Court File and Parties

COURT FILE NO.: CV-18-596718 DATE: 2019-02-20 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: AGNES CHAITAS, Applicant AND: BRIAN GREASLEY, Respondent

BEFORE: Sossin J.

COUNSEL: John Polyzogopoulos, Counsel for the Applicant Michael Carlson, Counsel for the Respondent

HEARD: February 13, 2019

Endorsement

Overview

[1] The applicant, Agnes Chaitas (“Chaitas”), brings a motion for contempt against the respondent, Brian Greasley (“Greasley”). Chaitas also seeks costs for the entire application and this motion on a full indemnity basis.

[2] Chaitas, a real estate agent and Greasley, then a real estate lawyer, were co-owners of two condominium units. As their relationship deteriorated, the parties disputed issues relating to the units and other financial arrangements. Chaitas brought an application for an order for the sale of the condominium units. The notice of application for partition and sale of the two units was issued on April 26, 2018.

[3] Following settlement negotiations, Justice Allen issued consent orders dated July 12, 2018 (the “Orders”), which stipulated particular timelines which the parties agreed to abide by, and related arrangements for the listing and sale of the units. The units in question were sold on November 14, 2018, and the parties agreed to a distribution of proceeds from the sale of the units.

[4] This motion relates to allegations by Chaitas that Greasley failed to comply with the Orders after July, 2018. Chaitas alleges that (i) Greasley did not take the steps required in the Orders to facilitate the sale of the units within 7 days, and (ii) did not deposit all revenues from the units into a trust account of the designated law firm, as required by the Orders.

[5] For the reasons that follow, I dismiss Chaitas’ motion for contempt. I award costs for the application to Chaitas, though not on a full indemnity basis.

Analysis

[6] This motion raises two issues. First, I must decide whether Greasley is in contempt of the Orders. Second, I must decide the issue of costs for the overall application (including this motion).

Contempt

[7] This motion is brought under Rule 60.11 of the Rules of Civil Procedure R.R.O. 1990, Reg 194. The test for civil contempt was set out in Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79, at paras. 32-35 (“Carey”):

a. The order alleged to have been breached states clearly and unequivocally what should and should not have been done; b. The party alleged to have breached the order had actual knowledge of it; and, c. The party allegedly in breach intentionally failed to do the act the order compels.

[8] The standard of proof to establish civil contempt is “beyond a reasonable doubt,” (Prescott-Russell Services for Children and Adults v. G. (N.) et al. (2007), 82 O.R. (3d) 686 (C.A.), at para. 27).

[9] Contempt proceedings are bifurcated so that if a finding of contempt is made, a second sentencing stage for the party in contempt will be appropriate (Carey, at para. 18).

[10] In Carey, Cromwell J. described a court’s contempt power in civil litigation settings (at para. 36),

The contempt power is discretionary and courts have consistently discouraged its routine use to obtain compliance with court orders …As this Court has affirmed, contempt of court cannot be reduced to a mere means of enforcing judgments” … Rather, it should be used “cautiously and with great restraint”: … It is an enforcement power of last rather than first resort.

[11] Cromwell J. confirmed that a mental element or intent is not relevant to the initial determination of whether a party is in contempt, though it may play a role in the second stage of a contempt proceeding, dealing with the sentencing of a party in contempt.

[12] Cromwell J. also confirmed that contempt remains available as a remedy to address non-compliance with a court order even where a party is no longer able to purge the contempt, either because the act that constituted the contempt cannot be undone or because a conflicting legal duty prevents compliance with the order, However, in Carey, the Court considered a context where the party’s own actions made compliance with the court order impossible (in that case, having expended funds that were to be held in trust pursuant to a Mareva order).

[13] The alleged contempt in this case involved non-compliance with the Orders made by Justice Allen generally, and specifically (i) time lines of seven days set out in those orders to facilitate the listing of the units, and (ii) an order to share revenue generated from the rental of the condominium units pending their sale. In this case, the question relevant to contempt is not the inability or unwillingness of Greasley to comply with the court orders at this stage, but rather that the Orders are moot pursuant to an agreement between the parties, resulting in the sale of the units and distribution of the proceeds.

[14] Chaitas submitted that contempt is appropriate notwithstanding the agreement between the parties which brings this application to an end, in order for there to be some accountability for Greasley’s conduct. Chaitas alleges that Greasley engaged in unnecessary delay tactics in responding to Chaitas and raised specious issues, which together had the effect of increasing the length and cost of the litigation.

[15] Greasley submits that with the litigation all but over, this motion is designed solely to punish him.

[16] With respect to the first prong of the contempt allegations, that Greasley failed to take the steps necessary to facilitate the listing of the property within seven days, as set out in the Orders, Greasley asserts that Chaitas only provided the listing agreements for him to sign in October, 2018, which was long after the deadline set out in the Orders. Greasley argues, in other words, that both parties agreed to step outside the terms of the Orders.

[17] Greasley further submits that the second prong of the Orders on which contempt is alleged, regarding the deposit of rental revenues from the units, was ambiguous. Justice Allen ordered that “all revenues generated with respect to the units” were to be deposited into the trust account of a law firm designated in the order. Greasley asserts that net revenues were deposited as the meaning of “all revenues” did not specify whether gross revenues or net revenues were intended. While I am satisfied that the Orders, by indicating all revenues were to be deposited, likely meant gross revenues, the record nonetheless supports at least partial compliance with this aspect of the Orders.

[18] Chaitas alleges that Greasley also has engaged in egregious conduct over the course of the application, including raising specious issues and fabricating evidence, such as falsely asserting illness during material times when he failed to respond to the timelines in the Orders, and threatening Chaitas with a complaint to the Real Estate Council of Ontario, the regulator of realtors in Ontario. Greasley conceded that he was mistaken in his earlier statement that he was ill as an excuse for not responding to Chaitas’ requests for compliance with the orders. In light of the competing accounts for the conduct of the parties evident in the record, I am not satisfied that the record discloses false evidence or groundless threats on the part of Greasley.

[19] For these reasons, I am not satisfied beyond a reasonable doubt that the test for contempt is established on the facts of this case. Consequently, I find that this is not an appropriate case for contempt.

Costs

[20] There is a rebuttable presumption that the successful party on a contempt motion is entitled to costs on a substantial indemnity basis, and where the party’s conduct is especially egregious, full indemnity costs may be appropriate: see Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766.

[21] As I have found contempt is not appropriate in this matter, I am left with the question of appropriate costs for the application as a whole, which is now at an end. Chaitas seeks costs on a full indemnification basis, for a total of approximately $60,000.00.

[22] Chaitas brought an application for the sale of the units on April 26, 2018. The parties reached an agreement to sell the units and the Orders to facilitate the sale were issued on July 12, 2018. The units were sold in November, 2018, with a further agreement to distribute the proceeds of the sale.

[23] I am satisfied that Chaitas is entitled to costs for the application as a whole. In determining the costs award, I distinguish between three distinct periods of this litigation.

(i) The Period Between the Application and the Orders

[24] For the period involving the April, 2018 application for partition and sale, and leading up to the July, 2018 Orders, I find partial indemnity costs are appropriate. While there are competing accounts for why the application was necessary and why the parties exhibited a degree of acrimony in the conduct of the application, I do not find a basis for a higher scale of costs in the record.

(ii) The Period Following the Orders

[25] For the period following the Orders, however, steps taken by Chaitas to enforce the Orders and secure compliance, as reflected in the correspondence from Chaitas dated July 17, 2018, July 25, 2018 and August 1, 2018, should not have been necessary. The correspondence of September 10, 2018 from Chaitas’ counsel to Greasley’s counsel summarizes that, “Notwithstanding that I have repeatedly followed up with you to request confirmation that you client has complied with the terms of the Order, I have received no information from you.” This letter concluded with notice that if no response was forthcoming, the assistance of the court would be necessary to enforce the terms of the Orders.

[26] Greasley followed a pattern of delay and non-response after the Orders of July, 2018 and until the signing of the listing agreements in October, 2018, for which no sufficient justification was provided. The listing agreement was signed on October 12, 2018, two days after Greasley was served with the notice of motion for this proceeding.

[27] I find costs on a substantial indemnity scale in favour of Chaitas are appropriate for the period up to and including the materials filed in support of the notice of motion dated October 10, 2018.

(iii) The Period of the Contempt Motion

[28] I am not satisfied that the motion for contempt was necessary to pursue after the listing agreement was signed in October, 2018, and it appears even less justified after the units were sold in November, 2018. At that point, negotiations to address the question of costs should have followed, with a motion, if needed, solely to resolve any remaining dispute on that question. While some background in the form of a motion record may have been required to address costs, the extent of preparation for this motion for contempt goes well beyond what was necessary to resolve a disagreement about the scale and quantum of costs.

[29] As the motion for contempt is dismissed, I find costs for this motion on a partial indemnity basis in favour of Greasley to be appropriate, and I would reduce the costs to which Chaitas is entitled during this period of the application.

Conclusion

[30] In the result, with these variations to the quantum of costs at each phase of the litigation in mind, I order Greasley to pay to Chaitas all-inclusive costs for the application of $35,000.00 within 30 days of this order.

Sossin J. Released: February 20, 2019