Caja Paraguaya et al. v. Antonio Duscio et al., 2021 ONSC 632

CITATION: Caja Paraguaya et al. v. Antonio Duscio et al., 2021 ONSC 632

COURT FILE NO.: CV-11-9210-00CL

DATE: 20210205

ONTARIO

SUPERIOR COURT OF JUSTICE

COMMERCIAL LIST

BETWEEN:

CAJA PARAGUAYA DE JUBILACIONES Y PENSIONES DEL PERSONAL DE ITAIPU BINACIONAL

Plaintiff

– and –

EDUARDO GARCIA OBREGON a.k.a. EDUARDO GARCIA a.k.a. EDDIE OBREGON, CLAUDIA PATRICIA GARCIA a.k.a. PATRICIA GARCIA a.k.a. CLAUDIA PATRICIA DE GARCIA a.k.a. CLAUDIA SANTISTEBAN, LIGIA PONCIANO, MANAGED (PORTFOLIO), CORP., GENESIS (LA), CORP. (ONTARIO CORPORATION NUMBER 1653094, GENESIS (LA), CORP. (Alberta) CORPORATE ACCESS NUMBER 2013145921), FC INT, CORP., FIRST CANADIAN INT, CORP., UNION SECURITIES LIMITED, SCOTT COLWELL, MARTY HIBBS, HIBBS ENTERPRISES LTD., COLUMBUS CAPITAL CORPORATION, ANTONIO DUSCIO, LEANNE DUSCIO, LEANNE DUSCIO carrying on business as THE QUEEN ST. CONSERVATORY, CATAN CANADA INC., VIJAY PAUL, GREG BAKER, BRADLEY F. BREEN, LOU MARAJ, 2138003 ONTARIO INC., MACKIE RESEARCH CAPITAL CORPORATION, FIRST CANADIAN CAPITAL MARKETS LTD., FIRST CANADIAN CAPITAL CORP., FC FINANCIAL PRIVATE WEALTH GROUP INC., JASON C. MONACO, DANIEL BOASE, PAOLO ABATE, NIKOLAOS SYLIANOS TSIMIDS, GENESIS LAND DEVELOPMENT CORPORATION, LIMITED PARTNERSHIP LAND POOL (2007), and GP LPLP 2007 INC.

Defendants

Jacqueline King and John De Vellis for the plaintiff

Justin Anisman, for the defendant Antonio Duscio

HEARD: October 19-21, December 1, 2, 2020

Koehnen j.

Overview

1This is a motion by the plaintiff to have the defendant Antonio Duscio found in contempt of court for violating a non-dissipation and disclosure order that Dunphy J. issued on May 23, 2018. For ease of reference, I will refer to Antonio Duscio as Tony throughout these reasons. I do so through no disrespect but because I will also be referring to his father and his brother in the course of these reasons. That use of first names will help prevent confusion between the three

2The action arises out of a judgment that now stands at approximately $8,000,000 that the plaintiff obtained against the defendants in respect of which it has collected nothing.

3On December 18, 2018, Dunphy J. convicted Tony of contempt of court for specific violations of the non-dissipation order. Justice Dunphy sentenced Tony to 12 months in jail. Tony’s sentencing appeal was dismissed by the Court of Appeal. Tony was released on parole on November 1, 2019 after serving seven months of his sentence.

4This motion concerns allegations of additional acts of contempt that Tony engaged in by misleading Dunphy J. and dissipating while in jail and/or while on parole for his first conviction of contempt.

5Tony submits that: the plaintiff has not proven contempt beyond a reasonable doubt, the plaintiff’s witnesses are unreliable and the documents the plaintiff relies on are largely inadmissible.

6I am unable to agree with Tony’s submissions. In my view the plaintiff has established additional acts of contempt by Tony beyond a reasonable doubt. I find Tony in contempt for failing to disclose his ownership of certain insurance policies, dissipating the proceeds of those policies and failing to disclose the whereabouts of a Ferrari Testarossa that he had previously disclosed as an asset.

Background to the Contempt Proceeding

7In rendering judgment on the merits in the underlying action, Justice Dunphy found Tony and other defendants liable for fraudulent misrepresentation in what the Dunphy J. described as “outright theft” of the plaintiff’s money. Dunphy J. found Tony liable for damages in the amount of $7,379,958, plus full indemnity costs and punitive damages in the amount of $100,000.

8At the conclusion of the trial on May 14, 2018, Justice Dunphy issued a verbal freezing and non-dissipation Order from the bench against Tony. Justice Dunphy explained the order to Tony.

9On May 15, 2018, plaintiff’s counsel emailed Tony explaining that: “The Court has made an order that your assets … be frozen and you do not dissipate any accounts or assets pending further Order of the Court…”

10On May 23, 2018, Justice Dunphy issued the written Non-Dissipation Order. The first paragraph of that order prohibits Tony from:

(a) selling, removing, dissipating, alienating, transferring, assigning, encumbering, or dealing with any assets, whether solely or jointly owned, wherever situated in the world, including, but not limited to … any other accounts which may have received any funds of Cajubi, (including any accounts of family members), and any other assets into which any funds of Cajubi may be traced or have been transferred

(b) instructing, requesting, counselling, demanding or encouraging any other person, including family to do so; and

(c) facilitating, assisting in, aiding, abetting or participating in any acts which would have the effect of doing so. ¹

11Paragraph 8 of the non-dissipation order Dissipation Order required Mr. Duscio to provide a sworn affidavit of assets containing the "value and location of any and all of [his] current and historical worldwide assets."

12Tony was incarcerated on December 18, 2018 and was released on March 1, 2019 to provide him with an opportunity to purge his contempt. He did not do so.

13On April 5, 2019, Mr. Duscio was sentenced to a 12-month custodial sentence was re-incarcerated and was released on parole in November 2019.

a. The Legal Test for Contempt

14To support a finding of civil contempt, the moving party must satisfy a three part test:

(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 the order;

(c) The party allegedly in breach must have intentionally performed the act that the order prohibits, or intentionally failed to perform the act that the order compels.²

15All three elements must be proven beyond a reasonable doubt. This differs materially from the ordinary civil burden of the balance of probabilities. The concept is rooted in the importance of the presumption of innocence. A conviction should be based solely on the reasoned application of evidence and not upon sympathy or prejudice. Probability of guilt is not sufficient to find Mr. Duscio liable for contempt. Mr. Duscio’s prior conviction for contempt is irrelevant to the issue before me, just as is his liability for fraud. The issue of his current contempt must be based solely on the evidence before me relating to new acts of contempt that were not before Justice Dunphy on the earlier conviction. The burden of proof rests solely on the plaintiff. There is no obligation on Mr. Duscio to explain himself nor can the absence of any explanation from him be held against him. The concept of reasonable doubt does not apply to individual pieces of evidence but to the evidence as a whole.

16I am satisfied that the plaintiff has established all three branches of the test beyond a reasonable doubt.

17The order states clearly and unequivocally what should or should not be done. In his December contempt reasons, Dunphy J. found at para. 38, that “the operative portions of the [the Non-Dissipation Order] were clear and unequivocal.” As a result of that finding, the issue is res judicata. Even without that finding by Dunphy J., I am completely satisfied that the order was clear and unequivocal. It states that Tony cannot sell, dissipate, transfer or assign any assets. Justice Dunphy explained that Tony orally and plaintiff’s counsel explained that to him as well.

18The second branch of the test is also satisfied. In paragraph 46 of his contempt reasons, Justice Dunphy stated: "I find that the plaintiff has proved beyond a reasonable doubt that Mr. Duscio had actual knowledge of both the existence and the terms of the two orders in question." That too is res judicata. Even without that particular finding, it is undisputed that Tony received a copy of the order and that he was in court when the order was explained to him.

19The third branch of the contempt test requires the plaintiff to prove that the defendant intentionally performed the prohibited acts. A plaintiff need not prove an intention to breach but merely an intention to perform the act.³ This third branch is the one truly at issue on this motion. Tony submits that the plaintiff has not proven beyond a reasonable doubt that he performed the act in question.

b. New Acts of Contempt

20The plaintiff moves for a finding that Tony engaged in three new acts of contempt:

i. He failed to disclose his ownership of certain insurance policies to Justice Dunphy.

ii. He transferred one policy to Marino Filiplic, arranged for the transfer of funds from another policy to Mr. Filiplic and directed Mr. Filiplic to disburse those funds.

iii. He has failed to disclose the whereabouts of a Ferrari Testarossa that he owns.

21A good part of Tony’s defence entailed submissions that certain evidence should be excluded. To make these reasons easier to understand, I will first address the facts as I have found them based on evidence to which Tony objected and that I admitted over his objections. I will address his objections to evidence later in these reasons. The analytical process I engaged in was to assess the admissibility of evidence first and then make findings based on the evidence that I had admitted even though the two are presented in reverse order in these reasons.

i. Ownership of Insurance Policies

22Paragraph 8 of the non-dissipation order required Tony to provide a sworn affidavit of assets.

23Tony purported to do so in an affidavit sworn April 2, 2019. The affidavit acknowledges that Justice Dunphy asked for closure of all life insurance policies that Tony held for others or that others held for Tony. In response, Tony stated in paragraph 25 of his affidavit:

I am not aware of any insurance policy or viatical instrument in my name or in any one else’s name held on my behalf.

24On October 11, 2018, Tony had sworn an affidavit⁴ in a lawsuit in Georgia stating that he was the beneficial owner of two life insurance policies. One on the life of Drexel Vealey in the amount of $500,000; the other on the life of Cecil Lovell in the amount of $1.2 million. Tony attached various exhibits to the affidavit all of which demonstrated that he was the beneficial owner of both policies.

25Tony did not disclose either the Vealey or the Lovell policy in his affidavit of assets and did not disclose receipt of the proceeds of the Vealey policy.

26The affidavit in the Georgia lawsuit could not have been in any way mistaken. It was sworn for the very purpose of establishing ownership of both policies. The ownership issue arose because Tony had purchased both policies from a long-time business associate, James Torchia. A receiver had been appointed over the affairs of Mr. Torchia. The receiver claimed ownership of the policies. Tony swore the affidavit to thwart the receiver’s claim and demonstrate his own entitlement.

27It appears that Tony’s ownership of the policies was long-standing. Among the documents he attached to his affidavit were a letter from AIG to Tony dated November 18, 2008 confirming him to be the owner and sole beneficiary under the Lovell policy⁵ and a cheque for $500,000 payable to Tony on the Vealey policy dated August 20, 2014.⁶

28Neither the Vealey nor the Lovell policies were disclosed in that affidavit. Not only does the affidavit not disclose those policies, it does not disclose the receipt of proceeds from the Vealey policy.

29Moreover, on April 8, 2019, Tony transferred the Lovell policy to Mr. Filiplic. Mr. Filiplic testified at the contempt hearing to the following effect: Tony wanted him to become the owner of the policy in case Tony’s assets were frozen. Tony wanted Mr. Filiplic to make premium payments. Mr. Filiplic was to receive the policy proceeds on the insured’s death and dispose of them as Tony would later direct. In exchange, Tony “would make it up” to Mr. Filiplic, that is to say, would find some way of compensating Mr. Filiplic for his trouble.

30On April 8, 2019, American General Life Insurance Company wrote to Mr. Duscio’s former counsel, Hilary Book, advising that Tony was the owner of the Lovell policy and that his wife, Leanne Duscio was the primary beneficiary.⁷ On the same day, American General Life Insurance Company sent a letter to Mr. Filiplic, advising that he was now the owner and primary beneficiary of the Lovell policy.⁸

31I am satisfied beyond a reasonable doubt that Tony’s failure to disclose the Vealey and Lovell policies in his affidavit of assets constitutes a fresh act of contempt. Tony’s affidavit of assets clearly demonstrates that he understood the nature of his obligation which included disclosure of insurance policies. His affidavits in the Georgia proceeding clearly demonstrates that he believed that he owned both the Vealey and Lovell policies. It is equally clear that Tony transferred the Lovell policy to Mr. Filiplic within days of swearing his affidavit of assets. He clearly knew that he was prohibited from engaging in such transfers.

32Tony submits that there is a reasonable doubt because the receiver of Mr. Torchia took the position that the policies belonged to Mr. Torchia. The receiver’s position does not create a reasonable doubt. The fact remains that Tony swore under oath that he was the owner of the policy and that Tony behaved as if he were the owner by transferring the policy to Mr. Filiplic. Although several years have passed, there was no evidence introduced at trial to suggest that there had been any finding holding that Mr. Torchia was in fact the owner of the policies.

ii. Transfer of $114,000

33Mr. Filiplic testified as follows about the receipt of funds from Tony: He has known Tony for approximately 50 years. In early December 2018, Tony called Mr. Filiplic and asked him to pay the premiums for certain insurance policies out of Mr. Filiplic’s bank account. Tony advised that Mr. Filiplic would be getting a large, unspecified amount transferred into his bank account by wire transfer.

34Tony also provided Mr. Filiplic with the details of three life insurance policies in respect of which Mr. Filiplic was to pay the premiums. Mr. Filiplic made notes in which he recorded the insurance company, the premium amount, the payment dates and the policy numbers in question.⁹

35Mr. Filiplic has produced a bank statement from his TD bank account showing the receipt of $114,822.50 by wire transfer on December 7, 2018. Mr. Filiplic says he did not know where the money came from, the money was not his and that it belonged to Tony.

36A fair bit of time was spent at trial on the issue of where the money in Mr. Filiplic’s account actually came from. The plaintiff introduced a bank statement of Stephanie Segarra, the wife of James Torchia which shows Ms. Segarra transferring the amount to Mr. Filiplic on December 7, 2018.¹⁰ Her bank statement specifically refers to Mr. Filiplic as the recipient.

37Much time was spent on whether the bank statement was admissible. I found that it was admissible. I address the issue of admissibility later in these reasons.

38Mr. Filiplic testified that he did not know Ms. Segarra but that he had occasional dealings with Mr. Torchia before 2015. While the source of the funds adds additional context, what is important for my purposes is that Tony told Mr. Filiplic that the money was Tony’s, and that he directed Mr. Filiplic about how to disburse the funds.

39More specifically, Mr. Filiplic testified that Tony instructed him to withdraw cash from the account and give it to him in cash filled envelopes as follows:

(a) $3,000 USD on December 11, 2018;

(b) $2,000 USD on December 13, 2018;

(c) $4,000 USD on March 19, 2019; and

(d) $20,000 USD on March 28, 2019.

40In addition to the foregoing cash payments, Mr. Filiplic says he withdrew $5,000 USD on February 11, 2019 and gave it to Mr. Duscio’s brother, John Duscio. Mr. Filiplic did so because John told him that Tony was in jail for contempt and needed money. Mr. Filiplic says he remembers the specific date because it was the date of the death of his mother-in-law. John denies this.

41Mr. Filiplic has a specific recollection of the March 28 $20,000 withdrawal because the withdrawal had to be carried out in four stages of $5,000 each. He recalls the specific bank branch and its location.

42In addition to the above, between May 2019 and November 2019, Mr. Filiplic paid over $45,000 USD in premiums for the three life insurance policies in which Tony had a beneficial interest and transferred $28,000 to a bitcoin wallet that belonged to Tony; all on Tony’s instructions.

43As noted earlier, on November 1, 2019, Mr. Duscio was released on parole.

44On November 6, Mr. Filiplic received a letter from the Plaintiff’s counsel serving him with the non-dissipation Order and a Third-Party Disclosure Order dated September 21, 2018. Mr. Filiplic testified that he was “freaked out” by the letter because he had been unaware of the order and asked himself what he had done.

45Mr. Filiplic called Tony and told him about the letter and the order. Tony became concerned and wanted to remove the remaining money out of Mr. Filiplic’s bank account. Mr. Filiplic initially refused because doing so would breach the terms of the order. According to Mr. Filiplic, Tony did not care about the order and insisted that the money be moved. When Mr. Filiplic resisted, Tony became more insistent and adamant that the money be moved. Ultimately Mr. Filiplic agreed. He says he was concerned for his safety.

46On November 8, 2019 Mr. Filiplic transferred $28,000 USD to a bitcoin wallet on Mr. Duscio’s instructions. This was the only bitcoin transaction that Mr. Filiplic had ever engaged in.

47During his testimony at trial, Mr. Filiplic walked through the individual steps he took to effect the bitcoin transfer. He has produced contemporaneous documentation in support of that transfer. He knew where to send the money because Tony had given him the QR codes necessary to complete the transfer to a wallet belonging to Tony.

48I am satisfied beyond a reasonable doubt that Tony’s dealings with Mr. Filiplic in respect of the $114,000 constitute a fresh act of contempt. The dealings clearly demonstrate explicit acts of giving instructions to disburse funds that belonged to Tony; conduct expressly prohibited by the non-dissipation order.

49The defence submits that it has created a reasonable doubt through its theory that Mr. Filiplic transferred the bitcoin funds to himself in order to pay off debts. I am not sure where that gets the defence. If the funds belonged to Tony, then any alleged wrongdoing by Mr. Filiplic by using the money for his own purposes rather than as Tony directed does not address Tony’s contempt in having failed to disclose them in his affidavit of assets or in having transferred the funds to Mr. Filiplic in the first place. If the funds belonged to Mr. Filiplic, then there would be no reason for him to transfer the funds to bitcoin in order to pay off debts. He could just have paid those debts directly from his bank account.

50The defence tried to avoid these problems by suggesting that the $114,000 in fact belonged to Mr. Torchia and that Mr. Filiplic was, through his evidence, somehow trying to protect Mr. Torchia. That does not create any reasonable doubt in my mind.

51On the record before me there is no explanation for why Mr. Filiplic would need to implicate Tony in order to protect Mr. Torchia. Mr. Filiplic’s involvement was prompted by a letter from the plaintiff’s counsel advising him of the non-dissipation order and warning him that a breach of that order could result in sanctions against him. In response, Mr. Filiplic contacted plaintiff’s counsel and explained what he had done. By responding as he did, Mr. Filiplic implicated himself in a breach of a court order and exposed himself to sanctions for that. Had he wanted to protect Mr. Torchia, Mr. Filiplic’s much easier response would have been to thank plaintiff’s counsel for their letter and indicate that he had not received any assets from Mr. Duscio and/or had not had any contact with him.

52Moreover, as I set out later in these reasons, I found Mr. Filiplic to be a credible witness.

iii. The Ferrari

53Tony swore to the fact that he owned a 1988 Ferrari Testarossa in affidavits of assets sworn June 6, 2018, and April 2, 2019 and that it was located at his residence in Puslinch.

54Mr. Anisman, on behalf of Tony, agrees that Tony was under an obligation to disclose the whereabouts of the Ferrari if he knew it.

55The Sheriff tried to seize the Ferrari in April 2019 pursuant to a writ of seizure and sale. When the Sheriff visited the Duscio residence, the Ferrari was not there.

56Both Tony’s wife and his brother John testified that Tony was very proud of the Ferrari.

57Ms. Duscio testified that the Ferrari was supposed to have been in the garage. She was not aware that it was missing before the Sheriff attended. After learning that was missing, she told Tony. Ms. Duscio testified that, as far she is aware, no one in the family has made inquiries about the Ferrari. She does not know whether it was stolen. She just does not know where it is.

58Tony’s brother John testified that after he learned the Ferrari was missing, he asked Tony about it while he was in jail. Tony replied that it should be in the garage. John also discussed the Ferrari with Ms. Duscio and with his two other brothers, Jack and Angelo. The extent of his conversation with Ms. Duscio was that the Ferrari was supposed to be the garage but was not there. After his one conversation with Tony in jail, John never discussed the Ferrari with Tony again.

59Neither John nor Ms. Duscio is aware of anyone having reported that the Ferrari was stolen.

60I infer from these facts that the Ferrari was not stolen and that Tony knows where it is. He is refusing to disclose the whereabouts of the Ferrari to prevent it from being seized. I am confident of this beyond any reasonable doubt. The idea that the Ferrari was supposed to be in the garage but was missing and that no one would report it stolen is consistent only with the fact that Tony made arrangements to hide the Ferrari. I have a high level of confidence that Ms. Duscio and John have a similar understanding otherwise they would either have reported it stolen or would have had further discussions with Tony. It is entirely implausible that a prized car would be stolen without Mr. and Ms. Duscio discussing the issue, especially when Ms. Duscio told Tony about the car not being there. At the very least, one would expect Tony to tell his wife to report the missing Ferrari to the police or to his insurer. It is equally implausible that John would never have raised the issue again with Tony unless he had an understanding that Tony knew where it was. Otherwise, one would, at a minimum, expect at least a passing comment to the effect of “whatever happened to that Ferrari?”

61Tony submits that, evidence about the Ferrari is circumstantial and that to the extent I rely on circumstantial evidence to find Tony in contempt, I must be satisfied that there are no reasonable inferences that can be drawn from that circumstantial evidence other than guilt of the accused.¹¹ If there are other plausible theories that are consistent with the innocence of the accused, I must acquit.

62Mr. Anisman says I must acquit because there are other theories that are inconsistent with guilt. Principally, Mr. Anisman submits that someone may simply have taken the car for a drive when the Sheriff tried to seize it. He notes that the sheriff was never sent back a second time to look for the car.

63While I agree, in principle, that I cannot make any adverse finding against Tony based on circumstantial evidence if there are other plausible theories consistent with Tony’s innocence, applying the principle in practice often turns on the meaning of a plausible theory. As the Supreme Court of Canada pointed out in R. v. Villaroman:

When assessing circumstantial evidence, the trier of fact should consider “other plausible theor[ies]” and “other reasonable possibilities” which are inconsistent with guilt. I agree with

the appellant that the Crown thus may need to negative these reasonable possibilities, but certainly does not need to “negative every possible conjecture, no matter how irrational or fanciful, which might be consistent with the innocence of the accused “Other plausible theories” or “other reasonable possibilities” must

be based on logic and experience applied to the evidence or the absence of evidence, not on speculation. (Citations omitted)¹²

64Alternative theories must be reasonable, not just possible.¹³

65The theory that someone took the car for a drive when the Sheriff tried to seize it falls into the category of the irrational and fanciful. Ms. Duscio continues to live in the home in the garage of which the Ferrari was supposed to be located. The tenor of her evidence was clear: the Ferrari was gone; she does not know where it is and it has never been reported stolen. That is entirely inconsistent with someone having taken the car for a drive when the Sheriff happened to be at the property. John’s evidence is to similar effect. He discussed the Ferrari with Ms. Duscio and with Tony. The tenor of John’s evidence was also that the Ferrari was still missing but that he never spoke to Tony about it after his one conversation while Tony was in jail.

66If the car were in fact still in the garage at Tony’s home, one might expect Ms. Duscio to say that rather than risk her husband being incarcerated a second time for contempt. Moreover, if it were at the home, Mr. Anisman agreed that Tony had a duty to disclose its whereabouts. Tony is well aware of the issue surrounding the whereabouts of the Ferrari and has not advised that it is in fact at his home in the garage.

c. Credibility of Mr. Filiplic

67The defence mounted several attacks on Mr. Filiplic’s credibility. First, they focussed on the following discrepancies between Mr. Filiplic’s evidence at trial and his evidence on previous occasions:

(a) At trial Mr. Filiplic said he deleted text messages from Tony because Tony had asked him to do so. In his examination of November 22, 2019, he said he deleted the texts because he did not want to go to jail.

(b) In paragraph 18 of his affidavit, Mr. Filiplic had described himself as knowing John but not having any relationship with him. At trial, Mr. Anisman took him to email correspondence with John in which Mr. Filiplic was bringing investments to John’s attention.

(c) In paragraph 24 of Mr. Filiplic’s affidavit he stated that he transferred $20,000 to an account in Florida at Tony’s request in March, 2019. At trial, he said the transfer was his own idea.

68These discrepancies do not create any doubt in my mind about Mr. Filiplic’s credibility. First, they are relatively minor discrepancies of the sort that may naturally arise when witnesses recount the same events at different times. Second, Mr. Filiplic provided an explanation for the differences in his description of events that are consistent with the fact that witnesses will rarely recount the same event with exactly the same language and characterization. Deleting texts because Mr. Filiplic did not want to go to jail or because Tony told him to are not necessarily inconsistent explanations. Both considerations can be present at the same time. The point is in any event entirely peripheral to the issue of contempt. Tony is not being found in contempt for allegedly telling Mr. Filiplic to delete emails but for failing to disclose and for dissipating assets.

69Mr. Filiplic’s evidence about not having any relationship with John is not materially inconsistent with sending him a few emails and bringing investments to his attention. It really turns on the meaning that an individual gives to the word relationship. Some may find sending the occasional email amounts to a relationship. Others may find it does not.

70The transfer of funds to Florida at Tony’s request is also not materially inconsistent with the transfer being Mr. Filiplic’s idea. As Mr. Filiplic explained, Tony wanted Mr. Filiplic to pay the premiums on the insurance policies from money that had been wired to Mr. Filiplic’s account. Tony wanted that done on a timely basis to ensure the policies did not lapse. To make sure that happened, Mr. Filiplic transferred money from his TD account in Ontario to an account in Florida. The point at issue in the proceeding is not whose idea it was to transfer money to an account in Florida but that Tony was directing Mr. Filiplic to disperse certain funds.

71The defence also tried to impeach Mr. Filiplic’s credibility by highlighting that he testified to meeting Tony on April 5, 2019. That was the day Tony was in court to be sentenced by Justice Dunphy. Mr. Anisman submits it was impossible for Mr. Filiplic to meet Tony and still allow Tony to be in court by 10 o’clock.

72That may or may not be true. Mr. Filiplic was not asked at what time of day the meeting occurred. Similarly, Mr. Anisman did not put the proposition that Tony was in court on April 5 to Mr. Filiplic in cross-examination thereby depriving him of the opportunity to explain the potential inconsistency. Mis-remembering the date on which something occurred several years after the fact does not necessarily undermine the credibility of a witness, unless the date is critical to the narrative at issue.

73The defendants point to John’s denial that Mr. Filiplic gave him $5000 on February 11 as Mr. Filiplic alleges. The defence asks me to prefer the evidence of John over that of Mr. Filiplic. I am not inclined to do so and prefer the evidence of Mr. Filiplic.

74Mr. Filiplic’s evidence was harmful to his own interests. Had Mr. Filiplic wanted to mislead the court he could simply have said that he did not receive money from Tony and leave it for the plaintiff to commence an action against him to prove the contrary. Instead, Mr. Filiplic volunteered that he knowingly helped Tony breach a court order thereby exposing himself to liability.

75John on the other hand was Tony’s brother. He had an interest in protecting a family member. He was not as forthcoming as Mr. Filiplic and was not as prepared to concede points against him, especially not when they implicated another family member. By way of example, an issue arose about whether Tony’s father, Mario had seen the Ferrari. In out-of-court examination, Mario denied having seen it. There were, however, pictures showing Mario standing almost beside the Ferrari. Although John agreed that his father had seen the Ferrari, he would not agree that his father knew it was a sports car.

76In argument, Mr. Anisman also suggested that Mr. Filiplic may have been influenced by comments that Justice Dunphy made in setting the terms of Mr. Filiplic’s cross-examination when Justice Dunphy stated:

If he is just a third party doing a favour for a friend, well then say what he did and undo what can be undone.

77According to Mr. Anisman, it is “too convenient” that Mr. Filiplic would use that story as his modus operandi because Justice Dunphy had already indicated that Tony was the villain the piece. As a result, Mr. Filiplic knew he had the perfect scapegoat. I disagree. Once again it would been far easier for Mr. Filiplic to have asserted that the money was his or the belonged to Mr. Torchia than to point the finger at Mr. Duscio and implicate himself in a breach of a court order.

d. Evidentiary Objections

i. Ms. Segarra’s Bank Statement

78Tony objects to the admission of Ms. Segarra’s bank statement as evidence. He says it is hearsay evidence that fails to meet the tests of reliability or necessity. According to Tony, the plaintiffs had other options. They could have obtained the bank statement either from Ms. Segarra or from Wells Fargo pursuant to letters of request. Their failure to do so should be held against them.

79The law on this point was usefully summarized by the Supreme Court of Canada in in R v. Bradshaw¹⁴ at paras 27 and 31 where it stated:

27The hearsay dangers can be overcome and threshold reliability can be established by showing that (1) there are adequate substitutes for testing truth and accuracy (procedural reliability) or (2) there are sufficient circumstantial or evidentiary guarantees that the statement is inherently trustworthy (substantive reliability).

30A hearsay statement is also admissible if substantive reliability is established, that is, if the statement is inherently trustworthy. To determine whether the statement is inherently

trustworthy, the trial judge can consider the circumstances in which it was made and evidence (if any) that corroborates or conflicts with the statement. (Citations omitted).

80In addition, when deciding whether to admit the evidence, the trial judge must be able to rule out any other plausible alternative explanations for the evidence on a balance of probabilities.

81Mr. Anisman submits the bank statement is not reliable. The plaintiffs obtained the bank statement from their Georgia lawyer, Mr. Wasmuth, who was suing Ms. Segarra in Georgia on behalf of the plaintiff. Mr. Wasmuth, testified that he obtained the bank statement from Ms. Segarra’s lawyer in the context of settlement discussions. Tony submits that this makes the document unreliable because it could have been altered by Ms. Segarra in an effort to obtain a more favourable settlement. While it is true that Ms. Segarra or someone else could have altered the bank statement, there is nothing on the face of the document that suggests it has been altered (apart from handwritten notes which I will address momentarily). Mr. Anisman has not been able to point to any discrepancies in the photocopying which suggest an alteration.

82In addition, it would be extraordinarily coincidental that Mr. Filiplic would receive a deposit in his bank account on the same day and in the same amount¹⁵ as is indicated on a supposedly fabricated bank statement of Ms. Segarra which shows the transfer on the same day in the same amount being made specifically to Mr. Filiplic. That again would take an alternative theory to the level of fanciful speculation.

83I am satisfied that in circumstances where Ms. Segarra’s lawyer gave the bank statement to the plaintiff’s Georgia lawyer who produced it in this litigation and the bank statement corresponds with the bank statement of Mr. Filiplic, that Ms. Segarra’s bank statement meets the test for reliability.

84I am also satisfied that Ms. Segarra’s bank statement meets the test for necessity. The plaintiffs introduced evidence of many efforts to subpoena Ms. Segarra after their settlement discussions broke down. She in effect evaded service. There are certain practical realities in proceeding in a case like this. Had the plaintiff been forced to wait with this application until it had obtained their corroborative evidence through a process of letters of request it would have added substantial delay. One can expect that Ms. Segarra would have evaded service of letters of request every bit as much as she evaded service of a summons to witness. Moreover, had letters of request been issued, there would have been procedural delays within that process and appeals from that process. All of that would have created substantial delay, all in regard to a piece of evidence that simply corroborates what Mr. Filiplic said on the stand and corroborates his own bank statement, the authenticity of which is not in question.

85Necessity is not an absolute concept. It is regularly referred to as reasonable necessity. The court must balance the effort to be undertaken against the need to have the witness testify viva voce and the reliability of the evidence. Where the evidence is less reliable, the threshold of necessity may be higher. Where the evidence is highly reliable, the threshold of necessity is lower.¹⁶ The mere fact that Ms. Segarra is out of the jurisdiction does not, in and of itself, amount to necessity. However, the fact that she is out of the jurisdiction and has evaded service does amount to reasonable necessity when dealing with proof of a bank statement that corroborates an uncontested bank statement that Mr. Filiplic has produced.

86The bank statement produced in the joint book of documents also contains handwritten notes. These are the notes the plaintiff’s Georgia attorney, Mr. Wasmuth, made during settlement discussions with Ms. Segarra’s attorney. I excluded the contents of those notes from the evidence. The handwritten notes entail significantly greater reliability risks than do the computerized entries on a bank statement. The notes reflect double hearsay. They reflect information that Ms. Segarra first gave to her own lawyer which was then passed on to Mr. Wasmuth which he recorded in the notes. The accuracy of the notes therefore depends on Ms. Segarra’s lawyer understanding the nuances of communications from Ms. Segarra, Ms. Segarra’s lawyer faithfully communicating that information to Mr. Wasmuth, Mr. Wasmuth understanding the nuances of the communication from Ms. Segarra’s lawyer and faithfully recording that understanding in the notes. There is, in that chain, simply too much scope for misspeaking, misunderstanding or understanding information in a way that confirms what one wants to hear to be reliable. The communications reflected on the handwritten notes also reflect the content of settlement discussions. Those discussions are without prejudice and should not be used to implicate others. While one can compel the production of documentation, one cannot necessarily compel a witness to testify on the stand in the same manner as they may be prepared to provide information during a settlement discussion.

ii. Admissibility of Georgia Affidavit

87Tony objects to the admission of the affidavit he swore in Georgia. He submits that admitting the affidavit would violate his protection against self-incrimination under s. 13 of the Canadian Charter of Rights and Freedoms. I disagree.

88Section 13 of the Charter provides:

A witness who testifies in any proceedings has the right not to have any incriminating evidence so given used to incriminate that witness in any other proceedings, except in a prosecution for perjury or for the giving of contradictory evidence.

89In R. v. Nedlecu,¹⁷ Justice Moldaver explained for the majority that:

6As I read the section, the “quid” that forms the critical first branch of the historical rationale, refers to “incriminating evidence” the witness has given at a prior proceeding in which the witness could not refuse to answer. The section does not

refer to all manner of evidence the witness has given at the prior proceeding. It refers to “incriminating evidence” the witness has given under compulsion.

8Thus, a party seeking to invoke s. 13 must first establish that he or she gave “incriminating evidence” under compulsion at the prior proceeding. If the party fails to meet these twin requirements, s. 13 is not engaged and that ends the matter.

90Tony did not provide the Georgia affidavit under compulsion. Indeed, the recitals to the affidavit indicate:

I give this affidavit freely, voluntarily, and without threat or coercion.

91Tony filed the affidavit in Georgia not because he was compelled to but because he wanted to oppose the position that Mr. Torchia’s Receiver was taking in respect of certain property. The Receiver was taking the position that the property belonged to Mr. Torchia. Tony wanted to take the position that the property belonged to him. That is self-interest, not compulsion.

92Tony raises similar grounds to object to the admission of his affidavit of assets sworn in the proceeding before Justice Dunphy on April 2, 2019. It is subject to a slightly different analysis because it was produced under compulsion and indicates on its face that, to the extent the affidavit may tend to incriminate Tony, he objects to providing the evidence but does so in accordance with section 9 of the Ontario Evidence Act¹⁸ and section 5 of the Canada Evidence Act.¹⁹

93Tony’s affidavit of April 2, 2019 was attached to an affidavit of Matilda Lici, an articling student at Shibley Righton, counsel for the plaintiffs. She attached the affidavit of Tony together with a number of other documents. At trial I admitted the affidavit under a voir dire subject to rulings on objections Mr. Aniston had.

94The Supreme Court of Canada made clear in R. v. Noël,²⁰ at paras. 23 – 24 that the protection against self-incrimination is available only where the witness was being truthful in the first compelled evidence. The public policy underlying the rule against self-incrimination is to promote the giving of truthful evidence. Here, the incrimination arises not because Tony gave truthful evidence in his affidavit of April 2, 2019. Rather, the point is to demonstrate that he gave false evidence in his affidavit and that doing so constituted contempt.

95The language of section 13 of the Charter tracks this concept when it provides that the protection against self-incrimination applies “except in a prosecution for perjury or for the giving of contradictory evidence.” This contempt proceeding is based on Tony having given contradictory evidence.

96If Tony’s position were correct, affidavits of assets commonly associated with Mareva injunctions would be impossible to enforce. Their enforcement generally depends on the concept that the defendant has failed to disclose assets. One can only establish that by demonstrating that the defendant’s affidavit omitted assets the defendant owned. That is impossible to do without the ability to put the initial affidavit to the court.

iii. Admissibility of Transcripts

97The plaintiff seeks to admit the transcripts of examinations of Mr. Mario Duscio, Tony’s father and Leanne Duscio. Both are attached to Ms. Lici’s affidavit. Tony objects on the grounds that the transcripts are hearsay.

98During the course of argument on the issue, I asked Mr. Anisman whether he had not put the content of the affidavits at issue by asking questions about their content during Ms. Lici’s cross-examination. That question contained an inappropriate suggestion. The evidence of Ms. Lici was admitted in a voir dire subject to my rulings on the admissibility of the transcripts. Mr. Anisman was therefore fully entitled to put the contents of the transcripts into issue.

99I advised counsel of my dispositive ruling with respect to the transcripts on October 28, 2020. In that dispositive ruling I held that the transcripts were admissible with respect to evidence concerning the Ferrari.

100On further reflection I would exclude the transcripts.

101Although transcripts under oath are regularly admitted in evidence, a key requirement for their admission is that the party opposing their admission had the opportunity to cross-examine the witness in the earlier proceeding.²¹ It is unclear from the evidence whether Tony had the opportunity to have counsel present and cross-examine. Mario’s examination occurred while Tony was in jail. The front page of the transcript indicating counsel present at the examination does not refer to anyone being present on behalf of Tony. The front page of the transcript for Ms. Duscio shows counsel being present for Antonia Duscio and Leanne Duscio. I am unclear whether Antonia is a typographical error and should read Antonio or whether there is an Antonia Duscio in the family. Plaintiff’s counsel did not make any submission to the effect that Tony was advised of the examinations and could have had counsel present.

102As a result, I have not reviewed any part of either transcript for the motion other than the one page of each transcript identifying counsel present at the examination.

103The entire issue of transcripts seems to be a bit of a red herring in any event. The plaintiff ended up calling that Leanne Duscio to testify viva voce. The only point that the plaintiff sought to elicit from Mario’s transcript was that Mario denied ever having seen the Ferrari during his examination even though a picture introduced into evidence showed him standing almost next to it at Tony’s home. I do not see how that point helps or hurts either side. That point plays no role in my determination of the motion.

iv. The Testimony of Leanne Duscio

104The plaintiff sought to call Leanne Duscio as a viva voce witness. Tony objected on the grounds that the plaintiff had already closed it case and that he would be prejudiced by her testimony. I allowed Ms. Duscio to testify.

105As will be evident from the hearing dates on the first page of these reasons, this hearing proceeded in two stages. The first occurred between October 19 and October 21, 2020. The second occurred on December 1 and 2, 2020.

106At the end of the day on October 21, the plaintiff advised that it had completed its case. I adjourned the hearing to December 1 and 2, 2020 for its completion.

107The following day, on October 22, 2020, the plaintiff advised by email that it would be calling Ms. Duscio as a hostile witness when the hearing resumed on December 1, 2020.

108Tony objected to having Ms. Duscio called as a witness because the plaintiff had already closed its case. He submits that her evidence would prejudice him because she was expected to testify about the whereabouts of the Ferrari. According to Tony, had he known that his wife would be testifying, he would have spent more time cross-examining about the Ferrari than he actually did and would have conducted a more in depth investigation into the Ferrari’s whereabouts. I nevertheless allowed Ms. Duscio to testify.

109This was not truly a case of the plaintiff introducing new evidence after it had closed its case. The plaintiff had closed its case in only the most technical of senses. As noted above, the hearing adjourned on October 21 without the defence beginning its case. The plaintiff advised of its intention to call Ms. Duscio on October 22. Moreover, it was Tony who urged that the transcript of Ms. Duscio should not be admitted into evidence and suggested that the plaintiff should have called his wife as a witness.

110I set a timetable for the exchange of written argument on the point and advised the parties on November 24, 2020 that I would allow the plaintiff to call Ms. Duscio.

111In Catholic Children’s Aid Society of Toronto v. MR²² the court noted at paragraph 16 that the test to apply when being asked to allow a party to reopen its case depended on the stage of the proceeding at which the party made the request:

… the test for reopening should be increasingly onerous as the stage of the trial progresses. Within that framework, the test would be least restrictive if a plaintiff’s motion to re-open was made after the plaintiff had closed its case, but before the defendant began to lead evidence, tightening after the defendant’s case had gone in, and tightening much more after judgment was announced, but before the order was entered. Within that framework, “the essential principle which arises is that….the trial judge should give significant consideration to the concepts of diligence and discoverability”, but not be bound by those considerations if a serious miscarriage of justice would occur if the motion to re-open was not allowed.

112Here, the motion was made the day after the plaintiff “closed” its case and over a month before the defendant would be called on to present its case. That is ample time for the defendant to address the issue. Moreover, the evidence was being called at the insistence of the defendant. The plaintiff had proposed alternative means of introducing the evidence of Ms. Duscio to which the defendant objected.

113Tony alleges he would have spent more time exploring the Ferrari with the plaintiffs’ witnesses. He does not say how or with whom. It is difficult to see how Tony would have spent more time cross-examining the plaintiffs’ witnesses about the Ferrari when the only evidence the plaintiff had came from Tony’s affidavit of assets and the transcripts of Mario and Ms. Duscio.

114In addition, Tony submits that he is prejudiced by the evidence of his wife because had he known she would be testifying he would have undertaken “a more detailed pretrial investigation into the whereabouts of the Ferrari.” He provides no particulars of the sort of investigation he would have conducted. That allegation is difficult to accept. The whole point of the plaintiff calling Ms. Duscio was to establish that he thought the Ferrari was in the garage of her residence, when the sheriff arrived to seize the Ferrari it was no longer there, Ms. Duscio was surprised that it was not there, she does not know where it is and to the best of her knowledge, no one has reported it as stolen. Having failed to report the car as stolen, it is difficult to determine what sort of more detailed pretrial investigation Tony would have undertaken with respect to its location. As noted earlier, I have inferred that Tony knows at least generally where the car is and who has possession of it.

115When Ms. Duscio was called, she invoked spousal privilege. Mr. Anisman objected to the plaintiff’s request that the plaintiff be allowed to cross-examine her. I allowed the plaintiff to cross-examine her. There is clear adversity of interest between Ms. Duscio’s interests and those of the plaintiff.

Disposition

116For the reasons set out above, I find that Tony is in contempt of court for having failed to disclose the Vealey and Lovell policies to Justice Dunphy, having disbursed the $114,000 that was transferred into Mr. Filiplic’s account (which funds belonged to Tony) and having failed to disclose the location of the Ferrari.

117I will address the issue of costs globally after the sanctions hearing.

118I would ask counsel to develop a schedule for the sanctions hearing. If the parties cannot reach agreement on a schedule, they can arrange a case conference and I will set a schedule.

Koehnen J.

Released: February 5, 2021

COURT FILE NO.: CV-11-9210-00CL

DATE: 20210205

ONTARIO

SUPERIOR COURT OF JUSTICE

(Commercial List)

BETWEEN:

CAJA PARAGUAYA DE JUBILACIONES Y PENSIONES DEL PERSONAL DE ITAIPU BINACIONAL

Plaintiff

– and –

EDUARDO GARCIA OBREGON et al.

Footnotes

1. 1The order is found at p. 1109-1117 of the Joint Book of Documents. Paragraph 1 is found at p. 1110-1111.
2. 2Carey v. Laiken 2015 SCC 17, [2015] 2 S.C.R. 79 at paras. 33-35
3. 3Carey v. Laiken 2015 SCC 17, [2015] 2 S.C.R. 79 at para. 38.
4. 4Joint Book of Documents page 1029
5. 5Joint Book of Documents page 1054
6. 6Joint Book of Documents page 1037.
7. 7Joint Book of Documents page 201.
8. 8Joint Book of Documents page 202.
9. 9Joint Book of Documents page 447.
10. 10Joint Book of Documents page 1294 – 1302
11. 11R. v. Villaroman, [2016] 1 S.C.C. 33 at paragraph 35.
12. 12Villaroman at para. 37.
13. 13Villaroman at para. 42.
14. 142017 SCC 35, [2017] 1 S.C. R. 865
15. 15Minus a few dollars for wire transfer fees.
16. 16Sopinka, Lederman & Bryant, The Law of Evidence in Canada, 4th ed. 4th ed. para 6.95-96, 6.102, 6.113
17. 17R. v. Nedelcu, 2012 SCC 59, [2012] 3 S.C.R. 311
18. 18Ontario Evidence Act, RSO 1990, c E.23
19. 19Canada Evidence Act, R.S.C. 1985, c. C-5.
20. 20R. v. Noël, 2002 SCC 67, [2002] 3 S.C.R. 433
21. 21See generally the discussion in Sopinka, Lederman & Bryant, The Law of Evidence in Canada, 4th ed. at paras. 6.371-6.379
22. 22Catholic Children’s Aid Society of Toronto v. MR 2014 ONCJ 762