



COURT OF APPEAL FOR ONTARIO

CITATION:
Doobay
    v. Diamond, 2012 ONCA 580

DATE: 20120907

DOCKET: C54141

Lang, Epstein and Hoy JJ.A.

BETWEEN

Danny
    Doobay and Richbuilt
    Development Inc.

Plaintiffs (Respondents)

and

Anthony
    Diamond
and Diamond
    + Diamond Merchant Banking Group

Defendant (Appellant)

David M. Midanik, for the appellant

Simon Bieber and Christopher Scotchmer, for the
    respondents

Heard: April 3, 2012

On appeal from the Order of Justice Beth A. Allen of the
    Superior Court of Justice dated July 25, 2011, with reasons reported at 2011
    ONSC 4457.

Epstein
    J.A.:

A.

OVERVIEW

[1]

Anthony Diamond appeals from an order finding him in contempt of court,
    sentencing him to 42 days in jail, and fining him $40,000. The finding was
    based on his refusal to answer questions he was asked during examinations in
    aid of the respondents attempts to execute on a 2007 default judgment they
    obtained against the appellant.

[2]

The appellant challenges the finding of contempt on several grounds.  He
    maintains that by the time the motion for contempt was heard he no longer had
    any obligations to the respondents as the matter had been settled or at least
    he had good reason to believe it had been settled.  The appellant submits that
    the motion judge erred by refusing his request for an adjournment for the
    purpose of calling
viva voce

evidence to this effect.  The
    appellant also argues that the motion judge erred by failing to specify which questions
    were inadequately answered.  He further contends that the motion judge erred by
    penalizing him for conduct for which he had already been penalized.

[3]

If his appeal from the finding of contempt is unsuccessful, the
    appellant appeals his sentence on the basis that the motion judge erred by imposing
    an unreasonable penalty.

[4]

For the reasons that follow, I would dismiss the appeal in its entirety.

B.

Facts

[5]

In October 2007, the respondents obtained default judgment against the
    appellant in the amount of $854,924.21. In his May 27, 2008, examination in aid
    of execution he refused to answer any questions. On August 22, 2008, Master
    Sproat ordered the appellant to re-attend the examination and answer all proper
    questions.  Further to this order, the appellant was examined on December 15,
    2008, but again refused to answer a substantial number of the required questions.

[6]

On July 24, 2009, on consent, Master Sproat ordered the appellant to
    provide written answers to all but one of the outstanding questions asked
    during the December 15, 2008 examination by September 30, 2009 (406 questions
    in total).  The order further required the appellant to attend an examination on
    October 23, 2009, for the purpose of answering any follow-up questions arising
    from his written answers.

[7]

While the appellant missed the September 30 deadline, he did purport to
    provide written answers to all 406 questions. However, the respondents were not
    content with the answers and brought a contempt motion.

[8]

After a three-day hearing, Spence J. concluded, in reasons released on
    June 18, 2010, that the answers provided to all but 70 questions were largely
    unresponsive and must be considered to be a deliberate attempt to obfuscate
    the issue before the court for the purpose of avoiding complying with the
    Order. As the appellant had failed to meet the terms of Master Sproats orders
    and had shown flagrant disregard for the Court process, Justice Spence held
    him to be in contempt of court, sentenced him to 21 days imprisonment and
    imposed a fine of $20,000.

[9]

After an unsuccessful attempt to appeal the decision of Spence J. to
    this court, the appellant served his sentence in January 2011.  Then, on the
    basis of the appellants continued disobedience of the court orders, the
    respondents brought another contempt motion.  At the hearing of this motion, scheduled
    to take place before Hainey J. on May 18, 2011, the appellant claimed that he
    had retained new counsel who could not attend on that occasion and undertook to
    purge his contempt if the matter were adjourned.  The adjournment, opposed by
    the respondents, was granted with the condition that the appellant provide
    responsive written answers, within 30 days of May 18, 2011.

[10]

Again,
    the appellant purported to deliver responses to the questions in issue and
    again the respondents remained dissatisfied.  They pursued their motion for
    contempt. The appellant brought a cross-motion for an order staying the
    contempt motion as an abuse of process, or alternatively, an adjournment in
    order to give him the opportunity to call
viva voce
evidence.

C.

Motion judges reasons

[11]

At
    the outset of the hearing, the motion judge dismissed the appellants cross-motion
    in which he sought an adjournment.  The appellant argued that the testimony of
    witnesses he proposed to call would supplement two emails that were before the motion
    judge that evidenced a settlement or at least supported his honest belief that
    a settlement had been reached.

[12]

The
    motion judges refusal to grant the adjournment was based on her finding that
    the record contained no evidence that supported the appellants position that the
    matter had settled or that he had reason to believe that a settlement had been
    reached.  The proposed testimony would therefore not have assisted in the
    determination of whether the appellant remained in contempt of court.

[13]

The
    motion judge also rejected the appellants argument that the respondents were
    using the contempt motions to force him into an improvident settlement and thus
    were abusing the process of the court. The appellant chose not to pursue this
    issue on appeal.

[14]

The
    motion judge then turned to the main motion for contempt.  She reviewed the
    answers the appellant had provided to the respondents counsel under cover of
    letter dated June 13, 2011, the respondents reply of June 28, 2011 indicating
    that, again, the answers were not responsive, and the appellants letter of July
    5, 2011, providing further answers. The motion judge then carefully categorized
    the outstanding questions that remained in dispute and examined the answers to
    the questions.

[15]

At
    the end of this detailed analysis, the motion judge concluded that the answers
    demonstrated the same evasiveness and unwillingness to comply with the Court
    Orders that the appellant had displayed in previous court appearances and that
    he was obviously still playing tricks and games to avoid the Courts
    authority.  She held that there is no question that [the appellant]
    deliberately and wilfully disobeyed the Court Orders for him to answer the
    questions responsively and therefore found that he had failed to purge his
    contempt, and remained in contempt of court.

[16]

After
    reviewing the courts jurisdiction to sanction contempt as set out in rule
    60.11 and related authorities, the motion judge specifically noted the fact
    that the appellants disrespect of the courts authority had not been remedied
    by the previous sanction, saying, at para. 46: [i]t is clear there has been
    active defiance on [the appellants] part. He has engaged in repeated
    unrepentant acts of contempt. Serving a previous period of jail time has not
    influenced his attitude and conduct.

[17]

After
    noting the respondents position that the appellant be incarcerated for three
    months and fined a further $50,000, the motion judge sentenced him to a term of
    incarceration of 42 days and imposed an additional fine of $40,000 to be paid
    within 30 days.

D.

ISSUES

[18]

The
    appellant has raised three principal grounds of appeal:

1. In
    dismissing the cross-motion, the motion judge erred in refusing to grant the
    requested adjournment, thereby preventing him from adducing evidence concerning
    the alleged settlement;

2. The motion judge
    erred by failing to specify which answers were inadequate and by penalizing for
    the same conduct that formed the foundation of the previous finding of contempt
    and accompanying penalty; and

3.  The
    sentence imposed was unreasonable.

E.

ANALYSIS

(1)

The Cross-Motion
for an Adjournment


[19]

The
    appellant argues that the motion judges refusal to grant the adjournment
    request deprived him of a fair hearing.  He claims that the evidence available
    from his proposed witnesses would have augmented the evidence the motion judge
    had before her in the form of the two emails  evidence that would have
    supported his claim that the matter had been settled or that he at least had
    reasonable grounds to believe that it had been settled.  I disagree.

[20]

First,
    as previously noted, Hainey J. adjourned the motion set for May 18, 2011 to
    enable the appellant to arrange for his witnesses to attend and testify.  In
    granting the adjournment, Hainey J. made the hearing of the motion peremptory
    to the appellant.  It was clear to the appellant that if he wished to call
    witnesses, those witnesses had to be ready to testify before the motion judge
    on July 13, 2011. He failed to ensure their attendance. This alone would be
    sufficient to dispose of this issue. However, even if the hearing on July 13
    was not peremptory to the appellant, I would still not give effect to this
    ground of appeal.

[21]

The
    appellants argument concerning the denied adjournment turns on whether the
    determination of the motion for contempt required the resolution of any
    material facts in dispute.  If so, a trial of an issue would have been
    necessary. In the absence of any disputed material fact, a motion for civil
    contempt may proceed summarily:
R. v. B.E.S.T. Plating Shoppe Ltd. and
    Siapas
(1987), 59 O.R. (2d) 145 (C.A.),
R. v. Jetco Manufacturing Ltd.
    and Alexander
(1987), 57 O.R. (2d) 776 (C.A.).

[22]

The
    only issue the appellant raised as being material and contentious was whether the
    parties had settled or at least whether he genuinely believed that they had
    settled their differences relating to the unsatisfied judgement.

[23]

In
    my view, the motion judge was correct in finding there to be no air of reality
    to the appellants allegations of a settlement  actual or perceived.  The two
    emails themselves belie the appellants argument as they do not demonstrate a
    settlement: they contain nothing more than a settlement proposal and its
    rejection.

[24]

The
    only evidence that a settlement had been reached was the appellants bald
    allegation in his affidavit sworn May 13, 2011, where, at para. 39 he says: I
    met with [the respondents representative] on March 27, 2011, to settle the
    civil claim of Doobay, and a settlement was reached.

[25]

The
    problem is that this assertion does not stand up to scrutiny when considered in
    the light of the appellants own conduct. He claims that, as far as he is
    concerned, a settlement was reached on March 27, 2011. However, in letters
    dated June 13, 2011 and July 5, 2011, the appellant, by providing further
    written answers to the outstanding questions, conducted himself in a manner
    contrary to the existence of a settlement or his reasonable belief that the
    matter had been settled.  I would also note that the appellant appeared before
    Hainey J. on May 18, 2011, five days after swearing his affidavit of May 13.
    The appellant did not raise the issue of settlement and obtained an adjournment
    on an undertaking to provide responsive answers within 30 days. All of the
    appellants conduct during this period is inconsistent with an honest belief
    that the matter had settled.

[26]

Against
    this background, I see no error in the motion judges exercise of her discretion
    to refuse the appellants request for an adjournment to call
viva voce
evidence.

[27]

I
    would therefore not give effect to this ground of appeal.

(2)

The motion for contempt

(a)

Specificity

[28]

The
    appellant, relying on
Cotroni v. Quebec Police Commission
, [1978] 1
    S.C.R. 1048, argues that the motion judge erred by not reviewing each of his
    responses in order to specifically set out which answers were unsatisfactory
    and thereby formed the foundation for the finding of contempt.

[29]

In
Cotroni
, the Supreme Court held that no one should be found guilty of
    contempt of court unless a specific charge has been brought against him.
    According to the Supreme Court:

An accused person who is sentenced to a long term in prison for
    evasive answers regarded as amounting to a refusal to testify is entitled to
    purge himself of his contempt by providing answers that are not evasive. In
    order to be able to do this he must know quite clearly which questions require better
    answers.

[30]

I
    would not give effect to this ground of appeal as it is clear that the
    appellant was well-aware of the specifics of his default.

[31]

In
    June 2011, the appellant attempted again to address the unanswered questions. 
    Counsel for the respondents advised that he still considered the answers to be
    unsatisfactory.  In a letter dated June 24, 2011, David McGregor, a lawyer
    working for the appellant, again wrote to the respondents lawyers asking for
    clarification on which answers in particular were non-responsive. On June 28,
    the respondents lawyer replied, listing every question and answer that
    remained problematic.

[32]

The
    motion judge did not review each and every answer.  Rather, she identified a
    long list of answers as inadequate, such as repeated replies of fishing
    expedition.

[33]

The
    appellant knew that answers such as this were unacceptable just as he was well
    aware of which questions Master Sproat ordered him to answer and which
    questions had not been satisfactorily answered. This is not a case where a
    contemnor was deprived of the opportunity to purge his contempt because of lack
    of specificity.

[34]

Accordingly,
    I would not give effect to this ground of appeal.

(b)


Double-jeopardy

[35]

The
    appellant submits that he had already been sentenced for contempt by Spence J.
    and cannot be punished for the same contempt twice. He relies on the holding of
    the Alberta Court of Appeal in
Re Braun
, 2006 ABCA 23, 262 D.L.R. (4
th
)
    611, that if contempt is not purged, continued disobedience is neither an
    aggravating factor nor a fresh transgression (at para. 27).

[36]

However,
    in
Chiang (Trustee of) v. Chiang
, 2009 ONCA 3, 93 O.R. (3d) 483, this
    court stated that it could not endorse the reasoning in
Braun
.  First,
    as explained in para. 44, it was 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 contemnors continuing defiance.

Second, the Ontario
Rules of Civil Procedure
provide
    more flexibility in sentencing than Albertas Rules of Court, Alta. Reg.
    390/1968.

[37]

While
    the reasoning expressed in
Chiang
was
obiter
, I would endorse it
    and apply it to this case. The coercive tool of civil contempt must have teeth.
    For that reason, I reject this ground of appeal.

(3)

The Penalty

[38]

For almost five years the
    appellant has been frustrating the respondents attempts to enforce the
    judgment they have against him  depriving them of their lawful rights and
    needlessly costing them time and money.  He has also shown profound disrespect
    for the court.

[39]

Spence J. tried to send a
    clear message to the appellant that conduct of this nature would not be
    tolerated.  Unfortunately, the message was not strong enough to impress upon
    the appellant the importance of obeying court orders. I see no reason to
    interfere with the motion judges decision to strengthen the message by
    doubling the sanction imposed for lack of compliance.

(4)

The Structure of the Contempt Hearing

[40]

A
    point not raised by the parties merits comment.  It involves the procedure the
    motion judge followed. While the procedure to be followed in contempt hearings
    is in the discretion of the motion judge, they are generally bifurcated - there
    is a liability phase and a penalty phase. This is to allow the contemnor an
    opportunity to purge his or her contempt:
College of Optometrists of
    Ontario v. SHS Optical Ltd. (c.o.b. Great Glasses)
, 2008 ONCA 685, 241
    O.A.C. 225, at para. 73.  The contemnors efforts to purge the contempt during
    the period between conviction and penalty are a relevant consideration in the
    determination of the appropriate penalty:
Great Glasses
, at para. 79.

[41]

Here,
    the motion judge determined liability and penalty at the same time.  As a
    result, prior to the determination of punishment, the appellant had no further
    opportunity to purge or at least attempt to purge the contempt found by the
    motion judge.

[42]

As
    Watt J.A. noted in
Great Glasses
,
in some circumstances
    a consolidated hearing may cause unfairness  it may not only deprive the
    contemnor of the opportunity to purge his or her contempt but also expose the
    contemnor to a situation where evidence relevant to penalty may affect the determination
    of liability.

[43]

Here,
    as noted, there was no challenge on this point.  Nor, in my view would one have
    been successful given that the contempt itself was effectively not in issue and
    that the history of the matter evidenced Mr. Diamond's intention to continue
    his contemptuous conduct.

A.

disposition

[44]

For
    these reasons, I would dismiss the appeal with costs payable by the appellant
    to the respondents that I would fix in the amount agreed upon by counsel of
    $8,900, inclusive of disbursements and applicable taxes.

Released:

SEL                                       Gloria
    J. Epstein J.A.

SEP 07 2012                          I agree Susan E. Lang
    J.A.

I agree
    Alexandra Hoy J.A.


