Court File and Parties

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

DATE: 2022-04-28

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

Counsel:

Jacqueline L. King and John De Vellis, for the Plaintiff

L. Leslie Dizgun, Justin W. Anisman, William McLennan for the Defendant, Antonio Duscio

HEARD: December 13-14, 2021

KOEHNEN J.

REASONS FOR JUDGMENT

[1] By reasons dated February 5, 2021, I found Antonio Duscio liable for contempt of court.[^1] These reasons address the sentence for those acts of contempt.

[2] The plaintiffs (“Cajubi”) ask me to impose a custodial sentence of two years. Mr. Duscio submits that a conditional sentence of 12 months served in the community and a 90 day custodial sentence served on weekends is a more appropriate sentence.

A. The Evidence at the Sentencing Trial

[3] Before turning to an analysis of the relevant sentencing principles, I will address the evidence called at the sentencing hearing. Mr. Duscio called several witnesses in his support and testified himself.

[4] Mr. Duscio’s first witness was Dr. John Murtrie, a family physician who has treated Mr. Duscio since 2017. Dr. Murtrie testified that when he met Mr. Duscio after his release from jail in November 2019, he seemed agitated, anxious, fearful, restless and near tears. Dr. Murtrie attributed the anxiety to having been in jail. His condition improved over time with improved mood, less drinking, less anxiety and a brighter disposition. In Dr. Murtrie’s view, sending Mr. Duscio back to jail would aggravate his anxiety and lead him to become fearful again. Mr. Duscio’s counsel suggested that the emotional turmoil was the product of remorse. Dr. Murtrie admitted in cross-examination that he would not be able to distinguish between emotional upset caused by remorse on the one hand, and upset caused by having been in jail or by a concern about returning to jail on the other hand. Dr. Murtrie also admitted that he had no knowledge of the victims of Mr. Duscio’s conduct and that any statements of guilt that Mr. Duscio made concerned feelings of guilt towards his parents, not towards the victims of his activities.

[5] The next witness was Angela Duscio, Mr. Duscio’s 27-year-old daughter. She testified as follows: Mr. Duscio was a good father, was very present in her life growing up and is very present with her own infant daughter. When Mr. Duscio was released from jail he had lost weight, lost his sense of humour and had shut down. Mr. Duscio’s incarceration had a negative effect on her and her family. Angela’s sister suffered from panic attacks as a result of the incarceration. Angela herself becomes stressed and begins to shake when she thinks about her father going back to jail.

[6] Angela, however, knew nothing about why Mr. Duscio was in jail. She knew nothing about the findings of fraud against him had never spoken with her father about the victims of his fraud. He has never told her that he had done something wrong.

[7] Arkady Shpindler was Mr. Duscio’s third witness. He is a Vice President of Lana Distribution, Mr. Duscio’s current employer. Mr. Duscio has worked there since early 2020 initially as a courier driver, then as a warehouse supervisor and then as a courier again when operations were cut back. Mr. Shpindler said he did not have much knowledge of Mr. Duscio’s legal problems. As far as he knew, the company for which Mr. Duscio worked had problems with clients as a result of which “a case was opened.” When confronted with the fact that Mr. Duscio had been found liable for a multi-million dollar fraud, Mr. Shpindler said that would make no difference to his opinion of Mr. Duscio because his own experience shows he can trust Mr. Duscio.

[8] Mr. Duscio also took the stand. He testified about the hardships of jail and how, when he was released from jail, he felt embarrassed, inferior and emotionally devastated. He said that he would turn the clock back and undo everything if he could. He says he feels bad for everyone in this and feels at fault. He also does not think he would make it through two years of jail and feels like his heart is going to tear through his shirt when he thinks of that possibility. Mr. Duscio says he would make restitution if he could.

B. Sentencing Principles

[9] The principal factors to consider in sentencing include the following:[^2]

a. the proportionality of the sentence to the wrongdoing;

b. the presence of aggravating or mitigating factors;

c. deterrence and denunciation;

d. the reasonableness of the penalty and the availability of sanctions other than jail; and

e. the similarity of sentences imposed on similar contemnors for similar contempts committed in similar circumstances.

a. The Proportionality of The Sentence to The Wrongdoing

[10] Assessing the proportionality of the sentence to the wrongdoing requires an understanding of the underlying facts that led to the contempt finding.

[11] The wrongdoing here is serious. This is not a single act of contempt but an ongoing pattern of serial breaches of court orders and a serial refusal to comply with them. Mr. Duscio remains defiant in flaunting the orders against him. His contempt strikes at the heart of the administration of justice.

[12] The contempt arises out of a judgment for approximately $8 million, including interest and costs, against Mr. Duscio for fraud. As part of the initial claim against Mr. Duscio, Dunphy J. issued a non-dissipation and disclosure order on May 23, 2018. The order restrained Mr. Duscio from disposing of any of his assets and ordered him to disclose all current and past assets.

[13] Mr. Duscio failed to comply with that order as a result of which Dunphy J. convicted him of contempt of court for specific violations of the non-dissipation order on December 18, 2018. The contempt for which Justice Dunphy found Mr. Duscio liable included, among other things, transferring assets to accounts in Liechtenstein to put them beyond the jurisdiction of this court.

[14] Mr. Duscio was initially incarcerated on December 18, 2018 and released on March 1, 2019 to provide him with an opportunity to purge his contempt. He did not do so. On April 5, 2019 Dunphy J. sentenced Mr. Duscio to a further 12 months in jail for his continued contempt. That sentence was upheld by the Court of Appeal.[^3] Mr. Duscio was released on parole by the Ontario parole board on November 1, 2019 after serving seven months of his sentence.

[15] In my reasons of February 5, 2021 I found Mr. Duscio liable for three new acts of contempt:

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

ii. Transferring one policy to Marino Filiplic, arranging for the transfer of funds belonging to Mr. Duscio to Mr. Filiplic and directing Mr. Filiplic to disburse those funds.

iii. Failing to disclose the whereabouts of a Ferrari Testarossa that he owns.

[16] The circumstances surrounding those acts of contempt are dealt with in detail in my initial reasons. I will only summarize them here briefly.

[17] Mr. Duscio transferred the insurance policy to Mr. Filiplic while he was in jail on his twelve-month contempt sentence. Mr. Duscio also gave Mr. Filiplic instructions on how to disburse funds that belonged to Mr. Duscio while he was serving his twelve-month contempt sentence. Shortly being after released on parole, Mr. Duscio gave Mr. Filiplic further instructions about transferring funds to a bitcoin wallet. Mr. Filiplic objected because he had by that time received a letter from the plaintiffs’ counsel advising him of the non-dissipation order. According to Mr. Filiplic, Mr. Duscio did not care about the order and insisted that the money be transferred. When Mr. Filiplic resisted, Mr. Duscio became more insistent that the money be moved. Mr. Filiplic ultimately agreed. He says he was concerned for his safety.

[18] While Mr. Duscio was in jail, the sheriff tried to seize the Ferrari which was located in the garage of Mr. Duscio’s home in Puslinch. When the sheriff arrived, the Ferrari was not there. Mr. Duscio’s explanations about the Ferrari are not credible. He says the Ferrari was supposed to be in the garage and that he has no idea where it is. His wife, who was living in the Puslinch home at the time says she does not know where it is either. It is uncontested that the Ferrari was a prized possession of Mr. Duscio. Although it appears to have disappeared and both Mr. and Mrs. Duscio say they have no idea where it is, it was never reported as missing or stolen to an insurer or to the police.

[19] Mr. Duscio’s brother John testified at the contempt hearing that, after he learned the Ferrari was missing, he asked Mr. Duscio about it while he was in jail. Mr. Duscio replied that it should be in the garage. After this one conversation with Mr. Duscio in jail, John never discussed the Ferrari with Tony again. I concluded at paragraph 60 of my reasons that the only reason the Ferrari was missing and not reported as stolen was that Mr. Duscio, or someone on his behalf, had made arrangements to hide the Ferrari. I have no doubt that Mr. Duscio could determine the location of and produce the Ferrari if he were minded to.

[20] Mr. Duscio was under specific court orders not to dissipate assets. There could be no possible misunderstanding on Mr. Duscio’s part about the effect of the order. When Mr. Duscio committed the acts of contempt at issue here, he was already serving a 12 month sentence in jail for having dissipated other assets.

[21] Even though he was already jailed, Mr. Duscio managed to arrange further dissipations from his jail cell and still further dissipations when he was released on parole.

b. The Presence of Aggravating or Mitigating Factors

i. Mitigating Factors

[22] Mr. Duscio submits there are a number of mitigating factors that should lead me to impose the sentence he submits is appropriate.

[23] Mr. Duscio first submits that the impugned acts occurred before he served his jail sentence, found employment, and received medical treatment for the effects of his imprisonment. I do not agree. Mr. Duscio remains defiant. He has made no effort to explain what happened to the Ferrari or the bitcoin transfers that were made at his direction. That defiance continues to this day.

[24] Mr. Duscio said in evidence that he was sorry for what he had done and would undo it all if he could. I do not accept that as a genuine expression of remorse. Mr. Duscio can still undo at least some of what he has done but refuses to do so. He cloaks his refusal behind statements like not knowing where the Ferrari is and not owning any bitcoin wallets. If those assertions were true and if Mr. Duscio were genuinely sorry for what he has done, I would have expected a fully transparent explanation of what was done with the Ferrari and at a very minimum, details of the bitcoin wallet to which Mr. Duscio instructed Mr. Filiplic to transfer funds. Similarly, if Mr. Duscio were truly sorry for what he had done, I would have expected him to have been truthful with his daughter, have explained to her that he had defrauded people of millions of dollars and had then hidden those assets to put them beyond the reach of the court and beyond the reach of the people he had defrauded.

[25] Mr. Duscio also submits that he has cooperated with Cajubi’s efforts to recover funds from the Lovell Policy, as a result of which that aspect of the Second Contempt is purged. It is correct that on August 25, 2021, Cajubi settled litigation in Georgia which involved the Lovell policy. The plaintiff in the Georgia litigation was the Receiver of a series of companies owned by James Torchia, a business associate of Mr. Duscio. The Receiver had sued Mr. Duscio seeking entitlement to the proceeds of the Lovell Policy. Cajubi had intervened in the proceeding. The court’s order approving the settlement between Cajubi and the Receiver noted that Mr. Duscio did not object to the settlement.

[26] Mr. Duscio submits that the settlement will result in approximately $1,500,000 being paid to Cajubi. That, however, is not correct. The value of the Lovell policy was USD $1,279,890. Cajubi settled with the receiver on terms pursuant to which it will receive one half of the value of the policy or USD $639,945.

[27] The funds are being paid to Cajubi because it managed to discover the policy in time, not because of any voluntary disclosure by Mr. Duscio. While Mr. Duscio did not object to the settlement in the Georgia litigation, he would have been hard pressed to given that, as noted in my contempt reasons, he had sworn an affidavit in Georgia attesting to the fact that the policy was his. Indeed, had Mr. Duscio managed his affairs so as not to obfuscate ownership of assets, Cajubi may well have received the full amount of the policy. In these circumstances I see the absence of an objection to the Georgia settlement as a minor mitigating factor.

[28] Mr. Duscio submits that he co-operated in the sale of the Puslinch property, that it has been sold and that Cajubi “will receive some proceeds from the house.” Calling the process of sale co-operative would be an overly positive characterization of the process. The sale should have occurred years ago. When, after several attendances, I made orders regarding the sale, Mr. Duscio refused to sign the agreements of purchase and sale as a spouse. The property was only sold after I directed that it be sold by a named real estate agent and that the signatures of Mr. and Mrs. Duscio would not be required on the listing agreement.[^4] Even after that, Mr. Duscio tried to rent out one of the rooms in the house. When that issue came to court Mr. Duscio professed only to have been trying to help his wife and not scupper any sale. Given that Mr. Duscio’s conduct required at least two court attendances, the whole issue of his involvement with the sale of the house could be seen as an aggravating factor. It is certainly not a mitigating factor. I will view it as a neutral factor for purposes of sentencing.

[29] Mr. Duscio’s statement that Cajubi will receive some proceeds from the sale of the house is not the true effect of his evidence at the sentencing hearing. The house was registered in the name of his wife, Leeanne Duscio. It was a matrimonial home. It appears that the marriage has now broken down. Mr. Duscio has a prima facie right to 50% of the proceeds of sale. He testified at the sentencing hearing that he refuses to make a claim on the proceeds of sale because it would make him “look like a total A-hole” and go contrary to what he told his family about dividing assets.

[30] Mr. Duscio next submits that a further mitigating factor is his cooperation in trying to find information about the source of the money for his legal fees. The fees were being paid by his brother John and a friend, Mr. Carmelo. The plaintiff’s concern is that these were monies that in fact belonged to Mr. Duscio and had been funnelled to John and Mr. Carmelo in order to pay for fees. Mr. Duscio’s counsel submitted in oral argument that Mr. Duscio had made “best efforts” to find the source of funds. I disagree. The only evidence of “best efforts” to which I was taken during the hearing is an email from Mr. Duscio’s counsel to John saying:

Good morning, John.

Further to our earlier phone conversation, I write to confirm that you refuse to provide us with source documents evidencing the payments you made to our firm for your brother's legal fees.

Thanks again for your time,

[31] If one were talking about “best efforts” one might have expected an email from Mr. Duscio to his brother imploring him to disclose the source of the funds and explaining the importance to Mr. Duscio that John disclose the source of funds.

[32] A further alleged mitigating circumstance is Mr. Duscio’s conduct with respect to the seizure of assets from his home. Mr. Duscio’s counsel submits that Mr. Duscio should receive “a merit award” for keeping his hands off the seizure process. While not part of the contempt proceeding before me, Mr. Duscio’s conduct with respect to the seizure of assets is characteristic of his approach to other issues. That is to say, it lacks credibility.

[33] The issue centres around a Harley Davidson motorcycle. The motorcycle had been a birthday present to Mr. Duscio from his wife. Mr. Duscio says he sold the motorcycle a few months to a year after he received it. When the Sheriff attended at the Puslinch property in July of 2021, the motorcycle was on the property and the sheriff “seized” it. The seizure did not involve the actual removal of the motorcycle as one might expect, but involved attaching a letter to the motorcycle that explained that it was under seizure by the Sheriff and could not be removed from the property. When the Sheriff returned to the property in October of 2021 to remove the motorcycle, it was gone.

[34] Mr. Duscio’s explanation of this is that he sold the motorcycle to someone named Jesse, whose last name he was unsure of. He had met Jesse at a Portuguese restaurant he sometimes frequents. He sold the Harley Davidson to Jesse for $10,000 which was paid in cash. In approximately December 2020[^5] Jesse approached him again and explained that he was moving to Columbia and needed a place to store the motorcycle and asked whether he could store it at Mr. Duscio’s home. Mr. Duscio agreed. Some time after the Sheriff had affixed the seizure notice to the motorcycle, Jesse called Mr. Duscio and said he wanted to come and get the motorcycle. Mr. Duscio says he told Jesse it could not be moved, Jesse replied, try to stop me. Jesse then came to the property and removed it. Mr. Duscio says he was not home when Jesse came to take the motorcycle. No one else testified about the removal of the motorcycle.

[35] Mr. Duscio’s explanation is implausible. Mr. Duscio asserts that he sold the Harley-Davidson motorcycle to raise funds for the trial before Justice Dunphy. That, however, was at a time when Mr. Duscio had access to other funds and before the various asset dissipations occurred. It is odd that Mr. Duscio would sell a birthday present from his wife to raise $10,000 for legal fees when he was able to transfer hundreds of thousands of dollars to Liechtenstein, into bitcoin accounts and to other unknown accounts in the United States. It is equally odd that there is not a shred of paper to support the sale to Jesse. No bill of sale, no transfer documentation, no evidence of large deposits into bank accounts to support the explanation. The oddness is compounded when Jesse all of a sudden wants to store the motorcycle back at Mr. Duscio’s house. According to Mr. Duscio, Jesse wanted to do that because Mr. Duscio’s house seemed to be a safe place to store the motorcycle. This despite the fact that, according to Mr. Duscio, a Ferrari Testarossa vanished into thin air from the same house. While the issue of the disappearance of the Harley-Davidson is not an issue of contempt before me, and I do not take into account in sentencing, it is not a mitigating factor and does warrant the “merit award” that Mr. Duscio’s counsel suggests.

[36] Mr. Duscio submits as a further mitigating factor, the fact that he attended an extraordinary judgment debtor examination on July 19, 2021. I ordered the examination to allow the plaintiffs to ask Mr. Duscio questions about the source of funding for his legal fees in these contempt proceedings. I view this as a minor mitigating factor. The fact that Mr. Duscio has obeyed one court order to attend an examination is not a material mitigating factor when it comes to sentencing him for breaches of other court orders which breaches have removed assets from the reach of the victims of his fraud.

[37] The final mitigating factor that Mr. Duscio cites is his attempt to deliver a series of postdated checks each in the amount of $165.00 which he says represents "more than 20% of his current average weekly earnings." The cheques came to a total amount of $2,475. While that is a mitigating circumstance, in that it is at least a small effort, it has no material affect on my analysis because it in no way compensates for his continued failure to make more material redress on issues like the Ferrari or the bitcoin transfers.

ii. Aggravating Factors

[38] There are numerous aggravating factors here.

[39] First, Mr. Duscio is a repeat offender. As noted in paragraph 13 above, Mr. Duscio was given several opportunities to purge his contempt before he was sentenced to 12 months in jail by Justice Dunphy. He failed to do so. Not only did he fail to purge his contempt, he engaged in new acts of contempt while in jail. When the Ontario Parole Board gave him the benefit of the doubt and released him after seven months, he engaged in still further acts of contempt. When Mr. Filiplic told him he could not transfer the funds as Mr. Duscio had directed him to because of the non-dissipation order, Mr. Duscio only became more insistent.

[40] Second, his acts of contempt are exacerbated by what I find are lies about his assets which are designed to benefit himself further.

[41] Third, in my view, he has told further lies to this Court on the sentencing hearing. Although Mr. Duscio says he would undo everything if he could, he has made absolutely no effort to do so. His professed lack of knowledge about the Ferrari’s location is, for the reasons indicated earlier in these reasons and in my contempt findings, not credible.

[42] Some of the transfers that Mr. Filiplic made on Mr. Duscio’s instructions were to bitcoin wallets that Cajubi has traced. Mr. Duscio provided no cooperation in getting to the bottom of those transfers. Mr. Filiplic took some of the money he received on behalf of Mr. Duscio and transferred it to a bitcoin wallet that Mr. Filiplic opened to transfer money on Mr. Duscio’s instructions. On November 9, 2019, Mr. Filiplic transferred three bitcoin from his own bitcoin wallet ("Wallet 1") to Mr. Duscio’s bitcoin wallet ("Wallet 2"). Three bitcoin are currently worth approximately USD $192,000. On November 26, 2019, three bitcoin were transferred from Wallet 2 to "Wallet 3." On the same day, three bitcoin were transferred from Wallet 3 to "Wallet 4." On June 28, 2021, three bitcoin were transferred from Wallet 4 to "Wallet 5." Wallet 5 continues to hold the three bitcoin.

[43] Although Mr. Duscio claims he does not own any bitcoin wallets I do not believe him. He has lied about the whereabouts of past assets. If bitcoin wallet number five is truly beyond Mr. Duscio’s control and if Mr. Duscio truly wanted to undo what he has done he could at the very least provide an explanation as far as he can. I accepted Mr. Filiplic’s evidence to the effect that he transferred three bitcoin to Wallet 2 and that Wallet 2 belonged to Mr. Duscio. If Mr. Duscio does not own Wallet 2 he could explain why he directed Mr. Filiplic to transfer funds to it and who owns Wallet 2. If he does own Wallet 2 but does not own Wallet 3, he could explain why bitcoin was transferred from Wallet 2 to Wallet 3 and so on. The only inference I can draw from the complete lack of explanation in the face of a court order that compels Mr. Duscio to disclose his assets is that Mr. Duscio is the beneficial owner all of the 3 bitcoin in question and that he engineered the further transfers to put the bitcoin further beyond the reach of this court and the victims of his fraud.

[44] Fourth, Mr. Duscio has shown no genuine remorse and made no genuine apology. Although he used the words I apologize in court, they lack credibility. A genuine apology would be accompanied by a truthful explanation rather than the web of implausibilities that Mr. Duscio weaves. If he had genuine remorse, one might have expected him to acknowledge his contempt and the underlying fraud to people like his daughter or his physician.

c. Deterrence and Denunciation

[45] Although coercing a contemnor to comply is a primary goal of civil contempt sentences, deterrence and denunciation are important secondary considerations[^6] because the law of civil contempt also reflects an important public element. As the Supreme Court of Canada noted in Vidéotron Ltée. v. Industries Microlec produits électriques Inc.,[^7] at para. 14:

The penalty for contempt of court, even when it is used to enforce a purely private order, still involves an element of "public law", in a sense, because respect for the role and authority of the courts, one of the foundations of the rule of law, is always at issue. In United Nurses of Alberta v. Alberta (Attorney General), 1992 CanLII 99 (SCC), [1992] 1 S.C.R. 901, McLachlin J. established a direct connection between contempt of court and the rule of law, at p. 931:

The rule of law is at the heart of our society; without it there can be neither peace, nor order nor good government. The rule of law is directly dependent on the ability of the courts to enforce their process and maintain their dignity and respect. To maintain their process and respect, courts since the 12th century have exercised the power to punish for contempt of court.

[46] In Milligan v. Lech the court noted:

Our legal system is wounded when court orders are ignored. The sentence must be one to repair the wound and renounce the conduct, but ensure compliance with the defendant's legal obligations. The court is the only guardian of civil justice for the plaintiff class.[^8]

[47] In Sussex Group v. Fangeat,[^9] Cummings J. noted at para. 51:

" ... the road to civil anarchy is close at hand. The thin veil of civilization that cloaks our community through the rule of law is fragile and in need of constant protection."

[48] Certainly if Mr. Duscio’s approach to court orders became widespread, civil anarchy would be close at hand.

[49] Denunciation and deterrence are related to punishment. Punishment aims to deter others more generally who may be inclined to engage in similar conduct.[^10] The brazen, long-standing and repeated nature of Mr. Duscio’s contempt calls for a strong signal of deterrence and denunciation.

d. Reasonableness of Sanctions Other Than Jail

[50] Custodial sentences are generally a last resort in civil contempt cases. The Court should consider whether any other penalty short of incarceration is sufficient to satisfy the purposes of a penalty for contempt.

[51] Custodial sentences for contempt are also relatively rare. This is largely because the threat of a contempt sentence is usually enough to lead the contemnor to comply with the court order. That is one reason for separating the finding of contempt from the sentencing hearing. The gap between the two allows the contemnor to purge his contempt to avoid a more serious sentence.[^11]

[52] Justice Dunphy first incarcerated Mr. Duscio on December 18, 2018 for approximately three months at which time Mr. Duscio was brought back before Justice Dunphy and given an opportunity to purge his contempt. Mr. Duscio did not do so. Justice Dunphy therefore sentenced him to a second, higher sentence of 12 months. The matter first came before me in March 2020. Mr. Duscio has had ample time to purge his contempt and has failed to do so.

[53] One common approach to sentencing is to impose lighter sentences on first offenders with increasingly serious sentences for subsequent offences. This is Mr. Duscio’s third contempt sentence. Mr. Duscio could reasonably expect that his third sentence would be more serious than his first or second.

[54] In my view, a sentence less than incarceration would have no effect on Mr. Duscio. As already noted, one of the primary goals of a contempt sentence is to coerce the contemnor into compliance. If Mr. Duscio’s two earlier incarcerations were not sufficient to make him comply, a sentence less than incarceration will certainly not do that either.

[55] Mr. Duscio submits that incarceration is inappropriate because he has not received any Covid vaccines. He has also filed an article from the Human Rights Commission of Ontario regarding incarceration during the Covid-19 pandemic. The bulletin is dated May 11, 2021 and focusses on reducing unnecessary incarceration in lieu of bail. I note that the bulletin was issued long before double, let alone triple vaccinations were widely available. I also note that many Covid-19-related restrictions in the province are in the process of being lifted.

[56] Mr. Duscio’s failure to receive any Covid vaccines is a matter of personal choice. He testified that he believes the vaccine is not sufficiently tested to warrant the risk of receiving it. While Mr. Duscio is entitled to his opinion and to his own choices about what medical treatments he receives, he cannot then use those choices to avoid incarceration for his own misconduct.

e. Comparison to Other Sentences

[57] The flagrant and repeated nature of Mr. Duscio’s contempt is somewhat unusual. There are relatively few contempt cases involving repeat offenders who engage in further acts of contempt after having received a custodial sentence already.[^12]

[58] In Milligan v Lech,[^13] the contemnor was involved in a $50 million fraud. He was ordered to produce documents, attend examinations, and attend court, all of which he failed to do. He was sentenced to 15 months. This followed on two earlier sentences of 12 months and 15 months for the same breaches. As serious as the contempt was in Milligan, Mr. Duscio’s contempt is, in my view, even more serious. In addition to failing to disclose information, Mr. Duscio took active steps to put his assets beyond the reach of the court and the victims of his fraud by breaching a non-dissipation order.

[59] In Chiang (Re),[^14] the contemnors (a husband and a wife) owed over $8 million to the respondent corporations. They had been ordered to produce documents relating to their business and failed to comply with six court orders. Instead, they transferred millions to their family members over the span of about 15 years to frustrate the respondents' attempt to collect the debt. Sentences of 12 month and eight months were considered appropriate in principle.[^15]

[60] In GM Textiles Inc. v. Sidhu,[^16] Sidhu and several of his companies settled a claim for approximately $1.7 million. The contempt proceedings arose in connection with Sidhu's breaches of six pre- and post-judgment orders to produce information. Most of Sidhu's breaches could no longer be remedied, and had cumulatively destroyed much of the value available to satisfy the judgment. The court sentenced Sidhu to 21 months less one day in circumstances where there was no evidence that Mr. Sidhu lived a lavish lifestyle or otherwise received significant benefits to which he was not entitled from the businesses. The evidence here is to the contrary. Until recently, Mr. Duscio has been living in a palatial home for many years which was clearly beyond his means to occupy and maintain based on the income he has disclosed in this proceeding.

[61] In Paramount Fine Foods v. Johnston,[^17] the court issued an order enjoining the defendant from defaming the plaintiff. Despite this order, the defendant continued to defame the plaintiff. Myers J. sentenced the defendant to 18 months in jail.

[62] Mr. Duscio relies heavily on Boroni et al. v. Polidoro et al.,[^18] 2018 ONSC 6631 where the contemnor was sentenced to a 76 day intermittent sentence to be served concurrently with another sentence for an earlier contempt. Boroni also involved a fraud case. In my view, Boroni is distinguishable on several grounds. First, the case involved a failure to disclose information, not allegations of putting assets beyond the reach of the victims of fraud. Second, the fraud in Boroni came to $71,800.[^19] While I appreciate that “offence” in respect of which the sentence is imposed is the contempt, not the wrongdoing that first brought the party before the Court,[^20] the wrongdoing that first brought the party to the court may still be relevant in connection with the proportionality of the sentence to the offence. A breach of a court order with smaller consequences to victims may be less serious than a breach of a court order with greater consequence to victims.

[63] The third and related distinguishing feature of Boroni is that the court noted as a mitigating circumstance that the contemnor had paid over $30,000 on the $71,800 judgment by the time of the sentencing hearing.[^21] That is a substantially greater proportional payment on the judgment than Mr. Duscio has made.

[64] In R. v. Pham,[^22] the Supreme Court of Canada noted that the collateral consequences of a sentence should be taken into account before imposing it.[^23] The collateral consequences to which Mr. Duscio points involve principally the potential effect of jail on his health, his family his employment and ability to make restitution.

[65] While I appreciate that Mr. Duscio would prefer to avoid jail, someone who has and continues to deliberately disobey court orders cannot simply invoke his or his family’s unhappiness with a jail sentence as a ground for avoiding one. There is no medical evidence before me of an impending danger to Mr. Duscio’s health of the sort that might excuse him from a jail sentence. His ability to make restitution based on his current income is so minimal that a jail sentence will not have any material impact on recovery to the plaintiffs. Similarly, the effect of a jail sentence on Mr. Duscio’s family does not, on the record before me, rise above the unhappiness and dislocation that all families feel when a family member is incarcerated.

C. Sentence

[66] In my view, an appropriate sentence here is one more in line with Milligan, Sidhu, and Paramount than those imposed in Re Chiang or Boroni.

[67] Factors that are particularly relevant to consider in relation to Mr. Duscio include the following:

i. The acts of contempt strike at the heart of the administration of civil justice in Ontario.

ii. The importance of general deterrence and denunciation.

iii. Mr. Duscio did not admit to the breaches during the contempt motion.

iv. The acts of contempt were part of an ongoing pattern of conduct.

v. Mr. Duscio is a repeat offender.

vi. The breach occurred with the full knowledge and understanding of Mr. Duscio and was not the result of a mistake or misunderstanding.

vii. Although he denies it, Mr. Duscio continues to be defiant in flaunting the court's order.

viii. Mr. Duscio benefited personally from his various acts of contempt.

[68] In light of the foregoing, I impose a custodial sentence of 16 months.

[69] I impose three conditions on that sentence.

[70] First, Mr. Duscio will be brought before me when the sentence is served to consider what further penalties if any, should be imposed given the state of Mr. Duscio’s compliance at that time or the state of his explanation for noncompliance.

[71] I am mindful of the words of the Court of Appeal in Chiang (Re)[^24] to the effect that a contempt is not over simply because the contemnor has served a jail sentence. If the contempt has not been purged by the end of the incarceration, the Court retains the jurisdiction to sentence the contemnor again for the same contempt. The court noted specifically that the concept that the court could not re-sentence a contemnor for the same offence:

…seems at odds with the coercive purpose of civil contempt. To permit only one penal sanction for the ongoing breach of an order deprives the court of the ability to impose measured, but incremental, sanctions to obtain compliance with that order. In other words, if the court can impose only one period of incarceration for a civil contempt, then it cannot address, in any meaningful way, a contemnor's continuing defiance. If repeated penal sanctions are permitted, the court can always address a concern that these sanctions may become oppressive.[^25]

[72] Second, I specifically order that the sentence is without possibility of parole. I order this specifically because Mr. Duscio was released on parole by the Ontario Parole Board after serving only 7 months of his first 12 month sentence. In Re Chiang, the Ontario Court of Appeal held that contempt is not subject to provincial parole in Ontario and is not subject to federal parole if it is a term of the order that the contemnor be brought back before the court at the end of his sentence. The Court of Appeal explained the rationale as follows:

[113] …. Section 35 of the MCSA[^26] authorizes the Parole Board to grant parole:

35. Subject to the regulations, the Board may order the release from custody on parole of any inmate convicted of an offence under any Act of the Legislature, any Act of the Parliament of Canada, or against a municipal by-law upon such conditions as the Board may determine.

[114] Jay Chiang is an "inmate". However, to be eligible for parole under this section he must be convicted of an "offence" under a provincial or federal statute. Even if civil contempt of court can be considered an "offence" under s. 35 -- a point we need not decide -- it is not a statutory offence.

[115] The Chiangs submit that civil contempt is an offence under s. 96(1) of Ontario's Courts of Justice Act: "[c]ourts shall administer concurrently all rules of equity and the common law". We do not agree. Section 96 does not create an offence. Indeed, civil contempt of court is not codified in any statute. It is a common-law offence. Thus, although civil contempt bears the imprint of the criminal law, it remains outside the ambit of s. 35 of the MCSA. Accordingly, Jay Chiang is not eligible for parole under the provincial statute.

[116] Both the federal and provincial regimes recognize that civil contemnors remain under the jurisdiction of the court, not the Parole Board. The court, not the Board, shall determine when a person convicted of civil contempt of court is eligible for release from custody.

[117] Removing the Board's jurisdiction to grant parole for civil contempt of court has a sound rationale. It lies in the purposes of sentencing for civil contempt. One purpose is, admittedly, punishment for a breach of a court order. But the main purpose is coercive: to promote compliance with the court's orders. As Doherty J.A. said in his endorsement on the first stay motion, "[u]nlike a criminal case in which incarceration is imposed exclusively as a punishment for prior criminal conduct, Mr. Chiang's incarceration serves both as a punishment and as an incentive to purge his ongoing contempt". Parole is at odds with this coercive or incentive-based purpose of sentencing for civil contempt. (citations omitted)

[73] In Chiang, the Court of Appeal held that the trial judge was within her powers when she quashed a decision of the parole board that had granted the contemnor parole because the parole board had no jurisdiction to do so.

[74] The final condition I impose is that Mr. Duscio can apply to me for early release from jail if he satisfies me that he has purged his contempt, or at a minimum, provided a complete accounting of what he has done with all of the funds and assets he has dissipated in contempt of court. When I say full accounting, I mean exactly that. Mr. Duscio should not waste the court’s or the plantiff’s time coming back and simply saying the funds are gone. He would have to provide a detailed accounting of what exactly was done with the money, including where it went, why it went there and provide full documentation of the sort that one would expect to see in relation to any transactions that Mr. Duscio says occurred, including full bank account records. The accounting should also be of the sort that will allow the plaintiff to pursue tracing remedies if they wish to. Mr. Duscio should be aware in advance that he has little, if any credibility with the court. As a result, any accounting must be fully complete. To the extent that Mr. Duscio purges his contempt, he will be treated much more leniently than if the effect of an accounting is that the funds are completely gone and unrecoverable.

D. Disposition and Costs

[75] For the reasons set out above, I sentence Mr. Duscio to 16 months in jail without possibility of parole. I also order that Mr. Duscio be brought before me at the end of his sentence to determine whether a further sentence should be imposed in light of any continued failure to purge his contempt. I also order that Mr. Duscio may appear before me at any time before the completion of his sentence for earlier release on satisfactory evidence that he has purged his contempt as set out in paragraph 74 above.

[76] Any party seeking costs of the contempt proceedings may make written submissions not exceeding 10 pages (excluding any bill of costs) with 2 weeks of the release of these reasons. Responding submissions are to be delivered 10days later with a further 5 days for reply.

Koehnen J.

Released: 2022-04-28

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

DATE: 2022-04-28

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

REASONS FOR JUDGMENT

Koehnen J.

Released: 2022-04-28

[^1]: 2021 ONSC 632; affirmed at 2022 ONCA 225, 2022 ON CA 225.

[^2]: Business Development Bank of Canada v. Cavalon Inc., 2017 ONCA 663 at para. 89.

[^3]: Caja Paraguyaya De Jubilaciones Y Pensiones Del Personal De Itaipu Binacional v. Obregon, 2022 ONCA 225

[^4]: See my endorsement of June 20, 2021.

[^5]: Mr. Duscio described it as “about a year ago” at the sentencing hearing in December of 2021.

[^6]: Business Development Bank of Canada v. Cavalon Inc., 2017 ONCA 663 at para 78, 81.

[^7]: 1992 CanLII 29 (SCC), [1992] 2 S.C.R. 1065

[^8]: Milligan v. Lech, [2006] OJ 3127 at para. 17; aff’d [2006] OJ 4700.

[^9]: (2003/ O.J. No. 52 C.P.C. (5th) 274,

[^10]: Business Development Bank at para. 81.

[^11]: Business Development Bank at para. 86.

[^12]: Boroni et al. v. Polidoro et al., 2018 ONSC 6631

[^13]: [2006] OJ 3127, aff’d [2006] OJ 4700,

[^14]: 2009 ONCA 3 ("Chiang"): https://canlii.ca/t/22223

[^15]: I say in principle because those sentences were ultimately set aside by the Court of Appeal because of complexities that arose out of the consequences of noncompliance that had been articulated in a court order issued six years earlier.

[^16]: GM Textiles Inc. v. Sidhu, 2016 ONSC 2055 ("GM Textiles"). https://canlii.ca/t/gnzdq

[^17]: 2021 ONSC 6558 ("Paramount")

[^18]: Boroni et al. v. Polidoro et al., 2018 ONSC 6631

[^19]: Boroni at para 54.

[^20]: Devathasan v. Ablacksingh, 2018 ONSC 7557 at para. 21

[^21]: Boroni at para. 54.

[^22]: R. v. Pham, 2013 SCC 15, [2013] 1 SCR 739

[^23]: Ibid. at para. 11

[^24]: Chiang (Re), 2009 ONCA 3

[^25]: Ibid. at para. 44

[^26]: Ministry of Correctional Services Act