CITATION: 796839 Ontario Limited v. Platt, 2016 ONSC 7097

COURT FILE NO.: CV-90-CQ-046548-000

DATE: 20161116

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

796839 ONTARIO LIMITED and JACOBUS HANEMAAYER

Plaintiffs

– and –

ROBERT PLATT, JAMES BAY KAOLIN CORPORATION, JAMES BAY COMPANYMINERAL RESOURCES INC., BLACK GREGOR EXPLORATIONS LTD., CARLSON MINES LIMITED SOURCE CORP., ANDRE BOUDREAU and ALL-TERRAIN TRACK SALES & SERVICES

Defendants

Irwin A. Duncan, for the Responding Parties

R. Donald Rollo, for the Moving Parties

HEARD: May 19, June 30, August 26, September 28, & October 27, 2016

R.F. GOLDSTEIN J.

REASONS FOR JUDGMENT AND SENTENCE ON CONTEMPT MOTION

[1] On May 19, 2016 I found Mr. Hanemaayer in contempt of this Court. He is a judgment debtor. He owes a great deal of money to Mr. Boudreau and All-Terrain Track Sales. As a judgment debtor he is obliged to answer questions and make financial disclosure to his judgment creditors. On January 6, 2016 Master Pope ordered that Mr. Hanemaayer answer a series of written interrogatories. The written interrogatories were designed to accommodate Mr. Hanemaayer’s poor health. He was not required to attend a judgment debtor examination.

[2] Mr Hanemaayer failed to comply with Master Pope’s order. He did not answer the interrogatories. Boudreau and All-Terrain brought a motion to hold Mr. Hanemaayer in contempt. A contempt motion is usually heard in two parts: first the liability phase and then the penalty phase. The motion judge will ordinarily hear the evidence and decide whether the alleged contemnor (“contemnor” being a term for a person found in contempt of court) is, in fact, guilty. After a finding of contempt the contemnor will ordinarily be given an opportunity to purge his or her contempt. If the contemnor fails to purge the contempt, then the motion judge may impose any of the penalties set out in Rule 60.11(5) or (6) in the case of a corporation, or at common law. See: College of Optometrists of Ontario v. SHS Optical, 2008 ONCA 685 at paras. 72-75.

[3] I found Mr. Hanemaayer in contempt in a hearing on May 19, 2016. Sentencing has been adjourned several times to allow him to purge. Sentencing has also been adjourned so that he could appear and explain himself.

[4] On the last occasion I issued a warrant for his arrest. For the reasons that follow, I find that he has not purged his contempt. His attempts to comply have been characterized by obfuscation and manipulation. It is true that Mr. Hanemaayer has provided information and answered questions. The information he has provided has not been meaningful. He has paid only a tiny fraction of the costs orders against him.

[5] For the reasons that follow, Mr. Hanemaayer is prohibited from taking any steps in this action. He is also prohibited from taking any steps in any action to which he, Mr. Boudreau or All-Track are all parties, or related to the parties. The prohibition will continue until he has purged his contempt.

BACKGROUND

[6] This matter has a long and tortured history. It arose out of a failed mining venture in the 1980’s. The main litigation took 23 years to get to trial. On January 31, 2014 Mr. Justice Penny granted judgment against Mr. Hanemaayer and 798839 Ontario Limited. The trial was very lengthy. Justice Penny awarded $812,281.03 plus pre-judgment interest of $873,267.08 for a total of $1,685,548.11 to All-Terrain Track Services. He also awarded substantial indemnity costs of $795,000.00 All-Terrain and Boudreau. Thus, Mr. Hanemaayer owes almost $2.5 million, plus post-judgment interest on the judgment itself. He has paid about $5,000.00 towards costs. His business interests are wide and varied. There is evidence that a company under his control received a great deal of money in 2012. He has done nothing to explain what happened to that money. He asserts, through counsel, that he has no money. Documents that would substantiate that assertion have not been forthcoming. It is difficult to escape the conclusion that he simply just doesn’t want to pay either the costs award or the judgment.

[7] Mr. Boudreau and All-Track are now trying to collect on their judgment. To that end they obtained an order from Master Pope for written interrogatories. They filed this motion for contempt when Mr. Hanemaayer failed to comply with Master Pope’s order.

[8] I heard the motion on May 19, 2016. There is a three-part test for a finding of contempt. Blair J.A. set out the elements of contempt in Bell ExpressVu Limited Partnership v. Torroni (2009), O.R. (3d) 614 at para. 21:

• the order that was breached must state clearly and unequivocally what should and should not be done;

• the party who disobeys the order must do so deliberately and willfully;

• the evidence must show contempt beyond a reasonable doubt.

[9] I was satisfied that all three elements had been shown. I therefore made the following hand-written endorsement after hearing the motion:

May 19, 2016

In my view, given the plain record and the long, tortured history of this action it is plain and obvious that Mr. Hanemaayer has wilfully refused to comply with the order of Master Pope. He was served over a month ago with the contempt motion. The order was made on January 6, 2016. The order for written interrogatories was made to convenience Mr. Hanemaayer. Although he has had counsel throughout, he sent a lawyer today without instructions, Mr. Dallichan – although let me be clear, I do not in any way fault Mr. Dallichan. I accept that Mr. Hanemaayer is ill, but I he has been ill for a long time and able to give instructions to counsel and manage his affairs. Dr. Chettimada’s letter does not in any way explain why Mr. Hanemaayer was unable to comply with an order made 5 ½ months ago. Based on the history of this matter and the material before me I am satisfied beyond a reasonable doubt that the contempt was wilful and flagrant. The matter will return before me on June 30, 2016. At that time Mr. Hanemaayer will have an opportunity to purge his contempt. If not, we will proceed to sentencing.

Costs reserved to the June 30, 2016 hearing.

[10] Mr. Hanemaayer was personally served with the contempt materials more than a month prior to the motion (more about that later in these reasons). I have no difficulty in finding that Mr. Hanemaayer is a sophisticated litigant – he has been litigating different things for a very, very long time. He sent an unfortunate ill-informed junior lawyer with no meaningful instructions or information to try to adjourn a contempt motion before a judge who did not have the full background. This tactic must be considered against the entire background of the litigation. It is obvious that he was attempting to manipulate the process.

[11] Mr. Hanemaayer’s methods of litigating resulted in Justice Penny granting substantial indemnity costs against him at the trial. It is worth excerpting some of Justice Penny’s comments in his costs endorsement dated April 7, 2014:

[25] Hanemaayer alleged that Platt, using investor’s money, acquired for himself cottages, took trips to the Bahamas, invested in speculative margin trading on the stock market and billed for services that were never rendered. He also alleged that Boudreau assisted Platt in these activities and that Boudreau also took excessive and inappropriate personal financial benefit out of these Projects.

[26] Hanemaayer took exactly the opposite position in his dealings with Revenue Canada, when he was trying to maintain the tax deductions and obtain the maximum grant. Notwithstanding his prior inconsistent position, however, all of these allegations were pursued at trial.

[27] Hanemaayer and his forensic accountant, Mr. Alkier, maintained these allegations throughout their evidence at trial and this position was advanced in final argument. These allegations, I find, were seriously prejudicial to the character and reputation of the personal defendants. The allegations were not proved and the plaintiff’s claims were dismissed.

[28] The Court of Appeal found that 39 Ontario and Hanemaayer initiated bankruptcy proceedings against Platt for an improper purpose – to eliminate Platt as an adversary in this litigation. The Court of Appeal also found that Hanemaayer’s counsel has engaged in other improprieties – swearing a false affidavit and misleading the Court.

[29] That was a different proceeding and the plaintiffs, although not parties to that litigation, were required to pay partial indemnity costs of $40,000.00. While the findings of the Court of Appeal are not sufficient, standing alone, to warrant an award of substantial indemnity costs in this proceeding, the Court of Appeal’s findings confirm, and support, my finding in this case that Hanemaayer engaged in “hardball” tactics taken with the intent of crushing a financially more vulnerable opponent. But for Boudreau’s willingness to support Platt financial through the worst of this litigation, Hanemaayer’s tactics might well have been successful.

[30] Hanemaayer, as plaintiff, had an obligation to advance his case diligently and bring it to a conclusion on the merits. He failed to do so. Indeed, his own tactics in this litigation caused extreme delays and unnecessarily incurred cost.

[12] On June 29, 2016 Mr. Hanemaayer’s counsel, Mr. Duncan, provided written answers to counsel for Mr. Boudreau and All-Terrain, Mr. Rollo. It should be noted that Mr. Duncan was not acting for Mr. Hanemaayer at the time of the trial and was not the counsel whose behaviour drew sharp criticism from Justice Penny and the Court of Appeal. Mr. Hanemaayer later provided other answers through Mr. Duncan.

[13] On June 30, 2016 counsel for the parties appeared before me. Mr. Hanemaayer did not. There was no further medical evidence provided, other than evidence that was clearly dated – it was the same evidence that was before Justice Penny. I made the following endorsement:

June 30, 2016

Mr. Hanemaayer provided a list of answers to counsel yesterday. Counsel needs to determine whether the answers are fully compliant with my order in order to determine whether he has purged his contempt.

The matter is adjourned to August 26, 2016 for sentencing on the contempt finding. Mr. Hanemaayer’s best course of action is to ensure that he has answered the questions to the satisfaction of opposing counsel and paid all of his outstanding costs orders. In any event, Mr. Hanemaayer is to appear in person on August 26. If he does not, I will issue a warrant for his arrest. Only the most compelling evidence not only of ill health but also infirmity and immobility will prevent me from issuing a warrant. I strongly suggest that if Mr. Hanemaayer does attend on grounds of ill health that any physicians providing evidence be present so they can be cross-examined. I will presume that Mr. Hanemaayer’s poor health is a mere sham unless there is strong evidence to the contrary.

Costs reserved to August 26, 2016.

[14] On August 4, 2016 Mr. Rollo wrote to Mr. Duncan with further follow-up questions. On August 23, 2016 Mr. Duncan provided further answers to Mr. Rollo. He also included Directions and Authorizations to Mr. Rollo. The Directions and Authorizations permitted Mr. Rollo to obtain some of Mr. Hanemaayer’s personal banking information. They also permitted Mr. Rollo to obtain Mr. Hanemaayer’s personal tax returns from his tax preparers. Mr. Rollo returned the directions and authorizations, on the theory that it was not his duty to dig out information from third parties; it was Mr. Hanemaayer’s job to provide the information sought. I agreed.

[15] On August 26 the matter returned before me. The only material filed before me was an affidavit of Kusum Hanemaayer, Mr. Hanemaayer’s spouse. There was no further medical evidence. No doctor attended to be examined. Ms. Hanemaayer’s affidavit set out essentially the same evidence of Mr. Hanemaayer’s medical problems that had been filed over the course of many years.

[16] I made the following endorsement:

Aug 24, 2016 (Note that the date was erroneous)

Despite my earlier endorsements Mr. Hanemaayer has not appeared. The medical evidence has failed to address any of the issues I raised in my endorsement. As well, I am advised that none of the costs orders have been paid. There have been no explanations for the failure to pay costs (or even an attempt). I draw the inference that his health issues, while no doubt real (see Penny J.’s endorsement) are currently being used as a sham to avoid answering questions and appearing in Court. It is difficult for me to draw any other conclusion than this: Mr. Hanemaayer is banking on the fact that I am very reluctant to issue an arrest warrant for a man who is 89 years old and in poor health.

This is how the matter will proceed on return:

[1] Mr. Duncan will have the opportunity to show me that his client has purged the contempt.

[2] If I am not satisfied that Mr. Hanemaayer has purged the contempt, then the Court will proceed to sentencing that day. Mr. Hanemaayer is required to attend. If he does not, he will be required (through counsel) to demonstrate why the Court should not issue a warrant for his arrest.

Mr. Duncan should also be prepared to provide an explanation and account as to why costs have not been paid. That explanation (or lack thereof) may well be a mitigating or aggravating factor on sentencing.

[17] The matter returned before me on September 28, 2016 for submissions. I heard submissions on whether Mr. Hanemaayer had purged his contempt. I also heard submissions on penalty in the event I found that he had not purged. No meaningful explanation was forthcoming as to why no costs have been paid, other than a blanket assertion of financial difficulty.

[18] Shortly before the hearing Mr. Hanemaayer’s counsel provided about $5,000.00 in satisfaction of the costs orders from the sale of some assets held in a brokerage account. I indicated that I would provide reasons for judgment on October 27, 2016.

[19] I also issued a discretionary bench warrant for Mr. Hanemaayer’s arrest if he did not appear that day: 796839 Ontario Limited v. Platt, 2016 ONSC 6337.

[20] In preparation of my reasons for judgment to be delivered on October 27, 2016 I reviewed again affidavit of Todd Snider in detail. Mr. Snider is a process server. He personally served Mr. Hanemaayer with the contempt materials. He attended at Mr. Hanemaayer’s home in Kitchener, Ontario on April 20, 2016 at 6:15 pm. These are the key parts:

[1] … As I turned onto the street I saw a man on an electric scooter pull out of a driveway and onto the street. At this time he appeared to be alone…

[3] I spent the next twenty minutes or so going up and down the neighbouring streets but could not locate the scooter or the man on it. He had covered a fair distance in short time. I decided to return to the address and parked outside on the road across from the driveway.

[4] At around 6:50 pm on April 20, 2016 the man appeared heading up the street towards the address of the same scooter. He was still alone. I followed him in my car up the driveway, through his gate and he stopped in front of his garage… He identified himself as Jacobus Hanemaayer…

[21] I will describe some of Mr. Hanemaayer’s medical problems. The most obvious is that he is 89 years old. According to his doctor, Dr. Anil Chettimada, Mr. Hanemaayer was diagnosed with inclusion body myositis in 1997-98. This is a degenerative muscular disorder. It renders Mr. Hanemaayer susceptible to falls. He is dependent on a walker/wheelchair. He was diagnosed with atherosclerotic vasculature with a history of abdominal aortic aneurism. He had surgery in 2010 for this. According to Kusum Hanemaayer’s affidavit this was quite dramatic surgery. According to Dr. Chettimada, Mr. Hanemaayer’s surgery was “postoperatively complicated by thrombosis of his left limb graft, needing thrombectomy. He also suffered a mild heart attack with congestive heart failure postoperatively”.

[22] Mr. Hanemaayer was also diagnosed with a lower urinary tract syndrome, for which he had prostate surgery in 1999. This condition has been getting worse over the years and requires him to void his bladder every 90 minutes or so. Finally, Mr. Hanemaayer has suffered cognitive impairment/mixed dementia since 2012, hearing loss, and poor vision from macular degeneration.

[23] Dr. Chettimada concluded:

Given all the above significant comorbidities, especially his frail cardiovascular status and episodes of syncope/loss of consciousness in the past when exposed to undue stressors, I strongly feel that if his routine is altered, or he is exposed to any undue stressors, it can have significant detrimental effects on his health including death.

[24] I am in no position to make a finding that Mr. Hanemaayer is malingering. I do find it interesting that a man who “spends most of his time sitting or lying in bed” just happened to be out and about without assistance when a process server came by to serve material on the contempt motion. Was that, by striking coincidence, the only day he happened to be able to get out of bed? I also note that Mr. Hanemaayer is dealing with several different lawsuits and is instructing counsel and receiving advice. I specifically asked Mr. Duncan whether he was able to receive instructions from Mr. Hanemaayer. He confirmed that he was.

[25] I also note that virtually the same medical information that is before me was also before Justice Penney. Justice Penney permitted Mr. Hanemaayer to testify by video-link in order to accommodate his health concerns. Justice Penney made these comments:

[82] At the outset and during the trial of this matter I was called upon to make rulings about whether Hanemaayer and, later, Platt were incapable of testifying due to illness or infirmity. I held that while Hanemaayer suffered from a degenerative muscle disease, he was capable of testifying if certain accommodations were made to protect his health and comfort. Those accommodations included allowing Hanemaayer to use his discovery transcripts as his evidence in chief; to give evidence by video conference from a facility near his home in Kitchener rather than having to come to Toronto and testify in Court; and, to limit his viva voce testimony to two hours per day.

[83] Hanemaayer's cross-examination proceeded in this fashion, with some interruptions, until one day, while being pressed on adverse credibility findings made against him by the Ontario Court of Appeal, he had what can best be described as a "shutdown". Hanemaayer stopped answering questions or responding to external stimuli. Proceedings were adjourned on that day to allow him to rest and to await possible further medical evidence from Hanemaayer's doctor.

[84] Updated evidence on Hanemaayer's condition turned out to be the same as the evidence filed previously - Hanemaayer's doctor was concerned about the impact of undue stress on Hanemaayer's health. On the basis that there was no change in the medical evidence, I directed that Hanemaayer complete his cross examination (estimated to be another three hours) and issued orders granting further accommodations concerning the conduct of that examination. In the end, however, counsel were able to come up with an agreed statement of facts which obviated the need to complete Hanemaayer's viva voce cross examination.

[89] Hanemaayer's evidence at trial was difficult to say the least. Hanemaayer clearly suffered from a physically debilitating illness. During the trial, Hanemaayer could remember very little. He answered "I don't know" or "I cannot recall" a great deal. Failing memory, of course, is a risk of ancient cases such as this. Failing memory is also relevant to the reliability of Hanemaayer's evidence, particularly in a case where the relevant events took place almost 25 years ago. However, it is not all clear that Hanemaayer's answers at trial were the product of poor health or memory decline from age and passing years. I say this because, in his 1991 to 1993 discovery evidence (which, at his request, I accepted as his evidence in chief at trial), taken only two or three years after the relevant events, Hanemaayer was likewise unable to recall a great deal and frequently answered questions with "I don't know" or "I don't recall."

[91] I found Hanemaayer a thoroughly unreliable witness. His memory was highly selective. He was not forthcoming and became increasingly less and less forthcoming as his cross examination progressed. Hanemaayer was evasive in his answers, demonstrating an almost pathological fear of getting drawn into a discussion of any details. He frequently fell back on his "party line" or "canned" version of events, even when this approach was not responsive to the question. His evidence was often inconsistent with contemporaneous documentary evidence. "I don't recall" was often what he said when he did not want to answer the question.

[26] Notwithstanding the medical evidence of Dr. Chettimada, and the affidavit of Kusum Hanemaayer, it seems that as of April 20, 2016 Mr. Hanemaayer was able to leave his home unaided on a scooter, get around the neighbourhood, and identify himself to a process server. His counsel conceded that he liked to go to his neighbourhood Tim Horton’s, and occasionally attended neighbourhood games. This seems rather at odds with the notion conveyed to me that he can barely function, is at death’s door, and he might expire at any time if he is required to do something that he is actually obligated to do, like show up in Court.

[27] As a result I decided not to pronounce sentence but to allow Mr. Hanemaayer one more opportunity to purge. I made the following endorsement on October 27, 2016 (I excerpt the key parts):

October 27, 2016

This endorsement should be read with my other endorsements in this matter.

Despite opportunity after opportunity to provide medical evidence, I am not satisfied that Mr. Hanemaayer is not able to attend. The current affidavit from Ms. Hanemaayer does not, in my view, meet the concerns of the Court.

A warrant will issue for Mr. Hanemaayer’s arrest. He may be brought before me or any Superior Court judge in Ontario and be dealt with according to law.

[28] I accept that Mr. Hanemaayer is a frail 89-year old man with real and serious health problems. I find, however, that his health is not the reason he has been unwilling to purge his contempt. Rather, he has used his health as an excuse to avoid compliance with Court orders.

ANALYSIS

[29] With that background in mind, I now turn to the issues:

(a) Has the contempt been purged?

(b) What is the appropriate penalty if the contempt has not been purged?

(a) Has the contempt been purged?

[30] The onus is on Mr. Hanemaayer to demonstrate on a balance of probabilities that he has purged his contempt or made his best efforts to do so. Rule 60.11(8) permits a judge on motion to discharge, set aside, vary, or give directions in relation a finding of contempt.

[31] I find as a fact that the contempt has not been purged. The answers provided on June 30, 2016 and August 23, 2016 are inadequate. Mr. Hanemaayer is a director of several companies but indicated that he knows nothing of them and does not know where there records are. He provided bank account numbers but few bank statements.

[32] It is not necessary to analyze every single question and response. Three responses are particularly troubling and demonstrate that Mr. Hanemaayer’s claim that he does not know anything and has no documents is tactical. My observations about his answers to the written interrogatories are very similar to the conclusions Justice Penny drew about Mr. Hanemaayer’s answers on cross-examination at the trial.

[33] First, Mr. Hanemaayer indicated in his answers that he is owned the shares of a company that owned a 3-acre development property on Margaret Avenue in Kitchener. According to the affidavit of Mr. Boudreau, that company was Community Expansion Inc. In his written answers Mr. Hanemaayer stated that he owned a part of Community Expansion but left unanswered the question asking what his ownership interest was. He conceded he was an officer and a director but did not know the head office. He stated that the minute book, share register, and corporate tax returns were not in his possession. He stated that he did not know when it last owned property or assets. Mr. Hanemaayer further stated that he sold the property for $6 million on August 9, 2012. He indicated that the proceeds of the sale were deposited to Scotiabank to pay debt and into Court. He said that the bank records were not available.

[34] In his follow-up, Mr. Rollo asked the following question:

Produce the Minute Books for Community Expansion from 1999 through to 2015. Tell us who has them if you don’t. The same applies to the requested tax returns, shareholder registers and bank accounts. If you cannot produce the requested documents advise why that is the case and who you contacted to request the records.

[35] The answer was as follows:

Mr. Hanemaayer is not in possession of Minute Books or tax returns and is not aware of their whereabouts.

[36] That answer was obviously not responsive. The answer did not even mention the bank accounts. It appears that no effort whatsoever was made to find out. Furthermore, although Mr. Hanemaayer was prepared to provide a Direction and Authorization in respect of some bank accounts and personal tax returns, I think it is telling that he was not prepared to do the same for the law firm, accounting firm, real estate brokerage, or other institution that might have had something to do with the sale of the Margaret Avenue property.

[37] Thus, there is no evidence before me of where this substantial amount of money went. Those funds might well have been sufficient to satisfy the judgment and the costs award, and still leave a substantial amount left for Mr. Hanemaayer and the other shareholders. I find that this was a deliberate and wilful refusal to provide meaningful information.

[38] Second, according to Mr. Boudreau’s affidavit 798839 Ontario Inc. received a grant of $1.05 million in 2010. Mr. Hanemaayer did not recall whether he still owed shares in that numbered company, whether he was a director, who the shareholders were, whether he was still a shareholder, the location of the head office, or the location of the minute book, share transfer register, or corporate tax returns. He could only say that he had been an officer. He stated later in his written answers that he received the grant in 2010 and that he had spent the money. When asked where he put that money, he stated that he did not remember. I do not think it is speculative to think that a man who cannot remember what he did with a million dollars is probably quite used to dealing with large amounts of money. Either that or he was obfuscating.

[39] Third, Mr. Hanemaayer was asked for his tax returns for the previous ten years. His answer was that his tax returns for 2011, 2012, 2013, 2014, and 2015 were attached. In fact, Mr. Hanemaayer actually only produced the following documents:

• His Notice of Assessment for 2012 along with his 2012 summary;

• His Notice of Assessment for 2014;

• His Notice of Assessment for 2015.

[40] The tax records are especially troubling. They are not tax returns (as stated in the answers to the interrogatories) which would – or at least should – contain full information. They are merely (with the exception of 2012) the Notices of Assessment. Notices of Assessment are generated by the Canada Revenue Agency, not the taxpayer. The problem is illustrated with the 2012 return, the only one with a summary. Although Mr. Hanemaayer stated in his answers that he only received CPP and OAS, in 2012 he had dividend income of $48,750. It is unclear what company or companies paid the dividends. Furthermore, there is nothing in his 2012 return that would indicate what happened to the $6 million received in relation to the Margaret Avenue property. Did he receive funds for the 2012 sale of the Margaret Avenue property in 2013? The judgment creditor – and the Court – is left to guess. As I have already noted, that mystery might have been solved but for the fact that Mr. Hanemaayer did not provide meaningful information about that corporation.

[41] Furthermore, the tax returns themselves might shed light on whether there are, for example, large losses brought forward that shelter large amounts of income – thus explaining a low net income on his Notice of Assessment. Without the foundation documents, the judgment creditors – and the Court – are left to speculate.

[42] It is true that Mr. Hanemaayer signed the Authorization and Direction so that Mr. Rollo could access his tax preparer’s records. As I stated, that is not sufficient. It is not enough for Mr. Hanemaayer to sign authorizations and hand them over to Mr. Rollo so that he can spend his client’s time and money to gather information that Mr. Hanemaayer is obligated to gather and produce. In any event, if Mr. Hanemaayer was able to provide some of his tax information (the assessments) then why not all of his tax returns for all of the years that he claimed he was providing in his answers (but did not)? Yet again, it is difficult to escape the conclusion that this is a form of game-playing by Mr. Hanemaayer, and not a genuine attempt to purge his contempt.

[43] Furthermore, the authorizations that Mr. Hanemaayer’s counsel provided to Mr. Rollo also did not include authorizations to Revenue Canada to obtain the corporate tax returns for Community Expansion. Presumably, as a director, he could have signed such a direction. In any event, as I have indicated it is not Mr. Rollo’s job to gather information that Mr. Hanemaayer should be producing.

[44] Overall, I find that Mr. Hanemaayer answered many of the questions put to him, but he did not answer the most important. He failed to provide key information. Providing partial information in dribs and drabs does not inspire confidence that a contemnor is trying to purge. He has not purged his contempt.

[45] Furthermore, Mr. Hanemaayer has not paid any of his outstanding costs orders, other than the $5,000.00 he obtained from selling assets in his iTrade account. That is a true drop in a large bucket. In my respectful view the burden is on him to explain why a man with so many business interests and who received (through his company) $6 million in 2012 is unable to pay any meaningful costs. He has not even explained why he cannot do so – other than a simple assertion through counsel that he cannot pay. He is the one with the burden in that respect. He has not met it or even attempted to meet it in a meaningful way.

(b) What is the appropriate penalty if the contempt has not been purged?

[46] Mr. Rollo did not ask for a jail sentence for Mr. Hanemaayer. I can well understand that, and I agree. Although I do believe that Mr. Hanemaayer’s medical condition is not as serious as his spouse and his doctor would have the Court believe, I still do not believe it is in the interests of justice to jail this frail 89-year old man who has not been convicted of a criminal offence. The warrant was issued so that he could be brought to Court and explain himself, not to punish him. Accordingly, the arrest warrant is rescinded.

[47] There are, however, other measures that can be taken. Mr. Rollo argues that I should make an order preventing Mr. Hanemaayer from taking steps in this or any other litigation until he has purged his contempt.

[48] There is no question that a Court may refuse to hear a party in contempt until the contempt is purged: Paul Magder Furs Ltd. v. Attorney General of Ontario (1991), 1991 CanLII 7053 (ON CA), 6 O.R. (3d) 188 (C.A.); Hadkinson v. Hadkinson, [1952] 2 All E.R. 567 (C.A.). Accordingly, I have little difficulty in ordering that Mr. Hanemaayer may take no steps in this action until he has purged his contempt.

[49] That order, however, is of little practical value to the judgment creditors in this case. Mr. Hanemaayer has already lost the trial and his appeal has been dismissed. He owes Mr. Boudreau and All-Track a lot of money. There is a judgment against him. It is difficult to see what meaningful steps he could be barred from taking in this action that would truly compel obedience and punish disobedience.

[50] What about taking steps in any other litigation to which Mr. Hanemaayer is a party? I approach that issue in two steps: first, I must determine whether jurisdiction exists to make such an order; and second, if it does, should the order be made and should it be limited?

[51] Is there jurisdiction in the Courts of Justice Act to order that Mr. Hanemaayer not be heard in any other litigation? Mr. Rollo points to s. 140(1) of the Courts of Justice Act as authority. That section provides:

140.(1) Where a judge of the Superior Court of Justice is satisfied, on application, that a person has persistently and without reasonable grounds,

(a) instituted vexatious proceedings in any court; or

(b) conducted a proceeding in any court in a vexatious manner,

the judge may order that,

(c) no further proceeding be instituted by the person in any court; or

(d) a proceeding previously instituted by the person in any court not be continued,

except by leave of a judge of the Superior Court of Justice.

[52] I have some difficulty with the notion that this sub-section provides authority to prevent a contemnor from taking action in this or any other litigation. Mr. Hanemaayer has arguably conducted the proceedings in an abusive manner, but that does not mean the sub-section applies. Justice Myers described some of the attributes of a vexatious litigant in Leong v. Ryabikhina, 2014 ONSC 2512 at para. 14 (affirmed 2015 ONCA 886):

Courts have previously identified a number of attributes of a vexatious litigant. Not all of the criteria need be present in any given case. Moreover, other criteria may exist. The most telling features are:

(a) Bringing multiple proceedings to try to re-determine an issue that has already been determined by a court of competent jurisdiction;

(b) Rolling forward grounds and issues from prior proceedings to repeat and supplement them in later proceedings including bringing proceedings against counsel who have acted for or against them in earlier proceedings;

(c) Persistent pursuit of unsuccessful appeals;

(d) Failure to pay costs awards of prior proceedings;

(e) Bringing proceedings for a purpose other than the assertion of legitimate rights, including to harass or oppress others;

(f) Bringing proceedings where no reasonable person would expect to obtain the relief sought.

[53] Mere obstreperousness does not justify an order under s. 140. As the Court of Appeal stated in Baradaran v. Tarion Warranty Corp., 2014 ONCA 597 at para. 47:

There is evidence that the appellant has conducted himself in a vexatious manner in respect of the Tribunal proceedings and in the course of the Superior Court action. The application judge described such conduct as obstreperous. While such conduct no doubt makes it difficult for both opposing counsel and the court to understand and deal with the appellant's claims in the action, is distracting and impedes the proper resolution of the litigation, it does not justify the vexatious litigant order in the terms made by the application judge in this case.

[54] Although I am doubtful that there is authority s. 140(1) of the Courts of Justice Act, I do believe that there is authority under s. 140(5) as well as at common law and under the Rules of Civil Procedure.

[55] I start with Rules 1.04(1) and 1.04(1.1):

1.04(1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

(1.1) In applying these rules, the Court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.

[56] Rule 60.011(5) codifies the Court’s power to sentence for contempt. The power is very wide, as paragraphs (d) and (f) contemplate:

60.011(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;

(e) pay such costs as are just; and

(f) comply with any other order that the judge considers necessary…

[57] The purpose of a contempt sanction must also be considered. Nothing less than the rule of law itself is at stake in a contempt proceeding. As Justice McLachlin (as she then was) stated in United Nurses of Alberta v. Alberta (Attorney General), 1992 CanLII 99 (SCC), [1992] 1 S.C.R. 901 at 931:

The rule of law is directly dependent on the ability of the courts to enforce their process and maintain their dignity and respect. To maintain their process and respect, courts since the 12th century have exercised the power to punish for contempt of court.

[58] Ultimately, as Watt J.A. said in College of Optometrists of Ontario v. SHS Optical Ltd at para. 106:

The underlying purpose of contempt orders is to compel obedience and punish disobedience.

[59] In Dickie v. Dickie (2006), 2006 CanLII 576 (ON CA), 78 O.R. (3d) 1 (C.A.); appeal allowed 2007 SCC 8, [2007] 1 S.C.R. 346 the Court of Appeal and the Supreme Court considered the principle from Hadkinson v. Hadkinson, that the Court will not entertain an appeal from someone who has willfully breached an order until the breach is cured.

[60] Dr. Dickie was a wealthy and successful doctor. He decided to sell everything and move to the Bahamas. He stopped paying his child and spousal support although he was living a lavish lifestyle. Greer J. of this Court made orders that he post security for costs and an irrevocable letter of credit to secure his support obligations. He ignored them. Steward J. found him in contempt and ordered (among other things) that Dr. Dickie serve 45 days in jail. The issue was whether the Court of Appeal should entertain the appeal, based on the principle in Hadkinson v. Hadkinson. Juriansz J.A., for himself and Sharpe J.A., applied the narrow exception in Rule 60.011(1) that a contempt order cannot be used requiring a person to make a “payment of money”. Accordingly, Juriansz J.A. found that the Court should entertain the appeal. He qualified the Hadkinson v. Hadkinson rule and found that it had not been universally applied. In analyzing the judgment, he noted at para. 27:

Rohmer L.J. wrote separate reasons in Hadkinson. His articulation of the exceptions to the rule were summarised in N. Lowe & B. Suffrin, The Law of Contempt, 3d ed. (London: Butterworths, 1996) at 653-654:

According to Rohmer Elk's analysis in Hadkinson v. Hadkinson the rule is subject to the following exceptions namely where the contemnor is (1) applying to purge his contempt, (2) appealing against the order which has not been obeyed, (3) submitting that he is not or should not be treated as being in contempt, (4) defending himself against subsequent applications, and (5) appealing against an order made against him, provided that the order was not made in the exercise of the court's discretion.

[61] Laskin J.A. dissented on the basis that the Court had discretion to refuse to entertain the appeal until Dr. Dickie had complied with the orders issued by Greer J. He also found that the order to post security for costs and an irrevocable letter of credit were not orders for a “payment of money” and thus could be enforced by way of a contempt proceeding.

[62] Laskin J.A. disagreed with the categorical exceptions set out by Juriansz J.A. He favoured a flexible approach. He stated at paras. 85-86:

… The general rule against granting an audience to a contemnor who has failed to purge the contempt reflects the exercise of the court's discretion. That discretion is grounded in the inherent jurisdiction of the court to control its own processes and, in Ontario, in s. 140(5) of the Courts of Justice Act, which gives the court express power to stay or dismiss a proceeding as an abuse of process. The rationale underlying this exercise of discretion is that a court will not allow a litigant to abuse the court's processes, or to impede the course of justice, or to undermine the court's ability to enforce its own orders.

This rationale argues not for carving out categorical exceptions to the exercise of the court's discretion, but for a flexible approach to the exercise of this discretion. If needed to meet its underlying rationale, the court will exercise its discretion, apply the general rule, and refuse to entertain an appeal until the wilful breach is cured.

[63] Section 140(5) of the Courts of Justice Act states:

140(5). Nothing in this section limits the authority of a court to stay or dismiss a proceeding as an abuse of process or on any other ground.

[64] Laskin J.A. then analyzed Hadkinson v. Hadkinson. He ultimately preferred the following statement of Lord Denning:

I am of the opinion that the fact that a party to a cause has disobeyed an order of the court is not of itself a bar to his being heard, but if his disobedience is such that, so long as it continues, it impedes the course of justice in the cause, by making it more difficult for the court to ascertain the truth or to enforce the orders which it may make, then the court may in its discretion refuse to hear him until the impediment is removed or good reason is shown why it should not be removed.

[65] The Supreme Court, in a short unanimous decision, endorsed the approach taken by Laskin J.A.

[66] I conclude therefore that the Court has the authority to prohibit Mr. Hanemaayer from taking any step in an action where he is a party until he has complied with all of the outstanding orders of this Court, including costs orders. In my view, that authority is grounded in the Court’s common law power to control its own process. It is also grounded in s. 140(5) of the Courts of Justice Act.

[67] I am aware that some of the litigation involving Mr. Boudreau, All-Track, and Mr. Hanemaayer involves allegedly fraudulent conveyances to defeat creditors. I am aware that he will not be able to take steps to defend those actions. This prohibition should give him an incentive to comply with Court orders.

[68] This is the best, most expeditious and most proportional way to induce compliance and punish disobedience. There must, however, be some limits to the order. It would not be in the interests of justice if, for example, Mr. Hanemaayer found himself the subject of some kind of unrelated administrative proceeding that he could not respond to. He does not lose all of his civil and political rights.

DISPOSITION

[69] In my respectful view, the appropriate balance of punishment and compulsion is found by prohibiting Mr. Hanemaayer from taking any steps in a proceeding in this action or any litigation arising out of this action or related actions. Mr. Hanemaayer is also prohibited from taking any steps in a proceeding where he, Mr. Boudreau, or All-Track are parties. For greater certainty, Mr. Hanemaayer is also prohibited from taking any steps to respond to steps taken by other parties in any proceeding where he, Mr. Boudreau, or All-Track are parties or related to the parties to litigation. That prohibition includes taking any steps to respond to any motions, applications, writs, or other filings. The prohibition will last until Mr. Hanemaayer purges his contempt. It is my intention that this order will be very broad. It should include any litigation that involves parties that are related to Mr. Hanemaayer, Mr. Boudreau, or All-Terrain, such as corporations where anyone is a director, officer, or shareholder. Counsel will draft an appropriate order.

[70] There are three exceptions to the prohibition: Mr. Hanemaayer may bring a motion before me or another judge to lift it on the basis that he has purged his contempt by complying with the Order of Master Pope and that he has paid all of his outstanding costs orders. The second exception is on the launching of an appeal. I am not at all satisfied that I have the authority to prohibit that. I therefore do not include appeals in this order. The third exception is responding to the costs submissions on this motion, as I set out next.

COSTS

[71] Mr. Boudreau an All-Terrain have 15 days of the date of this judgment to provide a costs outline and submissions of no more than five pages. Mr. Hanemaayer will then have 15 days from that point to serve and file a costs outline and responding submissions of no more than 5 pages.

R.F. Goldstein J.

Released: November 16, 2016

CITATION: 796839 Ontario Limited v. Platt, 2016 ONSC 7097

COURT FILE NO.: CV-90-CQ-046548-000

DATE: 20161116

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

796839 ONTARIO LIMITED and JACOBUS HANEMAAYER

Plaintiffs

– and –

ROBERT PLATT, JAMES BAY KAOLIN CORPORATION, JAMES BAY COMPANYMINERAL RESOURCES INC., BLACK GREGOR EXPLORATIONS LTD., CARLSON MINES LIMITED SOURCE CORP., ANDRE BOUDREAU and ALL-TERRAIN TRACK SALES & SERVICES

Defendants

REASONS FOR JUDGMENT AND SENTENCE ON CONTEMPT MOTION

R.F. Goldstein J.