COURT FILE NO.: CV-17-5816400CL
DATE: 20210208
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: January 27, 2021
REASONS FOR DECISION
DIETRICH J.
Overview
[1] On October 5, 2020, I found the responding party Andrew Henry Ting in contempt of Justice Penny’s Order dated January 15, 2019 (the “January 2019 Order”). The January 2019 Order required Mr. Ting to attend an examination by the moving parties, the Trustees in this bankruptcy proceeding (the “Trustees”), and to produce certain documents, within 14 days of service of that Order.
[2] I granted the October 5, 2020 Order (the “Contempt Order”) following Mr. Ting’s unsuccessful appeal of the January 2019 Order, his failure to attend at an examination, and his unsuccessful application for leave to stay the January 2019 Order. I denied leave for the requested stay and granted my order on that application (the “Stay Order”) on October 5, 2020 as well. Mr. Ting’s application for leave to appeal the Stay Order was dismissed by the Court of Appeal for Ontario on December 18, 2020.
[3] In the Contempt Order, I granted Mr. Ting an opportunity to purge his contempt by attending at an examination within ten days of the date of the Contempt Order. Despite the Trustees’ efforts to arrange for such an examination, Mr. Ting declined to attend.
[4] Mr. Ting is seeking an appeal of the Contempt Order, both with leave under section 193(e) of the Bankruptcy and Insolvency Act, R.S.C., c. B-3 (“BIA”) and purportedly as of right pursuant to section 193(a) of the BIA.
[5] In the Contempt Order, I also invited the Trustees to arrange a return date for their motion for contempt should Mr. Ting decline to purge his contempt. At that time, they could make submissions on a suitable penalty to be imposed on him.
[6] The Trustees now seek an order sentencing Mr. Ting to five days imprisonment for his contempt. Mr. Ting was short served on the Trustees’ motion. He filed a responding record and a factum, and he made submissions. He did not seek an adjournment.
[7] For the reasons that follow, Mr. Ting shall be given one final opportunity to purge his contempt by attending an examination in compliance with the January 2019 Order, failing which he shall be incarcerated for his contempt.
Issues
[8] The issues in this matter are:
Do Mr. Ting’s pending appeals of the Contempt Order preclude determining a sanction for his contempt at this time?
If not, what is the appropriate sanction?
Determining the Sanction for Contempt Pending the Appeal
[9] Mr. Ting asserts that purging his contempt by attending at the examination arranged by the Trustees in accordance with the Contempt Order would have largely rendered the fruits of appeal nugatory and the appeal otiose.
[10] Mr. Ting goes on to argue that a sanctioning hearing is automatically stayed pending appeal. In support of his argument, he relies on s. 195 of the BIA. Section 195 states in part “[e]xcept to the extent that an order or judgment appealed from is subject to provisional execution notwithstanding any appeal therefrom, all proceedings under an order or judgment appealed from shall be stayed until the appeal is disposed of, …” Mr. Ting argues that the clock stopped on the Contempt Order and therefore it cannot be said that he was afforded an opportunity to purge the contempt if the Contempt Order is not overturned on appeal. He argues that there has been no trigger, which would allow the Trustees to proceed with the sentencing hearing.
[11] I reject Mr. Ting’s argument. The stay of proceedings under section 195 of the BIA is limited in its scope to “proceedings under an order or judgment appealed from.” In my view, a sanctioning hearing is not a proceeding taken under the Contempt Order, but rather a completion of the Contempt Order that could have been achieved at the first instance, but was deferred to a later date, as is done routinely by this Court in contempt proceedings.
[12] This view is consistent with the purpose of s. 195 of the BIA, as described by the Court of Appeal for Ontario in Re Dilollo, 2013 ONCA 550. In Dilollo, at para. 53, the Court of Appeal held that the purpose of the section “is to ensure that no steps are taken that cannot be unwound if the appeal succeeds.” The determination of a proper sanction for Mr. Ting’s failure to abide by the January 2019 Order is not a step that cannot be unwound, provided the sanction is not enforceable prior to his appeal being finally adjudicated.
[13] On contempt proceedings, in Sabourin & Sun Group of Cos v. Laiken, 2011 ONCA 757, at para. 9, the Court of Appeal stated as follows:
[t]o stay the contempt proceedings at this stage would also interfere with the design of the commonly followed procedure that is permitted, if not prescribed, by rule 60.11(5) and (8), of dividing a contempt proceeding into two phases, the first dealing with the issue of whether the party is in contempt and the second dealing with the issue of sanction. Until the order has been made under 60.11(5), the contempt proceedings have not come to their final conclusion. Until the sanction has been imposed, the judge has not expressed his or her final view of the case. (emphasis added)
[14] The Ontario Court of Appeal in Ruffolo v. David, 2019 ONCA 385, at paras. 5 and 8, affirmed the principle articulated in Sabourin that the motion judge’s consideration of the seriousness of the contempt, and the use of the sanction, whether to bring about compliance or to punish the contemnor, are integral to the nature and character of the contempt proceeding and essential to an appellate court’s full appreciation of the disposition under appeal.
[15] Accordingly, I find that the determination of a sanction in respect of Mr. Ting’s contempt, being the second phase of the contempt proceeding, is not a proceeding to which s. 195 applies. The Trustees acknowledge that any sanction imposed would not be enforced until Mr. Ting’s appeals are finally adjudicated.
The Sanction
[16] Pursuant to r. 60.11(5) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, where a finding of contempt is made, a judge may make any order as is just, including incarceration, payment of a fine and compliance with any other order necessary.
[17] The Court of Appeal for Ontario in Boily v. Carleton Condominium Corp. 145, 2014 ONCA 574, at para. 79, held that the remedy for civil contempt is designed not only to enforce the rights of a private party, but also to enforce the efficacy of the court process itself. It also identified these factors as relevant to a determination of an appropriate sentence for civil contempt: a) the proportionality of the sentence to the wrongdoing; b) the presence of mitigating factors; c) the presence of aggravating factors; d) deterrence and denunciation; e) the similarity of sentences in like circumstances; and f) the reasonableness of a fine or incarceration.
[18] Taking these factors into account, for the reasons that follow, I find that it is appropriate to give Mr. Ting one final opportunity to purge his contempt by complying with the January 2019 Order. Within seven days of the final adjudication of Mr. Ting’s appeal of the Contempt Order, he shall attend at an examination in accordance with the January 2019 Order. Should he fail to do so, he shall be sentenced immediately to seven days’ incarceration.
[19] Incarceration is an appropriate sanction in this case. In my view, Mr. Ting has intentionally and repeatedly frustrated efforts to carry out or complete the examination ordered by Justice Penny.
[20] Mr. Ting’s contempt is serious. The January 2019 Order was made over two years ago. He has now exhausted all avenues of appeal of that Order and still he persists in avoiding his obligation to attend an examination. As stated by Justice Gillese, of the Court of Appeal for Ontario, at para. 20, in her December 18, 2020 reasons for denying leave to Mr. Ting to stay the January 2019 Order, “[f]or this bankruptcy/insolvency proceeding to advance, the Penny Order must be fulfilled. To be fulfilled, Mr. Ting must submit to examination.”
[21] Under these circumstances, a penalty of incarceration is necessary to repair the depreciation of the authority of the court. In my view, there are no mitigating factors. Mr. Ting does not admit to the breach of the January 2019 Order, he has failed to attend scheduled examinations, and has been given the opportunity to purge the contempt, which he has not done. He has rejected the authority of the court, and breached an order with the full understanding and knowledge of the contempt.
[22] A period of incarceration of seven days is within the range of five days to twelve months set out by Brown J., as he then was, in Cellupica v. Di Giulio, 2011 ONSC 1715, at paras. 36-37. The term is consistent with the sentences imposed in other cases with similar facts and circumstances. See: Greenberg v. Nowack, 2015 ONSC 2015; Kopyto v. Clarfield, 1999 CanLII 7318 (ON CA), [1999] O.J. No. 672; and Algoma Central Railway et al. v. B. Allen Brown II et al., 2018 ONSC 1251.
[23] In the circumstances of this case, a fine would be an inadequate sanction. In addition to failing to attend at an examination, Mr. Ting has ignored a number of costs orders resulting in a failure to pay costs in excess of $30,000. He offers no remorse or explanation for his delinquency. Based on Mr. Ting’s conduct in this proceeding, a fine has little chance of being paid promptly and would not likely incent him to comply with the January 2019 Order.
Disposition
[24] Should the responding party Andrew Henry Ting be unsuccessful in his appeal of the Contempt Order, he shall attend at an examination in this matter within seven days of the final adjudication of his appeal, failing which he shall be immediately sentenced to seven days of incarceration.
Costs
[25] 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 hereof. 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. If costs submissions are not made in accordance with this timetable, they shall be deemed to have been agreed.
Dietrich J.
Released: February 8, 2021
COURT FILE NO.: CV-17-5816400CL
DATE: 20210208
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: February 8, 2021