Court File and Parties
COURT FILE NO.: CV-12-468162 DATE: 20170622 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 Paul Slansky, for the Defendant
HEARD: June 19 and 21, 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] This motion first came before me on May 2, 2017. At that time, the defendant, who was self-represented, sought an adjournment to permit him to retain counsel and produced a letter from a lawyer, Mr. Slansky, who he wished to retain. Mr. Slansky was available June 19, such that I made this motion returnable on that date. The defendant further advised the Court that he was prepared to do an accounting if granted an adjournment. I ordered that, in order to purge his contempt, the defendant was required to deliver to Mr. Greenglass and file with the Court by June 14, a tracing/accounting of the plaintiffs’ investment funds. I further ordered that my Order of November 12, 2014 remained an ongoing obligation: see my Endorsement of May 2, 2017.
[3] Mr. Nowack provided to Mr. Greenglass what purported to be a tracing and accounting at 7:02 PM on June 14, 2017. Mr. Slansky was present in Court on June 19. He advised that he had not been retained but was providing unbundled services to Mr. Nowack and was appearing on that basis. There is no evidence of the scope of those unbundled services which he is providing to Mr. Nowack.
[4] Mr. Slansky took the position that the one-page tracing and accounting produced to Mr. Greenglass purged Mr. Nowack’s contempt. I had originally found, based on all of the documentation and submissions before me on May 2, 2017, that Mr. Nowack was in contempt, which could be purged by producing the tracing and accounting ordered as regards the accounts of Dr. and Mrs. Greenberg. It was the position of Mr. Greenglass that this “accounting” provided to him was a simplistic accounting which did not purge the contempt. I advised Mr. Slansky that I did not find this one-page accounting to be a true tracing and accounting of the investments made by Dr. and Mrs. Greenberg. Mr. Slansky submitted that my statement indicated that I had prejudged the matter and clearly indicated bias. I proceeded to hear the submissions of both counsel including the documentation and case law placed before me.
[5] I note that the accounting is only provided through April 1, 2013. I further note that a final combined account statement regarding Dr. and Mrs. Greenberg dated July 27, 2012 indicates equity in the account of $4,047,262.80. This is not reflected in the one-page accounting and tracing before me, nor is there any indication of what happened to that amount.
[6] While there has been a long history of non-compliance with various court orders throughout these proceedings, it appears that Mr. Nowack has taken a first step toward disclosure. Accordingly, I am prepared to give Mr. Nowack one final opportunity to purge his contempt. As regards my Order for a tracing and accounting, I will provide a detailed indication of what the tracing and accounting is to include. A one-page cursory indication of amounts deposited to Scotia Bank Canadian account 513401692-26 from October 19, 2009 to February 24, 2011 and amounts deposited to Scotia Bank USD account 5134204157-26 including amounts converted to the US account from October 6, 2009 to January 18, 2010 and amounts paid to Dr. Joseph Greenberg from April 12, 2012 to April 1, 2013 is not, without more, a full and complete tracing and accounting.
[7] For greater certainty, I order that the defendant deliver to Mr. Greenglass and file with the Court by August 31, a full and complete tracing and accounting, to include all of the following:
- All funds originally received by Mr. Nowack from Dr. and Mrs. Greenberg, supported by production of the supporting documentation which deals with the receipt of funds and the bank statements for the bank accounts in question where the funds were deposited;
- As regards the paragraph immediately above, the movement of those funds through other accounts, the trading history of those funds throughout the time that Mr. Nowack has had the funds, and all supporting bank and investment statements and withdrawals related thereto;
- The transfer of all said funds to a broker or other entity for trading purposes and supported by bank and all investment statements showing the receipt of funds, investment of funds, sale of the investments made with said funds, subsequent withdrawal of funds, and final recipients of the withdrawn funds;
- Based on the indication that some or all of the monies provided to Mr. Nowack by Dr. and Mrs. Greenberg were deposited in a joint account held by Mr. Nowack and Dr. Greenberg and then invested by Mr. Nowack into a “pool” or “pools” of funds which included investments from numerous other of Mr. Nowack’s investors, a full tracing and accounting of the pool or pools of funds in which Dr. and Mrs. Greenberg’s money was invested, along with others, from July 27, 2012 to the present, supported by all evidence as regards deposits in investments made with respect to the pool or pools, the amounts deposited by each investor including the Greenbergs, withdrawal of all amounts and payment details indicating to whom in the pool or pools those payments were made, including the full name and address of each recipient, how much was paid to each investor and when the withdrawals occurred. This will include what occurred to the $4,047,262.80 that had been in Dr. and Mrs. Greenberg’s account set forth in the final combined account statement of July 27, 2012, referenced at paragraph 5, above.
[8] Given the Order, as set forth above, and the documentation required to be produced, the tracing and accounting, with supporting documentation to be provided, as indicated above, is to be produced to Mr. Greenglass and filed with the Court by August 31. That will give Mr. Nowack sufficient time to produce a complete tracing and accounting. I further note that I had set a date of August 31 for the examination in aid of execution. Given the fact that the tracing and accounting is now to be delivered and filed by Mr. Nowack by August 31, Mr. Nowack is to attend his examination in aid of execution on a date to be set by Mr. Greenglass prior to or on September 28, 2017, in consultation with Mr. Slansky.
[9] I had also, in my Order of May 2, 2017, required that my Order for production of November 12, 2014 remain an ongoing obligation on Mr. Nowack and that all documentation listed therein was to be produced to Mr. Greenglass by June 30, 2017 at the latest, which date has not as yet passed. This date is amended to August 31, 2017. Further, given that the Order was rendered two years and seven months ago, Schedule A, the items listed at numbers 1, 4 and 5 are amended as follows:
- Personal income tax returns for Mr. Nowack for the calendar years 2010 through 2016;
- Copies of the personal bank account statements of Mr. Nowack from June 1, 2012 to the present;
- Copies of credit card statements for Mr. Nowack from June 1, 2012 to the present.
[10] I am advised that item 9 on Schedule A has been provided.
[11] For greater certainty, to respond to the said Order regarding all documentation itemized in Schedule A thereof, as amended, Mr. Nowack is to produce the specific documentation as itemized at Schedule A of my Order of November 12, 2014, as amended, above. It will not be sufficient for Mr. Nowack to say that he has already provided said documentation, nor to indicate that he does not have such documentation as it was taken by the police. He has received Crown disclosure in respect of criminal charges regarding the investments, and has electronic copies of his accounts. Further, pursuant to the Order of Perell J, other documentation was ordered to be produced by third parties, including the Crown and Bank. While Mr. Nowack has, himself, indicated that this is not complete documentation and not sufficient to do an accounting, he is to produce all documentation listed at Schedule A, as amended, above, that he has.
[12] All documentation provided, including the tracing and accounting and the responses to all items listed at Schedule A of my Order of November 12, 2014, as amended, are to be appended to an Affidavit to be sworn by Mr. Nowack.
[13] To comply with the production Order pursuant to Schedule A of my Order, as amended, Mr. Nowack is to provide all listed documentation, identifying all pieces of documentation by the number indicated on the listing of documents at Schedule A, as amended, to Mr. Greenglass.
[14] I trust that there will be no more delays as regards production of a tracing and accounting and disclosure of documentation by Mr. Nowack. However, in the event that the tracing and accounting, with all supporting documentation is not delivered and filed by August 31, or does not comply with my Order herein such that the finding of contempt has not been purged, based on my clarification of what must be produced, Mr. Greenglass may continue with the contempt motion. Should it be required, I have set a tentative date of September 15, 2017 for this purpose, at a time and venue to be confirmed. I remain seized.
[15] Costs of this motion are to be reserved to the next attendance before me.