SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-12-4195-00
DATE: 2014-04-02

RE: Ever Fresh Direct Foods Inc. v. Jamia Islamia Canada Ltd.

BEFORE: Barnes J.

COUNSEL: Ronald Birkin, for the Applicant and Anser Farooq, for the Respondent

HEARD: December 03, 2013

ENDORSEMENT

INTRODUCTION

[1] On November 4, 2013, I found Ever Fresh Direct Foods Inc. and its principal, Abdul Razak Alyousef (collectively “Ever Fresh”), in contempt for failing to comply with the order of Ricchetti J., dated September 21, 2012; two orders of Ricchetti J., dated October 5, 2012; and two orders of Gray J., dated February 8, 2013. This endorsement should be read in conjunction with my endorsement dated November 4, 2013.

BACKGROUND FACTS

[2] On February 1, 2008, Ever Fresh entered into a lease agreement with Jamia Islamia Canada Ltd. (“Jamia Islamia”) for a period of ten years. The sole purpose of the lease was for Ever Fresh to operate a food manufacturing, distribution and warehouse business.

[3] On August 28, 2012, Jamia Islamia alleged that Ever Fresh was in breach of the lease agreement and provided a remediation period of 15 days. When the 15 days expired, Jamia Islamia served a Notice of Eviction, terminated the lease and changed the locks. This occurred on September 2012.

[4] On June 13, 2013, this court heard a contempt motion. Jamia Islamia alleged that Ever Fresh had wilfully breached eight separate orders. This court concluded that Ever Fresh had wilfully breached five of those orders. I found Ever Fresh in contempt.

[5] Jamia Islamia seeks a cost award of $39,220.15; a further award of punitive damages; and a dismissal of Ever Fresh’s application for relief of forfeiture.

[6] Ever Fresh submits that a global punitive damage award in the amount of $1,100 and a cost award of $5,000 is appropriate.

[7] I have concluded that Ever Fresh’s actions demonstrate a pattern of complete disregard for court orders. Ever Fresh’s sentence is as follows: Ever Fresh’s application for relief of forfeiture is struck; Ever Fresh shall pay Jamia Islamia $40,000 in costs within 30 days of this order; Ever Fresh shall comply with the order of Gray J., dated February 8, 2013 and pay Jamia Islamia $20,000 as contemplated in the order. This amount shall be paid within 90 days of this order. Should Ever Fresh fail to comply with this order, the parties shall schedule a hearing within 30 days to explain the reasons for the breach and whether incarceration or some other sanction or remedy will be appropriate.

[8] At the end of the contempt motion before me, counsel for Ever Fresh, Mr. Ronald Birkin, applied to be removed from the record on all matters involving Ever Fresh except matters stemming from this contempt motion. The principal of Ever Fresh was present and did not raise any objection. This motion was granted.

[9] Mr. Alyousef, principal of Ever Fresh, cannot represent Ever Fresh Direct Foods Inc., the corporate applicant, pursuant to rule 15.04(6)(a). Ever Fresh shall appoint counsel, within 30 days from the date of this order, by serving a notice under rule 15.03(2). With the consent of Ever Fresh, Mr. Birkin’s representation of Ever Fresh is limited to this contempt motion unless they agree otherwise.

[10] Jamia Islamia shall file a bill of costs for any outstanding cost orders by March 30, 2014; Ever Fresh shall file a bill of costs for any cost orders by April 15, 2014. Each bill for costs shall be no more than two pages and shall identify the applicable order of this court deferring the issue of costs to the judge hearing the contempt motion.

ANALYSIS

[11] The authority of the court upon a finding of contempt is set out in rule 60.11(5):

(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; and

(e) comply with any other order that the judge considers necessary, and may grant leave to issue a writ of sequestration under rule 60.09 against the person’s property.

[12] A finding of contempt of court is a finding that the offending conduct is an affront to the administration of justice: see SNC – Lavalin Profac Inc. v. Sankar (2009), 2009 ONCA 97, 94 O.R. (3d) 236 (C.A.); Cornwall Public Inquiry (Commissioner of) v. Dunlop (2008) 2008 10382 (ON SCDC), 90 O.R. (3d) 524 (Div. Ct.).

[13] There are two types of contempt: criminal contempt, which captures disobedience of court orders where such conduct interferes with the administration of justice; and civil contempt, which is concerned with the disobedience of court orders governing a dispute between private litigants: see British Columbia Government Employees’ Union v. British Columbia (Attorney General), 1988 3 (SCC), [1988] 2 S.C.R. 214; Canada Metal Co. Ltd. et al. v. Canadian Broadcasting Corp. et al. (No.2) (1975), 1976 37 (ON CA), 11 O.R. (2d) 585 (H.C.). Ever Fresh was found guilty of civil contempt.

[14] A contempt proceeding is punitive in nature. The court has broad powers which include incarceration: see Anthes v. Wilson Estate (2005), 2005 14567 (ON CA), 197 O.A.C. 110 (C.A.). Sentencing principles include proportionality; denunciation; general and specific deterrence; rehabilitation; an assessment of mitigating and aggravating factors; the promotion of a sense of responsibility; and the acknowledgment of harm done to victims and the community. The primary sentencing purpose is general and specific deterrence: see Chiang (Trustee of) v. Chiang, 2009 ONCA 3, 305 D.L.R. (4th) 655.

ACCESS TO PREMISES

[15] On September 21, 2012, Ever Fresh breached the order of Ricchetti J. by failing to permit Jamia Islamia general access to the premises between the hours of 9:00 a.m. and 6:00 p.m. The contemptuous conduct includes: changing the locks to the premises; closing doors to the premises when Jamia Islamia attempted to enter the premises; continually instructing Jamia Islamia to leave the premises during the access time permitted by the order; and refusing access to Jamia Islamia on September 25, 2012.

ENTRY PERMITTED ON OCTOBER 8, 2012

[16] Ever Fresh breached the order of Ricchetti J., which restricted Ever Fresh’s access to the premises to October 8, 2012, between 10:00 a.m. and 3:00 p.m. Ever Fresh was in the premises on October 6, 2012, which is the contemptuous conduct.

REMOVE NO NON-PERISHABLES

[17] Ever Fresh breached the order of Ricchetti J., dated October 5, 2012, prohibiting the removal of non-perishable items from the premises. The contemptuous conduct: on October 8, 2012, agents of Ever Fresh permitted non-perishable items to be removed by third party Maghani Pacific, even though Ever Fresh was alerted by Jamia Islamia during the removal process that such action was in violation of the court order.

REMOVAL OF PERISHABLES

[18] By order dated February 8, 2013, Gray J. instructed Ever Fresh to attend the premises for an eight-hour period to inspect the premises and remove perishable items. The contemptuous conduct: Ever Fresh attended the premises on February 18, 2013, and failed to remove the perishable items as per the order.

[19] At the sentencing hearing, counsel for Ever Fresh argued that this court should reconsider its finding that Ever Fresh was in contempt of this order.

[20] Counsel submitted that Mr. Alyousef testified that upon arrival at the premises, he found that the items were garbage not perishables and therefore, he did not remove them. Counsel submits that Ever Fresh was not in violation because the order did not contemplate the removal of garbage.

[21] Counsel’s submissions raise the issue of the propriety of this court revisiting what amounts to a final order after a contempt hearing; however, during the hearing, Mr. Alyousef testified that it was his understanding, from his counsel, that he had four days to remove the perishables. I specifically rejected his testimony on this point. This court found Mr. Alyousef to be less than forthright, leading to the multiple findings of contemptuous conduct as articulated in my endorsement of November 4, 2013. In effect, I do not find Mr. Alyousef credible and therefore, I specifically reject his testimony that the items were all garbage and that there were no perishable items to be removed.

[22] I accept submissions of counsel that no perishables were scheduled to be removed on March 2, 2013. This date was fixed for the attendance of the insurance representative and contractor. By order of Gray J., dated March 15, 2013, an inspection of the premises and goods was scheduled for March 16, 2013, with no removal of goods contemplated at that time; however, having rejected Mr. Alyousef’s testimony indicating the perishables had turned to garbage, Ever Fresh’s contempt of the order is proved beyond a reasonable doubt. The contempt finding is unchanged.

FAILURE TO PAY HEATING BILLS

[23] Ever Fresh failed to pay “all future heating bills” as per the order of Gray J., dated February 8, 2013. I found this conduct to have been wilful and deliberate.

THE SENTENCE

[24] The rule of law is a fundamental component of a peaceful and democratic society. Failure of courts to ensure that court orders are complied with will shake the confidence of the public and undermine the very foundation of a peaceful, just and democratic society. The courts are the avenue of last resort in settling and preventing disputes. It is not an exaggeration to conclude that a society without a court system, which shall act to enforce its orders, is a society headed to or already in the midst of utter chaos. Contempt of a court order is an affront to the administration of justice and an attack on the bedrock of a peaceful and just society.

[25] Between September 21, 2012 and February 8, 2013, Ever Fresh has engaged in contemptuous conduct. This court has found five instances of contemptuous conduct. This constitutes a pattern of wanton disrespect for the court process.

[26] In mitigation of its conduct, I note that Ever Fresh was not found in contempt of three of the eight allegations of contempt. This factor is also considered in predicting Ever Fresh’s future conduct in the pending forfeiture application.

[27] The aggravating factor against Ever Fresh is that this pattern of contemptuous behaviour, as characterised by the obstructionist conduct described in my November 4, 2013 endorsement, indicates that Ever Fresh has engaged in conduct designed to frustrate the orders of this court. There is no reason to conclude that this conduct will change.

[28] As a result of the cumulative contemptuous conduct of Ever Fresh, I am satisfied that this pattern of flagrant disregard of court orders shall continue.

[29] In circumstances where the court concludes that such conduct will continue, the court may strike the contemptor’s pleadings in order to deter such behaviour and to uphold the court processes: see rule 60.12(b); Itrade Finance Inc. v. Webworx Inc. (2005), 255 D.L.R. (4th) 748 (Ont. S.C.), at para 21; First Choice Capital Fund Ltd v. O’Brien (1998), 1998 13532 (SK KB), 164 Sask. R. 95 (Q.B.), at para 17.

[30] Striking a pleading or application for contemptuous conduct should be ordered as a sentence of last resort. In most circumstances the contemptor should be provided with an opportunity to purge the contempt: see Bell ExpressVu Ltd. Partnership v. Torroni (2009), 2009 ONCA 85, 94 O.R. (3d) 614 (C.A.), at para 35.

[31] In this case, no submissions were made as to how the contempt can be purged. Perhaps the reasons for this are that many of the orders were time limited which cannot be undone with the passage of time. If I am wrong in my characterisations of the orders breached, no submissions were advanced on how the contempt can be purged.

[32] The applicant also sought to minimize the nature and extent of its breaches during sentencing submissions, there was also no expression of remorse or any assurance that future court orders will be complied with. All of these factors, together with the pattern of contemptuous behaviour, has led this court to conclude that such behaviour will continue. For all these reasons, the applicant’s application seeking relief from forfeiture is struck with prejudice. This is a proportionate sentence in this case in relation to the gravity of the contemptuous conduct.

[33] The applicable order of Ricchetti J. is varied and Jamia Islamia shall have immediate access to, and use and enjoyment of the premises.

COSTS – FEBRUARY 8, 2013, ORDER

[34] On February 8, 2013, Ever Fresh, with the assistance of its counsel, entered to minutes of settlement. On consent, and by order, dated February 8, 2013, Gray J. converted these minutes of settlement into an order of the court.

[35] Paragraph 9, of the February 8, 2013, order reads:

This Court orders, on consent, if the Applicant or Mr. Abdul Al Yousef breaches his obligations under this order, he shall pay costs in the amount of $20,000.00 within 48 hours.

[36] Paragraph 3 of the February 8, 2013, order, required Ever Fresh to remove perishable items. This court has found Ever Fresh in contempt of this provision of the order. Paragraph 8 of the same order, required Ever Fresh to pay all future heating costs in Unit B until the hearing or other disposition of the application. This court has found Ever Fresh in contempt of this provision of the order.

[37] Therefore, as per paragraph 9 of the order, Ever Fresh, shall pay Jamia Islamia $20,000. The time period specified in the order is varied to “within 90 days”.

COSTS FOR CONTEMPT MOTION

[38] Costs on a substantial indemnity scale should be awarded where there has been “reprehensible, scandalous or outrageous conduct on the part of one of the parties: see Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3, at p.17; Envoy Relocation Services Inc. v. Canada (Attorney General), 2013 ONSC 2622, at para. 60; R.(S.) v. S.(J.), 2013 ONCJ 403, at paras. 13-14.

[39] The cumulative conduct by Ever Fresh amounts to such conduct; however, after assessing Jamia Islamia’s bill of costs, this amount is fixed at $40,000. I considered the $20,000 Ever Fresh is already required to pay pursuant to the February 8, 2013 order. Ever Fresh shall pay costs in the amount of $40,000 within 30 days from the date of this order. This award shall have an interest rate of two per cent per annum.

COSTS GENERALLY

[40] Pursuant to rule 60.11(6), all these cost awards apply to Ever Fresh Direct Foods Inc. and its principal, Abdul Razak Alyousef, jointly.

[41] Should Ever Fresh fail to comply with this order, the parties shall schedule a hearing within 30 days before me to explain the reasons for the breach and whether incarceration or some other sanction or remedy is appropriate.

CHANGE IN COUNSEL

[42] On consent, counsel for Ever Fresh, Ronald Birkin, is removed as counsel of record with his involvement, limited to dealing with the contempt motion, unless Ever Fresh and counsel agree otherwise.

[43] On behalf of Ever Fresh, Mr. Birkin made an application, which in effect was pursuant to rules 15.04(6)(b) and 15.01(2), that Ever Fresh Direct Foods Inc. “be represented by a person other than a lawyer”. The person put forward is Abdul Razak Alyousef.

[44] Mr. Abdul Razak Alyousef has been found to have shown flagrant disregard for the court’s orders and, together with Ever Fresh Direct Foods Inc., engaged in a series of contemptuous conduct. Under these circumstances, it is inappropriate for Mr. Abdul Razak to act on behalf of Ever Fresh Direct Foods Inc. Due to the history of such conduct it will be inappropriate for any person other than a lawyer who is bound by Rules of Professional Conduct to appear on behalf of Ever Fresh Direct Foods Inc. This court is concerned that a person not bound by the Rules of Professional Conduct may be unduly influenced by Ever Fresh. This is particularly the case since this court has concluded that the flagrant disregard for court orders is likely to continue.

[45] Ever Fresh shall appoint a new lawyer of record for the corporation, Ever Fresh Direct Foods Inc., within 30 days of the date of this order: see Rule 15.04(6).

COSTS OF PREVIOUS MOTIONS

[46] Counsel for Jamia Islamia asserts that the costs of earlier motions, prior to the contempt motion, were reserved to the judge hearing the motion for contempt.

[47] Therefore, Jamia Islamia shall file a bill of costs by March 30, 2014; Ever Fresh shall file a bill of costs by April 15, 2014. Each bill of costs shall be no more than two pages in length and shall identify the order(s) reserving the assessment of these costs to the judge hearing the contempt motion.

Barnes J.

DATE: Judgment Released: March 17, 2014
Reasons Released: April 02, 2014

COURT FILE NO.: CV-12-4195-00
DATE: 2014-04-02

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Ever Fresh Direct Food Inc. v. Jamia Islamia Canada Ltd.

BEFORE: Barnes, J.

COUNSEL: Ronald Birken, for the Applicant

Anser Farooq, for the Respondent

ENDORSEMENT

Barnes J.

DATE: Judgment Released: March 17, 2014
Reasons Released: April 02, 2014