Court File and Parties

COURT FILE NO.: CV-17-567863 DATE: 20181211 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Aeon Sodding Corp. and Adeo Contracting Limited, Plaintiffs AND: Steven Mann, Due Process Legal Services, ZHM Recruitment Group aka ZHM Group, Defendants

BEFORE: Carole J. Brown, J.

COUNSEL: Eric Turkienicz, for the Plaintiffs/Moving Parties No one appearing for the defendants, although duly served

HEARD: November 19, 2018

Endorsement

[1] The plaintiffs bring a motion for contempt of court as regards Steven Mann (“Mann”), and for an Order requiring Cathy Huntrods to attend an examination in aid of execution pursuant to Rule 60.18 of the Rules of Civil Procedure.

[2] The motion for contempt arises from a fraudulent scheme of the defendant, Steven Mann, personally and through the corporate defendants which were controlled by him. Mann, pretending to be a licensed paralegal and law student, and later a licensed lawyer, solicited legal work from the plaintiffs. The plaintiffs retained Mann and his businesses to collect numerous outstanding invoices through litigation. Despite numerous reports and updates regarding the status of the various matters given to him, Mann never undertook any work or initiated any litigation on behalf of the plaintiffs, nor was he licensed to do so.

[3] In the spring of 2017, the plaintiffs commenced this action against the defendants pleading fraud and deceit. The defendants never responded to the claim or contacted plaintiffs’ counsel, although duly served with the various court documents associated with the action. On November 3, 2017, the plaintiffs were awarded judgment of $1,472,512.72 in damages plus costs of $19,688.78 and prejudgment interest of $22,097.11 as against the defendants. Dietrich J further ordered that the defendants provide an accounting and enjoined the defendants from dealing with any money or property pending further court order.

[4] The plaintiffs served Mann with the judgment and a Notice of Examination in Aid of Execution returnable December 18, 2017. However, he did not attend the examination. The plaintiffs obtained an order from Master Short, varied by Master Abrams compelling Mann to attend the examination in aid of execution and personally served it on Mann with a Notice of Examination returnable June 22, 2018. Again, Mann did not attend the examination. On March 12, 2018, the plaintiffs brought a motion to compel Mann to attend a further examination in aid of execution. The motion record was served personally by process server at Mann’s Mississauga address. Mann did not appear at the motion and Master Short ordered Mann to attend the examination within 30 days of the order. The plaintiffs attempted to serve Mann with the order and a new Notice of Examination at the same Mississauga address a second time, but he appeared to have vacated the address in the intervening weeks.

[5] On April 10, 2018, the plaintiffs brought a motion without notice to vary the order of Master Short to compel Mann to attend the examination in aid within 30 days of service of the order rather than within 30 days of the order itself. The plaintiffs then attempted to serve Mann as they had in the past by attending his next criminal court appearance in Newmarket. However, Mann did not appear at the scheduled court appearance. The plaintiffs later discovered that Mann was scheduled to appear on an unrelated fraud over $5,000 at Old City Hall in Toronto and were able to serve him on May 31, 2018 with the orders of Master Short and Master Abrams and with the Notice of Examination returnable June 22, 2018.

[6] Again, on June 22, 2018, Mann failed to attend the examination in aid.

[7] This motion for contempt was initially brought before Favreau J on August 30, 2018. At that motion, Favreau J was not prepared to make a contempt order without further efforts to serve Mann. She ordered that the motion be adjourned to November 6, at which time Mann could show cause as to why he should not be found in contempt. In advance of November 6, he was to comply with the following: to attend an examination in aid of execution before October 31, 2018 and to comply with providing a full accounting to the plaintiffs by no later than October 31, 2018, pursuant to the order of Justice Dietrich. The motion and endorsement were to be served on Mann by sending a copy to his defence counsel and by making all reasonable efforts to serve him personally.

[8] At this motion, counsel for the moving party has provided the Affidavit of Service outlining the efforts made to serve Mann. Mann failed to attend an examination in aid of execution prior to October 31, 2018 and has not provided the full accounting as first ordered by Justice Dietrich on November 3, 2017.

[9] Counsel further provided three affidavits from his law clerks outlining attempts to serve Mann from August 20 through October 31. There were at least 10 attempts at service either on Mann personally by attending Old City Hall where criminal fraud proceedings were to take place, all of which were unsuccessful due to the fact that Mann did not appear for those criminal proceedings, or on his counsel, Mr. Barry. Through September 26, Mr. Barry and his staff refused to accept service. However, on October 1, after being provided with the order of Favreau J, he confirmed that he had passed all materials to Mann. Finally, on November 1, he responded that he may have to remove himself from the record as he was unable to locate or contact Mann.

[10] Mann was not in attendance at the motion before me to show cause why he should not be found in contempt.

The Issue

[11] In this motion, the issue to be determined is whether, in failing to appear for an examination ordered by Masters Short and Abrams and in failing to comply with the orders of Justice Dietrich, the defendant, Mann, is in contempt of the orders of the court.

Analysis

[12] The three elements for a finding of civil contempt as set forth by the Supreme Court of Canada are as follows:

1. The order alleged to have been breached must state clearly and unequivocally what should be done or not done;
2. The party who breached the order must have had actual knowledge of the order or have been wilfully blind; and
3. The party must have intentionally done the act that the order prohibits or intentionally failed to do the act that the order compels.

[13] In the present case, I am satisfied that the orders of Justice Dietrich, Master Short and Master Abrams all clearly and unequivocally set forth what must be done or not done. I am satisfied that this part of the test is met.

[14] Further, the order of Justice Favreau was equally clear and unequivocal, and reiterated that Mann was to comply with the orders of Justice Dietrich and Masters Short and Abrams. Mann was personally served with the orders of Justice Dietrich and Masters Short and Abrams and, through his criminal counsel, Mr. Barry, was served with the order of Justice Favreau. This was confirmed by Mr. Barry. Mann thus had actual knowledge of the orders in question either because he was personally served or, as regards the order of Justice Favreau, which simply reiterated the first three orders, by having his criminal counsel provide the orders to him. This part of the test is met.

[15] As regards Mann’s intentionally failing to comply with the orders, I am satisfied, in all the circumstances, that this part of the tripartite test is also met.

[16] I find that Mann is in contempt of the orders of this Court.

[17] Mann is to be provided one last opportunity to purge his contempt prior to my imposing a penalty by attending examination in aid of execution by on or before January 15, 2019 and by providing the full accounting as ordered by Justice Dietrich, also by that date. The argument of penalty or punishment is adjourned to a date to be set in the new year.

The Motion to Compel the Attendance of Cathy Huntrods

[18] Ms. Huntrods is the mother of Steven Mann and the director of one of his businesses. The middle initial in his business ZHM stands for “Huntrods”. She is also the registered owner of his Mercedes.

[19] Rule 60.18(2) of the Rules of Civil Procedure permits a non-party to be examined in aid of execution where there is difficulty enforcing an order and the court is satisfied that the person might have knowledge of any of the following matters:

1. The reason for non-payment or non-performance of the order;
2. The debtor’s income and property;
3. The debts owed to and by the debtor;
4. Disposal the debtor has made of any property either before or after the making of the order;
5. The debtor’s present, past and future means to satisfy the order;
6. Whether the debtor intends to obey the order or has any reason for not doing so; and
7. Any other matter pertinent to the enforcement of the order.

[20] I am of the view that Ms. Huntrods will have information pertinent to the enforcement of the order, as she is Mann’s mother and appears to be involved in his businesses. She is listed as a director of one of the businesses and her name appears as the H in the defendant ZHM Group. She is likely to be aware of his finances in general, potentially his assets and likely the finances and assets of his businesses or some thereof. She would also have information about where he could be located to aid the plaintiffs in examining him and enforcing judgment.

[21] I note that in Canadian Imperial Bank of Commerce v Sutton, (1981), 34 O.R.(2d) 482 (Ont. C.A.), the Ontario Court of Appeal permitted the plaintiff to examine the defendant’s sister on the basis that she was a family member which was the one link to the debtor’s business or finances; and see Waxman v Waxman, 2015 ONSC 1353.

[22] In the event that Mann does not comply with my orders as stated above at paragraph 20, and does not appear for his examination in aid of execution on or before January 15, 2019, and does not appear before this Court and attempt to purge his contempt prior to the Court imposing a penalty, I will order that Ms. Huntrods attend for an examination in aid of execution on a date to be selected by counsel for the plaintiff or on a date to be agreed upon by Ms. Huntrods and counsel for the plaintiffs.

[23] In the event that Mann does not comply with my orders at paragraph 20, I am of the view that there is difficulty in enforcing the judgment and that the plaintiff has essentially exhausted the available means to overcome this difficulty, such that the provisions of Rule 60.18(2) are applicable. In this regard, I have taken into account the cases of Blastco Corporation v Pittman Environmental Technologies Inc., (2001), 10 CPC (5th) 106 and CIBC v Sutton, supra, as regards “exhausting all means available”, and Lauzier v Ranger (1995), 41 CPC (3d) 64 and Blastco Corporation v Pittman Environmental Technologies Inc., supra, as regards the definition of “means” which, in the latter case above-mentioned, are only those that one would reasonably be expected to pursue in the circumstances. As stated above, in the event that Mann does not comply with my order, I am satisfied, in all of the circumstances, that the moving party has exhausted all reasonable means available to overcome the difficulty enforcing the judgment and the orders of Justices Dietrich and Favreau, and the orders of Masters Short and Abrams.

[24] The moving party has submitted its bill of costs on both a partial and substantial indemnity basis. In all of the circumstances of this case, and taking into consideration the factors, set forth at Rule 57.01 of the Rules of Civil Procedure, and the reasonableness and proportionality of the costs sought, I exercise my discretion and award costs payable to the moving party plaintiff on a substantial indemnity basis in the amount of $13,039.04, inclusive of HST and disbursements.

Carole J. Brown, J. Date: December 11, 2018