Contempt Motions - Hull on Estates #181
Listen to: Contempt Motions - Hull on Estates #181
This week on Hull on Estates, Sharon Davis and Craig Vander Zee discuss contempt motions, specifically in relation to the passing of accounts.
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Contempt Motions - Hull on Estates- Episode #181
Sharon Davis: Hello and welcome to Hull on Estates. You’re listening to episode 181 on Tuesday, September 29th, 2009.
Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada. Hosted by the lawyers of
Sharon Davis: Hi and welcome to another episode of Hull on Estates. I’m Sharon Davis.
Craig Vander Zee: And I’m Craig Vander Zee.
Sharon Davis: If you want to be heard on Hull on Estates, you can participate by leaving us a comment. E-mail us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.
So hello Craig. How are you today?
Craig Vander Zee: Good Sharon, yourself?
Sharon Davis: Great thanks. We’re just over a weekend and it’s Tuesday. It’s hard to believe it’s only Tuesday. But did you have a good weekend?
Craig Vander Zee: It is. It’s hard to believe that we’re going to be into October in the next couple of days. But the weekend was good, filled with cheerleading for my daughter and hockey games for my son, so pretty active.
Sharon Davis: Well that’s all fun. I hope they did everything you asked them to do on the weekend.
Craig Vander Zee: Generally speaking they did.
Sharon Davis: That’s good. You know, I think maybe that brings us to our topic for today because what do you do when people won’t do what they’re supposed to do? Now as a parent, you might want to send them to their room or you might want to take away their laptop. I guess it all depends on what you want to achieve and who your child is and what works best on them. So perhaps we can really relate that to the civil law context and what you do when orders don’t get…
Craig Vander Zee: Yeah, I think Sharon what we’re going to do is talk about today is contempt motions in the context of a passing of accounts. And that is when there’s been an Order to pass accounts granted by the Court and the trustee or the estate trustee, whomever it is that was ordered to pass their accounts, is simply not obeying. And unfortunately sending them to their room or taking away a laptop won’t work. Now Bianca La Neve and Rick Bickhram of the firm did a very good blog back in July of this year on the Willis Estate case. That’s a decision by Justice Brown dealing with a contempt matter. In today’s discussion, I thought that we would talk or focus a bit more on the kind of relief one might consider in contemplating a contempt motion. And Justice Brown’s decision certainly gets into the differences between criminal contempt and civil contempt. And criminal contempt being more punitive in nature in design than civil contempt which is to pressure compliance.
So first of all, when we’re faced with a situation where an Order for passing of accounts hasn’t been complied with, you want to sit down and consider the test for a contempt motion.
Sharon Davis: That’s right. And you’ll find that test under Rule 60.11. And in order to make a finding for contempt, the Court must first of all realize and understand that there is an unambiguous Order directing the doing of some sort of an act. So you’ve got to have a clear, unambiguous Court Order. Then the person in question has to have had knowledge or notice of that Order. So if they didn’t know about it, you’re not going to get anywhere with your contempt motion. And thirdly, they have to have acted in contravention. Basically, they’ve breached it. They understood that it was there, there’s clear proof and they just have decided not to comply.
Craig Vander Zee: And the reason why I start with the test is really to consider whether a contempt motion is indeed appropriate. Perhaps the estate trustee or the trustee is simply not complying, that is, that no accounting has been provided. But you could have a situation where there has been some accounting but it’s completely or wholly inadequate and you need a further accounting and there’s a denial that any further accounting is coming. In that kind of scenario, I would consider whether the trustee or the estate trustee is capable of providing a better accounting. Maybe you do have everything but it’s such a mess, you can’t make heads or tails of it. In that particular case, you might consider bringing an Order for directions with respect to the accounting or you might consider a contempt motion but consider having the relief being sought, that is, having a third party prepare the accounts and having the accounting turned over to that third party, someone experienced in the preparation of accounts, so that they in turn can prepare the accounts for the trustee or the estate trustee. So in that particular kind of case, you’re not really looking to have a fine applied or seeking imprisonment. And we’re going to get into…
Sharon Davis: You don’t want to throw ‘em in jail and throw away the key and all that.
Craig Vander Zee: Right, right.
Sharon Davis: That might be good if there was a relative…
Craig Vander Zee: Well…
Sharon Davis: who was an executor you really don’t like, we wouldn’t recommend it.
Craig Vander Zee: There are instances, for sure, where you would consider having the person show up with their toothbrush because imprisonment might be a possibility. But in the scenario I’ve just said, I think not. So it could…and we’ll get into the remedies under a contempt motion…but in the specific situation I just mentioned, you might consider having an Order where a third party prepares the accounts.
Sharon Davis: And at the end…
Craig Vander Zee: And sorry, at the cost at the trustee or the estate trustee, so that it’s not coming out of the estate or out of your client’s pocket.
Sharon Davis: But of course. And I think that’s a really good point is what do you want to achieve at the end of the day, you know, for the estate, for your client. And in fact, imprisonment really isn’t helping anyone a whole lot if what you really do want is to get a hold of a good set of accounts. Then you need to think about what it is you have to do in order to get that.
Craig Vander Zee: It could, you know, perhaps you know it’s time to consider in further detail what, you know, Rule 60 says about the types of relief because you’re right, Sharon, imprisonment isn’t just something that the Court is going to grant simply because there has been disobedience with an Order. They’re going to have to be the right set of circumstances or perhaps the appropriate set of circumstances where a Court is going to grant that. But under Rule 60.11, a judge in finding a contempt situation, that is, the Court has made an Order of contempt, could imprison a person for such period of time and such terms as is just, could imprison a person if they fail to comply with the terms of an Order, pay a lump sum, pay a fine, do or refrain from doing something and pay costs. And then here’s the almighty catch-all – comply with any other Order that the judge considers necessary. So there you have it. You have the possibility of imprisonment. And as you said, that’s not going to be something that the Court, and the Court should not, take it lightly but there are circumstances and could very well be circumstances where imprisonment would be appropriate.
Sharon Davis: Certainly I think that comply with any other Order the judge considers necessary, given that kind of discretion, gives some latitude to really achieve what you might want to achieve in your case. So what would be some of the other kinds of things, if you’ve got perhaps an estate trustee and you’ve got co-mingling of funds for example?
Craig Vander Zee: Well, first of all, you may wish to seek all the relief available under 60.11. You may not want to just seek one aspect of it. You may want to leave it to the judge to his or her discretion as to what would be the best. So it’s not an either/or situation when it comes to the relief. It could be that if its such a situation where there have been 4 or 5 Orders that have just simply been not complied with or circumstances where imprisonment is appropriate, then maybe you do seek imprisonment. Maybe you seek a fine, a lump sum fine, to get the attention. But in a circumstance that you’re talking about where there is evidence that the trustee or estate trustee has co-mingled funds from the estate with their own funds, and there has not been the provision of an accounting to refute that, then you might consider asking the Court for an Order enjoining them from selling or transferring or disposing of any of the assets which have been purchased or potentially purchased with funds from the estate. It could also be that you would like to try and maintain the status quo with respect to the assets of the individual, that is, the individual trustee or estate trustee who, on the face of it, is liable for the disappearance of funds and it appears that they’ve disappeared into their own back pocket. In that specific case, it may very well be that if they hold assets such as real estate, that a Court may be prepared to order or make an Order requiring that that specific asset not be sold pending their compliance with the Order. So you’re not seeking a transfer. You’re not seeking a judgment or an Order transferring an interest that they have in an asset. What you’re trying to ensure is that they don’t sell the very asset you’re alleging they purchased with funds from the estate and you can’t illustrate that to the Court in detail because they haven’t provided the accounting.
Sharon Davis: Right. And that makes a lot of sense because really you want to make sure that there’s some sort of security there so that when you get to the point where you’re arguing on that basis, the assets haven’t been completely dissipated and there’s nowhere to go.
Craig Vander Zee: And again, this kind of motion is brought on notice to the individual. So when they’re faced with this kind of motion and you’re seeking this kind of relief in your Notice of Motion, they’re on notice as to what you’re trying to do. So from that standpoint, prior to the hearing of the motion for contempt, if they purge the contempt then of course the relief that we’re talking about here may not be appropriate anymore if the accounting is appropriate and shows otherwise. We’re talking about a situation where there’s an Order for a passing of accounts. It was clear and unambiguous. They were clearly served with it. And they’ve breached it and they’re not providing an accounting. And they show up to the contempt motion, or don’t show up to the contempt motion, having notice of it. And in that circumstance, you’re trying to maintain the status quo with the assets so indeed, the people who are entitled to the assets ultimately have the opportunity to obtain the assets.
Sharon Davis: Right. Well I think that just about brings us to the end of our time. Thank you very much for discussing today contempt of Court and hopefully none of you out there are in contempt of any Court Orders. I’d suggest you go out there and purge that contempt right away. In any event, thanks for listening and thanks for joining me today, Craig.
Craig Vander Zee: My pleasure, Sharon.
Sharon Davis: And we look forward to hearing from our listeners. You can send us an e-mail at hull.lawyers@gmail.com. Be sure to visit our blog at estatelaw.hullandhull.com where you’ll find even more information and discussion on today’s practice of estates law. We hope you enjoyed the show. I’m Sharon Davis.
Craig Vander Zee: And I’m Craig Vander Zee.
Sharon Davis: Till next time, cheerio.
This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.
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