Blackman v. CIBC Wood Gundy Financial Services Inc.

Blackman v. CIBC Wood Gundy Financial Services Inc. Court Supreme Court Date 2009-05-08 Citation 2009 NSSC 416 Docket Hfx 224723 Judge/Registrar/Adjudicator Murphy, John D. (Honourable Justice) Document Type Decision Relations Library Sheet - Blackman v. CIBC Wood Gundy Financial Services Inc. - 2009 NSSC 416 - 2009-05-08 - Library Sheet Decision Content SUPREME COURT OF NOVA SCOTIA Citation: Blackman v. CIBC Wood Gundy Financial Services Inc., 2009 NSSC 416 Date: 20090508 Docket: Hfx No. 224723 Registry: Halifax Between: Richard George Blackman Applicant v. CIBC Wood Gundy Financial Services Inc. and CIBC World Markets Inc. Respondents Judge: The Honourable Justice John D. Murphy Heard: April 29, 2009, in Halifax, Nova Scotia Written Decision: February 18, 2010 {Oral decision rendered May 8, 2009} Editing in written decision limited to minor reorganization, improving grammar, editing quotations, providing citations for referenced authorities and incorporating parties’ agreement concerning costs. Counsel: Eric K. Slone and Jason P. Gavras, for plaintiff as applicant Peter MacLellan, Q.C. and G. Grant Machum, for defendants as respondents By the Court: INTRODUCTION AND BACKGROUND FACTS [1] The Applicant, the Plaintiff Mr. Blackman, seeks an order pursuant to Rule 55 of Nova Scotia Civil Procedure Rules (1972), citing the Defendants for contempt of court as a consequence of failing to obey the terms of an Order granted by Justice MacAdam dated May 31, 2005 (The “Disclosure Order”). Leave to bring this motion was granted during August 2008. Materials provided, all of which I have considered, include Mr. Blackman’s Affidavit and exhibits, and his counsel’s original and reply brief, and from the Respondents,(sometimes collectively referred to as “CIBC”), Mr. Scott’s Affidavit and exhibits, Ms. Ditchfield’s Affidavit and exhibits, and counsel’s brief. [2] The Plaintiff’s original brief at para.5 succinctly states the background, which is not disputed: The Plaintiff was at all material times an investment advisor. He’s suing his former employer, CIBC for breach of contract and constructive dismissal. The essence of the action is to the effect that CIBC was legally obliged to honour certain terms of his employment arrangements negotiated with a predecessor employer and failed to do so. [3] Disclosure of documents and exchange of information led to a motion before Justice MacAdam which was resolved by the Disclosure Order. [4] The Disclosure Order required the Defendants to: [C]onfirm in writing to the Plaintiff whether there are or were any agreements existing that include a provision that contracts of investment advisors employed with Merrill Lynch Canada Inc. prior to acquisition of certain assets by CIBC World Markets would be assigned to CIBC World Markets at the time of the completion of the purchase and sale agreement. [5] The response from CIBC’s counsel in purported compliance with the Disclosure Order was dated July 29, 2005 and stated: ...I have been advised by my client that there have been no agreements that include a provision that employment contracts of investment advisors (i.e. you) employed with Merrill Lynch Canada Inc. prior to the acquisition of certain assets by CIBC World Markets Inc. will be assigned to CIBC World Markets Inc. at the time of the completion of the purchase and sale agreement. - This satisfies the Order of Justice MacAdam. [6] The Purchase and Sale Agreement (“PSA”) referred to in that response was eventually produced in 2008, pursuant to an Order of Justice Coady of this court, (the “Production Order”) which was affirmed by the Court of Appeal. The Plaintiff, as Applicant in this motion, says that the PSA contains provisions which are irreconcilable with the statement made by the Defendants in purported compliance with the Disclosure Order. [7] The relevant statement in the PSA, found in Clause 6.1.1, states: As of the RB Closing, the RB Purchaser shall assume all salary, bonus, commission, benefit and other employment-related liabilities of MLCI with respect to all employees who accept offers of employment from the RB Purchaser (the “Transferred Employees”) and the RB Purchaser shall have no liability (including any liability for severance or termination pay) owing to any employee who refuses employment with the RB Purchaser or any other Employee of Retail Brokerage. [8] As expressed at para.13 of the Plaintiff’s brief in support of the present motion, an important issue in this litigation is whether CIBC inherited employment-related contractual obligations when the PSA was completed. [9] Mr. Blackman says CIBC’s answer to the direction in the Disclosure Order was disingenuous and misleading, and a contemptuous attempt to subvert justice. The Plaintiff says CIBC was not honest. [10] CIBC takes a different position, saying in its brief at pp.1 and 2: CIBC submits it is not in contempt of court and that it fully met the terms of the order,...CIBC says that it is clear from his submission that Blackman is taking an overly-expansive view of the substance of the Order when in fact the Order was, by its nature, restrictive and narrow in terms of the “confirmation”required. ... The order was very specific in its requirement and Wood Gundy complied with this requirement....The very nature of the order required CIBC to provide its interpretation of any agreements. ... The answer was based on instruction from Wood Gundy. It was and remains the position of CIBC that the Purchase Agreement does not provide for any assignment of employment contracts of investment advisors employed with Merrill Lynch nor are there any other agreements that provide for the assignment of such employment contracts. ISSUES [11] There are two issues: (a) was the answer provided by CIBC inappropriate in response to the Disclosure Order; and (b) if it was not appropriate, does the response, or the absence of information provided, constitute contempt? QUALIFICATION [12] The following limitations apply with respect to my analysis of the issues which arise in this motion: (a) I will be referencing the Disclosure Order and the PSA, especially Article 6.1.1, and discussing such matters as assignment and assumption or transfer of liability; I emphasize that I will be doing so only in the context of indicating whether information should have been disclosed or provided, or how the question posed in the Disclosure Order should have been addressed. I am not making any finding which would bind a trial judge, or which would influence a trial judge on the merits of the claim. Nothing I say should be taken as a suggestion about how any documentation should ultimately be interpreted. I am dealing only with the disclosure issue, and the narrow issue of whether a response was contemptuous. I am not dealing with the merits of the Plaintiff’s claim. (b) I will be referring to various quotations including findings made by judges addressing prior motions, and in that vein I echo the comments in para.24 of the Court of Appeal decision affirming the Production Order, where Justice Cromwell said: I would have thought it goes without saying that the facts the judge relied on in making a production order were for the most part simply allegations that will be an issue at trial; however, as CIBC and the Intervenor have raised the matter and the respondent does not take issue with their point, I would as requested by CIBC and the Intervenor make it clear that any statements of fact made by the Chambers Judge in the context of the Production Application are not binding on the parties in future proceedings. Any judge who in future must address the merits of the case ought not to consider any of the findings of fact made by the Chambers Judge in relation to the merits of the case. If anything in this decision might be construed as making findings of fact, they are findings made by a chambers judge in the same vein as Justice Coady’s remarks in the Production Order context, and they do not have any role in any subsequent adjudication of the merits. ANALYSIS [13] I advised at the conclusion of the Motion Hearing that the answer provided by CIBC was not appropriate in the circumstances. I find that it did not constitute the disclosure contemplated by the Nova Scotia Civil Procedure Rules (1972) (“Rules”) which were in effect at that time, or by Nova Scotia litigation practice. In my view, the answer was an overly-technical, narrow response which represented only the Defendants’ interpretation of a clause in a document, the meaning of which was arguable. It was not enough for CIBC to say, in effect, that there was no assignment, when there was a clause which might be construed as or akin to an assignment. [14] The comments of Justice Jones, speaking for the Court of Appeal in CMHC v. Foundation Company (1983), 54 N.S.R. (2d) 43 at p.49, illustrate the broad interpretation which is to be applied to the Rules: Coupled with the requirements under the Rules for complete disclosure and inspection of documents, interrogatories, admissions notice of experts’ reports, and pre-trial conferences, it is apparent that our Rules are designed to ensure the fullest possible disclosure of the facts and issues before trial and thereby avoid the element of surprise. Whereas the former Rules prevented pre-trial disclosure of evidence I think one can now say the opposite is true. The object is to avoid surprise, simplify the issues and hopefully discourage the need for continued litigation. And he continued at p.53: The practice in this Province has been to interpret the Rules liberally. [15] The context of the Disclosure Order is significant. The request for disclosure had been ongoing. There were continuing requests by the Plaintiff for information from the PSA about CIBC receiving employment-related contractual obligations. In my view, use of the word “assignment” in the Disclosure Order should not be narrowly or technically construed. Its context refers to something which was more than a technical assignment, but even if a narrow interpretation is imposed, the answer should not have been simply ‘no assignment’, but at least something like ‘arguably no assignment’ - the court would then decide if the clause contained an assignment. [16] The background is important. The Plaintiff was (at the relevant time) a self‑represented litigant, not a lawyer who would be expected to make subtle distinctions between legal terms such as ‘assignment’ ,‘assumption’ ,‘transfer’ and so on. The parties up until the granting of the Disclosure Order hadn’t been conversing only in terms of “assignment.” That was just the word which appeared in the Disclosure Order to describe the object of the inquiry which was being made. If one examines the parties’ dealings as far back as January 2005 (and in this regard, I refer to Mr. Scott’s Affidavit filed in this motion on Defendants’ behalf at paras.32, 33 and 34), the nature of the inquiry is apparent. In para.32, Mr. Scott quotes from his previous affidavit and says: On December 28, 2001 CIBC World Markets purchased certain assets of Merrill Lynch Canada Inc. CIBC did not purchase the shares of this company nor did it agree to assume liability for any employees of Merrill Lynch Canada Limited. (underlining added) In para.33, he quotes from Defence counsel’s brief in an earlier motion in January 2005 where the same sentence appears: CIBC World Markets did not purchase the shares nor did it agree to assume liability for any employees of Merrill Lynch Canada Inc. (underlining added) And then Mr. Scott continued in para.34 of his affidavit filed in October 2008 in support of this Motion: I made the statement at para.3 of my affidavit dated January 12th because of my sincerely held belief that there was no assumption of liability for employees of Merrill Lynch, but only for new employees who accepted offers of employment from CIBC World Markets. (underlining added) The expressions used in the context of the continuing inquiry include “assume” and “assumption” of liability. [17] I do not refer to those documents to make a finding as to whether the response to the Disclosure Order was contemptuous, and I don’t make a ruling based on what was contained in those documents, which include statements made prior to the hearing before Justice MacAdam; however, they do show the context in which the direction was given in the Disclosure Order, and in my view provide some indication of what a fair answer would be. [18] I also refer to the transcript of the proceedings before Justice MacAdam, which shows a broader discussion of the issue than CIBC’s narrow answer to the question would suggest. That transcript of the hearing which resulted in the Disclosure Order appears at tab 2 of Mr. Blackman’s Affidavit, and I am going to highlight a few extracts which show what was happening leading up to the Disclosure Order. At p14, Justice MacAdam said: So the only...the real question is whether Merrill Lynch..whether CIBC acknowledges that it assumes the contract. And Mr. Blackman says, Yes, that’s the issue. It is, yes. Absolutely it is. The term used there was “assumes.” Then at p.18, Mr. Blackman said to Justice MacAdam: I just thought that if I had the confidentiality agreement it might show where they would state in the agreement that the pre-existing employment contract would have transferred. Mr. Blackman said later in that page: The pre-existing Merrill Lynch contracts would have transferred to CIBC. I just thought that the information might be in those documents. So the word used there was “transferred.” [19] At p.34, the Judge said, after a fairly long discussion which I am not going to set out: Your real issue is to find out whether or not there was provision for the assignment of Merrill Lynch...that’s what you really want to know. Mr. Blackman said: That’s exactly it, yeah. And then following further discussion at p.39, Justice MacAdam said: The purpose (inaudible) was to determine whether there was any agreement - that would either be a confidential or the purchase and sale agreement that provided for an assignment of employment (inaudible) contracts between Merrill Lynch and his employees to CIBC Wood Gundy. That’s what I understand today. Ms. Veniot, representing CIBC responded: Yes My Lord. The Judge then said: So that’s the one I would like you to take under advisement. As to whether there’s any objection to providing to Mr. Blackman the specifics as to whether there was any provision for the assignment (inaudible) contract. It seems to be a rather important issue in the case, from what I understood is his argument. And Justice MacAdam continued at pp.40 and 41: ...Was there any provision in any agreement - and I will broaden it from what he said, so we don’t come back again and use some other terminology, - was there any provision in any agreement whereby the Merrill Lynch employment contract with its advisors...were assigned to CIBC Wood Gundy? ...it would simply require...a statement as to whether or not any of the agreement had a provision for the assignment of the Merrill Lynch, from the nature of his presentation, without getting into the merits or the nature of his presentation, that is rather important to his case, as he sees it, and I think that would be a relevant issue in view of the way his argument (inaudible).. I’m using any agreement, so that if there’s some other kind of agreement (inaudible)..it would cover anything. But if you could deal with that, counsel, that would appear to deal with the whole issue of confidentiality, purchase and sale and the whole thing. Ms. Veniot responded: Certainly, My Lord. So I find that the context of what took place with Justice MacAdam was that he was interested not specifically in whether there was a technical “assignment”, but rather whether there was any provision for an assignment or assumption or transfer, or whether there was some other terminology or some other kind of agreement. I don’t conclude that in the Disclosure Order the question was confined to the narrow issue of whether there was a technical assignment. I consider that “assignment” was a convenient word which was chosen by the judge to identify the sort of term which might be in an agreement. [20] CIBC’s answer was narrow. It may have been technically correct - there may not be a strict legal assignment of the employment contract. In their brief in this court at pp.3 and 4 and pp.15 to 20 the Defendants made technical arguments that there was no “assignment.” I am not going to refer to those submissions except to identify them by page; it’s not for me to rule on those or to interpret the contract - that may be addressed at trial. [21] I am satisfied, however, that it is arguable that there was an assignment or similar arrangement reflected in the PSA. I acknowledge that there’s an argument about what constitutes an assignment, and I refer to both parties’ submissions, but in my view there’s a debatable issue. [22] I also note CIBC’s argument in this motion that there could not have been an “assignment”, given the employment law definition and understanding of that term. I have some difficulty with that position as expressed in the Defendants’ brief and oral argument - if the use of the word “assignment” by Justice MacAdam was inappropriate, then it should have been pointed out to him by counsel when the Disclosure Order was being crafted. [23] All of those things suggest to me that the construction of the word “assignment” in the Disclosure Order should be broader than CIBC’s answer reflects. [24] There were also developments after the answer was provided which should have indicated to CIBC that Mr. Blackman, who was a layperson, was not attuned to the technical “assignment” language, but was addressing a broader concept. I refer to the exchange of emails during August, 2005, soon after CIBC’s response, which are identified in Mr. Scott’s Affidavit and attached at tabs 25, 27 and 28. At tab 25, for example, the record shows that Mr. Blackman sent an email which was received by CIBC’s counsel, and by Justice MacAdam’s office. The Plaintiff says: The Defendant did not provide any documentation in writing to support their assertion that there were no provisions made for pre-existing employment contracts in the purchase and sale agreement between CIBC and Merrill Lynch. That language, “provisions made for pre‑existing employment contracts” is certainly not as narrow as “assignment.” [25] CIBC’s lawyer’s response (produced at tab 27 of Mr. Scott’s Affidavit) states: It is inappropriate for Mr. Blackman to attempt to re-argue the application especially through email. Mr. Blackman is now represented by counsel and I do not intend to respond... CIBC’s lawyer took that position in response to a reference by Mr. Blackman to no “provisions” as opposed to an ‘assignment.’ And that expression appears again in the email at tab 28 where Mr. Blackman said: The Order of Justice MacAdam stated the Defendant was to confirm in writing whether there were provisions for pre-existing contracts in the matter. There was therefore an indication after the Disclosure Order’s issuance that Mr. Blackman was seeking something broader than a strict legal reference to “assignment.” [26] In my view, in response to the Disclosure Order CIBC should have revealed clause 6.1.1 of the Purchase Agreement - it was relevant to the inquiry. CIBC made a categorical statement to the effect there was no assignment; I don’t want to hypothesize, but a frank answer would have been something like ‘there is a clause which may address the issue raised - we don’t consider it to be an assignment’ - and then the Court could have decided whether there was a document to be disclosed, and ultimately it would determine when it deals with the merits whether it was an assignment. [27] The Defendants didn’t indicate that they were providing a strict legal interpretation. They conveyed the impression that the topic was not addressed in the PSA. The technical arguments made now don’t justify the narrow response to the broad inquiry. [28] It is also significant that when the Production Motion came before Justice Coady in 2007 the Respondent forcefully suggested that its answer to the Disclosure Order had fully addressed the issue raised in the Production Motion. However, the Production issue was clearly broad, and if the Defendants were taking the position it was res judicata based on the response to the Disclosure Order, that answer should not have been so narrow. [29] At pp. 1 and 2 of his reasons for decision in Production Motion, Justice Coady, under the heading “Documents or Answers Sought”, set out a list which included: § What agreements were there, if any, concerning Merrill Lynch employees and what would happen to them upon the completion of the purchase? § Was there any agreement between Merrill Lynch CIBC that dictated what Merrill Lynch would do with its employees prior to the closing of the transaction? § Was there any agreement between CIBC - and I’ll use “CIBC” as a global term so I don’t have to say the whole thing every time. They are the party that purchased Merrill Lynch retail operation. Was there any agreement that CIBC would hire or continue to employ Merrill Lynch employees? § Was there any agreement between CIBC and Merrill Lynch to the effect that CIBC would offer employment to every investment advisor currently employed by Merrill Lynch? § As a supplementary question to that, was there anything in the agreement that left CIBC free to pick and choose among those investment advisors that it wished to retain and those it did not wish to employ? They were among the questions which Justice Coady indicated he was dealing with, and CIBC’s position in the context of those questions was that it was all res judicata because the Disclosure Order had been answered. [30] I find that it was inconsistent for CIBC to respond in the context of the broad questions in the Production Motion by saying that it had all been dealt with by response to the Disclosure Order, when that response had been restrictive. [31] Justice Coady summarized the parties’ positions at p.3 of his decision in that Production Motion: The plaintiff has continuously requested production of this document. [The PSA] The plaintiff also questioned Mr. Scott about the document on discovery examination. It is fair comment that the defendants have blocked production of, or discussion about this agreement. The defendants have advanced the following in support of their position. · Their trial position that they have no liability for prior employer contracts. · That the agreement lacks relevance and is a confidential agreement · That this application is blocked by the principle of res judicata: He then said at p.5: I respectfully disagree with the Defendant’s position on the relevance issue. The employment and compensation of hundreds of employees were transferred pursuant to the terms of the agreement. While the Defendants doubt their liability for the actions of a predecessor employer, the Plaintiff has squarely put in issue their inheritance of prior employment contracts. ... It is fair comment that the Defendants rely on the principle of res judicata for their most robust response to this application. [32] Justice Coady then noted that the res judicata position was based on the Disclosure Order, saying at p.6: There was another application brought by the Plaintiff before Justice MacAdam on May 25, 2006 (sic). It is this proceeding that the Defendants rely for their res judicata argument. The Defendants submit that the issue of the production of the purchase and sale agreement was previously determined by Justice MacAdam. The Plaintiff’s position is that “the application which had been brought, and the order which resulted, did not bring the issue into sufficient focus for the matter to be considered a ‘thing decided.’” [33] It is apparent that the Defendants took the position that the answer to the Disclosure Order had been so broad as to make matters before Justice Coady res judicata, but that’s just inconsistent with the narrow answer that it gave. [34] If the Defendants had wanted to advance a res judicata argument before Justice Coady, they should have provided more information in answer to the Disclosure Order, and they could have done that anytime before the Production Motion hearing. The Disclosure Order is a continuing order - such orders remain operative and if matters come to light, then they are to be disclosed at a future time in a litigation. [35] I also refer to the evidence of Mr. Scott, CIBC’s representative. In his affidavit filed in opposition to the present motion, he said at paras.51, 52 and 54: 51. The reasons given at discovery [Mr. Scott’s discovery during April 2006] for the refusal to produce and refusal to answer questions were twofold. First, the issues addressed by the questions asked and documents requested were previously addressed in an application brought by Mr. Blackman before Justice MacAdam on May 25, 2005. 52. I am informed by Mr. Machum and verily believe that on March 18, 2007 Mr. Machum emailed Mr. Slone and again advised that it was CIBC’s position that the matter of the production of the purchase agreement had been before Justice MacAdam and addressed in that application. 54. ...this Application was heard on April 18, 2007 before Justice Kevin Coady in Chambers. The Application for Production centered on the transaction between Merrill Lynch and CIBC and whether that transaction resulted in any agreement with respect to Merrill Lynch employees....CIBC took the position that the questions asked and documents requested were previously addressed by Justice MacAdam and that they did not have a semblance of relevancy to the claim. [36] Mr. Scott’s evidence suggests to me that CIBC attributed a much wider scope to the Disclosure Order in 2007 than its 2005 response implied. [37] During the discovery examination of Mr. Scott in April 2006 (Scott Affidavit tab 30), Plaintiff’s counsel said at p.20: My question is, what agreements, if any, were there concerning what would happen to Merrill Lynch employees upon the completion of a purchase? CIBC’s counsel responded: My information is there’s nothing in the agreements to that extent and if we’re wrong on that, we’ll let you know. A discussion followed about normal terminology in agreements, but no reference was made to Clause 6.1.1 of the PSA. [38] In the context of what transpired between the parties, the existence of clause 6.1.1 in the PSA should have been revealed in response to the Disclosure Order. It should have been the subject of the original response or alternatively, subsequently disclosed when it was apparent from emails that Mr. Blackman had made a broader request, or even later before CIBC took the position that the broad questions identified during the Production Motion were res judicata following the response to the Disclosure Order. [39] I find there was no justification to withhold the existence of clause 6.1.1, given the broad disclosure environment under the Rules, the semblance of relevancy test which was in effect at that time, and the overall context in which the word “assignment” happened to be used in the Disclosure Order. CIBC should have done more than simply instruct its lawyer to convey a message that there was no assignment. The fact that the parties spent so much effort during this motion, both by written submissions and in oral argument, debating whether or not the PSA contained an assignment, demonstrates that more than a categorical assertion of denial was required. [40] I accordingly find that CIBC’s answer to the inquiry in the Disclosure Order was misleading. It implied there was no issue when there was, and apparently there still is. With respect to relevance, I refer to Justice Cromwell’s comment at para.19 of the Court of Appeal decision upholding the Production Order (at tab 6 of Mr. Blackman’s Affidavit), where he said: ... The theory of CIBC’s defence directly places in issue the nature of the transaction with Merrill Lynch. CIBC’s defence filed in the action pleads to that “CIBC Wood Gundy is not responsible for any agreements with or representations made by previous employers of the Plaintiff.” Mr. Scott’s Affidavit sworn January 12, 2005, filed by CIBC maintains that “it...did not purchase the shares of [Merrill Lynch Canada Inc.] nor did it agree to assume liability for any employees of Merrill Lynch Canada Inc.” The Defence and Mr. Scott’s Affidavit therefore place in issue the nature of the transaction. The agreement the judge ordered to be produced presumably sets out the terms of the transaction. Respectfully, CIBC cannot, on the one hand, rely on terms of the transaction to defend the lawsuit and then, on the other hand, assert that those terms are irrelevant. Although Justice Cromwell was addressing the Production Order, in my view his words apply to the Disclosure Order as well. [41] Having found the Defendants’ response to the Disclosure Order to be inappropriate, the next issue is whether it amounts to contempt. Reluctantly, I conclude that it does. The circumstances and context which I have outlined show that a more frank and complete answer was required than was given. The response to the Disclosure Order was a persistent non-disclosure in response to an inquiry in a court order. [42] I am not going to extensively review authorities, as I accept what counsel have provided in their briefs concerning what constitutes contempt. I do refer to Justice Cromwell’s decision in T.G. Industries Limited v. Williams 2001 NSCA 105, where he notes at para.13: ...The core element of civil contempt is failure to obey a court order of which the alleged contemnor is aware. I also refer to para.48 in the Plaintiff’s brief under the heading “No Requirement to Prove Mens Rea”, and adopt the following accurate statement of the law: 48. CIBC’s motive is irrelevant. It is contempt even when a party fails to exercise proper diligence. There is no requirement to prove mens rea. The British Columbia Court of Appeal in Topgro Greenhouses Ltd. v. Houweling 2003 BCCA 355 (CanLII), (2003), 184 B.C.A.C. 118, 2003 BCCA 355 at para.6, where Smith J.A., citing R. v. Perkins, [1980] 4 W.W.R. 763 (B.C.C.A.), stated: To knowingly breach a court order is to commit a contempt of court. All that is necessary to establish the contempt is proof of deliberate conduct that has the effect of contravening the order; an intent to bring the court into disrepute or to interfere with the due course of justice or with the lawful process of the court is not an essential element of civil contempt. In T.G. Industries (supra) our Court of Appeal set out several principles which I have followed in assessing CIBC’s conduct: (a) There is a long line of authority for the view that intention to disobey is not an element of civil contempt.(para.19) (b) The elements of contempt must be proved beyond a reasonable doubt. (para.32) (c) The Court should use its contempt power cautiously and with great restraint. [43] Although I have addressed the primary arguments made by the Defendants, other considerations deserve comment. The Defendants allege that there was not full disclosure during the Leave hearing which authorized this motion, and say that I should not make a contempt finding for that reason. This is not an appeal of this Court’s conclusion in the Leave Motion. As the Plaintiff notes in his brief, the issue now is not whether leave ought to have been granted, but whether the Defendants should be found guilty of contempt. [44] The Defendants also noted that CIBC World Markets was not a party when the Disclosure Order was issued; in my view, that doesn’t absolve the Defendants. The Disclosure Order has continuing effect and it was binding on everyone who became a party subsequently. CIBC World Markets has the same counsel who communicated the original response, and as a participant in the action it was obliged to provide the correct information as a party subject to the Disclosure Order. [45] Failure to disclose is contrary to proper practice, and constitutes contempt when it occurs despite a court order. To establish contempt, it doesn’t have to be shown that disobedience of an order was intentional. I am satisfied for the reasons I’ve given, based on Mr. Blackman’s evidence in this motion, that he’s proved CIBC’s contempt beyond a reasonable doubt. The Defendants had knowledge of the Disclosure Order, and were in possession of the PSA and knew its content when CIBC instructed counsel to give the July 29, 2005 response. The Defendants maintained their position throughout the Production Motion and Appeal, and gave every indication that they had made a broad and full response to the Disclosure Order throughout that period. [46] It is also significant, and noted in the authorities, including T.G. Industries, that an order must be obeyed according to its spirit as well as its letter; given the circumstances in this case I have determined that the spirit of the order was not obeyed. [47] I reject the suggestion that CIBC could just instruct counsel to communicate a technical interpretation of legal terminology to a lay litigant in satisfaction of the Disclosure Order. Making a subtle distinction between such terms as ‘assignment’, ‘assumption of liability’, ‘accepting an offer to employ’ and ‘new contract’ was not in the spirit of that order, nor was reliance on res judicata a proper answer to the Production Motion. CIBC gave an unequivocal answer and didn’t clarify it, when the breadth of the Disclosure Order should have been apparent. [48] If the Defendants were relying on a technical distinction, as canvassed at length in their brief, involving the law of assignment of employment contracts, they should have advised the Plaintiff of the PSA term which precipitated making those arguments. Their answer was, in my view, misleading, narrow and overly technical.. [49] The Defendants have argued that the disclosure issue has become moot as a result of the subsequent production of the PSA as directed by the Production Order. I don’t agree that the issue is moot. Being forced by a subsequent court order to produce a document after resisting through two levels of court does not constitute a purging of contempt, or a substantial compliance that would vitiate contempt. The Plaintiff has still incurred cost and delay and suffered harm as a result of contempt. [50] I am not addressing the merits of the case by finding the Defendants’ answer was contemptuous. I am not deciding whether there was a technical assignment, but rather ruling, in agreement with the Plaintiff’s position, that the wording in the PSA, clause 6.1.1 at least raises an uncertainty regarding a main issue in the case, and should have been revealed [51] I am satisfied beyond a reasonable doubt that the Defendants’ answer to the Disclosure Order, and failure to correct it as circumstances continued to unfold, constitutes contempt. [52] With respect to remedy - the options are: costs, fine, or a more extreme remedy, including striking the defence. In this case, I am not going to impose a fine or direct any remedy beyond costs. I refer to T.G. Industries (supra) at para.37 where Justice Cromwell said: If there has been compliance with the order by the time of the contempt application, it will often be the case that no further sanction beyond an order for costs will be imposed. [53] No public denunciation by a fine is needed in this case. The matter is ultimately a disclosure issue between the parties. The problem has been rectified in substance, notwithstanding the delay and the extra costs, by the disclosure which resulted from the Production Order. Although that doesn’t make the issue moot, and being forced to produce doesn’t purge contempt because purging is an initiative that the party in contempt takes to solve the situation, there has now been compliance, albeit only pursuant to further court order. This is not a case where a request was ignored, and I haven’t found there was intentional disobedience - it is rather a clear failure to comply with the spirit of the Rules and to give a frank response to a specific court order. The remedy should not exceed a reasonable award of costs. Note: The parties were invited to make written submissions to address the costs award, but reached agreement before filing. J.