COURT OF APPEAL FOR ONTARIO
CITATION: Oliveira v. Oliveira, 2023 ONCA 520
DATE: 20230802
DOCKET: C69619, C70452 & C70060
Feldman, Lauwers and Roberts JJ.A.
DOCKET: C69619
BETWEEN
Jack Oliveira and Luis Camara on their own behalf and
on behalf of all members of Labourers International
Union of North America, Local 183
Plaintiffs (Respondents)
and
Mario Oliveira
Defendant (Appellant)
DOCKET: C70452
AND BETWEEN
Jack Oliveira and Luis Camara on their own behalf and
on behalf of all members of Labourers International
Union of North America, Local 183
Plaintiffs (Respondents)
and
Mario Oliveira
Defendant (Appellant)
DOCKET: C70060
AND BETWEEN
Mario Oliveira
Plaintiff/Respondent
(Appellant)
and
All Industries LiUNA CECOF (a.k.a. LiUNA Central and
Eastern Canada Organizing Fund II), Labourers
International Union of North America Local 183,
Labourers International Union of North America,
Canadian National Federation of Independent Unions
LiUNA, Local 3000 and Frank Martins a.k.a. Francisco Martins
Defendants/Moving Parties
(Respondents)
Mario Oliveira, acting in person
Michael D. Wright and Youssef Kodsy, for the respondents Jack Oliveira and Luis Camara on their own behalf and on behalf of all members of Labourers International Union of North America, Local 183
Casey M. Dockendorff and Clifton Yiu, for the respondents All Industries LiUNA CECOF (a.k.a. LiUNA Central and Eastern Canada Organizing Fund II) (C70060)
Heard: January 17, 2023
On appeal from the orders of Justice Jane Ferguson of the Superior Court of Justice, dated February 26, 2021, April 29, 2021, with reasons reported at 2021 ONSC 3231, and from the costs order, dated June 25, 2021 (C69619).
On appeal from the order of Justice Jane Ferguson of the Superior Court of Justice, dated January 14, 2022 (C70452).
On appeal from the order of Justice Heather A. McGee of the Superior Court of Justice, dated October 22, 2021, and from the costs order, dated December 8, 2021 (C70060).
Feldman J.A.:
[1] The appellant, Mario Oliveira, was involved in two types of litigation misconduct, both involving the misuse of information in two separate actions. The first was a breach of the deemed undertaking rule (Rule 30.1.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194) because the appellant disclosed the contents of a document received in the discovery process to a newspaper, the Office of the Premier of Ontario and two other non-parties. The second was the appellant’s failure to abide by two interlocutory injunctive orders that required him to delete a confidential list of union members and their contact information (the “Confidential List”), enjoined him from disseminating or using the confidential information, and ordered him to provide access to his electronic devices for verification.
[2] In the first action, in which the appellant sought damages for wrongful dismissal and alleged mistreatment prior to his termination (the “Wrongful Dismissal Action”), his pleadings were struck and the action was dismissed with costs of $36,725. In the second action, which was a breach of confidence action against the appellant (the “Breach of Confidence Action”), he was found in contempt of two court orders related to interlocutory injunctive relief and sentenced to 89 days in jail to be served intermittently as well as costs of the injunction and contempt motions of $75,000.
[3] The appellant appeals the order in the Wrongful Dismissal Action dismissing the action with costs. The appellant also appeals the finding of contempt in the Breach of Confidence Action, and the orders for 89 days’ incarceration and costs.
Factual Background
(a) The Breach of the Deemed Undertaking Rule in the Wrongful Dismissal Action
[4] The appellant was employed by the respondent, LiUNA Central and Eastern Canada Organizing Fund II (“CECOF”), as a union organizer. CECOF is a trust created for the purposes of funding union organizing campaigns on behalf of various local unions of the Labourers’ International Union of North America throughout central and eastern Canada.
[5] The appellant was assigned to Local 183, a construction union and the Cobourg, Ontario office of CECOF, in the summer of 2015 and almost immediately had difficulties with his supervisor, Frank Martins. In April 2016, while off work on account of medical disabilities, he reported that he was being physically harassed and threatened by Mr. Martins. This conduct included repeated threats of dismissal, yelling and screaming in front of co-workers and pointing a firearm at the appellant.
[6] An independent investigation was conducted and a report was prepared which substantiated the appellant’s allegations (the “Report”). The appellant was given an oral report but was not provided with the Report because the investigation was conducted on a confidential basis and the Report was treated as confidential. As a result of the investigation and the Report, Mr. Martins’ employment was terminated.
[7] In February 2017, the respondent CECOF terminated the appellant’s employment, which Local 183 stated was for reasons that were not related to the investigation or the Report. The appellant initiated the Wrongful Dismissal Action, which included claims relating to his treatment by Mr. Martins and allegations of serious misconduct by the union and by Mr. Martins acting for the union. As part of the production of documents, his counsel asked for and, after several requests, received a copy of the Report. The Report was marked “Privileged and Confidential”. The appellant’s then counsel emailed a copy of the Report to him on November 5, 2018, whereupon the appellant emailed the Report within hours to the Office of the Premier of Ontario, a reporter at the Toronto Star newspaper, and two other non-parties by blind copy.
[8] In his covering message, the appellant stated:
I trust you received the investigation report I sent you as a result of my Whistle blowing. Regardless I have attached it including the intimidating and threatening correspondence Jack Oliveira’s attorneys sent today to my litigation lawyer.
[9] The motion judge, McGee J., found that the appellant’s then lawyer advised him the next day that he must retract the Report, but instead the appellant instructed his counsel to tell the defendants that he intended to publicize all matters related to his claim. As a result, his counsel took steps to withdraw as counsel of record.
[10] The respondents CECOF and Local 183 originally moved on December 19, 2018 for an order finding that the appellant had breached the deemed undertaking rule, and as a remedy, dismissing the Wrongful Dismissal Action, and, in the alternative, a finding of contempt, or in the further alternative, an order directing the appellant not to make any further breaches and to pay costs. For reasons that the motion judge described as not relevant to the decision, the motion was not heard until September 15, 2021. In the interim, the respondents asked the appellant to retract the delivery of the Report, which he did not do. The Toronto Star published an article that referenced the Report in May 2019.
[11] The motion judge found that the appellant had breached the deemed undertaking rule by emailing the Report to the Office of the Premier of Ontario, a Toronto Star reporter and two other non-parties. The motion judge noted that the appellant did not contest the finding.
[12] In her discussion of the appropriate remedy, the motion judge referred to the two leading decisions of Goodman v. Rossi (1995), 24 O.R. (3d) 359 (C.A.) and Juman v. Doucette, 2008 SCC 8, [2008] 1 S.C.R. 157. She specifically rejected the appellant’s assertion that in November 2018 he did not understand that emailing the Report would be a breach of the deemed undertaking rule. He was advised of the confidentiality of the Report a number of times, he called himself a whistle-blower, and he refused to retract the Report from the people to whom he had sent it. The motion judge acknowledged that the appellant did apologize in his supplementary affidavit for the motion after his then current counsel had been retained, but other than that, he had taken no steps to remedy the breach.
[13] The motion judge focused on the nature of the document disclosed, being a confidential report based on interviews conducted in confidence and not subject to cross-examination. In her view, the appellant’s conduct jeopardized the process for enforcing workplace violence and harassment policies, by possibly creating a chilling effect on fellow workers who could be interviewed in the process.
[14] The motion judge also considered the appellant’s conduct in related proceedings, relying on Dickie v. Dickie (2006), 78 O.R. (3d) 1 (C.A.), at paras. 85 and 87, per Laskin J.A. (dissenting), rev’d 2007 SCC 8, [2007] 1 S.C.R. 346. By the time the motion judge heard the motion in September 2021, there were two related matters. One of them was the Breach of Confidence Action with the corresponding contempt finding, which is the other subject of this appeal.
[15] The first related matter was a defamation action brought by Jack Oliveira, the Business Manager of Local 183, (the “Business Manager”) against the appellant after he widely disseminated false allegations that the Business Manager was a pedophile. He did this when his membership in Local 183 was terminated in May 2018 by the Business Manager. That action resulted in a summary judgment and award of $30,000 in damages for defamation as well as a permanent injunction. There was also a costs award of $51,158.53.
[16] The second related matter was the Breach of Confidence Action, which arose when the Business Manager’s counsel asked the appellant to pay the judgment. He responded by threatening to send the pedophile allegations out to Local 183’s 10,000 members, implying that he had a contact list for the members.
[17] Local 183 commenced the Breach of Confidence Action and, as interlocutory injunctive relief, obtained an order that the appellant immediately return the confidential contact information, prohibited him from using or retaining that information, and appointed a third-party forensic inspection of all the appellant’s electronic devices and email accounts to ensure that the information had been deleted. Despite a further order compelling compliance, the appellant did not comply and Ferguson J. found him in contempt on February 26, 2021, and deferred sentencing to give the appellant the opportunity to purge his contempt.
[18] The appellant made a forensic inspection of his devices impossible by physically destroying them and he refused to provide his email password.[1] Although the appellant’s new counsel offered an apology, the sentencing judge, who had previously made the contempt finding, was not persuaded of its sincerity. She ordered costs of $75,000. Because of the COVID-19 pandemic, the balance of the sentencing was further deferred and not referred to by McGee J. as part of the description of the related proceedings.
[19] Justice McGee concluded that even without taking into account the related proceedings, this was a serious breach of the deemed undertaking rule for two reasons. One was the confidentiality of the Report. The second was her conclusion that the appellant had no litigation purpose for forwarding the Report and his intention was “to exact maximum reputational damage against his perceived aggressors.”
[20] The motion judge noted that the purpose of the remedy for breach of the deemed undertaking rule is to compel compliance and to limit or recompense the harm caused. She acknowledged that the remedy of striking the pleadings should only be imposed where no other remedy would suffice. She then rejected the option of paying costs out of the potential recovery in the Wrongful Dismissal Action. She concluded that there was no certainty of a financial recovery in excess of the amounts the appellant already owed Local 183. She also rejected an order of costs as a precondition to the appellant taking any further steps in the proceeding as having little utility in the circumstances of the costs orders already outstanding.
[21] The motion judge also rejected making a finding of contempt. There was at that point no ability to purge such a finding because the Toronto Star had already printed an article referring to the Report. A finding of contempt would only prolong the litigation and generate further costs.
[22] Having concluded that no other remedy would suffice, the motion judge struck out the appellant’s pleadings and dismissed the Wrongful Dismissal Action with costs. In her reasons for awarding costs of $36,725, including partial indemnity fees of $30,000 ($64,856.46 had been requested), the motion judge stated:
I have attempted to balance the proportionality of the proceeding to the issues at hand, the Plaintiff’s modest means and the reality that it was his unreasonable litigation conduct that drove the proceeding. Costs must discourage and sanction inappropriate litigation behaviour.
(b) The Finding of Contempt in the Breach of Confidence Action
[23] This action arose out of the Business Manager’s attempt to collect on the judgment in the defamation action in November 2020. The appellant’s response was to threaten to disseminate the defamatory comments about the Business Manager to a list of 10,000 members of Local 183. The respondents first asked the appellant to immediately return the Confidential List, to confirm that he had not retained any copies and to undertake that he would not make use of that information in the future.
[24] In response, the appellant sent the respondents a spreadsheet titled “UNION LIST 10000 PLUS” which contained 13,000 entries listing names, addresses and phone numbers. The respondent Local 183 then commenced the action for breach of confidence and sought injunctive relief which was granted by the motion judge, Ferguson J., on December 23, 2020. The order provided:
(a) That the appellant is required to return all confidential contact information, including that which he attached to an email from himself to counsel for Local 183 on December 2, 2020 at 12:34 AM (the “Confidential List”);
(b) That the appellant is enjoined from disseminating the Confidential List or from using the Confidential List in any way and cannot retain any copies of the Confidential List or any other confidential contact information for Local 183. This order is in effect until the final disposition of the trial of this matter unless modified on consent or by further order of this court.
(c) a further order appointing Computer Forensics Inc. as an independent third party forensic inspector to conduct a forensic inspection of the appellant’s electronic devices and email accounts to ensure that all confidential contact information for Local 183 has been permanently and irrevocably deleted from the appellant’s devices and accounts.
[25] The corresponding hand-written endorsement noted that the appellant “largely consented to the relief being sought” but wanted to ensure his privacy interests would not be violated. The December 23, 2020 order required Computer Forensics Inc. (the “Forensic Inspector”) to ensure “that the [appellant’s] privacy interests are respected and intruded upon as minimally as possible.”
[26] The appellant sought leave to appeal the December 23, 2020 order to the Divisional Court. When he told the motion judge on February 26, 2021 that he believed seeking leave to appeal had the effect of staying the order, she told him that it did not have that effect. The application for leave was eventually dismissed in September 2021.
[27] In seeking leave to appeal, the appellant included a copy of the Confidential List, which demonstrated that he still retained it. On January 15, 2021, counsel for the respondent advised the appellant by email that he was in breach of the December 23, 2020 order and gave him until the end of the day to comply. The appellant did not respond to the email or comply with the order.
[28] The motion judge scheduled a remote case conference for January 28, 2021 at 9:00 a.m. Counsel for the respondents attended the case conference, but the appellant did not. When scheduling this case conference, the appellant said he was unavailable because he had to assist his father with medical appointments, but he did not suggest a date when he could attend. The motion judge issued a further order requiring the appellant to comply with the December 23, 2020 order by January 29, 2021 at 5:00 p.m. and to pay costs of $2,500 within 30 days. The appellant received a copy of the January 28, 2021 order but he did not comply with it.
[29] As a result, at a contempt hearing held remotely on February 26, 2021, after hearing submissions from both sides, the motion judge found the appellant in contempt of the December 23, 2020 and January 28, 2021 orders, and gave him the opportunity to purge his contempt by bringing his computer and cell phone to the Forensic Inspector for an examination to determine if he still retained any confidential contact information of the respondents. The appellant’s privacy concerns were discussed. It was agreed that the appellant would be present for the forensic examination and that the motion judge would be available by phone if any issues arose. The motion judge explained that the appellant could go to jail for contempt although the respondents were not asking for that remedy.
[30] In making the contempt order, it was accepted that the respondents had to prove three elements beyond a reasonable doubt: 1) that the order states clearly and unequivocally what the appellant had to do and what he could not do; 2) that the appellant had actual knowledge of the order; and 3) that the breach was intentional. The motion judge found that all three elements had been proved.
[31] Following the contempt hearing, the appellant was to agree to a date for the forensic inspection, after which the application judge would issue her endorsement. However, the appellant then proceeded to physically destroy his computer and cell phone, which he delivered to the Forensic Inspector on March 5, 2021. He also refused to provide his email password. The Forensic Inspector reported on March 12, 2021 that it could not conduct the required examination on the destroyed equipment.
[32] The motion judge scheduled a sentencing hearing for March 31, 2021, where the respondent sought a stay of the Wrongful Dismissal Action as a penalty for the contempt. As a result, the hearing was adjourned to April 8, 2021 to allow the appellant’s counsel on the Wrongful Dismissal Action, Mr. A. Davis, to participate. By endorsement dated April 16, 2021 and a subsequent order dated April 29, 2021, the motion judge rejected the respondent’s submission that the Wrongful Dismissal Action be stayed as a penalty for contempt, and instead imposed a period of incarceration, as suggested by Mr. Davis and by counsel for the respondent to be determined and served after the COVID-19 pandemic had subsided. The motion judge commented in her April 16, 2021 endorsement that she was considering a conditional sentence, but decided in her April 29, 2021 reasons that that would not be appropriate because COVID-19 had imposed house arrest on everyone.
[33] In her costs endorsement dated June 25, 2021, the motion judge ordered the appellant to pay costs of $75,000. A further hearing was held on November 8, 2021 to address the length of the period of incarceration to be imposed. On January 14, 2022, the appellant was ordered to serve 89 days in jail intermittently once the jails were allowing intermittent sentences to be served after the COVID-19 pandemic. In imposing the 89-day intermittent sentence, the motion judge took into account the fact that the appellant was caring for his elderly parents who had serious health issues and that he himself had health issues.
Issues on the Appeal
[34] The appellant raises a broad array of issues. He argues that McGee J. erred: 1) in finding that the Report was protected by the deemed undertaking rule; 2) in the exercise of her discretion in the remedy she imposed for the appellant’s breach of the deemed undertaking rule; 3) in exercising her discretion in awarding costs. He argues that Ferguson J. erred: 4) in finding that the appellant was in contempt; 5) in her approach to imposing an appropriate and fair sentence for the appellant’s contempt; and 6) in exercising her discretion on costs.
[35] The appellant also alleges numerous errors by McGee J. in her findings of fact. I see no basis to interfere with those findings, which are the province of motion judges in these cases.
[36] In addition, the appellant couches many of his submissions on these issues in terms of criticism of the actions of counsel for the respondents and of the presiding judges and alleges abuse of process. I have considered these submissions and I am satisfied that they do not impact the outcome of the legal issues considered on this appeal.
Analysis
(1) The Breach of the Deemed Undertaking Rule
[37] Rule 30.1.01 of the Rules of Civil Procedure is the deemed undertaking rule. Subrule (1) describes the evidence and information to which the rule applies and subrule (3) sets out the rule itself:
(1) This Rule applies to,
(a) evidence obtained under,
(i) Rule 30 (documentary discovery)
[…]
(b) information obtained from evidence referred to in clause (a).
[…]
(3) All parties and their lawyers are deemed to undertake not to use evidence or information to which this Rule applies for any purposes other than those of the proceeding in which the evidence was obtained.
[38] No remedy for breaching the deemed undertaking rule is provided by the rule, but under subrule (8), where “the interest of justice outweighs any prejudice that would result to a party who disclosed evidence”, the court may order on terms as are just that the deemed undertaking in subrule (3) does not apply.
[39] The rule was enacted following this court’s decision in Goodman that recognized a common law implied undertaking rule in respect of documents produced in litigation. This decision was later approved by the Supreme Court. In Juman, which succinctly described the available remedies for breach of the deemed undertaking rule at para. 29:
Breach of the undertaking may be remedied by a variety of means including a stay or dismissal of the proceeding, or striking a defence, or, in the absence of a less drastic remedy, contempt proceedings for breach of the undertaking owed to the court. See Lac d’Amiante, at para. 64, and Goodman v. Rossi (1995), 125 D.L.R. (4th) 613 (Ont. C.A.), at p. 624.
[40] In this case, there was no dispute on the motion that the appellant breached the deemed undertaking rule by delivering the Report to the Office of the Premier of Ontario, but most importantly, to the Toronto Star with the intent of being a whistle-blower against Local 183. This was clearly a use of the document that was outside the litigation. It was done without the consent of the respondents or the permission of the court.
[41] In addition, the appellant was asked to withdraw the Report from the Toronto Star, but he did not do so, and eventually, an article was written that referred to the Report.
[42] The appellant, however, did apologize through new counsel prior to the motion seeking to dismiss the Wrongful Dismissal Action, and there is no suggestion in the record that he made any further dissemination of the Report.
[43] The issue on appeal, therefore, is whether the motion judge erred in law in the exercise of her discretion in the remedy she imposed for the breach of the deemed undertaking rule, which was to strike the Wrongful Dismissal Action and award costs of $36,725.
[44] On the appeal, the appellant takes the position that the Report was not subject to the deemed undertaking rule because its disclosure was required under the Occupational Health and Safety Act, R.S.O. 1990, c. O.1 (“OHSA”), it was referenced in the respondents’ pleadings, and it was a report about criminal conduct, which was the conduct whereby Mr. Martins threatened the appellant with a firearm. He argues that any prejudice that the respondents may suffer is outweighed by the interests of justice in exposing the Report, seemingly an argument for the application of subrule 30.1.01(8).
[45] He also argues that the motion judge made a number of factual errors. One is with respect to the Toronto Star article. He states that it was he who terminated his counsel because he did not inform the appellant about the deemed undertaking rule, and that he retained new counsel and that his new counsel did tell the Toronto Star not to reference the Report itself. The appellant argues that the Toronto Star did not quote directly from the Report in the article published on May 24, 2019, but instead, the article used the information known to the appellant and that he himself had provided for the Report.
[46] The motion judge specifically found that she did not believe that the appellant did not know about the deemed undertaking rule. He argues that that finding was tainted by the scandalous material filed by the respondents about the appellant on the motion. He argues further that it was contrary to his interest in the litigation to undermine his position by breaching the deemed undertaking rule, which he did not know about.
[47] I would not give effect to these arguments, which appear to be made for the first time on the appeal. The finding that the Report was produced as a document on discovery and was subject to subrule 30.1.01(3) is irrefutable. With respect to the Report not being covered by the deemed undertaking rule because it relates to criminal conduct, as Binnie J. stated in Juman: “The rules of discovery were not intended to constitute litigants as private attorneys general”: at para. 43. The appellant also suggests that the Report was produced to him to satisfy the employer’s obligation under s. 32.0.7(1)(b) of the OHSA to provide a written report of the results of an investigation. This provision postdated the Report. In any event the employer made it clear to the appellant at the time that it was not producing the Report to him which was prepared in confidence in accordance with its workplace policy. The appellant never sought to use subrule 30.1.01(8) to disclose the Report.
[48] With respect to the alleged error of fact on the appellant’s communications with the Toronto Star, the record does not disclose any communication from the appellant’s counsel not to use the Report in an article, and in fact, as set out by the respondents in their factum, the article of May 24, 2019 did specifically reference and quote the Report.
[49] Finally, the motion judge was entitled to disbelieve the appellant with respect to his knowledge of the deemed undertaking rule. It was clear that he was told about it by his counsel at least immediately after he sent out the Report, and he continued to rely on his right to be a whistle blower and on the record before the court. As the motion judge found, the appellant did not take any steps to try to retract the Report.
(2) The Appropriate Remedy for Breaching the Deemed Undertaking Rule
[50] The appellant submits that the motion judge imposed a disproportionate remedy and erred in law by referring to the appellant’s conduct in the other proceedings as part of her consideration of the appropriate remedy. By the time the motion judge heard the motion in September 2021, the appellant had already been found in contempt by Ferguson J., ordered to pay $75,000 in costs, and told that he would be subject to a period of incarceration although the length had not yet been finalized because of COVID-19 restrictions. The motion judge recited this history in her reasons.[2]
[51] Ultimately, she commented that “[e]ven without considering the related litigation, this was a serious breach of the deemed undertaking rule.” She did, however, refer to the appellant’s failure to pay the damages ordered in the defamation action of $30,000 in rejecting a costs remedy for the breach.
[52] In relying on the related proceedings, the motion judge referred to the dissenting reasons of Laskin J.A. in Dickie on this point. While his reasons were upheld on appeal to the Supreme Court of Canada, it is unclear that that court considered this issue.
[53] Nevertheless, I see no error by the motion judge in referring to the appellant’s conduct in the related proceedings, as long as he was not punished twice for the same conduct. I will discuss the totality principle later in these reasons when addressing the sentence for contempt.
[54] The motion judge acknowledged that striking a litigant’s pleadings should only be done in extraordinary circumstances. The reason is obvious. Striking pleadings is the capital punishment of civil litigation. The case is over with no opportunity to achieve success or recompense for a wrong.
[55] Although this case is a wrongful dismissal action, in the pleadings the appellant makes serious allegations against the respondents regarding improprieties that he would not tolerate, which resulted in the firearm threats by his then superior, Mr. Martins. He also seeks redress for that incident which had already been substantiated by the Report. In the statement of defence, the respondents state that that they are not vicariously liable for Mr. Martins’ actions and took all reasonable steps to address the issues raised by the appellant in a timely manner. On its face, there may be potential merit in the appellant’s position.
[56] Bearing in mind those consequences, as well as the confidential nature of the inquiry process and the resulting Report, the motion judge discussed the available remedies for breach of the deemed undertaking in this case.
[57] The appellant’s counsel suggested a costs award payable from the proceeds of the Wrongful Dismissal Action, which the motion judge rejected as too uncertain.
[58] She also rejected the payment of costs as a precondition of any further steps in the litigation as futile. This was based on the appellant’s failure to pay damages already ordered and the costs incurred to enforce that damages award while facing his threat of further defamation.
[59] Finally, the motion judge rejected the option of finding the appellant in contempt, because there was no further ability to purge the contempt by retracting the Report from the Toronto Star after the article about it had been published. It would just prolong the proceeding and add cost. She therefore concluded that no other remedy would suffice except to strike the appellant’s pleadings and dismiss the action.
[60] I see no error in the logic employed by the motion judge in her analysis of the options for a remedy. Striking the claim is one of the basic remedy options prescribed by the Supreme Court and this court for such a breach: see Juman, at para. 29; Goodman, at para. 36. The motion judge turned her mind to alternative remedies, including those suggested by the appellant’s counsel, and provided reasons why they would not be appropriate. She made no error in imposing the remedy in the circumstances of this case.
(3) The Costs Awarded on the Motion to Dismiss the Wrongful Dismissal Action
[61] The appellant also seeks leave to appeal the costs awarded by the motion judge on December 8, 2021. Costs are in the discretion of the motion or trial judge.
[62] The motion judge considered the factors in r. 57.01(1) of the Rules of Civil Procedure, the appellant’s modest means, his unreasonable litigation conduct that led to his claim being struck, and his partial success in opposing the motion to strike parts of his affidavit. The amount ordered, $36,725 ($64,856.46 requested as a partial indemnity amount), is reasonable. I would not interfere with the costs award.
(4) The Contempt Order in the Breach of Confidence Action
[63] This court has set out the test for civil contempt in a number of cases. Blair J.A. summarized the test in Susin v. Susin, 2014 ONCA 733, 379 D.L.R. (4th) 308, at para. 21, leave to appeal refused, [2008] S.C.C.A. No. 315 as follows:
The test for civil contempt where breach of a court order is in issue is three-fold: (a) the order that is said to have been breached must be clear and unequivocal; (b) the party who is alleged to have breached the order must be found to have done so deliberately and wilfully; and (c) the evidence must prove contempt beyond a reasonable doubt: Prescott-Russell Services for Children and Adults v. G.(N.) (2006), 82 O.R. (3d) 686 (C.A.), at para. 27; Bell ExpressVu Limited Partnership v. Torroni, 2009 ONCA 85, 94 O.R. (3d) 614, at para. 21.
[64] The appellant submits that the orders of December 23, 2020 and January 28, 2021 were not clear and unequivocal. He argues that he did not understand that he could not send a copy of the Confidential List to the Divisional Court when seeking leave to appeal the December 23, 2020 order. The appellant further argues that he was not clear on the date by which he had to destroy the Confidential List in his possession and that he was complying with the court orders.
[65] There is no merit in these submissions. The orders of December 23, 2020 and of January 28, 2021 are clear. The contempt finding was based on the fact that the appellant had retained a copy of the Confidential List as of January 8, 2021 when he filed his appeal. This was a breach of the December 23, 2020 order. He had not delivered his electronic devices for inspection by the date of the February 26, 2021 contempt hearing. The appellant was well aware of what he was required to do and did not do it.
[66] The appellant also argues that because he filed a motion for leave to appeal to the Divisional Court, the contempt order was premature and the orders were effectively stayed as they remained subject to adjudication. That submission is without merit. A court order must be obeyed unless stayed by a rule or by another order: R. v. Bird, 2019 SCC 7, [2019] 1 S.C.R. 409, at para. 1; Ontario (Attorney General) v. Paul Magder Furs Ltd. (1991), 6 O.R. (3d) 188 (C.A.), at para. 14, leave to appeal refused, [1992] S.C.C.A. No. 92. The filing of a motion for leave to appeal does not have that effect: Rules of Civil Procedure, r. 63.
[67] At the February 26, 2021 hearing, the appellant again raised his concerns about the privacy of his information and proposed changes to the forensic inspection portion of the order, including that he would destroy his devices and provide them to the Forensic Inspector. That proposal was not accepted by the court. The motion judge made it clear that the order was not going to be renegotiated. Nevertheless, the appellant proceeded to take the route he had proposed. He destroyed his devices before delivering them to the Forensic Inspector. At that point, no forensic inspection was possible.
[68] The appellant complains about his treatment by the motion judge as a self-represented litigant. It is clear from a review of the hearing transcripts that the appellant was treated with respect and patience by the court. The finding of contempt was made based on the clear evidence that the appellant had not complied with the orders of December 23, 2020 and January 28, 2021. He was aware of the orders and the consequences if he failed to purge the contempt.
[69] The appellant was given the opportunity to purge his contempt. He attempted to do so in his own way, but that did not comply with the orders, and had the effect of frustrating the third part of the December 23, 2020 order requiring a forensic inspection. Having said that, there is no evidence that the appellant has maintained any copy of the subject list, or has attempted to use it since that time.
(5) The Costs Awarded on the Contempt Motion
[70] The motion judge awarded $75,000 in costs for the contempt proceedings from December 2020 to April 2021. Although she did not say so specifically, this amount appears to reflect substantial indemnity costs. The motion judge stated that the high costs sought by the respondents were completely the appellant’s responsibility, and noted that “[h]e still seems to have no realization that he is in contempt of court orders.”
[71] This was clearly a frustrating situation for all concerned. However, the principle of proportionality must still be a guiding factor in dealing with all aspects of a contempt hearing including costs. The costs of the proceeding were clearly affected by numerous communications with the motion judge over the period.
[72] While an award of costs is a discretionary order, in this case, the motion judge’s reasons, after quoting some case law and academic commentary, consist only of the fact that two orders were breached, the costs are high because of the appellant’s conduct and that he does not realize he is in contempt. There is no further analysis. In particular, the motion judge did not factor in that other punitive measures were being imposed as well. She had decided to impose a period of incarceration.
[73] In all the circumstances, I would reduce the costs ordered to $50,000, all inclusive.
(6) The Appropriate Sentence for Contempt
[74] The sentencing phase of the contempt proceeding occurred in two stages because of the COVID-19 pandemic. In reasons delivered April 29, 2021, based on a motion in writing, the sentencing judge outlined the factors from this court’s decision in Business Development Bank of Canada v. Cavalon Inc., 2017 ONCA 663, 416 D.L.R. (4th) 269, at para. 90, leave to appeal refused, [2017] S.C.C.A. No. 407, that a court should consider when deciding the sentence after a finding of civil contempt:
(a) Proportionality of the sentence to the wrongdoing – a sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender;
(b) Deterrence and denunciation – the sentence should denounce unlawful conduct and promote a sense of responsibility in the contemnor, and deter the contemnor and others from defying court orders;
(c) Presence of aggravating and mitigating factors;
(d) Similarity of sentence in like circumstances;
(e) Reasonableness of a fine or incarceration.
[75] The sentencing judge noted that appellant’s counsel in the Wrongful Dismissal Action suggested a period of incarceration would be appropriate. This submission was made when the action had not yet been struck out by McGee J. for breach of the deemed undertaking rule. Counsel for the respondents also made this suggestion.
[76] The sentencing judge indicated in her reasons that she was considering imposing a period of house arrest, but accepted the submission by respondents’ counsel that “COVID-19 has essentially created a house arrest situation and that such an order would have no impact on Mr. Oliveira who just continues to blindly avoid following orders.” She decided to impose a period of incarceration to be served after the COVID-19 pandemic had subsided. She effectively adjourned the hearing for 45 days to assess the situation. She also noted that she had not received any submissions from the appellant on sentencing and gave him 30 days to make a submission.
[77] A further remote hearing was held on January 14, 2022. This hearing took place a few months after the appellant’s Wrongful Dismissal Action had been struck. The appellant had filed submissions regarding his and his parents’ health problems. The sentencing judge indicated that the appellant had been “back and forth” with her, and that he knew he was going to jail and that the sentence would be served intermittently. An intermittent sentence was still not possible because of the jail situation with COVID-19. As a result, the sentence was imposed but postponed until an intermittent sentence could be served.
[78] The sentencing judge announced the sentence at the January 14, 2022 hearing. She stated that because there were two serious breaches of court orders, she was considering a 6-month jail sentence, but decided on 3 months less a day to be served intermittently. She explained again that because “we’ve all been on house arrest” during the COVID-19 pandemic she rejected imposing a conditional sentence.
[79] The issue for this court is whether the sentencing judge erred in her approach to imposing an appropriate and fair sentence for the appellant’s contempt. In Boily v. Carlton Condominium Corp. 145, 2014 ONCA 574, 121 O.R. (3d) 670, this court set out 6 relevant factors to determine an appropriate sentence for civil contempt:
(a) The proportionality of the sentence to the wrongdoing;
(b) The presence of mitigating factors;
(c) The presence of aggravating factors;
(d) Deterrence and denunciation;
(e) The similarity of sentences in like circumstances; and
(f) The reasonableness of a fine or incarceration.
[80] Although the sentencing judge referred to a similar list from Business Development Bank of Canada, which this court drew from Boily, after listing the factors, the sentencing judge did not discuss how any of them applied to the facts of this case, or undertake any further analysis. In addition, she made her decision to incarcerate in April 2021 before she had received any submission from the appellant.
[81] In my view, because of these errors, the decision to incarcerate the appellant as the penalty for contempt must be set aside. It then falls to this court to impose the appropriate sentence.
[82] The first factor is proportionality. The appellant’s conduct is serious and constitutes deliberate disobedience of court orders. While the list of union members’ contact information does not contain serious confidential personal information, the problem in this case was the appellant’s threatened use of the Confidential List to disseminate defamatory allegations and his subsequent disregard for court orders. As I indicated earlier, although the appellant chose his own way to comply with the orders, thereby thwarting the ability to examine his devices, there is no suggestion that he in fact retained the Confidential List.
[83] The second factor is deterrence and denunciation. The appellant has had his action struck out, has outstanding costs orders and a defamation judgment against him. These facts will inform the method for imposing a deterrent and denunciatory sentence.
[84] The aggravating factors are clear. The appellant has exhibited a disregard for court processes and has been subject to a contempt order for a prolonged period. The mitigating factors are the appellant’s financial, health and family responsibility circumstances.
[85] Although the court is to consider similar sentences in like circumstances, this case has the unique feature that the appellant has had his Wrongful Dismissal Action against these respondents struck out with costs. That fact must be factored into any consideration of like circumstances.
[86] Finally, the court should assess the reasonableness of imposing a period of incarceration rather than another penalty. In my view, the imposition of a term of incarceration in this case was not a reasonable penalty in all the circumstances.
[87] The sentencing judge was considering a period of house arrest under a conditional sentence as appropriate. Her reason for rejecting that option was flawed. While the population was under a form of quarantine during the COVID-19 pandemic, that quarantine is not equivalent to house arrest, which is a punitive sentence that forbids leaving the house except under strict conditions. As recognized by the Supreme Court in R. v. Proulx, 2000 SCC 5, [2000] 1 S.C.R. 61, at para. 22, a conditional sentence is a “punitive sanction capable of achieving the objectives of denunciation and deterrence.” A conditional sentence is a sentence of imprisonment: it is intended to be punitive, but also addresses rehabilitative objectives.
[88] In addition, the sentencing judge failed to consider the totality of the circumstances which had become clear by January 2022. The appellant had his action struck and had numerous substantial costs awards against him. The sentencing principle referred to as the totality principle should have been considered and applied in this case: Poulie v. Johnston, 2022 ONSC 5186, at para. 47. The court is not to impose a crushing sentence, but a proportional one.
[89] Conditional sentences align with the dual purpose of civil contempt orders. The primary objective is to coerce and persuade people into obeying court orders, while punishment serves as a secondary goal: Ontario (Attorney General) v. Paul Madger Furs Ltd. (1993), 12 O.R. (3d) 72 (Gen. Div.). This court has previously recognized the appropriateness of conditional sentences for civil contempt: Astley v. Verdun, 2015 ONCA 543, 70 C.P.C. (7th) 142, leave to appeal refused, [2015] S.C.C.A. No. 332. In contrast, incarceration for civil contempt is rare and is a penalty of last resort: Business Development of Canada, at para. 82. It was necessary to consider whether any other penalty short of incarceration would be a sufficient sanction for the gravity of the contempt, taking into account this purpose and the principles set out above: Business Development Bank of Canada, at para. 89.
[90] A conditional sentence is appropriate in these circumstances. The appellant’s actions were serious. His actions reveal a disregard for the court’s authority. However, a penalty short of incarceration is sufficient. The appellant attempted to purge his contempt in his own way by destroying his devices, which did not serve any personal or financial advantage, and there is no suggestion that he in fact retained the Confidential List. His conduct has led to the dismissal of the Wrongful Dismissal Action and substantial financial and costs awards against him. Further, the appellant has health concerns, family responsibilities, and no criminal record. A carceral sentence is not necessary or proportionate in light of these circumstances.
[91] Having regard to all of the circumstances, I would impose a conditional sentence of 14 days on the following conditions:
(a) Mr. Oliveira will be under house arrest for 14 days. He will be required to remain in his residence except for medical appointments or medical emergencies involving himself or his family, shopping trips to purchase groceries or other necessary items of less than two hours duration twice per week, and activities directly related to compliance with Ferguson J.’s December 23, 2020 order and the costs orders in this case;
(b) Mr. Oliveira will keep the peace and be of good behaviour;
(c) Mr. Oliveira will carry a copy of the conditional sentence order with him whenever he leaves his residence, for the duration of the conditional sentence order.
Conclusion
[92] In the result, I would dismiss the appeal of the order striking out the Wrongful Dismissal Action and the corresponding costs order. I would also dismiss the appeal from the finding of contempt in the Breach of Confidence Action, but I would set aside the sentence imposed, and instead impose a conditional sentence of 14 days. I would also reduce the costs award for the contempt proceedings from $75,000 to $50,000.
[93] As success on the appeal is divided, I would order no costs of the appeal.
Released: August 2, 2023 “K.F.”
“K. Feldman J.A.”
“I agree. P. Lauwers J.A.”
“I agree. Roberts J.A.”
[1] To physically destroy his devices, Mr. Oliveira used a power drill to bore several holes through his computer hard drive, rendering it unusable and its data unrecoverable. He also disassembled his phone thus making it inoperable.
[2] Justice McGee referred to the sentencing reasons of August 29, 2021 where Ferguson J. held that the appellant would be subject to a period of incarceration. However, McGee J. did not specifically note this sentence in her reasons.