The Respondent, Mr. Lymer, was a second time bankrupt. The Trustee’s report disclosed proven unsecured creditors of $21,148,026.95 and assets of $6,308,008.00. Mr. Lymer applied to have his bankruptcy annulled. A number of Mr. Lymer’s creditors (the “Objecting Creditors”) opposed Mr. Lymer’s annulment Application. The Objecting Creditors sought additional information on the status of Mr. Lymer’s companies (the “Lymer Companies”) via Examination of Mr. Lymer and Examination of Records from the Lymer Companies under s. 163(2) of the Bankruptcy and Insolvency Act, RSC 1985, c B-3.

Mr. Lymer filed an Affidavit of Records on his own behalf, and obtained an extension to file an Affidavit on behalf of his companies. Master Smart granted an Application by the Objecting Creditors requiring Mr. Lymer to provide a further and better Affidavit of Records for himself, and issued further directions for Mr. Lymer to prepare an Affidavit of Records for the Lymer companies. The Affidavits were not filed on time, and the Objecting Creditors brought the present Application, seeking, inter alia, that Mr. Lymer and the Lymer Companies be declared in contempt; and that Mr. Lymer’s Application to have his bankruptcy annulled be struck.

The Court noted that to find contempt the Applicants must prove beyond a reasonable doubt: an existing requirement of the Court; notice to the person alleged to be in contempt; and an act that constitutes a breach of the requirement. The Court further noted that a “[f]ailure to abide by the terms of a court order without reasonable excuse is contempt” and that if a litigant fails to exercise due diligence or properly delegate, that is also basis for contempt. In addition, “an attempt to indirectly frustrate a court order is contempt of court”.

Master Smart observed that the remedy of striking Pleadings for contempt was drastic but appropriate where the contemptuous litigant does not correct their misconduct despite being given many chances and where the misconduct is persistent, intentional and blocks the Action. Master Smart concluded that “Mr. Lymer and the Lymer Companies breached the Oct. 2, 2013 Production and Examination Order” and were therefore in contempt. Master Smart further noted that Mr. Lymer’s goal was to block and end inquiry into his business activities and financial history. The evidence presented satisfied the test for the absence of a reasonable excuse. In the result, Master Smart found Mr. Lymer and the Lymer Companies to be in contempt and Mr. Lymer’s annulment Application was struck.