REDDY v SAROYA

The parties had been engaged in litigation since 2012 after being involved in real estate development projects in Alberta and the United States. The Appellant appealed an Order declaring him in civil contempt because he failed to provide adequate responses to several undertakings he was ordered to satisfy.

On several occasions the Appellant provided answers, and revised answers, along with supporting documents. But the answers and documents were not presented in a well-organized fashion, and the Respondent continued to maintain that answers were missing or deficient. The Respondent filed several applications seeking orders for further and better answers, and to find the Appellant in contempt.

In September 2018, the Chambers Judge directed that a “referee report” be prepared under Rules 6.45 and 6.46 to address the state of the Appellant’s answers to undertakings. The Referee Report found 63 of the undertaking responses were either not responsive or not sufficient to permit a meaningful dialogue to test the answer.

The Respondent then filed an application to compel the Appellant to provide further and better answers to undertakings arising from the referee report, which then lead to the contempt proceedings under appeal after certain responses continued to be deficient.

The general procedure for civil contempt is set out in Rules 10.51-10.53. An applicant must prove beyond a reasonable doubt each of the following elements: (1) the order breached unequivocally states what must be done or not done; (2) the contemnor had actual knowledge of the order; and (3) the contemnor intentionally did, or did not do, what the order unequivocally requires.

The Court upheld the majority of the contempt findings on the basis that the standard of review had not been met in those instances, but overturned findings for 10 undertakings.  The Court further cautioned that contempt should not be routinely used to resolve disputes about the adequacy of answers to undertakings. Contempt is generally discouraged, and undertakings are often fulfilled on a reasonable or best-efforts basis, meaning a party may comply even if they cannot provide useful information. Disputes may arise from missing records rather than intentional non-compliance, making contempt an ill-suited remedy. The Court encouraged counsel to consider whether alternative remedies, such as proceeding to trial without the information or drawing adverse inferences, are adequate.