Appeal: John Citti and Lester Yamashita (Appellants) challenged the sanctions imposed by the Superior Court for the respondents' contempt of court.
Background:
Eric A. Klein, Evan L. Klein, and associated entities (Respondents) were found in contempt for violating a Mareva injunction by mortgaging a property and failing to deposit rental income into a trust as required.
The respondents did not make payments on the mortgage, leading to the property's surrender and subsequent sale.
Lower Court Decision:
The Superior Court ordered a $35,000 fine and the payment of $15,474.32 in costs. Failure to pay would result in the striking of the respondents' defense and counterclaim.
The appellants sought more severe sanctions, including imprisonment and full indemnity costs.
Appeal Decision:
The Ontario Court of Appeal upheld the lower court's decision.
The court agreed with the motion judge that the contempt was modest, involved remorse from the respondents, and did not cause direct financial loss to the appellants.
The decision to impose a fine instead of imprisonment was considered reasonable given the circumstances, including the COVID-19 pandemic.
The court also upheld the partial indemnity cost award for the sanctions phase, finding no reason to interfere with the lower court's discretion.
Outcome:
The appeal was dismissed, and the appellants were ordered to pay $5,000 in costs to the respondents.
