Court File and Parties

COURT FILE NO.: CV-12-468162 DATE: 20170502 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: H. Joseph Greenberg and Pepi Greenberg, Plaintiffs AND: Steven J. Nowack, Defendant

BEFORE: Carole J. Brown, J.

COUNSEL: Martin Greenglass, for the Plaintiffs Steven Nowack, for the Defendant

HEARD: May 2, 2017

Endorsement

[1] The plaintiffs seek an order that the defendant is in contempt of Orders of this Court and should be incarcerated, as a result.

[2] Mr. Nowack seeks an adjournment to permit him to retain counsel. He has produced a letter from Paul Slansky, who states that he has not agreed to go on record until and unless the case is adjourned. He has advised that he is available to attend at court on June 19.

[3] Mr. Nowack advises me that he is prepared to do an accounting if granted an adjournment, and has the necessary documentation to do this. Mr. Greenglass has indicated that he would be prepared to return on a date available to Mr. Slansky, upon a finding of this Court that Mr. Nowack continues to be in contempt of court, with the opportunity to purge that contempt.

[4] I will first address the issue of contempt.

[5] The history of these proceedings, which commenced in November 2012 are long. Attempts to have the defendant comply with Orders of the court have extended over a period of four years. I will set forth the relevant history below.

[6] The plaintiffs are retired. The plaintiff, Joseph Greenberg was a medical doctor who had been the defendant’s physician. As alleged in the statement of claim, issued November 21, 2012, the defendant had represented himself to the plaintiffs as a portfolio manager of investment transactions, with expertise in hedge funds and trading in foreign currencies. The plaintiffs entrusted him with their retirement savings in excess of $3 million, which were never returned to them.

[7] In January 2013, the parties settled the claim pursuant to Minutes of Settlement by which the defendant was to repay the plaintiffs $3,552,000. The judgment was dated July 3, 2013. Examination in Aid of Execution was to be conducted on July 3, 2013. At that Examination in Aid, Mr. Nowack attended but failed to produce any documentation. The Examination in Aid was adjourned, with Mr. Nowack undertaking to produce all relevant documentation prior to resumption of the Examination.

[8] Mr. Nowack failed to produce any documentation and, from December 13, 2013 through December 16, 2016, there have been 20 court appearances, five contempt orders, appeals to the Court of Appeal, a complete failure to respect or honour any Order of this Court to produce documentation and undertake tracing/accounting of the plaintiffs’ funds invested by the defendant. He has been incarcerated on one occasion already resulting from his ongoing contempts. In addition to the judgment of $3,552,000, there are also costs awards in excess of $44,000 against him, none of which have been satisfied.

The Law

[9] Pursuant to Rule 60.11 of the Rules of Civil Procedure, a judge, on a motion for contempt of court, may “make such order as is just, including imprisonment, payment of a fine, complying with any other order and payment of such costs as are just. There are generally four penalty options available upon a finding of contempt: “no penalty (usually where the contempt has been purged; a suspended sentence (perhaps conditional upon some act or event occurring); a fine; or incarceration: Niagara (Municipality) (Police Services Board) v Curran (2002), 57 OR (3d) 31, at para 20 (SCJ).

[10] For a finding of civil contempt, three elements must be established beyond a reasonable doubt, including i) that the order alleged to have been breached must state clearly and unequivocally what should and should not be done; ii.) that the party alleged to have breached the order must have actual knowledge of it; and iii.) that 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.

[11] In this case, based on all of the evidence before this Court, I am satisfied that all of the criteria required for a finding of contempt against Mr. Nowack have been satisfied beyond a reasonable doubt.

The Adjournment

[12] Given the history of this case, I am hesitant to grant an adjournment. However, Mr. Greenglass seeks a significant period of incarceration for Mr. Nowack’s contempt. I am of the view that Mr. Nowack should be given the opportunity to retain counsel and to prepare the accounting/tracing of the plaintiffs’ investments, which he has, today, before this Court, undertaken to do. In the circumstances, an adjournment should be granted on the following specific terms.

[13] The matter is to be brought back before me on June 19, 2017 at 10 AM, to give Mr. Nowack the opportunity to purge his contempt. Mr. Slansky has indicated that he is available on that date.

[14] The matter will proceed on June 19, 2017, whether or not counsel has been retained, whether or not counsel is present in court and whether or not Mr. Slansky, in the interim, becomes unavailable on that date.

[15] On June 14, 2017, Mr. Nowack or his counsel will provide to Mr. Greenglass and file with the court, a tracing/accounting of the plaintiffs’ investment funds.

[16] My Order of production of November 12, 2014 remains an ongoing obligation on Mr. Nowack. All documentation listed therein is to be produced to Mr. Greenglass by June 30, 2017, at the latest.

[17] An Examination in Aid of Execution of Mr. Nowack is to be held July 31, 2017. Mr. Slansky has indicated that he is also available on that date, as is Mr. Greenglass.

[18] Costs of today’s motion will be dealt with at the return motion on June 19, 2017.

[19] I am seized of this matter.

Carole J. Brown, J. Date: May 2, 2017