Court File and Parties

COURT FILE NO.: 20-CV-82608 DATE: 09/07/2020 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

BRUCE BORER and ANISE ODEH Plaintiffs – and – ROBERT NELSON, RUTH NELSON and JACK NELSON Defendants

Counsel: Douglas Cunningham for Anise Odeh Bruce Borer – Self-represented Defendants - Self-represented

Heard: June 30 and July 3, 2020

AMENDED JUDGMENT ON MOTION FOR CONTEMPT

The text of the original judgment was amended on July 9, 2020 and the description of the amendment is appended

S. GOMERY J.

[1] The plaintiff Anise Odeh asks the court to find the defendant Robert Nelson (“Robert”) in contempt because he has failed to comply with court orders to disclose information and records. These orders included a Mareva injunction. Robert argues that he has been prevented from complying with the orders for a variety of reasons, but chiefly because his employer, TD/MBNA, has not authorized him to disclose its corporate documents and records.

[2] The other plaintiff, Bruce Borer, supports the contempt motion.

[3] The other defendants, Robert’s parents Jack Nelson (“Jack”) and Ruth Nelson (“Ruth”), support Robert’s position.

[4] In this judgment, I will determine if Robert is in contempt. If he is, I will set a hearing date for submissions on appropriate sanctions for the contempt.

The test for contempt

[5] To find Robert in contempt, I must reach three conclusions: [1]

(1) Robert breached an order or orders that stated clearly and unequivocally what he must do;

(2) He disobeyed the order(s) deliberately and willfully; and

(3) The evidence leaves me with no reasonable doubt that Robert is liable for contempt.

The orders at issue

[6] On March 10, 2020, I issued a Mareva order without prior notice to the defendants. In seeking the order, the plaintiffs alleged that they advanced about $2.8 million to Robert over several years. The defendants had represented to the plaintiffs that, as a senior TD/MBNA employee, Robert had access to a lucrative investment opportunity known as the Employee Profit Sharing Plan (the “EPSP”). After the promised returns from the EPSP failed to materialize, the plaintiffs became suspicious and hired a lawyer. In October 2019, this lawyer wrote to the legal department at TD Bank and was advised that there was no “special fund” as described by Robert, and no record indicating that Robert was or had been an employee of TD or MBNA in Canada over the preceding five years. This, along with other information obtained, led the plaintiffs to begin this action and seek a Mareva order.

[7] Paragraph 3 of the Mareva order required each of the defendants, including Robert, to “prepare and provide to the Plaintiffs within ten (10) days, a sworn statement describing the nature, value, and location of his or her assets worldwide, whether or not such assets are registered in his or her own name and whether or not such assets are solely or jointly owned”. On March 11, the Mareva order was served on the defendants.

[8] On March 20, the parties attended a case conference by telephone. Jack and Ruth advised that they were having trouble arranging to have an affidavit sworn in response to the Mareva order due to the Covid-19 pandemic. In my March 20 endorsement, I set out, in plain language, what the defendants were required to do:

Further to the existing Mareva order, I direct the defendants to immediately disclose all bank accounts and other assets to the plaintiffs. This includes any account used for day to day banking. If the defendants cannot get an affidavit sworn, they must still comply with the order by at the very least providing an unsworn statement to the plaintiffs. [Emphasis in the original.]

[9] On May 15, 2020, the plaintiffs returned before me seeking further disclosure in preparation for cross-examinations of the defendants on their affidavits. The plaintiffs’ counsel had included a long list of records in each of the notices of examination served on the defendants, which he wanted to have in hand in advance of the examinations.

[10] In my May 15 endorsement, I concluded that the plaintiffs were entitled to records that would confirm that the defendants had any interest in assets or funds, and records showing that Robert was or is employed by TD/MBNA, given his claim that the bank held significant funds in relation to his employment. I accordingly ordered Robert to produce, within the next ten days, records listed at ten numbered paragraphs in the notice of examination that had been served on him. For further clarity, I ordered the plaintiffs’ counsel to prepare and serve fresh notices of examination that listed only those records that I had ordered the defendants to produce in advance of their examinations.

[11] The defendants agreed at the time that they could produce the records in ten days. Despite this, on May 27, 2020, they sought an extension of the May 25 deadline for the disclosure ordered on May 15. They said that they had been unable to obtain copies of many records due to restrictions arising from the Covid-19 health emergency. In my May 27 endorsement, I noted that the defendants had failed to comply with past disclosure orders and had not filed any evidence supporting their explanations for their non-compliance. I further noted that some of the excuses they had presented for non-disclosure were “frankly implausible”. My endorsement concluded as follows:

I am giving the defendants a final opportunity to comply with the May 15 order, failing which the plaintiffs may seek appropriate remedies.

I hereby order that:

(i) The defendants shall deliver to Mr. Cunningham, by email, a copy of all records listed in the May 20, 2020 notices of examination that they currently have in their possession by no later than 16h00 on May 28, 2020. If Robert Nelson currently has none of these records in his possession, he must send an email to Mr. Cunningham by May 28, 2020 at 16h00 stating this.

(ii) The defendants shall deliver to Mr. Cunningham, by email, a copy of all remaining records listed on the notices of examination by June 3, 2020 at 16h00. In the accompanying email, they shall describe the steps they have taken to obtain these records.

[12] The ultimate deadline for June 3 was set based on the defendants’ assurances that this would give them enough time to obtain the records at issue.

(1) Has Robert breached court orders?

[13] I find that Robert has breached multiple court orders that clearly and unequivocally required him to disclose information and records with respect to his assets.

[14] In his cross-examination on June 19, 2020, Robert admitted that he has received at least $2.7 million from the plaintiffs. He has been ordered four times – in the March 10 Mareva order, and in endorsements issued on March 20, May 15 and May 27 – to deliver information and records that would allow the plaintiffs to understand what happened to that money. Robert has produced nothing in response, or at least nothing meaningful.

[15] On March 21, 2020, Robert delivered an affidavit that purportedly listed his assets, as required in paragraph 3 of the Mareva order. In his affidavit, Robert stated that:

(i) He has furniture and personal effects worth about $500.

(ii) He has no bank accounts currently open.

(iii) Between 2012 and 2015, he purchased EPSP “payouts” from TD bank in the amount of $2,488,415 on behalf of the Nelson and Borer family. During this same period, he paid TD bank $822,199.05 in taxes levied by the CRA, including “Income Tax, EPSP tax, Specialty tax, Capital Gains and Admin. fees”.

(iv) TD owes him a total of about $546,574.18 in unpaid salary and other amounts owed, that it was holding in trust for him. He stated that, since May 20, 2016, the bank had withheld his salary or offset it against various “unsubstantiated fees”, although he had received three “pays” in cash from the bank in 2016.

[16] I find that Robert’s March 21 affidavit did not comply with the clear and unequivocal requirement in the Mareva order and the March 20 endorsement that Robert disclose his assets “whether or not such assets are registered in his or her own name and whether or not such assets are solely or jointly owned”. Even though Robert affirmed that he had “payouts” worth almost $2.5 million in the alleged EPSP, his affidavit did not provide any meaningful information about them, such as an account number or account location; the form of the investment or the terms on which it would be repaid; or whether the “payouts” were held under his own name or in the plaintiffs’ names.

[17] Robert attached two spreadsheets that purported to list the payments that he made to the EPSP and the taxes he paid on the funds. As he admitted during cross-examination, he and Jack created these spreadsheets. They do not provide any further insight into the location or nature of Robert’s current assets.

[18] I find that Robert has furthermore not complied with orders on May 15 and 27 that clearly and unequivocally required him to deliver records that would substantiate his assertions that the plaintiffs’ money was invested in the EPSP or that such a fund even exists or that he works for TD/MBNA. Beyond the spreadsheets I have already mentioned, Robert has produced no records whatsoever.

[19] I conclude that the first element of the test for contempt is proved.

(2) Did Robert disobey the orders willfully and deliberately?

[20] I find that Robert has willfully and deliberately disobeyed the court’s orders.

[21] Robert has offered various excuses for his failure to comply. His main excuse has been that he cannot disclose records kept at TD/MBNA without either a court order or authorization from unspecified individuals at the bank.

[22] In his March 21 affidavit, Robert stated that he had receipts for $488,700 owed to him by TD/MBNA in his office at MBNA, but:

due to TD confidentiality rules will require a court order to have them removed from the building. My pay, refunds and reimbursement requirements are also listed on my HR file printout which is also controlled by the same confidentiality rules. I will pursue release of these documents.

[23] In a June 8, 2020 letter to the court signed by all three defendants, Robert again asserted that he could not obtain relevant records from TD/MBNA in the absence of a court order:

Due to our financial situation we have not been able to secure legal representation and therefore have no way of obtaining a Court Order for the release of these documents from MBNA.

[24] The problem with this argument is that the court has already in fact issued an order for release of records of Robert’s accounts at the bank. It issued the Mareva order on March 10. Pursuant to paragraph 6 of the Mareva order, three banks, including TD, were required to disclose and deliver to the plaintiffs:

Any and all records held by the Banks concerning each Defendant’s assets and/or accounts, including the existence, nature, value and location of any monies or assets or credit, wherever situate, held on behalf of each of the Defendants by the Banks, whether such monies, assets, or credit are in the sole name of each Defendants or jointly with one or more of the other Defendants

[25] TD was served with the Mareva order the same day it was issued. Its response indicates that the reason why Robert has not been able to produce records from the bank is not because the bank has refused to disclose them. The reason is that no such records exist.

[26] On March 13, 2020, Ivana Matic, an officer with TD, sent the plaintiffs’ counsel a letter stating that, “as per paragraph #6 of the order, we are providing the following account information… .”. She went on to list six accounts jointly or solely controlled by Ruth and four jointly or solely controlled by Jack. With respect to Robert, Ms. Matic stated that, based on the records retained for the preceding seven years, he did not have any account of any type with TD.

[27] Ms. Matic’s letter is consistent with other correspondence from TD’s legal department. As mentioned at the beginning of these reasons, the plaintiffs’ lawyer wrote to TD last year to inquire about the EPSP. In her October 21, 2019 response, Teresa Walsh, Managing Counsel of the TD Bank Group, flatly denied the existence of such a special fund at TD Bank. In this same letter, Ms. Walsh stated that no one by the name of Robert Nelson has been employed by TD Bank Group, or MBNA, a division of TD Bank Group, in Ottawa or elsewhere in Canada, at any time between 2014 and present.

[28] In a further email on March 16, 2020, Ms. Walsh confirmed that all employees and executives of TD Bank, including those working for MBNA, are required to have a TD bank account for direct pay purposes. A TD bank account “is required before employees/executives are provided with system access as part of their employment onboarding process”.

[29] The defendants contend that I should not give any weight to the letters from TD, because they were produced as exhibits to affidavits sworn by two people who work with Mr. Odeh’s lawyer. They say that these affidavits are full of false accusations against the defendants and that the affiants are in a conflict of interest. I completely reject this submission. There is absolutely no basis to accuse either of these affiants of false statements. There is no basis to find that the copies of the TD letters attached to their affidavits are inauthentic.

[30] Robert and the other defendants have not presented any evidence, beyond their own bald assertions, that contradicts the statements in the letters from TD filed into evidence by the plaintiffs.

[31] Even without taking into account the TD letters, Robert’s explanations for his non-compliance with the court’s orders are implausible.

[32] A striking example is Robert’s explanation for not producing any T4s from TD/MBNA as ordered on May 15 and again on May 27.

[33] In various communications with the court in March and April, Robert maintained that he had been prevented from accessing records at TD/MBNA because he had been quarantined for almost two months after exposure to Covid-19. During the case conference on May 15, he advised the court that he had assembled all of the records that the court had ordered him to disclose – which included his T4s from 2012 to 2020 - and was simply waiting for “one last signature” from someone at TD. In the defendants’ June 8, 2020 letter to the court, he maintained this position:

Robert has in fact rounded up all the TD/MBNA documents required to satisfy the NOE [notice of examination]. … The avenue Robert has pursued is to have TD authorize the removal of the documents from the MBNA building, but this requires multiple signatures from TD head Office officials. This has been a most tedious task so he has requested the aid of TD Bank Chairman of the Board, Mr. Brian Levitt and the TD Bank President and CEO, Mr. Bahrat Masrani to help facilitate this action. Word from these executives is that one more signature is required to release all these documents and release is imminant [sic].

[34] During his cross-examination less than two weeks later, however, Robert’s explanation for his failure to produce T4s changed. He testified on June 19, 2020, that he had not received any T4s from TD since 2016, because he had not been paid since that time. A few minutes later, he amended his answer to say that he had not received any T4s since 2011 or 2012. When asked why he had not taken steps to receive tax documents from TD for the purpose of filing a tax return over the last eight years, he said he “wasn’t in a rush to do it at the same time”.

[35] Beyond the fact that Robert’s explanation for failing to deliver the T4s has changed over time, accepting his current explanation would require me to believe that:

• a major Canadian bank failed to provide a senior executive with records required for annual tax filings;
• this same bank failed to remit a regular salary to the same senior executive for four years, but made three cash payments to him; and
• Robert was content not to take any steps to get paid, even though his May 21 affidavit discloses no current bank accounts or liquid assets.

[36] I do not believe any of this.

[37] There are other examples of statements made during Robert’s June 19 cross-examination that are simply implausible. For example, he testified that he has an office at MBNA’s premises in Ottawa but could not provide his email address or office telephone number, because they were for internal use only. He said that he had no records in connection with payments totaling over $800,000 in taxes supposedly paid in connection with the EPSP. He maintained that he discussed the disclosure order with the chairman of the board and president and CEO of TD, but that he was unaware that he had the right to provide these gentlemen with a copy of the Mareva order.

[38] In testimony before me, Robert made further statements that I do not find credible. On June 30, 2020, at the hearing of the motion for contempt, he was sworn under oath. He testified that since the Mareva order was issued, he has attended at the MBNA premises in Ottawa a dozen times or more as an employee and has repeatedly slept in the office for four or five days at a time. This testimony was both inherently implausible and inconsistent with the representations made at earlier case conferences about a nearly unbroken quarantine at home or in hospital for a period of two months.

[39] At this early stage of proceedings and in the absence of a full hearing, I hesitate to make findings on central issues in the litigation. I am forced to do so, however, because I cannot determine if Robert has deliberately and willfully breached the court’s orders without determining whether his explanation for non-disclosure has any plausibility.

[40] I am satisfied, based on my review of Robert’s cross-examination and his limited sworn testimony during the June 30 hearing, that I am in a position to make findings on Robert’s alleged employment and his alleged investment in a fund at TD/MBNA. Where the underlying facts for the basis of a contempt allegation can be resolved on affidavit evidence or a transcript of cross-examination, the court is entitled to proceed without a full hearing: Chiaramonte v. Chiaramonte, 2016 ONSC 7328, at para. 102.

[41] I find that the reason Robert has not disclosed records relating to his employment at TD/MBNA or the EPSP is that no such records exist. These records do not exist because Robert is not employed by the bank and has no accounts or investments with the bank.

[42] Given my conclusion on these points, I necessarily find that Robert has deliberately and willfully breached the court’s orders with respect to disclosure. He swore a false affidavit. He has not disclosed his assets or delivered records he was ordered to deliver. He has treated the court process and the court’s orders with contempt.

(3) Is there any reasonable doubt that Robert is liable for contempt?

[43] Because the possible penalties for contempt include jail or fines, the standard of proof is a criminal standard. I must be convinced beyond a reasonable doubt that Robert is liable for contempt. As held recently in Citti v. Klein, 2020 ONSC 2228, at para. 30, I must consider the evidence as I would in a criminal matter, using the test set by the Supreme Court of Canada in R. v. W.(D.), [1991] 1 S.C.R. 741, that is:

(i) If I accept Robert’s evidence that he did not deliberately and willfully breach the court’s orders, I must conclude that he is not liable for contempt;

(ii) If I do not believe his evidence, but still have some reasonable doubt about his liability, I must conclude that he is not liable for contempt;

(iii) Finally, even if Robert’s evidence does not leave me with any reasonable doubt about his culpability, I must find him in contempt only if the rest of the evidence that the court accepts proves his culpability beyond a reasonable doubt.

[44] I do not believe Robert’s evidence on cross-examination and before me at the June 30 hearing nor does it leave me with any reasonable doubt about his liability for contempt. I am sure, based on the evidence that I find reliable, that the court’s orders were clear and unequivocal; that Robert understood the court’s orders; that Robert failed to comply with these orders; and that his non-compliance was deliberate and willful.

Conclusion

[45] For the reasons set out above, I find Robert Nelson in contempt of the court’s orders on March 10, March 20, May 15 and May 27, 2020.

[46] A hearing is set for next Wednesday, July 8, 2020, at 10h00, at which time I will hear submissions on the penalty for Robert’s contempt. This hearing will take place in-person at 161 Elgin Street, courtroom 36.

[47] Robert and the other defendants are self-represented and are facing serious allegations of fraud. In light of this, I have made a considerable effort, during case conferences and in drafting endorsements in this action, to ensure that my directions were clear and direct. I urged the defendants repeatedly to obtain legal advice. I did my best to convey to them that the court’s orders must be taken seriously. I gave Robert a second and third and fourth chance to comply with the Mareva order.

[48] Robert now has one last chance. In the next few days, he can disclose information and records that show where the plaintiffs’ money has gone, which would limit any sanction that might be imposed on a finding of contempt by this court. Alternatively, he can continue to refuse to comply with the court’s orders to disclose his assets, in which case he should expect to face serious sanctions, including possible jail time.

[49] The plaintiffs seek a further extension of the Mareva order until adjudication or other resolution of the merits of the action. The plaintiffs agreed shortly after the order issued that the defendants could access up to $3500 per month. Although they agreed to this amount at the time, the defendants now claim it is inadequate and that they face financial hardship if the order remains in place or, at the very least, the monthly allowance is not increased.

[50] I am not willing to lift the order given the lack of meaningful disclosure, to date, by the defendants. The plaintiffs have submitted compelling evidence of fraud. As a result of Robert’s refusal to provide the plaintiffs with any information about what happened to their money, which refusal is supported and condoned by his parents, Mr. Odeh and Mr. Borer are no closer now than they were in early March to obtaining any meaningful recovery, should the action be granted. The balance of convenience favours a continued order.

[51] With respect to the monthly allowance, the defendants agreed three months ago that it was adequate and have presented no credible evidence of new material facts that would give rise to a modification of the amount.

[52] I am therefore ordering that the Mareva order remain in place until the trial of the action, the disposition of the action by summary judgment or consent judgment, subject to the defendants’ right to move to set it aside. As requested by the defendants, the order shall contain a provision that, should the defendants provide security by paying $2,779,770 into court, the order shall be lifted.

X. S. Gomery J. Justice Sally Gomery Released: July 9, 2020

Appendix

COURT FILE NO.: 20-CV-82608 DATE: 03/07/2020 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: BRUCE BORER and ANISE ODEH Plaintiffs – and – ROBERT NELSON, RUTH NELSON and JACK NELSON Defendants JUDGMENT ON MOTION FOR CONTEMPT Justice Sally Gomery Released: July 9, 2020

APPENDIX

July 9, 2020: In paragraph [7] “jointly owed” was corrected to read “jointly owned”.

July 9, 2020: In paragraph [16] “May 21 endorsement” was corrected to read “March 20 endorsement”.

July 9, 2020: In paragraph [16] “jointly owed” was corrected to read “jointly owned”.

July 9, 2020: In paragraph [34] “wasn’t in a rush to it at the time” was corrected to read “wasn’t in a rush to do it at the same time”.

[1] A three-prong test for contempt is found in the Court of Appeal’s decision in Prescott-Russell Services for Children and Adults v. G(N) (2006), 82 O.R. (3d) 686, at para 27, which it reiterated again more recently in Bell ExpressVu Limited Partnership v. Torroni, [2009] 0J No. 356.