Court File and Parties

COURT FILE NO.: CV-19-81266 DATE: 2024/04/11 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Perley-Robertson, Hill, & McDougall LLP, Solicitor/Creditor/Moving Party AND Eureka 93 Inc. and Acenzia Inc., Debtor/Responding Party

BEFORE: Justice Robert Smith

COUNSEL: Andrew J. F. Lenz, counsel for the Moving Party Alex Flesias, counsel for the Responding, Acenzia Inc

HEARD: February 20, 2024

Reasons for Decision

R. SMITH J.

[1] Perley-Robertson, Hill & McDougall LLP (“Perley-Robertson”) brings a motion seeking:

a. An Order that Grant Bourdeau (“Bourdeau”) be found in contempt of the Order of M. Smith J. dated September 12, 2023, for failing to attend and answer questions at an examination in aid of execution;

b. An Order that a Writ of Sequestration be issued against the Debtor Acenzia Inc. (“Acenzia”); and,

c. If necessary, a warrant of committal.

Background

[2] In May 2018, Perley-Robertson acted for Livewell Canada Inc. now Eureka 93 Inc. (“Eureka”) and Acenzia with regards to Eureka acquiring Acenzia. An engagement letter was signed between Perley-Robertson and Acenzia but unfortunately, the purchase was not completed.

[3] By September 2019, Eureka owed Perley-Robertson for legal services. Perley-Robertson commenced assessment proceedings and in Fall 2019 to collect the legal fees owing. A consent resolution was reached with Seann Poli, a director of Acenzia.

[4] The parties agreed that Acenzia would consent to the assessment and Perley-Robertson would forgo its costs and any enforcement until January 10, 2020. The assessment was for approximately $400,000 and an Order against Acenzia was signed on consent in Fall 2019 by the Assessment Officer in Ottawa.

[5] On November 27, 2019, Eureka instituted bankruptcy proceedings.

[6] On February 28, 2020, Acenzia issued a Statement of Claim in Toronto against Perley-Robertson claiming damages of $25,000,000 alleging negligence, conflict of interest, and breach of fiduciary duty and loyalty to it when acting on behalf of both Eureka and Acenzia in the negotiations related to Eureka’s intended purchase of Acenzia. Acenzia also seeks a declaration that the retainer agreement signed by Acenzia and Perley-Robertson is void and unenforceable and as a result, Acenzia is not liable to Perley-Robertson for payment of any legal services.

[7] Pleadings were exchanged in the Toronto motion, but the Toronto proceedings stalled. An agreement was reached that the Toronto action would be moved forward and in return, Perley-Robertson would refrain from enforcing its assessment order but could bring the enforcement back on 30 days’ notice.

[8] Examinations for discovery were completed in the Toronto action in July 2021 and after two years, then counsel for Acenzia advised that he would be getting off the record.

[9] On July 11, 2023, Mr. Bourdeau, an officer and director of Acenzia was served with a Notice of Examination in Aid of Execution. Counsel for Mr. Bourdeau advised that Mr. Bourdeau would not be attending the examination due to the outstanding Toronto action.

[10] Perley-Robertson brought a motion, to compel Mr. Bourdeau to attend an examination in aid of execution in Ottawa and to produce certain documents. On September 12, 2023, M. Smith J. ordered Mr. Bourdeau to attend an examination and the parties agreed that this would occur on November 7, 2023 and Mr. Bourdeau was to produce all documents and information set out in the Notice of Examination ten days prior to the date set for the examination. A copy of M. Smith J.’s order is attached as Schedule A hereto.

[11] Mr. Bourdeau attended at the examination on November 7, 2023, but failed to produce any of the documents ordered before attending and refused to answer any questions related to the examination in aid of execution.

Issue #1 - Should Grant Bourdeau be found in contempt of M. Smith’s order?

Analysis

[12] The Test for a finding contempt of court was set out in Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79. A party must prove beyond a reasonable doubt that a) the order alleged to have been breached must state clearly and unequivocally what should or should not have been done; b) the party alleged to have breached the order had actual knowledge of it; and c) the party alleged in breach intentionally failed to do the act the order compels: A judge retains a discretion to decline to make a contempt order where it would be unjust to do so, even if the above factors are met.

[13] M. Smith J’s order is clear that Mr. Bourdeau was to attend at an examination in aid of execution personally in Ottawa on a mutually convenient date, no later than December 1, 2023. In addition, Mr. Bourdeau was to produce all documents and information set out in the Notice of Examination in Aid of Execution ten days before the examination.

[14] I find that the order is clear and unequivocal that Mr. Bourdeau was ordered to attend an examination in aid of execution and that the order includes the requirement to answer reasonable questions and produce the related documents referred to in the order related to an examination in aid of Execution ten days before.

[15] The second requirement is that Mr. Bourdeau had knowledge of the terms of the order. This is not in dispute because he attended with counsel but refused to answer any of the questions.

[16] The third requirement is that Mr. Bourdeau intentionally breached the order I am satisfied beyond a reasonable doubt that Mr. Bourdeau intentionally failed to comply with the order because he attended with counsel and failed to provide any of the documents ordered to be produced 10 days before the examination and he refused to answer any of the relevant questions at the examination.

[17] Mr. Bourdeau attended the motion before M. Smith J. with counsel and attended the motion for an order for contempt with counsel. Mr. Bourdeau does not dispute that he intentionally refused to comply with M. Smith J.’s Order dated September 12, 2023. Rather, Mr. Bourdeau submits that he has scheduled an appointment to schedule a timetable and a date for a long motion in the Toronto negligence action to seek a stay of the enforcement of the assessment order obtained in Ottawa. A date for hearing the motion to stay the enforcement order in the Toronto action is expected to occur in three to four months from now.

[18] The motion to stay the enforcement of the assessment order in the Toronto action is a different matter from the proceeding before me in Ottawa. In this proceeding, M. Smith J. ordered that Mr. Bourdeau attend for an examination in aid of execution. Mr. Bourdeau attended the examination but refused to answer any of the questions, which was a clear breach of M. Smith J.’s order. The fact that Mr. Bourdeau plans to bring a motion in a separate action at some future date to stay the enforcement does not change the fact that he intentionally breached the order made by M. Smith J.

[19] There is a strong public policy that Orders of the Court must be respected. Mr. Bourdeau did not bring a motion to stay the enforcement of M. Smith J.’s Order in response to the Perley-Robertson’s motion for an order for contempt.

[20] For the above reasons, I find Mr. Grant Bourdeau is in contempt of the order of M. Smith J. dated September 12, 2023. He is given 60 days to purge his contempt by attending at an examination in aid of execution in Ottawa at a mutually agreeable time to answer all relevant questions posed by Perley-Robertson. In the event that Grant Bourdeau fails to purge his contempt within 60 days, he shall be sentenced to 30 days in jail.

Costs

[21] Mr. Grant Bourdeau is ordered to pay costs on a substantial indemnity scale in the amount of $6,000 including HST, plus disbursements of $2,872.55 including HST.

Justice Robert Smith

Date: April 11, 2024