Ontario Court of Appeal applies proportionality principles in lowering costs, imprisonment

In the case of Oliveira v. Oliveira 2023 ONCA 520, recently heard by the Ontario Court of Appeal, the appellant, Jack Oliveira, appealed a decision by the motion judge, resulting in a sentence of 89 days in jail and $75,000 in costs.

Background, motion judge’s decision

The appellant was employed by the respondent, LIUNA Central and Eastern Canada. The appellant was terminated from his employment and subsequently brought a claim for wrongful dismissal. During this action, the appellant’s then counsel received a report from the respondent’s counsel which was marked “Privileged and Confidential.” Despite being instructed otherwise, the appellant emailed the report to non-parties, including the Toronto Star newspaper, and refused to retract the delivery of the report. The respondent moved for an order to find that the appellant had breached the deemed undertaking rule. This motion was heard nearly three years later, wherein the motion judge struck the appellant’s pleadings and imposed costs of $36,725 against him.

By the time the motion judge addressed the matter, two related issues had emerged: a defamation action and a breach of confidence action. The defamation case was initiated by the respondent’s business manager against the appellant due to his widespread dissemination of false allegations. This led to a judgment of $30,000 in damages, a permanent injunction and costs totalling $51,158.53.

The breach of confidence action arose when the appellant was asked to pay the judgment, to which he responded by threatening to send the false allegations to LiUNA union Local 183’s 10,000 members, implying he had a contact list for the members. An interlocutory injunctive relief was obtained through the breach of confidence action, and the appellant was ordered to return the contact list, submit his electronic device for inspection and refrain from using this information. However, the appellant did not comply with these orders and physically destroyed his electronic device. This led to a finding of contempt, resulting in a sentence of 89 days in jail to be served intermittently, along with costs totalling $75,000 awarded against him.

Ontario Court of Appeal reasoning, decision

On appeal, the appellant appealed the dismissal of his claim, the contempt ruling, the incarceration sentence and the costs imposed.

Regarding the dismissal of his wrongful dismissal claim, the appellant argued that the motion judge imposed a disproportionate remedy and erred in law by considering the appellant’s conduct in the other proceeding. The Court of Appeal found no error in the motion judge referring to the appellant’s conduct in the related proceeding, as long as he was not punished twice for the same conduct. The Court of Appeal also found the costs award reasonable.

In relation to the contempt ruling, the appellant argued that the orders lacked clarity and were unequivocal. However, the Court of Appeal dismissed this argument. The appellant was fully aware of his obligations but failed to follow them. Despite knowing his obligations, the appellant did not submit his electronic devices for inspection and went as far as physically destroying his electronic devices. The appellant further argued that the contempt order was premature due to his motion for leave to appeal to the Divisional Court. This argument was also invalid. Courts have established that an order must be followed unless specifically stayed by a rule or another order. In other words, filing an appeal motion doesn’t automatically suspend the need to comply with a court order.

In awarding costs for $75,000, the motion judge held the appellant accountable for the elevated costs and commented on his apparent lack of understanding regarding the contempt of court orders. However, the Court of Appeal emphasized that the principle of proportionality must guide decisions in a contempt hearing, including costs. The motion judge’s rationale primarily focused on the breached orders, the appellant’s conduct driving up costs and his failure to acknowledge his contempt. However, the judge did not consider other punitive measures alongside the cost award, including the imposed period of incarceration. Given these circumstances, the Court of Appeal reduced costs to $50,000.

The Court of Appeal conducted a further analysis to determine if the sentencing judge had made errors in her approach to imposing a just and suitable sentence. There are six factors that courts use to establish a fair civil contempt sentence: proportionality, mitigating and aggravating elements, deterrence and denunciation, comparison to similar cases and the reasonableness of the penalty.

While the sentencing judge acknowledged these factors in her ruling, she did not explain how they applied to the specifics of this case. Furthermore, she made the decision to imprison the appellant before hearing his submissions. Due to these reasons, the Court of Appeal invalidated the incarceration decision and considered these six factors to impose a more fitting sentence.

The Court of Appeal decided that a conditional sentence is suitable. While the appellant’s serious actions showed disrespect for the court’s authority, a penalty less severe than jail time was deemed sufficient. The appellant tried to rectify his contempt by destroying his devices, but gained nothing and likely did not keep the confidential list. The appellant’s actions caused his case to be dismissed, with hefty financial penalties. Considering the appellant’s health problems, family duties and clean criminal record, the Court of Appeal found that imprisonment was not necessary and imposed a conditional sentence of 14 days.

This case highlights the importance of proportionality, accountability and the consideration of multiple factors when rendering judgments.

This article was written by Dharshani Arumugam and was originally published in Law 360 Canada on August 15, 2023. Dharshani is licensed by the Law Society of Ontario and is an Employment Lawyer at Monkhouse Law. 

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