Keenan v. Keenan, 2015 ONSC 574

COURT FILE NO.: 11-50680

DATE: 20150127

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

RICHARD KEENAN

Plaintiff

– and –

ROBERT KEENAN

Defendant

Craig Bater/Emily Villeneuve, for the Plaintiff

Chantal Beaupré, for the Defendant

HEARD: January 23, 2015

Beaudoin J.

1On September 12, 2014, I found the Defendant Robert C. Keenan in contempt and ordered that his Statement of Defence be struck. I also granted partial judgment in the amount of $174,462.81 plus interest in favor of the Plaintiff. I later awarded the Plaintiff’s costs of $50,000. I gave the Defendant a further opportunity to purge his contempt by filing complete answers to his undertakings within seven days of my Decision.

2The Plaintiff has brought a return of the contempt motion and claims that the Defendant has failed to purge his contempt as he has yet to provide a complete or adequate answers to all of his undertakings. He seeks to have the Defendant incarcerated for his continuing contempt.

3In my Supplemental Reasons released on September 15, 2014, I reviewed the history of these proceedings and found that the record disclosed a pattern of misconduct on the part of the Defendant. On the eve of the motion of September, 2014, the Defendant had provided further documents at the last minute. These were not in the form of any sworn evidence; they were incomplete, and many pages were heavily redacted. Moreover, they were completely unresponsive to the critical undertakings. A key document for tracing money lent from the Plaintiff to the Defendant was hand-written and had no supporting documentation. His solicitors produced a further bundle of unorganized documents on the return of the hearing in a further attempt to satisfy the undertakings. I concluded those documents, also heavily redacted, were totally useless.

4In response to this motion, the Defendant has once again produced what he claims to be a complete answer to the outstanding undertakings. A closer look at those documents reveals that the Defendant continues to play a game of “hide and seek” with the Plaintiff and with this Court. He has simply repackaged the same deficient documents he provided in September.

5He has now typed the previously handwritten accounting ledger and he has added additional detail. An examination of that document reveals that this is yet one more attempt to deceive this Court by bundling unresponsive documents and fabricating a form of accounting. For example, an entry recorded on March 30, 2011 allegedly discloses a vendor payment in the amount of $10,000. This vendor payment supposedly relates to an investment in a textile business that Defendant made on the Plaintiff’s behalf.

6This entry is cross-referenced to a bank statement marked as Exhibit #10. There is no recorded debit of $10,000 on that statement, although, there is a withdrawal in the amount of $17,007.50. The Defendant has annotated the statement and written the word “vendor.” He has written further notes at the bottom which refer to an amount of $10,000 with the name “Richard” next to it. Once more, the document is redacted. Most significantly, this would appear to be the very first vendor payment recorded on his ledger. This entry makes no sense. The Plaintiff commenced his claim against the Defendant in February 2011. In that claim, he seeks the return of monies he entrusted the Defendant to invest on his behalf. In his defence, the Defendant claimed he had invested in a textile business in May 2010. The Defendant’s claim that he is making a first payment to a vendor nearly one year later and, after the litigation has been commenced and defended, is unbelievable.

7The alleged statement of the Defendant’s savings account does not appear to be a proper bank record. The Defendant claims he got the statement online and since the “President’s Choice” logo was not present on the document, he cut and pasted it on himself.

8At various times, the Defendant has alleged that he has invested either $100,000 or $150,000 of his brother’s money in a clothing business; the so-called ledger which purports to trace the Plaintiff’s money lists 34 “vendor payments” which only add up to a total of $52,600. At his judgment debtor examination, he gave conflicting stories about a bank account at Caisse Populaire Orleans and produced limited statements. He claimed that it was a family trust account but he had no documents to support that statement. He admitted on his examination that he used that account to make some of the loans he claims were made on the Plaintiff’s behalf.

9I conclude that the Defendant has not purged his contempt and has once again attempted to mislead the court. I find his apologies impossible to believe.

10Rule 60.11(5) empowers of the court to order a sentence that is just in the circumstances:

60.11(5) In disposing of a motion under some rule (1), the judge may make such order as is just, and were 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 the terms of the order;

(c) pay a fine;

(d) do or refrain from doing an act;

(e) pay such costs as are just; and

(f) 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 a person’s property.

11It is not disputed that the purpose of sentencing for civil contempt is to “repair the depreciation of the authority of the court, in addition to achieving specific deterrence from the contemnor and general deterrence from the public.”¹ The courts have a wide discretion to determine the appropriate sentence for civil contempt. Traditionally, these sentences are fine, costs or imprisonment. Our courts are also empowered to make alternative types of sentences, including an order for the tracing of funds.

12A modest fine and a conviction for contempt have ordinarily been found to be sufficient to restore the dignity of the justice system.² Courts have been reluctant to impose imprisonment in the absence of serious, continuous, deliberate, wilful conduct.

13In Boilly³ the Court of Appeal set out the following principles to guide the court in the exercise of its discretion:

a. Sentences must be proportionate to the gravity of the contempt and the degree of responsibility of the contemnor;

b. Sentences should be adjusted for any mitigating or aggravating factors which may be present in the circumstances;

c. Like sentences should be imposed unlike instances of contempt;

d. Sentences should deter contemptuous conduct by the contemnor and the public, and compel contemnors to accept responsibility for their actions;

e. The reasonableness of fines or incarceration should be considered.

14The courts have also recognized certain mitigating factors which might justify a lighter contempt sentence.⁴ These are:

a. Attempts to purge the contempt;

b. Genuine signs of remorse;

c. Apologetic behaviour;

d. Efforts to mitigate damages on other parties;

e. Medical conditions;

f. First convictions of contempt;

g. Admissions of contempt; and

h. Willingness to comply with, or to consent to, orders of the court.

15Aggravating factors that may increase a sentence have been found to be the following⁵:

a. A deliberate course of conduct over a lengthy period of time;

b. Benefiting financially from contempt;

c. Numerous breaches of orders;

d. A contemnor’s attempt to justify his actions as “an act of conscience”;

e. A finding of contempt of fresh orders while a contempt motion is pending;

f. Repeated acts of contempt;

g. Refusal to take responsibility;

h. The presence of fraudulent misrepresentations and forgery.

16As noted above, the Defendant has failed to purge his contempt and continues to present documents of dubious and limited value. I conclude that he has attempted to play a game of “smoke and mirrors” with the court and said so at the conclusion of the argument on the motion. I immediately ordered the Defendant to sign authorizations for the release of his bank records and CRS returns in my presence. Even then, the Defendant was very reluctant to sign any authorizations for the statements from the alleged “family trust account.” I ordered that he execute any further authorizations as may be required by Plaintiff’s counsel so that the Plaintiff can trace the funds he gave to the Defendant to invest on his behalf. I ordered him to satisfy all undertakings from his judgment debtor examination within a period of 30 days of the release of this decision. As I concluded that the critical undertakings from his examination for discovery remained outstanding, I gave the Plaintiff leave to seek further directions in the event that the Plaintiff is unable to trace the funds through the records obtained from the signed authorizations.

17The Plaintiff seeks a sentence of four to six months for the Defendant’s continued contempt and cites the aggravating factor listed above. The Defendant urges me to consider a fine instead. His counsel cites and relies on the decision in Willis v. Willis, 2009 CarswellOnt 3439 (Ont. S.C.J.), where the court found a number of aggravating factors yet imposed a suspended sentence and a fine of $7,000 and a short jail term should the contemnor fail to pay the fine.

18I reserved on the issue of what further sanction should be imposed. In considering the appropriate sentence for the Defendant, I must take into account that I’ve already struck his defence, granted judgment against him and ordered him to pay costs in the amount of $50,000. This essentially puts an end to the litigation. It is doubtful that those amounts will ever be paid unless the Plaintiff is successful in tracing the funds.

19I’ve already noted aggravating factors in my earlier Decision. There are few, if any, mitigating factors as I do not consider the Defendant’s apology to be sincere or meaningful. More particularly, I am troubled by the Defendant’s continued attempts to mislead the court with manufactured documents that are completely unresponsive to the undertakings he gave in this action. In his proposal to his trustee in bankruptcy, he indicated that he had an ability to pay $500 per month towards his creditors and his counsel emphasizes that her client has the ability to pay a fine. He has access to funds since he manages to rehire his counsel whenever he gets pushed into a corner.

20Having regard to the sanctions already imposed, I conclude that the appropriate sanction in this case is a fine of $7500 payable to the Accountant of the Superior Court of Justice which is to be paid in two instalments of $3750. The first payment is to be made 90 days from the release of this decision and the second is to be paid within 90 days thereafter. The Defendant is to provide proof of payment of the fine to the Plaintiff’s counsel and to my attention. In default of the payment of that fine, an arrest warrant will be issued and I direct that the Defendant be brought before me to show cause why he should not be incarcerated for a period of 30 days.

21The Plaintiff, having been successful in this motion, is presumptively entitled to his costs on a substantial indemnity basis.⁶ Given the Defendant’s continued contempt, I see no basis to depart from that principle. Having regard to the limited amount of additional materials filed, I order the Defendant to pay the Plaintiff’s costs which I fix in the amount of $12,000.00.

Mr. Justice Robert N. Beaudoin

Released: January 27, 2015

COURT FILE NO.: 11-50680

DATE: 20150127

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

RICHARD KEENAN

Plaintiff

– and –

ROBERT KEENAN

Defendant

REASONS FOR JUDGMENT

Beaudoin J.

Footnotes

1. 1Boilly v. Carleton Condominium Corp. 145, 2014 ONCA 574; (2014), 121 O.R. (3d) 670
2. 2Supra at para 108
3. 3At para 90
4. 4Astley v. Verdun, 2013 ONSC 6734; (2013), 118 O.R. (3d) 43, aff’d in 2014 ONCA 668; [2014] O.J. No. 4571
5. 5See Astley v. Verdun and Korea Data Systems Co. v. Chiang 2009 ONCA 3; (2009), 93 O.R. (3d) 483
6. 6See Astley v. Verdun at para 57