SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 10-19773

DATE: 2013-06-19

RE: 822878 Ontario Ltd carrying on business as Wilson Air, plaintiff

AND: Charlie Firth, defendant

BEFORE: Mr Justice Ramsay

COUNSEL: Mr Sharoon J. Gill for the plaintiff; Mr Adam Paglione for the defendant

HEARD: 2013-06-19

ENDORSEMENT

[1] These are my reasons for finding the defendant guilty of contempt of court.

[2] The plaintiff, having been given leave by Turnbull J. (2013 ONSC 2422), moved for an order declaring the defendant guilty of contempt of court and sentencing him therefor.

The effect of the assignment in bankruptcy

[3] First, counsel for the defendant admitted contempt, but said that the proceedings for contempt are stayed by the defendant’s assignment in bankruptcy.

[4] I then dealt with that question.

[5] On June 11, 2010 the plaintiffs were given judgment for about $90,000. On September 20, 2010, the defendant conveyed his residence to his wife. On August 15, 2012 the defendant failed to appear for a judgment debtor examination. On October 23, 2012 Parayeski J. ordered the defendant to appear at a judgment debtor examination and to bring with him certain relevant documents. On December 14, 2012 the defendant was examined. He refused to answer questions about his pertinent assets and he did not bring to the examination documents that he had been ordered to bring.

[6] On April 3, 2013 the defendant filed a notice of assignment in bankruptcy. Does this have the effect of staying the motion for contempt?

[7] The Bankruptcy and Insolvency Act provides:

69.3 (1) Subject to subsections (1.1) and (2) and sections 69.4 and 69.5, on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy.

69.4 A creditor who is affected by the operation of sections 69 to 69.31 or any other person affected by the operation of section 69.31 may apply to the court for a declaration that those sections no longer operate in respect of that creditor or person, and the court may make such a declaration, subject to any qualifications that the court considers proper, if it is satisfied

(a) that the creditor or person is likely to be materially prejudiced by the continued operation of those sections; or

(b) that it is equitable on other grounds to make such a declaration.

[8] The defendant submits that the stay imposed by s.69.3 covers a contempt motion for disobedience of an order made as a result of proceedings in aid of execution, and relies on Tucker v. Jollimore, [1978] N.S.J. No. 60 (SCTD).

[9] The plaintiff disagrees and says in addition that the question was decided by Turnbull J.

[10] I accept both of the plaintiff’s submissions. Rule 60.11 does not require the moving party to obtain leave before bringing a motion for contempt. It is obvious from Turnbull J.’s reasons that he was making the declaration and directions provided for in s.69.4 of the Bankruptcy Act. For my purposes, then, the matter is decided.

[11] I would only add that Turnbull J.’s decision is amply supported by the case law. The British Columbia Court of Appeal and a judge of our own Court of Appeal in chambers have both said that the bankruptcy legislation does not prevent punishment of acts of contempt committed before the bankruptcy. See Neufeld v. Wilson, [1997] B.C.J. No. 279 and Manis v. Manis, [2001] O.J. No. 2627 (Simmons J.A.). In the case before me, the defendant disobeyed the order of Parayeski J. before filing the assignment in bankruptcy.

[12] When I announced my decision, counsel for the defendant said that he did not admit that his client was guilty of contempt, only that he had not fulfilled the terms of Parayeski J.’s order. He did admit that his client was guilty of contempt, but I tried the issue anyway. The defendant testified essentially that he had done what he could. Also he said that he the house had always been in his wife’s name. He only transferred it to himself for a two-week period and then back into her name on September 20, 2010 because the bank would not refinance it unless it was in his name.

[13] His testimony before me bore no resemblance to his deposition in aid of execution. For example, he said nothing in examination about refinancing the house. He just said that it was his wife’s and he did not know much else about it. His explanation for the transfer of title amounts to saying that it was not a fraudulent conveyance, but a fraud on the bank. This hardly helps his credibility. He also testified about representations made to him by counsel for the plaintiff which do not appear on the transcript. He managed to mention the possibility of an off-the-record discussion when prompted by his counsel. I rejected his evidence in its entirety.

[14] The defendant’s performance at the examination in aid of execution was a classic stonewall. Before me, he tried to justify his prevarication about the ownership of the residence by saying that since it was under forfeiture it was not an asset. The order of Parayeski J. did not call on the defendant to give evasive and clever answers. It called for complete and candid answers to questions that were put in plain English. The defendant did not do this and he did not bring with him the items that he was specifically ordered to produce, including items in his control, and items in the possession of others that he made no effort to obtain.

[15] For these reasons I found beyond a reasonable doubt that the defendant’s disobedience of the court order was deliberate.

[16] I then proceeded to deal with sentence and costs, which are the subject-matter of oral reasons.

J.A. Ramsay J.

Date: 2013-06-19