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PAGE 10 FOCUS OctOber 5/12, 2009 • Law times OWL search… ® Courts put their foot down on civil contempt BY JULIUS MELNITZER For Law Times left little doubt that Ontario's judges are viewing civil contempt more seriously. By refusing in June to grant leave to T appeal in the case, the Supreme Court of Canada has indicated that it has no apparent problem with the trend. It's important to put civil contempt — sometimes overshadowed by its cousin, criminal contempt — in con- text. But in fact, civil contempt can Minimize Risk, Maximize Time You represent the vendor in the sale of a business. You represent the lender in a ®) online a full report delivered via email. Details for $49.95.* result in life imprisonment, something that might surprise some people. "Th e breadth of penalties available for civil contempt is enormous," says Ira Nishisato of Borden Ladner Gervais LLP. "Th e applicable rule [of civil pro- cedure] says merely that the sanctions may include fi nes or imprisonment." To be sure, it may be more appropriate to say that life imprisonment is only techni- cally available for civil contempt. Sentences such as the 15-month jail term imposed in 2004 on the defendant in Milligan v. Lech are about as harsh as they get. Yet 15 months in jail is hardly a mi- nor sanction. Neither is the $16-million fi ne for contempt imposed in SHS. "My sense is that defendants prone to disobeying court orders may take the view that contempt proceedings are purely civil, so there's nothing to worry about," Nishisato says. "And because it's not an issue that comes up that often, counsel don't think that much about it. Th e con- sequences of a contempt fi nding can be extremely serious, especially in cases in- volving extraordinary relief like Mareva injunctions or Anton Piller orders." In June 2003, Justice Raymond Har- ris barred SHS Optical and its principal, Bruce Bergez, from dispensing correc- tive lenses without a prescription from an optometrist or physician as required under the Optometry Act and the Op- ticianry Act. SHS Optical had been off ering free eye tests to its customers administered by a machine known as the Eyelogic system. Th e system measured errors in a custom- er's vision and produced data allowing an he Court of Appeal's January de- cision in College of Optometrists of Ontario v. SHS Optical Ltd. employee to identify the lenses necessary to correct the error. But the system didn't detect eye diseases that might impair the customer's sight. Neither an optometrist nor a physician examined the customer or provided a prescription. Years later, in November 2006, Justice David Crane of the Superior Court found SHS Optical in contempt of Harris' order and imposed a $1-million fi ne. Crane also ordered SHS Optical to purge its contempt in conformity with a series of mandatory orders, failing which it and Bergez would be liable to pay a fi ne of $50,000 for each day they were not in compliance. SHS Optical retained Louis Frap- porti and Heather Devine of Gowling Lafl eur Henderson LLP and appealed Crane's order. But while the appeal was pending, the College of Optometrists, represent- ed by Roy Stephenson and Brian Moher of Lerners LLP, sought enforcement of the mandatory terms of Crane's order. Justice Eugene Fedak of the Superior Court found that the appellants had not purged their contempt and ordered them to pay the fi ne of $50,000 per day to the date of his judgment. Th e fi ne to- talled $16 million. So SHS Optical also appealed Fedak's order. In October 2008, the Court of Appeal dealt with the appeal from Crane's order. Th e court stated Crane's fi ndings succinctly. "Crane J. found that the appellants had continued in breach of the compliance or- der from the time it was made," wrote Jus- tice David Watt on behalf of a unanimous bench. "Nothing had changed." As Watt saw it, Crane had commit- ted no error in principle. "Th e underlying purpose of contempt orders is to compel obedience and pun- ish disobedience," Watt wrote. "In this case, there is a singular need for punish- ment. It is essential that any monetary penalty imposed not be or appear to be a licence fee for further disobedience of a public health-care statute." Bergez had ignored the statutory re- strictions "and redrew the boundaries to suit his own crass commercial pur- poses." Th is was "fl agrant, protracted, and deliberate" disobedience. See Court, page 11 Subscribe to Law Times Why pay extra for your legal news? Cutting-edge legal affairs, news and commentary for just 37¢ a day! Make the time for Law Times and keep up with all the developments in Ontario's legal scene. Subscribe today and receive: • Unlimited access to the Law Times digital editions and to our digital edition archives...FREE • Canadian Legal Newswire, a weekly e-newsletter from the editors of Law Times and Canadian Lawyer...FREE 'Shock and disappointment' Cosgrove says 'life goes on' after the bench www.mckellar.com www.mckellar.com 1-800-265-8381 $3.55 • Vol. 20, No. 13 Covering Ontario's Legal Scene together we have all the tools. TitlePLUS title insurance and you, TitlePLUS title insurance and you, together we have all the tools April 20, 2009 BY ROBERT TODD Law Times F dicial Council's decision to call for his ouster, saying he was compelled to resign due to his pending retire- ment, despite finding aspects of the council's report "troublesome." Cosgrove tells Law Times in an interview that once the CJC issued its recommendation to the justice minister, "My options were pretty narrow." While he believes he could have appealed an earlier committee report at ormer Ontario Superior Court justice Paul Cosgrove has spo- ken out on the Canadian Ju- month after the CJC issued a final re- port stating that his actions in a late- Cosgrove people in public office, and they were given little weight, according to the decision." 3 Cosgrove's final criticism is the CJC's determination that the issue of public confidence was central to its decision. He suggests that it remains unclear what evidence is required to make such a determination. Fight Over Fees inquiry the Federal Future uncertain for McCarthys' Ottawa office Court, he says a decision was un- likely before his mandatory retire- ment took hold in December. resigned earlier this Former Superior Court justice Paul Cosgrove tells Law Times that his pending mandatory retirement compelled him to resign from the bench rather than battle a call for his ouster. 1990s murder trial led to the conclusion that he "failed in the execution of the duties of his judi- cial office and that public confidence in his abil- ity to discharge those duties in future has been irrevocably lost." The decision made him only the second federal judge to meet such a fate. But the former judge says parts of the CJC's the senior regional judges in Ottawa since I've been here for the last 24 years, all wrote very positive recommendations, and they also were aware of the trial," says Cosgrove. "So to say that these letters, the people had final report could have been challenged. The council did not use a set of 32 letters of no knowledge of what was going on was not accurate." Cosgrove also suggests the council should support written by judges and retired judges, law- yers, and members of the public when coming to its decision, saying they were irrelevant, he notes. "Personally, I found that difficult because, for example, there were my supervising judges, have used the letters from community mem- bers when considering whether he had lost the public's confidence. "It would seem to me that it's logical to test what the public's demeanour is; you ask people who are knowledgeable in the public," he says. "And there were a number of letters from given rise for us to challenge," he says. "The problem with that is, of course I'm retired — manda- tory retirement in December of this year. And the process, for ex- ample, dealing with the constitu- tional issue, took three years." He says he did not want to "So, all of those issues may have 6 Inside This Issue Financial Matters with 20,000 pages of evidence likely put forth. The 74-year-old former judge, who will gamble and let the matter play out before Parliament, where an un- precedented joint resolution would have been required to finalize his ouster. Doing so may have proved cumbersome, suggests Cosgrove, collect an annual pension of about $170,000, says that before the decision he was reason- ably confident that the council would not call for his dismissal. Independent counsel Earl Cherniak, a partner at Lerners LLP, had previ- ously told the council such a stern punishment was not necessary. "It was shock and disappointment," Cos- 9 Focus On ADR/ Mediation grove says of his reaction to the final decision. He says he has been dealing with the fall- out by responding to media inquiries, and See Cosgrove, page 4 Quote of the week BY TIM NAUMETZ For Law Times OTTAWA — The possible closure of McCarthy Tétrault LLP's high- profile office in the nation's capital is unrelated to dire economic cir- cumstances that have hit home for some Canadian law firms, a senior McCarthys partner says. zation we review our business plans on an ongoing basis," Boake tells Law Times when asked of the Ot- tawa office closure possibility. She adds the firm wants to meet the needs of its clients, and that each of its offices have a practice and focus which aligns with McCarthys' over- all strategy. "So it's in that context "Yeah, I guess, like any organi- staff, remains undecided. "It's really just a question of the fact that we are in discussion with lawyers there as part of an overall strategic review," she tells Law Times. "These discussions have been decisions" because of a drop in busi- ness due to the economy, letting go less than 20 of its 650 lawyers across the country. She would not give the specific number or other details. Gowling Lafleur Henderson going on for a while and are not related to the economy," she says. "I would call it a strategic review. Our firm really focuses on integrat- The financial crisis that has hit directly New York and London, being financial centres of the world, and the financial institutions based there, has not hit to the same degree in Canada, primarily because of the strength of the financial institutions in Canada. McCarthys' Ottawa contingent is a "strategic review" based on the firm's national business plan, and the role played by all of its six loca- tions across Canada, says Barbara Boake, national leader, profession- als, at McCarthy Tétrault. Consideration of the future of that we're currently reviewing the Ottawa office, but no decision has been made to close it," she says. Boake would not divulge fur- ther details and said the fate of the office, along with the employ- ment of its seven partners, two associates, and 11 administrative ed practices; we have offices right across the country. We have a very diversified practice geographically and our overall strategy is to inte- grate those practices and develop client teams on a firm-wide basis." Boake, however, confirmed Mc- Carthys has taken "difficult staffing LLP also confirmed to Law Times the firm released staff last week. But Gowlings chairman and CEO Scott Jolliffe said the shakeup did not involve partners or associ- ates. Jolliffe says the firm is shifting toward a "pod" model where law- yers and associates share a smaller number of secretaries, but he would not say how many were affected. The move not only economizes, but also creates a team atmosphere among secretaries that is useful for mentoring and sharing workloads. Sources in the legal community say McCarthy Tétrault's Ottawa re- view may be related to a management See Ottawa, page 4 WHICH DIRECTION IS BEST FOR YOU? 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