COURT FILE NO.: CV-18-2850
DATE: 2021 07 08
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MARCELINA MALALUAN, also known as LYNN, v. LIWAYWAY MIRANDA, also know as LILY MIRANDA HAMMER, A & L HAMMER WORKFORCE MANAGEMENT INC., and A & L HAMMEER WORKFORCE MANAGEMENT
BEFORE: BIELBY J.
COUNSEL: N. Hashmi, for the Plaintiff
M. Seddigh, for the Defendants
HEARD: June 29, 2021
ENDORSEMENT
Introduction and Background
[1] The plaintiff has before the court a motion to compel additional disclosure and compliance with two outstanding court orders. Further, although not set out formally in the motion’s prayer for relief, a finding of contempt is sought as against the defendant Liwayway Miranda, also known as Lily Miranda Hammer (Miranda), for breaching the two court orders. It is submitted that, after finding the defendants in contempt, Miranda should be given a further 30 days to comply, after which time the appropriate penalty can be imposed.
[2] On March 5, 2019, the plaintiff obtained default judgment against all the defendants for $91,947.40 plus interest. The defendants were given 15 days to satisfy the judgment.
[3] The judgment was not satisfied within 15 days and counsel for the plaintiff commenced collection proceedings.
[4] The plaintiff brought a motion before Shaw J. on July 16, 2019, seeking an order requiring the defendants to answer a series of written questions and to provide financial disclosure.
[5] Neither the defendants nor anyone on their behalf attended at the motion and Shaw J. granted the relief sought by the plaintiff.
[6] The order included the following provisions which are relevant to this motion:
(a) the defendants were to provide answers to the plaintiff’s written questionnaires and disclose the financial documents as set out in Schedule A attached to the motion, by August 2, 2019;
(b) at the option of the plaintiff, the defendant Miranda was to attend on behalf of all the defendants at an oral examination if the answers to the questions were evasive or not satisfactory; and
(c) the plaintiff was entitled to bring contempt proceedings against the defendant Miranda if there was a failure to comply with the order.
[7] It is alleged by the plaintiff that the defendants have not complied with the order of July 16, 2019, and a subsequent order of mine made on August 4, 2020, and therefore continue to be in contempt of the orders.
[8] A motion for contempt brought by the plaintiff was before me on June 26, 2020, however the defendant Miranda failed to attend. As a result of the non-attendance an order was made to issue a warrant for the arrest of the defendant Miranda.
[9] At some point thereafter the defendant became aware of the warrant and retained counsel.
[10] The matter was next before me on August 4, 2020, and I stayed the exercise of the warrant on the condition that the defendant complied with the order of July 16, 2019, by August 31, 2020.
[11] Answers to the questions and disclosure were delivered by the defendants on August 31st. However, the plaintiff submits that some of the answers were unsatisfactory and some questions remain unanswered. Further, it is alleged that the disclosure requirements were not completely satisfied.
[12] Regardless, and presumably based on the disclosure and answers received, on September 28, 2020 counsel for the plaintiff wrote to counsel for the defendants with additional questions to be answered and seeking further and additional disclosure. It is submitted by the plaintiff that these demands arose out of the answers and disclosure received on August 31st.
[13] Counsel for the defendants opposes the relief sought and submits that the defendant Miranda, has, to the best of her ability provided answers to the questions and delivered the disclosure ordered. Further, it is submitted that the proper procedure was for the plaintiff to first conduct an examination in aid of execution, further to Rule 60.18, and, as a result of her failing to do so, the plaintiff has no authority to require answers to additional questions and/or seek additional disclosure.
The Law
[14] The following authorities were provided by both counsel.
[15] 6071376 Canada Inc. v. 39966305 Canada Inc. and Mahmood Khedmatgozar, 2021 ONSC 205, is an endorsement on a motion made by Gomery J. The motion resulted from the defendants’ failure to satisfy a number of undertakings made during an examination in aid of execution conducted further to Rule 60.18, and for wrongfully refusing to answer certain questions.
[16] It was said that the purpose of an examination in aid of execution is to determine the whereabouts and extent of money and property held by the defendants for the purpose of satisfying the judgment (para. 8).
[17] Gomery J. reviewed Rule 60.18(2) and the topics that would be relevant to an examination in aid of execution. The scope of the inquiry was said to be “broad” (para. 16).
[18] Gomery J. relied on a number of authorities, stating at para. 18, that a debtor is not only required to answer questions put to him but to actively assist the creditor in understanding what he has at his disposal to satisfy the judgment. Reference was made to Foster v. Van Wormer (1888) 12 O.P.R. 597, at pg. 598, where it was written,
“It is the duty of the defendant to furnish such explanations as will place his dealings in an intelligible shape. It is not to be left to the creditors to find out the best way they may, what is the business of the defendant to make it plain.”
[19] It was also said that the plaintiff is entitled to broad disclosure of the defendant’s current and past financial situation, so that it may execute the judgment it has obtained. Accordingly, it is legitimate for the plaintiff to ask follow-up questions notwithstanding the limit of one annual examination in aid of execution (para. 27).
[20] It is to be noted that, while the plaintiff relies on this authority, the process under consideration by Gomery J. was initiated by an examination in aid of execution.
[21] Uyj Air Inc. v. Barnes; Ogilvy Renault v. Barnes, 2011 ONSC 3847 is a decision of Madame Justice Roberts, in a motion for contempt. It was alleged that in relation to their examinations in aid of execution, two of the defendants were in contempt of multiple undertakings and a court order. The case provides a good review of the law of contempt.
[22] A person is guilty of civil contempt by disobeying a court order (para. 5).
[23] To establish a case of contempt it must be shown that the terms of the order are clear and unambiguous, that the defendant has had proper notice of the terms and that the breach is clearly established (para. 7).
[24] The acts constituting the breaches must be intentional or deliberate, or they must arise out of a serious indifference or contemptuous disregard of the courts (para. 8).
[25] The criminal standard of proof applies. The contemptuous behaviour must be proven beyond a reasonable doubt (para. 9).
[26] Counsel for the defendant provided me with an additional authority, Moncur v. Plante, 2021 ONCA 462, a decision of Jamal J.A. and from para. 10, I quote:
The following general principles govern the use of the court’s power to find a party in civil contempt of court for breaching a court order:
For a party to be found in contempt of court for breaching a court order, three elements must be proven beyond a reasonable doubt: (1) the order alleged to have been breached must state clearly and unequivocally what should and should not be done; (2) the party alleged to have breached the order must have had actual knowledge of it; and (3) 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, [2015] 2 S.C.R. 79, at paras. 32 – 35; Greenberg v. Nowck, 2016 ONCA 949, 135 O.R. (3d) 525, at paras. 25 – 26.
Exercising the contempt power is discretionary. Courts discourage the routine use of this power to obtain compliance with court orders. The power should be exercised cautiously and with great restraint as an enforcement tool of last rather than first resort. A judge may exercise discretion to decline to impose a contempt finding where it would work an injustice. As an alternative to making a contempt finding too readily, a judge should consider other options, such as issuing a declaration that the party breached the order or encouraging professional assistance: Carey, at paras. 36 – 37; Chong v. Donnelly 2019 ONCA 799, 33 R.F.L. (8th) 19, at paras. 9 – 12; Valoris pour enfants et adultes de Prescott-Russell c. K.R., 2021 ONCA 366, at para 41; and Ruffolo v. David 2019 ONCA 385, 25 R.F.L. (8th) 144, at paras. 18 – 19.
When the issue raised on the contempt motion concerns access to children, the paramount consideration is the best interests of the children; Ruffolo, at para. 19; Chone, at para. 11; and Valoris, at para. 41.
[27] In the text, Canadian Civil Procedure Law 2nd ed., Abrams, McGuinness, at key 19.32, it is said that the examination in aid of execution should be liberally interpreted by the courts to permit aggressive and penetrating questions, so long as those questions are not put for the obvious purpose of humiliating the judgment debtor.
Analysis and Discussion
[28] In the matter before, there was no attempt by the plaintiff to engage or take advantage of Rule 60.18. As noted above, counsel for the plaintiff, further to her motion on notice returnable on July 16, 2019, chose to seek answers to written questions and financial disclosure on a very broad scale as set out in Schedule A to the motion (which became a schedule to the order) without first conducting an examination in aid of execution.
[29] I have not been provided with any authority, nor do I know of any authority, which would allow the plaintiff to seek out financial information by motion without first conducting a Rule 60.18 examination, in an effort to satisfy her judgment.
[30] Regardless, the defendants chose not to appear in court on July 16, 2019, and the plaintiff obtained the order she was seeking.
[31] The order was not appealed, and its validity has not been challenged. A breach of such an order of the court can be grounds for a finding of contempt.
[32] In support of the motion I have had regard to the plaintiff’s affidavit, sworn March 1, 2021. Therein, at para. 16, she deposed that the defendants’ answers to the questions were incomplete, evasive and did not reflect their true financial pictures. She further deposes that the defendants were not truthful in disclosing the assets. It was further submitted that Miranda did not provide a credit report, nor did she put the answers to the questions in affidavit form as required by the order.
[33] At para. 26, it was deposed by the plaintiff that the defendant refused to answer follow up questions and to provide additional financial disclosure documents. It was said that such follow up was reasonable and relevant. (It is to be noted that subsequent to August 31, 2020, the defendants did provide the plaintiff with additional bank statements for certain CIBC accounts.)
[34] The defendant Miranda, in an affidavit sworn April 14, 2021, responded. Therein she offered an explanation in regard to her financial circumstances and stated that, for a long time she could not cope with a number of serious issues facing her (para. 6).
[35] At para. 9 of her affidavit, the defendant deposed that she had complied with the July 16th order by providing disclosure and answering the questions. At para. 10 she deposed,
“My answers are correct to the best of my knowledge belief and information and I adopt them in this affidavit. This especially includes the vandalism attack on my office, that I describe in my answers, after the CBSA charged me, the landlord locked us out and getting our equipment and belongings because of the damage done to his property.”
[36] The defendant Miranda went on to depose that she provided all the documents she had or could find from the banks or their former accountant. She attended bank branches where she remembered the company had accounts and delivered everything she could obtain to the plaintiff’s lawyer (para. 12).
[37] The defendant Miranda deposed that she did not have a credit report but would obtain one if the plaintiff paid for it (para. 16).
[38] There is no doubt the defendants breached the order of Shaw J. dated July 16, 2019. She had not answered the questions and had not provided the disclosure as required by the order within the time limits set out in the order. By my order dated August 4, 2020, the defendants were given to August 31, 2020, as referenced above. Miranda deposes that she did her best to comply.
[39] In regard to the July 16th order, I find the affidavit of the defendant Miranda, as discussed above, sufficiently satisfies the defendants’ obligation to provide an affidavit containing the answers to the questions. The affidavit adopts the answers and disclosure provided.
[40] What the court is left with is conflicting affidavit evidence. Because of their quasi-criminal nature, most often, contempt hearings are done in open court with viva voce evidence, allowing the trier of fact to make credibility findings.
[41] In regard to the untested affidavits, I am unable to make any findings as to credibility. For that reason alone, a finding of contempt cannot be made, keeping in mind the plaintiff’s burden of proof, is proof beyond a reasonable doubt.
[42] Further, as set out above, one of the requirements to establish contempt is that the alleged breaches must be intentional or deliberate. On the deposed evidence I am unable to find that such contemptuous behaviour has been proven beyond a reasonable doubt.
[43] A finding of contempt is said to be, a “last ditch” remedy and the circumstances of this case do not warrant the exercise of such a remedy.
[44] In regard to additional questions and disclosure sought by the plaintiff, given the failure to first conduct an examination in aid of execution, I will not grant such relief. In my opinion the proper way to proceed is for the plaintiff to first conduct such an examination.
[45] In my opinion the plaintiff already has sufficient information to initiate enforcement proceeding such as issuing notices of garnishment.
[46] As to costs, while generally it can be said that the plaintiff has not been successful on this motion and presumptively, the successful party is entitled to costs, the defendants must be held accountable for the fact that much of these court proceedings arose from her default and inaction. As a result, therefore, the plaintiff’s motion is dismissed without costs.
Bielby J.
DATE: July 8, 2021
COURT FILE NO.: CV-18-2850
DATE: 2021 07 08
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MARCELINA MALALUAN, also known as LYNN, v. LIWAYWAY MIRANDA, also know as LILY MIRANDA HAMMER, A & L HAMMER WORKFORCE MANAGEMENT INC., and A & L HAMMEER WORKFORCE MANAGEMENT
BEFORE: BIELBY J.
COUNSEL: N. Hashmi, for the Plaintiff
M. Seddigh, for the Defendants
ENDORSEMENT
BIELBY J.
DATE: July 8, 2021