Fraud victims often turn to the courts to protect their rights. In certain cases, a court will make temporary orders without notice to the defendant. These can include Mareva freezing orders to stop assets from being disposed of, or Anton Piller orders that provide for evidence to be preserved. Once these orders are made, the parties subject to them are required to comply with their terms. A person who disobeys a court order can face serious consequences including imprisonment, following a finding of contempt of a court order. The contempt power is an important part of the justice system. It is an enforcement power of last resort that helps ensure that court orders are followed.
Since contempt can lead to serious penalties, courts must decide what protections apply to the person accused of contempt. For example, can that person be forced to testify? Are they entitled to have the contempt hearing take place within a reasonable time? The Supreme Court of Canada recently agreed to hear two appeals on this issue. The cases come from Ontario and Alberta, and the appeal courts reached different conclusions about whether the Charter of Rights and Freedoms apply to contempt proceedings.
In the Ontario case, Sutherland Estate v. Murphy, the issue was whether one contempt finding was wrongly based on testimony the alleged contemnor had been forced to give. The Ontario Court of Appeal noted that even though contempt is often called “civil,” it can still lead to imprisonment. For that reason, the court held that the person accused of contempt had the right under section 11(c) of the Charter not to be forced to testify against themselves. The court found that the motion judge made an error by compelling the testimony and then relying on it to make one of the contempt findings.
In the Alberta case, Lymer v. Jonsson, the Alberta Court of Appeal took a different view. The alleged contemnor argued that the proceedings should be stopped because they had not happened within a reasonable time, contrary to section 11(b) of the Charter. The Alberta court accepted that people accused of contempt are entitled to protections, but said those protections come from the common law, not the Charter. In its view, the Charter did not apply because a court order is not “state action,” which is generally required for the Charter to apply. As a result, the Alberta court concluded that the criminal-law right to a trial within a reasonable time did not apply to civil contempt proceedings.
Together, these cases give the Supreme Court a new opportunity to decide whether the Charter applies to contempt proceedings. If it does not, the Court may also need to explain what protections still apply to people accused of contempt, and the legal basis for those protections.
This is not the first time the Supreme Court has considered civil contempt. In its 1992 decision in Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc., which both appeal courts discussed, the Supreme Court held that contempt has an important public dimension, especially because it can lead to imprisonment. As a result, contempt proceedings must follow basic rules of fairness, even if that makes contempt harder to prove. The majority said contempt cannot be treated simply as a tool for enforcing judgments. If contempt is not enough to enforce court orders in some cases, it may be up to legislatures to create other enforcement tools.
In dissent, Justice L’Heureux-Dubé saw the issue differently. In her view, civil contempt is meant mainly to pressure a person to obey a court order, not to punish them like a criminal offence. Because the dispute is usually between private parties, she cautioned against importing criminal-law protections too readily. She was concerned that doing so could make it much harder for a private party, such as a fraud victim, to enforce an order they had already obtained from the court.
Vidéotron shows the tension at the heart of these two appeals to be heard by the Supreme Court. On one hand, contempt proceedings need safeguards because imprisonment may be at stake. Indeed, in its 2015 decision, Carey v. Laiken, the Supreme Court again affirmed that the contempt power should be used “cautiously and with great restraint” and reiterated that contempt cannot be reduced to a mere means of enforcing judgments. On the other hand, fraud victims need effective ways to enforce court orders. If a fraud victim cannot prove contempt without evidence from the alleged contemnor, and that evidence cannot be compelled, the victim may be left without a practical remedy. Our office will be closely following the developments in this area.