In a January 2020 ruling, a New Brunswick court has found an executor of an estate to be in contempt of court for distributing estate assets to beneficiaries, in blatant violation of a non-dissipation order.
The case reminds us of what should be obvious: that court orders are not mere suggestions, they’re orders, and, if litigants fail to abide by same, they could be found to be in contempt of court. Regardless of whether a litigant has been “deliberately contumacious”, they can still be found in contempt if it is shown that they intentionally disobeyed a court order. The question then becomes, what is the appropriate remedy for contemptuous acts.
In Jensen v. Jensen Estate, Betty Jensen, the surviving spouse of the deceased, Sterling Edward Jensen, had commenced an action against Sterling’s estate and its executors, claiming various forms of relief, including declarations that the deceased’s assets had been mismanaged. The matter was set to proceed to a trial, however, Betty passed away and the trial was adjourned.
The executors of Betty’s estate obtained a court order to continue the action on behalf of Betty’s estate, and an order that no further assets of Sterling’s estate could be distributed, until conclusion of the action or further court order. The Court granted a non-dissipation order on November 23, 2017 that read as follows:
“until judgement is rendered in this action no further assets of the Defendant [Sterling’s] Estate shall be transferred or disposed of except as necessary to pay the property taxes and other such expenses or as required by law or further order from this Court”
In spite of the non-dissipation order, on February 28, 2018, the executor of Sterling’s estate paid $7,000 each to 5 beneficiaries of Sterling’s estate, including to himself. On May 8, 2018, the executor transferred land that was owned by the Sterling’s estate to another beneficiary. No court orders had been obtained sanctioning such transfers in advance of these transactions being made.
The executors of Betty’s estate subsequently brought a motion for an order that the executor of Sterling’s estate be declared in contempt of court for transferring estate assets and flouting the non-dissipation order.
The defendant conceded that he had violated the terms of the non-dissipation order, but he argued that he did not intend to violate the “spirit of the order” and he believed, at the time of the transfers, that he could distribute some funds to some beneficiaries despite the existence of the non-dissipation order.
The Court quickly rejected these defenses, concluding that there was “no question” that the executor of Sterling’s estate was in contempt. Whether the executor intended to breach the order or thought his actions were proper was completely irrelevant.
The Court in Jensen cited the New Brunswick Court of Appeal’s ruling in Boivin v. MacDougall, 2005 NBCA 62 which found that
“to constitute contempt, the act or omission which contravenes the injunction must have been intentional but not necessarily deliberately contumacious. It is well established that ‘it is no answer to say that the act was not contumacious in the sense that, in doing it, there was no direct intention to disobey the order’…. In other words, the party seeking a finding of contempt must prove no more than that the defendant intentionally did the forbidden act or consciously omitted what was required.”
The ruling in Jensen is a clear indication from the judiciary that, regardless of whether a litigant has acted with the direct intention to disobey an order, regardless of whether the litigant thought that their actions were permissible, so long as they have acted in violation of an order and have done so willfully, they can be found in contempt.
The Court concluded that the wording of the non-dissipation order could not have been clearer, and that the executor was clearly in contempt. The next issue was a determination of the proper remedy for such wrongful actions.
Under both Ontario and New Brunswick law, if a litigant is found in contempt, the punishment is entirely in the court’s discretion and the court may make any order that the it deems just, including an order that the party in contempt: be imprisoned; pay a fine; pay costs or expenses; comply with any other order; or do or refrain from doing some act.
In Jensen, the Court ruled that the executor pay the funds that had been improperly distributed to the beneficiaries back to the estate of Sterling, as well as pay a portion of the moving parties’ costs.
The reasons set out that “court orders are not suggestions”, and the case is a lesson that where a court order is deliberately violated, the contravening party is liable to be declared in contempt, with the punishment for same being entirely in the court’s discretion.
 Jensen v. Jensen Estate, 2020 NBQB 8 A
This paper is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This paper is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.