Court File and Parties
Oshawa Court File No.: CV-17-2965-00 Date: 2019-02-27 Ontario Superior Court of Justice
Between: Fourteen Estates Limited and Shawn Rondeau, Plaintiffs/Moving Party And: Ramin Mesgarlou, Respondent
Counsel: Melissa Seal, for the Plaintiffs/Moving Party Jock Climie, for the Respondent
Heard: February 7, 2019
Reasons for Decision
DE SA J.
Overview
[1] The Plaintiffs/Moving Party have moved to have the Defendant found in Contempt and seek an order that the Defendant’s statement of defence be struck and that the Defendant be required to pay the Plaintiffs a fine, damages and costs. The Plaintiffs allege that the Defendant breached the terms of an interim order (the “Order) by making statements in a private chat group in contravention of the terms of that Order.
[2] The Defendant takes the position that the Plaintiffs have breached the implied undertaking rule by relying on these posts in a proceeding other than the proceeding in which the information was obtained and accordingly the Plaintiffs should not be permitted to rely on them. They also take the position that the postings are not in contravention of the Order.
[3] While I will grant the Plaintiffs leave to rely on the postings, I agree with the Defendant that the postings were not in contravention of the Order. Accordingly, the motion is dismissed.
[4] The reasons for my decision are outlined in detail below.
Summary of Facts
The Injunction Motion
[5] The Defendant’s online public postings are the subject matter of the main action. The Defendant is alleged by his defamatory postings to have caused irreparable harm to the Plaintiffs’ business as general contractors, developers and builders of upscale residential communities in the Greater Toronto Area.
[6] In the context of the main action, the Plaintiffs brought a motion, returnable on December 8, 2017, seeking injunctive relief against the Defendant (the “Injunction Motion”).
[7] The Injunction Motion was heard on December 21, 2017. After brief submissions, Justice Corkery requested that the parties work out an order on consent. Justice Corkery endorsed a consent order which stipulated that the Defendant shall not publish, directly or indirectly, on the internet or any other mediums, any further statements concerning the Plaintiffs, save and except those expressly permitted pursuant to the Order.
[8] The Order contains two appendices which specifically include the nature of the remarks the Defendant is permitted to post (the “Appendices”). The Appendices permitted the Defendant to post his own personal experiences regarding his dealings with the Plaintiffs. He was not permitted, however, to post comments that were clearly defamatory or that could be construed to comment more generally on the integrity of the Plaintiffs.
[9] Seven days following the Order being granted, on December 28, 2017, the Defendant posted in a Facebook group. The post was made by the Defendant in a closed Facebook group entitled “Fourteen Estates – Customers Experiences - Chat Group” (the “Chat Group”). The “Post” read as follows:
UPDATE ON THE INJUNCTION HEARING…
So we were in court and Shawn and his lawyer were also there. Fourteen Mistake lawyer got up and blabbed on for 20 minutes with pure lies and fabrications that my lawyers could not believe a lawyer would do . My lawyer didn’t even get to present and the opening arguments at all because I think the judge had read both affidavits and wasn’t going to waste time on this.
..I refused to give them what they wanted but grant some things to show to the Judge that we are reasonable because everything I wrote. They spend over $20,000 on this injunction… surely they knew the percentage of winning was low from their lawyers so as I always said ITS ALL POSTURING to scare and wear down what I perceive to be their victims . Looking forward to the main battle…
As for other cases here, it’s not pleasant BUT you are fortunate that this is happening now and you are in this chat group. You are hugely benefiting from Mandy and I as Fourteen is way too swamped with our cases to stick to what is RIGHT and don’t give in to pressure. …I always say, every dog has its day and Fourteen days are here. After what happened in injunction court hearing, I highly doubt that Fourteen will try it again with Mandy and I expect that case against Mandy will be dropped.
[10] The Plaintiffs are pursuing the moderator of the Chat Group in a different action for defamation in relation to various posts made in the Chat Group. The defendant of that other action was required to disclose the posts of the Chat Group as part of its own production obligations. The Post came to the Plaintiffs’ attention because it was provided to the Plaintiffs’ counsel as part of Schedule “A” of the Affidavit of Documents in that other action.
[11] The Plaintiffs’ Statement of Claim in this action also alleges that the Defendant was working in concert with Mandy Jensen (the defendant in the other action) by using the Chat Group to defame the Plaintiffs.
[12] The Post has not been disclosed in the action herein as the parties have yet to exchange their Affidavits of Documents.
[13] On June 12, 2018, Plaintiffs’ counsel wrote to the Defendant via counsel requesting that the Post be removed from the Chat Group because it was in breach of the Order. The Defendant removed the Post immediately.
[14] The Plaintiffs have now brought the motion herein for Contempt in relation to the Post.
Analysis
Did the Plaintiffs breach the Implied Undertaking Rule by relying on the Post in a different proceeding?
Rationale for the Implied Undertaking Rule
[15] The root of the implied undertaking is the statutory compulsion to participate fully in pre-trial oral and documentary discovery. A litigant who has some assurance that the documents and answers will not be used for a purpose collateral or ulterior to the proceedings in which they are demanded will be encouraged to provide a more complete and candid discovery.
[16] For good reason, therefore, the law imposes on the parties to civil litigation an undertaking to the court not to use the documents or answers for any purpose other than securing justice in the civil proceedings in which the answers were compelled, whether or not such documents or answers were in their origin confidential or incriminatory in nature.
[17] In Doucette (Litigation Guardian of) v. Wee Watch Day Care, 2008 SCC 8, the Supreme Court explained the importance of the rule. The Court commented at para. 25:
The public interest in getting at the truth in a civil action outweighs the examinee’s privacy interest, but the latter is nevertheless entitled to a measure of protection. The answers and documents are compelled by statute solely for the purpose of the civil action and the law thus requires that the invasion of privacy should generally be limited to the level of disclosure necessary to satisfy that purpose and that purpose alone . Although the present case involves the issue of self-incrimination of the appellant, that element is not a necessary requirement for protection. Indeed, the disclosed information need not even satisfy the legal requirements of confidentiality set out in Slavutych v. Baker, [1976] 1 S. C.R. 254 . The general idea, metaphorically speaking, is that whatever is disclosed in the discovery room stays in the discovery room unless eventually revealed in the courtroom or disclosed by judicial order. [emphasis added]
[18] As explained in Doucette, a breach of the undertaking may be remedied by a variety of means including a stay or dismissal of the proceeding, or striking a defence, or, in the absence of a less drastic remedy, contempt proceedings for breach of the undertaking owed to the court.
Seeking leave to Use information for Other Purposes: Rule 30.1.01
[19] A party bound by the undertaking may apply to the court for leave to use the information or documents otherwise than in the action, specifying the purposes of using the information and the reasons why it is justified, and both sides will have to be heard on the application. Rule 30.1.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”).
[20] An application to modify or relieve against an implied undertaking requires an applicant to demonstrate to the court on a balance of probabilities the existence of a public interest of greater weight than the values the implied undertaking is designed to protect, namely privacy and the efficient conduct of civil litigation.
[21] If satisfied that the interest of justice outweighs any prejudice that would result to a party who disclosed evidence, the court may order that subrule (3) of Rule 30.1.01 does not apply to the evidence or to information obtained from it, and may impose such terms and give such directions as are just. O. Reg. 61/96, s. 2; O. Reg. 263/03, s. 3.
Application to the Facts of this Case
[22] The Defendant takes the position that the Plaintiffs and their counsel are prevented from obtaining the relief sought because they have used documentation obtained through discovery in another proceeding for purposes other than those of the proceeding in which the evidence was obtained in breach of the implied undertaking rule.
[23] I agree with the Defendant that the Posts are subject to the implied undertaking rule. I also agree that leave is required to be permitted to use the documentation in this proceeding.
[24] The Plaintiffs, as part of their motion, have applied for leave, if necessary, to rely on material obtained from a different proceeding. In my view, there is a compelling basis to provide leave to rely on the documentation in the context of the proceeding for the following reasons:
- The documentation will also be produced in the context of this action in the ordinary course.
- Given that it forms the basis for an alleged contempt, there is a compelling public interest in the evidence being considered by the court.
- There is no meaningful prejudice to the party which disclosed the information in the circumstances.
[25] Accordingly, I will grant the Plaintiffs leave to rely on the documentation obtained through discovery in another proceeding in this proceeding for the purposes of the Contempt motion.
Is the Defendant in Contempt of the Order
[26] Rule 60.11 of the Rules of Civil Procedure provides:
60.11 (1) A contempt order to enforce an order requiring a person to do an act, other than the payment of money, or to abstain from doing an act, may be obtained only on motion to a judge in the proceeding in which the order to be enforced was made.
[27] The power to punish for contempt of court is an integral part of the inherent powers of the courts (see Canadian Broadcasting Corp., supra), and as such it constitutes an essential element in the proper administration of justice: Day v. Thomas, 2018 ONSC 7029.
[28] The gravity of a contempt order is underscored by the criminal law protections afforded to the person against whom such an order is sought. The significance of a contempt order is also evident from the sanctions potentially faced by the offender. In Canada, an individual in contempt of court can be committed to jail (see Rule 60.11 of the Rules of Civil Procedure) or may face the imposition of any other sanction available for a criminal offence, such as a fine or community service: Westfair Foods Ltd. v. Naherny (1990), 63 Man. R. (2d) 238 (C.A.). Thus, both the process used to issue a declaration of contempt and the sanction bear the imprint of criminal law. Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52, [2006] 2 S.C.R. 612, at para 35.
[29] The three constituent elements of the test for civil contempt were summarized in Prescott-Russell Services for Children and Adults v. G. (N.), 82 O.R. (3d) 686, [2006] O.J. No. 2488 (C.A.), at para. 27:
The criteria applicable to a contempt of court conclusion are settled law. A three-pronged test is required. First, the order that was breached must state clearly and unequivocally what should and should not be done. Secondly, the party who disobeys the order must do so deliberately and wilfully . Thirdly, the evidence must show contempt beyond a reasonable doubt. Any doubt must clearly be resolved in favour of the person or entity alleged to have breached the order. (Citations omitted) [emphasis added]
[30] In relation to the first of these elements, it must be clear to a party exactly what must be done to be in compliance with the terms of an order: Pro Swing, at para. 24. As the Court of Appeal explained in Bell ExpressVu v. Torroni, infra, at para. 24:
The strength of a finding of deliberate disobedience of an order weakens progressively with the lack of clarity in the terms of the order against which the disobedience must be measured.
[31] In relation to the second element, the party alleged to have breached the order must have actual knowledge of the order. The party allegedly in breach must have intentionally done the act that the order prohibits or intentionally failed to do the act that the order compels. Carey v. Laiken, 2015 SCC 17, at paras. 33-35.
[32] While the contemptuous act must be intentional, contumacious intent is not required to establish contempt. All that is required to establish civil contempt is proof beyond a reasonable doubt of an intentional act or omission that is in fact in breach of a clear court order of which the alleged contemnor has notice. As explained in Carey v. Laiken, supra, at para. 42:
As I have already discussed, requiring contumacious intent would open the door to mistakes of law providing a defence to an allegation of civil contempt. It could permit an alleged contemnor to rely on a misinterpretation of a clear order to avoid a contempt finding, which would significantly undermine the authority of court orders.
[33] The requirement of proof beyond a reasonable doubt ensures that the potential penal consequences of a finding of contempt are not ordered lightly: Bell ExpressVu Limited Partnership v. Torroni, 2009 ONCA 85, at para. 20.
[34] The contempt power is discretionary and courts have consistently discouraged its routine use to obtain compliance with court orders: see e.g. Hefkey v. Hefkey, 2013 ONCA 44, at para. 3. Generally speaking, a civil contempt remedy is one of last resort. It should not be sought or granted in cases where other adequate remedies are available to the allegedly aggrieved party.
[35] Where the impugned conduct is not directed at defying the court’s authority, the goal should be to ensure compliance. Hefkey v Hefkey, supra.: Morrow, Power v. Newfoundland Telephone Co. (1994), 121 Nfld. & P.E.I. R., 334 (Nfld. C.A.) at para. 20.
[36] A judge on motion may, instead of or in addition to making a contempt order, order the act to be done, at the expense of the disobedient person, by the party enforcing the order or any other person appointed by the judge. Rule 60.11 (9) of the Rules of Civil Procedure.
Application to the Facts of this Case
[37] The Defendant submits that this case in not one deserving of a finding of Contempt, even if this court finds that the three elements of the test have been met. First, the Defendant has expressed his regret for breaching the terms of the Order, even if it was done so unintentionally. Second, the Defendant did not fully understand the terms of the Order, had no intention to breach it, and as soon as he learned of the concerns of the other parties, he removed the Post at issue.
[38] The Defendant further submits that the Plaintiffs are using this contempt motion as a tactic to enforce the Order and as an attempt to extract a personal apology, damages and other remedies from the Defendant. With respect to enforcement of the Order, the Defendant submits that the evidence shows that the Plaintiffs’ tactic is unnecessary to cause him to comply with the Order moving forward. The purpose of sentencing in contempt cases is to “repair the depreciation of the authority of the court” not to obtain direct remedies, financial or otherwise from the offending party.
[39] In the circumstances of this case, I would agree with the Defendant that a finding of Contempt is unwarranted.
[40] First of all, in my view, the conduct of the Defendant is not clearly in breach of the Order. The Order provides that the Defendant shall not publish, directly or indirectly, on the internet or any other medium, any statements concerning the Plaintiffs apart from statements listed in the Appendices. The general purpose of the Order is to limit the Defendant from posting remarks that are obviously scandalous or directed at publicly defaming the Plaintiffs. At the same time, it is designed to permit the Defendant to post remarks pertaining to his experience/opinion with the Plaintiffs’ work in a public forum.
[41] In this case, the impugned remarks are not obviously defamatory, or intentionally harmful in nature. Moreover, they were posted in a private Chat Group which was not meant to be viewed by the public at large.
[42] I understand the Plaintiffs’ complaint that the members who are permitted to join the Chat Group are part of a small group of potential customers for the Plaintiffs, and accordingly, by posting negative comments in the Chat Group, the Defendant is causing direct harm to the Plaintiffs. While I recognize this concern, in my view, that issue is more properly addressed by way of damages in the main action.
[43] I also disagree with the Plaintiffs that the purpose of the Order is to completely restrict the Defendant from making any comments beyond what is specifically contained in the Appendices. Rather, I view the Order as directed at restricting the Defendant from communications/postings that are obviously defamatory in nature.
[44] The interpretation suggested by the Plaintiffs is at odds with much of the jurisprudence limiting the availability of interim injunctions of this sort which have the risk of unduly limiting free expression. In the light of the sovereign jurisdiction of the jury to determine the issue of defamation, a fairly stringent rule was developed early in the history of the law concerning the granting of interim injunctions restraining the publication of alleged defamatory material until the trial of the action.
[45] In the decision of Canada Metal Co. Ltd., v. Canadian Broadcasting Corp., (1975), 7 O.R. (2d) 261, 55 D.L.R. (3d) 42, Stark J., delivering the reasons of the Divisional Court said at pp. 261-62:
The granting of injunctions to restrain publication of alleged libels is an exceptional remedy granted only in the rarest and clearest of cases. That reluctance to restrict in advance publication of words spoken or written is founded, of course, on the necessity under our democratic system to protect free speech and unimpeded expression of opinion. The exceptions to this rule are extremely rare.
For at least one hundred years and certainly since the leading cases of William Coulson & Sons v. James Coulson & Co. (1887), 3 T.L.R. 846, and Collard v. Marshall, [1892] 1 Ch. 571, and perhaps above all, in the leading case of Bonnard v. Perryman, [1891] 2 Ch. 269, it has been universally and consistently held by British and Canadian Courts that such an interim injunction will never be granted where the defendant expresses his intention to justify unless the words in question are so clearly defamatory and so obviously impossible to justify that the verdict of a jury accepting a plea of justification as a defence would of necessity have to be set aside as a perverse finding on appeal. [emphasis added]
[46] An interim injunction should only issue where the words complained of are so manifestly defamatory that any jury verdict to the contrary would be considered perverse by the Court of Appeal. Rosemond Estates Inc. et al. v. Levy et al., 65 O.R. (3d) 79, [2003] O.J. No. 1748; Rapp v. McClelland & Stewart Ltd. (1981), 34 O.R. (2d) 452, 128 D.L.R. (3d) 650 (S.C.) per Griffiths J. at p. 455 O.R..
[47] In his treatise Injunctions and Specific Performance (2nd ed. 1992 (loose-leaf)), Robert Sharpe says the following, at paras. 5.40-5.70 (pp. 5.2-5.4):
There is a significant public interest in the free and uncensored circulation of information and the important principle of freedom of the press to be safeguarded.
The well-established rule is that an interlocutory injunction will not be granted where the defendant indicates an intention to justify [i.e. prove the truth of] the statements complained of, unless the plaintiff is able to satisfy the court at the interlocutory stage that the words are both clearly defamatory and impossible to justify.
[48] In light of the prevailing jurisprudence, in my view, the Order should be narrowly construed.
[49] Even if the Defendant’s Post was in breach of the Order, his actions in removing the Post demonstrate an intention to purge the breach and bring his actions in compliance with the Order. Accordingly, I agree with the Defendant that a finding of Contempt is not warranted in this case.
[50] In light of the above, I dismiss the Plaintiffs’ motion for Contempt.
[51] In the particular circumstances of this case, each party will bear its own costs.
Justice C.F. de Sa Released: February 27, 2019