All About Estates

Cat and Mouse with the Court is A Dangerous Game

Clients usually want to know what happens when an opposing party does not follow a court order.  As can be seen in Estate of Paul Penna, imprisonment is a possibility, but the widely-held view has been that imprisonment is unlikely to be ordered in civil cases unless a finding of contempt of court has been made more than once already.  This view may be outdated, though.  In the recent case of Cellupica v. Di Giulio 2011 ONSC 1715 (CanLii), Justice Brown held that a 90 day custodial sentence was appropriate, even though this was the “contemnor’s” first offence.  In this case, Michael Di Giulio had purported to invest the plaintiffs’ money – some $2.5 million – on their behalf, posing as an investment advisor. He defrauded them of all of the funds and the plaintiffs commenced an action and eventually obtained default judgment against him.  As is often the case where default judgment is obtained, Mr. Di Giulio did not attend his examination in aid of execution. He also failed to produce certain banking records which he had agreed to obtain in a consent order.  In an October, 2010 decision, Justice Brown found that Mr. Di Giulio was in contempt of court.*

In determining Mr. Di Giulio’s punishment, Justice Brown held that the fact that this was Mr. Di Giulio’s first offence was not enough of a mitigating factor to outweigh other aggravating factors that favoured a custodial sentence, such as Mr. Di Giulio’s lying to the court, not appearing at previous court dates and “playing a cat-and-mouse game with the creditor plaintiffs in an effort to avoid their legitimate efforts to examine him in aid of execution.” In the end, it was the “pronounced disdain” which Mr. Di Giulio exhibited towards the legal system by turning his back on court orders which netted him three months’ imprisonment.

While this decision is not made in the estates context, the principles considered by the court are equally applicable to estates practitioners. Justice Brown observed that the trend of the Ontario courts in recent years in sentencing contemnors has been away from leniency. This decision adds further weight to that pronouncement.

Angelique Moss

*The decision is also notable, as are many other of Justice Brown’s decisions, for its cry for judicial reform.  Mr. Di Giulio did not attend one of the court hearings, apparently because he simply could not locate the court room where the hearing was taking place, as it had been changed from the originally-scheduled courthouse.  In agreeing that Mr. Di Giulio’s absence on that occasion may not have been deliberate, Justice Brown commented that “the  failure of the Toronto Region of the Superior Court of Justice to provide litigants, counsel, and members of the public with comprehensive lists of all proceedings for a sittings day at all four courthouse locations or the option of accessing such lists on-line through the Superior Court of Justice website constitutes a systemic failure by this court to provide users of the court with information necessary to ascertain the location of proceedings which may affect them.”

About Angelique Moss