Law Times

Law times • OctOber 1, 2012 Court punishes man twice for same contempt order Case considers question of double jeopardy for continued refusal to comply NEWS R BY HEATHER GARDINER Law Times ing to a recent Ontario Court of Appeal ruling. In a rare case of double jeop- efusing to follow a court order more than once can land you in double trouble, accord- ardy, the court has twice punished Anthony Diamond of Diamond + Diamond Merchant Banking Group for the same contempt charge. "The coercive tool of civil con- tempt must have teeth," wrote ap- peal court Justice Gloria Epstein in Doobay v. Diamond. In doing so, she noted her agreement with the court' Chiang (Trustee of) v. Chiang. In that earlier case, the court s previous conclusions in made its feelings clear when it stated: "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 ob- tain compliance with that order. In other words, if the court can impose only one period of in- carceration for a civil contempt, then it cannot address, in any meaningful way, a contemnor' continuing defiance." s ders need to be enforced, and if the court' sentence of 21 days in jail and a fine of $20,000 on June 18, 2010, aſter Ontario Superior Court Jus- tice James Spence found him in contempt of court for failing to an- swer questions during examina- tions related to litigation launched by plaintiffs Danny Doobay and Richbuilt Development Inc. In the decision, Spence found that Diamond's answers "are pre- sented by him as proper answers to the questions, but very largely unresponsive. Con- sequently, they must be consid- ered to be a deliberate attempt to obfuscate the issue before the court for the purpose of avoid- ing complying with the order. Then on July 21, 2011, Su- they are " perior Court Justice Beth Allen sentenced Diamond to an addi- tional 42 days in jail and a fine of $40,000 for the same offence. In dismissing Diamond' tion, Allen wrote: "It is clear there has been active defiance on Mr. Diamond' s mo- in repeated unrepentant acts of contempt. Serving a previous period of jail time has not influ- enced his attitude and conduct." The Ontario Court of Appeal dismissed Diamond's appeal of s part. He has engaged that ruling last month. The dispute began in Septem- ber 2004 when the plaintiffs sued then it has to continue to insist on people complying with the court order even if they've already been held in contempt of it," says Simon Bieber, a partner at Wardle Daley Bernstein LLP and counsel for the plaintiffs in Doobay. Diamond received an initial "We can all agree that court or- s going to be able to do that, Diamond for an alleged breach of contract aſter their business transaction fell through. According to the state- ment of claim, Doobay paid Diamond $790,000 to arrange a loan for his clients towards the purchase of Dignicare Inc., an Ontario business that was in receivership. However, the loan allegedly never materialized and Diamond refused to return the payment he had received for his services. Diamond said he believed the parties had settled the case. In October 2007, Doobay won default judgment against Diamond for $855,000. During the examination in approximately May 2008 to help with the exe- cution of the judgment, Diamond refused to answer any questions. Then-master (and now Justice) John Sproat of the Superior Court ordered Diamond to reattend the examination and answer all proper questions. But he wouldn't answer all 406 questions. In July 2009, Sproat ordered Di- amond to provide written answers to all but one of the outstanding questions. Diamond agreed, but the plaintiffs weren't happy with his answers and proceeded to file a motion for contempt. The hearing before Spence didn't result in Diamond's fa- If someone continues to breach an order, the court can continue to hold the person in contempt, says Simon Bieber. ing, Bieber says the plaintiffs no- tified Diamond of the questions they didn't think he had answered properly. Diamond "delivered answers to those questions, [but] they weren't responsive in my view, uled for May 18, 2011, but Dia- mond said he had retained new counsel who couldn't attend on that day. He offered to purge his contempt if the court adjourned the matter. The court granted the adjourn- The next hearing was sched- " he says. vour. He served his 21-day jail term in January 2011 aſter an unsuccessful attempt to appeal the decision. Following that, the plaintiffs filed another con- tempt motion. Leading up to the next hear- ment under the condition that Di- amond provide written responses within 30 days. However, the plaintiffs were yet again unhappy with his answers and went ahead with their contempt motion. Diamond then sought a court order to stay the contempt mo- tion as an abuse of process or an adjournment so he could call oral evidence. But Allen, who presided over the hear- ing, rejected his arguments. Aſter carefully scrutinizing the same evasiveness and un- willingness to comply with the court orders." "Mr. Diamond is obviously s responses "reflect still playing tricks and games to avoid the court' I find he has failed to purge his contempt," she added. Diamond' the questions and answers in dispute, Allen determined that Diamond' in contempt. "What the Court of Appeal was saying is the only way that the court can enforce its or- ders is to continue to insist that the order be complied with even aſter someone' stitutional argument at stake. Diamond "gave answers of it," he says. But Midanik says there' s authority and Midanik argues it's unfair for s lawyer David fresh order — then arguably it's the court to punish someone for the same finding of con- tempt. "Had another judge made an order to answer the same questions — and it' s a was framed, it was clearly the same order that he was punished for twice. to be able to enforce their orders. In his view, if someone contin- ues to breach an order, the court can continue to hold the person But Bieber says the courts need " not double punishment," he tells Law Times. "But the way the application questions on several different oc- casions and no one ever specified — neither in the notice of applica- tion nor in the judgment — which of the answers constituted con- tempt," he says. Midanik says this violates two areas of the Charter of Rights and Freedoms: s. 10(a) involving people' s been held in contempt s a con- to exactly what they're charged with and s. 7 involving the right to life, liberty, and security of the person because it' s right to know if someone doesn't know what the charges are. "The certainty strikes me as be- s hard to defend a matter ing an essential constitutional ele- ment for a valid penal sanction," he says. Last week, the Supreme Court denied an application for leave to appeal in relation to Diamond' first conviction for contempt of court. LT Law Times will not be publishing next week but will return on October 15, 2012. Happy Thanksgiving Meanwhile, enjoy fresh content on our web site at: www.lawtimesnews.com RELIABLE GUIDANCE ON THE RULES OF COURT NEW EDITION ONTARIO ANNUAL PRACTICE 2012-2013 THE LATE HONOURABLE JUSTICE JAMES J. CARTHY, W.A. DERRY MILLAR, AND JEFF G. 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