The Ontario Court of Appeal recently set aside an order committing an estate trustee to 15 days in jail, to be served on weekends, for contempt of an order requiring the estate trustee to pass his accounts.
In Ross v. Ross, 2019 ONCA 724 (CanLII), the estate trustee was a lawyer, 73 years of age, with no prior convictions or findings of contempt. At the time of the appeal, the estate trustee had purged his contempt.
At the hearing below, the judge found that the contempt arose from “a failure to understand and appreciate or to ignore the need for, and importance of, complying with the order within the specified time or within a reasonable time.” The Court of Appeal held that this finding meant that the estate trustee’s actions did not amount to a callous disregard for the court’s authority. Accordingly, a jail sentence was not appropriate.
For other cases on contempt and sentencing, see our blog, here and here. In the first blog, reference is made to a case where an 88 year old litigant with health issues was sentenced to 30 days in jail for contempt. In the second blog, we discuss a case where an attorney for property failed to pass accounts as required by court order. He was fined $7,000.
Finally, consider the case of Canavan v. Feldman, 2004 CanLII 4787 (ON SC). This was a claim by an estate trustee against his former lawyer. There, the estate trustee, 67 years old, spent 35 days in jail for contempt of court orders relating to a passing of accounts, and was only released when new counsel put further evidence before the court. The estate trustee’s prior lawyer had consented to an order of contempt without the estate trustee’s knowledge. The lawyer told the estate trustee that he had “nothing to worry about”. At a sentencing hearing, the lawyer did not attend. The estate trustee was sentenced to 6 months in jail. The estate trustee was awarded general damages of $200,000 and punitive damages of $100,000 against his prior lawyer.
Thanks for reading.
Being a trustee is serious business. A trustee, by law, owes a fiduciary duty to the beneficiaries for whom he or she holds property and must keep this in mind and act in the best interest of those beneficiaries at all times.
The Court does not take the breach of fiduciary duties lightly and will Order trustees to fulfil their obligations. If a trustee doesn’t heed such Orders, they may find themselves in contempt of court, as was the case in a recent Ontario Superior Court of Justice decision, Re Penna Estate.
In Re Penna Estate, the defendant was found in breach of the following four Court Orders during the course of litigation that had been ongoing for five years:
1. A Mareva Injunction.
2. A Passing of Accounts Order.
3. An Order to provide the Court with an up-dated Affidavit respecting the values of assets listed in the Mareva Injunction.
4. An Order of to attend at an Examination in-aid-of execution and to bring all documentation. The Defendant was also ordered to provide an Affidavit respecting the status of his assets, which were frozen under the Mareva Injunction, since it was discovered that he had liquidated all such assets.
Justice Greer found that the Defendant had made no attempt to comply with the Orders and had committed fraud in the administration of the estate. The Court discussed the possible sanctions for contempt, which include:
1. Imprisonment for such a period and on such terms as are just.
2. Imprisonment if the person fails to comply with the term of the Order.
3. A fine to be paid to the Provincial Treasurer.
4. A Order to do or refrain from doing an act.
5. An Order to pay such costs as are just.
6. An Order to comply with any other order that the Judge considers necessary.
In Re Penna Estate, the Court considered the applicable sentencing principles and found that the appropriate sanction in the circumstances was a term of imprisonment. The Defendant was sentenced to 14 months. Furthermore, because this was a civil contempt, there was no method of parole as there is in criminal matters.
A sobering lesson for all who are the subject of civil Court Orders, indeed.
Sharon Davis – Click here for more information on Sharon Davis.
The recent decision of Brown J. in Re Willis Estate, 2009 CanLII 30681 (Ont. S.C.J.) addresses the issue of an appropriate sentence to impose on an attorney for property who has been found in contempt of a court order requiring him to account for his dealings with his mother’s property.
In that proceeding, the court ordered in January 2008 that a son produce an inventory of assets held by his mother either alone or jointly with him, and to provide a full accounting of all dealings with the joint assets.
The son failed to do so. Various further orders were made, and ultimately, a motion was brought to punish the contempt.
In making a ruling, Brown J. reviewed the court’s contempt power. “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.”
Brown J. then considered whether the son had, in fact, complied with the orders, and found that the contempt had not been purged.
Turning to sentencing, Brown J. noted the difference between criminal and civil contempt. The purpose of criminal contempt sentencing is to punish, whereas the purpose of civil contempt sentencing is coercive and persuasive, designed to enforce the rights of a private party and to secure compliance. As such, custodial sentences are rare, and lengthy custodial sentences even rarer. Incarceration, although not unheard of, is a sanction of last resort.
The sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.
After considering the nature of the contempt, and various mitigating and aggravating factors, the court ordered that the son pay a fine of $7,000, failing which, he was to be jailed for 7 days. He was also to retain professionals to assist him in preparing the accounting and inventories. Costs were to be spoken to.
"Some day, a wise person in a position of authority will realize that a court of law is not the best forum for deciding custody and access disputes, where principles of common sense masquerade as principles of law." – Mr. Justice Joseph Quinn as quoted in the Globe and Mail.
Until that day, the fighting parents who appeared before Mr. Justice Quinn have been barred from court unless they obtain special leave. Looking at the context, it’s hard to argue they did not earn it: 25 court orders from 12 different judges over 7 years, three contempt motions, one suspended sentence, 12 different lawyers, 2000 pages of court filings.
An apparent lack of respect for the rulings of the Court by both litigants was a factor in this extraordinary Order. As Mr. Justice Quinn is quoted, "[b]oth sides have shown an inability to abide by court orders such that their access to this court should be restricted by the requirement to obtain leave."
Mr. Justice Quinn is further quoted as saying "[t]he parties have gorged on court resources as if the legal system were their private banquet table. It must not happen again,". It is easy to forget that courts are very expensive operations: rent, upkeep and salaries. An hour before a judge in court is not cheap for society, whether or not the litigants are represented by lawyers. As a purely editorial comment, it is heartening to see principled recognition of this fact.
The father, perhaps unsurprisingly given the reported facts, is apparently considering an appeal.
Enjoy the weekend,