COURT FILE NO.: CV-17-5816400CL
DATE: 20201005
ONTARIO
SUPERIOR COURT OF JUSTICE COMMERCIAL LIST
IN THE MATTER OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3, AS AMENDED
AND IN THE MATTER OF A PROCEEDING IN THE HONG KONG SPECIAL ADMINISTRATIVE REGION RE: JAMES HENRY TING (IN BANKRUPTCY)
APPLICATION OF COSIMO BORRELLI AND JACQUELINE WALSH OF BORRELLI WALSH LIMITED UNDER SECTION 272 OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C., 1985, c. B-3, AS AMENDED
BETWEEN:
COSIMO BORRELLI AND JACQUELINE WALSH, Moving Parties/Applicants
– and –
ANDREW HENRY TING, Responding Party
Ishai, I., for the Moving Parties/Applicants
Rogerson, A. and Jazayeri, A., for the Responding Party
HEARD: September 8, 2020
REASONS FOR DECISION
DIETRICH J.
Overview
[1] This motion was heard immediately following a motion brought by Andrew Henry Ting, the responding party in this proceeding, to stay the January 15, 2019 Order of Justice Penny (the "Stay Motion"). The January 15, 2019 Order required the responding party to produce certain documents as set out in that Order and required him to attend at an examination.
[2] I denied the stay and dismissed the Stay Motion. My reasons are reported at 2020 ONSC 5955.
[3] The moving parties/applicants then proceeded with this motion (the "Contempt Motion"). In their capacity as foreign representative and joint and several trustees in bankruptcy, appointed pursuant to the Bankruptcy and Insolvency Act, R.S.C. 1985. C. B-3 (the "Trustees"), of the property of James Henry Ting (the "Bankrupt"), they seek an order declaring that the responding party has breached the terms of the January 15, 2019 Order, and that he is in contempt of that Order. They also submit that the responding party has failed to pay the costs ordered pursuant to that Order and an Order made by the Court of Appeal for Ontario in this matter, but they do not seek a contempt order in respect of those failures.
[4] Following the submissions of the Trustees in support of their motion, the responding party made a motion seeking my recusal. I dismissed that motion for the reasons that follow.
[5] For subsequent reasons that follow, I find that the responding party is in contempt of the January 15, 2019 Order.
Issues
[6] The issues in this matter are as follows:
Should I recuse myself from hearing the Contempt Motion?
If my recusal is not required, is the responding party in contempt of the January 15, 2019 Order?
Motion for Recusal
[7] Following the Trustees' submissions, the responding party moved to have me recuse myself from hearing the balance of the Contempt Motion.
[8] The responding party asserted that in the Trustees' submissions, they referred to his father, the Bankrupt, as a "thief", and someone who engaged in "fraudulent" and "criminal" activity, and who demonstrated a "consistent pattern of disobedience." The responding party further asserted that these characterizations of the Bankrupt were all irrelevant to the responding party, a separate person, but because I had heard them, there was a danger that they would lead me to "forbidden reasoning."
[9] The responding party asserted that as the presiding judge, I would be deemed to have heard all of the evidence, and that the test for recusal is not whether I would in fact be influenced by what I heard, but what a reasonable person might apprehend. In the responding party's view, a reasonable person would conclude that I would be influenced by such submissions and, therefore, that I would not decide the motion fairly.
[10] I dismissed the motion on the basis that, in my view, an informed person considering the alleged bias would not conclude that I would not decide the motion fairly. The responding party asked that I provide written reasons. These are those reasons.
[11] The relevant test in the case of a reasonable apprehension of bias is whether an informed person, viewing the matter realistically and practically, and having thought the matter through, would think it is more likely than not that the decision-maker, whether consciously or unconsciously, would not decide the matter fairly: Yukon Francophone School Board, Education Area No. 23 v. Yukon Territory (Attorney General), 2015 SCC 25, at paras. 20-21. See also R. v. Ibrahim, 2009 ONCA 631, at para. 83.
[12] An "informed" person, for this purpose must be an objectively reasonable person – one who has knowledge of all of the relevant circumstances, including knowledge of the judicial process and the nature of judging: Duca Financial Services Credit Union Ltd. v. Smith, 2016 ONSC 6289, at para. 18.
[13] Judicial impartiality is a well-settled and foundational principle in which public confidence in our legal system is rooted: Wewaykum Indian Band v. Canada, 2003 SCC 45, [2003] 2 SCC 45, [2003] 2 S.C.R., at para. 57. There is a strong presumption of judicial impartiality and a heavy burden on a party who seeks to rebut this presumption: Langstaff v. Marson, 2014 ONCA 510, 121 O.R. (3d) 369, at para. 24.
[14] The inquiry into reasonable apprehension of bias is highly fact-specific. Bias connotes a predisposition to decide a matter in a certain way that does not leave the judicial mind open and impartial: Wewaykum, at para. 58.
[15] The onus is on the responding party to adduce evidence of my alleged bias and partiality. He must show that an informed person, viewing the matter realistically and practically, and having thought the matter through, would conclude that I would be influenced by the comments made by the Trustees about the Bankrupt when determining whether the Bankrupt's son should be found to be in contempt of the January 15, 2019 Order for failing to attend at an examination.
[16] The basis for the responding party's request for my recusal is his subjective view on how I could be influenced. He perceives that what he sees as emotive language and exaggerations regarding the Bankrupt's character, which could deny him safeguards that would protect him from wrongful conviction, could lead to an unfair result for him.
[17] In my view, no informed person, viewing the matter realistically and practically, would conclude that a judge would impute to the son a negative description of his father's character, which is irrelevant to the determination of the issue at hand. The issue to be determined on the Contempt Motion is straightforward: is the responding party in breach of the January 15, 2019 Order and if so, should he be found to be in contempt? This question can be determined, objectively, on the record.
[18] The moving party speculated that an informed person, viewing the matter realistically and practically, and having thought the matter through, would conclude, that it is more likely than not, that I would see the son as the father; and I would not maintain an open mind, but would be influenced by the Trustees' submissions on the character of the Bankrupt. The Bankrupt is not a party to the proceeding before me. I do not accept that the strong presumption of a presiding judge's impartiality could be overcome by such speculation. I find that the basis for the recusal motion is without merit and the responding party has not met his onus. I find that there is no objectively reasonable apprehension of bias.
Motion for Contempt
Background Facts
[19] Having dismissed the moving party's motion to recuse myself, I must now determine whether the responding party is in contempt of the January 15, 2019 Order for failing to attend at his examination.
[20] By January 9, 2020, the responding party had exhausted all avenues of appeal regarding the January 15, 2019 Order. On that day, the Supreme Court of Canada dismissed his application for leave to appeal the judgment of the Court of Appeal for Ontario dated June 21, 2019.
[21] From March 9, 2020 to March 10, 2020, counsel to the Trustees and counsel to the responding party exchanged email correspondence regarding the proposed examination of the responding party and his failure to pay the costs awarded against him in earlier proceedings.
[22] On March 10, 2020, the Trustees served a Notice of Examination for the responding party to be examined on March 19, 2020 pursuant to the January 15, 2019 Order.
[23] The responding party, through counsel, advised the Trustees that it would be inappropriate for the examination to proceed in light of the fact that the Bankrupt had one day earlier brought an application seeking to annul the Bankruptcy Order in the Hong Kong Court from where it issued.
[24] The March 19, 2020 examination was cancelled by the court reporting service provider owing to the COVID-19 pandemic.
[25] The Trustees arranged for another court reporter to participate in the examination. They then provided a further Notice of Examination for the responding party to be examined on March 26, 2020 in accordance with the January 15, 2019 Order.
[26] The responding party did not attend to be examined on March 26, 2020. He did not explain his failure to attend.
[27] On June 1, 2020, the Trustees sent a copy of their Notice of Motion for a contempt order against the responding party to his counsel.
[28] The Trustees allege that the responding party is in contempt of the January 15, 2019 Order for failing to produce all of the documents listed in the schedule to the Order and for failing to attend at an oral examination at the place and time stipulated in a Notice of Examination served on him.
Analysis
[29] The Supreme Court of Canada articulated a three-pronged test for civil contempt in Carey v. Laiken, 2015 SCC 17, at paras. 32-35. The moving party must prove beyond a reasonable doubt the following three factors: a) the order alleged to have been breached must state clearly and unequivocally what should and should not be done; b) the party alleged to have breached the order must have had actual knowledge of it; and c) the party allegedly in breach must have intentionally done the act the order prohibits or intentionally failed to do the act the order compels.
[30] Based on the record, I am satisfied that the first prong of the test is met. The January 15, 2019 order is clear and unequivocal. It clearly sets out all essential details regarding where, when and to whom it applies. The January 15, 2019 Order sets out, in a schedule, what documents and information must be produced, by whom, and by when. It further directs that the responding party must present himself to be examined by the Trustees on a date stipulated in the Notice of Examination served on him. The responding party has not complied with these terms.
[31] The responding party submits that external circumstances, being the COVID-19 pandemic, obscured the meaning of the January 15, 2019 Order because it does not specify what is to be done in the event of a national emergency. I do not accept this argument. Despite the COVID-19 pandemic, the Trustees were able to find a court reporter prepared to provide reporting services. There is no documentary evidence to support the responding party's contention that he failed to attend his examination owing to COVID-19 concerns.
[32] I am also satisfied that the second prong of the test is met. The responding party had actual knowledge of the January 15, 2019 Order. Though the responding party may not have been served with the January 15, 2019 Order, actual knowledge may be inferred from the circumstances. The responding party's counsel assisted in the drafting of the Order and consented to its form and content. In email correspondence between counsel to the parties, the responding party's counsel referred to the Order several times and gave no indication that the responding party was not aware of it. Counsel to the responding party had a hand in drafting the Order and the Trustee's counsel emailed a copy of the final Order to him.
[33] The third prong of the test requires a finding that the party allegedly in breach must have intentionally failed to do the act the order compels. I must therefore consider whether the responding party intentionally failed to attend the examination that he was ordered to attend. The Court of Appeal for Ontario stated in Greenberg v. Nowack, 2016 ONCA 949, at para. 27, that to prove this factor, the moving party must show an intentional act that breaches the order.
[34] The record shows that once the responding party's leave to appeal to the Supreme Court of Canada was dismissed, a Notice of Examination was served on him, via his counsel, in accordance with the January 15, 2019 Order. Contrary to the clear language in paragraph 3 of the Order, requiring the responding party to appear at the scheduled examination, he did not.
[35] When served with the Notice of Examination, counsel to the responding party communicated that it would be inappropriate to proceed until the Bankrupt's application to annul the Bankruptcy Order had been resolved. I do not find this reasoning compelling. The fact that the Bankrupt had brought a proceeding in another jurisdiction to annul the Bankruptcy Order, made nearly four years earlier, does not excuse the responding party from compliance with an order of this court. To cause the Trustees to put their information gathering and the examination of the responding party on hold pending the resolution of an issue in another court proceeding would create unfairness.
[36] The responding party asserts that he did not intentionally fail to attend the examination as ordered. He asserts that it was not realistic to expect him to attend an examination during the COVID-19 pandemic. He submits that the concerns about the pandemic were significant in March of 2020 and that I must take judicial notice of the effects of the pandemic. He asserts that the Province of Ontario was shutting down when the examinations were scheduled and that this was the very reason the first-scheduled examination was cancelled. As noted above, I do not accept this explanation. The Trustees were able to find a court reporter prepared to participate in the examination scheduled for March 26, 2020, but the responding party neither attended nor did he advise the Trustees of any concern relating to the pandemic. Had this concern been raised, the Trustees could have taken steps to accommodate the responding party, including arrangements for an examination via videoconference or teleconference.
[37] Further, based on the email exchanges between counsel to the responding party and counsel to the Trustees, I am satisfied that the responding party had no intention of attending the examination, regardless of the pandemic. On March 9, 2020, counsel for the responding party replied to an email from counsel to the Trustees regarding the scheduling of the examination, in which he states: "I am sure you would not dream of procuring the contempt of my client creating a situation in which he is bound to fail. We now have the joinder of issue as evidence for the court. The stay application will be prepared by us: contempt by you. We should cooperate on listing."
[38] The responding party also argues that he was not properly served on the motion for contempt because rule 60.11 of the Rules of Civil Procedure, R.R.O., Reg. 194 requires personal service of the notice of motion on him. There is no evidence before the court to show that the responding party was served personally with the Notice of Motion. However, it is clear that the Notice of Motion was served on his counsel. It is also clear from the March 9, 2020 email exchange that counsel for the responding party was expecting the contempt motion.
[39] Rule 1.04 of the Rules provides that the Rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. I am satisfied that there was no prejudice to the responding party as a result of the service of the Notice of Motion on his counsel instead of on him personally. The Contempt Motion came to the attention of the responding party and he responded to it. Rule 60.11 is aimed at ensuring that the alleged contemnor has notice of the contempt proceeding. The rule does allow for an alternative to personal service by court order. Such court order was not obtained, but I am satisfied that the responding party had adequate notice of the Contempt Motion.
[40] Based on the record, I am satisfied, beyond a reasonable doubt that the Trustees have met their burden and that the three prongs of the test for civil contempt have been met.
[41] This court has found that conduct like that of the responding party warrants a finding of contempt against him. See: Target Lumber & Logging Company LLC v. Snow Angel Venture 1 GP Inc., 2019 ONSC 3005, at para. 7; and Morreale Consulting Professional Corp. v. Manieri, 2016 ONSC 7048, at para. 17 regarding a failure to produce documents and attend an examination in aid of execution.
[42] I recognize that the contempt powers of this court are discretionary and should be exercised with caution and great restraint. I am nonetheless satisfied that a finding of contempt is appropriate in this case. Justice Penny's January 15, 2019 Order was made over 20 months ago, and despite having exhausted all avenues of appeal, the responding party has failed to comply with his obligation to attend to be examined. I find that since the January 15, 2019 Order was issued, the responding party has not acted in good faith in taking reasonable steps to comply with the Order. The costs he was ordered to pay have not been paid and he has not attended to be examined. Whether he has fully complied with his obligations to produce the documents he was ordered to produce cannot be fully assessed until he is examined.
[43] Accordingly, I find that the responding party is in breach of the terms of the January 15, 2019 Order and is in contempt of court for failing to attend the examination on March 26, 2020 in respect of which he was served with a Notice of Examination. He has failed to provide any adequate explanation for his failure to comply with the January 15, 2019 Order.
Disposition
[44] The Trustees have succeeded on their motion. I declare that the responding party Andrew Ting is in breach of the January 15, 2019 Order and in contempt of that Order for failing to attend at an examination as he was ordered to do.
[45] The responding party Andrew Ting shall be given an opportunity to purge his contempt by attending at an examination within 10 days of the date of these reasons. The examination shall be arranged by the Trustees in accordance with the Rules of Civil Procedure. Should the responding party Andrew Ting fail to purge his contempt, the Trustees may arrange a return date for the Contempt Motion when I will hear submissions on a suitable penalty to be imposed on him.
Costs
[46] The Trustees have succeeded on their motion and are entitled to costs. The parties are strongly encouraged to agree on the matter of costs. If they cannot agree, the Trustees may make written submissions, not exceeding three pages in length (not including a Bill of Costs or Costs Outline) within fourteen days of these reasons. The responding party may make written submissions, not exceeding three pages in length (not including a Bill of Costs or Costs Outline) within fourteen days thereafter. Reply submissions may only be made with leave.
Dietrich J.
Released: October 5, 2020
COURT FILE NO.: CV-17-5816400CL
DATE: 20201005
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C. 1985, c. B-3, AS AMENDED
AND IN THE MATTER OF A PROCEEDING IN THE HONG KONG SPECIAL ADMINISTRATIVE REGION RE: JAMES HENRY TING (IN BANKRUPTCY)
APPLICATION OF COSIMO BORRELLI AND JACQUELINE WALSH OF BORRELLI WALSH LIMITED UNDER SECTION 272 OF THE BANKRUPTCY AND INSOLVENCY ACT, R.S.C., 1985, c. B-3, AS AMENDED
BETWEEN:
COSIMO BORRELLI AND JACQUELINE WALSH, Moving Parties/Applicants
– and –
ANDREW HENRY TING, Responding Party
REASONS FOR DECISION
Dietrich J.
Released: October 5, 2020