reasons on contempt motion
COURT FILE NO.: CV-20-650568
DATE: 20210112
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: KMM LAWYERS PROFESSIONAL CORPORATION and MIGUNA MIGUNA, Applicants
AND:
KAZEMBE & ASSOCIATES PROFESSIONAL CORPORATION, COURTNEY A. KAZEMBE AND 134082 ONTARIO INC, Respondents
BEFORE: Paul B. Schabas J.
COUNSEL: Miguna Miguna for the Applicants
Gary Caplan for the Respondents
HEARD: January 11, 2021
[1] This is a motion by the applicants seeking to have the court find the respondent, Courtney Kazembe (“Kazembe”), in contempt of court arising from breach of orders I made in this proceeding in the fall of 2020, as well as breaches of a settlement agreement reached between the parties on December 8, 2020. The dispute arises from a brief law partnership between the applicant, Miguna Miguna (“Miguna”), and Kazembe, which ended acrimoniously just a few months after it began.
[2] For the reasons that follow, I dismiss the applicants’ motion for contempt. Miguna’s complaints arise from his position that Kazembe has not complied with the settlement agreement, for which he should bring enforcement proceedings or seek rescission and/or damages. Further, contempt is a remedy of last resort, and it would not be appropriate to invoke the contempt power where the orders alleged to be breached pre-date the settlement and, in any event, the facts are highly contested.
Background
[3] Miguna and Kazembe are both lawyers in Toronto. On June 1, 2020, they established a partnership, KMM Lawyers, after jointly registering KMM Lawyers Professional Corporation.
[4] The partnership did not last long.
[5] In late October 2020, Miguna sought an urgent hearing before the Court following the receipt of a notice of eviction from Kazembe. I was assigned the matter and convened a case conference on October 28, 2020. Kazembe and Miguna attended, representing themselves. At that hearing, Miguna made many allegations regarding interference by Kazembe in Miguna’s ability to practice law. Kazembe did not concede this to be the case, but stated that the eviction notice had been withdrawn and he undertook not to interfere with the practice of law by Miguna or other lawyers in the firm. I issued a brief endorsement describing the circumstances and adjourned the case conference on terms to ensure compliance with the undertakings given by Kazembe, as follows:
Mr. Kazembe and his entities or agents shall take no steps to evict Mr. Miguna or KMM Lawyers P.C., or lawyers or others employed by KMM Lawyers P.C., prior to December 31, 2020, unless otherwise ordered by the Court.
Mr. Kazembe and his entities or agents shall not interfere with the practice of law by Mr. Miguna and KMM Lawyers P.C., including its lawyers and other employees, pending further order of this Court.
[6] Although I adjourned the matter to November 27, 2020, my hopes that these two professionals would work out their differences were quickly dispelled. Just two days later, this time at Kazembe’s request, I held another case conference on October 30, 2020. In that case conference, Kazembe provided me with an inflammatory memo Miguna had circulated within the firm which went well beyond anything necessary for the ongoing operation of the practice. Kazembe said he could no longer work with Miguna and many more allegations were made by both Kazembe and Miguna against one another. Miguna was concerned about banking and the financial status of the firm, and Kazembe was now concerned that Miguna was interfering with his law practice.
[7] In my endorsement following that case conference I stated, among other things:
There were many allegations made by each of them on today’s call. However, as I made clear, repeatedly, I do not have any evidentiary basis on which to grant injunctive relief to favour one or the other. Nor should the court be put in the role of being called in whenever one party thinks the other has misbehaved. Much of what they complain about will have to be resolved when they unravel their partnership and figure out who owes who what, which is a damages issue.
These are two partners who need to sort out their differences and go their separate ways. Fortunately, sections 88-90 of their agreement provides for mediation and binding arbitration to resolve their disputes. At today’s case conference, both professed to be willing to go to mediation quickly and I invited them to suggest mediators. If they can agree, so much the better. But that does not seem likely.
[8] I invited the parties to submit names of proposed mediators to me by Monday, November 2, 2020. If they could not agree on someone, I would then select one. I also made the following additional orders:
Mr. Miguna shall not interfere with the practice of law by Mr. Kazembe or others at KMM Lawyers P.C.
KMM Lawyers P.C., through which Mr. Kazembe and Mr. Miguna carry on the practice of law, shall continue until an agreement is reached to dissolve the partnership or further order of this court or a binding arbitration decision is issued.
Pending further order of this court or a binding arbitration decision, or agreement of the parties, all funds received arising from the practice of law in Ontario by Mr. Miguna and Mr. Kazembe, or others at KMM Lawyers P.C., shall be paid to KMM Lawyers P.C., which funds shall only be used for the purpose of carrying on the business of KMM Lawyers, so that it may meet its financial obligations, and no disposition of funds shall be made that are not in the ordinary course of business or agreed to by Mr. Kazembe and Mr. Miguna.
Mr. Miguna shall forthwith take steps to commence this proceeding so that it may be assigned a court file number.
The November 27 case conference is cancelled. Should further court intervention be sought by either party, it should be on notice, with proper materials and scheduled through the Civil Motions office.
[9] On November 2, 2020, following receipt of four names from Miguna and having been advised by Kazembe that he was “ok with any mediator Mr. Miguna chooses,” I selected a mediator.
[10] On December 2, 2020, I convened a case conference at the urgent request of Miguna, who sought to hold Kazembe in contempt of my orders. Kazembe then sought the appointment of an arbitrator, expressing a desire to go straight to arbitration even though a mediation was scheduled for December 11, 2020.
[11] Following discussion, in which Kazembe was represented by Mr. Caplan, it was agreed that the mediation would proceed and that the mediator could also conduct an arbitration of any issues not resolved through mediation. Also, by agreement, I directed the parties to jointly retain an accountant to review the financial records.
[12] As to the contempt motion, I declined to schedule it, stating:
Depending on the outcome of the mediation and next steps in the process, Mr. Miguna can contact me if he wishes to move ahead with it. In the meantime, it is to be hoped that Mr. Miguna and Mr. Kazembe, both lawyers in this province, will work professionally and in good faith to resolve their differences as quickly as possible, and in the meantime to conduct their law practice – which is still a partnership - in an open, transparent, efficient and collaborative way, which was the intention of my earlier directions. This should include ensuring that each lawyer promptly receives all correspondence, emails and voicemails that are sent to, or intended for each of them and their colleagues, and to otherwise comply with my earlier orders including those relating to banking and the deposit and disposition of funds. All of this should go without saying, given their professional obligations as licensees of the Law Society of Ontario.
[13] Prior to the mediation, Miguna and Kazembe reached a settlement of their dispute on December 8, 2020, signing what is described as a Full and Final Release, but which also contains the terms of their agreement. This settlement includes payments to be made, cooperation in communicating with clients, and a number of administrative steps including transferring control of internet domain names, email accounts, bank accounts, and staff, among other things. Miguna was to vacate the premises by January 20, 2021, and this proceeding was to be dismissed on a without costs basis on January 4, 2021.[^1]
[14] Perhaps inevitably, given the level of acrimony and distrust, within a week or so of reaching their agreement, Miguna alleged that Kazembe was not complying with the settlement and my orders, claiming that Kazembe was blocking Miguna’s access to clients’ electronic files, billing records, Teraview and other information or platforms necessary to Miguna’s practice.
[15] Another case conference was held on December 22, 2020 in which I urged the parties to cooperate. I made no further order but did say that if matters were not resolved, then Miguna could, if he wished, contact me to schedule a hearing for contempt and/or enforcement of the settlement.
[16] Regrettably, matters were not worked out and on December 24, 2020, at Miguna’s request, I scheduled this hearing for January 11, 2021.
[17] Both sides have filed evidence accusing one another of breaching the settlement. Miguna has moved out of the office and set up his practice in new space; however, he complains that Kazembe continues to block access to his emails and correspondence, has failed to deliver banking records, and has undermined his ability to secure client files and maintain proper books and records, all of which has compromised his ability to carry on his practice and discharge his responsibilities to his clients.
[18] Kazembe has filed an affidavit disputing some of the allegations, although at least one document produced by him appears to support Miguna’s allegation that Kazembe has indeed been unhelpful, if not obstructive, in providing Miguna with access to information and platforms on the internet.
Analysis and Conclusions
[19] In my view, Miguna’s complaints now arise from Kazembe’s alleged breach of the settlement agreement. While it may be that Kazembe’s actions are inconsistent with my orders, those orders were interlocutory and intended to provide some control over the parties pending a mediation, arbitration or other resolution. That resolution occurred on December 8, 2020 when, with the consent of Miguna, Kazembe’s obligations were specifically set out. What Miguna now seeks is an order enforcing the settlement, and for that he should commence a new proceeding or, perhaps, seek to amend this current application to seek that relief.
[20] I have considered Miguna’s submission that Kazembe’s conduct, if Miguna’s allegations are proven, demonstrates a flagrant disrespect for court orders which requires sanction. However, on the record before me, I cannot safely reach that conclusion. There is conflicting evidence on both sides, including evidence from one associate in the firm who initially filed evidence for Miguna, but has recently filed an affidavit supporting Kazembe.
[21] I also have concerns about making a finding of contempt based on my orders, which are worded in general terms - to not “interfere with the practice of law” by one another – which was deliberate. Where possible, courts should avoid becoming involved in supervising their orders and the conduct of parties to litigation. My orders were made in the context of urging two individuals to find a way to resolve their dispute and otherwise act professionally, not to establish precise steps to take on each and every issue involving their dispute, or to supervise the breakup of their partnership.
[22] Furthermore, the Law Society of Ontario is aware of the situation, and that institution, the regulatory authority for the legal profession, is much better placed than a Court to provide supervision in such circumstances, if necessary.
[23] Miguna also suggests that Kazembe’s conduct has been contemptuous of the court throughout this proceeding, and that his misconduct is so notorious that it is not necessary to meet the usual evidentiary requirements, citing R. v. Williams, 1998 782, [1998] 1 S.C.R. 1128. I do not agree. Williams dealt with the challenge of recognizing racial prejudice in jurors, a very different matter than proving breach of a court order. Furthermore, even though some of the evidence from Miguna is compelling and some of it has not been addressed by Kazembe in his responding material, the evidence before this court far from satisfies me that I can or should ignore evidentiary rules and procedural fairness to make a finding of contempt against Kazembe.
[24] On the other hand, if, at the end of the day, in a properly constituted proceeding to enforce the settlement, Miguna’s allegations are established, then Kazembe may well face sanction from the Court, and he will be liable for damages to Miguna.
[25] In light of the many facts in dispute, I also considered whether an appropriate course would be to adjourn this hearing to permit cross-examination or to direct a trial on the contempt issue. However, in light of my conclusion that the real complaint here relates to the breach of a settlement agreement, I have concluded that it is not appropriate to use the contempt power in these circumstances.
[26] In this context, I am mindful that the contempt power is to be exercised with caution and not to be used routinely to obtain compliance with court orders. As the Supreme Court stated in Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79 at para 36:
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, 30 R.F.L. (7th) 65, at para. 3. If contempt is found too easily, “a court’s outrage might be treated as just so much bluster that might ultimately cheapen the role and authority of the very judicial power it seeks to protect”: Centre commercial Les Rivières ltée v. Jean Bleu inc., 2012 QCCA 1663, at para. 7. As this Court has affirmed, “contempt of court cannot be reduced to a mere means of enforcing judgments”: Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc., 1992 29 (SCC), [1992] 2 S.C.R. 1065, at p. 1078, citing Daigle v. St-Gabriel-de-Brandon (Paroisse), 1991 3806 (QC CA), [1991] R.D.J. 249 (Que. C.A.). Rather, it should be used “cautiously and with great restraint”: TG Industries, at para. 32. It is an enforcement power of last rather than first resort: Hefkey, at para. 3; St. Elizabeth Home Society v. Hamilton (City), 2008 ONCA 182, 89 O.R. (3d) 81, at paras. 41-43; Centre commercial Les Rivières ltée, at para. 64.
[27] Cromwell J. went on to observe at para. 37 of Carey v. Laiken that a judge “generally retains some discretion to decline to make a finding of contempt… where it would work an injustice in the circumstances of the case.”
[28] Accordingly, the motion by the applicants is dismissed.
[29] Miguna has also raised concerns about confidential personal information that Kazembe included in his responding record. It is asserted that Exhibit “V” at pages 174 – 193 identifies a young person charged with criminal offences whom Kazembe represented and who should not be identified. If that is the case, which will be known to Kazembe, he should take steps to redact all information which may tend to identify that individual before the material from this motion is filed with the court.[^2]
[30] Miguna also complains about Kazembe’s inclusion of documents relating to the purchase of a home by him and his wife in September 2020, found at Exhibit “X” at pages 203 – 206 of the responding record. Miguna asserts that the documents are irrelevant, disclose personal information, and that they have been altered. I do not agree that they are irrelevant, and I have no evidence that they have been altered. However, I direct that the address of the property be redacted prior to filing the material with the court.
[31] Should Kazembe decide to seek costs, he may provide me with written submissions not exceeding 3 pages double-spaced, not including supporting materials, within 14 days of the release of these reasons, and Miguna may respond in similarly limited submissions 7 days later.
Paul B. Schabas J.
Date: January 12, 2021
[^1]: The document incorrectly states “2020” but the parties intended the dates to be in 2021.
[^2]: Due to the COVID-19 pandemic, all material for this motion, which was heard virtually by ZOOM, was provided to me on sync.com. However, copies of the materials should be filed with the court in accordance with court procedures.