Court File and Parties

COURT FILE NO.: CV-10-21322 DATE: November 17, 2023 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Canada Mortgage and Housing Corporation, Plaintiff AND: Melissa Hart and Patricia Hart, Defendants

BEFORE: MacNeil J.

COUNSEL: Ian Houle – Lawyer for the Plaintiff Melissa Hart – Self-represented Patricia Hart – Self-represented

HEARD: August 11, 2023

REASONS FOR DECISION

INTRODUCTION

[1] A contempt proceeding was brought by the Plaintiff, Canada Mortgage and Housing Corporation (“CMHC”), as against both of the Defendants, Melissa Hart and Patricia Hart, for their failure to attend examinations in aid of execution that had been ordered by The Honourable Justice Krawchenko on June 22, 2022 (“the Debtor Examinations Order”). On November 17, 2022, I found both of the Defendants in contempt of the Debtor Examinations Order as they had failed to attend at the examinations and there was no evidence of any good reason for said failure. The parties subsequently attended before me on January 10, 2023 and March 17, 2023 regarding this matter.

[2] At the hearing on August 11th, the parties finally made submissions on what penalty is appropriate for the Defendants’ civil contempt and this is my decision regarding same.

BACKGROUND

[3] First National Financial GP Corporation (“First National”) obtained default Judgment against the Defendants, dated September 30, 2010 (“the Judgment”). CMHC was subrogated and assigned all of First National’s rights in the Judgment, and it obtained an Order to Continue.

[4] The Defendants then commenced two court actions on November 16, 2017 and May 31, 2018 against CMHC and/or First National seeking to set aside the Judgment on the basis of a “misrepresentation of facts”. Both actions were summarily dismissed by the decisions of Glustein J. dated April 10, 2018 and September 14, 2018, as being frivolous, vexatious and an abuse of process of the court.

[5] Then, on or about October 24, 2019, the Defendants brought a motion against CMHC and First National based on the same or similar allegations raised in the two actions Glustein J. had dismissed. On November 25, 2020, Skarica J. dismissed the motion, in part on the basis that it was frivolous and vexatious. The Defendant, Melissa Hart, appealed that dismissal. By its decision in Canada Mortgage and Housing Corporation v. Hart, 2022 ONCA 51, dated January 24, 2022, the Ontario Court of Appeal dismissed the appeal of Skarica J.’s decision. In so doing, the Court of Appeal held at paragraph 2:

She admits that the statement of claim was served on her in September 2010. She failed to defend and default judgment was obtained in 2010. The respondent took enforcement action and various amounts were recovered from the appellant between 2012 and 2018. The appellant was aware of the judgment, but took no steps to set it aside for many years. She commenced two separate actions against the respondent in 2017 and 2018, claiming damages as a result of the enforcement of the mortgage and the judgment. Both actions, which were based on substantially the same facts as she now relies upon, were dismissed under r. 2.1.01 as frivolous and vexatious.

[6] On or about January 31, 2022, the Defendants brought another motion seeking to set aside the Judgment.

[7] After the dismissal of the appeal by the Court of Appeal, CMHC attempted to proceed with examinations in aid of execution of both of the Defendants pursuant to the Judgment and served notices of examination for examinations on April 14, 2022. Neither of the Defendants attended. CMHC then brought a motion to compel the Defendants to attend examinations, which motion was heard on June 22, 2022. On that date, Krawchenko J. made the Debtor Examinations Order.

[8] The relevant background and finding of contempt are set out in my prior endorsements and need not be repeated here. Briefly, however, on November 17, 2022, the contempt motion proceeded in a bifurcated fashion. A hearing to determine whether the Defendants met the threshold for contempt proceeded first. Mr. Houle and Melissa Hart attended at the motion. Melissa Hart advised that she was representing her mother, Patricia Hart.

[9] After hearing from the parties, I found both of the Defendants, Melissa Hart and Patricia Hart, in contempt of the Debtor Examinations Order. I provided each of them with an opportunity to purge their contempt before the penalty phase of the contempt proceeding, by attending an examination in aid of execution on December 12, 2022 for Melissa Hart, and on December 13, 2022 for Patricia Hart. Both were also ordered to produce relevant documents for the purposes of their examinations.

[10] The penalty phase of the proceeding was adjourned to be heard by me on a date after December 14, 2022 to be arranged by the Trial Co-ordinator.

Attendance on January 10, 2023

[11] The second stage of the contempt motion, being the penalty phase, was heard by me on January 10, 2023. Mr. Houle and Melissa Hart attended before me to make submissions. Melissa Hart again represented her mother, Patricia Hart.

[12] Neither of the Defendants had purged their contempt as of that date. At that time, I decided to give both of them a “last chance” to purge their contempt and ordered each to attend an examination in aid of execution and to produce financial documentation for the purpose of those examinations. The Defendant, Melissa Hart, was to attend an examination on February 9, 2023 and the Defendant, Patricia Hart, was ordered to attend an examination on February 10, 2023.

[13] The next appearance was scheduled for March 17, 2023, and I issued a bench summons requiring Patricia Hart to attend in person in court on that occasion.

Attendance on March 17, 2023

[14] On March 17, 2023, the parties attended before me again to make submissions on what penalty is appropriate for the Defendants’ civil contempt. Melissa Hart filed responding materials which consisted of her affidavit, sworn March 13, 2023, wherein she requested that the Debtor Examinations Order be set aside and the contempt order be stayed. As of that date, Melissa Hart and Patricia Hart were in breach of three court orders: the Debtor Examinations Order, and my two orders requiring production of documents and attendance at examinations dated November 17, 2022 and January 10, 2023.

[15] March 17th was the first occasion Patricia Hart appeared to speak to the matter. She advised that she had been unaware of the status of things and had not known that she was to attend on earlier court dates. Melissa Hart, her daughter, was the one who had been handling things, purportedly on behalf of both of the parties. Patricia Hart advised that she is willing to attend an examination in aid of execution and to produce the required financial documentation for same. She advised that she had brought some financial papers with her to court that day.

[16] At the attendance, Melissa Hart continued to object to CMHC enforcing the original default judgment and the outstanding costs awards that had been granted in the course of the proceedings.

[17] Melissa Hart made a motion that was heard on February 2, 2023 seeking to set aside or vary the three orders at issue. Sheard J. heard that motion and, as indicated in her written endorsement, dismissed it for a number of reasons, including: (i) the notice of motion did not identify the relief sought in any meaningful way; (ii) the evidence did not provide an evidentiary basis to support the relief sought; and (iii) the fact that Ms. Hart had been found in contempt of court already in the action and, until that contempt has been purged, the Defendants should not be permitted to bring any other motion. Justice Sheard ordered costs fixed in the amount of $1,500.00, all inclusive, to be paid by Melissa Hart to CMHC.

[18] After hearing submissions from each of the parties and after discussing scheduling and dates with them, for reasons given at the hearing, I set yet another timetable by which the Defendants were to produce financial documents and to attend for examinations in aid of execution in order to purge their contempt. I also set a return date of August 11, 2023.

Attendance on August 11, 2023

[19] On August 11, 2023, the parties attended to make submissions on penalty for the civil contempt.

[20] Mr. Houle advised that, as of that date, Patricia Hart had retained legal counsel and collected her financial documents. While she had not attended examinations yet, CMHC had agreed that it would first review her documents and then examinations would proceed later. Ms. Hart was willing to attend examinations. Since CMHC had not made a decision about examining Patricia Hart, and since Patricia Hart was prepared to purge her contempt and showed the intention to purge, counsel for CMHC requested that her penalty stage matter be adjourned sine die returnable on 15 days’ notice. I agreed to grant the request and made an order to that effect.

[21] With respect to the penalty for Melissa Hart, counsel for CMHC made a number of submissions which are summarized below.

THE PARTIES’ POSITIONS

Position of CMHC

[22] Since the March 17th endorsement, which had provided Melissa Hart with her third opportunity to purge, Melissa Hart has brought further court proceedings and she still has not produced the documents ordered to be produced. She did not attend her examination that was scheduled for April 18, 2023 and a certificate of non-attendance was obtained.

[23] By a decision dated May 10, 2023, Associate Justice McGraw ruled on CMHC’s Rule 2.1.01 request for an order dismissing the Defendants’ motion dated January 31, 2022 on the basis that it was frivolous or vexatious and/or an abuse of the court’s process. Associate Justice McGraw granted CMHC’s request in this regard, holding that the Defendants’ motion was frivolous and vexatious and dismissing it.

[24] By an application issued on March 8, 2023, CMHC sought an order pursuant to s. 140 of the Courts of Justice Act, R.S.O. 1990, c. C.43, declaring Melissa Hart to be a vexatious litigant. In her decision dated June 13, 2023, Bell J. found Melissa Hart was a vexatious litigant and ordered that she was not to bring any further proceedings without leave of the court.

[25] Even since the decision of Bell J., Melissa Hart has filed a further motion. It was scheduled to be heard on a date following this appearance. CMHC’s position is that Melissa Hart is not permitted to proceed with that motion.

[26] To date, Melissa Hart has not taken the three opportunities to purge her contempt. Costs have been awarded against her in the amount of $46,837.22 to June 30, 2023. She is ignoring all court orders. She now needs leave to bring any motion or appeal but in the face of all of that, she is still trying to file materials with the court. Her course of conduct is such that she continues to show contempt.

[27] CMHC submits that Melissa Hart has no intention to purge, comply with the court orders or pay costs. Any penalty imposed should consider these circumstances. Since she has ignored the opportunities granted her to purge, there is no point in giving her another one. A fine will be ineffective. There are six costs orders outstanding. So there appears to be only one avenue left that may assist in getting compliance, imprisonment. CMHC submits that it is the court’s discretion what the appropriate length of imprisonment should be.

[28] Mr. Houle acknowledges that, before March 17th, Melissa Hart did send CMHC some documents. But she has not complied with the prior orders and since March 17th, there have been no additional documents produced. No banking information has been produced.

[29] CMHC is concerned that it will continue to face a slew of motions from Melissa Hart despite her being found to be a vexatious litigant. She has promised before to attend but has not appeared, so there is no reason to believe her now. There is a lot of money and resources being wasted. CMHC is owed much more in legal fees than has been awarded in costs.

Position of Melissa Hart

[30] Melissa Hart continues to argue that her prior motions to set aside and/or vary the Judgment and related court orders should have succeeded and that important evidence has been overlooked by the courts.

[31] Regarding any penalty to be imposed, Melissa Hart submits that she has made attempts to set the court orders aside, including the Debtor Examinations Order. She explained that, in April 2023, she served a leave motion to set aside one of the orders; the motion was to be heard in May 2023 but, due to an emergency, it was abandoned.

[32] Melissa Hart acknowledges that she did not attend at the judgment-debtor examination. However, she argues that CMHC has the financial information that it needs. She contends that CMHC is a third-party creditor and not the proper party to enforce the Judgment against her. CMHC is not able to speak to the original proceeding brought by First Financial.

[33] Melissa Hart argues that there should be no penalty given the circumstances and given the motions she has brought to set aside the court orders. She has had difficulties getting materials filed with the court. And, until the parties had received the decision of Associate Justice McGraw, the Rule 2.1.01 issue was unresolved; she submits that she could not make informed decisions on how best to proceed without having received that decision. She would like to resolve matters and focus on her motions to set aside the court orders and move forward. Any penalty should be stayed. She also submitted that Rule 60 does not permit penalties.

[34] Melissa Hart submits that she could produce the banking documents if the court further extends the time to comply, and the parties could schedule another judgment-debtor examination.

ANALYSIS

Civil Contempt

[35] The common law contempt power is codified in Rule 60.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. It reads, in part:

60.11 (1) A contempt order to enforce an order requiring a person to do an act, other than the payment of money, or to abstain from doing an act, may be obtained only on motion to a judge in the proceeding in which the order to be enforced was made.

(5) In disposing of a motion under subrule (1), the judge may make such order as is just, and where a finding of contempt is made, the judge may order that the person in contempt,

(a) be imprisoned for such period and on such terms as are just; (b) be imprisoned if the person fails to comply with a term of the order; (c) pay a fine; (d) do or refrain from doing an act; (e) pay such costs as are just; and (f) comply with any other order that the judge considers necessary,

and may grant leave to issue a writ of sequestration under rule 60.09 against the person’s property.

(7) An order under subrule (5) for imprisonment may be enforced by the issue of a warrant of committal (Form 60L).

(8) On motion, a judge may discharge, set aside, vary or give directions in respect of an order under subrule (5) or (6) and may grant such other relief and make such other order as is just.

(9) Where a person fails to comply with an order requiring the doing of an act, other than the payment of money, a judge on motion may, instead of or in addition to making a contempt order, order the act to be done, at the expense of the disobedient person, by the party enforcing the order or any other person appointed by the judge.

[36] The two purposes of a penalty for civil contempt are (i) to enforce compliance with a court order; and (ii) to ensure societal respect for the courts: see Boily v. Carleton Condominium Corp. 145, 2014 ONCA 574, at para. 79.

[37] As D.M. Brown, J. explained in Mercedes-Benz Financial v. Kovacevic, 2009 CarswellOnt 1142, 308 D.L.R. (4th) 562 (Ont S.C.J.), at para. 5:

A court exercises its contempt power to uphold the dignity and process of the court, thereby sustaining the rule of law and maintaining the orderly, fair, and impartial administration of justice: see the sources cited by Lax J. in Korea Data Systems Co. v. Chiang, 85 O.R. (3d) 425, paras. 16 to 19. When a person deliberately fails to obey a court order, he shows disregard for the obligations which he owes to others in his community, disrespect for his community’s system of justice which enforces those obligations, and disdain for the fundamental principle that all persons who live in our community do so subject to the rule of law. By disobeying a court order, a person seeks to place himself above and beyond the law of his community. His disobedience also creates conditions of gross inequality, rewarding those who turn their backs on the law, while placing burdens on those who follow the law...

[38] There are four penalty options generally imposed upon a finding of civil contempt: no penalty (usually where the contempt has been purged); a suspended sentence (perhaps conditional upon some act or event occurring); a fine; or incarceration: see Niagara Regional Police Services Board v. Curran (2002), 57 O.R. (3d) 631 (Ont. S.C.J.), at para 20.

[39] In Boily, at para. 90, the Court of Appeal identified the following factors as being 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.

[40] I consider these factors and apply them to this case below.

Proportionality

[41] As in other sentencing situations, a sentence for civil contempt “must be proportionate to the gravity of the offence and the degree of responsibility of the offender”: Korea Data Systems Co. v. Chiang, 2009 ONCA 3 (Ont. C.A.), at para. 86.

[42] Here, the amount of money originally at issue was not large. However, the costs awards now owing to CMHC are substantial and that is due primarily to Melissa Hart’s conduct alone. The tasks imposed upon Melissa Hart were simple: to attend an examination in aid of execution and produce relevant financial documents. Her attempts to avoid providing CMHC with relevant information and evidence has spanned a period of more than a year.

[43] I find that Melissa Hart’s contempt is serious, repeated, over a considerable period of time, and reflects an almost complete disregard for the court’s process.

Mitigating Factors

[44] In this case, the mitigating factors are:

(a) Melissa Hart has appeared and/or responded to each court date. (b) Melissa Hart is self-represented. (c) Melissa Hart has tried, albeit unsuccessfully, to appeal, set side and/or vary the court orders that she objects to. (d) Melissa Hart has provided some, but very limited, financial documentation requested by CMHC. (e) While it is unclear to me whether Melissa Hart truly understands the impact of her conduct, her breaches were plainly deliberate and not due to mistake or misunderstanding.

Aggravating Factors

[45] In this case, the aggravating factors are:

(a) Melissa Hart refuses to accept the decisions made by the courts, including the Ontario Court of Appeal, and continues to argue that such decisions are wrongly decided. (b) Melissa Hart has wilfully refused to comply with court orders, including terms that she consented to. (c) Melissa Hart could have purged her contempt by taking steps to provide the financial information sought by CMHC and attending at the examination in aid of execution. She has chosen not to do either. (d) Melissa Hart has continued to file and/or attempt to file unwarranted and frivolous motions. (e) Melissa Hart has been found to be a vexatious litigant, in part because of the numerous motions she has brought in the context of the within proceeding. (f) Melissa Hart’s non-compliance with the court orders has been flagrant and repeated. (g) Melissa Hart has not demonstrated any remorse.

Deterrence and Denunciation

[46] The punishment for contempt is intended to reflect deterrence. It should serve as a disincentive to those who might consider breaching court orders. The sentence should be one that “will repair the wound” to the legal system caused when court orders are ignored and denounce the conduct: see Boily, at para. 105.

Sentences in Like Circumstances

[47] In order to determine an appropriate sentence, I have reviewed a number of civil contempt cases. It is clear that sentencing decisions are heavily fact-driven. As a result, unlike in criminal law, a meaningful range of sentences in civil contempt is hard to identify. Cases wherein imprisonment has been ordered tend to involve repeated and serious instances of non-compliance. Ordinarily incarceration is a sanction of last resort: Korea Data Systems, at para. 90.

[48] The length of the term of incarceration imposed for simple civil contempt varies greatly with the facts of a case and can vary between a number of days and a year.

[49] A potential sentence for contempt is a conditional sentence: see Devathasan v. Ablacksingh, 2018 ONSC 7557 (Ont. S.C.J.), at para. 37.

Reasonableness of Fine or Incarceration

[50] While Melissa Hart has suggested that she could produce banking information if she was given additional time and a new examination date could be set, I am not persuaded that she actually intends on purging her contempt. She has had ample opportunity to do so and she clearly understands what steps need to be taken to purge. She has given no reason why she should be believed this time around. It has been suggested to her to obtain legal advice on clearing her contempt. She is wholly entrenched in her belief and position that the courts have made the wrong decision in granting the Judgment and that CMHC has no entitlement to enforce any part of the Judgment.

[51] Given Melissa Hart’s statements about her poor financial situation, and the outstanding Judgment and costs awards to date, I find that it is most unlikely that a fine would be paid and would serve little purpose in obtaining compliance. I believe Melissa Hart would simply ignore the fine.

Conclusion on Reasonable Sentence

[52] I have considered the range of sentencing options. In my view, the only way for the court to enforce compliance with the outstanding orders is to impose a period of incarceration. The hope is that Melissa Hart will realize the seriousness of her situation and that her conduct in this proceeding is clearly not acceptable and that she needs to comply with court orders.

[53] In the circumstances of this case, after weighing all of the sentencing factors, I conclude that a conditional sentence is the appropriate sentence for Melissa Hart’s contempt.

[54] In addition to the usual statutory terms, the conditional sentence will include the following terms:

(a) Melissa Hart shall be under house arrest for sixty (60) days. She will be forbidden to leave her residence except for: medical appointments for herself; medical emergencies involving herself or her mother, Patricia Hart; shopping trips of less than 4 hours’ duration once per week to purchase groceries or other necessary items; and activities directly related to purging her contempt; (b) Melissa Hart shall report to a conditional sentence supervisor; (c) Melissa Hart shall remain in the Province of Ontario for the duration of the conditional sentence order; (d) Melissa Hart shall carry a copy of the conditional sentence order with her whenever she leaves her residence, for the duration of the conditional sentence order; (e) Melissa Hart shall comply fully to the best of her ability with my Order of March 17, 2023, which incorporated the substance of the Debtor Examinations Order; and (f) Melissa Hart shall attend before me at the conclusion of the 60 days to determine if these conditions have been met. (g) If Melissa Hart participates in a meaningful and fully responsive examination in aid of execution and she delivers to CMHC the remaining bank records and documents ordered to be produced, prior to the expiry of her term of imprisonment, she can move before me on four (4) days’ notice to CMHC for the variation of this order, including a reduction of the sentence that has been imposed.

[55] Melissa Hart shall attend in person before me on Thursday, November 30, 2023 at 10:00 AM for the purpose of finalizing the order for this conditional sentence. The conditional sentence does not commence until it has been finalized. (Counsel for CMHC does not have to attend on that date, although he is free to do so by Zoom if he wishes. He would have to notify the Trial Co-ordinator’s Office in time to arrange for a Zoom link.)

COSTS

Position of CMHC

[56] Mr. Houle submits that Melissa Hart consented to the Debtor Examinations Order, the very order which she failed to comply with, leading to her being found in civil contempt. She did not comply because she does not want CMHC to enforce against her. This is the fourth appearance before the court on this matter, with many opportunities to purge having been given. CMHC is seeking its costs relating to all four appearances, on a full indemnity basis in the amount of $12,389.58. A costs outline was filed by CMHC. It showed the claimed fees at a substantial indemnity rate of $12,136.76 and at a partial indemnity rate of $8,850.14.

[57] CMHC submits that the parties are jointly and severally liable. Patricia Hart’s portion should be $2,400.00, with the balance to be paid on a full indemnity basis from Melissa Hart.

Position of Melissa Hart

[58] Melissa Hart submits that there should be no costs awarded to CMHC for the contempt motion. CMHC was aware that she was moving to set aside the court orders and that the motion before Associate Justice McGraw was not yet resolved.

Discussion

[59] In Business Development Bank of Canada v. Cavalon Inc., 2017 ONCA 663 (Ont. C.A.), at para. 104, the Ontario Court of Appeal confirmed that substantial indemnity will be the appropriate scale of costs in the context of costs for a contempt motion involving serious conduct.

[60] Melissa Hart’s conduct and the contempt itself has shown a deliberate and ongoing attempt on her part to frustrate the series of court orders and delay the ultimate conclusion of this litigation. Based on the applicable Rule 57.01 factors and based on the facts as I have found them, I am satisfied that this is a case that justifies an order for substantial indemnity costs. CMHC would not have been put to the expense it has but for Melissa Hart deliberately choosing not to follow the court’s orders.

[61] In reviewing CMHC’s costs outline, I am satisfied that the work performed, the time spent, and the rates claimed are all fair, reasonable and proportionate in the circumstances. A significant number of hours has been spent on preparation and attendances alone.

[62] Accordingly, I order that costs of this contempt motion be paid to CMHC by Melissa Hart on a substantial indemnity basis. I fix those costs in the amount of $9,000.00, inclusive of HST and disbursements.

[63] This costs award will be paid by Melissa Hart alone to CMHC. Any determination of costs against Patricia Hart will await the conclusion of the contempt motion against her. I adjourn any request for costs against Patricia Hart on the same terms as I have previously adjourned the penalty portion of this motion relating to her.

[64] I will remain seized of this matter for now. In addition to the upcoming November 30, 2023 attendance by Melissa Hart, I will monitor Melissa Hart by means of interim appearances which may be scheduled by the court or by CMHC’s counsel or by Melissa Hart but only with leave of a judge of the Superior Court of Justice, including for the purpose of considering a reduction to this sentence should the contempt be purged prior to the expiry of the sentence. Any willful breaches of this order could result in an additional period of incarceration.

MacNEIL J. Released: November 17, 2023