ONTARIO

SUPERIOR COURT OF JUSTICE

2012 ONSC 2240

DURHAM COURT FILE NO.: CV-37312/05 (Toronto Action) CV - 08-357570

DATE: 20120416

B E T W E E N:

SWEDA FARMS LTD. carrying on business as BEST CHOICE EGGS

Donald R. Good, for the Plaintiffs

Plaintiff

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ONTARIO EGG PRODUCERS, MARK BEAVEN and HARRY PELISSERO

Defendants

A N D B E T W E E N:

BEST CHOICE EGGS, a division of SWEDA FARMS LTD., VERIFIED EGGS CANADA INC., and SVANTE LIND

Plaintiffs

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BURNBRAE FARMS LIMITED, BURNBRAE HOLDINGS INC., JOSEPH P. HUDSON, CRAIG HUNTER, L.H. GRAY & SON LIMITED, WILLIAM HARDING GRAY, MICHAEL WALSH, MAPLE LYNN FOODS LIMITED, JOHANNES KLEI, and JOHN KLEI

Alison M. Webster, for the Defendants L.H. Gray & Son Limited, William Harding Gray and Michael Walsh, Moving Parties
G. Schible, for Norman Bourdeau, Responding Party

Defendants

HEARD: April 12, 2012

REASONS FOR DECISION

LAUWERS J.:

[ 1 ] In my decision dated July 28, 2011 ( 2011 ONSC 3650 , [2011] O.J. No. 3482), I found the responding party Norman Bourdeau to be in contempt of the order of Justice Corkery dated February 12, 2010, for the reasons set out therein. I noted at paragraph 76 that “Although he now appears to be in compliance with the order, he has not purged his contempt.” I directed counsel to appear before me on the next scheduled case management date of October 13, 2011, to address the court on the issues of penalty and costs. Mr. Bourdeau then discharged his counsel Mr. Refcio and appealed my decision. As a result the penalty hearing did not proceed. The appeal is now scheduled to be heard on April 30, 2012.

[ 2 ] On March 19, 2012, Mr. Bourdeau moved for an order of the Court of Appeal staying the appeal and requiring me to deal with the issues of penalty and costs, in light of the decision of Sharpe J.A. in Sabourin and Sun Group of Companies v. Laiken, 2011 ONCA 757. Although Rouleau J.A.’s endorsement is silent on the issue, according to Ms. Webster he agreed that he lacked jurisdiction to make an order requiring me to rule and Mr. Bourdeau then withdrew the motion.

[ 3 ] By letter dated April 3, 2012, Mr. Bourdeau requested that I fix an early return date: “to finalize the penalty and costs phase of the finding of contempt prior to April 30, 2012. This would allow the complete record at the appeal hearing so as penalty, costs and finding of contempt can be heard in their entirety in the Appeal not fragmented (sic).” I agreed to expedite the penalty hearing.

The Contextual Facts

[ 4 ] The background facts are set out at length in my decision to set aside the order of Justice Corkery (found at 2011 ONSC 1570 , [2011] O.J. No. 1422), and in the contempt decision. I point out two other contextual matters.

[ 5 ] First, the contempt hearing set for March 10, 2011, was adjourned on consent subject to terms that obliged Mr. Bourdeau to produce and deliver certain material to the supervising solicitor and to produce a list of the third parties with whom he had shared documentary evidence obtained from L.H. Gray by March 16, 2011. He failed to do so by that date, and at the return of the contempt motion on June 10, 2011, consented to an order fining him $500.00 and obliging him to pay L.H. Gray $1500.00 in costs. L.H. Gray consented to the adjournment at least in part relying on the Affidavit of June 6, 2011, in which Mr. Bourdeau swore:

1. I, Norman Bourdeau, state that as of June 3 rd , 2011, I have delivered to the supervising solicitor, Darryl Hawreliak, all originals and copies of all electronic and documentary (hard copy) information obtained from LH Gray & Son Limited in my possession and to which I have access, as well as an electronic copy of any information contained on any hard drives in my possession or to which I have access that stored said electronic information prior to the deletion of same as discussed below.

2. I further state that I have not retained in my possession, nor do I have access to, any originals or copies of any electronic and documentary (hard copy) information obtained from LH Gray & Son Limited and that I have deleted all originals and copies of said electronic information in my possession and to which I had access.

[ 6 ] Second, L.H. Gray has sued Mr. Bourdeau for $15 million in a lawsuit in the Superior Court of Justice in London, Ontario. I made some brief references to it in the contempt decision at paragraphs 8, 11 and 70. Jenkins J. issued an order on May 30, 2011, in that action permitting Mr. Bourdeau to communicate with certain law enforcement and administrative bodies but otherwise obliging him to:

…refrain, until the final disposition of the trial of this action and any appeals, from communicating or attempting to communicate, directly or indirectly, verbally or in writing, with any of the Plaintiff’s, customers, producers, anyone with whom the Plaintiff has a commercial relationship or members of the public, with regards to any allegations of wrongdoing of the Plaintiff, including disseminating any information regarding the Plaintiff or obtained from the Plaintiff…

[ 7 ] The Order of Jenkins J. also provided that Mr. Bourdeau: “Shall refrain, until the final disposition of the trial of this action and any appeals, from disseminating any electronic or documentary information obtained from the Plaintiff in any communications with the Federal and Provincial regulatory agencies and law enforcement authorities listed in paragraph 1 above.” This order continues in full force and effect.

[ 8 ] Mr. Schible, who represented Mr. Bourdeau as agent for the purposes of this penalty hearing, advised that although Mr. Bourdeau was in complete compliance with the order of Corkery J. by June 3, 2011, he has since obtained documentation in the ordinary course from two major sources. He got the file back from his former counsel, Mr. Refcio. The Strathroy Police Service also returned a binder of documents. All of this material would ostensibly have been caught by the order of Corkery J. L.H. Gray is quite troubled by Mr. Bourdeau’s possession of it and does not trust him. It seems to me, however, that the material is covered by the order of Jenkins J. If L.H. Gray wishes to pursue other relief nothing prevents it from doing so, but this contempt motion is not the right vehicle.

The penalty sought by L.H. Gray

[ 9 ] L.H. Gray seeks to incarcerate Mr. Bourdeau for a period between two weeks and two months, and to fine him an amount ranging between $7,000.00 to $10,000.00.

[ 10 ] L.H. Gray seeks costs on a full indemnity basis in the amount of $57,530.00 plus HST and disbursements inclusive of HST for a total amount of $73,107.48. In making this claim Ms. Webster cites the decision of Cumming J. in Royal Bank v. Yates Holdings Inc., 2007 23601 (ON SC):

Costs should normally follow the event, and in the circumstances of the matter at hand, on a full indemnity basis. Given the finding of contempt, the award of costs on a full indemnity basis is an appropriate and logical consequential result.

She also cites Hobbs v Hobbs, [2008] O.J. No. 240, per Sproat J. at para 4. Ms. Webster submits that her client ought not to be out of pocket at all as a result of Mr. Bourdeau’s contempt. In the alternative, L.H. Gray seeks costs on a substantial indemnity basis in the amount of $47,007.50 for fees plus HST and disbursements inclusive of HST for a total of $61,217.06: SNC-Lavalin Profac Inc. v. Sankar, 2009 ONCA 97.

[ 11 ] In a nutshell, Mr. Schible submits that the incarceration of Mr. Bourdeau would not be appropriate, that the fine should not exceed $1,500.00, and that the costs claimed by L.H. Gray are excessive.

[ 12 ] L.H Gray also seeks other incidental relief, which I dispose of summarily. It seeks: “An Order requiring Norman Bourdeau to send a letter to all third parties with whom he has had contact advising that the documents disclosed were done so in contempt of the Order dated February 12, 2010.” From what I have seen, the egg business appears to be a close-knit community. The finding of contempt is likely already well known to all. The only purpose for this term would be to gratuitously expose Mr. Bourdeau to more ignominy. I decline to include such a term in any order.

[ 13 ] L.H. Gray also seeks the following relief:

An Order requiring Norman Bourdeau to produce to the supervising solicitor forthwith all evidence and documents in his possession with respect to the business, computer and electronic records of L.H. Gray & Son Limited, which form the subject of the Order dated February 12, 2010, including all documentation contained in the submission to the Farm Products Marketing Commission;

An Order requiring Norman Bourdeau to produce copies of all correspondence, letters, emails, notes, receipts and/or invoices regarding his circulation of the material which forms the subject of the Order dated February 12, 2010, including all correspondence forwarded to regulatory agencies/bodies and third parties containing or referencing the material, all correspondence relating to the preparation and/or circulation of the material, and all receipts and invoices related to the cost of preparing the material.

[ 14 ] To my mind, all of the material was in the hands of the supervising solicitor by June 3, 2011, according to Mr. Bourdeau’s affidavit. The additional material that he later acquired is caught by the order of Jenkins J. in the London action, which prevents its abuse; it must be produced in that action under the Rules of Civil Procedure. There is no need for this relief and I decline to order it.

[ 15 ] I now turn to consider L.H. Gray’s requests that Mr. Bourdeau be incarcerated, that he be fined, and that he be required to pay costs, all of which fall within the traditional heads of punishment for civil contempt.

The applicable legal principles

[ 16 ] The court’s jurisdiction in respect of penalties for civil contempt is set out in rule 60.11(5) of the Rules of Civil Procedure. In T.G. Industries Ltd. v. Williams, 2001 NSCA 105, Cromwell J.A. considered the purpose of civil contempt orders:

35 In civil contempt, the primary purpose of the sanction is to coerce compliance with the order...

[ 17 ] In Mastronardi Produce Ltd. v. Butera, 2011 ONSC 5481, Nolan J. set out a number of useful principles related to penalties...

[ 18 ] In Nelson Barbados Group Ltd. v. Cox, 2010 ONSC 569, Shaughnessy J. listed at para. 25 a number of factors to be considered by the court in assessing the sanction for civil contempt...

The Nature of the Contemptuous Acts

[ 19 ] The core of my finding concerning Mr. Bourdeau’s contempt is set out at paragraph 75 of my decision of July 28, 2011:

I find that Mr. Bourdeau breached the order by retaining a copy of some of the evidence that he was obliged to file with the supervising solicitor and by disseminating it...

[ 20 ] This paragraph concluded an extensive review of Mr. Bourdeau’s improper conduct...

Discussion

[ 21 ] L.H. Gray’s makes the following submissions in its Factum:

The contempt of Bourdeau is serious and causes prejudice to LH Gray...

[ 22 ] L.H. Gray’s submissions track the factors referred to in the authorities.

Incarceration

[ 23 ] Mr. Schible submits that this is not a case where it would be appropriate to incarcerate Mr. Bourdeau...

[ 24 ] I do not see Mr. Bourdeau’s other misconduct to be mere belated compliance. It is much more serious.

[ 25 ] That said, this is not a case of egregious and repeated acts of contempt as in Chiang (Trustee of) v. Chiang (2009), 93 O.R. (3d) 483, 2009 ONCA 3...

[ 26 ] I conclude that Mr. Bourdeau’s incarceration would not be an appropriate penalty.

The Payment of a Fine

[ 27 ] In my view there is a public interest in ensuring that contempt of court is not tolerated but punished...

[ 28 ] In my view a fine would be appropriate. Mr. Schible suggests a fine of $1,500.00. I find that amount to be only nominal and therefore not an effective deterrent specifically or generally. I order Mr. Bourdeau to pay a fine of $5,000.00 to the Treasurer of Ontario within 60 days, failing which I impose on Mr. Bourdeau a sentence of ten days’ incarceration to be served in a provincial institution.

Purging Contempt

[ 29 ] Mr. Bourdeau’s Factum notes:

…this court found Bourdeau wilfully breached the order...

[ 30 ] Mr. Bourdeau cannot purge his contempt in the ordinary manner by apologizing to the court while his appeal is outstanding...

The Payment of Costs

[ 31 ] For Mr. Bourdeau this element of his punishment will likely weigh most heavily...

[ 32 ] Despite the contempt overlay, in my view I must still take into account the ordinary principles for assessing costs...

[ 33 ] An element to be considered is the losing party's reasonable expectation as to the costs payable...

[ 34 ] Mr. Schible did not quarrel with the concept that Mr. Bourdeau should be obliged to pay L.H. Gray’s costs of the contempt motion...

[ 35 ] First, he notes that both Mr. Williams and Ms. Webster appeared on March 10, 2011...

[ 36 ] Second, Mr. Schible points out that both counsel participated in the cross-examinations...

[ 37 ] In my view, the court should not ordinarily second-guess experienced counsel...

[ 38 ] Mr. Bourdeau knew his adversary intimately...

[ 39 ] Third, Mr. Schible notes that the cross-examinations were in aid of both of the contempt motion before me and a motion for relief in the London action...

[ 40 ] Fourth, Mr. Schible urges me to take into account L.H. Gray’s mixed motives...

[ 41 ] Mr. Schible’s argument goes further, however...

[ 42 ] Making the adjustments referred to earlier, and rounding down a bit, I fix cost on a full indemnity basis at $58,000.00 all-inclusive, and require Mr. Bourdeau to pay them to L.H. Gray within 60 days.

[ 43 ] Ms. Webster seeks costs in the amount of $4,000.00 for the plaintiffs’ motion for leave to intervene in the penalty hearing...

[ 44 ] Mr. Good’s express motivation was to shelter Mr. Bourdeau...

[ 45 ] This order is stayed pending the decision in the appeal.

[ 46 ] So ordered.

Justice P.D. Lauwers

RELEASED: April 16, 2012