QUESTOR TECHNOLOGY INC v STAGG

The Respondents were found guilty of civil contempt in a previous decision for knowingly providing false evidence, knowingly withholding evidence, and knowingly misleading the Applicant and the Court. This Application was brought further to the provisions of Rule 10.53, seeking punishment for that civil contempt.

Jeffrey J. considered the parties’ positions and relevant case law. The Applicant sought to strike the Respondents’ pleadings, a large fine equivalent to all wasted legal fees and, if the Court wished, incarceration. The Respondents rejected all of the Applicant’s requests, acknowledging that a lesser fine of $5,000 per incident (of which there were 9) would be appropriate.

On the suggestion of incarceration, the Court found that the contempt, though egregious, was not driven at defying the Court’s authority. Rather, it was to gain personal advantage through deception. On this basis, the Court held that the punishment should be monetary loss, not loss of liberty.

In considering whether to strike the Respondents’ pleadings, Justice Jeffrey analyzed four factors. First, the Court was not persuaded that the corporate Respondent should bear the burden for the civil contempt of its owners or agents in the absence of the corporation itself being found in contempt. Second, the Court held that the aim of punishments for civil contempt is not remedying harm caused by the contempt. Third, Jeffrey J. held that striking out the pleadings of the corporate Respondent would likely have adverse impacts on third parties. Finally, the Court held that striking a defence is effectively denying the party’s opportunity to answer in Court a claim against it, and that the courts do not lightly deny audience to any party unless the requisite degree of defiance is met. In light of these factors, the Court refused to strike out the pleadings of the Respondents.

On the issue of imposing a fine, Jeffrey J. found that the individual contemnors were not responsible for the same number of incidents of contempt, although they participated in each. Further, the conduct was egregious and therefore deserving of a significant penalty. Therefore, the Court found each contemnor jointly and severally liable for a fine of $150,000, plus the Applicant’s solicitor-client costs.