Court File and Parties
COURT FILE NO.: 9140/08 DATE: 2019/01/04
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Pollard Windows Inc. Plaintiff
Santiago H. Costa, for the Plaintiff (Responding Party)
- and -
1736106 Ontario Inc., Andrew Ferri, Niagara Home Builders Inc. carrying on business as Niagara Heritage Homes and Steveco Enterprises Inc. Defendants
Kris Hutton, for the Moving Party 1746878 Ontario Inc.
HEARD at Welland, Ontario: December 11, 2018
The Honourable Justice T. Maddalena
MOTION ENDORSEMENT
[1] This motion was brought by 1746878 Ontario Inc. (hereinafter referred to as “174”) to stay the finding of contempt against it, which contempt is noted in paragraph 6 of the Order of Ramsay J. dated March 21, 2018. Paragraph 6 of the Order of March 21, 2018 states as follows:
THIS COURT FURTHER ORDERS that 1746878 Ontario Inc., is in contempt of court and is ordered to appear before me to decide penalty and sanctions on notice served by the Plaintiff in accordance with the provisions of the Rules of Civil Procedure for notice of a motion. If the plaintiff and 1746878 Ontario Inc. agree, representations on this issue may be made in writing instead.
[2] The aforementioned finding of contempt of 174 is currently pending an appeal before the Divisional Court.
[3] 174 has also appealed the Order of Ramsay J. dated May 23, 2018 wherein a $10,000.00 fine was imposed as a sanction as a result of the finding of contempt. As a result of the Notice of Appeal being filed, the monetary component of the Order of May 23, 2018 is automatically stayed by operation of Rule 63.01(1) of the Rules of Civil Procedure.
[4] The legal test for the granting of a stay pending an appeal is trite law and is outlined in the case of RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311. At pp. 332-33 of the RJR-MacDonald case, the Supreme Court of Canada enunciated the test for the granting of a stay as follows:
- There is a serious issue as to the correctness of the order;
- Compliance will cause irreparable harm;
- The balance of convenience, taking into account the public interest, favours retaining the status quo until the court has disposed of the legal issues.
[5] 174 pleads in this motion that the contempt of court finding is a large blemish now attached to the corporation that forever will tarnish its reputation and credibility in the business and legal community. This, according to 174, continues to cause it irreparable harm.
[6] 174 suggests that this finding of contempt will affect the distribution of funds motion which was scheduled for hearing on the 17th of December 2018.
[7] Further, 174 pleads that it continues to suffer the stigma and the loss of credibility every day that the stay of the contempt is not granted by the court.
[8] I do not agree with the position taken by 174. The monetary payment obligation arising out of the contempt order has already been stayed by virtue of the notice of appeal. Therefore, this leaves a bare finding of contempt. A bare finding of contempt against 174 cannot be enforced. The bare contempt order contains no mandatory or injunctive relief against 174.
[9] Importantly, 174 has admitted to its contempt. Therefore, there is no serious issue to be tried. At the proceedings before Ramsay J. on May 23, 2018, 174 through its counsel admitted its contempt. Page 11, starting at line 24, of the transcript reads as follows:
MR. HUTTON: Thank you, Your Honour. As I’d mentioned before, my client, on behalf of 174, is here. She’s taken the day off from her employment as an elementary school teacher in Niagara Falls to show the court her full and open apology to the finding of contempt made by yourself in your endorsement dated March the 21st, 2018. There are no if, ands or buts about it, we are not here to re-open the case in any form whatsoever. I would like ….
THE COURT: Well, are you not?
MR. HUTTON: No.
THE COURT: Well, then what’s paragraph 6 of her, of her affidavit all about?
MR. HUTTON: Paragraph 6 is her understanding, or out understanding …
THE COURT: Okay.
MR. HUTTON: … of what the material – the facts were that were found to be in contempt by 174.
THE COURT: So she’s a ….
MR. HUTTON: You’re reciting it so we are just apologizing for essentially stating the contempt of registering the caution on title …
THE COURT: I see.
MR. HUTTON: … and then also of your finding, and we will get to that of – I guess once a ….
THE COURT: And she’s admitting that, she’s admitting that the company committed …
MR. HUTTON: Correct.
THE COURT: … contempt?
MR. HUTTON: Correct. We are.
THE COURT: Oh, okay.
MR. HUTTON: Yes, we are.
[10] 174 now pleads that this is not an admission of its contempt but merely its respectful admission to the rule of law.
[11] I do not agree. Firstly, on a clear reading of the ordinary plain English, it is a clear and positive admission of contempt. 174 was not compelled by the court or anyone to admit or apologize to the court, but it did. The apology was completely voluntary and lessened the sanction imposed by the court.
[12] It is clear further from the reasons of Ramsay J. that the admission and apology of 174 have influenced the sanctions. In this regard, the transcript of the proceeding at page 22 has the court, in its ruling, noting as follows:
“ … The director admits guilt of contempt, so perhaps this is not all that important. 174 submits that it has purged its contempt. It has gone some way to undoing the wrong that was done by having the caution lifted, and if it does not do anymore to interfere with the sale and simply comes to court to ask for its share of the proceeds, whatever that share may be, it will be acting as the law expects. I do not think that this goes so far as to excuse the contempt. The course of – it was a course of conduct that lasted for some time. It was dishonest, high-handed and utterly disrespectful of the court and its process. If this were to be the standard operating procedure in commercial affairs, the community would lose much, and the fact that it is not, is to some extent, at least, due to the realization that court orders have to be respected, they can be enforced, and there is a penalty to be paid when they are not enforced.”
[13] There is no irreparable harm to 174. 174 is permitted to come to court and make its claim with respect to the distribution of funds being held in trust. The contempt finding and its appeal is completely separate from any motion that may be pending dealing with the distribution of funds.
[14] I, therefore, conclude that the legal test for a stay of the contempt finding is not met.
[15] Further, in the context of a construction lien action, and more particularly s.67(2) of the Construction Lien Act, R.S.O. 1990, c.30 (now the Construction Act), the motion brought by 174 is not necessary and does not expedite the resolution of issues in dispute. It adds nothing to the issues in dispute.
[16] I, therefore, conclude this motion is unnecessary and does not advance or expedite the construction action.
[17] The plaintiff Pollard Windows further submits that the Superior Court of Justice in Welland does not have jurisdiction to order the relief sought by 174 in this motion.
[18] It relies on Rule 63.02(1) of the Rules of Civil Procedure. It pleads that any such motion should be brought to the judge of the court to which the appeal has been taken.
[19] Pollard argues that it is for the appellate court (Divisional Court in Hamilton) to determine whether a stay should be granted. I do not agree with the position taken by Pollard. This court has inherent jurisdiction to deal with this matter.
[20] Further, s.106 of the Courts of Justice Act, R.S.O. 1990, c.43, states:
Stay of proceedings
A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just. R.S.O. 1990, c. C.43, s. 106.
[21] The plaintiff Pollard Windows further moved before the court that Mr. Andrew Ferri, as director of 174, continues to be in contempt of the Order of Ramsay J. dated March 21, 2018.
[22] Paragraph 3 of the aforementioned Order reads as follows:
“THIS COURT FURTHER ORDERS that Andrew Ferri has no standing in these proceedings and shall take no further part.”
[23] Mr. Ferri in these proceedings admitted initially that he was a “consultant” of 174. It is clear from the affidavit sworn by Andrew Ferri on September 27, 2018, that he was appointed director, president and secretary of 174 on May 10, 2018, thereby replacing his partner/spouse Connie Northdurft as the sole director.
[24] The plaintiff Pollard Windows pleads that Mr. Ferri continues to be in contempt of court by acting as director of 174.
[25] I do not agree with the position of Pollard in this regard.
[26] The Order of Ramsay J. dated March 21, 2018 referenced Mr. Andrew Ferri having no standing and not taking part in these proceedings. The Order does not specifically preclude him from acting as director of 174.
[27] I therefore conclude that the oral motion brought by Pollard for continued contempt by Mr. Ferri is dismissed.
Summary of Orders Made
[28] The following orders are made:
- The motion brought by 17436106 Ontario Inc. for a stay of the contempt is dismissed.
- The oral motion brought by Pollard Windows Inc. moving for ongoing and further contempt of Mr. Ferri is dismissed.
Costs
[29] Costs submissions shall be made in writing, limited to two pages double-spaced, plus any applicable offers to settle, plus a bill of costs. The plaintiff shall serve and file written costs submissions by January 15, 2019. 1746878 Ontario Inc. shall serve and file written costs submissions by January 24, 2019. No reply is permitted and no extensions shall be granted. Submissions are to be forwarded to 102 East Main Street, Welland ON L3B 3W6. Any submissions received outside of the specified timeframe shall not be considered.
Maddalena J.
Released: January 4, 2019