COURT FILE NO.: CV-19-2375-0000
DATE: 2022-08-24
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DERRICK McCLELLAND
Cara Zacks, for the plaintiff
Plaintiff
- and -
ERIC PARTANEN personally and as Estate Trustee for the Estate of Helen Margaret McClelland,
LAURI PARTANEN and
JANET PARTANEN
Jonathan Friedman, for the defendants
Defendants
HEARD: August 18, 2022
REASONS FOR DECISION
C. Chang J.
Nature of the Motion
[1] On this motion, the plaintiff seeks a “kitchen sink” of different items of relief (all, apparently, to be heard in the scheduled time of 30 minutes) arising from the defendants’ alleged breach of a specific provision in the order of Chozik J. dated December 5, 2018, as amended by the order of Conlan J. dated February 6, 2020, (the “Subject Order”). That specific provision prohibits any encumbrance of the property municipally known as 5 Layton Crescent, Barrie, Ontario (the “Subject Property”) in excess of $309,000.00 (the “Subject Prohibition”).
[2] The plaintiff does not allege that any of the defendants is in breach of any other part(s) of the Subject Order or of any other order(s). Therefore, the issues before me relate only to the defendants’ alleged breach of the Subject Prohibition.
Narrowing of the Issues
[3] Following the opening of court, I stood this matter down until 2:15 p.m. and strongly recommended to counsel that they direct their efforts over the subsequent few hours toward significantly narrowing (if not, resolving) the issues to be dealt with today.
[4] Following the resumption of court at 2:15 p.m., I was pleased to hear that the parties had indeed managed to narrow the issues for today by agreeing to following:
a. the defendant, Lauri Partanen (“Lauri”), conceded and admitted that he is in contempt of the Subject Order;
b. the sole issue to be decided today is whether or not the defendants, Eric Partanen (“Eric”) and Janet Partanen (“Janet”), are in contempt of the Subject Order;
c. Eric and Janet conceded and agreed that:
i. the Subject Order clearly and unequivocally states what should and should not be done, and
ii. they had actual knowledge of the Subject Order;
d. the penalty phase of this contempt motion respecting Lauri (and Eric and/or Janet should I find either to be in contempt) is to be adjourned; and
e. the balance of the relief sought on this motion, including costs, is also to be adjourned.
[5] After the parties concluded their respective arguments, I scheduled the next hearing date of this motion for October 6, 2022, before me, for 60 minutes, which date was agreed to by counsel and parties.
[6] I advised counsel that the hearing of the “penalty phase” of the contempt motion will be the priority on October 6, 2022 and the hearing of that issue is to be completed before any of the other relief claimed by the plaintiff on this motion is addressed.
The Law
[7] The law on civil contempt is well settled and is set out in the Supreme Court of Canada’s decision in Carey v. Laiken, 2015 SCC 17, at paras. 32-35.
[2] As set out in Carey, in order for me to make a finding of contempt, I must be satisfied beyond a reasonable doubt that:
a. the order alleged to have been breached clearly and unequivocally states what should and should not be done;
b. the alleged contemnor had actual knowledge of that order; and
c. the alleged contemnor intentionally did the act that the order prohibits or intentionally failed to do the act that the order compels.
Lauri’s Contempt
[8] Based on the overwhelming evidence of his contempt, as well as his own admission of his contempt, I find Lauri to be in contempt of the Subject Order beyond any reasonable doubt.
[9] I will provide Lauri with an opportunity to purge his contempt by paying into court to the credit of this action the amount $216,000.00 (the “Payment into Court”), being the difference between the maximum amount that he was allowed to encumber the subject property pursuant to the Subject Prohibition (i.e., $309,000.00) and the total amount that he actually encumbered the property (i.e., $525,000.00).
[10] If Lauri makes the Payment into Court before October 6, 2022, he will have purged his contempt and I will vacate the penalty portion of this motion.
[11] If Lauri does not make the Payment into Court before October 6, 2022, I will hear arguments on that date as to the appropriate penalty for Lauri’s contempt.
Eric’s and/or Janet’s Contempt
[12] As outlined above, based on the evidence and his own admission, Lauri’s contempt of the Subject Order is established beyond a reasonable doubt.
[13] The plaintiff’s allegations of contempt against Eric and Janet are a completely different matter.
[14] For the following reasons, I find that the plaintiff has failed to prove beyond a reasonable doubt that either Eric or Janet should be held in contempt to the Subject Order.
[15] As previously outlined, Eric and Janet concede and admit that:
a. the Subject Prohibition clearly and unequivocally states what should and should not be done; and
b. they both had actual knowledge of the Subject Prohibition.
[16] However, they deny that they intentionally did the act that the Subject Prohibition proscribes.
[17] Notwithstanding the plaintiff’s express acknowledgment that it was only Lauri who executed the applicable mortgage documents, he nonetheless argues that Janet and Eric also breached the Subject Prohibition because they knew what Lauri had done. Plaintiff’s counsel argued that “just because they didn’t sign [the documents], doesn’t mean that they didn’t do it”, as “there is compelling evidence that they were involved as equal parties” with Lauri.
[18] Unfortunately for the plaintiff, that “compelling evidence” is, at best, anemic and comprises little more than the plaintiff’s uncorroborated assertions that Eric and Janet knew what Lauri had done. The record contains nothing approaching direct (or even strong circumstantial) evidence of their alleged knowledge.
[19] Given this, plaintiff’s counsel suggested that I should infer that Eric and Janet knew what Lauri had done; however, there is no sufficient evidentiary foundation upon which I can make any such inference.
[20] The strongest evidence proffered by the plaintiff to this effect is as follows:
a. an unspecified amount of the proceeds from the mortgages obtained in breach of the Subject Prohibition may have been used to make payment on a mortgage secured against another property jointly owned by Lauri and Janet;
b. an amount of the proceeds from the mortgages obtained in breach of the Subject Prohibition was deposited into a bank account jointly held by Lauri and Janet, some of which Lauri used to “pay off” debts that were joint to him and Janet;
c. payments for the mortgages obtained in breach of the Subject Prohibition were made from that same joint bank account; and
d. in his role as estate trustee, Eric failed to provide a prompt response to the plaintiff’s requests for information and documentation respecting the Subject Property.
[21] As the above is “as good as it gets” for the plaintiff, there is simply no reasonable basis upon which I can make the requested factual inference and I am not prepared to do so.
[22] Further, and in any event, even if I were to accept (which I do not) that Eric and Janet had material knowledge of Lauri’s actions at the material time, the plaintiff has still failed to prove – beyond a reasonable doubt or otherwise – that either Eric or Janet did anything in breach of the Subject Prohibition.
[23] Their alleged knowledge of Lauri’s breach of the Subject Prohibition does not equate to their own breach(es) thereof. If I am to find Eric or Janet in contempt, I must first find that they knowingly acted in breach of the Subject Prohibition.
[24] I am not prepared to make such a finding on the evidence before me.
[25] The plaintiff has an additional – and much larger – problem with his contempt allegations against Janet.
[26] The Subject Order was made in Court File No. CV-18-9203 and the Subject Prohibition states, “THIS COURT ORDERS that the respondents shall not take steps to encumber…” [emphasis added].
[27] Janet was not a party to that proceeding at the time that the Subject Order was made and is, therefore, not subject thereto.
[28] There is no proof beyond a reasonable doubt that Eric or Janet acted in breach of the Subject Prohibition. Therefore, there is no basis for a finding of contempt against either of them, and I decline to make such a finding.
[29] The plaintiff’s motion for contempt orders against Eric and Janet is dismissed.
Summary
[30] In accordance with well-settled jurisprudence, in order to make findings of contempt against Lauri, Eric and/or Janet, I must find the following:
a. the Subject Prohibition clearly and unequivocally sets out what should and should not be done;
b. Lauri, Eric and/or Janet had actual knowledge of the Subject Prohibition; and
c. Lauri, Eric and/or Janet intentionally did what the Subject Prohibition proscribed.
[31] In the case-at-bar, as outlined above:
a. I am satisfied that Lauri’s contempt of the Subject Order has been proven beyond a reasonable doubt; and
b. I am not satisfied that either Eric’s or Janet’s contempt thereof has been proven beyond a reasonable doubt or otherwise.
[32] Accordingly, I find that Lauri is in contempt of the Subject Order and I find that Eric and Janet are not.
[33] Respecting the balance of this motion, as agreed to by the parties, same will be adjourned to be dealt with on October 6, 2022.
Orders
[34] I therefore make the following orders:
a. Lauri is in contempt of the Subject Order;
b. Lauri may purge his contempt by making the Payment into Court before October 6, 2022;
c. the plaintiff’s contempt motion is dismissed as against Eric and Janet;
d. on consent, the balance of this motion, including, without limitation, the “penalty phase” of the contempt motion against Lauri and the issue of costs, is adjourned to October 6, 2022;
e. on October 6, 2022, the hearing of the penalty phase of Lauri’s contempt, if required, is to be completed before any of the other relief claimed by the plaintiff on this motion is addressed; and
f. the plaintiff and Lauri shall deliver (i.e., serve, file and upload) further materials respecting only the penalty phase of Lauri’s contempt motion.
[35] Counsel assured me that they will agree on an appropriate timetable for the exchange of additional motion materials (again, limited to the penalty phase of Lauri’s contempt only), which timetable will comply with the Rules of Civil Procedure, so I make no applicable timetable order.
[36] I am seized of the October 6, 2022 hearing date.
C. Chang J.
Released: August 24, 2022
COURT FILE NO.: CV-19-2375-0000
DATE: 2022-08-24
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DERRICK McCLELLAND
Plaintiff
- and -
ERIC PARTANEN personally and as Estate Trustee for the Estate of Helen Margaret McClelland, LAURI PARTANEN and JANET PARTANEN
Defendants
REASONS FOR DECISION
C. CHANG J.
Released: August 24, 2022