Boroni et al. v. Polidoro et al., 2018 ONSC 6631

Boroni et al. v. Polidoro et al., 2018 ONSC 6631

COURT FILE NOS.: CV–16–548173 & CV–17–574160 DATE: 20181126 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

SALVATORE BORONI, GILDO BORONI, ROSINA BORONI, SALVATORE GIULIANO, VITO GIULIANO, KATERINA GIULIANO, and BRUNO GIULIANO Plaintiffs – and – COSIMO “COSMO” POLIDORO, JOHN DOES, JANE DOES, and the DOE CORPORATIONS Defendants

COUNSEL: Norman Groot and Ashley Ferguson, for the Plaintiffs Joseph Irving, for the Defendants

AND BETWEEN:

MICHAEL MACAES and GASPAR MACAES Plaintiffs – and – COSIMO “COSMO” POLIDORO, ROSELLINA CIPOLLONE, REMIGIO POLIDORO, JOHN DOES, JANE DOES, and the DOE CORPORATIONS Defendants

COUNSEL: Norman Groot and Ashley Ferguson, for the Plaintiffs Joseph Irving, for the Defendants

HEARD: November 24, 2017, December 21, 2017, January 19, 2018, February 28, 2018, May 15, 2018, July 16, 2018, & October 16, 2018

BEFORE: P.J. Monahan J.

1These proceedings arise out of two separate actions [1] brought against the principal defendant, Cosimo “Cosmo” Polidoro (“Polidoro”), in connection with a series of fraudulent real estate transactions. The plaintiffs in both actions have already obtained judgment for their liquidated damages suffered as a result of the frauds perpetrated by Polidoro. [2] In addition, on July 21, 2017, Archibald J. of this court found Polidoro liable for eight counts of civil contempt for his failure to comply with a variety of court orders in the Boroni Action, and sentenced him to 76 days of incarceration. [3]

2On May 15, 2011, I found Polidoro liable for an additional six counts of civil contempt (“Contempt Number 2”) for his continuing failure to comply with orders and undertakings in the Boroni Action. Submissions on the appropriate penalty were heard on July 16, 2018 and October 16, 2018. These Reasons set out my ruling on the appropriate penalty for Contempt Number 2.

3Both the Boroni Plaintiffs and the Macaes Plaintiffs also seek punitive damages against Polidoro for the frauds he perpetrated upon them, and I deal with those claims in the course of these Reasons.

Background Facts

4Polidoro has already been found liable for the frauds perpetrated on both the Boroni Plaintiffs and the Macaes Plaintiffs and, further, found liable for a total of 14 counts of civil contempt. In order to provide a proper context for the Reasons that follow, it is necessary to briefly recount certain material facts that form the basis for these prior findings.

a. The Boroni Action

5The frauds in the Boroni Action originated in conversations between Salvatore Boroni (“S. Boroni”) and Polidoro that took place in June 2014. At that time, Polidoro was a Construction Superintendent at Bondfield Construction Company Ltd., and S. Boroni was an employee of Bondfield. Polidoro represented to S. Boroni that he owned land at Highway 9 and Highway 27 in the Township of Schomberg, Ontario that had been subdivided into residential building lots. Polidoro indicated that he was interested in selling lots at a special “insider discount rate” prior to the development of the property by Bondfield. Polidoro explained that each lot was currently available for purchase for $50,000 and that, once Bondfield commenced construction, the lot value would increase to $150,000.

6S. Boroni decided to purchase two lots from Polidoro. On June 25, 2014, S. Boroni signed what purported to be agreements of purchase and sale for the lots and paid deposits totaling approximately $12,000 by way of personal cheques payable to Polidoro. These funds were to be held “in trust” by Polidoro pending the closing of the transactions contemplated by the agreements of purchase and sale. S. Boroni also advised a number of his family members about this “investment opportunity of a lifetime” and they, too, signed agreements of purchase and sale and paid deposits to Polidoro. Between June 25, 2014 and August 26, 2014, the seven Boroni Plaintiffs paid a total of $71,800 to Polidoro in the form of personal cheques made out to Polidoro personally, with the funds to be held “in trust”.

7By late November 2015, when there had been no progress on the development site, the Boroni Plaintiffs undertook a series of inquiries through which they learned that Polidoro did not actually own the property that he had purported to sell to them. They demanded a refund of their deposits. Polidoro initially agreed to refund their deposits but subsequently failed to do so. This led the Boroni Plaintiffs to commence their action against Polidoro on March 7, 2016.

8Polidoro did not defend the Boroni Action. On July 14, 2016, Dow J. declared partial default judgment against Polidoro for fraud, breach of fiduciary duty, and conversion. Dow J. awarded damages to the Boroni Plaintiffs’ for their liquidated loss of $71,800, costs of $14,210.78, and also issued an order for an accounting.

b. Contempt Number 1

9Polidoro failed to provide the accounting ordered by Dow J. He also failed to attend a number of judgment debtor examinations, failed to produce documents ordered by the court, and failed to appear in court on a variety of occasions as ordered by Archibald J. In addition, in an attempt to justify his failure to appear in court, he falsely stated to Archibald J. that his father had passed away.

10On July 21, 2017, Archibald J. found Polidoro liable for eight counts of civil contempt. Archibald J. found that a lengthy sentence was clearly appropriate in light of Polidoro’s egregious lie about his father, coupled with his repeated breaches of court orders, beginning with his complete disregard for Dow J.’s initial order of July 14, 2016 to provide an accounting. However, Archibald J. found that there were certain mitigating factors in Polidoro’s favour, including that Polidoro has admitted his contempts through an agreed statement of facts, that he had agreed to a voluntary garnishment of a portion of his wages in order to pay his judgment debt, and that he had provided an apology to the court in which he stated that “he has been to confession, has learned a valuable lesson, and will ensure this never happens again.”

11Taking into account these various considerations, Archibald J. sentenced Polidoro to 76 days of incarceration, to be served intermittently on weekends commencing August 4, 2017. The intermittent sentence was found appropriate in order to permit Polidoro to continue working and paying off his judgment debt, in accordance with the voluntary garnishment of a portion of his wages.

12Archibald J. also ordered Polidoro to provide the accounting ordered by Dow J., attend a judgment debtor examination on August 21, 2017, and provide the supporting documentation he had thus far failed to deliver. This included certain so-called “farmers’ agreements”, contracts to purchase land which Polidoro claimed to have entered into with the owners of various farms in York Region. Archibald J. also cautioned Polidoro that should he fail to comply with these outstanding court orders, he could well face a further term of imprisonment in the future. [4]

c. The Macaes Action

13At the same time as Polidoro was perpetrating these frauds on the Boroni Plaintiffs, he was engaging in a virtually identical scheme in relation to the Macaes Plaintiffs. In the fall of 2014, Michael Macaes (“M. Macaes”) was a labourer working on a Bondfield construction site in downtown Toronto. In October 2014, Polidoro advised M. Macaes that he owned property at the corner of Highway 9 and Highway 27 in Schomberg, Ontario that had recently been approved for development. As with the Boroni Plaintiffs, Polidoro explained that he was prepared to sell parcels of land to M. Macaes at an “insider’s discount” of $50,000 per lot.

14Between October 2014 and January 2015, M. Macaes entered into agreements of purchase and sale for a total of four lots and paid Polidoro deposits totaling $53,000. M. Macaes also persuaded his father, Gaspar Macaes, to enter into similar transactions in January and February 2015. Gaspar Macaes paid Polidoro deposits totaling $29,000.

15M. Macaes had expected development work on the lots to commence by June 2016. When that did not occur, M. Macaes began to make various inquiries, which led him to discover the legal proceedings that had been commenced by the Boroni Plaintiffs. M. Macaes contacted one of the plaintiffs in the Boroni Action and eventually learned that Polidoro had been purporting to sell the Boroni Plaintiffs the same plots of land that he and his father had apparently agreed to purchase from Polidoro. On April 28, 2017, the Macaes Plaintiffs commenced their action against Polidoro and others.

16Polidoro attempted to defend the Macaes Action on the basis of the so-called “farmers’ agreements” which, he claimed, gave him some beneficial interest in the land which he was purporting to sell to the Macaes Plaintiffs. After repeated requests, in March and April 2018 Polidoro eventually produced two of these alleged “farmers’ agreements”. The documents consisted of one page agreements of purchase and sale, in which the vendor was named without any further identifying information, and the land being purchased was not described in any detail.

17When Polidoro was cross-examined on these agreements, he refused to provide any further information about the identity of the supposed vendors, or any other information about the nature of the transactions contemplated. Counsel for the Macaes Plaintiffs subsequently undertook due diligence and discovered that the vendors named in these agreements had never owned land in York Region in the past five years, and that the land described in the agreements did not exist.

18On May 15, 2018, I found that the “farmers’ agreements” were obvious and crude forgeries, that the alleged vendors did not exist, and that Polidoro did not have any beneficial or other interest in the lands which he had purported to sell to the Macaes Plaintiffs. Accordingly I granted the Macaes Plaintiffs’ motion for summary judgment against Polidoro for fraud, breach of trust and conversion, and awarded them their liquidated damages in the amount of $82,000. I reserved to a later date the issue of their entitlement to punitive damages.

d. Contempt Number 2

19As described above, in Boroni v. Polidoro 2017, Archibald J. had confirmed that Polidoro was required to provide an accounting as to what he had done with the funds that he had defrauded from the Boroni Plaintiffs, as originally ordered by Dow J. in July 2016. Archibald J. ordered Polidoro to attend for an examination on August 21, 2017 and also to provide various documents, including the so-called “farmers’ agreements”.

20Polidoro failed to attend the examination on August 21, 2017, as well as subsequent examinations scheduled for the fall of 2017, and failed to produce the required documents. This prompted the Boroni Plaintiffs to commence a second contempt proceeding against Polidoro, which first came before me on November 24, 2017.

21Although Polidoro did not attend on November 24, 2017, his counsel was in attendance. I ordered Polidoro to produce documents, attend for an examination for discovery on December 11, 2017 and appear before me on December 21, 2017. During the course of the hearing on November 24, 2017, questions were raised as to whether Polidoro was actually serving the intermittent sentence that had been imposed by Archibald J. Thus I also ordered Polidoro to provide evidence that he was in fact serving this intermittent sentence, by no later than December 21, 2017.

22Polidoro failed to comply with any aspect of my November 24, 2017 order, including failing to attend on December 21, 2017. On that day, Polidoro’s counsel advised the court that his client could not personally attend because he had surrendered himself into custody to the Toronto Police 22 Division earlier in the day, on an outstanding warrant for his arrest in connection with another matter. Polidoro’s counsel further explained that Polidoro had been attempting to serve his intermittent sentence but that, due to some paperwork error, the staff at the Toronto South Detention Centre (the “TSDC”) had been refusing to admit him to the facility.

23Polidoro’s counsel was unable to explain or justify Polidoro’s failure to comply with the various other elements of my order of November 24, 2017. Polidoro was ordered to appear before me on January 19, 2018 to provide an explanation, and to establish a schedule for the litigation.

24Polidoro failed to attend on January 19, 2018. His counsel indicated that Polidoro had fully intended to be present for the court hearing that day. However, Polidoro advised his counsel via email that, just as he was entering the courthouse at 330 University Ave. on the morning of January 19, 2018, he was arrested by a police officer from Durham Region on other charges. No explanation was provided as to how a Durham police officer was executing arrest warrants in downtown Toronto. [5]

25At the January 19, 2018 hearing, counsel for the Boroni Plaintiffs provided evidence in the form of an affidavit from a Toronto Police officer, indicating that Polidoro had not in fact been in Toronto Police custody on December 21, 2017, contrary to what had been represented by his counsel. Polidoro’s counsel was unable to explain the contradiction, other than to say that he had merely reported to the court what he had been told by his client. He acknowledged that in light of the affidavit from the Toronto Police, it appeared that Polidoro had lied about his whereabouts on December 21, 2017.

26On January 19, 2018, I issued a warrant for Polidoro’s arrest. On consent of counsel, I also fixed a schedule to apply to both the Contempt Number 2 proceeding and the Macaes Action. This schedule required Polidoro to file various documents (including a motion record and factum), and to submit to examinations by March 16, 2018. Oral argument in both the Contempt Number 2 proceeding and the Macaes Action was scheduled for May 15, 2018.

27Polidoro was subsequently arrested on other charges, and attended before me for the first time on February 28, 2018. On that day, Polidoro entered into a peace bond and the warrant for his arrest was rescinded. An amended schedule for productions and examinations was ordered on consent, confirming the May 15, 2018 date for oral argument on the Contempt Number 2 matter and a motion by the Macaes Plaintiffs for summary judgment.

28Although Polidoro did attend for examinations on March 11 and April 12, 2018 in accordance with the consent schedule and did produce two of the purported “farmers’ agreements”, on both occasions he either refused outright to answer entirely appropriate questions, or else gave numerous undertakings to provide answers at a later date. When he failed to satisfy any of his undertakings, the Boroni Plaintiffs sought and obtained from Master Graham an order that Polidoro answer all undertakings prior to the Contempt Number 2 hearing scheduled for May 15, 2018, and answer all refused questions by June 8, 2018. Polidoro failed to comply with Master Graham’s order.

29On May 2, 2018, Polidoro sought an adjournment of the May 15, 2018 hearing. He provided a sworn affidavit stating that he was currently serving his intermittent sentence for civil contempt through assignment to a community work program. According to his affidavit, he had been attending at the Salvation Army in Toronto on Saturdays and Sundays, in lieu of serving his intermittent sentence at the TSDC. Upon completing his shift at the Salvation Army at approximately 4:30 PM on Saturdays and Sundays, he was required to go directly home and remain there until Monday morning at 6 AM.

30Polidoro affirmed that because of his work schedule at Bondfield and the time spent on weekends in connection with the community work program, he had been unable to meet with his lawyer as often as required to fulfil his undertakings, look for documents, and provide his counsel with information necessary to prepare a Motion Record. He estimated that it would take him approximately three months to provide all the answers to the undertakings and to meet with his counsel in order to be in a position to prepare a responding Motion Record. Accordingly, he sought an adjournment of the scheduled May 15, 2018 hearing until September 2018.

31Polidoro’s request for an adjournment was refused on May 4, 2018. After hearing from counsel for both parties, I found that, even assuming Polidoro’s schedule was as described in his May 2, 2018 affidavit, he had had ample time to comply with the various undertakings and requests for documentary productions. Indeed, the document productions had been outstanding since Archibald J.’s order of July 21, 2017. Accordingly, I ordered the hearing scheduled for May 15, 2018 to proceed.

32Polidoro failed to attend the hearing on May 15, 2018. Nor had he complied with Master Graham’s order to satisfy his undertakings from the examinations on March 11 and April 12, 2018. However, counsel for both parties filed an agreed statement of facts in which Polidoro admitted that he had failed to comply with the following court orders:

1. Failure to Respond to Undertakings – Order of April 21, 2017;
2. Failure to Attend for Examination – Order of October 6, 2017;
3. Failure to Attend for Examination – order of November 24, 2017;
4. Failure to Attend Court on December 21, 2017 – Order of November 24, 2017;
5. Failure to Provide Evidence of Incarceration – Order of November 24, 2017;
6. Failure to Attend Court on January 19, 2018 – Order of December 21, 2017.

33The filing of this agreed statement of facts meant that it was unnecessary to hold a contested hearing with respect to Polidoro’s liability for contempt of court. I found Polidoro liable for contempt on these six counts, and scheduled the hearing on penalty for July 16, 2018.

e. Polidoro’s Failure to Serve His Intermittent Sentence

34In the course of these proceedings, counsel for the Boroni Plaintiffs has undertaken further due diligence with respect to whether Polidoro has served his intermittent sentence as ordered by Archibald J. on July 21, 2017. These inquiries have revealed that, although Polidoro has served a portion of his intermittent sentence, he discontinued reporting to the TSDC in April 2018 after only serving approximately one-half of his 76 day sentence. Nor has he participated in a community work program through the Salvation Army, as he claimed in his May 2, 2018 affidavit seeking an adjournment.

35These facts were established through the evidence of Ms. Debra Samuels (“Samuels”), the Records Manager at the TSDC, who testified at this court’s hearings on May 15, 2018 and July 16, 2018. According to Samuels, Polidoro served the first four days of his intermittent sentence on the weekend of October 6, 2017. He then failed to report to the TSDC until the beginning of February 2018, when he commenced reporting on weekends as required. By April 6, 2018, he had served a total of 38 days of the 76 day sentence. However as of that date he failed to report and no further time has since been served on his intermittent sentence. Polidoro’s current status at the TSDC is “unlawfully at large”.

36Polidoro claimed that his failure to report to the TSDC between October 2017 and February 2018 resulted from a “paperwork error” on the part of staff at the correctional institution. Polidoro did not provide any direct evidence in support of this claim. Instead, he attempted to utilize his counsel, Joseph Irving, to corroborate the alleged paperwork error. Polidoro called Irving at about 7:30 PM on October 27, 2017, and reported to Irving that he had attended at the TSDC, only to be turned away because correctional staff was not expecting him. Irving then emailed Samuels at 7:35 PM on October 27, 2017, and told her that “my client just called me from the entrance to your institution and advises that there is no paperwork for him and he has once more been turned away.”

37Upon receiving this email from Polidoro’s counsel, Samuels checked with correctional staff at the two locations in the institution where Polidoro may have reported and ascertained that Polidoro had never appeared. Samuels indicated that she was not surprised by the results of her inquiries, since she had herself spoken on the telephone with Polidoro at approximately 5 PM that day; Polidoro had told her that he was not planning to report that evening and was not going to commence serving his intermittent sentence until November 2017.

38Samuels also undertook investigations to ascertain whether Polidoro was participating in the Intermittent Community Work Program (“ICWP”) as he claimed in his May 2, 2018 affidavit. Through inquiries she made to the supervisor of the program, Samuels discovered that Polidoro had applied to the ICWP but had been denied acceptance into the program. She confirmed that he had never in fact participated in the program.

Determining the appropriate penalty for contempt

39The judiciary controls no purse and commands no army; its power comes from words alone. [6] It is precisely for this reason that courts have for centuries sought to maintain their dignity and respect through exercising the power to punish for contempt of court. [7] As Brown J. (as he then was) observed in Mercedes-Benz Financial v. Kovacevic, those who defy court orders seek to place themselves above the law, thereby creating “condition of gross inequality, rewarding those who turn their backs on the law.” [8] This will inevitably induce others to defy court orders to avoid the burdens associated with lawful conduct. The inescapable result of such intolerable inequality will be an increasing resort to self-help and further erosion of public respect accorded to court decisions, thereby undermining an independent judiciary and the rule of law itself.

40At the same time, courts have recognized that the power to punish for contempt must be approached as an exceptional remedy and utilized only as a last resort. Courts contemplating a contempt order must be wary of “tiring by its overuse”. [9] Otherwise, a court’s outrage “might be treated as just so much bluster that might ultimately cheapen the role and authority of the very judicial power it seeks to protect.” [10]

41Having already found Polidoro liable for six counts of civil contempt, my task is limited to determining the appropriate penalty. The Boroni Plaintiffs argue that I should make an order for the payment of punitive damages, as opposed to a sentence of incarceration. They nevertheless acknowledge that it may be necessary to impose a custodial sentence to uphold the dignity of the court and the rule of law. In that event, the Boroni Plaintiffs request that a “creative combination of punitive damages and incarceration” be imposed on Polidoro, a sentence that they suggest would properly reflect both the interests of the plaintiffs and the court.

42Polidoro asks the court to impose a fine. He argues that the actions constituting Contempt Number 2 (failing to appear for examinations, not surrendering into custody and not appearing before the court) are less serious than those involved in Contempt Number 1, in which Polidoro had lied to the court about his father having been deceased.

a. General principles applicable to sentencing for Civil Contempt

43Pursuant to Rule 60.11 of the Rules of Civil Procedure, the Court has broad discretion to fashion an appropriate remedy for contempt and may make such order as is just in the circumstances of the case.

44The principles applicable to sentencing for civil contempt are well established. [11] In contrast to sentencing for criminal contempt, the primary objective of sentencing for civil contempt is to coerce the contemnor to comply with the orders in question. A secondary purpose of sentencing in the civil context is punishment aimed at achieving both specific and general deterrence, and denouncing the conduct in question.

45Because the primary purpose of imposing a penalty for civil contempt is to secure compliance with the relevant order, incarceration for civil contempt is rare, and lengthy incarceration is even rarer. [12] Canadian courts have tended to punish contempt of court leniently. Ordinarily, a finding of contempt, together with a fine or some other appropriate order is sufficient to gain compliance and restore the authority of the court. Incarceration is a sanction of last resort.

46Epstein J. A. in Boily identified the following factors as relevant to sentencing for civil contempt: [13]

i. proportionality of the sentence to the nature of the contemptuous conduct; ii. the presence of mitigating factors; iii. the presence of aggravating factors; iv. deterrence and denunciation (general and specific); v. the similarity of sentences in like circumstances; and vi. the reasonableness of a fine or incarceration.

47I consider each of these factors in turn.

1) The nature of the contemptuous conduct

48The first of these factors directs attention to the nature of the contemnor’s wrongdoing. Counsel for Polidoro argues that his contempts were relatively minor, involving matters such as the failure to produce documents, the failure to appear for examinations, and the failure to appear in court as ordered.

49Counsel for Polidoro mistakes the nature of the inquiry to be undertaken in the context of civil contempt. The critical factor is not what the contemnor was ordered by the court to do but, rather, what the contemnor actually did in response to the court’s order. The point is illustrated by the reasons of Archibald J. in Boroni v. Polidoro 2017. Polidoro had lied about his father’s death in order to excuse his failure to appear in court. Archibald J. found it “hard to conceive of a more shameless, offensive, and disrespectful contempt of court.” In Archibald J.’s opinion, such behaviour “simply cannot be tolerated and must be deterred.” [14] In other words, the assessment of the gravity of Polidoro’s contempt turned on the seriousness of his contemptuous conduct, rather than on the nature of the court’s order; even where the court order is entirely commonplace and could have been complied with easily (such as the order to appear in Boroni v. Polidoro 2017), a contemnor who flagrantly disregards such an order can attract denunciation in the strongest possible terms.

50It is apparent that throughout this proceeding Polidoro has continued to wilfully ignore court orders, in effect “doubling down” on the very conduct which Archibald J. had found so objectionable. Polidoro’s contemptuous conduct in this proceeding has included the following actions, which are relevant to contempt counts 1, 4, 5 and 6:

• Polidoro has continued his pattern of lying in order to excuse his failure to comply with orders requiring him to attend court. However, rather than lie to the court directly, he has used his counsel to convey false information to the court as to his whereabouts. He told his counsel that he was in police custody on both December 21, 2017 and January 19, 2018, when in fact this was not the case. As expected, his counsel then conveyed these falsehoods to the court and was able to secure adjournments and further delay the proceedings. Polidoro’s ruse was only discovered later through the efforts of counsel for the Boroni Plaintiffs, who went to the trouble of securing affidavits from both the Toronto Police and the Durham Regional Police confirming that Polidoro was not in police custody on either of the days in question;
• Polidoro failed to serve the 76-day sentence of incarceration ordered by Archibald J., and then lied to the court in an effort to conceal his evasion. Once again, Polidoro used his counsel to convey his falsehoods to the court, by claiming to his counsel that he had attended at the TSDC on October 27, 2017 and been refused entry into the institution. Polidoro’s counsel then informed the court that Polidoro had been unable to serve his intermittent sentence because of a paperwork error at the institution. I find, based on Samuels’ testimony, that Polidoro did not in fact attend the TSDC on October 27, 2017 and that his call to his counsel was a further ruse designed to postpone or avoid his serving of the intermittent sentence;
• Polidoro did commence serving his intermittent sentence in February 2018, but ceased doing so as of April 6, 2018. He then provided the court with a perjured affidavit in which he falsely claimed to be participating in a community work program. In fact, as established through the Samuels’ testimony, Polidoro’s application to participate in the community work program was denied and he has never participated in the program;
• in response to this court’s repeated orders to produce documents and to provide an accounting to the Boroni Plaintiffs, Polidoro produced two so-called “farmers’ agreements”. These documents were crude forgeries. The alleged vendors had never owned land in York Region, and the lands described in the alleged agreements did not exist. Polidoro’s delay in producing these forged documents further delayed the proceedings and added significantly to the associated costs.

51I echo the comments of Archibald J. to the effect that it is hard to conceive of a more shameless, offensive and brazen contempt of court than what has occurred in the present proceeding. In fact, Polidoro’s conduct in this matter is far more egregious than that considered by Archibald J. In the prior proceeding, Polidoro had lied about the death of his father, but he had subsequently acknowledged that to be a lie and had apologized to the court. In contrast, in this proceeding Polidoro offered not a single lie but a series of lies, all in an attempt to conceal or excuse his noncompliance with various court orders. Not only has he lied to the court directly (as through his perjured May 2, 2018 affidavit), but he had also used his lawyer as a means to convey falsehoods and/or sow confusion about his conduct. Moreover, he has never acknowledged the fact that the various statements described above are false, nor has he taken responsibility for them through an apology.

52As described earlier, a primary purpose of sentencing for civil contempt is to obtain compliance with court orders. Polidoro remains in breach of his obligations and undertakings, and appears to be entirely unrepentant.

53It is well established that a sentence for civil contempt “must be proportionate to the gravity of the offence and the degree of responsibility of the offender”. [15] As Archibald J. concluded in the earlier contempt proceedings, the gravity of the contempt in this case cannot be understated. Moreover, Polidoro is entirely responsible for these contempts, since they arise out of his attempts to conceal or avoid the consequences of his fraudulent conduct in relation to the Boroni Plaintiffs. It is clearly necessary and appropriate to impose a lengthy sentence in light of the egregious and continuing nature of Polidoro’s disregard of court orders and, indeed, the entire justice system.

2) The presence of mitigating factors

54There is one significant mitigating factor in this case, namely, the fact that Polidoro has been making regular monthly payments to the Boroni Plaintiffs, pursuant to the voluntary garnishment arrangement previously described. Between May 2017 and June 2018, Polidoro has paid a total of $30,500 towards the judgment of $71,800. Polidoro’s counsel informed the court that he recently terminated his employment with Bondfield and thus it is unclear whether this garnishment will continue. In any event I regard this consistent record of payment to be a significant mitigating factor in his favour.

55I do not consider there to be any other mitigating factors in this case. It is true that Polidoro signed an agreed statement of facts, which obviated the need to conduct a hearing on whether he was liable for the contempts in question. But, as Lax J. concluded in relation to the contemnors in Chiang, [16] in my view Polidoro’s acceptance of the agreed statement of facts was purely tactical. Polidoro had sought unsuccessfully to secure an adjournment of the May 15, 2018 hearing at which the contempt motion was to be argued. When that was refused and it was clear that the hearing would proceed as scheduled, Polidoro had filed no evidence and had no basis for resisting a finding of contempt. Thus his acceptance of the agreed statement of facts establishing his liability for contempt was merely a recognition of the inevitable.

56Nor do I find that the filing of the agreed statement of facts resulted in any real saving of expense and inconvenience. This contempt proceeding first came before the court on November 24, 2017, just over one year ago. This matter has taken more than a year to bring to a conclusion largely because of Polidoro’s delaying tactics and refusal to participate in the proceedings in any meaningful way. It would be manifestly inappropriate for him to receive credit for the minor simplification of the liability phase of the process through acceptance of an agreed statement of facts.

3) The presence of aggravating factors

57There are numerous aggravating factors in this case, in addition to the pattern of lying noted above. These include the following:

• this is not a first offense, as Polidoro was previously found by Archibald J. to be liable for eight counts of contempt. In fact, Polidoro has displayed a continuing attitude of contempt and defiance for the court process for more than two years, dating back to the order of Dow J. in July 2016 that he provide the plaintiffs with an accounting of what he did with their money;
• Polidoro decided to cease serving the intermittent sentence imposed by the court in Boroni v. Polidoro 2017, seemingly without consequence; [17]
• Polidoro has been given numerous opportunities to comply with this court’s orders but has chosen, instead, to continue ignoring or defying the court’s directions;
• Polidoro has filed no evidence, has attended court on only one occasion in response to a warrant having been issued for his arrest, and has not participated in any meaningful way in these proceedings;
• Polidoro has not offered an apology or accepted responsibility for his contemptuous conduct.

4) Deterrence and denunciation

58In my view, considerations of deterrence and denunciation both weigh in favour of a lengthy sentence for these contempts. As Lax J. observed in Chiang, “[u]ndertakings given to a court are to be fulfilled; apologies tendered to a court are to be genuinely remorseful; court orders are to be obeyed in every respect.” [18] Unless Polidoro’s conduct is strongly sanctioned, he will essentially have made a mockery of this court’s processes. A message must be sent, not only to him individually but also to other litigants and the public, that this kind of conduct cannot be tolerated.

5) Sentences in like cases

59Most of the reported cases for civil contempt involve first-time offenders. Moreover, in the vast majority of these cases, the prospect of a fine or custodial sentence is sufficient to compel compliance by the contemnor. There are relatively few cases involving a repeat offender who, after having received a custodial sentence, continues to defy and/or ignore the authority of the court.

60One case which I find to be relevant is Chiang, which the Court of Appeal described as “one of the worst cases of civil contempt to come before this court.” [19] In my view, Polidoro’s contempt has significant similarities to the conduct of the contemnors in Chiang.

61In Chiang the contemnors had been ordered to produce documents relating to their business and financial affairs. They failed to comply with a total of six court orders, which enabled them to transfer millions of dollars out of their business to family members. They were then given the opportunity to purge their contempts by fulfilling a number of undertakings which, in general, required them to disclose and document the transfers of money. They failed to comply with those undertakings, but were then granted a further extension of time to purge their contempt, all the while being warned that they could not expect leniency if they failed to comply. They failed to do so and remained in breach of their undertakings and numerous court orders.

62Lax J. found that the contemnors had engaged in a deliberate course of conduct over a lengthy period of time and had breached court orders on numerous occasions, including fresh orders made while the contempt motion was pending. They benefited financially from their contempt and caused extreme prejudice to the plaintiffs. They had shown disrespect to the court by lying to it, offering an insincere apology, and giving only the appearance of compliance with the courts’ orders. Lax J. imposed custodial sentences of 12 months and 8 months respectively on the two defendants. Although those sentences were set aside on appeal because of an earlier consent order regarding penalty, the Court of Appeal noted that, but for the consent order on penalty, the sentences were entirely appropriate. [20]

63Also of relevance in this context is the decision of Reid J. in G.M. Textiles v. Sidhu, [21] where the plaintiffs had obtained a judgment of $1.7 million against the defendants as a result of loans and investments in several franchise businesses. The defendants failed to comply with orders requiring them to provide documents and information about the franchise operations, thereby frustrating the ability of the plaintiffs to access information needed to protect their investments. By deliberately failing to comply with various court orders, the defendants were able to surreptitiously take money out of the businesses, thereby depleting their value to zero. As a result, the plaintiffs were unlikely to recoup any portion of their judgement.

64Reid J. concluded that a custodial sentence was the only realistic option in the circumstances. He found that it was completely unacceptable that court orders be deliberately, blatantly and continuously flouted. He further observed that it would be completely inappropriate for a party subject to court orders to assume that the penalty for breach will be dealt with leniently so as to give what amounts to a license for disobedience.

65Reid J. imposed a custodial sentence of between 18 months and 21 months on the principal defendant. Although he acknowledged that this sentence was in the upper range for contempt, he considered it to be appropriate based on the numerous orders violated, the extended period of time during which the contempt continued, and the defendant’s continuous disregard for court orders and the court process.

66Polidoro’s conduct has some similarities with that of the contemnors in both Chiang and G.M. Textiles. As in those cases, Polidoro has breached numerous court orders over a period of years, including fresh orders made while this contempt proceeding was ongoing. He has benefited financially from his contempt, lied to the court, offered an insincere apology and, generally, given only the appearance of compliance with court orders. He has deliberately, blatantly and continuously flouted the authority of the court.

67It might be argued that the contempt in this case should be treated more leniently because the amount of money involved is significantly less than that in either Chiang (where the defendants had deprived the plaintiffs of $8 million) or in G.M. Textiles (where the plaintiffs lost an investment of $1.7 million). In contrast, in this litigation, Polidoro has defrauded the Boroni Plaintiffs of $71,800.

68In my view, the amount of money involved in the underlying litigation is a minor factor in determining an appropriate sentence for contempt. The key consideration is the nature of the contemptuous conduct, for it is this conduct that requires and justifies the imposition of sanctions by the court. Like the contemnors in both Chiang and G.M. Textiles, Polidoro is a repeat offender who has violated or ignored court orders for years. He continues to defy this court’s authority and displays a complete disregard for legal process.

69In any event, it should not be assumed that the significance of a fraud is necessarily determined by the absolute amount of money involved. The Boroni Plaintiffs filed victim impact statements describing the effects on them of the frauds perpetrated by Polidoro. What emerges from these victim impact statements is that the Boroni Plaintiffs were individuals of modest means for whom the loss of $71,800 was hugely significant. These frauds have had a profound and continuing effect on their lives and on the lives of their families. The following passage from one of the victim impact statements speaks eloquently to the lasting effects that these losses have caused:

The emotional toll this is taken on me is not possible to express entirely in words. The pain has been so severe at times that I feel as if I am breaking apart from the inside…

I know I may never be able to trust again - this breaks my heart each and every day… I certainly was not able to predict that the false reality created by Cosmo Polidoro to defraud me would so negatively affect the lives of my family and friends.

The constant struggles to reconcile what happened to me occupy so much of my mental energy that it left me unable to think clearly and focus. How do I learn to trust again when the look in my daughter’s eyes say, Dad, you let us down. How do I help my wife who suffers from depression and anxiety, and the situation is just adding to her illness. She asks me every day, when are we getting back the money? How and why did he do this to us? How are we supposed to move forward?

As a result my family, work and social life has severely struggled.

6) Reasonableness of a fine or incarceration

70The Boroni Plaintiffs have urged me to impose punitive damages as an appropriate sanction for the contempt in this case. In my view, however, an award of punitive damages would be inconsistent with the objectives of imposing sanctions for contempt of court. As Nordheimer J. (as he then was) observed in 1307347 Ontario Inc. v. 1243058 Ontario Inc., [22] punitive damages are not an appropriate sanction for civil contempt. While punitive damages have sometimes been described to be “in the nature of a fine”, punitive damages flow to a plaintiff whereas a fine flows to the system. As Nordheimer J. noted, in a case of contempt, “it is not the other party who is principally harmed, it is the system of justice which is first and foremost harmed and it is the system, therefore, to which the penalty should be paid.”

71While punitive damages are not an available sanction for civil contempt, neither would the imposition of a fine be appropriate in this case. Given Polidoro’s continuing failure to comply with this court’s orders, even in the face of the substantial 76-day custodial sentence previously imposed by Archibald J. in July 2017, a fine would be little more than a license fee for continued defiance. It is evident that this is one of those rare cases where a substantial custodial sentence, at least as long if not longer than that imposed by Archibald J., is both appropriate and necessary at this time.

72Nor would an intermittent custodial sentence be appropriate at this stage of the proceedings. Polidoro has only served approximately one half of the 76-day sentence imposed by Archibald J. in July 2017. Moreover he has attempted to conceal his noncompliance through various falsehoods, including allegations that he was denied entry to the institution on various occasions due to paperwork errors, or that he has been participating in a community work program in lieu of serving time in the institution.

73Also significant is the fact that in February 2018 Polidoro received two additional intermittent sentences arising from unrelated Criminal Code convictions, the first for 28 days and the second for 20 days. He has thus far served only a single day of each of these intermittent sentences, and has not served any time on either sentence since February 27, 2018.

74While the Boroni Plaintiffs seek imposition of another intermittent sentence so that he may continue his employment and continue to make voluntary garnishment payments, Polidoro’s counsel has advised that Polidoro’s employment at Bondfield has recently ended. In any event, given Polidoro’s demonstrated noncompliance with his prior intermittent sentences, in my view it would be inappropriate it impose a further intermittent sentence on Polidoro and a sentence of incarceration on a straight time basis is necessary.

7) Conclusion on Sentence for Contempt

75Taking into account all these circumstances and considerations, including the sentences imposed in analogous circumstances, in my view it would have been open to the court to impose a sentence in the range of 1.5 to 2 months for each of the 6 contempts committed by Polidoro, or a total sentence in the range of 9 to 12 months. Given the seriousness of the contemptuous conduct, it would also have been open to the court to order that this sentence be served consecutively to the 84 days remaining on his prior intermittent sentences. [23]

76However, I believe that Polidoro is entitled to a significant reduction in any such sentence, having regard to the mitigating fact that he has been making regular payments towards his judgment debt to the Boroni Plaintiffs. Accordingly, I fix his sentence at one month for each act of contempt, or a total of six months incarceration, to be served concurrently with his prior intermittent sentences. Taking into account the 84 days remaining on his existing intermittent sentences, which will be served concurrently, this approximately doubles the outstanding period of Polidoro’s incarceration, while ensuring that the sentence will actually be served.

77I further confirm that Polidoro remains under an obligation to provide the Boroni Plaintiffs with an accounting, and he may be required to provide further documents or information to the Boroni Plaintiffs. I order that he be brought before me in four months’ time to review his compliance with the accounting process, and determine appropriate next steps. Polidoro is not eligible for parole or early release [24] but when he is brought back before me, depending on his willingness to comply with his obligations and this court’s orders, I will consider at that time a possible variation or reduction in the remainder of his sentence.

Punitive Damages

78Both the Boroni Plaintiffs and the Macaes Plaintiffs seek punitive damages against Polidoro. In their Statement of Claim, the Boroni Plaintiffs did not specify the amount of punitive damages sought, while the Macaes Plaintiffs originally claimed $100,000 in punitive damages. At the conclusion of this proceeding, the Boroni Plaintiffs indicated that they are now seeking $500,000 in punitive damages. They also seek an order of full indemnity costs against Polidoro.

1) Entitlement to Punitive Damages

79As the Supreme Court of Canada made clear in Whiten v. Pilot Insurance Co., punitive damage awards are very much the exception rather than the rule, and are imposed only if there has been “high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour.” [25] The general objectives of punitive damages are punishment (in the sense of retribution), deterrence of the wrongdoer and others, and denunciation, namely “the means by which the jury or judge expresses its outrage at the egregious conduct”. [26] Punitive damages are awarded only where compensatory damages are insufficient to accomplish these objectives. Moreover punitive damages are given in an amount that is no greater than necessary to rationally accomplish their purpose.

80In Whiten, Binnie J. emphasized that a key consideration in assessing punitive damages is proportionality, considered in several dimensions, including: (i) the blameworthiness of the defendant’s conduct; (ii) the degree of vulnerability of the plaintiff; (iii) the need for deterrence; (iv) other penalties, both civil and criminal, which have been or are likely to be imposed on the defendant for the same misconduct; and (v) the advantage wrongfully gained by the defendant from the misconduct.

81Binnie J. also identified the key factors relevant to a determination of the blameworthiness of the defendant’s conduct. These include whether the misconduct was planned and deliberate; the intent and motive of the defendant; whether the defendant persisted in the outrageous conduct over a lengthy period of time; whether the defendant concealed or attempted to cover up his/her misconduct; the defendant’s awareness that what he or she was doing was wrong; and whether the defendant profited from his/her misconduct.

82In light of these factors and considerations, I have little difficulty in concluding that Polidoro’s conduct is sufficiently blameworthy as to attract an award of punitive damages. His conduct was clearly planned and deliberate, in that he carried out a series of frauds involving numerous victims, continuing over an extended period of time. He even involved a real estate agent to prepare agreements of purchase and sale so as to give the fraudulent transactions an air of legitimacy. Moreover, he was in a position of authority and trust relative to his victims, as he was a construction superintendent at Bondfield while his victims were labourers and/or employees of the company, or their relatives. Polidoro exploited this authority and trust to induce his victims to enter into these fraudulent transactions.

83Polidoro then made extensive efforts to frustrate the efforts of the plaintiffs to discover what he had done with their money. Throughout most of this proceeding, Polidoro claimed that he did not have a bank account and operated entirely on a cash basis. During Polidoro’s examinations in aid of execution, he had testified that any time he received a cheque, he would cash it at Money Mart and use the cash to pay his expenses. At a late stage of these proceedings, through extensive due diligence, the Boroni Plaintiffs discovered that Polidoro did in fact have a bank account. Pursuant to a court order, in September 2018 the Boroni Plaintiffs received Polidoro’s bank records and are undertaking further analysis in an effort to trace the use of funds, and identify any other property which Polidoro may own.

84The Boroni Plaintiffs tendered evidence with respect to Polidoro’s lifestyle and household expenses. This evidence indicated that Polidoro and his spouse reside in a million-dollar home in Pickering, Ontario and that they each lease late-model luxury vehicles, including a Mercedes SUV. Polidoro’s salary from Bondfield was approximately $150,000 per year, and his spouse is not employed. It is evident that Polidoro utilized the funds derived from his frauds committed on the plaintiffs in these two proceedings, along with frauds committed on other victims, [27] in order to finance his lifestyle and expenses.

85Courts have noted that it is rational to use punitive damages to “relieve a wrongdoer of its profit where compensatory damages would amount to nothing more than a license fee to earn greater profits through outrageous disregard of the legal or equitable rights of others.” [28] In such circumstances, compensatory damages merely provide plaintiffs with the means to recover their own money, but do nothing to deter the wrongdoer from carrying on with their wrongful conduct. That is clearly the case here since an award of compensatory damages would merely require Polidoro to return the money he has improperly taken from the plaintiffs, without imposing any real economic cost or penalty upon him. As such, an award of punitive damages is obviously necessary to achieve the goals of punishment and deterrence.

86In considering the appropriateness of punitive damages, it is necessary to take into account any other penalties, both civil and criminal, that may be imposed for the wrongful conduct at issue. The issue this raises is whether an award of punitive damages would be inappropriate in light of the fact that I have already imposed a substantial custodial sentence on Polidoro for his contempt of court.

87In my view, the fact that Polidoro is facing a substantial period of incarceration for civil contempts associated with or arising from these frauds, is relevant to a determination of the quantum of any punitive damage award. However, I do not believe that there is any necessary duplication between a custodial sentence for civil contempt and an award of punitive damages for fraud. An award of punitive damages for fraud serves to punish and deter Polidoro for his wrongful actions in relation to the plaintiffs, whereas his sentence for civil contempt results from his wrongdoing in relation to the court. Thus the fact that Polidoro may have been sentenced for civil contempt is no bar to the plaintiffs seeking punitive damages for the wrongs he has committed against them, since the blameworthy conduct in each instance is separate and distinct. To put the matter another way, even if Polidoro had not acted in a manner contemptuous of this court’s authority, his previous high-handed and reprehensible treatment of the plaintiffs would have in itself justified an award of punitive damages. That said, in accordance with the observations of Binnie J. in Whiten, the fact that Polodoro is facing a substantial sentence of incarceration for civil contempts which flowed out of the frauds in this case is a relevant consideration in terms of the proportionality and reasonableness of the quantum of any punitive damages awarded.

88In my view, the number of victims involved and the devastating impacts upon them, the fact that Polidoro exploited his position of authority and trust over his victims, and the fact that Polidoro engaged in transactions over an extended period of time that he knew to be fraudulent in order to finance his lifestyle and expenses, justifies an award of punitive damages in both the Boroni Action and the Macaes Action.

2) Quantum of Punitive Damages

89A review of the jurisprudence on punitive damage awards suggests that determining the appropriate quantum is more art than science. Binnie J. in Whiten indicated that the court must determine what amount of damages (taking into account both compensatory and punitive damages) is “rationally required” to punish the defendant’s misconduct. Binnie J. also rejected a mechanical or formulaic approach, such as a fixed ratio between compensatory and punitive damages. The governing principle for quantum is proportionality, such that “compensatory damages plus punitive damages plus any other punishment related to the same misconduct, should be rationally related to the objectives for which the punitive damages are awarded (retribution, deterrence and denunciation).” [29]

90While Binnie J. rejected a formulaic approach in the determination of punitive damages, I do not read his reasons as precluding a consideration of the quantum of compensatory damages in fixing punitive damages. Indeed, elsewhere in his reasons, Binnie J. noted that a proportionality analysis should take into account factors such as “the harm caused, the degree of the misconduct… and any advantage or profit gained by the defendant.” [30] Moreover, Binnie J. also concluded that a jury award of punitive damages that was three times the plaintiff’s compensatory damages did not exceed the bounds of rationality. These comments indicate that, while there is no “fixed ratio” between punitive and compensatory damages, it is rational and appropriate to take into account the losses suffered by the plaintiffs in determining the quantum of punitive damages.

91One relevant consideration is punitive damage awards that have been made in analogous circumstances by courts and tribunals. I note that in Pirbbai v. Singh, [31] a court awarded $50,000 in punitive damages where there was a compensatory loss of $33,000, in the context of a repair shop engaged in fraud with its client, and significant litigation misconduct. In Walling v. Walling, [32] a court awarded $100,000 in punitive damages where there was a compensatory loss of $42,000, in the context of an estate trustee’s breach of fiduciary duty.

92In this case, however, it is important to have regard to the history and evolution of the Boroni Plaintiffs’ claim for punitive damages. The matter of punitive damages was first considered by Dow J. in July 2016. Dow J.’s July 14, 2016 order had crossed out a paragraph in a draft version of the order which would have awarded the Boroni Plaintiffs punitive damages. One issue considered in oral argument before me was whether the fact that Dow J. had crossed out the paragraph referring to punitive damages meant that this issue had already been determined at that time.

93Counsel for the Boroni Plaintiffs subsequently produced a transcript of the default judgment proceedings held on July 14, 2016. This transcript confirms that the motion for a punitive order was adjourned by Dow J. on the basis that the Boroni Plaintiffs had not specified a precise quantum of punitive damages that they were seeking.

94On August 8, 2016, the Boroni Plaintiffs then issued a motion for punitive damages in the amount of $25,000. The question this raises is whether an award of $25,000 is sufficient to accomplish the purposes associated with a punitive damage award in this litigation.

95The Boroni Plaintiffs argue that they should not be limited to this amount since, when the process began in 2016, the Plaintiffs were not aware of other victims of similar fraud and also of Polidoro’s lengthy record of criminal fraud convictions, amongst other issues. On this basis, they maintain that an order for punitive damages in the amount of $500,000 would be appropriate.

96In my view, however, it would not be appropriate to increase punitive damages awarded to these particular plaintiffs in order to take account of frauds that may have been committed against others, or for which Polidoro may have been convicted (and presumably sentenced) criminally. I am also mindful of Binnie J.’s observation in Whiten to the effect that any award of punitive damages should be no greater than is “necessary to achieve their intended purpose.”

97The Boroni Plaintiffs themselves initially took the position that a punitive damage award of $25,000 would be appropriate in this case. At that time, they were fully aware of the nature of the frauds that had been perpetrated upon them. I therefore conclude that an award in excess of this amount would not be truly “necessary” to achieve the purposes of punishment, deterrence and denunciation, taking into account the fact that Polidoro has also been sentenced to a sentence of 6 months incarceration in connection with the contempts arising out of these transactions. Furthermore, assuming this amount is appropriate in the Boroni Action, I see no basis upon which a higher amount should or could be awarded in the Macaes Action.

98I therefore order punitive damages in the amount of $25,000 payable by Polidoro to each of the Boroni Plaintiffs and the Macaes Plaintiffs. Any punitive damages recovered are to be divided amongst the respective plaintiffs in proportion to their losses suffered as a result of these frauds.

Conclusion

99I sentence Cosmo Polidoro to a total of six months’ incarceration for six counts of civil contempt, to be served concurrently with his existing intermittent sentences, commencing immediately upon the conclusion of today’s hearing. Polidoro also remains under an obligation to provide an accounting to both sets of plaintiffs, including complying with undertakings to provide financial information with supporting documentation. To that end, Polidoro will be brought before me in four months’ time to review his compliance with the accounting process, and determine appropriate next steps. Polidoro is not eligible for parole or early release [24] but when he is brought back before me, depending on his willingness to comply with his obligations and this court’s orders, I will consider at that time a possible variation or reduction in the remainder of his sentence. Polidoro is also ordered to pay $25,000 in punitive damages to the Boroni Plaintiffs, and $25,000 in punitive damages to the Macaes Plaintiffs.

100The Boroni Plaintiffs seek recovery of their costs on a full indemnity basis, in the amount of $151,746.53, consisting of fees of $127,187.50, HST of $16,534.38, and disbursements of $8024.65. Their partial indemnity costs would be approximately $95,000.

101I note that it is only through the diligence and determination of these plaintiffs and their counsel that the full extent of Polidoro’s frauds as well as his contemptuous conduct towards this court have become evident. The Boroni Plaintiffs have filed over a dozen motion records and dozens of affidavits. They have steadfastly pursued this matter for over a year in the face of intransigence, evasion and falsehoods on the part of Polidoro. Few would have gone to the time and expense that these Plaintiffs have been prepared to incur, and their work has been invaluable in providing the Court with an appropriate record. Moreover, the costs they have incurred have been significantly increased due to the delays and misrepresentations on the part of Polidoro.

102At the same time, considerations of proportionality and reasonableness remain paramount in fixing costs, in accordance with Boucher v Public Accountants Council (Ontario). [33] An award of costs should reflect “what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties.” Given the amounts at issue in this litigation, I do not see how it would be proportional or reasonable to make an order of costs in excess of $100,000, even taking into account the exceptional circumstances in this case and the role played by the Boroni Plaintiffs. I therefore fix the costs payable by Polidoro to the Boroni Plaintiffs at $95,000 on an all-inclusive basis, including disbursements and HST, payable within 30 days.

P. J. Monahan J.

Released: November 26, 2018

Footnotes

1For ease of reference, I will refer to Boroni et al. v. Polidoro et al., court file CV–16–548173, as the "Boroni Action", and the plaintiffs in that action as the "Boroni Plaintiffs"; and Macaes et al. v. Polidoro et al., court file CV–17–574160, as the "Macaes Action" and the plaintiffs and that action as the "Macaes Plaintiffs".

2In addition to obtaining judgment against Polidoro, both the Boroni Plaintiffs and the Macaes Plaintiffs have also obtained judgment against his spouse, Rosellina Cipollone, for one half of the liquidated damages ordered as against Polidoro. Cipollone's liability was based on her knowing receipt of funds derived from Polidoro's fraud.

3Boroni v. Polidoro, 2017 ONSC 4447 ("Boroni v. Polidoro, 2017").

4Boroni v. Polidoro 2017, at paragraph 63.

5Counsel for the Boroni Plaintiffs subsequently obtained an affidavit from a detective with the Durham Regional Police ("DRP") who advised that Polidoro was not in fact arrested by the DRP on January 19, 2018. As discussed below, I find that the email Polidoro sent to his counsel claiming he had been arrested was a ruse, intended to excuse his noncompliance with the court's order to attend personally on that day.

6This is the classic argument of Alexander Hamilton in Federalist, No. 78, (1788), available at https://www.congress.gov/resources/display/content/The+Federalist+Papers : “[The judiciary] may truly be said to have neither FORCE nor WILL, but merely judgment; and must ultimately depend upon the aid of the executive arm even for the efficacy of its judgments.” For a modern restatement of this argument, see Alexander Bickel, The Least Dangerous Branch (Yale University Press, 2nd edition, 1986).

7United Nurses of Alberta v. Alberta (Attorney General), [1992] 1 S.C.R. 901 at page 931.

8[2009] O.J. N0. 888, 2009 ONSC 9423, 308 D.L.R. (4th) 562 (S.C.J.) at paragraph 6.

9Karen Jolley, “Sanctions for Civil Contempt – A National Survey and a Critique”, in Archibald and Echlin (eds) Annual Review of Civil Litigation 2013 (Thomson Canada 2013) 361 at p. 366.

10Centre commercial Les Rivières Ltée v. Le Jean Bleu Inc., 2012 QCCA 1663 (Que. C.A.) at para. 7.

11See generally: Business Development Bank of Canada v. Cavalon Inc., 2017 ONCA 663 at paragraph 77; Boily v. Carleton Condominium Corporation 145, 2014 ONCA 574 ("Boily") at paragraphs 90 to 112; Chiang (Trustee of) v. Chiang, 2009 ONCA 3 ("Chiang CA") at paragraphs 9 to 12.

12Boily at paragraph 82; Chiang CA at paragraph 90.

13Boily at paragraph 90.

14Boroni v. Polidoro 2017, at paragraphs 47 to 49.

15Chiang (Trustee of) v. Chiang (2007), 2007 ONSC 82789, 85 O.R. (3rd) 425 ("Chiang SCJ") at paragraph 26.

16Chiang SCJ, at paragraphs 42 to 44.

17Polidoro seems to have succeeded, thus far at least, in avoiding his intermittent sentence simply by failing to show up at the TSDC. Although the institution lists his status as "unlawfully at large", there does not appear to be any mechanism in place that would compel Polidoro to complete serving his intermittent sentence. It is unclear whether this situation is limited to Polidoro, or is more widespread. At the very least, the Ministry should investigate its processes to ensure that those who are sentenced to intermittent sentences are in fact serving those sentences.

18Chiang SCJ, at paragraph 48.

19Chiang CA, at paragraph 1.

20Chiang CA, at paragraph 92.

212016 ONSC 2055.

22[2001] O. J. No. 257 (S.C.J.) at paragraph 23. See comments to the same effect by D. M. Brown J. (as he then was) in Cellupica v. Di Giulio, 2011 ONSC 1715 at paragraph 33.

23Polidoro has 38 days remaining on the intermittent sentence imposed by Archibald J., and 27 and 19 days, respectively, remaining on the two Criminal Code intermittent sentences imposed in February 2018.

24As discussed by the Court of Appeal in Chiang CA, because Polidoro is to be brought back before me, he is therefore not eligible for parole, in accordance with the combined operation of the Ministry of Correctional Services Act, R. S. O. 1990, c. M. 22 and the Corrections and Conditional Release Act, S. C. 1992, c. 20 s. 99 (1). For a discussion of the operation of these statutory provisions in the context of sentences for civil contempt, see Chiang CA, at paragraphs 105-112.

25Whiten v. Pilot Insurance Co., 2002 SCC 18 ("Whiten") at paragraph 94.

26Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130 at paragraph 196; Whiten at paragraph 68.

27The Boroni Plaintiffs tendered affidavits from other victims of Polidoro's frauds. For a variety of reasons, these victims were not in a position to institute legal proceedings against Polidoro. Nevertheless, it is clear that Polidoro's frauds were not limited to the two sets of plaintiffs in these actions.

28Whiten at paragraph 72.

29Whiten at paragraph 74.

30Whiten at paragraph 94.

312011 ONSC 1366, at paragraphs 2 and 92.

322012 ONSC 6580 at paragraphs 29 to 40.

33(2004), 2004 ONCA 14579, 71 O.R. (3rd) 291 (Ont.C.A.) at paragraph 24.