CITATION: Blatherwick v. Blatherwick, 2016 ONSC 7680

COURT FILE NO.: 810/10 (Guelph)

DATE: 2016-12-07

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: BARBARA ANN BLATHERWICK

Applicant

AND:

BRIAN EARL BLATHERWICK

Respondent

BEFORE: Ricchetti, J.

COUNSEL: J. Cox and N. Bazar, Counsel for Mrs. Blatherwick

I. Kilgour, Counsel for Brian Earl Blatherwick

M. Kestenberg and T. Slahta for SimpsonWigle LLP and Stuart Law

HEARD: November 30, 2016

ENDORSEMENT ON SIMPSONWIGLE LLP MOTION

TO DISMISS CONTEMPT MOTION

Contents

Overview of the Proceedings. 2

Background. 3

Matrimonial Litigation. 3

The Contempt Issue. 5

Apprehension of Bias. 6

Timing of the Contempt Motion. 7

THE RECORD.. 12

THE POSITION OF SIMPSONWIGLE LLP. 13

THE POSITION OF MRS. BLATHERWICK.. 14

ANALYSIS. 15

Not In Dispute. 15

The importance of compliance with injunctions. 15

The Purpose of Contempt Jurisdiction. 16

The Requirements for Contempt 17

The Timing of Contempt Motions. 19

Must the contempt motion be brought while the order is live and operative?. 20

The Family Law Rules. 21

Alternatively. 22

Must the Order be Live and Operative when the Contempt finding is made?. 23

CONCLUSION.. 24

Overview of the Proceedings

[1] This is part of a long, bitter and highly contested matrimonial proceeding.

[2] The trial on the matrimonial issues between Mrs. Blatherwick and Mr. Blatherwick was lengthy. Numerous issues arose during the course of the trial.

[3] One of the allegations that needed to be determined at trial, was whether Mr. Blatherwick had continued to pay his lawyer, Stuart Law of SimpsonWigle LLP, despite and contrary to a Mareva Order. Mrs. Blatherwick sought the return of such allegedly improper payments from SimpsonWigle LLP.

[4] The Reasons for Judgment, dated April 27, 2015, are found at Blatherwick v Blatherwick, 2015 ONSC 2606 ("Reasons for Judgment"). The Judgment issued on June 12, 2015 ("Judgment").

[5] In accordance with the direction in the Judgment, on December 20, 2015, Mrs. Blatherwick brought a motion against SimpsonWigle LLP and Stuart Law for a finding of contempt for allegedly breaching the Mareva Order.

[6] The contempt hearing against SimpsonWigle LLP and Stuart Law was scheduled for November 30, December 1 and 2, 2016.

[7] At the commencement of the contempt hearing, SimpsonWigle LLP and Stuart Law brought this motion to dismiss Mrs. Blatherwick's contempt motion.

[8] On December 1, 2016 during a conference call, this court advised counsel that SimpsonWigle LLP and Stuart Law's motion was dismissed. Reasons would be forthcoming in the future. These are those reasons.

Background

Matrimonial Litigation

[9] Mrs. Blatherwick commenced this proceeding on November 26, 2010 seeking support, equalization of net family property, declarations of trust over certain properties and transfers of certain property to Mrs. Blatherwick.

[10] At the commencement of this proceeding, a motion was brought by Mrs. Blatherwick for a Mareva Injunction and an order freezing and preserving Mr. Blatherwick’s assets in various companies and entities. Justice Belleghem issued an order on November 18, 2010 (the "Mareva Order"). Essentially, the Mareva Order was to preserve Mr. Blatherwick’s assets pending trial by "freezing" the assets of a number of offshore companies and entities owned, partially owned or controlled by Mr. Blatherwick (“offshore companies”). Payments by the offshore companies were prohibited save and except in the ordinary course of business. The offshore companies subject to the Mareva Order were set out in the Mareva Order.

[11] By Order dated November 30, 2010, the Mareva Order was continued on consent of Mr. Blatherwick, through his counsel, Mr. Stuart Law of SimpsonWigle Law LLP. This order granted an exception to the Mareva Order to permit access to $100,000 from the frozen assets of these offshore companies and entities, with such monies to be divided equally between Mr. Blatherwick and Mrs. Blatherwick.

[12] Mr. Blatherwick continued to be represented in the matrimonial litigation by Mr. Stuart Law for approximately four years including during the following:

a) A Consent Order dated January 25, 2011, where the Mareva Order was continued;

b) An Order dated February 8, 2011, where Mr. Blatherwick was granted an exemption of the Mareva Order in order to access $50,000 from the frozen assets to be divided equally between Mr. Blatherwick and Mrs. Blatherwick; and

c) An Order dated June 23, 2011, where Mr. Blatherwick was granted a further exemption of the Mareva Order in order to access a further $350,000 from the frozen assets to be provided to Mrs. Blatherwick as an advance on the equalization payment.

[13] Mrs. Blatherwick's counsel discovered documents which suggested that Mr. Blatherwick had breached the Mareva Order by receiving monies from the offshore companies without an exemption order for payment of Mr. Blatherwick’s legal accounts in this proceeding. Mrs. Blatherwick’s counsel advised Mr. Stuart Law of this allegation.

[14] In late 2014, SimpsonWigle LLP was removed as solicitor of record for Mr. Blatherwick. Mr. Blatherwick was self-represented at trial.

[15] The trial commenced on February 2, 2014.

The Contempt Issue

[16] Part of the relief sought at trial by Mrs. Blatherwick included a finding that Mr. Blatherwick had breached the Mareva Order by making payments to SimpsonWigle LLP for its legal accounts from the offshore companies.

[17] Mrs. Blatherwick's counsel, Mr. Cox, advised this court that he sought to recover, from SimpsonWigle LLP, the legal fees allegedly paid to SimpsonWigle LLP in contravention of the Mareva Order.

[18] Similar allegations were made and relief sought against Ormston List Frawley LLP, counsel for Seasons HK Limited – one of the companies which Mr. Blatherwick had an interest in. Mr. J. Ormston was counsel for Seasons HK Limited at trial.

[19] It became evident to this court that, essentially Mrs. Blatherwick was advancing a claim which required a finding of contempt against the two law firms. The law firms did not have notice of the claim for a finding of contempt. The laws firms needed to be put on notice and have an opportunity to respond.

[20] Notice was not a problem with Ormston List Frawley LLP as J. Ormston was present when Mrs. Blatherwick's counsel advanced this allegation of contempt. However, no one was present from SimpsonWigle LLP at the trial.

[21] The court required that SimpsonWigle LLP to be notified of Mrs. Blatherwick's claim for a finding of contempt against the law firms.

Apprehension of Bias

[22] The first issue that needed to be dealt with was whether there was a reasonable apprehension of bias preventing this court from proceeding to deal with the allegation of contempt given that a presiding justice in Brampton was, at the time of the allegations, a partner in SimpsonWigle LLP.

[23] Mr. Cox wrote to Mr. Stuart Law at SimpsonWigle LLP on February 5, 2015 advising of Mrs. Blatherwick's contempt claim. A copy of this letter was marked as an exhibit at trial. This letter included:

I confirm that you indicated that there was not a conflict and that if a finding was going made against Simpson Wigle that you would like to be advised so that Simpson Wigle could appear and make representations.

(emphasis added)

[24] Ms. Fisher of SimpsonWigle LLP wrote to this court by letter dated February 6, 2015. This letter was marked as an exhibit at trial. This letter from SimpsonWigle LPP included:

SimpsonWigle Law LLP needs to determine if retention of counsel is appropriate and we are respectfully requesting a proper opportunity to address any such issues which may result in findings that in turn affect Simpson Wigle Law LLP.

(emphasis added)

[25] All parties agreed that there was no conflict with this court proceeding to deal with the allegations of contempt against the law firms.

Timing of the Contempt Motion

[26] Proceeding with the alleged contempt by the law firms during the trial was problematic. The trial had already commenced. If the alleged contempt by the law firms was to be heard during the trial, Ormston List Frawley LLP could not continue to act on behalf of a party (Seasons HK) and defend the allegations of contempt. SimpsonWigle LLP was entitled to be represented throughout the trial. A mistrial would be required. The scheduled 6-8 week trial would have to re-commence with the law firms separately represented throughout the trial.

[27] After SimpsonWigle LLP and Ormston List Frawley LLP received notice of the allegations of contempt, the parties agreed that the contempt claims against the law firms could and would be dealt with after the matrimonial issues in the trial had been completed. In the meantime, the matrimonial trial would not result in findings or determinations regarding the alleged contempt of the law firms.

[28] If, at the end of the matrimonial trial, Mr. Blatherwick was found not to have breached the Mareva Order, then there could be no finding of contempt against the law firms. The allegations of contempt would be moot. On the other hand, if Mr. Blatherwick was found to have breached the Mareva Order, then the contempt motions against the law firms could proceed at a later date on notice and with the participation of the law firms. What was clear and agreed to was that the claims for contempt against the law firms would not proceed during the matrimonial trial; the law firms did need not be present during the trial; and as a result, no findings of contempt could or would be made at the trial to prejudice the position of the law firms.

[29] In order to ensure that there was no misunderstanding as to how the trial and the subsequent contempt hearings were to proceed, on February 13, 2015, this court directed Mr. Cox to write to SimpsonWigle LLP confirming this agreement on how to proceed with these matters. Mr. Ormston was in court and agreed to the procedure outlined above.

[30] Mr. Cox wrote to SimpsonWigle LLP on February 13, 2015 stating:

At the conclusion of court today, Mr. Justice Ricchetti directed that I write and advise you of the status of the matters.

In the event that His Honour makes a finding that Mr. Blatherwick has breach a mareva-injunction and/or freezing order by paying Simpson Wigle with offshore funds, no finds of breach or contempt will be made against Simpson Wigle until after the judgment is released in the matrimonial litigation. Following this, a full hearing on the issues of breach and contempt of court by your firm will be held, at which time you will have the opportunity to fully participate and make submissions.

[31] No one appeared from SimpsonWigle LLP in the continuing matrimonial trial to object to proceeding in this manner. No response to this letter was sent to the court by SimpsonWigle LLP. No objection was voiced by SimpsonWigle LLP in writing or in court to the procedure to be followed.

[32] As a result, this court proceeded in the manner set out in Mr. Cox's February 13, 2015 letter to SimpsonWigle LLP.

[33] This court included in its Reasons for Judgment the following:

The Contempt Motions

[46] During the course of the trial, an issue arose regarding potential consequences of Mr. Blatherwick's alleged breaches of the Mareva/Freezing Order, should such a determination be made.

[47] It was apparent that, during the course of the trial, Mr. Blatherwick continued to pay legal fees to his counsel. Legal fees were also paid to Season's HK's lawyers. It is clear that the amounts paid to the two law firms exceeds $800,000. These amounts were paid to Messrs. SimpsonWigle Law LLP (Mr. Blatherwick’s matrimonial counsel until November 2014) and to Messrs. Ormston List Frawley LLP (Seasons HK’s counsel).

[48] Mrs. Blatherwick’s alleged that these law firms were in contempt because they had knowingly received monies in breach of the Mareva/Freezing Order. Mrs. Blatherwick made a claim for the return of these monies.

[49] Messrs. SimpsonWigle Law LLP, the former counsel for Mr. Blatherwick, were advised that this issue had arisen. Mr. Ormston of Messrs. Ormston List Frawley LLP was present in court when this issue arose.

[50] Rather than deal with this issue during the course of the trial, all parties agreed that this court would determine whether Mr. Blatherwick had breached the Mareva/Freezing Order as part of this trial. This court would make no finding of breach or contempt by the law firms.

[51] If this court were to find that Mr. Blatherwick had breached the Mareva/Freezing Order, then a further hearing would be scheduled, on notice to all parties and giving all parties the opportunity to adduce any evidence and make submissions on the issue of whether the law firms were in contempt of court and, if so, what remedial order should be made.

[34] Mr. Blatherwick was found to have breached the Mareva Order. See paragraphs 544 to 556 of the Reasons for Judgment.

[35] Mrs. Blatherwick sought to continue the Mareva Order as part of the Judgment. However, a Mareva Order would have had the result of preventing monies from flowing to Mr. Blatherwick to satisfy the financial terms of the Judgment. This court's Reasons for Judgment state:

Continuation of the Mareva/Freezing Order

[589] Mrs. Blatherwick seeks the continuation of the Mareva/Freezing Order. I understand her concerns. However, continuation of the order would have the effect of preventing Mr. Blatherwick to receive monies he is entitled to for his business operations.

[590] What I do consider being reasonable in these circumstances, is that Mr. Blatherwick’s interests in the various corporations not be transferred, encumbered or pledged in any way, without the written consent of Mrs. Blatherwick or further order of this court. This will ensure that the underlying assets which generate the income or are the basis of the equalization award are not, through additional steps taken by Mr. Blatherwick, put beyond the reach of Mrs. Blatherwick.

[591] In my view, this unusual order is necessary given the circumstances of this case and the actions of Mr. Blatherwick to distance himself from certain assets and income and his attempt to defeat Mrs. Blatherwick’s claims by going bankrupt.

[36] As a result of finding Mr. Blatherwick in breach of the Mareva Order, and pursuant to what had been agreed to by the parties during the course of the trial, the court concluded as follows with respect to the contempt motions:

CONTEMPT MOTIONS

[602] Arrangements are to be made with the Trial Coordinator’s Office for a hearing date(s) for all parties with an interest in the contempt motions involving SimpsonWigle LLP and Ormston List Frawley LLP.

[37] The Judgment included the following terms:

11. A date is to be set for a Contempt Hearing against SimpsonWigle Law LLP for Contempt of Court for breach of a Mareva Injunction and Freezing Order.

12. A date is to be set for a Contempt Hearing against Ormston List Frawley LLP for Contempt of Court for a breach of a Mareva Injunction and Freezing Order.

[38] After issuance, a copy of the Reasons for Judgment, when released, was sent to the law firms.

[39] Although Ormston List Frawley LLP initially appealed the Judgment, the appeal did not proceed. No other party appealed the Judgment including SimpsonWigle LLP.

[40] In May 2015, SimpsonWigle LLP retained counsel to deal with the contempt hearing. On May 5, 2015, counsel for SimpsonWigle LLP wrote to Mrs. Blatherwick's counsel to settle on the "procedure and the manner" for the contempt hearing.

[41] On May 8, 2015, counsel for SimpsonWigle LLP wrote to the court seeking a case conference "to discuss the manner in which the contempt matter is to proceed". A March 2016 date was tentatively scheduled for the contempt hearings.

[42] On November 19, 2015 a case conference was conducted "regarding the scheduling of the proposed contempt motions against the two law firms". A procedural consent order was issued, which required Mrs. Blatherwick to file the formal contempt motion record by December 31, 2015 and tentative hearing dates were scheduled for the week of either July 25 or August 1, 2016.

[43] On November 27, 2015, in order to facilitate productions regarding the contempt hearings, Mr. Blatherwick waived solicitor-client privilege with respect to documentation regarding payments made by him to SimpsonWigle LLP.

[44] On December 17, 2015, Mrs. Blatherwick abandoned the contempt motion against Ormston List Frawley LLP.

[45] Mrs. Blatherwick's contempt motion against SimpsonWigle LLP was served by December 31, 2015.

[46] On February 9, 2016, SimpsonWigle LLP provided a responding record which included a lengthy affidavit of Stuart Law. In his affidavit Mr. Law does not dispute the understanding and agreements, set out above, during the trial regarding how the contempt motions against the law firms would proceed. Mr. Law puts forward substantive defences to the alleged contempt.

[47] A conference call was held on March 1, 2016. A consent procedural order was made regarding cross-examinations. The contempt hearing was scheduled for November 30, December 1 and 2, 2016.

[48] A conference call was held on October 6, 2016 as production issues had arisen. Counsel for SimpsonWigle LLP requested that another judge determine the "production issue". The motion was scheduled before Justice LeMay on November 1, 2016. Justice Lemay released his decision on the production issue on November 22, 2016.

[49] On November 4, 2016, SimpsonWigle LLP's counsel advised Mrs. Blatherwick's counsel that it wished to raise a preliminary jurisdictional issue on this motion. On November 22, 2016, SimpsonWigle LLP brought this "preliminary motion" to dismiss Mrs. Blatherwick's contempt motion.

[50] It is noteworthy that Ms. Rosemary Fisher, a partner at SimpsonWigle LLP and the managing partner who wrote the February 6, 2015 letter to this court and received Mr. Cox’s letter of February 13, 2015, filed an affidavit dated November 28, 2016 on this motion. Ms. Fisher does not deny in her affidavit that she understood and agreed to the procedure set out in the Reasons for Judgment for dealing with the contempt motion against SimpsonWigle LLP. Ms. Fisher does not deny that the Reasons for Judgment and the Judgment came to her attention shortly after their release. Ms. Fisher does not suggest there was or ever raised any objection to the "agreement" in 2015. Ms. Fisher does not explain why no appeal was taken of the terms of the Judgment to hold contempt hearings after the trial had been completed. All that Ms. Fisher says is that SimpsonWigle LLP had not waived any "substantive defences" to the contempt motion. There is no dispute that SimsponWigle’s “substantive defences” were unaffected by the continuation of the matrimonial trial.

THE RECORD

[51] Counsel for Mrs. Blatherwick and SimpsonWigle LLP submitted that this court should not go behind its Reasons for Judgment and the terms of the Judgment by reviewing the various discussions that took place on the record in February 2015.

[52] SimpsonWigle LLP's counsel submitted that, when this court referred to "all parties agreed" in paragraph 50 of the Reasons for Judgment, “parties” only refers to Mr. Blatherwick and Mrs. Blatherwick.

[53] After the lengths this court went to put SimpsonWigle LLP and Ormston List Frawley LLP on notice of the allegations of contempt, the proposed procedure to be followed regarding the contempt motions and to obtain agreement to the proposed procedure, to suggest that the law firms were not part of the agreement on how and the timing of the contempt motions against the law firms makes no sense at all. The law firms were the most important stakeholders in the proposed contempt proceedings.

THE POSITION OF SIMPSONWIGLE LLP

[54] SimpsonWigle LLP's counsel submits in its factum that: "Since the Beleghem Order [Mareva Order] is no longer live and operative, there is no basis in law to entertain the Applicant's Contempt Motion, and it is respectfully submitted that the Applicant's Contempt Motion should be dismissed".

[55] The cornerstone of SimpsonWigle LLP's position is the decision in Fiorito v. Wiggins, 2015 ONCA 729. In Fiorito, two interim orders had been made regarding access on October 24, 2008 and March 5, 2010. The father brought contempt proceedings against the mother for not complying with the access ordered. Thereafter, the parties entered into a final settlement on October 19, 2010 settling all custody and access issues. However, disputes regarding access continued. The trial judge found the mother in contempt of the prior orders.

[56] The Court of Appeal in Fiorito set aside the contempt findings and stated:

[17] The civil contempt remedy exists where a party fails to comply with a live or operative order of the court: Family Law Rules, r. 31(1); Prescott-Russell Services for Children and Adults v. G. (N.) (2006), 2006 CanLII 81792 (ON CA), 82 O.R. (3d) 686 (C.A.), at para. 27. In the present case, by the time of the 2011 hearing, the 2008 and 2010 Orders no longer were operative. Those were interim orders. They were superseded by the parties’ 2010 agreement on custody and access contained in the final Minutes of Settlement. Consequently, there was no order outstanding in respect of which the trial judge could find the mother in contempt. His finding of contempt and imposition of sentence on the mother therefore is set aside.

[57] SimpsonWigle LLP's counsel submits that this passage in Fiorito makes it clear that a finding of contempt against SimpsonWigle LLP is not available in this case because there is no longer a live or operative Mareva Order.

[58] SimpsonWigle LLP's counsel also points to Jackson v. Jackson, 2016 ONSC 3466, where the court following Fiorito stated:

[49] The first element of the test for contempt of a court order is that there is a court order to be enforced. Given that the fundamental purpose of the civil contempt remedy is to protect and enforce private rights, it is only available to redress breaches of orders that are live and operative when the contempt finding is made, and which the aggrieved party wishes to enforce. It is not available for the purpose of sanctioning historical breaches of orders that have been superseded or are no longer governing the parties for any other reason as of the time when the contempt finding is made (Fiorito v. Wiggins, 2015 ONCA 729 (C.A.)). Rule 31(1) reinforces the private law enforcement purpose of the civil contempt remedy in family law cases by specifically stating that an order may be “enforced” by a contempt motion made in the case. To extend the use of the civil contempt remedy to cases where the purpose is not to enforce an outstanding order, but simply to sanction or deter misconduct in relation to orders that are no longer governing the parties, would fundamentally alter the concept of civil contempt by cloaking it with “the public dimension that lies at the heart of criminal contempt.” (Vidéotron Ltée., Supra.). The Ontario Court of Appeal recently reinforced these points in Fiorito, where it stated that “the civil contempt remedy exists where a party fails to comply with a live or operative order” (at para. 17). In that case, the court set aside contempt findings and sentencing on the basis that the orders upon which the trial judge had based the contempt findings had been superseded by a final custody and access agreement that the parties had reached. The court concluded that the temporary orders were no longer operative at the time of the contempt finding, even though the Minutes of Settlement had never been incorporated into a court order, since the parties had been abiding by the terms of the Minutes of Settlement rather than the orders.

THE POSITION OF MRS. BLATHERWICK

[59] The position of Mrs. Blatherwick is that:

a) The court's jurisdiction to deal with the contempt hearings was preserved with the consent of all "parties" and the terms of the Judgment;

b) SimpsonWigle LLP, having not appealed the Judgment or raised this jurisdiction issue earlier, is estopped from raising this issue at this time;

c) this motion is a collateral attack on the Judgment; and

d) This court does have jurisdiction to deal with contempt in these circumstances because the contempt motion, having been reserved in the Judgment, continues to still be part of the trial proceedings.

ANALYSIS

Not In Dispute

[60] There is no dispute that the Mareva Order was an interlocutory order and it expired upon the issuance of the Judgment. There is no dispute that this court had the jurisdiction in February 2015 to hold contempt hearings and make findings of contempt (if appropriate) during the trial as the Mareva Order continued to be in full force and effect at that time.

[61] This proceeding is not yet complete. In addition to the contempt hearings reserved in the Judgment, the issue of costs has yet to be determined.

The importance of compliance with injunctions

[62] In Chicago Blower Corp. v. 141209 Canada Ltd. (1987), 1987 CanLII 7042 (MB CA), 44 Man. R. (2d) 241 (C.A.) (leave to SCC refused (1987) 50 Man. R. (2d) 80), Manitoba Court of Appeal said the following about compliance with injunctions:

An injunction must be implicitly obeyed and every diligence made to obey it to the letter; those who do not obey it are guilty of contempt. It is a punitive jurisdiction of the court based on centuries of experience and founded on the sound principle that it is not for the good of the plaintiff or a party to the action but it is for the good of the public that orders of the court should not be disregarded. People should not place themselves in the position of assisting in breaches of valid court orders. See Seaward v. Paterson, [1897] 1 Ch. 545; [1895-99] All E.R. Rep. 1127.

The Purpose of Contempt Jurisdiction

[63] There is no dispute that, in this case, this court is dealing with alleged civil contempt.

[64] There are many authorities which state that the primary purpose of civil contempt is to coerce a party to comply with the order. However, that is not the sole purpose of civil contempt.

[65] This was best said in Chiang (Re), 2009 ONCA 3:

[10] The distinction between civil and criminal contempt is not always clear cut. Both have a common root: only by having the ability to exercise the power of contempt can judges maintain respect for our courts and for the rule of law. Moreover, recent case law has recognized that even in purely private litigation, the breach of a court order and the resulting sanction for contempt invariably reflect public disrespect for the authority of the court: see Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc., 1992 CanLII 29 (SCC), [1992] 2 S.C.R. 1065 and Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52, [2006] 2 S.C.R. 612. Nonetheless, the distinction persists and the case before us is undoubtedly a case of civil contempt of court.

[11] In civil contempt, the court’s emphasis is less about punishment and more about coercion – attempting to obtain compliance with the court’s order. Still, civil contempt bears the imprint of the criminal law. Civil contempt must be made out to the criminal standard of proof beyond a reasonable doubt. And, a person found in civil contempt of court may be committed to jail or face any other sanction available for a criminal offence, such as a fine or community service: see Pro Swing, at paras. 34-35.

[66] There is a strong public interest in the administration of justice to ensure that court orders are obeyed. Parties and persons with knowledge of the orders should not be permitted to deliberately and flagrantly breach the orders or enjoy any benefits of breaching the orders without some consequences.

[67] Justice Myers in Pronesti v. 1309395 Ontario Ltd. 2015 ONSC 1139 expressed this public interest component to civil contempt motions as follows:

31 A Mareva order is indeed an exceptional and drastic remedy. It represents the civil law's efforts to protect against a rogue flouting the civil processes of the court. A civil remedy that cannot be enforced provides scant justice to the applicant. The civil law must enforce its Mareva orders if justice is to be served in cases involving people whose consciences do not bind them to comply with the law. Thus, while this case is one of civil contempt, it falls to the more serious end of the continuum.

32 The power to punish for contempt is essential to the rule of law and the proper administration of justice. In United Nurses, supra, at p. 931, McLachlin J. (as she then was) observed that:

The rule of law is at the heart of our society; without it there can be neither peace, nor order nor good government. 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.

33 Because the matter is one of civil contempt rather than criminal contempt, the law is not concerned only with punishment for the affront to the court. Rather, sentencing for civil contempt also takes into account the desirability and necessity of ensuring compliance with the court's orders. Some punishment is required for deterrence and to express condemnation, but compelling compliance with the underlying order is required to acheive civil justice.

34 In College of Optometrists of Ontario v. SHS Optical Ltd., 2008 ONCA 685 at para. 106, 93 O.R. (3d) 139, Watt J.A. noted that "[t]he underlying purpose of contempt orders is to compel obedience and punish disobedience." However, as mentioned above, when sentencing a civil contemnor, the court should generally place greater emphasis on coercion and compelling compliance than on punishment per se: Chiang, supra, at para. 11.

[68] The Court of Appeal in Rogacki v. Belz, (2003) 2003 CanLII 12584 (ON CA), 67 OR (3d) 330 (C.A.), expressed the public interest component of civil contempt in the following manner:

[22] Although civil contempt, as in this case, and criminal contempt take a variety of forms, it is important to emphasize that each involves an interference with the due administration of justice. Indeed, contempt of court, both civil and criminal, has existed for centuries. It is the mechanism used by the court to ensure compliance with its orders and to protect its process. As such, it is a sanction that serves the administration of justice in the public interest.

The Requirements for Contempt

[69] The Supreme Court in Carey v. Laiken 2015 SCC 17, [2015] 2 S.C.R. 79 set out the three requirements for civil contempt to be established:

32 Civil contempt has three elements which must be established beyond a reasonable doubt: Prescott-Russell Services for Children and Adults v. G. (N.) (2006), 2006 CanLII 81792 (ON CA), 82 O.R. (3d) 686 (C.A.), at para. 27; College of Optometrists, at para. 71; Bhatnager v. Canada (Minister of Employment and Immigration), 1990 CanLII 120 (SCC), [1990] 2 S.C.R. 217, at pp. 224-25; Jackson v. Honey, 2009 BCCA 112, 267 B.C.A.C. 210, at paras. 12-13; TG Industries Ltd. v. Williams, 2001 NSCA 105, 196 N.S.R. (2d) 35, at paras. 17 and 32; Godin v. Godin, 2012 NSCA 54, 317 N.S.R. (2d) 204, at para. 47; Soper v. Gaudet, 2011 NSCA 11, 298 N.S.R. (2d) 303, at para. 23. These three elements, coupled with the heightened standard of proof, help to ensure that the potential penal consequences of a contempt finding ensue only in appropriate cases: Bell ExpressVu, at para. 22; Chiang, at paras. 10-11.

33 The first element is that the order alleged to have been breached "must state clearly and unequivocally what should and should not be done": Prescott-Russell, at para. 27; Bell ExpressVu, at para. 28, citing with approval Jaskhs Enterprises Inc. v. Indus Corp., 2004 CanLII 32262 (Ont. S.C.J.), at para. 40. This requirement of clarity ensures that a party will not be found in contempt where an order is unclear: Pro Swing, at para. 24; Bell ExpressVu, at para. 22. An order may be found to be unclear if, for example, it is missing an essential detail about where, when or to whom it applies; if it incorporates overly broad language; or if external circumstances have obscured its meaning: Culligan Canada Ltd. v. Fettes, 2010 SKCA 151, 326 D.L.R. (4th) 463, at para. 21.

34 The second element is that the party alleged to have breached the order must have had actual knowledge of it: Bhatnager, at p. 226; College of Optometrists, at para. 71. It may be possible to infer knowledge in the circumstances, or an alleged contemnor may attract liability on the basis of the wilful blindness doctrine (ibid.).

35 Finally, the party allegedly in breach must have intentionally done the act that the order prohibits or intentionally failed to do the act that the order compels: Sheppard v. Sheppard (1976), 1976 CanLII 710 (ON CA), 12 O.R. (2d) 4 (C.A.), at p. 8. The meaning of this element is one of the main points in contention on appeal and I will turn to consider it in more detail momentarily.

[70] The Supreme Court in Carey did not set out any requirement that the underlying order be valid or existing at the time the contempt motion was brought or the contempt finding is made. It is telling that in Carey, the contempt motion was brought almost three years after judgment and it is clear from the facts set out in Court of Appeal's reasons that the Mareva order did not continue past the judgment as the plaintiff received a monetary judgment.

[71] It is also noteworthy that the Supreme Court in Prescott-Russel referred to the same three prong test set out in Carey. I also note that para 27 in the Prescott-Russel case referred to in Fiorito does not set out the requirement that a live and operative order be in place at the time the contempt motion is brought or at the time the contempt finding is made. The issue in Prescott-Russel was the failure to comply with a judgment of the court. There was no issue regarding whether the judgment was live or operating as it had only issued four days prior to the alleged contempt.

[72] I am satisfied that there is a three prong test for civil contempt as set out in Carey and in Prescott-Russel for civil contempt.

The Timing of Contempt Motions

[73] Clearly, the acts of the alleged contemnor must have occurred while the order was valid and subsisting. In this case the Mareva Order was issued on November 18, 2010. The alleged acts of contempt were payments made to SimpsonWigle LLP prior trial in February 2015. The Mareva Order expired on April 27, 2015.

[74] The issue in this case is one of timing: whether the contempt motion must be brought before the Mareva Order expired.

[75] In The Law of Contempt in Canada, by Jeffry Millar, 1997 Carswell, Mr. Millar states the following at page 59:

(d) The Timing of the Proceedings

In any event, even where the judge in the main action hears the contempt proceedings, the main action takes precedence: "According to firmly rooted practice in Canada, in cases where urgency is not the essence, tribunals believe that it is right to postpone the hearing of the contempt charge until the end of the current proceedings.

In R. v. Froese, Nemetz C.J.B.C. adopted the dictum of Lord Goddard C.J. in R. v. Sunday Express, to the effect that contempt proceedings for breaches of publicity restrictions should be heard after the main proceedings" "If the publication has in fact done any harm, the hearing of the application only emphasises that harm." The decision whether to delay the contempt proceedings will depend upon the length of the main action, the need to avoid further prejudice, agreement of counsel, transfer of jurisdiction of the contempt to another judge, and the form of the proceedings.

In Hebert v. Quebec (attorney General) the Quebec Court of Appeal held that contempt proceedings could be brought more than seven years after the conclusion of the proceedings "scandalized"....

[76] In Carey, where the facts are similar to the facts before this court, the purpose of the contempt motions was not to coerce compliance (the money had already been disbursed by the lawyer) but to deal with a serious deliberate and flagrant breach of a Mareva order. The Supreme Court of Canada in Carey had no difficulty upholding a contempt finding made on a motion brought more than three years AFTER the judgment had issued and the Mareva order expired.

[77] In this case, the purpose of the contempt motion is not to coerce SimpsonWigle LLP to comply with the Mareva Order. If the allegations are proven beyond a reasonable doubt, SimpsonWigle LLP and Stuart Law knowingly received hundreds of thousands of dollars from the offshore companies to pay Mr. Blatherwick's legal accounts, despite a Mareva Order which prohibited the offshore companies from making such payments. There was no coercion purpose of this alleged contempt at trial or at this time. The purpose of this contempt hearing is to maintain the public's interest in ensuring that court orders are followed by all, including law firms and lawyers.

Must the contempt motion be brought while the order is live and operative?

[78] I am not persuaded that there is a fourth requirement for a finding of civil contempt - namely that the contempt motion be brought while the interim order is live and operative. This would make the scheduling of contempt motions a priority over the main issues in the proceeding.

[79] In this case, making scheduling a priority over dealing with the issues in an efficient and fair way to all interested parties, would have required deciding the issue of the alleged contempt of the law firms before this court had determined whether Mr. Blatherwick had made any payments to the law firms from the offshore companies contrary to the Mareva Order. Alternatively, this court could have delayed the issuance of its Judgment for a lengthy period of time to permit the contempt motions to be heard and disposed of. Neither makes sense.

[80] From an efficiency perspective, SimpsonWigle’s submission would have required this trial to be mistried in early February 2015 and incurring a significant delay to permit the law firms to retain counsel to deal with the contempt issue - if in fact there was an issue for them to deal with. Additional costs would have had to be incurred by all. At the same time, delaying the contempt hearing until after the Judgment resulted in no unfairness or prejudice to SimpsonWigle LLP or Stuart Law.

[81] Imposing a requirement that the underlying order be live and operative when the contempt motion is brought is contrary to the interests of justice, particularly where the purpose of the contempt is to deal with breaches of injunctive relief such as a Mareva order. For example, if a party does not determine that a person has deliberately breached the Mareva order until after the final judgment issues, is it not in the interests of justice that the person who deliberately breached the Mareva order be permitted to continue with impunity as though the breach had never occurred. That would mean that a person would be permitted to keep whatever benefits accrued as a result of the deliberate breach with no consequences? If this were the case, it becomes a game: if you don't catch me in time, it's ok. Surely, it is not in the interests of justice to simply ignore deliberate and flagrant breaches of court orders.

The Family Law Rules

[82] There is no such restriction as to when to bring a contempt motion in Rule 31 of the Family Law Rules ("FLR").

[83] The primary objective of the FLR is set out in R. 2:

(2) The primary objective of these rules is to enable the court to deal with cases justly.

(3) Dealing with a case justly includes,

(a) ensuring that the procedure is fair to all parties;

(b) saving expense and time;

(c) dealing with the case in ways that are appropriate to its importance and complexity; and

(d) giving appropriate court resources to the case while taking account of the need to give resources to other cases.

(4) The court is required to apply these rules to promote the primary objective, and parties and their lawyers are required to help the court to promote the primary objective.

[84] The Blatherwick v. Blatherwick "case" remains subject to the FLR. "Case" is defined in R. 2(1) of the FLR as:

“case” means an application or any other method allowed in law for bringing a matter to the court for a final order or provisional order, and includes all motions, enforcements and appeals; (emphasis added)

[85] Rule 1 (7.2) and (8) of the FLR appears to give broad discretion to this court to grant or impose conditions with respect to procedural matters and the "failure to obey an order": The FLR provide this court has the jurisdiction to make the following orders:

(7.2) For the purposes of promoting the primary objective of these rules as required under subrules 2 (4) and, particularly, (5), the court may make orders giving such directions or imposing such conditions respecting procedural matters as are just.....

(8) If a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including,

(g) on motion, a contempt order.

Alternatively

[86] Even if this court is incorrect that the contempt motion must be brought while the interim order is live and operative, the contempt motion against SimpsonWigle LLP was identified and sought as relief at trial, when the Mareva Order was live and operative. Even if SimpsonWigle LLP's submissions are accepted, this court had the jurisdiction to deal with the alleged contempt of the law firms at that time.

[87] By the agreement of the law firms, including SimpsonWigle LLP, the contempt hearings were deferred until after the trial proper on the matrimonial issues. No appeal was taken of the procedure agreed on to be followed by SimpsonWigle LLP. In my view, this court would not and did not lose jurisdiction to deal with the contempt issue after the trial with the consent of the alleged contemnor. The timing was strictly a scheduling issue to secure the just, most expeditious and least expensive determination of the issues before it on the merits.

[88] In my view, to allow SimpsonWigle LLP's submission would necessarily engage estoppel or abuse of process.

[89] In the further alternative, if necessary, I would have accepted Mrs. Blatherwick's counsel's submission that, by reserving the contempt hearings to a later date, the contempt hearings are part of the continuing trial in this case. As set out in McClure v. Backstein, [1987] O.J. No. 498:

The contempt proceeding is an integral part of the entire civil action from its commencement to judgment, and to enforcement thereof.

Must the Order be Live and Operative when the Contempt finding is made?

[90] SimpsonWigle LPP goes further. It submits that, even if the contempt motion is brought while the order is live and operative, the finding of contempt can only be made at a time when the order continues to be live and operative. Counsel points to Jackson.

[91] Jackson relied on Fiorito to impose this fourth requirement for a finding of contempt. In my view, Fiorito and Jackson are distinguishable as cases where the primary purpose was to coerce a party to obtain compliance with a court order. This is not the circumstances of this present case.

[92] In any event, for the same reasons why a fourth requirement is not required for a finding of contempt and as a result of the application of the Family Law Rules, I am not persuaded that the order alleged to be the subject of the contempt proceeding must be live and operative at the time the finding of contempt is made.

CONCLUSION

[93] SimpsonWigle LLP's motion is dismissed.

[94] Any party seeking costs shall serve and file written submission on entitlement and quantum within four weeks of the release of these reasons. Written submissions shall be limited to five pages, with attached Costs Outline and any authorities.

[95] Any responding party shall have two weeks thereafter to serve and file responding submissions. Written submissions shall be limited to five pages with any authorities relied on attached.

[96] There shall be no reply submissions without leave.

Ricchetti, J.

Date: December 7, 2016

CITATION: Blatherwick v. Blatherwick, 2016 ONSC 7680

COURT FILE NO.: 810/10 (Guelph)

DATE: 2016-12-07

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: BARBARA ANN BLATHERWICK v. BRIAN EARL BLATHERWICK

BEFORE: Ricchetti, J.

COUNSEL: J. Cox and N. Bazar, Counsel for Mrs. Blatherwick

I. Kilgour, Counsel for Brian Earl Blatherwick

M. Kestenberg and T. Slahta for SimpsonWigle LLP and Stuart Law

ENDORSEMENT

Ricchetti, J.

DATE: December 7, 2016