



COURT OF APPEAL FOR ONTARIO

CITATION: Wallace (Re), 2017 ONCA 342

DATE: 20170428

DOCKET: C61514

Blair, Lauwers and Hourigan JJ.A.

In the Matter of the Bankruptcy of Alma Maria Wallace (aka
    Alma Maria Belacic) of the City of Toronto, in the Province of Ontario

Sean N. Zeitz, for the appellant, Brief & Associates
    Inc.

Chris Dockrill, for the respondent, Alma Maria Wallace

Heard and released orally: April 21, 2017

On appeal from the order of Justice Barbara A. Conway of
    the Superior Court of Justice, dated November 17, 2015.

ENDORSEMENT

[1]

The Bankrupt,

Alma
    Maria Wallace (aka Alma Maria Belacic),
was required by order
    of Pattillo J. dated April 8, 2015 to execute a power of attorney with respect
    to her interest in a property in Croatia, which would enable the Trustee in Bankruptcy,
    Brief & Associates Inc., to complete a sale of the property. The Bankrupt
    did not appeal or seek a variation of that order and it remains in effect.

[2]

The Bankrupt has refused to execute the power of
    attorney. While there was some dispute over the form the power of attorney
    should take, the Bankrupt made it clear in the contempt proceeding before
    Conway J., which is the subject of this appeal, that she would not sign any
    power of attorney.

[3]

Instead of determining whether the Bankrupt was
    in contempt, because doing so would serve no practical purpose, the bankruptcy
    judge made an order granting the Trustee authority to sign the power of
    attorney on behalf of the Bankrupt in the form tendered by the Trustee, with
    one change: she redacted the last sentence that would have enabled the Trustee
    to assign its powers to a third party in Croatia. She ordered, nonetheless,
    that if it became necessary to transfer the power of attorney to Croatian
    counsel to facilitate the sale process, the Trustee could return to court to
    seek that relief.

[4]

The Trustee appeals, not with respect to the
    main substance of the order, but with respect to the motion judges refusal to
    make a finding of contempt and with respect to the redaction of the last
    sentence of the power of attorney. The Trustee seeks the Bankrupts
    incarceration for contempt.

[5]

The Trustee argues the bankruptcy judge erred by
    failing to find the Bankrupt in contempt and impose a penalty on the Bankrupt. The
    record might well justify a contempt finding, as the bankruptcy judge
    recognized. Instead of making that finding and imposing a penalty, the
    bankruptcy judge made an order providing the Trustee with a power of attorney
    that did not require the Bankrupts approval. The Trustee argues the bankruptcy
    judge erred in considering that a contempt order would lack utility.

[6]

We do not see any basis for interfering with the
    bankruptcy judges decision. In our view, she made an order in relation to the
    power of attorney that on the record matched the Trustees request for an effective
    power of attorney. There is no evidence before the court that the power of
    attorney with the judges redaction is insufficient to accomplish its goal of
    permitting the Trustee to realize the bankrupts Croatian assets.

[7]

We do not condone the Bankrupts conduct and
    emphasize to her that the failure to obey a court order is serious misconduct
    not to be continued. However, even if circumstances are such as to meet the
    three-stage test for contempt as set out in such authorities as
Prescott-Russell
    Services for Children and Adults v. G. (N.)
(2006), 82
    O.R. (3d) 686 (C.A.), courts have long recognized the need to exercise caution
    prior to making a contempt order and, as counsel for the Trustee admits, making
    such an order is discretionary. The motion judge made a discretionary decision
    carving out instead an order that met the practical needs of the situation. We
    see no error in her doing so.

[8]

The appeal is dismissed. We do not think this is an appropriate case for
    costs. There will be no order as to costs.

R.A. Blair J.A.

P. Lauwers J.A.

C.W. Hourigan J.A.


