Kelana Holdings Ltd. v 393510 Alberta Ltd.: Civil contempt standards and implications for enforcement

A recent decision by the Alberta Court of King’s Bench in Kelana Holdings Ltd. v 393510 Alberta Ltd., 2023 ABKB 486 [Kelana],[1] provides clarity for parties looking to exercise their rights of enforcement when a party does not comply with their statutory obligations.  In Kelana, the Court of King’s Bench considered the requirements for civil contempt under the Civil Enforcement Act, RSA 2000, c C-15 (the “CEA”),[2] as well as the requirements for civil contempt due to failure to abide by an Order or a similar directive, under the Alberta Rules of Court (the “ARC”).[3]

Section 13(2)(k) of CEA: Civil Contempt for the Failure to Deliver Seized Property

In Kelana, the Applicant sought an Order for civil contempt pursuant to Section 13(2)(k) of the CEA for failing to deliver property which was specified in a Notice of Seizure and Addendum.

Section 13(2)(k) of the CEA provides that:

(k)      where a person

(i)   is under a duty to deliver to a bailiff or an agency personal property that is under seizure, and

(ii)  defaults in delivering the personal property to the bailiff or agency within a reasonable time after being required to do so by the bailiff or the agency,

the Court on application may hold that person liable for civil contempt and award damages and costs against that person.

Under Rule 10.52(3)(b) of the ARC, the Court is authorized to issue an Order for civil contempt if a relevant enactment explicitly allows for such a finding.[4] However, prior to Kelana, there was limited case law interpreting and applying the established jurisprudence for a finding of contempt pursuant to Section 13(2)(k) of the CEA.[5]

Requirements for Civil Contempt

Under the common law, a party applying for a finding of contempt must establish, beyond a reasonable doubt, the following three requirements:[6]

1. The Order alleged to have been breached must state clearly and unequivocally what should and should not be done;
2. The party alleged to have breached the Order must have had actual knowledge of it; and
3. The party allegedly in breach must have intentionally done the act that the Order prohibits or intentionally failed to do the act that the Order compels

(collectively the “Carey Requirements”).

In considering what meaning to ascribe to the term “civil contempt” under the CEA, the Court in Kelana explored the various iterations of civil contempt under the ARC, excluding instances based on conduct in the courtroom. In so doing, the Court made the following findings:

• While civil contempt under the ARC generally arises in circumstances where an Order is not followed, breach of the implied undertaking rule found in Rule 5.33 of the ARC can also result in a finding of contempt;[7] and
• Although civil contempt under Rule 10.52(3)(b) of the ARC can flow from any enactment that so provides, the enactments typically mirror the language used in Rule 10.52(3)(a). For example, civil contempt under provincial statutes generally refer to a person’s non-compliance relating to a notice issued under a statutory authority, or orders and directives.[8]

Although the civil contempt alleged in Kelana was premised on a party’s failure to comply with a section of an enactment, rather than a Court Order, the Court found that the Respondent’s failure to deliver the property under seizure pursuant to the Notice of Seizure and Addendum issued under Section 13(2)(k) of CEA was analogous to a breach of a Court Order, and applied the Carey Requirements accordingly.

Ultimately, however, the Court found that none of the requirements for civil contempt were satisfied.[9] Regarding the first requirement, the Court determined that the Notice of Seizure and Addendum lacked essential details about the property under seizure, instead relying upon overbroad and vague language in describing the property.[10] The Court found that the second requirement was also unfulfilled, as the inadequate description of the property did not provide the Respondent with sufficient notice of the property required to be delivered.[11] Finally, based on the evidence before the Court, the Applicant was unable to establish that the Respondent intentionally failed to comply with its duty to deliver the property under seizure.

PRACTICAL IMPLICATIONS

The Court’s reasoning in Kelana clarifies the requirements for civil contempt under Section 13(2)(k) of the CEA, as well as provincial statutes more generally. Parties looking to hold a Respondent in contempt under provincial statute should give attention to the Carey Requirements, but may need to make necessary modifications in argument to fit the purposes of the enactment they are alleging has been breached.

The failure to establish contempt due to a lack of proper evidence before the Court can attract adverse cost consequences. Therefore, parties should ensure from the outset that proper procedures are utilized and followed. To mitigate evidentiary hurdles in proving contempt under Section 13(2)(k) of the CEA, for example, it is clear from Kelena that the item(s) under seizure should be accurately and specifically identified, described, and recorded, and that overbroad or vague language (such as “miscellaneous”) should be avoided. Notices should clearly state, without errors, what property is to be delivered.

For further questions about this area of law, including civil enforcement issues, please contact Miller Thomson’s Commercial Litigation Group.

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[1] Kelana Holdings Ltd v 393510 Alberta Ltd, 2023 ABKB 486 [Kelana].

[2] Civil Enforcement Act, RSA 2000 c c-15 at s 13(2)(k) [CEA].

[3] Alberta Rules of Court, Alta Reg 124/2010 [ARC].

[4] Ibid at r 10.52(3)(b).

[5] Kelana, supra note 1 at para 40.

[6] Carey v Laikon, 2015 SCC 17 at paras 32 – 36

[7] Olkowski v Nano-Green Biorefineries Inc., 2023 ABKB 441.

[8] Kelana, supra note 1 at paras 88 – 91.

[9] Ibid at para 136.

[10] Ibid at para 132.

[11] Ibid at para 136.