DEMB v VALHALLA GROUP LTD, 2017 ABQB 256
5.2: When something is relevant and material
10.53: Punishment for civil contempt of Court
The individual Defendants were held in Civil Contempt, pursuant to Rule 10.53, due to failures in their documentary production obligations. The Court of Appeal referred the determination of the appropriate penalty for Civil Contempt back to Justice Jones as Case Management Judge. The Claim arose from outstanding loans and investments made by the Plaintiffs, and included allegations of fraud against the individual Defendants. The Defendants had repeatedly failed to produce sufficient and fulsome financial information and records, which led to the Contempt Order. However, just prior to the Appeal, individual Supplemental Affidavits of Records were served. The records were not put before the Court of Appeal nor drawn to the Court’s attention by either party. Nonetheless, the Plaintiffs argued that the Supplemental Affidavits of Records still failed to produce all the relevant documents, and as such, the individual Defendants’ Statement of Defence should be struck. The Defendants argued that they had purged the Contempt and sought to have the Application for a penalty for contempt dismissed.
Justice Jones noted that the purpose of Civil Contempt is to compel compliance rather than punish, and that severe punishment, such as the striking out of a Statement of Defence, was normally reserved for persistamt non-compliance. Justice Jones held that there was no deliberate defiance of the Order to file a further and better Affidavit of Records, and the Plaintiffs and Individual Defendants were not cooperating and were both responsible for delay in addressing production matters. Further, the individual Defendants took steps to purge their Contempt prior to the Appeal, and Justice Jones held that the most recent Supplemental Affidavits of Records indeed purged their Contempt. The documents included a general accounting ledger with supporting invoices and records, which were the relevant and material documents in accordance Rule 5.2(1). Ultimately, Jones J. ordered the individual Defendants to pay: a fine of $1,000 as a penalty for the Civil Contempt, and the Plaintiffs’ Costs.View CanLII Details