ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FS-03-47948-0002
DATE: 2013-11-27

B E T W E E N:

MICHAEL MOUDRY

Barbara J. Puckering, for the Applicant (Respondent in Motion)

Applicant (Respondent in Motion)

• and -

SHELLEY ANN MOUDRY aka SHELLEY ABRAHAM

Nancy Deskin and Dani Ann Robichaud, for the Respondent (Appellant in Motion)

Respondent (Appellant in Motion)

HEARD: November 19, 2013,
at Brampton, Ontario

Price J.

Reasons For Order

Nature of Motion

[1] Ms. Abraham and Mr. Maudry conceived their only child, Meagan, in the hope that beginning a family would strengthen their troubled marriage. When their troubles continued, Ms. Abraham separated from Mr. Maudry, before Meagan was born, and went to live with her parents in Gatineau, Quebec. When Mr. Maudry commenced the present proceeding and obtained a series of Orders requiring Ms. Abraham to return Meagan to Ontario and facilitate Mr. Maudry’s access to her, Ms. Abraham, a law clerk in a major Ottawa law firm, repeatedly disobeyed the Orders.

[2] Sproat J., after finding Ms. Abraham in contempt of court, held that it would not be in the best interests of the family to imprison her. Instead, he ordered Ms. Abraham to pay a special costs award to Mr. Moudry in the amount of $18,846.36 as a “sanction of sorts for the contempt and that it should be paid in 60 days.” When the applicant attempted to collect the amount owed, Ms. Abraham filed for bankruptcy in the Province of Quebec. She now argues that her discharge from that bankruptcy extinguished the costs sanction against her.

[3] Ms. Abraham seeks a declaratory order that:

(a) this court has no jurisdiction to deal with her bankruptcy; or, in the alternative,

(b) her costs order was discharged by her discharge from bankruptcy; or, in the further alternative,

(c) she has paid the costs because she paid daycare expenses for the child that it was Mr. Moudry’s obligation to pay.

Background

[4] Mr. Moudry and Ms. Abraham were married February 5, 2000. At that time, they were both employed by a major law firm in Toronto. Ms. Abraham was a law clerk and Mr. Moudry was employed in the accounting department. They soon experienced conflict in their marriage but decided to have a child, in the hope that starting a family would improve their relationship. Their daughter, Meagan, was born on May 2, 2002. By March 31, 2003 the parties were separated and Ms. Abraham had taken Meagan with her to Gatineau, Quebec, to stay with her family. Mr. Moudry moved to his parents’ residence in Mississauga.

[5] The litigation that ensued between Mr. Moudry and Ms. Abraham has been long and contentious, with numerous orders, appeals, and hearings. A brief review of the litigation, and of the procedural steps, including the present motion, that Ms. Abraham took to deny Mr. Maudry access to Meagan, is necessary to put Sproat J.’s costs order in context.

[6] Mr. Moudry began a divorce proceeding in Ontario because in April 2003, Ms. Abraham could not meet the residency requirement to bring such a proceeding in Quebec. Ms. Abraham nevertheless began a proceeding in Quebec in which she sought custody, access, and support but when she was served with Mr. Moudry’s divorce petition from Ontario, she concluded that the Quebec court did not have jurisdiction and the Quebec proceeding was stayed.

[7] On May 16, 2003, O’Connor J. made a temporary order granting Mr. Moudry access to Meagan every other weekend. On July 8, 2003, MacKenzie J. made an order granting Mr. Moudry summer access and adjourned the balance of Mr. Moudry’s motion to September 2, 2003. On September 2, 2003, MacKenzie J. made a further order, granting the parties temporary joint custody of Meagan, granting Mr. Moudry access to Meagan on alternate weeks from Sunday at noon through Wednesday at noon, and requesting the involvement of the Office of the Children’s Lawyer to investigate and report on custody and access issues.

[8] Ms. Abraham applied for leave to appeal MacKenzie J.’s order, which was denied on October 20, 2003.

[9] Sproat J. later found that Ms. Abraham denied Mr. Moudry access to Meagan on multiple occasions during the summer of 2003, some of which were justified, others which were not. He found, however, in his April 2007 reasons, that in November and December 2003, Ms. Abraham did not comply with MacKenzie J.’s order requiring her to bring Meagan to Mississauga on alternate weekends. As a result, Mr. Moudry was unable to exercise access to Meagan. Mr. Moudry brought a motion for contempt and obtained access to Meagan on December 13 and 14, 2003.

[10] The contempt motion was heard January 30, 2004, at which time Belleghem J. ordered that alternate week access continue and adjourned the motion to April 6, 2004.

[11] On March 24, 2004, Ms. Abraham made a motion to the Quebec Superior Court, without notice to Mr. Moudry, asking that court to exercise exclusive jurisdiction regarding custody and access. Bedard J. dismissed that application, stating:

Considering that [Ms. Abraham] has appeared through an Ontario solicitor and has contested custody without raising the absence of jurisdiction, she is presumed to have accepted the jurisdiction of the Ontario Court which, until a contrary decision, has jurisdiction to deal with the litigation.

[12] On the return of the motion before Corbett J. in Ontario, Ms. Abraham asked that the proceeding be transferred to Quebec. Corbett J. exercised his discretion not to transfer the proceeding to Quebec. He stated:

In respect to the motion to transfer this proceeding to Quebec, I am convinced that such a transfer would have the effect of prejudicing Mr. Moudry’s ability to pursue meaningful access. The conduct of [Ms. Abraham] to date shows a pattern of litigation strategy that does not respect the spirit of past orders.

[13] Corbett J. found that there was enough in the record for a finding of contempt against Ms. Abraham, if the evidence was believed, but that there was enough in issue that there should be viva voce evidence. He noted that Mr. Moudry did not want an order committing Ms. Abraham to jail. He stated:

More important, for the future it appears that [Ms. Abraham] wishes to frustrate [Mr. Moudry’s] access and his efforts to establish a relationship with his daughter. If this course of conduct persists, it could establish deliberate alienation in which event [Ms. Abraham] could find herself as an access parent rather than a custodial parent. A real effort to cooperate and ensure regular and meaningful access is required and may do much to ameliorate past conduct forming the basis of the contempt motion.

[14] On August 19, 2004, Ms. Abraham applied to Plouffe J. of the Quebec Superior Court for custody of Meagan, suspension of Mr. Moudry’s access rights, and payment of child support. Plouffe J. dismissed the application on the basis of lack of jurisdiction.

[15] An expedited trial was eventually scheduled to begin in Ontario on February 14, 2005. In the face of that, Ms. Abraham brought a motion before the Quebec Superior Court, without notice to Mr. Moudry, to suspend Mr. Moudry’s access to Meagan in Mississauga “until a physical assessment rules out any sign of sexual abuse and a psychological assessment has been done providing an opinion on the terms and conditions of access between [Mr. Moudry] and the child.”

[16] Sproat J., later noted that that the physical examination of Meagan disclosed no sign of sexual abuse. He characterized Ms. Abraham’s motion as a subterfuge calculated to delay the trial that was about to begin in Ontario. in his reasons in April 2007, he stated:

From beginning to end this proceeding was an abuse of process and travesty of justice. All the steps taken appear calculated to frustrate the Court process and orders made in Ontario. I wish to make it clear I am not criticizing the courts in Quebec that dealt with the matter.

[17] On February 3, 2005, the Quebec Court granted a temporary order suspending Mr. Moudry’s access until February 8, 2005, and ordered that the motion and exhibits be served immediately. Mr. Moudry’s evidence was that he did not receive the exhibits, and Sproat J., who accepted his evidence, also found, in his April 2007 reasons, that Ms. Abraham’s affidavit to the Quebec Court “was false or misleading in a number of respects.”

[18] Meagan was examined by a paediatrician on February 9, 2005, who reported the following day:

The evidence is undisputed that the mother knew that there was no merit to any allegations with respect to physical or sexual abuse by the father on the child. The child has been examined by a paediatrician on the referral of Dr. Alain Couet on February 9, 2005. The mother accompanied the child on February 9, 2002 [sic]. The specialist’s report was written on February 10th, 2005. Report reads as follows: “…Diagnostic impression: physical examination: vulva normal, no irritation, hymen normal, no abnormal bruises, remainder of physical examination normal.”

[19] Ms. Abraham’s lawyer later stated that her client, who had attended the examination and was aware of the conclusion reached on February 9, 2005, did not advise her that the paediatrician found no evidence of abuse. As a result of the serious allegations that Ms. Abraham made in Quebec and uncertainty as to the status of the investigation of them, the trial could not proceed in Ontario on February 14, 2005. Eventually, however, on March 29, 2005, a peremptory trial date was fixed for May 9, 2005. Dunn J. made a further order on April 13, 2005, that Mr. Moudry’s access to Meagan was to resume on April 15, 2005.

[20] Ms. Abraham did not appear for the trial, which proceeded before Snowie J. from May 9 to 11, 2005. She later acknowledged that it was a “mistake” on her part not to appear. Sproat J., in his April 2007 reasons, stated “I have a healthy suspicion, but cannot be satisfied, that Ms. Abraham’s failure to attend on the new ‘peremptory’ trial date on May 9, 2005, was not a mistake but a further example of her seizing an opportunity to turn a miscommunication or misunderstanding to her advantage.”

[21] Snowie J. released her decision on June 23, 2005, awarding custody of Meagan to Mr. Moudry. From November 2005 to July 2006, Ms. Abraham exercised access to Meagan every other week from Wednesday to Sunday.

[22] On July 21, 2006, assailants attacked Mr. Maudry in an apparent effort to deter him from continuing to exercise access to Meagan. On that date, four masked men beat Mr. Moudry with wooden bats inside the entrance to the family home. There was profuse bleeding and Mr. Moudry was taken to hospital where he received 10 staples in his head. Mr. Moudry testified that one of the assailants said words to the effect: “It’s over – the child goes back to her mother.” The investigating officer later testified that Mr. Moudry related this to him that night and his note indicated that he reported the same to one of the initial officers at the scene.

[23] Ms. Abraham appealed successfully from Snowie J.’s judgment on the ground that her counsel’s request for a brief adjournment should have been granted. The trial was re-scheduled and took place before Sproat J. from April 3 to 20, 2007.

[24] In his reasons issued April 30, 2007, Sproat J. stated:

In this case, actions speak louder than words. Ms. Abraham has, at virtually every turn, taken a technical, misleading and/or contemptuous position with a view to undermining Meagan’s relationship with her father. Ms. Abraham has also attempted to manipulate the court system and deprive the court of helpful evidence.

[25] Regarding custody of Meagan, Sproat J., after reviewing the evidence, concluded. “In my opinion:

a) Ms. Abraham will act according to her beliefs and preferences and without regard to court orders;

b) Ms. Abraham will do her best to undermine Mr. Moudry’s relationship with Meagan;

c) Ms. Abraham has a blind-spot when it comes to Meagan’s best interests in that she cannot see that her conduct has been harmful to Meagan; and

d) Given that Ms. Abraham has filed false affidavit evidence and her conduct throughout, the evidence of Mr. Moudry should be preferred to the extent it conflicts with her evidence.

[26] Sproat J. concluded that it is in Meagan’s best interest that Mr. Moudry have custody of her. He granted Ms. Abraham access to Meagan on alternate weekends, with shared access during Christmas and summer vacations.

[27] With regard to the issue of contempt, Sproat J. stated:

I am also satisfied beyond a reasonable doubt that Ms. Abraham was in contempt of the Court orders referred to in paragraph 2(b) and (c) above [that is, MacKenzie J.’s Order dated September 2, 2004, Corbett J.’s Order dated May 13, 2004, Dunn J.’s Order dated April 13, 2005, and Snowie J.’s Order dated June 23, 2005, by denying access from February 4, 2005, to October 23, 2005]. Ms. Abraham admits that she decided to disregard Justice MacKenzie’s order to suit her belief as to Meagan’s need for breast-feeding. The fact that Ms. Abraham found a pretext for not allowing Mr. Moudry access in Gatineau unless he would stay within the municipality for his access time provides no excuse for Ms. Abraham breaching the order by not bringing Meagan to Mississauga.

Ms. Abraham was clearly in breach of the orders of Justice Dunn and Justice Snowie. In my opinion, it is not a defence to file false and misleading material to secure an inconsistent Quebec order and opt to follow that order. In any event, Ms. Abraham continued to disregard Justice Snowie’s order even after Plouffe J. dismissed her Quebec proceeding for lack of jurisdiction on August 24, 2004. [Reasons dated April 23, 2007, paras. 119 and 120].

[28] With regard to penalty, Sproat J. stated

Incarcerating Ms. Abraham will not assist this family in attempting to move and look forward. If, however, Ms. Abraham in future disregards Court orders that may be the appropriate response. I am not going to impose a civil fine. Given the parties have had the expense of two trials, I am going to order, pursuant to Rule 60.11(5) of the Rules of Civil Procedure that the costs of the contempt motions be paid by Ms. Abraham on a substantial indemnity basis. [Reasons dated April 30, 2007, para. 122]

[29] Following written submissions from counsel, Sproat J. issued his costs endorsement on June 25, 2007. With regard to the costs of the contempt motions, Sproat J. stated:

At trial, I found that Ms. Abraham was in contempt and awarded Mr. Moudry his costs of the contempt motions, on a substantial indemnity basis, which motions had been reserved to the trial judge. [Mr. Moudry’s lawyer] claims $18,846.36 for these motions based upon the time spent, prior to trial, on the motions themselves.

The time spent and rate claimed are reasonable. The contempt issue was of great importance and I am satisfied that this amount is reasonable and so I award $18,846.36 in relation to the contempt motions.

[30] With regard to the balance of Mr. Moudry’s costs, amounting to $62,417.39, and recognizing that not every step in the litigation was caused by Ms. Abraham’s bad faith, Sproat J. apportioned 25 per cent to the contempt motions, 25 per cent to necessary litigation costs, and 50 per cent to costs caused by Ms. Abraham’s bad faith conduct. Based on this allocation, he awarded Mr. Moudry 87.5 per cent of the amount he claimed (75 per cent full recovery plus 12.5 per cent partial recovery), being $54,615, for the costs of the action, apart from the contempt motions. To recognize limitations on Ms. Abraham’s ability to pay, he directed that these costs could be paid at the rate of $500 per month beginning October 1, 2007.

[31] Returning to the costs of the contempt motions, Sproat J. concluded:

I did not, as Justice Snowie had ordered, impose a fine for contempt on Ms. Abraham. The $18,846.36 costs order is, however, a sanction of sorts for the contempt and should be paid within 60 days.

[32] Mr. Moudry never received payment of either costs amount that Sproat J. awarded him. When an attempt was made to collect on the costs order a year later, Ms. Abraham declared bankruptcy, the second time she had done so. This appears from her Notice of Bankruptcy dated August 29, 2008.

[33] Ms. Abraham acknowledges that she has not paid the contempt sanction of $18,846.36 as ordered by Sproat J. on June 25, 2007. Her justification for not doing so is that:

a) She was discharged from bankruptcy and does not have to pay it;

b) She paid daycare expenses of $216.50 per month as ordered by Sproat J. on April 30, 2007, and has paid Meagan’s airfare for her to fly to and from Ottawa for access since November 2011; and

c) She did not receive her half of the proceeds ($9,977.05) from the sale of the matrimonial home on June 28, 2005.

[34] In September 2010, Ms. Abraham made a motion to vary the order that Sproat J. made in 2007, to extend her access, and to require Mr. Moudry to contribute to the cost of Meagan’s airfare. At a case conference on March 23, 2012, I ordered that Ms. Abraham could take no further steps in this proceeding until she paid the $18,846.36 portion of Sproat J.’s costs order. Ms. Abraham’s counsel submitted that the costs order had been discharged by Ms. Abraham’s bankruptcy and, further, that she would present evidence demonstrating that the costs had, in fact, been paid. Her motion was adjourned to November 19, 2013, for argument on these issues.

Issues

[35] Ms. Abraham raises the following issues for determination:

a) Does the Superior Court of Justice in Ontario have jurisdiction to determine whether the costs order of Sproat J. was discharged by Ms. Abraham’s bankruptcy, or does the Bankruptcy Court in Quebec have exclusive jurisdiction to determine that issue?

b) If the Superior Court in Ontario has jurisdiction, was the costs order discharged by Ms. Abraham’s bankruptcy?

c) If the costs order was not discharged by the bankruptcy, has Ms. Abraham paid the costs, as required, by reason of a set-off she claims for the costs of Meagan’s daycare and airfare, or her half interest in the net proceeds of sale of the parties’ matrimonial home?

Analysis

Does court have jurisdiction to make a declaration as to whether the costs order survived Ms. Abraham’s bankruptcy?

[36] Ms. Abraham argues the only competent court to deal with bankruptcy issues is the Superior Court of Quebec as she is a resident of Quebec.

[37] As a general rule, all matters relating to bankruptcy should be dealt with in the Bankruptcy Court. However, the bringing of third-party proceedings in the ordinary civil courts does not require leave of the Bankruptcy Court. The mere fact that a judge hearing a motion would be required to make a decision relating to the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 (“BIA”), does not preclude the judge from hearing the motion if it is part of a proceeding that is within the ordinary jurisdiction of this court.[^1]

[38] Upon hearing an application for discharge, the court does not make a declaration that its order of discharge will not release a particular claim of a creditor.[^2]

[39] The proper procedure to recover a debt that is not released by an order of discharge is for the creditor to bring an action in the ordinary civil courts.[^3]

[40] The ordinary civil courts have jurisdiction to determine whether the claim has been released by an order of discharge.[^4]

Did the costs order survive Ms. Abraham’s bankruptcy?

[41] Ms. Abraham argues that the Bankruptcy Court in Quebec had an opportunity to declare that the cost award was exempt pursuant to s.178 of the BIA but declined to do so. Additionally, she argues that s.178(1) only applies to criminal or quasi-criminal fines and penalties.

[42] Mr. Moudry argues that a discharge from bankruptcy does not determine which claims survive bankruptcy. The bankruptcy hearing is summary in nature. The issue of whether a claim survives bankruptcy cannot be determined at a discharge hearing.

[43] The BIA provides, in s.178(1):

178. (1) An order of discharge does not release the bankrupt from

(a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;

(a.1) any award of damages by a court in civil proceedings in respect of

(i) bodily harm intentionally inflicted, or sexual assault, or

(ii) wrongful death resulting therefrom;

(b) any debt or liability for alimony or alimentary pension;

(c) any debt or liability arising under a judicial decision establishing affiliation or respecting support or maintenance, or under an agreement for maintenance and support of a spouse, former spouse, former common-law partner or child living apart from the bankrupt. [Emphasis added.]

[44] Civil contempt is an offence against the administration of justice. In Halsbury’s Laws of Canada – Civil Procedure (2012 Reissue), Master Linda S. Abrams, Kevin P. McGuinness, and Jay Brecher, in their chapter entitled “Enforcement of Judgments and Orders”, state:

Civil contempt constitutes an offence. It might naturally be assumed from the terminology employed that civil contempt constitutes an actionable civil wrong, whereas criminal contempt constitutes a crime. In point of fact, the terminology is misleading. Both civil and criminal contempt constitute offences, and both are subject to the normal standards of proof and constitutional safeguards applicable to a criminal charge. [Poje v. British Columbia (Attorney General), 1953 34 (SCC), [1953] S.C.R. No. 25, [1953] 1 S.C.R. 516 (S.C.C.)]

[45] Sproat J.’s terminology in finding “beyond a reasonable doubt” that Ms. Abraham’s conduct amounted to contempt of the access orders, combined with his stating that the costs order he imposed was “a sanction of sorts” for that contempt, leaves no doubt that he regarded Ms. Abraham’s contempt as a quasi-criminal offence, requiring evidence that met the criminal burden of proof, and that the costs order he was imposing was a sanction for that offence.

[46] The costs order that Sproat J. characterized as “a sanction of sorts” for Ms. Abraham’s contempt is an “other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence” within the meaning of s. 178 of the BIA and is not extinguished by a discharge in bankruptcy (emphasis added).

[47] The integrity of the administration of justice, including the enforcement of court orders, requires that the court not permit its power to impose and enforce sanctions for contempt to be undermined by permitting contemnors to seek refuge in bankruptcy. The Court of Appeal for Ontario, in Manis v. Manis, upheld the lower court’s finding that a husband was in contempt after he breached an order requiring him to remove his wife from their joint line of credit and mortgage, notwithstanding his declaration of bankruptcy four months later.[^5]

[48] Neither the Supreme Court of Canada nor the Court of Appeal for Ontario has ruled definitively as to whether a contempt proceeding initiated by a creditor to enforce the payment of money is stayed by bankruptcy. That type of contempt is distinguishable from the present case in two respects. First, the present case does not involve an issue of whether a motion to find an alleged contemnor in contempt but, rather, involves a finding of contempt that has already been made. Second, the contempt in the present case involved denying a father access, not the payment of money to a creditor.

[49] In proceedings by a creditor to have a debtor found in contempt for failing to pay a judgment requiring payment of money, the court must reconcile the importance of permitting the civil court to enforce its own orders, and the importance of recognizing the BIA’s protection of debtors from creditors who are using contempt proceedings to enforce payment of the debts they are owed. Courts have sometimes, but not always, treated such proceedings differently from other types of contempt and stayed them pursuant to the provision in the BIA which automatically stays proceedings by creditors to enforce debts.

[50] In 8222878 Ontario Ltd. v. Firth, Turnbull J. held that the automatic stay arising under the BIA in respect of any proceedings by a creditor against a debtor did not apply to a creditor’s motion to have the debtor found in contempt. He stated:

I have reviewed the file and do not find that the remedy sought by the plaintiffs on this motion is one which is recoverable in bankruptcy. The plaintiffs seek an order that the defendant Charles Firth be found in contempt, that a warrant of committal issue against him and an order that he be imprisoned for a period determined by the court. The remedies sought essentially are ones by which the court is urged to enforce its own orders.

The same issue was considered by O’Keefe J. of the Federal Court in Long Shong Pictures (H.K.) Ltd. v NTC Entertainment Ltd. 2000 50931 (FC), 18 C.B.R.(4th) 233, 6 C.P.R. (4th) 506 which followed the decision in Neufeld , supra. I concur with both those decisions which held that courts must be able to enforce their decisions.[^6]

[51] In Brit Corp. v. Triumbari Containers Ltd., Mackenzie J. held that the automatic stay provision in the BIA did apply and stayed the motion for contempt until the Registrar in Bankruptcy could consider whether the stay should be lifted. Mackenzie J. noted that the jurisprudence is divided as to whether the stay arising from bankruptcy applies to contempt proceedings.[^7]

[52] Counsel for the creditor in Brit Corp. cited Neufeld v. Wilson (1997), in which the creditor had obtained a judgment against the debtor requiring monthly payments to the creditor on account of the judgment debt.[^9] The debtor made one payment before making an assignment in bankruptcy three months later. Six weeks after the assignment in bankruptcy, the creditor moved for an order that the debtor be found in contempt. The B.C. Court of Appeal, after considering the stay provisions of s.69.3(1) of the BIA, upheld the order finding the debtor in contempt.

[53] Counsel for the creditor in Brit Corp. also cited Long Shong Pictures (H.K.) Ltd. v. NTC Entertainment Ltd., in which the Federal Court-Trial Division followed Neufeld, holding that the contempt motion could proceed notwithstanding the debtor’s bankruptcy.

[54] Mackenzie J. noted that in Long Shong, there was no concern with respect to the enforcement of a claim (for contempt) provable in bankruptcy as the alleged contemnor had not yet been found guilty of contempt.

[55] Mackenzie J., in deferring to the Bankruptcy Court, cited Steele J. in McClure v. Backstein.[^11]

[56] Steele J.’s conclusion in McClure, holding that proceedings under rule 60.11 are not penal, does not appear to be in accord with the line of authorities holding sanctions for civil contempt to be offences that are quasi-criminal. In any event, though, the above decisions which stayed contempt proceedings required the court to resolve the conflicting priorities between the court’s control of its process and the BIA’s role in allowing debtors respite from their creditors in respect of judgments for the payment of money. Such decisions are distinguishable from the present case, where Sproat J.’s finding of contempt related not to an order for payment of money but one granting access to a child. In the present case, Sproat J.’s costs order is not a claim, like those of ordinary creditors, based on a judgment for money, but a sanction for failing to obey a court order requiring access to a child. Such a sanction for contempt is not extinguished by discharge from bankruptcy.

[57] The present case is also distinguishable in that it does not concern an issue of whether a motion to have Ms. Abraham found in contempt is stayed by her bankruptcy but, rather, an issue of whether a sanction imposed on her for her contempt survives her discharge from bankruptcy. The result I have arrived at is consistent with the decision of Rivard J. in Mgrdichian v. Mgrdichian, who ordered that the costs of the action, as well as penalties for contempt, survive the husband’s discharge from bankruptcy pursuant to s. 178 of the BIA.[^12]

[58] Ms. Abraham’s claim that Sproat J.’s costs sanction is extinguished by her discharge from bankruptcy amounts to a collateral attack against a costs order imposed as a sanction for contempt. She did not appeal from the finding of contempt, or the order for cots, or apply to the Bankruptcy Court for a formal stay of proceedings to enforce the order for costs. Additionally, she did not comply with the order for a year after it was made, and declared bankruptcy only when Mr. Moudry sought to enforce it. Her invocation of the BIA at this point in these circumstances is unsupportable.[^13]

Is the cost order set off by day care expenses?

[59] Ms. Abraham argues that she has paid the cost award against her “in kind”, as it should be set off against payments she made for daycare expenses that she claims were not incurred. Mr. Moudry asserts that the expenses were incurred. Mr. Moudry further disputes his obligation to contribute to Ms. Abraham’s expense of airfares for Meagan between Mississauga and Gatineau. There would need to be an adjudication of Ms. Abraham’s entitlement to these amounts before they could support a set-off for the costs which she was ordered to pay.

CONCLUSION AND ORDER

[60] I find that this court has jurisdiction to declare that the costs sanction that Sproat J. imposed upon Ms. Abraham survives her discharge from bankruptcy. The court finds that the sanction has survived her discharge as the order was in the nature of a fine or restitution for the offence of contempt. Finally, the court finds that Ms. Abraham has not established any debt of Mr. Moudry to her that supports her claim for set-off or that constitutes payment of the costs order against her.

[61] Based on these findings, it is ordered that:

1. Ms. Abraham shall not take any further steps in this proceeding until she has paid the costs sanction imposed by Sproat J. by his order dated June 25, 2007.

2. Ms. Abraham shall forthwith pay to Mr. Moudry his costs of her unsuccessful motion on a substantial indemnity scale in the amount of $18,000, based on the Bill of Costs filed by Mr. Moudry’s solicitor.

Price J.

Released: November 27, 2013

Footnotes

[^1]: Sumner Co. (1984) (Trustee of) v. Triarch Maritimes, Inc. (1990), 3 C.B.R. (3d) 209.
[^2]: Re Michaud (1978), 28 C.B.R. (N.S.) 93 (Que. S.C.); Migneault v. S.C.F.P., Local 313 (1991), 9 C.B.R. (3d) 73 (Que. S.C.); Re Kierdorf (1990), 80 C.B.R. (N.S.) 6 (Ont. S.C.); Re Mathieu (1999), 1998 13705 (SK QB).
[^3]: Beneficial Finance v. Durward (1961), 2 C.B.R. (N.S.) 173 (Ont. F.D.).
[^4]: Graves v. Hughes, 2001 NSSC 68.
[^5]: Manis v. Manis (2001), 2001 3851 (ON CA).
[^6]: 8222878 Ontario Ltd. v. Firth, 2013 ONSC 2422, at paras. 7‑8.
[^7]: Brit Corp. v. Triumbari Containers Ltd., 2005 24916 (Ont. S.C.).
[^9]: Neufeld v. Wilson (1997), 1997 3163 (BC CA).
[^11]: McClure v. Backstein (1987), 17 C.P.C. (2d) 242 (H.C.J.).
[^12]: Mgrdichian v. Mgrdichian, 2006 13773 (Ont. S.C.).
[^13]: Manis v. Manis (2001), 2001 3851 (ON CA), at paras. 22‑23.