COURT OF APPEAL FOR ONTARIO

CITATION: Perley-Robertson, Hill & McDougall LLP v. Eureka 93 Inc., 2025 ONCA 95

DATE: 2025-02-07

DOCKET: M55718 (COA-24-CV-0443)

Roberts J.A. (Motion Judge)

BETWEEN

Perley-Robertson, Hill & McDougall LLP

Creditor/Moving Party (Moving Party/Respondent in Appeal)

and

Eureka 93 Inc. and Acenzia Inc.*

Debtors/Responding Parties (Responding Party*/Appellant in Appeal*)

Counsel: Andrew J.F. Lenz, for the moving party Denise Cooney and Alex Flesias, for the responding parties, Acenzia Inc. and Grant Bourdeau

Heard: January 30 and February 5, 2025

REASONS FOR DECISION

Overview

[1] The moving party has brought a motion for directions before me as the case management judge designated under this court’s November 28, 2024 order to address any issues arising from the enforcement of that order.[^1] The moving party takes the position that Grant Bourdeau, the sole director and officer of Acenzia Inc. (“Acenzia”), has failed to comply with the November 28, 2024 order and seeks various remedies against him, including incarceration for contempt because of his breach of court orders.

Factual background

[2] The moving party is Acenzia’s former counsel. On October 1, 2019, the moving party obtained a certificate of assessment for payment of its outstanding accounts (“the assessment order”). To-date the moving party is owed $424,769.22 including interest and enforcement costs. It commenced collection proceedings, including garnishment, and sought to examine in aid of execution Grant Bourdeau, Acenzia’s sole officer and director.

[3] On February 28, 2020, Acenzia commenced an action against the moving party and members of the law firm, challenging the assessment order and asserting, among other claims, that it owes nothing to the moving party for its services because of the moving party and its members’ alleged negligence, breach of fiduciary duty and breach of contract (“the Acenzia action”).

[4] In the assessment proceedings, the moving party served a notice of examination and brought a motion for production of documents. On September 12, 2023, Marc Smith J. ordered that: 1) Mr. Bourdeau produce the documents and information set out in the notice of examination in aid of execution 10 days before the examination in aid of execution; 2) Mr. Bourdeau attend for an examination in aid of execution which was to be held on a mutually convenient date no later than December 1, 2023; and 3) Mr. Bourdeau pay the moving party its costs of the motion in the amount of $6,500. Neither Acenzia nor Mr. Bourdeau appealed or sought to stay Marc Smith J.s order.

[5] Mr. Bourdeau paid the costs order made by Marc Smith J. However, he failed to produce any of the documents or information ordered produced before he attended the examination in execution on the agreed upon date of November 7, 2023. When he attended the examination, he refused to answer any questions related to the examination in aid of execution on the advice of his counsel.

[6] The moving party brought a contempt motion. On April 11, 2024, Robert Smith J. found Mr. Bourdeau to be in contempt of Marc Smith J.’s order. He ordered that Mr. Bourdeau purge his contempt by attending an examination in aid of execution within 60 days of his order, failing which Mr. Bourdeau would be committed to custody for 30 days. He further ordered that Mr. Bourdeau pay the moving party its costs of the second motion on a substantial indemnity scale in the amount of $8,872.55.

[7] Acenzia and Mr. Bourdeau appealed Robert Smith J.’s order to this court but no stay was sought of that order. They did not take the position that the orders of Marc Smith J. and Robert Smith J. were unclear or that they did not understand or were unaware of them. They repeated the arguments that were rejected by Robert Smith J. that it would not be in the interests of justice to enforce the assessment order and require Mr. Bourdeau to attend an examination in aid of execution in the face of the Acenzia action against the moving party, including a motion scheduled for later this year to stay the consent assessment order underlying the order that Mr. Bourdeau produce documents and attend the examination in aid of execution.

[8] On November 28, 2024, for reasons that followed on December 2, 2024 (“the November 28, 2024 order”), this court dismissed the appeal, seeing no error in Robert Smith J.’s order. We agreed with Robert Smith J.’s conclusion that the elements of civil contempt were clearly made out beyond a reasonable doubt:

1. the terms of the first motion judge’s order were clear; 2) Mr. Bourdeau had actual knowledge of those terms; and 3) Mr. Bourdeau intentionally chose, on the advice of counsel, not to comply with them because of alleged potential prejudice to his and Acenzia’s position in other proceedings.

[9] We further found that “[t]here was and remains no excuse for Mr. Bourdeau’s ongoing failure to comply with clear court orders.”

[10] After advising that the appeal was dismissed, we gave the parties the opportunity to agree on remedy. The parties agreed on the following order:

1. The contemnor, Grant Bourdeau, shall produce all of the documents referred to in Appendix “A” of the September 12, 2023 order of Marc Smith J. before January 9, 2025.

2. Mr. Bourdeau shall attend at the office of Perley-Robertson Hill & McDougall LLP in Ottawa on January 22, 2025, at 10:00 a.m., and shall answer any and all proper questions.

3. Acenzia and/or Grant Bourdeau shall forthwith pay costs of the appeal to Perley-Robertson in the amount of $16,000.

4. Acenzia and/or Grant Bourdeau shall forthwith pay the costs ordered by the April 11, 2024 order of Robert Smith J.

[11] Significantly, this court cautioned Mr. Bourdeau at para. 12 of the reasons:

While the parties are to be commended for agreeing on remedy and are confident that there will be no further issues with Mr. Bourdeau’s compliance, it is important that he understands that he has been granted a significant indulgence in being allowed one last opportunity to purge his contempt. [Emphasis added.]

[12] On December 5 and 20, 2024, counsel for the moving party sent emails to the responding parties’ counsel, reminding them of their obligation to pay forthwith the April 11, 2024 costs order and this court’s costs order.

[13] It is not disputed that the costs orders were not paid “forthwith”; nor were the documents produced by January 9, 2025. Indeed, there was no response to the moving party’s inquiries until counsel for the moving party wrote to the Registrar of this court on January 13, 2025, raising the responding parties’ failure to comply and requesting a case management conference before me, which was scheduled for January 21, 2025.

[14] On January 15, 2025, counsel for the responding parties forwarded full payment of the costs order to counsel for the moving party. On January 17 and 20, 2025, production of a large number of documents was made by the responding parties.

[15] At the case conference on January 21, 2025, the moving party’s motion for direction was scheduled to be heard before me on January 30, 2025. I adjourned Mr. Bourdeau’s examination in aid of execution scheduled for January 22, 2025. The motion was heard on January 30 and February 5, 2025.

Analysis

[16] As earlier indicated, there is no issue that Mr. Bourdeau failed to comply with the November 28, 2024 order within the deadlines stipulated in that order. There is also no issue that the production required by the November 28, 2024 order continues that stipulated in the orders of Marc Smith and Robert Smith JJ. As earlier indicated, the purpose of the consent remedy contained in the November 28, 2024 order was to give Mr. Bourdeau one last opportunity to purge his contempt of the orders of Marc Smith and Robert Smith JJ. As in Chiang (Trustee of) v. Chiang, 2009 ONCA 3, 93 O.R. (3d) 483, I am not hearing a fresh motion for contempt but inquiring into the appropriate sanction for an ongoing breach by Mr. Bourdeau.

[17] In consequence, as framed by the parties, there are two issues for determination:

1. Did Mr. Bourdeau completely purge his breaches of the November 28, 2024 order and the previous, related orders of Marc Smith and Robert Smith JJ.; and

2. What consequences should flow from Mr. Bourdeau’s breaches of those orders?

[18] I start my analysis of these issues with reference to some general principles. A contempt order under r. 60.11(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, is to enforce an order requiring a person to do an act, other than the payment of money, or to abstain from doing an act.

[19] As the Supreme Court instructs in Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79, at paras. 32-35, to establish civil contempt, three elements must be proved beyond a reasonable doubt: (1) the order alleged to have been breached must be clear and unequivocal; (2) the defendant must have knowledge of the order; and (3) the defendant must have intentionally breached the order. Contemnors may prove they have purged their contempt on a balance of probabilities: Chiang, at paras. 50-52.

[20] The court’s discretion at the penalty phase of a contempt hearing is wide: Business Development Bank of Canada v. Cavalon Inc., 2017 ONCA 663, 416 D.L.R. (4th) 269, at para. 74, leave to appeal refused, [2017] S.C.C.A. No. 407. Under r. 60.11(5), in disposing of a contempt motion, the judge “may make such order as is just”; and where a finding of contempt is made, the judge may order that the person in contempt:

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

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

(c) pay a fine;

(d) do or refrain from doing an act;

(e) pay such costs as are just; and

(f) comply with any other order that the judge considers necessary

[21] The purpose of a civil contempt order is seen primarily as coercive rather than punitive, with the court’s goal being to obtain compliance with its order and to protect and enforce the rights of a private party; however, one purpose of sentencing for civil contempt is punishment for breaching a court order: Carey, at para. 31; Chiang, at para. 11; Business Development Bank of Canada, at paras. 77, 81. Even in purely private litigation, as here, “the breach of a court order and the resulting sanction for contempt invariably reflect public disrespect for the authority of the court”: Chiang, at para. 10; Business Development of Canada, at para. 78.

[22] The purging of contempt is a significant mitigating factor to be taken into account in the determination of the appropriate sanction, but it does not prevent the court from imposing a sanction because of the purged breach: Business Development Bank of Canada, at para. 86. The factors relevant to a determination of an appropriate sanction for civil contempt were summarized by this court in Business Development Bank of Canada, at para. 90 and include:

Proportionality of the sentence to the wrongdoing - a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.

Presence of aggravating and mitigating factors.

Deterrence and denunciation - the sentence should denounce unlawful conduct and promote a sense of responsibility in the contemnor, and deter the contemnor and others from defying court orders.

Similarity of sentence in like circumstances.

Reasonableness of a fine or incarceration.

[Citations omitted.] [Underlining in original.]

[23] That said, incarceration should be treated as an order of last resort. As this court further noted in Business Development Bank of Canada, at para. 82: “Ordinarily, a finding of contempt, together with a fine or some other order in relation to the litigation, is sufficient to gain compliance and restore the authority of the court.” However, the court went on to review various cases where incarceration was imposed and concluded that incarceration is appropriate where the breach is wilful and flagrant and “shows a callous disregard for the court’s authority, or that causes significant prejudice to the other party”, including for the “failure to produce documents or corporate records”: at paras. 87, 88.

[24] Turning then to the facts of this case, I start by observing that Mr. Bourdeau was found in contempt by Robert Smith J. for failing to comply with Marc Smith J.’s order. Robert Smith J. ordered him to comply with that order, failing which he would be subject to 30 days’ incarceration. He failed to do so and failed to seek a stay of Robert Smith J.’s order. This court gave him one last chance to comply.

[25] As I discuss in greater detail below, while Mr. Bourdeau produced many documents on January 17 and 20, 2025, he has not produced important categories of documents that have been outstanding since Marc Smith J.’s September 12, 2023 order. This constitutes ongoing breach of three crystal clear court orders. There is no question that Mr. Bourdeau was aware of the orders and that he deliberately chose not to comply with them, including the most recent obligation to produce the clearly identified documents by January 9, 2025. I repeat my earlier observation that Mr. Bourdeau did not produce any documents by the agreed upon court-ordered deadline and it was only when counsel for the moving party brought his noncompliance to the court’s attention that he produced some, but not all, of the identified documents.

[26] Mr. Bourdeau has filed an affidavit, sworn January 27, 2025, in response to the moving party’s motion. Mr. Bourdeau does not allege that he did not understand the production terms of this court’s order, which mirror the previous orders. Indeed, it would have been difficult for him to make that statement given that it was negotiated and drafted by his counsel and was on consent.

[27] I do not accept as credible or sincere his statement in para. 3 of his January 27, 2025 affidavit that notwithstanding the explanations and urgings of his lawyers, he was somehow confused by what needed to be produced. His explanation and apology are belied by the factual context of this case, as earlier reviewed in these reasons. This context includes the precisely worded orders that can leave no doubt as to which documents had to be produced, as well as the absence of any expressed confusion. Importantly, Mr. Bourdeau never previously indicated before Marc Smith J. or Robert Smith J. that he was confused about the court production orders. Rather, he took the position in his affidavits that he should not be required to produce the documents because it would prejudice the Acenzia action. I therefore do not accept Mr. Bourdeau’s explanation or purported apology as mitigating factors. In my view, Mr. Bourdeau is simply unwilling to accept that the existence of the Acenzia action does not serve as an excuse to deliberately fail to comply with clear court orders. Mr. Bourdeau has “engaged in a concerted course of conduct to frustrate [the moving party’s] efforts to collect its debt”: Chiang, at para. 1.

[28] Does the recent production of documents on January 17 and 20, 2025 complete Mr. Bourdeau’s production obligations under the orders and purge his contempt? It does not. While Mr. Bourdeau has produced many documents, there are several important categories of documents that have not yet been produced. As a first example, Mr. Bourdeau failed to produce documents related to all conveyances and charges of real property in which Acenzia may have an interest, most notably, a first mortgage in favour of Acenzia’s parent company. Second, Mr. Bourdeau failed to provide the notices of assessments and any other documents or correspondence from the Canada Revenue Agency. A third instance of non-disclosure relates to an action commenced by a creditor against Acenzia on its mortgage. Mr. Bourdeau failed to provide a copy of the claim and any associated orders.

[29] What sanction should be imposed?

[30] As I have already indicated, I do not give any weight to Mr. Bourdeau’s purported apology and explanations for his noncompliance. While Mr. Bourdeau’s delayed payment of the costs orders cannot be the subject of a contempt order, it nonetheless illustrates his disregard and disrespect for the court’s authority and processes. So, too, does his failure to produce the clearly identified documents. That said, he has produced a number of documents, although not all of the relevant documents. His delayed and incomplete production serves as a mitigating factor although it does not completely purge his contempt.

[31] The real difficulty here is that Mr. Bourdeau’s failure to comply has been designed to impede and has impeded the moving party’s collection efforts. The moving party is entitled to examine Mr. Bourdeau in aid of execution in relation to its assessment order. It cannot effectively do so without full production of the documents identified in Marc Smith J.’s order. The point of the court-ordered documentary production and examination is to locate monies and assets that can be seized in satisfaction of the assessment order. Mr. Bourdeau’s noncompliance undermines that process and stems directly from his position as pleaded in the Acenzia action that the moving party is not entitled to be paid anything on its outstanding accounts.

[32] Given these circumstances, an appropriate sanction is to order that Mr. Bourdeau pays or causes to be paid[^2] the full amount of the moving party’s judgment into court. The payment into court of these monies satisfies the moving party’s objectives in seeking production and examination in aid of execution and directly addresses the root of Mr. Bourdeau’s noncompliance. It is a solution that both parties have suggested in the draft orders that I requested they file as part of their submissions about the appropriate order to be made. Both parties agree payment should be made by February 28, 2025. They also agree that if and once payment is made: the moving party’s garnishment proceedings shall be withdrawn, all collection efforts shall cease, and any monies received from the Sheriff after February 28, 2025 will be forwarded to the responding parties’ counsel or as they direct. The parties also agree that it would be appropriate for Mr. Bourdeau to make a donation to the Lawyers’ Feed the Hungry Program. Finally, they agree that in the event payment is not made by February 28, 2025, production of the outstanding documents will be made prior to Mr. Bourdeau’s examination in aid of execution that will take place in Ottawa in early March 2025.[^3]

[33] Where the parties part company is, first, with respect to the source of the monies to be paid into court. The moving party submits that if it receives any monies from the Sheriff’s Office as a result of its garnishment proceedings against Acenzia between now and the responding parties’ payment of the monies into court by February 28th, it should be entitled to keep them and thus reduce the amount to be paid into court. The responding parties argue that the moving party should not be entitled to keep any garnished monies, this court should order the Sheriff to pay any monies obtained through garnishment into court, and the responding parties will top up any shortfall by February 28, 2025. According to the responding parties, to order otherwise would undermine their rights in the Acenzia action, including their stay motion set for November 13, 2025, as well as contravene the March 19, 2024 case management order in the Acenzia action that provides for the parties to seek a case conference if the moving party takes any enforcement steps.

[34] I agree with the moving party that it should be entitled to receive and keep any proceeds from the garnishment proceeding prior to the payment into court on February 28, 2025, and subject to a reduction of the amount then to be paid into court. The orders allowing for the assessment order and the garnishment proceedings are in force and have not been stayed. The responding parties have not availed themselves of the opportunity to seek a case conference in the Superior Court in the face of the moving party’s ongoing garnishment proceedings. Their motion to stay the assessment proceedings is not scheduled until November 13, 2025. There is nothing in the March 19, 2024 case management order that stays the moving party’s entitlement to enforce its assessment order. Moreover, even assuming, without deciding, I had the jurisdiction to order the Sheriff to pay monies into court, I certainly would not have the jurisdiction to do so without a proper motion brought on proper notice to all interested parties, including creditors with higher priority than the moving party to any funds garnished and without knowing what amount of funds have been garnished to date.

[35] The moving party’s draft order also provides for some terms designed to encourage compliance with the order: first, a provision that if Mr. Bourdeau fails to comply with the payment into court, he will file a notice of discontinuance with prejudice in the Acenzia action; second, if Mr. Boudreau fails to comply, he will be incarcerated for 30 days as set out in the April 11, 2024 order of Robert Smith J. The responding parties object to both provisions.

[36] Given Mr. Bourdeau’s history of noncompliance, I share the moving party’s concern that Mr. Bourdeau may not voluntarily comply with any order of this court and that some incentive is necessary. The incentive of the attendance before me and the motion for directions, with the potential for incarceration, certainly resulted in whatever compliance, albeit delayed, that Mr. Bourdeau carried out in relation to the previous orders. I agree that previous orders were not spent or overturned, including Robert Smith J.’s incarceration order. The purpose of the remedy agreed upon in the November 28, 2024 order was to give Mr. Bourdeau one last opportunity to purge his contempt but did not erase the orders and the breaches that had gone before. I have found that he has failed to purge his contempt.

[37] That said, I am of the view that circumstances have changed since Robert Smith J.’s order in terms of Mr. Bourdeau’s compliance. He has produced many documents and is prepared to attend and answer questions on the examination in aid of execution. This is a mitigating factor that leads me away from imposing incarceration as a term of the order at this point, as I do not believe it is necessary in order to secure Mr. Bourdeau’s compliance. The importance of the Acenzia action has been at the core of Mr. Bourdeau’s disobedience. Its potential loss by way of a with prejudice discontinuance will be sufficient encouragement to Mr. Bourdeau to comply. As a result, in the event that Mr. Bourdeau fails to pay or cause to be paid the monies into court by the close of business on February 28, 2025, he will be deemed at that time to have discontinued the Acenzia action. In that event, he will serve and file a notice of discontinuance by March 3, 2025, or if he fails to do so, the moving party may rely on this order to file a notice of discontinuance in the Acenzia action with respect to Mr. Bourdeau.

[38] The responding parties propose that the moving party receive partial indemnity costs on this motion. I disagree. The moving party is entitled to its full indemnity costs in the amount of $20,400.95. It ought not to have been put to the expense of securing Mr. Bourdeau’s compliance.

[39] Accordingly, order to go as follows:

1. Mr. Bourdeau has not purged his contempt of the orders of Marc Smith J. dated September 12, 2023, Robert Smith J. dated April 11, 2024, and of this court dated November 28, 2024, with respect to the production of all relevant documents and information.

2. Mr. Bourdeau shall pay or cause to be paid into court the amount of $424,769.22 in relation to the Ottawa Assessment file, Court File No. 19-81226, by no later than February 28, 2025, pending further order of the court.

3. Upon payment into court of the amount of $424,769.22, the moving party will cease any and all steps associated with the enforcement of the assessment order, including the termination of any and all outstanding garnishments related to Acenzia.

4. The moving party may retain any amounts that it receives prior to February 28, 2025, from the Sheriff’s Office in response to its garnishments related to Acenzia (“the garnishment amounts”). The amount to be paid into court by Mr. Bourdeau shall be reduced by the total of any garnishment amounts. Any garnishment amounts received following the payment into court of the amount of $424,769.22 (or such reduced amount because of its reduction by any garnishment amounts received by the moving party prior to payment into court) shall be returned to Hammond Flesias or as Hammond Flesias directs.

5. If Mr. Bourdeau fails to make the requisite payment into court:

i. The moving party will be entitled to enforce immediately the debt outstanding under the assessment order;

ii. Mr. Bourdeau shall provide to the moving party by March 4, 2025 all further outstanding documents as identified in the September 12, 2023 order of Marc Smith J., including but not limited to:

• copies of all documents associated with the taxation of Acenzia including any and all tax returns, exchanges with the Canada Revenue Agency or Acenzia’s accountants, financial statements, and copies of any payments;

– copies of all legal processes with respect to any action in which Acenzia has been involved and any orders associated with such litigation;

– copies of any documents relating to any conveyance or charge of any real property in which Acenzia may have an interest.

iii. Mr. Bourdeau shall attend in person for an examination in aid of execution at the Ottawa offices of the moving party on either March 6 or 7, 2025, as the parties shall agree;

6. In any event, Mr. Bourdeau shall make a donation in the amount of $7,500 to the Lawyers Feed the Hungry Program at a location of his choice within 30 days of the date of this order.

7. In any event, Mr. Bourdeau shall pay the moving party its costs fixed in the amount of $20,400.95 within 30 days of the date of this order.

“L.B. Roberts J.A.”

[^1]: There was no objection taken by the parties to a single judge of this court hearing this motion: see: North Elgin Centre Inc. v. McDonald’s Restaurants of Canada Limited, 2021 ONCA 173, at paras. 10-13.

[^2]: This reflects the responding parties’ suggestion in their draft order that it be “Acenzia and/or Mr. Bourdeau”.

[^3]: It is not clear from their respective draft orders whether there is agreement on March 6 or 7, 2025 as the examination date. I will leave that to the parties to resolve, failing which they may request a case conference before me.