Astley v. Verdun
Ontario Reports
Ontario Superior Court of Justice,
Goldstein J.
October 29, 2013
118 O.R. (3d) 43 | 2013 ONSC 6734
Case Summary
Contempt of court — Costs — Plaintiff successfully suing defendant for damages for defamation — Trial judge in defamation action issuing injunction prohibiting defendant from communicating with anyone about plaintiff — Defendant breaching injunction by communicating his unfounded concerns about plaintiff to Member of Parliament — Defendant found in contempt of court — Defendant ordered to pay costs of contempt proceedings on substantial indemnity basis.
Contempt of court — Sentence — Plaintiff successfully suing defendant for damages for defamation — Trial judge in defamation action issuing injunction prohibiting defendant from communicating with anyone about plaintiff — Defendant breaching injunction by communicating his unfounded concerns about plaintiff to Member of Parliament — Defendant found in contempt of court — Defendant's misguided belief that his actions amounted to principled act of conscience being aggravating factor — Contempt not involving financial gain and defendant apologizing to court — Appropriate penalty being 90-day conditional sentence with house arrest followed by 18 months' probation.
The plaintiff successfully sued the defendant for damages for defamation. The trial judge in the defamation action issued an injunction prohibiting the defendant from communicating with anyone about the plaintiff. The plaintiff breached that injunction by communicating his unfounded concerns about the plaintiff to a Member of Parliament. He was found in contempt of court.
Held, the defendant should receive a conditional sentence and probation.
The defendant's misguided and self-serving attempt to justify his actions as a principled act of conscience was a slightly aggravating factor. The fact that the defendant ultimately apologized to the court was mitigating, although he still had a way to go in order to fully appreciate the nature of his conduct. In the circumstances, the objectives of sentencing could be accommodated with a sentence that did not include a period of incarceration. The defendant's contempt did not involve personal financial gain. He needed rehabilitation more than he needed punishment. The objectives of general and specific deterrence could be met with a combination of sanctions that would denounce the defendant's conduct and deter future contempt. A 90-day conditional sentence with house arrest was imposed, followed by 18 months' probation. The defendant was ordered to perform 200 hours of community service.
There is a rebuttable presumption that substantial indemnity costs are appropriate in contempt cases. The presumption may be rebutted where the contemnor is suitably contrite, has attempted to purge his or her contempt, has taken steps to minimize costs incurred by the other party, and the contempt itself is towards the lower end of the "flagrant and wilful" scale. In this case, the defendant's apology came late in the process, his decision to represent himself had the effect of driving up costs and he was well aware that contempt proceedings might result in substantial indemnity costs. The defendant was ordered to pay the costs of the contempt proceedings on a substantial indemnity basis. [page44 ]
Cases referred to
1307347 Ontario Inc. v. 1243058 Ontario Inc. (c.o.b. Golden Seafood Restaurant), [2001] O.J. No. 585, 103 A.C.W.S. (3d) 271 (S.C.J.); Airst v. Airst, [2000] O.J. No. 2461 (S.C.J.); Astley v. Verdun (2011), 106 O.R. (3d) 792, [2011] O.J. No. 2727, 2011 ONSC 3651, 38 C.P.C. (7th) 39, 203 A.C.W.S. (3d) 624 (S.C.J.); Astley v. Verdun, [2013] O.J. No. 2356, 2013 ONSC 2998 (S.C.J.); Boucher v. Public Accountants Council for Ontario (2004), 71 O.R. (3d) 291, [2004] O.J. No. 2634, 188 O.A.C. 201, 48 C.P.C. (5th) 56, 132 A.C.W.S. (3d) 15 (C.A.); Bush v. Mereshensky, [2007] O.J. No. 3777, 2007 ONCA 679, 229 O.A.C. 200, 43 R.F.L. (6th) 267, 2007 CarswellOnt 6273, 74 W.C.B. (2d) 814; Canadian National Railway Co. v. Plain, [2013] O.J. No. 3392, 2013 ONSC 4806 (S.C.J.); Chiang (Trustee of) v. Chiang (2009), 93 O.R. (3d) 483, [2009] O.J. No. 41, 2009 ONCA 3, 78 C.P.C. (6th) 110, 305 D.L.R. (4th) 655, 49 C.B.R. (5th) 1, 257 O.A.C. 64, 2009 CarswellOnt 28, 174 A.C.W.S. (3d) 105; College of Optomestrists of Ontario v. SHS Optical Ltd. (2008), 93 O.R. (3d) 139, [2008] O.J. No. 3933, 2008 ONCA 685, 241 O.A.C. 225, 300 D.L.R. (4th) 548, 170 A.C.W.S. (3d) 512, 79 W.C.B. (2d) 618; Cornwall (Public Inquiry) v. Dunlop (2008), 90 O.R. (3d) 524, [2008] O.J. No. 957, 290 D.L.R. (4th) 699, 234 O.A.C. 352, 164 A.C.W.S. (3d) 786, 77 W.C.B. (2d) 687 (Div. Ct.); Einstoss v. Starkman, [2003] O.J. No. 96, 37 R.F.L. (5th) 77, 119 A.C.W.S. (3d) 443 (S.C.J.); Mercedes-Benz Financial v. Kovacevic, [2009] O.J. No. 888, 74 C.P.C. (6th) 326, 308 D.L.R. (4th) 562 (S.C.J.); Niagara (Regional Municipality) Police Services Board v. Curran (2002), 57 O.R. (3d) 631, [2002] O.J. No. 179, [2002] O.T.C. 48, 16 C.P.C. (5th) 139, 111 A.C.W.S. (3d) 246, 52 W.C.B. (2d) 335 (S.C.J.); Pro Swing Inc. v. Elta Golf Inc., [2006] 2 S.C.R. 612, [2006] S.C.J. No. 52, 2006 SCC 52, 273 D.L.R. (4th) 663, 354 N.R. 201, J.E. 2006-2235, 218 O.A.C. 339, 41 C.P.C. (6th) 1, 52 C.P.R. (4th) 321; R. v. Vermette, [1987] 1 S.C.R. 577, [1987] S.C.J. No. 21, 38 D.L.R. (4th) 419, 74 N.R. 221, [1987] 4 W.W.R. 595, J.E. 87-646, 52 Alta. L.R. (2d) 97, 77 A.R. 372, 32 C.C.C. (3d) 519, 57 C.R. (3d) 340, 2 W.C.B. (2d) 74; S.N.C.-Lavalin Profac Inc. v. Sankar (2009), 94 O.R. (3d) 236, [2009] O.J. No. 365, 2009 ONCA 97, 70 C.P.C. (6th) 227, 304 D.L.R. (4th) 251; Sussex Group v. Fangeat, [2003] O.J. No. 3348, [2003] O.T.C. 781, 42 C.P.C. (5th) 274, 125 A.C.W.S. (3d) 64 (S.C.J.); Sussex Group v. Sylvester (2002), 62 O.R. (3d) 123, [2002] O.J. No. 4350, [2002] O.T.C. 908, 32 C.P.C. (5th) 308, 118 A.C.W.S. (3d) 207, 56 W.C.B. (2d) 13; Westfair Foods v. Naherny, [1990] M.J. No. 32, 63 Man. R. (2d) 238, 19 A.C.W.S. (3d) 218 (C.A.); York (Regional Municipality) v. Schmidt, [2008] O.J. No. 4915, 173 A.C.W.S. (3d) 114 (S.C.J.)
Statutes referred to
Criminal Code, R.S.C. 1985, c. C-46, ss. 718 [as am.], 718.1 [as am.], 718.2(a), (b), (d), (e)
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 57.01, 60, 60.11, (5)(e)
SENTENCING for civil contempt of court.
Brian N. Radnoff and Amy P. Archer, for plaintiff.
Edward L. Greenspan, Q.C., and Jeremy Tatum, for defendant. [page45 ]
GOLDSTEIN J.: —
1. Overview
1Mr. Astley sued Mr. Verdun for libel. In 2011, a jury awarded Mr. Astley $650,000 in damages. Madam Justice Chapnik, the trial judge, subsequently issued a very broad injunction. The injunction prohibited Mr. Verdun from communicating with anyone about Mr. Astley. Despite this injunction, Mr. Verdun did so anyway. On May 23, 2013, I found Mr. Verdun guilty of contempt of court [[2013] O.J. No. 2356, 2013 ONSC 2998 (S.C.J.)]. On October 22, 2013, I read my reasons for sentence. I also indicated that I would release my reasons in writing. These are those reasons, and they include a costs award. Any differences between these reasons and those delivered in court reflect minor spelling and grammar corrections.
2For the reasons that follow, Mr. Verdun is sentenced to a conditional sentence followed by probation. The court will monitor Mr. Verdun by means of regular appearances. Mr. Verdun will also pay the costs of the contempt proceeding. Any wilful breaches of my order or Madam Justice Chapnik's order will undoubtedly result in a period of incarceration in jail.
2. The Facts
3The facts leading up to my finding of contempt are set out in my judgment dated May 23, 2013. See Astley v. Verdun, [2013] O.J. No. 2356, 2013 ONSC 2998 (S.C.J.). To summarize, Mr. Verdun is a self-described corporate governance activist. Mr. Astley is a prominent businessman. In 1999, Mr. Astley was president of Mutual Life of Canada. Mutual Life commenced a process of de-mutulization. Mr. Verdun, who was a Mutual Life policyholder, opposed de-mutulization. In doing so, he took on Mr. Astley and publicly accused him of all manner of civil and criminal misdeeds. He publicly opposed Mr. Astley's nomination to the board of directors of the Bank of Montreal. He circulated inflammatory comments about Mr. Astley. Mr. Astley eventually sued Mr. Verdun for libel and obtained a $650,000 judgment after a jury trial. Mr. Verdun has never paid any amount towards the judgment. He has also never paid the various costs judgments against him.
4In June 2011, Madam Justice Chapnik [ (2011), 2011 ONSC 3651, 106 O.R. (3d) 792, [2011] O.J. No. 2727 (S.C.J.)], the judge who presided over the jury trial, issued an injunction against Mr. Astley, the terms of which are as follows:
THIS COURT ORDERS that the Defendant is permanently enjoined from disseminating, posting on the Internet or publishing, in any manner [page46 ]whatsoever, directly or indirectly, any statements or comments about the Plaintiff, Robert M. Astley;
THIS COURT FURTHER ORDERS that the Defendant shall not publish or cause to be published, or otherwise disseminate or distribute in any manner whatsoever, whether by way of the Internet or other medium, any statements or other communications which refer to Robert M. Astley by name, depiction, or description[.]
5As I noted in my judgment, Madam Justice Chapnik made the following observations about Mr. Verdun's relentless campaign against Mr. Astley [at paras. 24 and 25]:
Mr. Verdun undoubtedly intends to continue his negative and defamatory campaign against Mr. Astley. He not only refuses to offer any apology or retraction of his statements, but has extended the scope of his publications after the commencement of the action by publishing his book and posting statements on the Internet which he refused to disengage even after the jury's verdict. Indeed, he continues to assert the propriety of his criticisms and his defences which were soundly rejected by the jury.
In the circumstances, I find it highly likely that the defendant will continue to publish defamatory statements about the plaintiff[.]
6Mr. Verdun appealed the jury's verdict. The registrar of the Ontario Court of Appeal dismissed his appeal for failure to order transcripts. A three-judge panel of that court upheld the dismissal. The Supreme Court of Canada dismissed a further appeal.
7Madam Justice Chapnik's prediction that Mr. Verdun would continue his campaign was prescient. In 2008, the Minister of Finance appointed Mr. Astley president of the Canada Pension Plan Investment Board, a position of obvious importance. In 2012, Mr. Verdun, in violation of the injunction, communicated with Stephen Woodworth, the Member of Parliament for Kitchener Centre, regarding his concerns about Mr. Astley. The concerns were the same ones that Mr. Verdun had raised in his libelous campaign against Mr. Astley.
8On May 23, 2013, I found Mr. Verdun guilty of contempt of court for communicating with Mr. Woodworth about Mr. Astley. I rejected his defence that he was only following his conscience, and that he owed some kind of higher duty. It is worth repeating my reasons for rejecting his defence [at paras. 28, 29, 31 and 32]:
During his submissions Mr. Verdun did not deny that his contact with Mr. Woodworth was in violation of the injunction. Instead, he justified his actions on the basis that it was incumbent on him to follow his conscience as a result of the Nuremberg Principles. He had no choice, he said, but to draw Mr. Astley's alleged ethical breaches to his Member of Parliament. He said that it is inconceivable in a free and democratic society that a citizen could not communicate with a Member of Parliament about the issues of the day. [page47 ]
Mr. Verdun is surely right that it would be inconceivable that a member of a free and democratic society could not communicate with his Member of Parliament on the issues of the day. He is surely wrong that Madam Justice Chapnik's order prevents him from doing so. He simply has to stay away from mentioning Mr. Astley -- there is no exemption in the order simply because the recipient of the communication is a Member of Parliament. He is wrong about that, too.
Mr. Verdun's references to the Nuremberg Principles are misguided, self-serving and offensive. The Nuremberg Principles are shorthand for the body of international criminal law developed after the Second World War that is concerned with war crimes and crimes against humanity. The Nuremberg Principles are not a blank cheque for anyone to do anything they want and then call it an act of conscience. There are real prisoners of conscience in the world who suffer under oppressive regimes. Mr. Verdun is not one of them. He is no martyr, except to his own peculiar obsession.
As well, Mr. Verdun's references to the Nuremberg Principles trivialize important principles of international law. It cannot be seriously suggested that alleged ethical breaches by Mr. Astley as Chairman of the Canada Pension Plan Investment Board (and I hasten to add that there is absolutely no evidence of any such breaches) have even the most remote connection to war crimes and crimes against humanity.
3. Positions of the Mr. Astley and Mr. Verdun
9Mr. Radnoff, for Mr. Astley, argues that Mr. Verdun should serve 21 days in jail, although the notice of motion asks for a sentence of 14 days. His view is that only the sanction of jail will bring home to Mr. Verdun the seriousness of his conduct and deter like-minded persons from flouting court orders.
10Mr. Greenspan, for Mr. Verdun, argues that this is an unusual case that calls for a creative sentence. He argues that the conviction has had a significant effect on Mr. Verdun. He now understands his situation, and the grave consequences that follow a finding of contempt. Mr. Greenspan also argues that Mr. Verdun's age and health militate against a jail sentence. His view is that the objectives of sentencing can be met with a non-custodial sentence.
4. Analysis
11This case is unusual. Most contempt of court proceedings involve money. Orders that are breached usually include failures to comply with undertakings, or failures to furnish complete financial statements or the dissipation of funds. Sometimes contemnors hide money. Sometimes they refuse to provide complete information about their assets or their financial transactions. Often contemnors violate court orders in an effort to hide money from an ex-spouse or a judgment debtor. [page48 ]
12Mr. Verdun is unusual in that he perceived his wilful non-compliance with Madam Justice Chapnik's order to be an act of conscience. In other words, he argued that he was, essentially, engaged in a form of civil disobedience. As I recounted in my reasons finding him in contempt, his explanation was wrong and wrong-headed. After observing Mr. Verdun in the witness box, and hearing his apology to the court, I now believe that he understands that he is not a Canadian Rosa Parks. His wilful violation of a court order is not comparable to refusing to comply with unjust Jim Crow laws.
13In order to determine an appropriate sentence, the following issues must be decided:
(a) What principles of sentencing apply in a proceeding for civil contempt?
(b) What are the mitigating and aggravating factors?
(c) Is jail appropriate?
(d) What sanctions other than jail are appropriate?
(e) Is a form of probation appropriate?
(a) What principles of sentencing apply in a proceeding for civil contempt?
14The rule of law depends upon respect for court orders. Accordingly, courts require the ability to enforce their orders and punish violations. The power of the Superior Court of Justice to punish contemnors derives from the court's power as a court of inherent jurisdiction: R. v. Vermette, 1987 1 S.C.R. 577, [1987] S.C.J. No. 21; see, also, Cornwall (Public Inquiry) v. Dunlop (2008), 90 O.R. (3d) 524, [2008] O.J. No. 957 (Div. Ct.).
15Although the contempt power is a common law power, it is regulated in Ontario by Rule 60 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Rule 60.11 sets out the court's punishment powers:
60.11(5) In disposing of a motion under subrule (1), 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; [page49 ]
(e) pay such costs as are just; and
(f) comply with any other order that the judge considers necessary[.]
16The principles of sentencing themselves are similar to those found in the criminal law: Chiang (Trustee of) v. Chiang (2009), 2009 ONCA 3, 93 O.R. (3d) 483, [2009] O.J. No. 41, 78 C.P.C. (6th) 110, 305 D.L.R. (4th) 655, 2009 CarswellOnt 28 (C.A.). Briefly, the principles can be summarized as follows:
A sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender: Criminal Code, R.S.C. 1985, c. C-46, s. 718.1; Chiang, para. 86; Mercedes-Benz Financial v. Kovacevic, [2009] O.J. No. 888, 308 D.L.R. (4th) 562, 74 C.P.C. (6th) 326 (S.C.J.), at para. 12.
A sentence should be increased or reduced to account for aggravating or mitigating factors surrounding the contempt or the contemnor: Criminal Code, s. 718.2(a); Chiang, para. 24; Sussex Group v. Fangeat, [2003] O.J. No. 3348, 42 C.P.C. (5th) 274 (S.C.J.), at para. 67.
A sentence should be similar to sentences imposed on similar contemnors for similar contempts committed in similar circumstances: Criminal Code, s. 718.2(b); Chiang, para. 24.
Sentences should denounce unlawful conduct, promote a sense of responsibility in the contemnor, and deter the contemnor and others from defying court orders: Criminal Code, s. 718; Sussex Group, at para. 67; Chiang, at para. 24.
The court should consider sanctions other than jail: Criminal Code, s. 718.2(d) and (e); Sussex Group v. Sylvester (2002), 62 O.R. (3d) 123, [2002] O.J. No. 4350 (S.C.J.), at paras. 80-82.
17As Watt J.A. stated in College of Optometrists of Ontario v. SHS Optical Ltd. (2008), 2008 ONCA 685, 93 O.R. (3d) 139, [2008] O.J. No. 3933, 300 D.L.R. (4th) 548 (C.A.) with his usual pithiness:
The underlying purpose of contempt orders is to compel obedience and punish disobedience.
18Rule 60.11 provides a measure of flexibility to a judge sanctioning a person for contempt: Chiang, at para. 45.
19The most important principles in sentencing a contemnor are general and specific deterrence: Cornwall (Public Inquiry) v. Dunlop, supra, at para. 48. The contemnor must be deterred from further acts of contempt. Perhaps more importantly, [page50 ]respect for court orders must be maintained and violations punished adequately in order to deter future violations.
20With those principles in mind, I turn to Mr. Verdun's situation, starting with the aggravating and mitigating factors.
(b) What are the mitigating and aggravating factors?
21Mr. Radnoff argues that there are a variety of aggravating factors, the most important of which is Mr. Verdun's lack of remorse and attempts to justify his actions. He argues that on May 7, 2013, the day of the contempt hearing, Mr. Verdun offered a highly qualified apology to the court. On August 27, 2013, Mr. Verdun offered for the first time a more fulsome apology. Mr. Radnoff argues, in effect, that the apology is too little and too late to be a mitigating factor. Mr. Radnoff also points to the wilful nature of the violation, Mr. Verdun's misguided view that it was somehow an act of conscience and the revelation of more communications about Mr. Astley.
22Mr. Greenspan argues that it is mitigating that Mr. Verdun did not engage in contempt of court for personal gain or financial advantage. He points to Mr. Verdun's health problems, which have been significant and include a heart condition regulated by a pacemaker. He submits that the process has been salutary for Mr. Verdun, as he now understands the serious nature of his contempt and the reality that the court will not take it lightly. He also notes Mr. Verdun's relatively advanced age, and the fact that he is the caregiver for his 75-year-old companion, who is in frail health. Mr. Greenspan also argues that Mr. Verdun is akin to a first offender, although I note that that observation is likely one that can be made about the vast majority of contemnors.
23A party seeking to rely on a mitigating factor in contempt proceedings must establish that factor on a balance of probabilities: Chiang, paras. 50-52.
24As noted, Mr. Verdun was motivated by a misguided act of civil disobedience. Is that circumstance aggravating or mitigating? It is clear that disagreement with a law or regulation -- or a court order -- does not entitle one to ignore that law, regulation or order: College of Optometrists of Ontario v. SHS Optical Ltd., supra, at para. 107. On the one hand, violation of a court order is contemptuous (and often contemptible) conduct. On the other hand, a genuine if misguided belief in the justice of one's cause may be less morally blameworthy worthy than, say, contempt arising out of the hiding of assets from one's ex-spouse or a failure to comply with child support orders. In my view, Mr. Verdun's misguided and self-serving attempts to justify his [page51 ]actions as an act of conscience are ultimately aggravating, although not as aggravating as they would be if personal financial gain or gain at the expense of an ex-spouse was the goal. It has only a limited effect as an aggravating factor.
25Mr. Greenspan also points to the mitigating factor of the apology. An important mitigating factor in contempt cases occurs where a contemnor purges or attempts to purge his or her contempt. For example, a wilful refusal to comply with undertakings may give rise to a finding of contempt that can simply be purged by compliance. In this case, purging is impossible because of the nature of the order and the violation. An apology goes some way towards mitigation. Mr. Verdun has filed an affidavit in which he states the following:
I unconditionally apologize to the court for any violation of the injunction, and I beg the mercy of the court for any transgression that has occurred.
26It is true that Mr. Verdun at one point indicated that he would rather accept jail than mitigate his beliefs. This kind of defiance and bluster is common, until the contemnor actually contemplates the reality of spending some time as a guest of Her Majesty. Contemnors then often try to come down from the limb that they have gone way out on when they recognize that they are busy sawing it off. It appears that something like that has happened to Mr. Verdun, perhaps because he finally retained experienced counsel for his sentencing hearing.
27Mr. Radnoff argues that this apology is self-serving and does not fully show insight into the contempt. I disagree. It was apparent to me from viewing Mr. Verdun at the penalty hearing that he has come some way from the dismissive, almost arrogant way in which he approached the proceedings. I do believe, however, that Mr. Verdun still has a way to go in order to fully appreciate the nature of his conduct. Ultimately, I accept the apology to the court as a mitigating factor.
(c) Is jail appropriate?
28The propriety of a jail sentence for contempt of court has been the subject of much judicial comment. Mr. Radnoff argues that only a jail sentence can meet the requirements for sentencing in this case. Although jail is obviously available, I respectfully disagree. A review of the authorities leads me to determine that a sanction other than jail is appropriate.
29In Bush v. Mereshensky, 2007 ONCA 679, [2007] O.J. No. 3777, 229 O.A.C. 200, 2007 CarswellOnt 6273 (C.A.), the husband accessed some $400,000 in a bank account jointly held with his wife in the face of several court orders. He was ordered to provide a written [page52 ]accounting of his assets, to pay $317,000 into court, and to comply with other terms and conditions. He did not do so, in what the motion judge described as a "flagrant disregard" of court orders. The motion judge imposed a sentence of 60 days, which was upheld by the Court of Appeal. The Court of Appeal noted that the sentence was fit in light of the flagrant violation of several court orders and the ineffectiveness of other sanctions.
30In the rather unusual case of York (Regional Municipality) v. Schmidt, [2008] O.J. No. 4915, 173 A.C.W.S. (3d) 114 (S.C.J.), the contemnor sold unpasteurized milk and milk products in violation of several health and safety regulations. The court issued an injunction, ordering Mr. Schmidt to stop distributing these products. Mr. Schmidt did it anyway, and was found in contempt. Mr. Schmidt, not unlike Mr. Verdun, considered himself on something of a crusade. He asked for a harsh punishment. In contrasting the municipality's position (which sought only a fine and costs), Boswell J. stated [at paras. 8 and 9]:
Mr. Schmidt, ironically, argued the opposite. He says he should indeed be punished at the harshest level. He likened himself to Gandhi and Martin Luther King in an apparent attempt to highlight his struggle for political change.
As I expressed in my Reasons for finding Mr. Schmidt in contempt, this is not a case about the merits of raw milk, nor for that matter, the bigger picture about the limits of acceptable governmental regulation over our lives. This is a case about the integrity of the administration of justice in our community and the importance of respect for court orders.
31Boswell J. found that Mr. Schmidt was intelligent, well-meaning and good-intentioned if misguided. Ultimately, he accepted the submissions of counsel for the municipality and found that a jail sentence was not required to meet the objectives of general and specific deterrence and the principles of sentencing. He imposed a fine of $5,000.
32In another unusual and famous case, Cornwall (Public Inquiry) v. Dunlop, supra, the commissioner of a public inquiry had subpoenaed Perry Dunlop, a former Cornwall police officer. Dunlop very publicly refused to testify and called into question the integrity of both the public inquiry and the judicial system. The commissioner found him both in criminal and civil contempt. The Divisional Court was asked to enforce the finding by imposing a penalty. Given the wilful, public and flagrant violation of the order to testify, the court imposed a penalty of six months, with a provision that Dunlop could purge the contempt at any time and apply for release if he testified.
33In Niagara (Regional Municipality) Police Services Board v. Curran (2002), 57 O.R. (3d) 631, [2002] O.J. No. 179, 16 C.P.C. (5th) 139 (S.C.J.), [page53 ]the contemnor operated an unlicensed taxi service in the face of municipal regulations and court orders. He was found in contempt and ordered to serve four months in custody by Quinn J. He breached a subsequent order to cease operating the service. The contemnor was also prosecuted in the criminal courts and convicted. Quinn J. found that the violation of quasi-criminal law and the violation of the court order were not the same delict and refused to consider a conditional sentence (which was the subject of a joint submission by counsel). Although he considered that a conditional sentence was available (of which more below), he ordered another six months in jail.
34The Court of Appeal in Chiang, supra, described the case as "one of the worst cases of civil contempt to come before this court". In 1998 and 2004, the plaintiff Korea Data Systems obtained judgments in California personally against Jay Chiang, Julius Chiang and Christina Chiang (Jay's wife) for millions of dollars. KDS obtained judgments in Ontario to enforce the California judgments. Jay and Julius then filed for bankruptcy. The Court of Appeal noted that the Ontario litigation consisted of Jay and Christina Chiang deliberately breaching court orders while transferring millions of dollars out of the province for the sole purpose of frustrating KDS's ability to collect on its debt. Notwithstanding the bankruptcy and affidavits setting out their impecuniosity, the Chiangs continued to maintain a lavish lifestyle. After a trial, Lax J. ordered that Jay Chiang be imprisoned for one year and Christina Chiang for eight months. The Court of Appeal found that those sentences were entirely fit, and commented [at para. 90]:
Custodial sentences for civil contempt are rare. Lengthy custodial sentence are even rarer. Canadian courts have tended to punish contempt of court leniently. Ordinarily the mere conviction for contempt together with a modest fine suffices to obtain compliance and protect the court's authority. Ordinarily incarceration is a sanction of last resort: see Robert J. Sharpe, Injunctions and Specific Performance, 3d. ed. (Aurora: Canada Law Book, 2000) at para. 6.120.
35In Mercedes Benz Financial v. Kovacevic, supra, D. Brown J. considered the Court of Appeal's comments in Chiang and stated [at para. 10]:
In that case the Court of Appeal also noted that Canadian courts have tended to punish contempt of court leniently. I suspect this observation was based on the commentary contained in the document published in May, 2001 by the Canadian Judicial Council entitled, "Some Guidelines on the Use of Contempt Powers", where, at page 40, the following statements are found: [page54 ]
In Canada punishment for contempt has been quite moderate, reflecting the courts' usual view that a conviction for contempt and a modest fine is usually sufficient to assert the courts' authority, to protect their dignity or to ensure compliance. Often these sentences are imposed after the contemnor has apologized and purged his or her contempt which substantially mitigates any punishment that might otherwise be imposed.
Notwithstanding these comments by the Canadian Judicial Council, sentences imposed in recent years by Ontario courts for civil contempt of court do not display a tendency towards leniency, especially in cases where the contemnor has engaged in a lengthy course of disobedience and has not purged his contempt . . . any differences in the resulting range of sentences should flow, in my opinion, from the application of the principle of proportionality, not from some notion that courts should treat instances of civil contempt leniently.
(Emphasis added)
36The circumstances that will warrant a jail sentence will depend on the facts of any given case, but I think it obvious that the more wilful, flagrant, ongoing and damaging the contempt the more likely it is that a jail sentence will be imposed. In other words, proportionality continues to be an important principle.
37In my view, the objectives of sentencing can be accommodated in this case with a sentence that does not include a period of incarceration. I reach this conclusion for the following reasons:
Mr. Verdun's contempt, although wilful, did not involve personal financial gain. Mr. Verdun did not seek to hide money from an ex-spouse or a judgment creditor. He was on some kind of quixotic, misguided quest. Although it is true that he is in debt to Mr. Astley, it is a debt incurred as a result of litigation and a jury's verdict. Mr. Verdun did not previously owe Mr. Astley money and his contempt does not flow from a wilful failure to pay the judgment.
Mr. Verdun has apologized to the court, and I accept his apology.
Mr. Verdun needs rehabilitation more than he needs punishment. He needs to gain the insight to understand that his actions were not those of a prisoner of conscience engaged in legitimate civil disobedience, but rather those of a person who has undermined the rule of law.
In Chiang, the Court of Appeal was clear that jail is an appropriate remedy only as a sanction of last resort. In this case, I am satisfied that the objectives of general and specific deterrence can be met with a combination of sanctions that will denounce Mr. Verdun's conduct, and deter future contempt. [page55 ]
38I note that while I accept that the effect of prison on Mr. Verdun might be disproportionate given his age and his health, if a jail sentence were otherwise appropriate I would impose one. Mr. Verdun's health problems are not so serious that he cannot serve a jail sentence. He should bear that in mind in the future.
(d) What sanctions other than jail are appropriate?
39As a court of inherent jurisdiction, the Superior Court of Justice has such power as is necessary to enforce its own process. Rule 60.11, in stating that on a finding of contempt a judge may make "such order as is just" simply enumerates the common law power.
40There does not seem to be a serious question that a conditional sentence is available as a sanction for contempt of court as part of the inherent jurisdiction of the Superior Court: in Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52, [2006] 2 S.C.R. 612, [2006] S.C.J. No. 52, the Supreme Court held, at para. 35, that a contemnor can be committed to jail or be subject to any other sanction available for a criminal offence. In Niagara (Regional Municipality) Police Services Board v. Curran, supra, Quinn J. held that he had jurisdiction to impose a conditional sentence but elected not to. In Airst v. Airst, [2000] O.J. No. 2461 (S.C.J.), Wein J. imposed a conditional sentence in a family law contempt situation.
41In Westfair Foods v. Naherny, [1990] M.J. No. 32, 63 Man. R. (2d) 238 (C.A.), a case quoted with approval by the Supreme Court of Canada in Pro Swing Inc., the Manitoba Court of Appeal found that the Court of Queen's Bench had the jurisdiction to order community service as a sentence for contempt of court. The court stated:
I do not think that the penalties that are available to the court in exercising its inherent jurisdiction to deal with contempt are limited to the traditional sanctions of fines or imprisonment.
42Despite Mr. Radnoff's compelling and able submissions, in my view a conditional sentence can be crafted that is sufficiently punitive to denounce the offence, meets the needs of general and specific deterrence, and promotes the rehabilitative goals of sentencing. Accordingly, Mr. Verdun will be subject to a conditional sentence of 90 days, during which he will be under house arrest. During that time, he will not be permitted to leave his residence except for medical emergencies, grocery trips and to attend at his conditional sentence supervisor. He will be subject to the usual statutory terms as well. [page56 ]
43A fine in this case is not appropriate. There are several monetary orders outstanding against Mr. Verdun. Mr. Radnoff argues persuasively that Mr. Astley, rather than the court, should have the first call on Mr. Verdun's assets. In any event, Mr. Greenspan does not seriously suggest that Mr. Verdun is currently in a position to pay a significant fine. That, of course, may change in the future but I agree with Mr. Radnoff that Mr. Verdun should be compelled to pay the judgment in favour of Mr. Astley first.
(e) Is a form of probation appropriate?
44I also impose a probation order on Mr. Verdun. In my view, he should be supervised for a period of time. Probation will also bring home to him the gravity of the offence. Accordingly, he will be placed on probation for 18 months. The main term of the probation order is that he will perform 200 hours of community service. He will appear before me periodically to monitor his progress, commencing at the end of his conditional sentence. He will also report to a probation officer.
5. Disposition
45Mr. Verdun will be subject to a conditional sentence order. In addition to the usual statutory terms, including reporting to a conditional sentence supervisor, the conditional sentence order will include the following terms:
Mr. Verdun will be under house arrest for 90 days. He will be forbidden from leaving his residence except for medical appointments, medical emergencies involving himself or Ms. Freund, grocery shopping trips of less than two hours duration twice per week, or to see his counsel.
Mr. Verdun will deposit his passport with his counsel within 72 hours, who has agreed to undertake not to return it until the expiry of the conditional sentence order.
Mr. Verdun will carry a copy of my order (including the conditional sentence order) with him whenever he leaves his residence. He will do so for the duration of the conditional sentence order.
Mr. Verdun will remain in the province of Ontario for the duration of the conditional sentence order.
Mr. Verdun will comply with the order of Madam Justice Chapnik. [page57 ]
-- Mr. Verdun will attend before me on March 14, 2014.
46Upon the expiry of the conditional sentence, Mr. Verdun will be on probation for 18 months. In addition to the usual statutory terms, including reporting to a probation officer, the probation order will include the following terms:
Mr. Verdun will appear before me periodically to monitor his progress and compliance with the order, commencing with an agreed date shortly after the expiry of the conditional sentence order.
Mr. Verdun will complete 200 hours of community service. He will be required to provide the court evidence that he is performing community service when he appears before me. I will leave it to Mr. Verdun and his counsel to determine a suitable form of community service, and present a plan to the court when he appears next.
Mr. Verdun will carry a copy of my order (including the probation order) with him whenever he leaves his residence. He will do so for the duration of the probation order.
Mr. Verdun will comply with the order of Madam Justice Chapnik.
47I ask counsel to draft an order that will reflect the terms I have set out and include the conditional sentence order and probation order as appendices.
48I appreciate that the terms of this conditional sentence order and subsequent probation are onerous. When all is said and done, Mr. Verdun may well wish that I had imposed a short, sharp jail sentence. And that is the point.
6. Costs
49Subrule 60.11(5)(e) of the Rules of Civil Procedure gives the court discretion to pay such costs as are just in a contempt of court matter.
50There are two issues to be determined:
(a) Should costs be payable on a substantial indemnity basis?
(b) What is the appropriate quantum?
(a) Should costs be payable on a substantial indemnity basis?
51Rule 57.01 sets out the facts that the court should take into account when determining a costs order. The overriding [page58 ]principle is that costs should be is fair and reasonable in the circumstances: Boucher v. Public Accountants Council for Ontario (2004), 71 O.R. (3d) 291, [2004] O.J. No. 2634 (C.A.).
52The authorities in Ontario lean to the view that costs should generally be awarded on a substantial indemnity basis in contempt matters: Canadian National Railway Co. v. Plain, [2013] O.J. No. 3392, 2013 ONSC 4806 (S.C.J.), at para. 27. In 1307347 Ontario Inc. v. 1243058 Ontario Inc. (c.o.b. Golden Seafood Restaurant), [2001] O.J. No. 585, 103 A.C.W.S. (3d) 271 (S.C.J.), Nordheimer J. set out the rationale [at para. 5]:
There ought to be something approaching a complete indemnity to the successful party in such motions since to do otherwise would involve some cost or punishment to the successful party arising solely out of the conduct of the other party in violating the court order.
53In Canadian National Railway, supra, the contemnor was the spokesperson for the "Idle No More" protest group that blocked a railway track. He was found in contempt of court. Thomas J. was aware that the protest was "an exercise of expressive freedom" and that the contemnor was an aboriginal protestor. He awarded substantial indemnity costs, notwithstanding that the contemnor acknowledged his contempt, and attempted to purge the contempt, and apologized.
54In S.N.C.-Lavalin Profac Inc. v. Sankar (2009), 2009 ONCA 97, 94 O.R. (3d) 236, [2009] O.J. No. 365, 304 D.L.R. (4th) 251 (C.A.), the Court of Appeal upheld an award of substantial indemnity costs in a contempt matter. Laskin J.A., for the court, stated that the flagrant and intentional breaches of court orders justified the substantial indemnity award. The court conducted no further analysis.
55In Einstoss v. Starkman, [2003] O.J. No. 96, 37 R.F.L. (5th) 77 (S.C.J.), LaForme J. (as he then was) examined the question of substantial indemnity costs on a contempt motion. He concluded that whether or not substantial indemnity costs should be awarded required a more nuanced analysis [at para. 14]:
It would seem that some note of caution when dealing with contempt cases ought to be sounded. Courts should be wary of confusing the issues of costs in the main action (i.e., the action generating the contemned order), and costs in the contempt action. While it may be that a person's contemning an order made in the main action would be strong evidence of deliberate frustration, it does not automatically follow that it is. Substantial indemnity should be awarded in the contempt action only if the contempt itself or the conduct of the contempt trial evinces a deliberate attempt at frustration. This no doubt will occur frequently but it is not necessarily inevitable, since the contempt itself may not be sufficiently egregious. [page59 ]
56In my view, a court should not simply accept that substantial indemnity costs are the norm without an examination of what is fair and reasonable in the circumstances and the reasonable expectations of the parties. The factors set out in rule 57.01 continue to play a role in guiding the court's exercise of discretion. No doubt, substantial indemnity costs are often appropriate, given the nature of contempt of court and the coercive purpose of substantial indemnity costs in these circumstances: Canadian National Railway, supra.
57I characterize the test this way: there is a rebuttable presumption that substantial indemnity costs are appropriate in a contempt of court case. The presumption may be rebutted where the contemnor is suitably contrite, has attempted to purge his or her contempt, has taken steps to minimize costs incurred by the other party, and the contempt itself is towards the lower end of the "flagrant and wilful" scale.
58Substantial indemnity costs are appropriate in this case. Such costs are fair to both parties for the following reasons:
Mr. Verdun's apology, while a mitigating factor on sentencing, has less force when considered in the costs context. It came late in the process. It also came after much protracted litigation. Mr. Verdun's decision to represent himself (also until late in the process) had the effect of driving up costs.
Regarding the manner in which Mr. Verdun conducted the proceedings, I certainly do not take issue with his right to represent himself. I also do not take issue with his right to conduct the case in a manner of his choosing (within reason) but he must also accept the consequences of doing so. Mr. Verdun is not an ingénue who is unfamiliar with the legal system. He is certainly more sophisticated than many unrepresented persons who represent themselves in civil litigation matters. He was well aware that contempt proceedings might well result in substantial indemnity costs.
I have already discussed the nature of the contempt itself. It is not on the lower end of the "flagrant and wilful" scale. The nature of the contempt does not tip the scales against substantial indemnity costs.
(b) What is the appropriate quantum?
59Mr. Radnoff submitted a bill of costs seeking substantial indemnity costs totalling $24,377.41. This is based on fees at substantial indemnity rates totalling $19,267.50, with the remainder being disbursements and HST. The time spent by [page60 ]counsel is certainly not out of line with what one would expect on a motion of this nature. In terms of the reasonable expectation of the parties, I note that the amount sought by Mr. Radnoff on a substantial indemnity basis is only slightly higher than the amount suggested by Mr. Greenspan for his fees on a partial indemnity basis. Accordingly, in giving weight to the reasonable expectation of the parties I award Mr. Astley $24,377.41.
Order accordingly.
End of Document