SCC Clarifies Civil Contempt - Holds Lawyer in Contempt For Returning Client's Funds
The Supreme Court of Canada has clarified the nature of "intent" necessary to find a person in contempt of court. Specifically, it is not necessary to establish the contemnor intended to interfere with the administration of justice or that he or she had a desire to, or knowingly chose to, disobey a civil court order.
Rather, all that must be established is proof beyond a reasonable doubt that the contemnor committed an act, or failed to act, in breach of a clear court order that the contemnor knew about.
In this case, the plaintiff to the underlying action obtained a Mareva injunction enjoining any person with knowledge of the order from dealing with or disposing of the defendant's assets. The defendant's lawyer had received funds in trust in the normal course of performing legal services and returned the majority of the funds to the defendant. The plaintiff successfully moved for an order finding the lawyer in contempt of the injunction. (The action became slightly more complicated at this stage as the lawyer moved to revisit the contempt finding with fresh evidence.) For the purpose of this brief article, what matter is that the issue went up to the SCC to evaluate the nature of "intent" required to commit civil contempt.
The SCC rejected the argument that contumacious intent is necessary to commit civil contempt. Contumacious intent is a desire to disobey the order or knowingly choosing to disobey the order. The SCC found that standard too high a threshold and ruled that it is sufficient to establish that the contemnor had knowledge of the order and breached it.
In this case, the lawyer knew of the Mareva injunction that prevented the client's funds from being dealt with or disposed of and still returned the funds which was sufficient to establish civil contempt.
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