Neufeld v. Nesbitt

2012 BCSC 2059 Neufeld v. Nesbitt IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Neufeld v. Nesbitt, 2012 BCSC 2059 Date: 20121207 Docket: E5901 Registry: Chilliwack Between: Wendy Lee Neufeld Claimant And Patrick Michael Nesbitt Respondent Before: The Honourable Mr. Justice Truscott Oral Reasons for Judgment Counsel for the Claimant: R.W. Krentz Respondent Patrick Michael Nesbitt: In Person Place and Date of Hearing: New Westminster, B.C. November 13, 2012 Place and Date of Judgment: New Westminster, B.C. December 7, 2012 [1] This hearing is being held to determine the sentence that should be imposed on Dr. Nesbitt for his contempt of court orders. [2] This is a family law action in which Ms. Neufeld is making a claim for child support and other relief. [3] On November 14, 2011, Master Caldwell of this Court ordered that Dr. Nesbitt provide a number of financial documents and other financial information to counsel for Ms. Neufeld by February 17, 2012. [4] Subsequently, on April 2, 2012, a contempt application was brought before me by Ms. Neufeld's counsel on the basis that Dr. Nesbitt had not complied with the order of Master Caldwell by February 17, 2012. [5] At that time I found Dr. Nesbitt in contempt of the court order of Master Caldwell in failing to provide the documents and information ordered. [6] In order to remedy his non-compliance with the order of Master Caldwell, I gave Dr. Nesbitt until June 1, 2012 to provide to counsel for Ms. Neufeld the documents and information from the order of Master Caldwell, as follows: a. his personal income tax returns for the years 2008, 2009 and 2010, together with the corresponding notices of assessment or reassessment from the Canada Revenue Agency, b. the notices of assessment or reassessment from the Canada Revenue Agency corresponding to his personal income tax returns for the years 2006, 2007 and 2008, c. documentation showing the amount of personally held mutual funds and investments that were depleted by the Respondent during the 2 years preceding his Form 89 Financial Statement sworn on January 8, 2010, d. the financial statements for 29 & Holding Ltd. and Dr. Patrick Nesbitt Inc. for the years 2009, 2010, and 2011, e. the corporate income tax returns for the years 2009, 2010 and 2011 for 29 & Holding Ltd. and Dr. Patrick Nesbitt Inc., together with the corresponding notices of assessment or reassessment from the Canada Revenue Agency, f. the corporation notices of assessment or reassessment from the Canada Revenue Agency corresponding to the corporate tax returns for the years 2007 and 2008 for 29 & Holding Ltd., g. the following information regarding the 2008 financial statement for 29 & Holding Ltd.: i. how the figure of $771,485.00 was arrived at for "property and equipment" under the heading of "Assets", ii. how the figure of $510,993.00 was arrived at for being "due to related parties" under the heading of "Liabilities and Shareholder's Deficiency", h. documentation to support the following entries under "Assets" in the 2008 financial statement for Dr. Patrick Nesbitt Inc.: i. an entry for "cash" of $151,824.00, ii. An entry for "marketable securities" of $51,847.00, and i. information regarding the source of revenue for Dr. Patrick Nesbitt Inc. for the fiscal years ending January 31, 2006, and January 31, 2007. [7] The contempt application came back before me on November 13, 2012 to determine whether Dr. Nesbitt had purged his contempt by June 1, 2012. [8] At that time I was told by counsel for Ms. Neufeld that in fact none of the documents or information had been provided by Dr. Nesbitt. [9] At that time Dr. Nesbitt provided an affidavit of June 13, 2012, indicating that he had approached his accountants in April 2012 with a view to getting the information, but was told that because it was tax season it could not be done by the end of April 2012. [10] He says he approached the accountants again in May 2012 and was told that since some of his companies had no income or expenses, the accountant was expecting to be able to complete the task in a couple of days. [11] Dr. Nesbitt says further that he sent the accountant all the information in May 2012 and followed up with a detailed email on May 16, 2012 and a personal attendance with the accountants on May 22, 2012. [12] In addition Dr. Nesbitt provided to the Court a note of May 23, 2012 from the accountants confirming that Dr. Nesbitt had forwarded all pertinent information in early May. [13] On July 23, 2012, Dr. Nesbitt swore another affidavit to which he attached another note from the accountants, undated, indicating that they were unable to meet the July 11, 2012 deadline date (I do not know what the point of that date was unless it had to do with Provincial Court) and were requesting an extension. [14] By the time of the hearing on November 13, 2012, no information had been received from the accountants and none of the documents or information ordered to be provided had in fact been provided by Dr. Nesbitt, even though on his own evidence he had met personally with the accountants on May 22, 2012, nine days before the date on which I allowed him to purge his contempt of June 1, 2012. [15] At the hearing on November 13, 2012, Dr. Nesbitt was asked why he personally could not provide some of the information that had been ordered, without regard to reliance on the accountants, including the documentation at item (c) which called for "documentation showing the amount of personally held mutual funds and investments that were depleted by the Respondent during the 2 years preceding his Form 89 Financial Statement sworn on January 8, 2010". It was pointed out to him that this was something he would personally know and be able to answer. [16] In addition he was asked why he could not provide the information at item (g) which concerned the 2008 financial statement for 29 & Holding Ltd. which was already in existence and if he needed any assistance in that regard why he could not ask the accountants about that. [17] Finally, he was also asked why he could not provide the documentation to support the entries under "assets" in the 2008 financial statement for Dr. Patrick Nesbitt Inc., again when it was obviously documentation already in existence and documentation that could either be provided by him or on his request to the accountants. [18] No relevant responses were received from Dr. Nesbitt to these questions from the Court. [19] The hearing was put over to today to determine the appropriate sentence for Dr. Nesbitt's contempt in view of his failure to purge his contempt as he had been given the opportunity to do so by June 1, 2012. [20] The case of Larkin v. Glase, 2009 BCCA 321, sets out the following principles of contempt of court: · A court order must be obeyed until and unless it is reversed. Refusal to obey court orders strikes at the heart of the rule of law, at the core of the organization of our society. If court orders can be disregarded with impunity, no one will be safe. Our free society cannot be sustained if citizens can decide individually what laws to obey and what laws to disregard. · Contempt of court is an issue between a party and the court. It is not concerned with the merits of the dispute between parties to litigation. · A finding of contempt of court "transcends the dispute between the parties; it is one that strikes at the very heart of the administration of justice" (from Ontario (Attorney General) v. Paul Magder Furs Ltd. (1992), 10 O.R. (3d) 46). · From Topgro Greenhouses v. Houweling, 2003 BCCA 355: To knowingly breach a court order is to commit a contempt of the 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. · The primary objective of the civil law sanction for contempt is to secure compliance with the courts' orders rather than punishment (from British Columbia (Attorney General) v. Perry Ridge Water Users Assn. (1997), 43 B.C.L.R. (3d) 258). · Deterrence and rehabilitation are factors relevant to securing compliance with court orders. · Generally incarceration is reserved for the more serious contempt of court. · It must always be borne in mind that the sanction of imprisonment is a power that ought to be used sparingly. · When imprisonment is imposed, the term imposed should be the least amount of time possible in the circumstances of the offender and the nature of the contempt. [21] In my opinion, a period of incarceration is the only appropriate sentence for Dr. Nesbitt to signal the Court's condemnation of his contempt of the orders of the Court. I sentence Dr. Nesbitt to a term of incarceration of five days. [22] That concludes my decision. [23] MR. KRENTZ: May I speak to the issue of costs, My Lord? [24] THE COURT: Is there costs in a contempt matter? [25] MR. KRENTZ: Yes. Your previous order made in April was for special costs and those have been assessed. I am asking for special costs with respect to this application. [26] THE COURT: This will be special costs as well. And just so it's certain Dr. Nesbitt, these are continuing breaches of the order of Master Caldwell. When you get out of custody, you still have an obligation to produce these documents. If you do not produce them, Mr. Krentz is probably going to bring on another contempt application. Thank you. "The Honourable Mr. Justice Truscott"