Criminal & Civil Contempt and Intent

December 28, 2022

By Jonathon Clark

We have written before about contempt of court, and its importance in maintaining respect for the administration of justice as well as to promote the enforcement of court orders.

To refresh your memory, the elements of contempt are:

  • the order alleged to have been breached “must state clearly and unequivocally what should and should not be done”;
  • the party alleged to have breached the order must have had actual knowledge of it; and
  • there must be an intentional act of “wilful and deliberate conduct” (but not necessarily specific intent to bring court into disrepute).

THE ISSUE

What does it mean to say that there must be an intentional act of willful and deliberate conduct?

THE CASE

Castillo v. Xela Enterprises Ltd looks at that question in the context of both criminal and civil contempt and the penalties that flow from a finding of civil but not criminal contempt.

The case involves lengthy and complex multijurisdictional litigation with respect to a poultry business in Guatemala. An Ontario Court had ordered the appointment of a receiver during that proceeding. One of the interested parties, Gutierrez, then preceded to swear a false affidavit in Guatemala that misled the authorities in Panama with respect to the role of the receiver.

The receiver moved for a finding of contempt. The judge found that civil contempt had been proved beyond a reasonable doubt but declined to make a finding of criminal contempt.

It did not help Mr. Gutierrez that he was found to be a less than credible witness. That compounds the difficulties created by his swearing a false affidavit in Guatemala in the first place.

CIVIL CONTEMPT

The judge on the contempt motion found that Gutierrez knew what he was doing when he signed the false declaration. He was aware of the contents of the document and swore that they were true despite knowing that they were untrue. He knew that the purpose of the declaration was to attempt to bring a criminal complaint in Panama to challenge the receiver’s actions.

The judge found that the Superior Court of Ontario had jurisdiction over the alleged contempt even though the acts complained of occurred in Guatemala and Panama.

Canadian courts will generally exercise jurisdiction over contempt matters where there is a real and substantial link between the misconduct and Canada. Although it is not enough that the initial order was issued in Canada, that was a substantial reason for Ontario to take jurisdiction. The reason a receiver was appointed in Ontario in the first place is because one of the companies involved an Ontario corporation. The false declaration referred to Gutierrez as president and director of the Ontario corporation. Add those facts together and you have jurisdiction.

The terms of the order appointing the receiver breached by Gutierrez’ false affidavit were clear and unequivocal. If the receiver exercised its rights under the order, no one else was to do anything to interfere with the exercise of those rights. Of course, that is exactly what happened by Gutierrez providing the affidavit.

Another section of the order prohibited any other proceeding or enforcement process being commenced in any court or tribunal against the receiver. That was also the intent of Gutierrez’ affidavit.

If Gutierrez truly believed that the receiver’s conduct was illegal or not in accordance with law, he could have returned to court for directions or to have the appointment order set aside. He could have sought leave to challenge the receiver’s actions in the courts of Panama. Gutierrez was an active participant in the proceedings throughout the receivership process, was represented by counsel, and knew or ought to have known about these options.

There was no issue that Gutierrez was aware of the appointment order and understood the key provisions.

It did not matter whether Gutierrez had knowingly chosen to disobey the order. The intent required by the test for civil  contempt is not an intent to breach the order. Gutierrez intended to carry out an act that is in fact prohibited by the order. The Gutierrez affidavit was prohibited by the order – not specifically but because of the intention to use it to breach the order.

Other potential defences advanced by Gutierrez were also rejected out of hand:

  • it did not matter whether Gutierrez intended to interfere with the administration of justice;
  • it is not a defence if a person’s own actions that contravened the terms of the order make it impossible for that person to purge their contempt; in layman’s terms this is the equivalent of “you made your own bed now you must lie in it”;
  • it is no defence for a person with a sophisticated understanding of business to claim that they were misled and to attempt to point the blame at another to avoid responsibility for their own actions; and
  • it is not a defence that an order should never have been granted or that the order is wrong or ineffective in law.

Gutierrez was found beyond a reasonable doubt to have committed civil contempt.

CRIMINAL CONTEMPT

What about criminal contempt? How does that differ from civil contempt and why was Gutierrez not found liable for criminal contempt?

Criminal contempt would only be found if Gutierrez had defied or disobeyed the court order in a public way. The standard of intention for criminal contempt is also higher than for civil contempt. For criminal contempt, the public defiance or disobedience of the court order must be done with intent, knowledge or recklessness as to the fact that the public disobedience would tend to depreciate the authority of the court.

The judge made no specific findings about the criminal contempt because, in his opinion, the notice of motion for contempt did not sufficiently put Gutierrez on notice that he was being accused of criminal contempt. Criminal contempt is a very serious matter, and thus the procedural requirements must be carefully complied with.

In a separate hearing and order, the same judge considered the penalty for Gutierrez’ contempt. The receiver sought an order of 90 days imprisonment for Gutierrez plus a fine and the requirement that Gutierrez fully indemnify the receiver for the costs of the contempt motion. Gutierrez submitted that the fine plus a term of probation would be sufficient.

The purpose of a sentence for civil contempt is different than for criminal contempt. A sentence for criminal contempt is a public punishment designed for general deterrence. The purpose of the sentence for civil contempt is primarily designed to coerce the violator into conforming with the order to protect enforce the rights of the aggrieved party.

While gaining compliance with the court orders is the primary aim in civil contempt proceedings, the court must also be aware that undermining the authority of the courts diminishes the respect for law and therefore there is a public aspect to even a civil contempt. The penalty must ensure that society maintains its respect for the courts and that the court process is respected.

Imprisonment is a rare punishment for civil contempt, although it is common for criminal contempt. Ordinarily a finding of civil contempt together with a fine or other penalty is sufficient to gain compliance and restore the authority of the court. Imprisonment for civil contempt is saved as a sentence of last resort.

As with other sentencing exercises, there are both mitigating and aggravating factors that help determine an appropriate sentence. We have examined those in previous articles. The judge went through the various factors present in the Gutierrez case. Although this was Gutierrez’ first contempt, he had not effectively purged his contempt, nor had he offered any apology or expressed remorse for his conduct.

The blatant, deliberate, wilful, and unrepentant nature of Gutierrez’ conduct is an aggravating factor.

In addition to specifically denouncing and deterring Mr. Gutierrez from committing further contempt, it was important for general deterrence that there be a significant penalty.

The judge considered penalties from other cases over the last 20 years. Although jail is seldom imposed for a first offence of civil contempt, a fine would not reflect the seriousness of Gutierrez’s conduct. It would not accomplish the objectives of general and specific deterrence.

Gutierrez was sentenced to 30 days in jail.

The Castillo case illustrates and emphasizes the importance of obedience to court orders.

TAKEAWAYS

  • Disobeying court orders is not only wrong as between the parties to that order, but it also risks public disrespect for the courts.
  • For contempt to be a criminal matter, both the actions of the wrongdoer and the intention must be more serious than in a civil contempt.
  • However, in a civil contempt, there is no requirement for specific intention to disrespect the court. Carrying out an action which is likely to encourage disrespect is sufficient without specifically intending that to result.
  • Although jail is a rare penalty in civil contempt, a serious enough civil contempt will result in a jail sentence.

WHAT WEILERS LLP CAN DO TO HELP YOU

Contempt of court is a serious issue. It requires advice and representation by lawyers who are serious about understanding the process and who have credibility with and an understanding of the local judges. In Thunder Bay, this makes the litigation team at Weilers LLP an outstanding choice. If you find yourself on either side of a contempt issue, please give Weilers LLP a call and see if we are the right lawyers for you.