).

[153] When individual liberties are at stake, it is not enough to say that the non-compliant person ought to have known what the judge meant, according to the background and context of the dispute.

[154] Applying the test for contempt in this way does not give contemnors room to "finesse" their way out of court orders. Sweda Farms Ltd. (c.o.b. Best Choice Eggs) v. Ontario Egg Producers, [2012] O.J. No. 2214, 2012 ONCA 337 illustrates how this court has addressed such "finessing" without diluting the principle that an order should be clear and unequivocal before a contempt order may be made.

[155] In Sweda Farms, the appellant was ordered to transfer to a supervising solicitor "any and all other evidence or documents in his possession". The appellant retained copies of documents he transferred to the solicitor, and claimed that this did not demonstrate contempt because the order did not prohibit him from retaining copies. This court noted, at para. 3, that the appellant's actions were contrary to the plain language of [page701] the order: "[i]n our view, the copies that the appellant retained are clearly caught within the language in the order: 'any and all other evidence or documents'".

[156] It was unnecessary to look to the purpose of the order, the factual matrix underlying the order or any extrinsic evidence to show contempt -- the order was clear and unequivocal, the appellant had performed an intentional act that was contrary to that order, and contempt had been proven beyond a reasonable doubt.

"Reinstate"

[157] The first reason I must disagree with the motion judge is because it was not clear what the motion judge meant by "reinstate". All the parties and the motion judge accepted that this word should not be interpreted literally -- that it could not have meant that the courtyard had to be reinstated exactly as it was before the construction.

[158] For example, the motion judge acknowledged that the pre-existing mature vegetation could not be reinstated in its former arrangement.

[159] All parties acknowledged that an access ramp had to be widened because of new regulatory requirements, and that some of the original bricks were no longer available.

[160] The respondents acknowledged in argument that the order did not contemplate that the pre-existing arrangement would be exactly replicated: that 30-year-old concrete was not to be replaced with 30-year-old concrete, and that since materials had changed over the intervening years, the appellants would of necessity have to choose new materials, and exercise some judgment as to what was to be substituted.

[161] Some of the pre-existing outside structures had caused damage to the garage, because their configuration led to leaking into the garage. When these were removed, it was discovered that the turning circle had depressed the surface asphalt, and was one of the causes of water penetration into the garage. The planters outside the courtyard walls had been installed without a back, and abutted brick cladding on the exterior of the courtyard walls. They did not have any waterproofing that separated the garage ceiling from the elements, and were a major factor in the water infiltration into the garage. The motion judge could not have contemplated that the structures that caused leakage into the garage were to be reconstructed in their defective form.

[162] The respondents submit that the order should have been interpreted so as to require construction of the entire exterior in a way that resembled the appearance and configuration of the [page702] previous exterior except for less mature vegetation, even if different materials were used.

[163] In Bell ExpressVu, at para. 28, this court adopted the following observation by Cullity J. in Jaskhs Enterprises v. 1444707 Ontario Ltd., [2004] O.J. No. 4062, [2004] O.T.C. 859 (S.C.J.), at para. 40: "a failure to comply with an order of the court will not be contempt if there are genuine, unresolved issues between the parties with respect to the manner in which it is to be carried into operation".

[164] It seems to me that there were genuine, unresolved issues between the parties as to how the courtyard was to be "reinstated" to its former state. The motion judge placed the board in the position of having to make judgment calls as to how to implement this very general instruction. The appellants and respondents could reasonably disagree over the merits of these judgment calls.

[165] For that reason, the appropriate course for the respondents was to ask the motion judge to vary his order to clarify the board's obligations -- not to skip straight to contempt proceedings.

The "Board"

[166] Secondly, I note that the endorsement directed the "board" to reinstate the courtyard. The individual appellants were found guilty of contempt because they were board members.

[167] As noted above, an individual not named in an order "could still be found in contempt if he, with knowledge of its existence, contravened its terms": Baxter Travenol Laboratories of Canada Ltd. v. Cutter (Canada) Ltd., 1983 CanLII 30 (SCC), [1983] 2 S.C.R. 388, [1983] S.C.J. No. 79, at pp. 396-97 S.C.R. I would adopt the following summary of the law of contempt as it applies to directors and officers of corporations, set out in Telus Mobility v. Telecommunications Workers Union, [2002] F.C.J. No. 872, 2002 FCT 656, 220 F.T.R. 291 (T.D.), at p. 295 F.T.R.:

[I]ndividuals, as officers and directors of a company which has been held in contempt, may not be held in contempt merely because they hold such positions, but rather there must be either an aiding and abetting, a standing idly by, or a failure to take steps which failure was causative of the breach. Conversely, where an officer or a director does what she or he can to avoid the breach, yet the breach occurred without fault on the part of the officer or director, there can be no individual liability for contempt.

[168] The motion judge did not undertake any individualized assessment of what each of the individual appellants did or did not do that made these individuals guilty of contempt. Three of the individuals he convicted are not mentioned by name at all in his judgment, outside of the title of proceedings.

[169] This is not enough in a quasi-criminal context. [page703]

"Courtyard"

[170] Finally, the motion judge did not make clear in his initial order what he meant by "courtyard". On the contempt motion, the motion judge indicated that he meant the "courtyard" to "encompass the entire podium, including vegetation". By "podium" he meant the entire area outside of the residential tower, including the area outside the actual courtyard walls, up to the property boundary abutting the sidewalk.

[171] There is some ambiguity as to what the "courtyard" included in the initial order. On the one hand, the Oxford Dictionary of English defines "courtyard" as "an unroofed area that is completely or partially enclosed by walls or buildings": Oxford Dictionary of English, 2nd ed., revised (Oxford University Press, 2005). Based on this definition, the "courtyard" would not include the podium. On the other hand, the motion judge's discussion of the podium and minutes of settlement that addressed the podium might have indicated to a reasonable person that the "courtyard" extended to the podium.

[172] To resolve this ambiguity, the motion judge drew from the factual matrix giving rise to the order to show that, when he said "courtyard", he was referring to the "podium". In doing so, he relied on principles of contract law. An examination of objective evidence of the context in which an agreement is made is an integral part of interpretation of a contract (Dumbrell v. Regional Group of Companies Inc. (2007), 2007 ONCA 59, 85 O.R. (3d) 616, [2007] O.J. No. 298 (C.A.)). Different considerations apply to interpretation of an order for the purposes of contempt proceedings.

[173] As Goudge J.A. noted in SeaWorld Parks & Entertainment LLC v. Marineland of Canada Inc., [2011] O.J. No. 4265, 2011 ONCA 616, 282 O.A.C. 339, at para. 16:

[W]here the words of a contract are clear and unambiguous, extrinsic evidence cannot be used to alter their meaning. Ambiguity is required before that is permitted. . . . This factual matrix is relevant not to alter the meaning of clear and unambiguous language but to assist the court "to determine the meaning of the contract against its objective contextual scene"[.]

[174] And, as noted in Eli Lilly & Co. v. Novopharm Ltd., 1998 CanLII 791 (SCC), [1998] 2 S.C.R. 129, [1998] S.C.J. No. 59, at para. 55, "it is unnecessary to consider any extrinsic evidence at all when the document is clear and unambiguous on its face".

[175] If the order was clear and unequivocal, it would not have been necessary for the motion judge to refer to extrinsic evidence to show what it meant. The fact that he had to rely on this evidence, in my view, indicates that his order was not clear and unequivocal. This is not to say that context is irrelevant to the [page704] interpretation of an order for the purposes of contempt proceedings. Given the quasi-criminal nature of the proceedings, any doubt should be resolved in favour of the alleged contemnor.

[176] There is a principled reason not to rely on extrinsic evidence, or the subjective intentions of the parties named in the order, in determining whether an order is clear and unequivocal. Unlike a contract, which is generally binding only on the parties to that contract, a court order is binding on everyone, even those without knowledge of the facts and circumstances that gave rise to that order. It has been held that anyone "with knowledge of [the] existence" of an order, who "contravene[s] its terms", can be convicted of civil contempt: Baxter, supra, at pp. 396-97 S.C.R.

[177] This holding is tenable only if, as a prerequisite to conviction, it is necessary that the text of the order, read in light of its reasons, be sufficiently clear and unequivocal that anyone with knowledge of that order would understand how to act in accordance with that order, regardless of how much or how little that person knows about the background facts giving rise to that order.

[178] For this reason, I conclude that the motion judge erred in turning to the factual matrix underlying his order to show what that order meant. In doing so, he implicitly accepted that his order was not "clear and unambiguous". He implicitly accepted that there is a real risk that an individual reading his order would not have been able to understand it in the way he felt it should have been understood without having access to additional information regarding the background to the litigation.

[179] I note that there are other contexts where the factual matrix underlying an order may be useful. For instance, if the respondents had asked the court to vary the motion judge's 2011 order in order to clarify the obligations imposed on the board, it would have been appropriate for the motion judge to refer to this factual matrix in carrying out this task: see Doucet-Boudreau v. Nova Scotia (Minister of Education), [2003] 3 S.C.R. 3, [2003] S.C.J. No. 63, 2003 SCC 62, at para. 81. Such clarification would have ensured that, moving forward, it would be manifestly clear to everyone what conduct would be necessary to avoid a conviction for civil contempt.

Conclusion

[180] The contempt power "is one to be used cautiously and only as a last resort. Implicit in its proper exercise is the principle of least intrusive means": St. Elizabeth Home Society v. Hamilton (City) (2008), 89 O.R. (3d) 81, [2008] O.J. No. 983, 2008 ONCA 182, at para. 41 (per Sharpe J.A.); see, also, Clements (Re) (1877), 46 L.J. Ch. 375 (Eng. C.A.); [page705] R. v. Cohn (1984), 1984 CanLII 43 (ON CA), 48 O.R. (2d) 65, [1984] O.J. No. 3344 (C.A.); Centre commercial Les Rivières ltée v. Jean bleu inc., [2012] Q.J. No. 8822, 2012 QCCA 1663, at para. 7; Rocca Dickson Andreis Inc. v. Andreis, [2013] O.J. No. 4071, 2013 ONSC 5508 (Div. Ct.), at para. 37; Law Reform Commission of Canada, Contempt of Court: Working Paper No. 20: Offences Against the Administration of Justice (Ottawa: Minister of Supply and Services, 1977), at p. 49.

[181] Where an order is open to more than one reasonable interpretation, contempt proceedings are not the least restrictive means of ensuring parties comply with the purpose and spirit of that order. To the contrary, the Supreme Court of Canada has noted that a less restrictive means of achieving this goal would be to vary the order so as to make its terms clearer: Doucet-Boudreau, at para. 81.

[182] This is one of the reasons why our law requires that an order be "clear and unequivocal" before a court can exercise its power to convict persons for civil contempt.

[183] In my view, the motion judge committed a palpable and overriding error in concluding that his endorsement was clear and unequivocal. The order contained no details giving any guidance as to the many different decisions which would have to be made in the course of reconstruction of the exterior landscaping and structures.

[184] As noted above, the respondents had another, less drastic means of achieving their goal: seeking an order varying the judge's initial order so as to state more clearly what the appellants were obligated to do.

[185] For these reasons, a contempt order is not justified here, and I would set aside the finding of contempt.

[186] Given my conclusion that the contempt order must be set aside, it is not necessary for me to address the other issues addressed by the majority.

Appeal from finding of contempt dismissed; appeal from

penalty allowed in part.

Notes

[^1]: The term "special owners meeting" has been used by the parties in their correspondence, and in submissions to this court and the court below. However, the Act, pursuant to s. 45, does not create specific types of meetings. Accordingly, I refer exclusively to "meetings".

End of Document