CITATION: Walchuk et al v. Houghton et al, 2015 ONSC 1291
COURT FILE NO.: CV – 09-121 SR - BRT
DATE: 2015 March 9
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mary Walchuk, Estate Trustee for Walter Walchuk, deceased
Plaintiff
– and –
Walter Houghton also known as Wilfred Houghton also known as Wilfred W. Houghton also known as Wilfred P. Houghton
Defendant
A. Sheremeta, for the Plaintiff
W. Houghton appearing for himself
HEARD: February 26, 2015
Justice R. John Harper
reasons for judgment
Background
[1] The plaintiff had obtained a judgment against the defendant on February 23, 2011 in the amount of $105,000 plus costs of $15,500. The plaintiff’s brought a motion originally issued in June, 2014. The motion claimed that the defendant did not attend an Examination in Aid of Execution pursuant of Rule 60.18). In that same motion, the plaintiff also requested that the plaintiff be ordered to attend at such an examination at a specific time and place.
[2] That motion was before me on September 5, 2014. At that time, the defendant appeared without representation. He admitted that he did not attend at the examination scheduled for December 5, 2013. He claimed that he was not properly served. The solicitor for the plaintiff advised that the defendant was properly served and he filed an affidavit of service. The issue of the manner of service was placed front and centre at this motion before me.
[3] At that motion, I adjourned the contempt proceeding to a date to be set by the trial coordinator and, pending the adjournment, the defendant was to attend at an Examination in Aid of Execution on September 17, 2014 at Glen Abbey Verbatim in Oakville Ontario. I also ordered that the Defendant bring to that examination, numerous documents that were set out in the Plaintiff’s schedule to the motion.
[4] On September 16, 2014, the defendant filed for bankruptcy. He then attended on the examinations set for September 17, 2014. The defendant did not bring any of the documents he was ordered to bring pursuant to my order of September 5, 2014. He claimed that he filed for bankruptcy the day before the examinations and that he did not have to bring anything as he was advised that the court action my order was made in was stayed by the bankruptcy.
[5] The plaintiff subsequently brought an amended motion seeking to have the defendant found in contempt of my order of September 5, 2014.
[6] The defendant sought to have my order of September 5, 2014 set aside on the grounds that the service of the original motion for contempt was faulty as it was served by registered mail and that did not conform to the rules. The claim of the defendant was that had I been made aware of the lack of compliance with the service of the contempt motion, I would not have made the order that I did. On this assertion, I do not agree. I adjourned the issue of contempt on September 5, 2014. I dealt with the motion to have the plaintiff obtain an order to require to defendant to attend at the examinations at a specified time and place. I made the order requiring him to attend on September 17, 2014 and for him to bring certain documents to that examination.
[7] The transcript of the examinations that did take place on September 17, 2014 reveal that the defendant knew that he had to attend on that date and he also knew that he had to bring the documents that were listed. He stated in that examination that he also received a letter from the plaintiff’s lawyer that set out the new notice of examinations and the list of documents required.
[8] The plaintiff submits that the defendant is in contempt of my order of September 5, 2014 and the new notice of examinations that the defendant admits to receiving.
The Law and Analysis
[9] The Rules of Civil Procedure R. 60.11 provides as follows:
Motion for Contempt Order
60.11 (1) A contempt order to enforce an order requiring a person to do an act, other than the payment of money, or to abstain from doing an act, may be obtained only on motion to a judge in the proceeding in which the order to be enforced was made. R.R.O. 1990, Reg. 194, r. 60.11 (1).
(2) The notice of motion shall be served personally on the person against whom a contempt order is sought, and not by an alternative to personal service, unless the court orders otherwise. R.R.O. 1990, Reg. 194, r. 60.11 (2).
(3) An affidavit in support of a motion for a contempt order may contain statements of the deponent’s information and belief only with respect to facts that are not contentious, and the source of the information and the fact of the belief shall be specified in the affidavit. R.R.O. 1990, Reg. 194, r. 60.11 (3).
[10] In this case, I find that the order that is the subject matter of the contempt is my order of September 5, 2014. That order was made with the defendant present. He had actual notice of the order and its terms. In addition, he admitted that he had notice of the examinations and the terms of my order when he did attend the examinations.
[11] The defendant admits that he did not attend at the examinations on September 17, 2014 with any of the documents he was ordered to produce. He stated at the examinations that he did not have to attend with those documents because he had filed for bankruptcy the day before. The transcript of the examinations that took place on September 17 commencing at p. 4 Q. 22:
Q. Okay. So did you bring any of the documents that are listed in this ---
A. No.
Q. --- notice of examination? NO. And why not?
A. ‘Cause I declared bankruptcy yesterday.
Q. Okay. So what difference does that make? You were ordered by the court to produce documents.
A. Yeah, it stays all court actions.
Q. Okay. So that’s your understanding?
A. Yes.
Q. Okay.
A. And if you have any questions or problems with that, you can call Kyle or you can call Adam at Harrison & Partners, 8920 Woodbine Avenue, Suite 300, Markham, Ontario.
[12] The only document that the defendant produced at this examination was a Notice of Stay of Proceedings. That document states:
In the matter of the Bankruptcy of Wilfred Walter Houghton
OF THE COMMUNITY OF LINDSAY A REGION OF THE KAWARTHA LAKES, IN THE PROVINCE OF ONTARIO,
TRUCK DRIVER
SUMMARY ADMINISTRATION
Please note that on the 16th day of September, 2014, the above debtor made an assignment of all his property for the general benefit of his creditors.
According to the provisions of Section 69 of the Bankruptcy and Insolvency Act all proceedings shall be stayed, and more particularly the following case namely;
In the Superior Court of Justice, Court File CV-09121 SR,
Between:
Mary Walchuk, Estate trustee of Walter Walchuk, deceased. PLAINTIFF
AND
Wilfred Walter Houghton, DEFENDANT.
Furthermore, if you now hold any funds in your possession from this action, such money is deemed to be an asset of the bankrupt’s estate and must be transmitted forthwith to the Trustee, as required by Section 70 of the Bankruptcy and Insolvency Act.
Dated at Markham, Ontario, this 17th day of September, 2014.
[13] The document is signed by someone at Harris & Partners.
[14] The issue I must determine first is whether or not the s 69 of the Bankruptcy and Insolvency Act stays the Contempt Proceedings that are before me.
[15] Section 69 of the Bankruptcy and Insolvency Act reads:
69(1) subject to subsections (2) and (3) and sections 69.5 and 69.6 on the filing of a notice of intention under section 50.4 by an insolvent person,
(a) no creditor has any remedy against the insolvent person or the insolvent person’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy…
[16] Leave may be granted for an order lifting the stay under certain circumstances. There is no motion brought before this Court or the Bankruptcy Court for such an order.
[17] A very similar issue to this case was before the court in the case of 822878 Ontario Ltd carrying on business as Wilson Air v. Firth, (2013) ONSC 4248. In that case Justice Turnbull stated that the remedy being sought was one in which the court was being urged to enforce its own orders by way of contempt proceedings. That remedy is not one which is recoverable in bankruptcy. In the case before Justice Turnbull, the defendant filed a petition in bankruptcy the day prior to the return of the motion. He then asserted that all proceedings were stayed against him pursuant to the Bankruptcy and Insolvency Act s. 69.3(1). Justice Turnbull stated that the issue before him was whether this court can proceed with hearing contempt proceedings when a stay of proceedings has been issued in bankruptcy. Justice Turnbull did not feel that the stay applied to contempt proceeding and he granted leave to proceed.
[18] When the hearing of the contempt in that case was before Justice Ramsey, he stated that he accepted the position of the plaintiff in that case that Rule 60.11 does not require the moving party to obtain leave before bringing a motion for contempt. Although Justice Turnbull had already granted leave to proceed, Justice Ramsey stated at para 11 of his Endorsement at 2013 ONSC 4248:
“I would only add that Turnbull J.’s decision is amply supported by the case law. The British Columbia Court of Appeal and a judge of our own Court of Appeal in chambers have both said that the bankruptcy legislation does not prevent punishment of acts of contempt committed before the bankruptcy. See Neufeld v. Wilson, [1997] B.C.J. No 279 and Manis v. Manis, [2001] O.J. No. 2627 (Simmons J.A.) In the case before me, the defendant disobeyed the order of Parayeski J. before filing the assignment in bankruptcy.”
[19] In Moody v. Abraham 2013, ONSC 7362, Price J. dealt with a similar issue of the impact of s. 69 of the Bankruptcy and Insolvency Act on contempt proceedings. Although that case dealt with access to a child, the court made an order that the defendant was in contempt of numerous provision of court orders relating to custody and access and the court ordered costs against the defendant. The defendant went bankrupt after the cost order was made. Subsequent to that, the defendant Ms. Abraham sought to vary the order relative to access. An order was made by the court that she was not allowed to take any further steps in the proceeding until she paid the costs that were ordered on the contempt motion.
[20] Ms. Abraham submitted that the costs that were ordered were discharged by the bankruptcy.
[21] Justice Price considered whether the Superior Court had jurisdiction to deal with the cost order or was that an issue that was dealt with in the bankruptcy. Justice Price stated at para 47 or that decision:
“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 undermines 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.”
[22] I am of the view that the motion for contempt before me is one that goes directly to the issue of the courts ability to enforce its judgments. The order I made was an order that called for the defendant to do certain things. Whether he did them or not cannot be caught up in his choice of the timing of his filing for bankruptcy. I find that the motion for contempt may proceed. Counsel are to arrange with the trial coordinator a time to deal with whether or not the defendant is in contempt of my order of September 5, 2014. This issue may be dealt with in one hour. The defendant may give oral testimony relative to the issue of compliance with my order and be cross examined on that issue.
[23] Costs of the proceedings will be dealt with at that time
Harper, J.
Released: March 9, 2015
CITATION: Walchuk et al v. Houghton et al, 2015 ONSC 1291
COURT FILE NO.: CV – 09-121 SR - BRT
DATE: 2015 March 9
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mary Walchuk, Estate Trustee for Walter Walchuk, deceased
Plaintiff
– and –
Walter Houghton also known as Wilfred Houghton also known as Wilfred W. Houghton also known as Wilfred P. Houghton
Defendant
REASONS FOR JUDGMENT
Harper, J.
Released: March 9, 2015