COURT FILE NO.: CV-11-437576
DATE: 20130916
HAZELTON LANES INC AND STEPHEN CHAN
v.
1707590 ONTARIO LIMITED, JOHN FARACI, et al
September 16, 2013
ENDORSEMENT- Contempt Order
After hearing from counsel in court on July 9, 2013, I now make the following order.
The defendants, 1707590 Ontario Limited and John Faraci (the “Faraci defendants”) are found in contempt for the failure of Faraci to comply with my previous orders listed in the chart at tab “A” of The Plaintiffs’ Brief of the Outstanding Directions of the Honourable Mr. Justice Matlow” dated March 25, 2013. Those orders include, as # 19, my order of February 7, 2013, requiring the Faraci defendants to comply with all previous orders directed to Faraci throughout the trial of this action no later than on February 15, 2013.
Although Mr. Chalmers, counsel for the plaintiffs, submitted that I should strike the statement of defence and counterclaim of the Faraci defendants and grant other relief, I decline to do so now. Instead, my order is to include the following provisions which provide for an alternative relief that is sought:
• The Faraci defendants shall pay into Court, as security for the costs of this motion, the motions that gave rise to the orders listed in the chart, the examination of Ronald Chapman held on August 15, 2013, the cross-examination of Faraci on his affidavit sworn on July 31, 2013, held on August 15, 2013, and the time wasted throughout this trial by counsel for the plaintiffs for their reasonable efforts to compel compliance with the orders listed.
• The payment shall be in the sum of $35,000 and it shall be made no later than on October 4, 2013.
• I adjourn this motion before me to October 7, 2013, at 10 AM to receive evidence from the Faraci defendants in the form of a receipt issued by the Accountant of the Court showing that payment into Court was made as required. In the event of default, a further order will be made.
Even if I had not found the Faraci defendants to be in contempt, I would have made the same order pursuant to rule 60.12 (c).
As well, even if I doubted that Faraci had the financial means to make the payment as required, I would still have made the same order. For the reasons set out in paragraphs 10 and 12, below, there must be a sanction imposed even if it were to deprive the Faraci defendants of their right to defend this action and assert a counterclaim. However, on the evidence given by Faraci during the trial, it is my view that he does have the ability to make the required payment even it means he must call on others to provide the necessary funds.
I am persuaded beyond a reasonable doubt of the following:
• all of the orders listed were made either orally, in court in the presence of Faraci and his counsel, or in the form of a written endorsement that was sent to Faraci’s counsel;
• all of the orders came to the attention of Faraci at the times they were made or shortly thereafter;
• all of the orders were made in clear and unambiguous language such that there could be no reasonable doubt about their meaning and what they required of Faraci;
• on the few occasions when questions were asked by Faraci or his counsel in court about an order that had been made, the questions were answered in a manner that should reasonably have removed any doubt about what the order required;
• Faraci and his counsel consented to many of the orders made.
• the descriptions of the orders and the other information provided in the chart referred to above are substantially accurate as at March 20, 2013.
The trial of this action began in April, 2012, and was then estimated by counsel to require less than five days to complete. Since then, the actual trial has resumed from time to time on approximately 36 days and approximately 20 additional days have been utilized for motions.
I am persuaded beyond a reasonable doubt that the Faraci defendants have willfully engaged in ongoing efforts throughout this trial to delay it and impede the efforts of the plaintiffs to bring this action to the moment of judgment. The failure of Faraci to comply with my orders has been part of that strategy. He has partially complied, in drips and drabs, only when pressured by my orders and the prospect of being found in contempt and punished. He has rarely done what he has been ordered to do within the time limits prescribed. To the extent that he has complied, he has routinely done so in a way that makes it difficult to examine the fruits of his efforts.
When Faraci was cross-examined by Mr. Chalmers, he was questioned on issues related to the extent of Faraci’s compliance with my orders. Many of those questions were met with Faraci’s refusal to answer on the advice of his present counsel, Mr. Davis. That advice, and Faraci’s refusals as disclosed in the transcript of evidence, were not only wrong but unreasonable. In these circumstances, I draw an inference adverse to the Faraci defendants. This conduct supports my findings that the conduct on the part of Faraci that constitute contempt was willful and deliberate. There is no other reasonable inference that can be made.
Faraci’s conduct throughout this trial has been consistent with his strategy to obstruct and delay this trial. He is a lawyer with many years of experience in his profession. He is clearly intelligent and shrewd but feigns not to be. He clearly believes that, because he is apparently judgment proof by his own design, he will succeed by attrition because delay serves to increase the costs to the plaintiffs of pursuing this trial but not his costs because they would not be recoverable.
Faraci’s strategy must not be allowed to succeed. His ongoing efforts to hijack this trial are an affront to the administration of justice. Unless I interfere, they will also threaten the plaintiffs’ right to a fair trial.
Any claim for costs relating to this motion will be heard on a date after the conclusion of this trial at a time to be fixed by me.
This order is subject to being varied by me from time to time in accordance with the exigencies that may occur.
Matlow, J.
September 16, 2013