Citation: National Bank of Canada v. Weir, 2009 NSSC 287
Date: 2009/09/22
Docket: Hfx No. 307548
Registry: Halifax
Between:
NATIONAL BANK OF CANADA
Plaintiff
v.
LOWELL R. WEIR
Defendant
Judge: The Honourable Justice David MacAdam
Heard: September 22, 2009, in Halifax, Nova Scotia
Written Release
of Oral Decision: September 28, 2009
Counsel: Mr. David G. Coles, Q.C. for the Plaintiff
By the Court:
[1] On February 20, 2009 the Honourable Chief Justice Joseph Philip Kennedy granted a motion by the plaintiff, which was incorporated into an order that was signed by the Chief Justice on February 26th. The order provided:
... that effective at 4:00 pm on February 20th, 2009 and until the 2009 annual meeting of the shareholders of National Bank of Canada is closed, Lowell R. Weir is restrained from communicating in writing – including, but not limited to, by letters, facsimile transmissions, e-mails or internet postings – with any shareholder of National Bank of Canada or any person exercising the voting rights attached to shares in the share capital of National Bank of Canada, to solicit the exercise or non-exercise of proxy votes;
... that Lowell R. Weir prior to 12:00 pm Saturday, February 21st, 2009, disclose to counsel for the National Bank of Canada the identities of all persons contacted by Lowell R. Weir in writing, including, but not limited to, by facsimile transmissions, e-mails or internet postings with the view of soliciting the exercise of proxy votes of shares of the National Bank of Canada.
[2] The application related to the defendant soliciting proxies from shareholders of the plaintiff, in anticipation of a forthcoming annual general meeting of the plaintiff. The plaintiff alleged the solicitation violated s. 156.05(1)(b) of the Bank Act, S.C. 1991, c.46, in that they had not been copied to the plaintiff or its auditors.
[3] On February 21, 2009 the defendant provided a listing of individuals and/or corporations he apparently contacted with regard to soliciting the exercise of proxy votes.
[4] The plaintiff says that notwithstanding the order of Chief Justice Kennedy prohibiting the defendant from making any internet postings soliciting the exercise or non-exercise of proxy votes, “... effective at 4:00 pm on February 20th, 2009 and until the 2009 annual meeting of the shareholders of National Bank of Canada is closed ...,” on an internet IP address registered to the defendant, at 9:17 pm on February 20, 2009 the defendant, through an alias, made the following internet posting:
... I think the end is near. I hope most management are defeated and gone.”
[5] In his written submission counsel for the plaintiff states:
The aforesaid Internet posting was an intentional solicitation of the exercise or non-exercise of proxy votes, which was made at a time specifically prohibited by the Order of Chief Justice Kennedy.
[6] Counsel’s submission also refers to Chief Justice Kennedy’s order where it requires the defendant, “prior to 12:00 pm Saturday, February 21, 2009,” to disclose the identities of all persons he contacted soliciting the exercise of proxy votes. Although the defendants provided an “alleged complete list of persons solicited,” counsel suggests the list was incomplete, in that the defendant was utilizing an IP address, registered in his name, “to intentionally make Internet postings under various aliases with a view of soliciting proxy notes ...” of the plaintiff.
[7] By Ex parte Motion filed September 15, 2009, the plaintiff “moves for an order for leave to file a motion for contempt as against the defendant.”
[8] The plaintiff, in seeking “permission” to bring a motion for contempt, references Nova Scotia Civil Procedure Rules 89.04 and 89.05(1) which read as follows:
Motion or application by person other than judge
89.04 (1) A person other than a judge may not make a motion for, or apply for, a contempt order, unless a judge permits.
(2) A party, the prothonotary, a person appointed by the court to perform an act on behalf of the court, the Attorney General of Nova Scotia, or another interested person may make a motion for permission to do either of the following:
(a) make a motion for a contempt order in a proceeding to which the conduct alleged to be contemptuous relates;
(b) start an application for a contempt order, if the conduct alleged to be contemptuous does not relate to a proceeding.
Notice of motion for contempt order
89.05 (1) A person who has permission to make a motion for a contempt order may file a notice under Rule 23 – Chambers Motion, in the proceeding to which the alleged contemptuous conduct relates.
[9] The motion, as noted, is brought ex parte. Counsel’s submission continues:
The Nova Scotia Barristers’ Society has published educational notes that accompany each new Nova Scotia Civil Procedure Rule. Specifically,
Rule 89.04 now specifies who may move or apply for a contempt order. The notice provisions no longer expressly provide for substituted service or dispensing with service. The previous Rule required an ex parte leave application. Permission is still required and it appears implicit that permission may still be sought ex parte since the Rule does not provide for notice at that stage. [Emphasis added]
[10] The relevant previous Rule, that being Rule 55.02(1) of the Nova Scotia Civil Procedure Rules (1972) provided:
Application for leave to apply for a contempt order
55.02 (1) An application [now a motion] shall not be made to the court for a contempt order unless the court, on an ex parte application first grants leave to make the application. [E. 52/2(1)]
[11] As stated in Rule 89.05(1), the motion for contempt is made under Rule 23. Rule 89.04 stipulates the requirement for first obtaining the Court’s permission, before a person, other than a judge, may make a motion, or apply for, a contempt order. The Rule does not indicate under what Rule the motion for permission is to be brought. Presumably Rule 23 would be the relevant Rule on the initial motion for permission, as well. Rule 23 only provides the procedure for making the Chambers motion. Although Rule 23.14(1) stipulates what an ex parte motion must contain, the Rule does not indicate whether the motion may be made ex parte. Rule 22.03(1), on the other hand, provides:
Ex parte motion
22.03 (1) A party may make an ex parte motion in one of the following circumstances:
(a) the order sought does not affect the interests of another person;
(b) the party makes a motion in an ex parte application;
(c) the other party is disentitled to notice under Rule 31 - Notice;
(d) legislation or these Rules permit the motion to be made ex parte;
(e) there are circumstances of sufficient gravity to justify making a motion without notice, for which examples are listed in Rule 22.03(2).
[12] Although Rule 31 is indicated to “... supplements other Rules that require a party to give notice, or that provide a consequence of receiving notice”, it would not appear to be relevant on this application. The issue here is whether notice is required not on the nature of the notice or the consequence of receiving notice.
[13] An application for contempt, even at the stage of seeking permission to bring the motion, affects the “interests of another person.” To be the subject of a contempt application, is to be embroiled in serious, and potentially liberty-threatening litigation. Such a person’s interests are affected at all stages, not solely on the occasion of the final determination.
[14] None of the remaining circumstances listed in Rule 22.03(1) are here applicable. In particular the stipulation in the former Rule 55.01 that the application cannot be made, “unless the court on an ex parte application first grants leave ...” does not appear in the current Rule. The Rule is silent as to whether the application can be made “ex parte” or must be made “on notice.”
[15] Counsel, relying, at least in part, on the “published educational notes” published by the Nova Scotia Barristers’ Society, suggests there is nothing in the Rules to suggest any change. Counsel observes that, if the plaintiff is successful on the application for permission, the defendant will receive notice of the contempt hearing. Counsel also suggests, if the defendant also receives notice of the initial application, he will be able to twice argue the merits of the contempt application.
[16] However, the legal determination on each application is different. As counsel observes in his written submission, the onus on the applicant, in seeking permission to bring the application, is to satisfy the court there is “an arguable case” demonstrating that the defendant was in contempt. On the contempt hearing the onus is quite different. The merits of the application are only determined at the contempt hearing.
[17] Even under the previous Rule, a defendant who learned of an application for leave to bring a contempt application was entitled to appear and argue that there was no arguable case of contempt. Such a right was recognized by the Nova Scotia Court of Appeal in Mehta v. College of Physicians and Surgeons of Nova Scotia, [2000] N.S.J. No. 391, 2000 NSCA, 141. In Mehta the appellant appealed an order of a Chambers judge denying him leave to bring an application for contempt of court. He had applied ex parte pursuant to Rule 55.02, for a contempt order against the respondents. The applicant argued that the Chambers judge erred in allowing the respondents to participate and file material, the application having been made ex parte. The Court of Appeal held, at para. 5, that although the respondents were not entitled to notice of the leave application, “they became aware of it and it would have been highly artificial for the judge to preclude their participation. The material filed by the respondents outlined the rather complicated procedural history of the file and was, no doubt, of assistance to the judge in dealing with the application on its merits. Notwithstanding the participation of the respondents, the judge considered only whether leave should be granted and did not convert the application into anything other than a leave application.”
[18] There are, of course, some motions, although silent as to whether they may be made ex parte, that are obviously to be made without notice to a person who may be affected. Rule 31.10 provides for a “substituted method of giving notice of a proceeding.” Although silent as to whether the motion may be made ex parte, the circumstance of such a motion impliedly permits such a motion to be made ex parte.
[19] At issue is where the Rules neither stipulate a requirement for service or that an application can, or may be brought, ex parte, should those persons that may be affected, be given notice?
[20] Bateman, J.A., on behalf of the Nova Scotia Court of Appeal, in Society of Lloyd’s v. Van Snick, 2000 NSCA 84, 2000 CarswellNS 189, at para 22, addressed this question:
22. The appellant has argued that where an enactment is silent on the issue of notice, no notice is required. That proposition was rejected by this Court in Gaston v. Burton, (1998), 172 N.S.R. (2d) 342 (N.S. C.A.). There, a nonparty, Mr. Gaston, appealed from an order of the Supreme Court directing him to appear at a discovery examination and ordering that he pay costs of an aborted discovery and costs of the application. The application, pursuant to Civil Procedure Rule 18.15, had been made without notice to Mr. Gaston. That Rule empowers the court to grant relief where a person refuses or neglects to attend a discovery examination. It is silent on whether notice is required where such relief is sought. On the appeal the respondent argued that unless notice is specifically required by a Rule, an application may be made ex parte. Pugsley, J.A., for this Court, rejecting that submission said:
42. I do not accept, as was submitted by Mr. Saulnier before Justice Moir, that Mr. Saulnier’s ex parte application before Justice Boudreau was sanctioned under C.P.R. 37.04(1).
43. It provides:
An application my be made ex parte where,
(a) under an enactment or rule, notice is not required;
(b) the application is made before any party is served;
(c) the applicant is the only party;
(d) the application is made during the course of a trial or hearing;
(e) the court is satisfied that the delay caused by giving notice would or might entail serious mischief, or that notice is not necessary.
44. Mr. Saulnier submitted to Justice Moir that since C.P.R. 18.15 does not explicitly provide that notice is required to be given to a person against whom a penalty is sought, that C.P.R. 37.04(1)(a) should be interpreted to mean no notice at all is required.
45. I interpret C.P.R. 37.04(1)(a) as impliedly stipulating that notice should always be given to a person who may be affected by any proceeding directed against him, or her.
46. That requirement is an essential ingredient of due process. No person should be “condemned unheard or without having had an opportunity of being heard.” (Jowitt’s Dictionary of English Law, Sweet and Maxwell, 1977, p. 161, definition of audi alteram partem).
47. I come to this conclusion notwithstanding the provisions of C.P.R. 37.04(1)(c).
. . . . .
49. In my view, this section as well, should be interpreted in a way that is not inconsistent with the obligation of a court to give an opportunity to an individual to state his or her case when the decision of the court can affect that person’s rights.
50. Such an interpretation is consistent with the decision of this court in Walker v. Delory et al (1988), 90 N.S.R. (2d) 1, 230 A.P.R. 1 (C.A.). In that case, the plaintiff brought an action in negligence against three doctors. Counsel could not agree as to which of them was first entitled to examine the opposite parties on discovery. The plaintiff then obtained an ex parte order compelling the doctors to appear and be discovered first. The defendants appealed.
51. In the course of allowing the appeal and setting aside the order of the Chamber’s judge, Justice Matthews, on behalf of the court, held at p. 4:
With deference to the Chambers judge, there was no account taken of the issues concerning the procedural rights of the parties. He ignored the basic principle that the other side should be heard (‘Audi alteram partem’).
52. The principle has long been identified as a part of natural justice and an essential constituent of a fair hearing. (Emphasis added)
[21] Like an application for contempt, the application considered by Justice Bateman involved an initial application (to register the judgment) followed by a requirement for notice to the debtor, when the debtor would have an opportunity “to set aside” the registration of the judgment. Notwithstanding the entitlement to apply “to set aside” the registration of the judgment, Justice Bateman confirmed the entitlement to notice of the initial application to register the judgment, in the absence of any legislation or Rule providing for the application to be made ex parte.
[22] Rule 89.01(2)(a) provides that, while “Rules outside this Rule apply to contempt processes ... (a) a judge’s direction for the conduct of the process prevails over another Rule ....” In the circumstances, it is unnecessary to consider whether this Rule may have any application to this motion.
[23] The motion is adjourned sine die, pending notice of the motion being served on the defendant.
J.