Lymer (Re), 2014 ABQB 674

Court of Queen ’ s Bench of Alberta Citation: Lymer (Re), 2014 ABQB 674 Date: 20141106 Docket: BE03 1446521 Registry: Edmonton In the Matter of the Bankruptcy of Neil Alan Lymer _______________________________________________________ Memorandum of Decision of L.A. Smart , Master in Chambers _______________________________________________________ I. Introduction [ 1 ] Neil Alan Lymer [“Mr. Lymer”] was deemed bankrupt on March 4, 2011 when his

Part III, Division I Proposal was refused by the Court. He is a second time bankrupt. He received an Absolute Discharge in this previous bankruptcy on November 10, 1993. On March 5, 2013 the Trustee applied for Mr. Lymer’s discharge. The Trustee’s report disclosed proven unsecured creditors of $21,148,026.95 and assets of $6,308,008.00. [ 2 ] The cause of Mr. Lymer’s bankruptcy was described as: Expansion of corporations was financed by way of demand promissory notes issued joint and severally by Mr. Lymer and Tri-Corp. Canada Investments Inc. ("Tri-Corp").

Due to overexpansion, Tri-Corp was unable to meet its obligations under these promissory notes and creditors took steps to recover the debt from Mr. Lymer personally. [ 3 ] The monthly income of the bankrupt at the date of bankruptcy was $1,450.00 and $0.00 at the date of the report on January 30, 2013. His list of assets disclosed 20 companies [the “Lymer Companies”], which purportedly have an aggregate value of approximately $6,300,000.00.

The application for discharge was adjourned to June 20, 2013 so, inter alia , the Trustee could provide additional information to the court regarding the Bankrupt’s financial situation during the course of the bankruptcy. [ 4 ] On June 18, 2013 Mr. Lymer applied to have his bankruptcy annulled, arguing:

1. he was not insolvent; 2. arrangements had been made with creditors such that no monthly payments were currently due; 3. he was not insolvent when assigned into bankruptcy; 4. he should not of been assigned into bankruptcy; and 5. no prejudice to third parties will occur with the annulment of his bankruptcy. [ 5 ] A number of Mr. Lymer’s creditors [the “Objecting Creditors”] oppose both discharge of the Bankruptcy and Mr. Lymer’s annulment application. The Objecting Creditors sought additional information on the status of the Lymer Companies via examination of Mr.

Lymer and examination of records from the Lymer Companies under the Bankruptcy and Insolvency Act , RSC 1985, c B-3, s 163(2) [the “ BIA ”]. I ordered that step on Oct. 2, 2013. That Oct. 2 order detailed the documentary record required. [ 6 ] Mr. Lymer on Jan. 3, 2014 filed an Affidavit of Records for himself, and in an ex-parte without notice application obtained an extension on filing the Lymer Companies’ Affidavit of Records. On Feb. 25, 2014 I granted an application by the Objecting Creditors that Mr. Lymer provide a further and better Affidavit of Records for himself, and issued further directions for Mr.

Lymer to prepare an Affidavit of Records for the Lymer Companies. [ 7 ] Mr. Lymer in response requested the court order the Objecting Creditors pay $108,000.00 so that Mr. Lymer could hire a law firm to prepare those records, along with the funds to rent space used while collecting and sorting the documents in question. I denied that request and ordered his personal Affidavit of Records be filed and served by March 21, 2014, and the Lymer Companies affidavits by April 14, 2014. This decision is reported as Lymer (Re) , 2014 ABQB 134 . [ 8 ] The Objecting Creditors on June 11, 2014 applied for an order that: 1.

Mr. Lymer and the Lymer Companies are declared in civil contempt of court; 2. that Mr. Lymer’s application to have his bankruptcy annulled is struck out; 3. an order that Mr. Lymer and the Lymer Companies are prohibited from filing further applications or notices of motion until their contempt is purged; 4. that if Mr. Lymer and the Lymer Companies contempt is not purged then the matter will be referred to Lee J to consider whether Mr.

Lymer should be sentenced to a term of imprisonment; and 5. a cost award that may be collected immediately despite the BIA stay on enforcing debts. [ 9 ] This matter devolves to a discrete and simple point. Mr. Lymer says he was never a bankrupt. In other words, he has assets to pay his debts quantified as over $21 million. However, the Trustee reported Mr. Lymer’s companies had a value of over $6 million. None of the Lymer Companies have ever prepared financial statements nor is there other concrete evidence to support that valuation. [ 10 ] It is very doubtful that Mr.

Lymer’s companies have any value of significance. None of the companies operate. None have bank accounts and ostensibly none have any funds. Nonetheless, the Objecting Creditors seek to verify the financial condition of those businesses and obtain an accounting of where the Mr. Lymer and the Lymer Companies have expended the funds in a principal amount of some $15,000,000 received from approximately 80 creditors. If I am to annul Mr. Lymer’s bankruptcy then Mr. Lymer must prove to me his financial state, and that again largely revolves around the condition of the Lymer Companies. [ 11 ] However, Mr.

Lymer has failed to meet his court-ordered obligations, provided an ever-expanding array of excuses, initiated a host of applications and appeals, and in general conducted his litigation in a problematic manner. In Lymer (Re) at para 27 I warned: With these deadlines, Mr. Lymer has had 5 1/2 months since the Order of October 2, 2013 was given. As noted by the Applicants, Mr. Lymer knew of the courts concerns regarding deficiency in the evidence as early as when his proposal was refused. To be clear as to the consequence arising if Mr.

Lymer fails to provide the cataloging of the books and records as directed, unless I am satisfied there has been substantial compliance, I will entertain an application to dismiss the application for an annulment . Furthermore, Mr. Lymer should understand that whether or not his annulment application is allowed to proceed, he will not be relieved of his obligation to provide the cataloging of the books and records and to be examined as previously ordered as part of his bankruptcy discharge process. [Emphasis added.] [ 12 ] It is now almost eight months later and Mr. Lymer has still not met his obligation.

That requires a response. II. Timeline [ 13 ] Prior to my consideration of the Objecting Creditors’ application I will review what has occurred in these proceedings to date. I have opted for a quite detailed review so as to better provide both a backdrop and context for my subsequent analysis of the Objecting Creditors’ contempt application. March 4, 2011 I rejected Neil Alan Lymer’s Division I Proposal and Mr. Lymer was deemed bankrupt. On May 17, 2011, Justice Topolniski rejected

Mr. Lymer’s appeal from the Order rejecting the Proposal. March 5, 2013 The Trustee made an application for Mr. Lymer’s discharge from bankruptcy [the “Trustee’s Discharge Application”]. The Trustee’s report disclosed proven unsecured creditors of $21,148,026.95 and assets of $6,308,008.00. Mr. Lymer’s monthly income was $1,450.00 at the date of bankruptcy. His monthly income was $0.00 at the date of the report (January 30, 2013). His list of assets identified the Lymer Companies with a purported aggregate value of approximately $6,300,000.00.

The Trustee’s Discharge Application was adjourned to June 20, 2013, so that the Trustee could provide additional information to the court regarding the Bankrupt’s financial situation during the course of bankruptcy. In the Trustee’s First Supplementary Report, the Trustee recommended that Mr. Lymer receive his discharge provided that he consented to a judgment for some fixed percentage of the unproven secured claims on terms that the court deemed appropriate. June 18, 2013 Mr. Lymer filed an application before me to have his bankruptcy annulled [the “Annulment Application”].

The Trustee’s Second Supplementary Report indicated that Mr. Lymer was insolvent at the time of his deemed assignment and no evidence had been provided to show that this was not actually the case. The matter was adjourned to August 26, 2013. Aug. 23, 2013 Diane Jonsson and other Objecting Creditors filed an application [the “Creditors’ Production and Examination Application”]. They sought 1. to have both the Trustee’s Discharge Application and Mr. Lymer’s Annulment Application adjourned to complete questioning on Mr. Lymer’s affidavits (May 11, 2011, Dec. 19, 2011, and June 18, 2013); and 2. to examine Mr.

Lymer and the Lymer Companies: BIA , s 163(2). As part of that examination, they requested that Mr. Lymer produce all books, documents, records or other papers in his or the Lymer Companies’ possession or control regarding their business operations, financial operations, transactions, and dealings. Aug. 26, 2013 The Trustee’s Discharge Application, Mr. Lymer’s Annulment Application and the Creditors’ Production and Examination Application were adjourned to October 2, 2013. Sept. 30, 2013 Mr. Lymer filed an affidavit which deposed he may have formed a solicitor-client relationship with Mr. Rutman. Mr.

Lymer was concerned that Mr. Rutman may have provided his clients with private and confidential information. Oct. 2, 2013 Mr. Lymer made an oral application before me to question Diane Jonsson on her previously filed affidavits “[“Mr. Lymer’s Oral Questioning Application”]. I issued two orders. The first [the “Production and Examination Order”] ordered that: 1. Mr. Lymer and the Lymer Companies must, on a company by company basis, prepare and file affidavits of records by January 3, 2014; and 2. Mr. Lymer and the Lymer Companies must submit to examination under oath: BIA , s 163(2).

My second order adjourned the Trustee’s Discharge Application and Mr. Lymer’s Annulment Application sine die . I also dismissed Mr. Lymer’s Oral Questioning Application. Dec. 24, 2013 Mr. Lymer applied to me [the “Mr. Lymer’s Extension Application”] for an order: 1. directing Mr. Rutman to immediately prepare and serve on all parties a properly prepared Notice of Change of Representation; 2. directing the Objecting Creditors not to contact Mr. Lymer personally while represented by Mr. Rutman;

3. extending the deadline in the Production and Examination Order for the Affidavits of Records of the Lymer Companies until March 31, 2014; 4. directing Mr. Rutman serve a copy of the Production and Examination Order upon the Solicitor for the Lymer Companies; 5. directing the Creditors to pay $108,000.00, the financial cost of a bona fide law firm, to prepare the Lymer Companies’ Affidavits of Records; and 6. directing the Creditors to pay the cost of rental space used to house the Corporate Records of the Lymer Companies, while those materials were reviewed to prepare the Affidavits of Records.

Jan. 3, 2014 Mr. Lymer filed an Affidavit of Records on his own behalf, and without notice to other parties appeared before Simpson J and obtained an order which extended the deadline for the Lymer Companies’s Affidavits of Records until Jan. 23, 2014 [the Simpson J Order]. Jan. 7, 2014 Mr. Lymer filed an application before Lee J seeking an order [“Mr. Lymer’s Commercial List Application”]: 1. relieving me as the seized Registrar for the purposes of this application only; 2. allowing Mr. Lymer’s Annulment Application:

a) be heard forthwith and/or during the pending special chambers application, and

b) proceed without further questioning on any outstanding affidavits previously filed; 3. disallowing the Objecting Creditors BIA , s 125 Proof of Claim; 4. requiring the Objecting Creditors to pay costs: BIA , s 197(7); 5. directing the Objecting Creditors to post security for costs; and 6. seizing Lee J with the matters pertaining to this application until all issues are resolved. Jan. 10, 2014 Mr. Lymer filed an application [“Mr. Lymer’s Secondary Extension Application”] before me seeking an order: 1. advising Mr.

Rutman that the Dec. 24, 2013 Application would be heard before me on Feb. 6, 2014; 2. extending the deadline in the Production and Examination Order for the Affidavits of Records of the Lymer Companies until Feb. 6, 2014 or until the matter could be properly heard before me. Jan. 16, 2014 The Objecting Creditors filed a change of representation notice that Mr. Rutman was now the lawyer of record for all the Objecting Creditors. Jan. 20, 2014 I wrote to Mr. Lymer and the Objecting Creditors to adjourn Mr. Lymer’s Secondary Extension Application. That application would be heard on Feb. 6, 2014, along with Mr.

Lymer’s Extension Application. Jan. 23, 2014 Mr. Lymer adjourned his Commercial List Application sine die . Jan. 30, 2014 The Objecting Creditors filed an application [“the Creditors’ Better Affidavits of Records Application”] before me for an order that Mr. Lymer provide a further and better affidavit of Records to replace the Jan. 3, 2014 Affidavit of Records.

Feb. 6, 2014 Mr. Lymer’s Extension Application, Mr. Lymer’s Secondary Extension Application and the Creditors’ Better Affidavits of Records Application were put over to a full day hearing on Feb. 25, 2014. The same day, Mr. Lymer made an oral application before me that I recuse himself [“Mr. Lymer’s Oral Recusal Application”]. I issued an order [the “Feb. 6, 2014 Order”]: 1. dismissing Mr. Lymer’s Oral Recusal Application; and 2. providing that I would remain seized with the Action until further Order of the Court to the contrary. Mr. Lymer filed a very long affidavit as well as a supplementary affidavit.

In these documents Mr. Lymer: 1. alleged Mr. Rutman was receiving preferential treatment; 2. said that he was unsure of how to file a proper affidavit of records, that he did not have the expertise to complete the task, and that it was unreasonable for the court to expect one individual to arrange and sort multiples of thousands of documents. That same day Mr. Lymer also filed an application [“Mr. Lymer’s Contempt Application”] before the Presiding Justice seeking an order to: 1. remove me as the seized Registrar for the purposes of this Application only; 2. declare that Mr.

Lymer acted properly and appropriately at the appearance before Simpson J on Jan. 3, 2014; 3. declare that Simpson J fully understood the situation and made the Order based on the facts as presented to him on Jan. 3, 2014; 4. holding Mr. Rutman in contempt of court; and 5.

schedule the application directly before Simpson J. Feb. 10, 2014 Rooke ACJ appointed me as the case management Registrar for all matters within the jurisdiction of a Registrar in bankruptcy and Lee J as the case management justice for all matters not within the jurisdiction of a Registrar in bankruptcy. Feb. 21, 2014 Mr. Lymer filed an application [“Mr. Lymer’s Disclosure Application”] before Lee J seeking an order that: 1. required the Objecting Creditors, through Mr. Rutman, immediately serve all parties with their filed pleadings, retroactive to Aug. 24, 2013; 2. allowed Mr.

Lymer to examine Diane Jonsson on all of her previously sworn affidavits; 3. required Mr. Rutman to disclose all past, present and future representations that could be perceived as a potential conflict with the Trustee, BDO. 4. required Mr. Rutman to produce his file relating to his previous representation on behalf of the Bank of Montreal; 5. adjourned Mr. Lymer’s Extension Application, Mr.

Lymer’s Secondary Extension Application and the Creditors’ Better Affidavits of Records Application past the previously scheduled date of Feb. 25, 2014, sine die , until all outstanding matters before Lee J were properly dealt with; and 6. stayed all matters in the action, until all outstanding matters were addressed. Feb. 24, 2014 Lee J gave an order [the “Case Management Order”] which 1. struck out the portion of Mr. Lymer’s Contempt Application requesting that Mr. Rutman be held in contempt of court; 2. denied Mr. Lymer’s request to remove me as the seized Registrar; 3. denied Mr.

Lymer’s request for a stay; and 4. denied Mr. Lymer’s request to have Mr. Rutman swear an affidavit attesting that he was unable to locate any matters which would prohibit him from acting for the Creditors by reason of having a conflict of interest.

Mr. Lymer filed another affidavit on this date where he stated he had little understanding of the legal process and that he did not have the necessary knowledge or understanding to create satisfactory Affidavits of Records for the Lymer Companies. Mr. Lymer again expressed concern about his past relationship with Mr. Rutman. Feb. 25 - March 7, 2014 I heard the remaining portions of Mr. Lymer’s Extension Application, Mr. Lymer’s Secondary Extension Application and the Objecting Creditors’ Better Affidavits of Records Application. On March 7, 2014 I released Lymer (Re) , 2014 ABQB 134 .

This decision: 1. for the most part allowed the Objecting Creditors’ Better Affidavits of Records Application; 2. varied the Production and Examination Order by providing, in part, that:

a) Mr. Lymer must prepare, file and serve his Catalogue affidavit on Mr. Rutman on or before March 21, 2014; and

b) each of the Lymer Companies must prepare, file and serve corresponding Catalogue affidavits, on a company by company basis, on Mr. Rutman on or before April 9, 2014; 3. provided that if the Catalogue affidavits were not completed by the specified dates, the Creditors would be at liberty to seek the dismissal of Mr. Lymer’s Annulment Application; and 4. dismissed, for the most part, the remainder of the relief sought in Mr. Lymer’s Extension Application and Mr. Lymer’s Secondary Extension Application. March 14, 2014 Mr. Lymer appealed to Lee J and sought a stay of Lymer (Re) [“Mr.

Lymer’s Stay Application”] March 21, 2014 Mr. Lymer did not prepare, file or serve his personal Catalogue affidavit as required by Lymer (Re) . March 25, 2014 Mr. Lymer wrote a letter to me which indicated he did not understand the characteristics of a proper Affidavit of Records. April 1, 2014 Mr. Lymer applied to me for an order to require that the Objecting Creditors serve all other creditors with past and future documents [“Mr. Lymer’s Service Application”]. April 4, 2014 Mr. Lymer made two more applications to me: 1. an order expunging or reducing the claims of the Creditors [“Mr.

Lymer’s Proof of Claim Application”]. 2. an order [“Mr. Lymer’s Bank Application”]:

a) clarifying the March 7 Order;

b) requiring Mr. Rutman to disclose copies of his correspondence with Royal Bank of Canada and Bank of Montreal; and

c) requiring Diane Jonsson disclose information relating to Mr. Lymer’s pending jail term. On this date the Objecting Creditors applied [the “Creditors’ Contempt Hearing Application”] to me seeking an order setting a hearing for Mr. Lymer and the Lymer Companies to show cause why they were not in civil contempt of court for their ongoing failure to comply with Lymer (Re) and other allegedly contemptuous conduct. April 11, 2014 Mr. Lymer filed two affidavits. He says he is a simple layman who is inexperienced with the legal process. The orders against him were unfair because of the volume of documents that are involved. It is not his responsibility to go through the documents.

April 14, 2014 Mr. Lymer filed an Affidavit of Records for himself and each of the Lymer Companies. I issued four separate orders [the “April 14 Orders”] in which I: 1. dismissed Mr. Lymer’s Bank Application; 2. dismissed Mr. Lymer’s Service Application; 3. adjourned Mr. Lymer’s Proof of Claim Application sine die and prohibited Mr. Lymer from bringing back the proof of Proof of Claim Application unless certain conditions were met; and 4. granted the Creditors’ Contempt Hearing Application and ordered that Mr.

Lymer appear on June 13, 2014 to show cause why he ought not be held and declared in civil contempt of court. In addition, I requested the Trustee establish a web page similar to those used in commercial insolvencies so that all creditors in the bankruptcy could have access to all documents and be kept informed of the proceedings. April 23, 2014 Mr. Lymer sought an appeal and stay of the April Orders from Lee J. May 30, 2014 Mr. Lymer filed an application before Lee J to have me removed as case management Registrar. [“Mr. Lymer’s June 6 Recusal Application”]. June 3, 2014 Mr.

Lymer filed two affidavits and a bench brief. He again alleged that he was treated unfairly and that he did not know how to properly prepare a Catalogue affidavit. In the bench brief he argued that: 1. a layman cannot have an order imposed on him that he simply does not understand (p 8); 2. I have confused Mr. Lymer with the Lymer Companies; 3. I cannot force Mr. Lymer to do menial work on behalf of the Lymer Companies; 4. without an award of financial assistance, Mr.

Lymer will be unable to be comply with the Affidavit of Records orders. 5. the court cannot make an order above the intellectual capacity of the recipient (p 9); 6. the courts cannot

schedule a contempt hearing application before actual contempt of court action occurs (p 12); 7. all applications need to be ruled on upon their merits and it is not proper for the courts to banish an application prior to it being properly vetted (p 12); and 8. the courts must treat a layman fairly. June 6, 2014 Lee J dismissed Mr. Lymer’s appeal of the April Orders. June 10, 2014 Mr. Lymer filed an application [“Mr. Lymer’s June 10 Recusal Application”] before me that requested that I: 1. recuse myself as case management Registrar; 2. grant an order amending the March 7 Order; and 3. grant an order amending the April Orders. June 11, 2014

The Objecting Creditors filed the present application [the “Creditors’ June 11 Contempt Application”]. June 12, 2014 Mr. Lymer filed Affidavits of Records on behalf of the Lymer Companies. Each affidavit provided that Mr. Lymer was not aware of any bank accounts open in the name of that company, any business being conducted by that company, and any employees employed by that company. June 13, 2014 Mr. Lymer abandoned the June 10 Recusal Application.

He also filed an affidavit saying that: 1. he was unfamiliar with the term “catalogue affidavit”; 2. he continually offered the Objecting Creditors the opportunity to review his personal books and records and that they refused to do so; 3. he said that he would provide copies of the records directly to the Objecting Creditors if they would pay for the cost of production. I also received a letter from Mr. Lymer which stated that he had properly filed all the Catalogue affidavits for the Lymer Companies as required by the March 7 Order. The Lymer Companies were (allegedly) now fully compliant.

I adjourned the Objecting Creditors’ June 11 Contempt Application to July 10, 2014. June 30, 2014 The Objecting Creditors filed an application before me seeking an order directing Darlington Properties Inc., through its director Martin G. Schulz, submit to an examination pursuant to BIA , s 163(2) and to produce books, documents, records or other papers in the possession or control of Darlington [the “Creditors’ Darlington Application”]. That same day Mr Lymer filed an affidavit saying he had been treated unfairly.

He said that the Objecting Creditors had advanced zero dollars to him personally and since no money was ever advanced to him personally, it was an impossibility for him to be able to account for any money in his personal capacity (paras 14-15). He said that any delays with the production of the books and records for the Lymer Companies was the fault of Dentons LLP Canada (counsel for the Objecting Creditors) and its constant need to complicate the process. Mr. Lymer explained that he did not know how to file a proper affidavit of records; he thought that what he filed was proper (para 84).

With respect to the company affidavits, he said that he was a personal bankrupt and not a shareholder or a director of the Lymer Companies. He went on to say that if the Objecting Creditors could find suitable commercial space to house the books and records, arrange for necessary trucking requirements to move the books and records and provide a numerical hand stamper, he would be able to do his best to prepare a catalogue affidavit (para 138). He added that none of his applications were frivolous or vexatious. He said that he believed that he was at liberty to file any application before the courts that he chose.

July 9, 2014 Mr. Lymer filed an affidavit saying that he continued to be lost in the process and unheard by the courts. He also said that the Lymer Companies were no longer able to store their books and records in the Belmead Professional Building because of actions by the counsel for the Objecting Creditors. He was “absolutely unaware of a single place on planet Earth” where he could store the books and records of the Lymer Companies (para 5). Mr. Lymer wrote a letter to me complaining about late filing by Dentons Canada LLP.

He said: Hopefully, now that the books and records have arrived within the walls of the Denton’s LLP law firm, I will finally have a place to do the work demanded of me by the Applicant Creditors. With Mr. Rutman in close proximity, I will be able to seek his advice and direction to ensure I am completing the required Catalogue Affidavit to his high standards. I expect to attend everyday at the Denton’s law office and hope to have this arduous task completed within 90 days. I surely hope the Court appreciates my strenuous efforts on behalf of the Lymer Companies.

An affidavit was filed that same day by Diane Jonsson. It indicated that on July 9, 2014 the Edmonton office of Dentons Canada LLP law firm received 36 boxes of documents. These were apparently the Lymer Companies’ documents. July 10, 2014 Mr. Schulz appeared at this hearing to indicate he does not represent Mr. Lymer. I will discuss the events of the July 10, 2014 contempt proceeding below. I dismissed Mr. Lymer’s application to amend the April 14, 2014 orders, instructed Mr. Lymer remove the documents he had delivered

to the Dentons Canada LLP Edmonton office, and dismissed Mr. Lymer’s application for an adjournment. Aug. 25, 2014 Mr. Lymer filed two applications: 1. to have co-counsel for the Objecting Creditors, Ryan Quinlan, removed from the record for alleged misconduct including filing a false affidavit; and 2. for an order to discharge the current Trustee, BDO Canada LLP, and have the Objecting Creditors pay the Trustee’s post-Aug. 26, 2013 costs and the cost to maintain a website documenting Mr. Lymer’s bankruptcy proceedings. Mr. Lymer also demanded that website be secured against broad public access. Sept. 4, 2014 Mr.

Lymer forwarded copies of the August 25, 2014 applications to me and requested a full day hearing be scheduled. In his covering e- mail he also stated; “I am aware of the covert and secret Applications filed by Denton’s subject to Sealing Order(

s) and the pending Applications for a Sealing Order but the importance of my Applications should not be affected by those secret Applications. Very sadly, it is nearly impossible for a layman to get a fair hearing at the Court of Queen’s Bench, a burden I very often have to overcome. At all times, the Court should conduct itself with the utmost in transparency, especially when dealing with a layman.” Sept. 19, 2014 Mr.

Lymer applied for Lee J: 1. to grant a consent judgment in favour of all Creditors in the bankruptcy and have it treated as if it were the same as a successful proposal; and 2. to give him authority to complete an audit of counsel for the Objecting Counsel to determine the source of the retainer funds for that representation to “... fuel the Applicant Creditors continual objections to all amicable and reasonable resolutions to these Bankruptcy matters.” Sept. 24, 2014 Mr. Lymer filed two affidavits.

One alleges misconduct by lawyers, their “ethical abuse”, and how lawyers are protected by “deception” provided by the Law Society of Alberta. Mr. Lymer has been victimized by many lawyers. The second affidavit predicts that I will: ... hammer [him] with the most punitive Order ever levelled against a layman at the Court of Queen’s Bench. I also believe this pending Order will further lay the ground work for me to be imprisoned by the Courts for the rest of my natural life. ... Mr. Lymer complains he is entirely truthful and has been mistreated on the issue of storage for the Lymer Companies documents.

In addition, I: ... [continue] on a journey to destroy [Mr. Lymer’s] life. ... [T]he court is only interested in punishing me and breaking my spirit ... Mr. Lymer says he is being humiliated by disclosure of the bankruptcy proceeding documents which have been placed on the Internet. Many innocent creditors have been injured in this proceeding. Mr. Lymer is the subject of false, malicious claims by certain false creditors. Sept. 25, 2014 The applications set down on August 25, 2014 were adjourned to Nov. 18, 2014, and I requested the Trustee to examine its website and consider the concerns raised by Mr. Lymer.

Oct. 14, 2014 Mr. Lymer applied for an injunction to remove public access to Lymer bankruptcy documents posted on an Internet website. Mr. Lymer’s application states:

... the Court has become nasty and punitive and on numerous occasions has thwarted his great efforts to recover money for Creditors.The Court has levelled punitive and impossible Orders upon Neil A. Lymer, and have now ensured that he is humiliated on a worldwideamplified basis. Oct. 17, 2014 Justice Lee struck an Oct. 14, 2014 affidavit of Mr. Lymer as improperly filed. Mr. Lymer’s other applications were adjourned untilrelease of this decision. III.

Issues [14] This application involves a number of potential issues, some of which are emergent and arise only if I reach certainconclusions. [15] The first question is whether Mr. Lymer and the Lymer Companies are in civil contempt of court: 1. Did Mr. Lymer and the Lymer Corporations fail to obey one or more orders of this court? 2. Were Mr. Lymer and the Lymer Corporations aware of their legal obligations? 3. Was this failure intentional? 4. Does a reasonable excuse exist for that failure? [16] If I conclude that Mr.

Lymer and the Lymer Companies breached a court order without reasonable excuse then a secondquestion is what would represent an appropriate remedy? Should I: 1. Strike the Lymer Annulment application? 2. Restrict Mr. Lymer’s court filing activities until his contempt is purged? 3. Refer the contempt to the Lee J, the seized Alberta Court of Queen’s Bench case management justice, for consideration ofwhether Mr. Lymer should be sentenced to a term of incarceration? 4. Make a court costs order that is payable immediately despite the usual operation of the BIA? IV. The Law – Contempt of Court A.

A Registrar’s Contempt Authority [17] A court of inherent jurisdiction has a common law authority to manage and control its processes and enforce its orders:MacMillan Bloedel Ltd. v Simpson, (SCC), [1995] 4 SCR 725 at para 33, 130 DLR (4th) 385. Shelley J in Koerner vCapital Health Authority, 2010 ABQB 557 at para 31 expressed the authority in this manner: ... The central idea is that courts have a right to protect the dignity of their own proceedings, and they are entitled to discipline anyconduct that they feel tarnishes, undermines, or impedes the court’s role in society as administrator of justice.

The Court of Queen’sBench has an inherent power to find a person in contempt of court if they feel the proceedings are being disrespected ... [Citationsomitted.] [18] The Supreme Court of Canada in United Nurses of Alberta v Alberta (Attorney General), (SCC), [1992] 1SCR 901 at 931, 89 DLR (4th) 609 stressed: ... The rule of law is at the heart of our society; without it there can be neither peace, nor order nor good government. The rule of law isdirectly dependent on the ability of the courts to enforce their process and maintain their dignity and respect.

To maintain their processand respect, courts since the 12th century have exercised the power to punish for contempt of court. ... [Emphasis added.] [19] Despite their names civil and criminal contempt both require proof of contempt beyond a reasonable doubt.

The distinctionbetween these two categories of misconduct is reviewed in Fearn v Canada Customs, 2014 ABQB 114 at para 147-150, 94 Alta LR(5th) 318, where Tilleman J at para 149 observes the key distinction is: ... misconduct that attracts the criminal contempt sanction was identified by the manner in which it spills outside the in-court dispute andhas a broader effect. [20] The contempt jurisdiction is not solely intended to ensure compliance with court orders.

Civil contempt sanctions may alsopunish as a secondary objective: Walker v Walker, 2013 ABCA 213 at para 28, 553 AR 166. [21] My authority as Registrar flows from the BIA, and includes steps and procedures identified in s 192(1). My decisions arethose of a superior court of inherent jurisdiction: BIA, s 2 (definition of “court”). My orders are deemed to be an order of the AlbertaCourt of Queen’s Bench: BIA, s 192(5).

[22] The BIA explicitly excludes one aspect of my authority in relation to contempt of court: 192(3) A registrar has no power to commit for contempt of court. [Emphasis added.] [23] This provision was interpreted by Registrar Nettie in Re Cowan, 2010 ONSC 3138 at paras 47-48, 68 CBR (5th) 248 toindicate a Registrar has the authority to cite for both in facie and ex facie contempt, and to order any remedy, except for a term ofimprisonment: 47 In either event, it seems clear that a contempt hearing is not any kind of hearing addressed by s. 192(1) BIA, such that Parliamenthas removed or codified it from the powers otherwise conferred by the BIA.

Parliament, and the cases, give to Registrars the authority tohear many kinds of matters, both opposed and unopposed. The Superior Court of Justice, in Bankruptcy and Insolvency is a superiorcourt with the inherent power to control its own process and to cite for contempt, both in facie and ex facie. "Court" for the purposes ofthe BIA is defined as including a Registrar of the Court when exercising her authority under the BIA.

Thus it seems a reasonableconclusion that a Registrar exercising authority under the BIA is acting as the Court, and has all of the powers of the Court, as defined bythe BIA, and as are inherent to the Court at common law. Section 192(1) BIA is not, by its own terms, an exhaustive list of the powers ofa Registrar.

It follows that if contempt occurs in facie, during a proceeding or session being properly presided over by a Registrar of theCourt, or if the Order of a Registrar is flouted ex facie, then such Registrar has the inherent right of the Court to control the processbefore her, including the power of citing for contempt.

Section 192(8) BIA would permit any Registrar (including any Deputy Registrar)of the same Court to preside over a contempt hearing where it was more appropriate to assign another judicial officer to the hearing. 48 The only limit which Parliament has placed, in s. 192(3) BIA, is that a Registrar may not issue a committal order for contempt.While this may seem unusual given that Registrars somewhat regularly order the issuance of arrest warrants, and have issued committalorders, both pursuant to ss. 166 and 168 BIA and pursuant to Rule XXX of the Rules of Civil Procedure, nonetheless it is whatParliament has enacted.

Registrars being creatures of statute, and having no inherent powers of their own (only those of the Court andonly when exercising their statutory powers in the Court), this is a proper limit on the power of a Registrar to deal with cases ofcontempt. It clearly leaves to Registrars the ability to fine for contempt -- a not uncommon sanction in any event.

One supposes that if aRegistrar found a contemner guilty and was of the view that imprisonment was the appropriate sentence, then the Registrar would referthe matter of sentence to a Judge pursuant to s. 192(6) BIA. [Emphasis added.] [24] I agree with this conclusion. B.

The Elements of Civil Contempt [25] Rooke J (as he then was) in Point on the Bow Development Ltd. v William Kelly & Sons Plumbing Contractors Ltd., 2006ABQB 775 at para 19, 405 AR 1, affirmed 2007 ABCA 204, 417 AR 191 [“Point on the Bow”] identifies three elements for civilcontempt: To find civil contempt, the applicant must prove the following things beyond a reasonable doubt: (1) an existing requirement of the court; (2) notice of the requirement to the person alleged to be in contempt; and (3) an intentional act (or failure to act) that constitutes a breach of the requirement [26] Failure to abide by the terms of a court order without reasonable excuse is contempt: Koerner v Capital Health Authority,2011 ABQB 191 at para 43, 506 AR 113, affirmed 2011 ABCA 289, 515 AR 392.

The obligation to follow a court order is breached if alitigant fails to exercise due diligence or delegate as necessary; that too is a basis for contempt: Michel v Lafrentz, 1998 ABCA 231 atpara 21, 219 AR 192; S.W. v K.T., 2005 ABQB 298 at para 16, 379 AR 320. [27] Similarly, an attempt to indirectly frustrate a court order is contempt of court: Litterst v. Horrey (1995), 1996 ABCA 13, 178 AR 216 at para 14, 37 Alta LR (3d) 74, appeal abandoned [1996] SCCA No 55.

As Fraser CJA observed in that judgmentwhat is critical is the litigant’s intended objective: ...Whether he succeeds or has succeeded in his ultimate objective is irrelevant. ... [28] Alberta Court of Queen’s Bench jurisprudence is inconsistent on whether the applicant must prove the mental component(mens rea) to engage in contemptuous misconduct. Schitthelm v Kelemen, 2013 ABQB 42 at para 47, 557 AR 151 indicates that theapplicant must prove mens rea beyond a reasonable doubt.

Graesser J in FIC Real Estate Fund Ltd. v Lennie, 2014 ABQB 105 at paras74-83 concluded it is up to the allegedly contemptuous person to prove he or she had a reasonable excuse for breach of a court order. C. Factors Present in Contemptuous Litigation [29] It is a well-established legal principle that a person is presumed to intend the natural consequences of their acts: Starr vHoulden, (SCC), [1990] 1 SCR 1366, 68 DLR (4th) 641).

In a contempt analysis a person’s actions ‘speak forthemselves.’ The context of allegedly contemptuous behaviour is also relevant. [30] In Point on the Bow, at para 115 Rooke J listed a number of factors that may emerge in contemptuous litigation. Theseprovide a basis to better evaluate the intentions of a potentially contemptuous litigant:

(1) a breach of a rule or enactment, which may merit a costs award, is not contempt in itself (in the absence of the Rule or enactmentspecifically so providing) unless so declared by the Court by a specific order or direction - rather any such breach should be subject to aspecific Court order requiring compliance, the breach of which, without adequate excuse, would be, prima facie, contempt, confirmedupon further Court order; ... (3) a party who causes delay and compels the other side to take motions to require compliance with the Rules, agreements and Courtorders cannot be heard to complain that enforcement is delaying the case; (4) a party who feels aggrieved by the actions (or lack thereof) of another party that it considers to be contempt should seek aremedy in a timely fashion rather than accumulating grievances for a later contempt application; after all, contempt is not contempt interpartes, but contempt of court; (5) a party that finds itself unable to comply with an order or direction of the Court must act in advance to seek relief or mustcomply; (6) it is not an excuse for either party to say that nothing could be done because a case management justice was away; there arealways alternatives available to allow issues to be dealt with expeditiously, including telephone conferences or reference of the matter toanother justice pursuant to Rule 391, or to the Chief or Associate Chief Justice; (7) too much work for counsel is not an adequate excuse for failure to be timely in litigation - the answer is to get more help or haveother counsel appointed; (8) if a motion is needed to compel someone to do something that they should have done in any event and they do it before themotion is heard, it is open to the applicant to continue the motion for the purpose of asking for costs thrown away, but this is notnormally a matter of contempt; (9) absent relief by Court order, failure to conduct examinations for discovery within a Court-ordered time means that the partywhose right it was to conduct the examinations has lost that right; (10) where there is disagreement between parties as to the terms of an order, the proper procedure is for counsel to arrange a hearingto settle the terms, rather than simply to act in disregard of the order; and (11) parties in case managed proceedings can and should resolve issues either as they arise or at the next case management meetingrather than saving them up for a future contempt battle. [31] In legal analyses the term “vexatious” is synonymous with impropriety and abuse of process: Wong v Leung, 2011 ABQB688 at para 33, 530 AR 82; Mcmeekin v Alberta (Attorney General), 2012 ABQB 144 at para 11, 537 AR 136.

McLachlin J (as she thenwas) explicitly recognized the interrelationship between vexatious and abusive litigation in R v Scott, (SCC), [1990] 3SCR 979 at 1007, 116 NR 361: ... abuse of process may be established where: (1) the proceedings are oppressive or vexatious; and, (2) violate the fundamentalprinciples of justice underlying the community's sense of fair play and decency.

The concepts of oppressiveness and vexatiousnessunderline the interest of the accused in a fair trial. ... [32] The Supreme Court of Canada in Toronto (City) v Canadian Union of Public Employees Local 79, 2003 SCC 63 at para 37,[2003] 3 SCR 77 approved a definition of abuse of process found in Canam Enterprises Inc. v Coles, (2000), (ONCA), 51 OR (3d) 481 at para 55, 194 DLR (4th) 648 (Ont CA) (in dissent), dissent adopted en toto, 2002 SCC 63, [2002] 3 SCR 307: The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would bemanifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. ...

Thus this Court’s contempt authority emerges from the same inherent jurisdiction as other common law remedies which respond toabusive and vexatious litigation. [33] While not all vexatious litigation and abuse of process provides a foundation for a finding of contempt of court, these othercategories of litigation misconduct are very helpful to evaluate whether or not a litigant has acted in good faith.

Put another way, alitigant who breaches a court order and claims to have done so with a valid excuse is not going to adopt vexatious litigation strategies thatabuse court processes. [34] Recently Michalyshyn J in Chutskoff v Bonora, 2014 ABQB 389 conducted a comprehensive survey of factors whichcharacterize vexatious litigation and identified eleven general vexatious litigation indicia categories, each with many specific examples: 1. collateral attacks, 2. hopeless proceedings, 3. escalating proceedings, 4. bringing proceedings for improper purposes, 5. initiating “busybody” lawsuits to enforce alleged rights of third parties, 6. failure to honour court-ordered obligations,

7. persistently taking unsuccessful appeals from judicial decisions, 8. persistently engaging in inappropriate courtroom behaviour, 9. unsubstantiated allegations of conspiracy, fraud, and misconduct, 10. scandalous or inflammatory language in pleadings or before the court, and 11. advancing Organized Pseudolegal Commercial Argument [“OPCA”] strategies. [35] I conclude the appearance of these factors in a potential contempt fact scenario weigh against the allegedly innocent orjustified nature of a breach of court order or other challenge to court authority.

This parallels the approach of Marceau J in R v Eddy,2014 ABQB 391, 2014 DTC 5098 where these vexatious litigation indicia were an “'aggravating' factor” that favoured the unusualremedy of a cost award against a criminal accused. [36] Similarly, as in analyzing vexatious and abusive proceedings (McMeekin v Alberta (Attorney General), 2012 ABQB 456, 543AR 132; Curle v Curle, 2014 ONSC 1077 at para 24; Fearn v Canada Customs, 2014 ABQB 114, 94 Alta LR (5th) 318; Bishop vBishop, 2011 ONCA 211 at para 9, leave denied [2011] SCCA No 239) the entire litigation record is relevant to the mens rea of anallegedly contemptuous litigant who has breached or frustrated the terms of a court order.

D. Contempt Remedies [37] Contempt of court requires a court take steps to bring home the seriousness of that misconduct, the litigant’s responsibilities,and to meaningfully deter further misconduct of this kind.

Chief Justice Fraser in Dreco Energy Services Ltd. v Wenzel, 2005 ABCA185 at para 12, 371 AR 11 provides a list of relevant factors: (1) the role of counsel, including the extent to which the actions of the respondents' counsel might have contributed to therespondents' contempt; (2) the motivation for the [contemptuous misconduct] (3) the consequences flowing from the [contempt of court] and what redress should flow from that, including consideration ofwhether any adverse inferences should be drawn as a result thereof; (4) the entire context and history of the litigation; (5) the amount of reasonable thrown-away costs properly incurred; (6) the nature of the contempt; and (7) he degree of culpability of the contemnors. [38] Another list of potential factors was identified by Lee J in Precision Forest Industries Ltd. v Cox, 2013 at para 55: a. whether the contemnor has admitted the breach; b. whether the contemnor has tendered a formal apology to the court; c. whether the breach was a single act of part of an ongoing pattern of conduct; d. whether the breach occurred with the full knowledge and understanding that it was a breach rather than as a result of a mistake orunderstanding; e. the extent to which the conduct of the contemnor displayed defiance; f. whether the order was a private one, affecting only the parties to the suit of whether come public benefit lay at the root of theorder; g. the need for specific and general deterrence; h. the ability of the contemnor to pay; and i. the sanction of contempt should be proportional to the personal responsibility of the person in contempt and to the seriousness ofthe contempt. [39] The Alberta Court of Appeal in E.F. v J.S.S. (1995) 1995 ABCA 175 , 169 AR 47, 30 Alta LR (3d) 401 adopted thereasoning in Hadkinson v Hadkinson, [1952] 2 The Times L.R. 416 (UK CA) that: ... the general rule that where a person disobeys an order of the court, the court will not entertain any application by that person until heor she obeys the order. ...

See also Phillips v Phillips, 2005 ABCA 405 at para 14, 380 AR 167. [40] A more drastic step is to strike out a pleading. Nevertheless, this remedy is appropriate in certain circumstances, such aswhere the contemptuous litigant has been given many chances to correct the misconduct (Point on the Bow, at paras 98-99), where

contemptuous misconduct is persistent, blocks the action from proceeding, and is intentional ( Koerner v Capital Health Authority , 2011 ABQB 191 at para 57 , 506 AR 113; Point on the Bow , at paras 98-99). [ 41 ] Justice Lee in S.W. v K.T. , 2005 ABQB 298 , 379 AR 320 at paras 21-28 reviewed jurisprudence that considers this remedy and at para 42 concludes: As revealed in the cases cited above, there are two circumstances in which it may be appropriate to strike out pleadings: (1) where the breach of a Court order prevents the other party from defending an action; or (2) where the breach constitutes a flouting or flaunting of a judicial order, or demonstrates a persistent failure to obey ... [ 42 ] Costs are another alternative remedy.

In Point on the Bow Rooke J at paras 110-113 concluded that solicitor-client costs are an appropriate response to contempt of court. Punitive costs are another viable option for deliberate and knowing breach of a court order: Dell Chemical and Marketing Ltd. v Aquasol International Inc. 2001 ABQB 1038 , at para 34 . [ 43 ] The Objecting Creditors made written submissions concerning the law on imprisonment as a remedy for contempt of court, as well as factors that favour that as a response to Mr. Lymer’s alleged misconduct.

I do not have jurisdiction to consider that question, and will not discuss that subject further. That is an issue for Lee J, should I find Mr. Lymer in contempt of court. V. Analysis A. Are Mr. Lymer and the Lymer Companies in Breach of One or More Court Orders? [ 44 ] The first step in my analysis is to evaluate whether Mr. Lymer has breached or attempted to frustrate an order of this court. [ 45 ] The Objecting Creditors claim that Mr. Lymer breached several orders: Oct. 2, 2013 : the Production and Examination Order that Mr.

Lymer and the Lymer Companies must, on a company by company basis, prepare and file Affidavits of Records by Jan. 3, 2014. This deadline was extended to Jan. 24, 2014 by the order of Simpson J. March 7, 2014 : Lymer (Re) .varied the Production and Examination Order and ordered:

a) Mr. Lymer must prepare, file and serve his personal Catalogue affidavit on or before March 21, 2014; and

b) each of the Lymer Companies must prepare, file and serve their Catalogue affidavits, on a company by company basis on or before April 9, 2014. 1. Was Mr. Lymer and the Lymer Companies Under a Legal Obligation? [ 46 ] The validity of the two allegedly breached court orders is obvious. Both fall within my BIA jurisdiction. The March 7, 2014 order was explicitly confirmed on appeal. 2. Was Mr. Lymer and the Lymer Companies Aware of their Legal Obligation? [ 47 ] There is no question that Mr. Lymer was aware of both these orders. He attempted to delay or negate their operation. On Dec. 24, 2013 Mr.

Lymer applied to extend the deadline of the Production and Examination Order. Similarly, on March 14, 2014 Mr. Lymer responded to the order resulting from Lymer (Re) on March 14, 2014 with an appeal and stay application of that decision to Justice Lee. 3. Did Mr. Lymer and the Lymer Companies Breach their Legal Obligation? a. Oct. 2, 2013 Production and Examination Order [ 48 ] Initially Mr. Lymer claimed to have expertise and experience in preparing an Affidavit of Records: Lymer (Re) , at paras 9, 14 .

Nevertheless the Oct. 2 order provided detailed instructions on the content of the Affidavit of Records: Lymer (Re) , at para 7 . [ 49 ] Mr. Lymer filed and served an Affidavit of Records for himself on Jan. 3, 2014. In Lymer (Re) I identified many defects with that affidavit and concluded at para 14 “... The Affidavit of Records provided by Mr. Lymer is woefully inadequate. ...”. No Affidavits of Records were prepared for the Lymer Companies. [ 50 ] My conclusion on the adequacy of Mr. Lymer’s personal Affidavit of Records was upheld on appeal. [ 51 ] I conclude that Mr.

Lymer and the Lymer Companies breached the Oct. 2, 2013 Production and Examination Order. b. The March 7 Lymer (Re) Catalogue Affidavit Order [ 52 ] Mr. Lymer at the Feb. 25, 2014 hearing argued he was faced with a difficult task in that he had by then realized he lacked the expertise to properly prepare an Affidavit of Records. He required assistance funded by the Objecting Creditors: Lymer (Re) , at para 17 . [ 53 ] My solution was to instruct Mr. Lymer prepare a simpler format for disclosure of the relevant records: Lymer (Re) , at paras 22-23 .

This was to address his concerns on privilege and disclosure of confidential information, but still provide the Objecting Creditors

with a meaningful description of the documents: ... such that Applicants' counsel will have a reasonable understanding of what "he will see in the box without having to look in it". Every page of the books and records must be numbered. If a book or record does not fit within a category they shall be described individually. ... [ 54 ] Deadlines were set for a personal Catalogue affidavit on March 21, 2014, and the corporate affidavits by April 9, 2014, whether complete or not. [ 55 ] In this decision I made several warnings. One was that it was up to Mr.

Lymer to provide the evidentiary foundation for his annulment application, an extraordinary remedy: Lymer (Re) , para 19 . If he wanted to annul his bankruptcy then it was up to him to prove, as he claims, that he was and is not insolvent. I also warned he had not been diligent in the manner he addressed this issue: Lymer (Re) , para 29 . He was informed and should have been well aware of the importance of establishing a documentary record for his claims concerning the Lymer Companies: Lymer (Re) , para 29 . [ 56 ] I also indicated that if Mr.

Lymer did not substantially comply with his legal obligation to catalogue his and the Lymer Companies’ documentary material then I would consider an application to dismiss his annulment application: Lymer (Re) , para 27 . Regardless, he still had an obligation to prepare catalogue affidavits because that was a necessary precursor to his discharge from bankruptcy: Lymer (Re) , para 27 . [ 57 ] Mr. Lymer did not meet the deadlines set. He did, however, deliver Catalogue affidavits for himself and the Lymer Companies on April 14, 2014.

The Objecting Creditors argue these affidavits did not meet the criteria set on March 7 in Lymer (Re) . Further, the Lymer Company affidavits are obviously false or misleading, as they do not account for any of the $15 million that was loaned to those businesses. Mr. Lymer claimed that he did not have possession of these documents as they were in the custody of his lawyer. He was expressly warned in Lymer (Re) , that that was no basis to excuse his failure to catalogue those materials. [ 58 ] The Objecting Creditors argue the April 14, 2014 Catalogue affidavits were, at best, a notational effort by Mr.

Lymer to comply with his court-ordered obligations. [ 59 ] I agree. I believe it is useful to illustrate just how non-responsive Mr. Lymer has been with his April 14, 2014 affidavits. Even though he has on numerous occasions stressed that he has spent a great deal of time in review and organization of the documents associated with the Lymer Companies he still has, apparently, located nothing that would qualify for entry on

Schedule 1. Each affidavit for a Lymer Company has an identical

Schedule 1 which reads:

SCHEDULE 1 1) The company is not in possession or control of any tax returns filed for the years 2007 onward, as well as any records filed concurrent with such tax returns. 2) The company is not in possession or control of any bank, credit union, trust company and brokerage account statements (hard copy and electronic) respecting accounts for the years 2007 and forward. 3) The company is not in possession or control of any cancelled checks made from 2007 forward. 4) The company is not in possession or control of any records that demonstrate the receipt of any funds forming part of the claims of creditors of the estate from 2007 forward. 5) The company is not in possession or control of any records demonstrating the utilization and disposition of funds received from any creditors from 2007 forwards. 6) The company is not in possession or control of any records from 2007 forward that demonstrate the indebtedness of any person (inclusive, without limitation, of any corporate entity). 7) The company is not in possession or control of records demonstrating payments made to Neil A.

Lymer or employees of the Lymer Companies from 2007 forward, including, without limitation, T4 statements. 8) The company is not in possession or control of any internally and externally prepared financial statements from 2007 forward. 9) The company is not in possession or control of any ledgers or other books of account and cheque books maintained or prepared from 2007 forward. 10) The company is not in possession or control of records with respect to all dealings with the Saunders Manor project, which is discussed in one or more of the Lymer affidavits. 11) The company is not in possession or control of records with respect to the Ritchie Industrial project, which is discussed in one or more of the Lymer affidavits. 12) The company is not in possession or control with respect to all dealings to the property located at 4204 – 55 Avenue. [ 60 ] In brief, Mr.

Lymer has done nothing more than list the 12 categories of records identified in the Oct. 2, 2013 Production and Examination Order and Lymer (Re) , and said each Lymer Company has such no documents in its possession. [ 61 ] His June 12, 2014 variants are no better. [ 62 ] The April 14, 2014 affidavits also indicate in most instances that:

... all actual and existing records of the company are under the control of the solicitor of the company, Norm St. Arnaud, Cleall, LLP and have been since February 4, 2014. The actual records are located at; Belmead Professional Building 8944 182 Street Edmonton, AB T5T2E3 [ 63 ] However the 182 St. address is not that of the Cleall LLP firm. Mr. Lymer subsequently in his July 9, 2014 affidavit explained that he had previously stored the documents in the Belmead Professional Building until the company that managed that building was served documents by counsel for the Objecting Creditors. Now displaced, Mr.

Lymer says he had no choice but to deliver those documents to the Dentons Canada LLP Edmonton office as he had no other place to store them. However, this discloses the fact that it was not Mr. St. Arnaud who controlled those materials, but Mr. Lymer himself . He had them delivered . [ 64 ] But what is the most damning is Mr. Lymer’s own materials demonstrate his April 14, 2014 Affidavit of Records are not correct and that he has made false depositions to the Court. His April 14, 2014 Affidavit of Records for Tri-Corp

Canada Business Group Inc. includes the

schedule reproduced above. I note the seventh item: 7) [Tri-Corp

Canada Business Group Inc.] is not in possession or control of records demonstrating payments made to Neil A. Lymer ... from 2007 forward, including ...T4 statements [ 65 ] This same item in Mr. Lymer’s second June 12, 2014 Affidavit of Records for Tri-Corp

Canada Business Group Inc. is identical. [ 66 ] In his July 9, 2014 affidavit, Exhibit “B” Mr. Lymer attached certain tax records which include: Page 11: a 2007 T4 for Neil A Lymer, issued by Tri-Corp

Canada Business Group Inc. disclosing $95,000.00 in employment income. Page 26: a 2008 T4 for Neil A Lymer, issued by Tri-Corp

Canada Business Group Inc. disclosing $96,000.00 in employment income. Mr. Lymer has, at a minimum, lied to the court having produced and sworn a false affidavit as part of his April 14, 2014 disclosure. This alone is a basis to conclude beyond a reasonable doubt that Mr. Lymer and Tri-Corp

Canada Business Group Inc. are in breach of their legal obligations. [ 67 ] This is not the only issue that emerges from review of Mr. Lymer’s July 9, 2014 affidavit. The 2007, 2009, and 2010 tax returns are incomplete: • 2007: Mr. Lymer claims a $18,100.00 charitable donation but does not attach a receipt for that donation; • 2009: Mr. Lymer claims $56,750.00 in employment income, but does not attach any T4 slip to indicate the source of that income; and • 2010: Mr. Lymer claims $32429.07 in employment income, but does not attach any T4 slip to indicate the source of that income. Mr.

Lymer in his June 13, 2014 personal Affidavit of Records states that BDO has his 2011-2013 income tax records, if indeed they do exist. [ 68 ] In Precision Forest Industries Ltd. v Cox , 2013 ABQB 524 at para 50 the Court concluded that an incomplete or ineffective response to a court obligation was a basis to find contempt. That is one way to characterize Mr. Lymer’s activities – the Affidavits of Records he has filed without question fall dismally short of the standard he was required to meet. [ 69 ] I conclude Mr.

Lymer and the Lymer Companies are in breach of their Lymer (Re) legal obligation to document the materials in their possession. No steps have been taken since April 14, 2014 to rectify this defect. B. Does Mr. Lymer and the Lymer Companies Breach of their Legal Obligation Warrant Contempt Sanction? [ 70 ] The next issue is whether Mr. Lymer and the Lymer Companies’ breach of their court-ordered obligations requires court response to force compliance and to punish their misconduct. Put another way, my next task is to evaluate whether Mr. Lymer has an excuse for his misconduct to date. 1. The Tri-Corp

Canada Business Group Inc. False Affidavit [ 71 ] I will first comment on Mr. Lymer having sworn a false affidavit. It is well established law in Alberta that making a false statement under oath is contempt of court. In Arrow-West Equipment Ltd. v GDT Trading Ltd. , 2006 ABQB 762 , 407 AR 129 Acton J observes at para 26: ... In my view, giving evidence knowing it to be false or intentionally destroying the subject matter of an action also constitutes contempt of Court.

Rule 703(3) of the Alberta Rules of Court provides that: "Nothing in this Part prevents, or is to be construed as preventing, the Court, as a superior court, from exercising its inherent power to punish and cite in contempt those who disobey the lawful orders of the

Court, or who otherwise display contempt for its process ..." [Emphasis in original.] See also Murugamoorthy v Canada (Minister of Citizenship and Immigration) , [1998] FCJ No 121 (QL) 77 ACWS (3d) 838 (FC) . [ 72 ] Justice Acton continues to stress that as this is a quasi-criminal proceeding (para 31), a finding of contempt cannot be made unless there is sufficient notice to indicate the alleged ground for that contempt (para 30). [ 73 ] This is not an obstacle in the current application. Mr.

Lymer was very well aware of the allegations against him: that the information in his Affidavits of Records was incorrect or incomplete. [ 74 ] This leaves the question of whether Mr. Lymer had a reasonable excuse for this omission. I cannot see any. By his own account Mr. Lymer has carefully and exhaustively reviewed his personal documentation for relevant items. Similarly there cannot be any confusion as to whether the two T4 slips in the July 9, 2014 affidavit were captured by the relevant document category in the Oct. 2, 2013 order and Lymer (Re) . [ 75 ] I therefore conclude that Mr.

Lymer’s own documents have disclosed his contempt of court. He claims to be incompetent at law, but expert in business. He therefore clearly knew the T4 slips should have been disclosed in his April 14 Affidavit of Records for Tri-Corp

Canada Business Group Inc., but did not do so. This satisfies either the Schitthelm v Kelemen , or FIC Real Estate Fund Ltd. v Lennie criteria for the absence of a reasonable excuse. 2. Breach of Court Instruction: the Oct. 2, 2013 Order and Lymer (Re) [ 76 ] Mr. Lymer filed two affidavits that comment on his efforts to comply with the Court’s instructions. The June 30, 2014 affidavit explains he cannot meaningfully respond in this proceeding. He is “a legal idiot” (para 5), “a complete doofus before the Court.” (para 5). His affidavits are entirely truthful and unchallenged.

He has fully complied with his obligations (para 79). [ 77 ] Counsel for the Objecting Creditors have attempted to intimidate him (para 6) on behalf of their “rogue group” of disgruntled saboteur clients (para 17) via “idiotic, frivolous and vexatious lawsuits” (para 28). Their litigation is solely “... a tactic to extort unreasonable and unnecessary legal fees ...” (para 37). “All lawyers are not honest.” and that is why they have unfair “power ... over the Courts” (para 29). Mr. Rutman, in particular, has breached his ethical obligations. [ 78 ] Mr.

Lymer lacks capacity to prepare the Affidavits of Records and lacks the money to hire assistance. He has no responsibility for the Lymer Companies’ records. He cannot house them because his family prohibits him from bringing those into their home (para 130). He could never have complied with the court order to produce the affidavits, so he is faultless (para 144). Certain of the Objecting Creditors never loaned him or his companies any money (para 188). The bankruptcy proceedings sabotaged thriving businesses.

He is the target of illegal actions by his creditors. [ 79 ] Similarly, his second July 9, 2014 affidavit is broadly critical of court and opposing litigant activities to date. He complains, among other things, that he is mistreated by myself and the Court, mocked by opposing counsel, his associates and family are harassed by the Opposing Creditors and their counsel, no attempts have been made to verify his fair efforts, and as a self-represented litigant he is not treated equally and fairly in the courts. [ 80 ] His chief excuse is that he has nowhere to store, sort, and catalogue the Lymer Company documents.

However he has now solved that obstacle by delivering those materials to the Edmonton Dentons Canada LLP office where he anticipates the Lymer Company records can be properly documented with the assistance of Mr. Rutman, counsel for the Opposing Creditors. [ 81 ] These same protests were made at the July 10 hearing. Mr. Lymer explained he is all but a vagabond, living without any space to call his own. He resides in a room in his former home, now owned by his sister and rented to his son.

He had only managed to store the Lymer Company documents in the Belmead Professional Building thanks to the kindness of its owners. These innocent benefactors are now harassed and abused by the Opposing Creditors and their lawyers. [ 82 ] Mr. Lymer was emphatic that he did not have the space or resources to work on the Lymer Companies’ documents and compile the required affidavits. This is curious, given he has nevertheless managed to produce innumerable documents that have been filed in these proceedings. [ 83 ] Mr. Lymer explained what he had produced was the best he could do.

His step of delivering the Lymer Companies’ documents to the Dentons Canada LLP office was reasonable and necessary. He never would have had to take that step, were it not for the interference by opposing counsel in his affairs. Mr. Lymer stressed that if he had breached a court order it was either an honest error on his part or a consequence of that order requiring something he simply could not do. [ 84 ] I will now review the Lymer bankruptcy proceedings for indicia of legal misconduct, as identified in Chutskoff v Bonora , and then examine certain specific aspects of Mr. Lymer’s activities and statements. a.

Collateral Attack [ 85 ] There are limits to the right of a litigant to challenge a previous court result. Finality is important in legal proceedings. However, vexatious litigants often repeatedly return to the same subjects. [ 86 ] A Court cannot review or vary the decision of another court except in the proper procedural context, such as an appeal. Any attempt to litigate outside of that context is a “collateral attack”.

Justice Abella recently explained that term British Columbia (Workers’ Compensation Board) v Figliola , 2011 SCC 52 at para 28 , [2011] 3 SCR 422: The rule against collateral attack similarly attempts to protect the fairness and integrity of the justice system by preventing duplicative

proceedings. It prevents a party from using an institutional detour to attack the validity of an order by seeking a different result from a different forum, rather than through the designated appellate or judicial review route … [Emphasis added.] [ 87 ] A collateral attack is a frivolous basis for a lawsuit. An attempt to conduct a collateral attack is vexatious: Chutskoff v Bonora , at para 92 ; Dykun v Odinshaw , 2000 ABQB 548 at para 42 , 267 AR 318, affirmed 2001 ABCA 204 , 286 AR 392, leave denied [2001] SCCA No 442. [ 88 ] Mr.

Lymer’s litigation efforts have on several occasions returned to the same subject matter. On Jan. 7, 2014 he applied to Justice Lee to essentially conclude the bankruptcy annulment in his favour, even though I had previously adjourned that proceeding in anticipation of Mr. Lymer and the Lymer Companies document disclosure. That arguably could be generously construed as an irregular appeal, but I conclude it is more properly a collateral attack. [ 89 ] Another clear example of a collateral attack is that on Feb. 24, 2014 Justice Lee rejected an application by Mr. Lymer that Mr.

Rutman disclose communication that potentially establish a conflict of interest. A little over a month later, on April 4, 2014, Mr. Lymer made a parallel application to me. [ 90 ] Justice Lee has also concluded at the June 6, 2014 hearing that Mr. Lymer was returning to subjects that were previously addressed, an abuse of process and waste of time. b. Escalating Proceedings [ 91 ] A well-recognized characteristic of vexatious litigation is that it often ‘escalates’. Over time, more and more issues emerge, are repeated and supplemented.

Often new parties are added, and very frequently these are lawyers: Chutskoff v Bonora , at para 92 ; Dykun v Odinshaw , at para 42 ; Big Bear Hills Inc v Bennett Jones Alberta LLP , 2010 ABQB 764 , 507 AR 21; McMeekin v Alberta (Attorney General) , 2012 ABQB 456 at paras 203 , 205, 543 AR 132; Arabi v Alberta , 2014 ABQB 295 at para 104 . [ 92 ] Mr. Lymer has repeatedly attacked counsel who represent the Objecting Creditors. On Feb. 6, 2014 he applied to have Justice Lee find Mr. Rutman in contempt. Justice Lee rejected that conclusion on Feb. 24, 2014. Mr. Lymer has also persistently alleged Mr.

Rutman is in a conflict of interest and should be removed from the file. He applied on Feb. 21, 2014 to Lee J to force Mr. Rutman disclose information to support that allegation. Justice Lee rejected also rejected that application on Feb. 24, 2014. [ 93 ] Another disclosure application was made to me on April 4, 2014. As I have discussed above, that is a collateral attack on Justice Lee’s Feb. 24, 2014 decision. [ 94 ] Since then Mr. Lymer has initiated a formal complaint with the Law Society of Alberta (see June 30, 2014 affidavit Exhibit “D”). I note Mr.

Lymer’s apparent low regard for that institution is reflected in his Sept. 25, 2014 affidavit where he complains of the deceptive practices of that organization and how it shields unethical lawyers. [ 95 ] More recently Mr. Lymer has expanded his complaints to include co-counsel Ryan Quinlan, who Mr. Lymer alleges has provided false testimony and harassed innocent third-party businesses, allegedly as a stratagem to interfere with Mr. Lymer obtaining counsel: June 30, 2014 affidavit at para 277. c.

Bringing Proceedings for Improper Purposes [ 96 ] A range of improper bases for litigation are identified in Chutskoff v Bonora at para 92 . This includes litigation

a) without a legal basis and intended disrupt, pre-empt, or frustrate other litigation...

b) with an ulterior motive or to seek a collateral advantage ...

c) intended to extort a settlement or other benefit ...

d) intended as revenge, harassment, to oppress, or to inflict harm: ...

e) conducted in retaliation to other persons’ successes or their failure to cooperate with the plaintiff, including unwarranted complaints to professional bodies ... [Citations omitted] [ 97 ] This category catches potentially valid litigation steps but which are obviously taken for inappropriate purposes when viewed in the context of the proceeding as a whole. I have no difficulty concluding that Mr. Lymer’s entire litigation strategy has these objectives. It may be reduced to a simple point. Mr.

Lymer says he is not insolvent and never has been – and he can prove it. [ 98 ] If so, then why barrage the court and opposing parties with application upon application, affidavit after affidavit, why dispute and complain at every point? The timeline above makes it obvious that this litigation has been resisted – unsuccessfully – at every turn. [ 99 ] Individual procedures are also suspect when viewed on their own, for example: • Mr. Lymer applied to have the Objecting Creditors pay a very large sum to prepare materials that are Mr.

Lymer own responsibility if he is to prove the basis for his annulment application, a kind of foisted litigation obligation. • Mr. Lymer’s application to hold Mr. Rutman in contempt was based on nothing but bald allegation and innuendo. • Mr. Lymer directed his Proof of Claim Application to only those creditors who had questioned or resisted Mr. Lymer’s discharge

and annulment obligation; clearly nothing more than an attempted reprisal. [ 100 ] As Justice Shelley observed in McMeekin v Alberta (Attorney General) , 2012 ABQB 456 at para 199 , 543 AR 132: ... People make mistakes, and (hopefully) learn from them. When a person takes an incorrect action, is informed of their error, but then persists and commits the same ‘error’ again and again, that is evidence that the person does not misunderstand their action is incorrect. Rather, that indicates the person wants to break the rules. [Italics in original.] [ 101 ] Whatever Mr.

Lymer’s purpose may be, it is obvious from the volume and failure of his litigation activities that his objective is not to prove he is not a bankrupt. It is something else. d. Persistently Taking Unsuccessful Appeals from Judicial Decisions [ 102 ] Mr. Lymer has repeatedly appealed decisions that relate to his bankruptcy, all without success: May 17, 2011, June 6, 2014. As discussed above, his Jan. 7, 2014 application heard by Justice Lee is better characterized as a collateral attack on my earlier orders. It is nevertheless, a futile challenge to the action of a lower tribunal. e.

Unsubstantiated Allegations of Conspiracy, Fraud, and Misconduct [ 103 ] Vexatious litigants frequently allege they are the targets of conspiracy, prejudice, persecution, and misconduct by government and legal actors. In Chutskoff v Bonora at para 92 Justice Michalyshyn surveys how courts have described this factor:

a) claims of judge and lawyer deception, fraud, perjury, conspiracy, tampering of records and transcripts, and other conspiratorial misconduct made without the positive evidence ... legally required to support such allegations ...

b) sensational claims of conspiracies and intimidation, harassment and racial bias ...

c) pleadings that are “replete with extreme and unsubstantiated allegations, and often refer to far-flung conspiracies involving large numbers of individuals and institutions”, “where the allegations may be unfounded in fact or merely speculative, but the language is vitriolic, offensive and defamatory” ...[Citations omitted] [ 104 ] These factors emerge in Mr. Lymer’s materials. I have surveyed his negative commentary on the legal practice and specific lawyers, while allegedly facing unfair treatment in the Courts. In his affidavit of July 9, 2014 he states Mr.

Rutman “mocks my efforts and hard work as I desperately try to stay compliant with the complex and unfair Orders of Registrar Smart.”, and alleges the Dentons Canada LLP law firm targets and harasses unrelated businesses that have innocently helped Mr. Lymer. Incredibly, he says he is aware of covert and secret applications being made by Dentons, ostensibly heard by the Court but then sealed by Order. What these Orders might contain or their purpose is unclear. [ 105 ] This unfairness is a form of prejudice in favour of lawyers and the Objecting Creditors. In his July 9, 2014 affidavit Mr.

Lymer observes I find [the actions of the Objecting Creditors] to be very unfair and bizarre and I often wonder why the Courts continually allow them to be so abusive. ... [He] is being unjustly and unfairly held hostage within the abusive Bankruptcy process ... [ 106 ] Mr. Lymer describes his existence via dramatic terms: he is alienated from his friends and family who refuse to permit him to bring his bankruptcy materials into their presence, he is a “toxic individual to my friends, family, and former business associates.” [ 107 ] Mr. Lymer identifies me in particular.

He has twice sought I recuse myself (Feb. 6 and June 10, 2014) and applied to Justice Lee twice to have me removed from my role as Registrar (Jan. 7 and May 30, 2014). He thinks I am prejudiced in favour of those who oppose him and predicts in his Sept. 25, 2014 affidavit that my object is to “hammer” him so that he will “... be imprisoned by the Courts for the rest of my natural life. ...”. I seek to destroy him: ... [T]he court is only interested in punishing me and breaking my spirit ... [ 108 ] That said, at other occasions Mr. Lymer has nothing but good things to say about others.

For example, in his June 30, 2014 affidavit at para 193 he considers my conduct beyond reproach (though I still should be replaced): Although I continually stress that I know Registrar Smart to be a man of impeccable integrity, I strongly believe that perhaps a fresh look is needed to help move the outstanding matter along. [ 109 ] However his more recent evaluations are less favourable. His Oct. 14, 2014 affidavit states: On Sept. 25, 2014, I appeared before Registrar Smart seeking his assistance with my public and worldwide humiliation, and was taken aback by his satisfaction in my misfortune.

Registrar Smart was giddy with delight that I was experiencing this level of global embarrassment. This has caused me to realize for the 1st time how much disdain Registrar Smart has for me and why I have not been able to get a fair hearing before him. [ 110 ] Mr. Lymer’s exaggerated view of his litigation is also illustrated in his Oct. 14, 2014 application, at para 32: There is no precedent, in all of Canada, that could compare to the abuse the Court of Queen’s Bench has brought upon Neil A. Lymer. [ 111 ] Mr. Lymer reserves his most unkind comments for the Objecting Creditors.

He has called them “intellectually stupid people” and “human cancer”. Mr. Lymer contrasts those who oppose him with his supporters, “the forgotten Creditors” (June 30, 2014 affidavit at para 253):

The heinous acts of “marital infidelity, spousal abuse, and criminal activity” factually exist amongst members of the [Objecting Creditors]. However, more importantly these sad acts do not exist amongst the families of the long ago forgotten vast majority of Creditors.

The forgotten Creditors are made up of intelligent, well healed, reasonable and lawful people with no acts of volatility amongst them this making their wish for an amicable resolution to these matters to be more reasonable. [ 112 ] He alleges slander, that the Objecting Creditors have hired stalkers to harass him, the Lymer Companies, and other creditors.

Similar criticisms are found in the Aug. 25, 2014 affidavit where he states the Objecting Creditors engage in slander and are “an abusive group of hostile individuals ...” who “... use the Courts as a punitive bully for the sole purpose of causing egregious and irreparable damage to Neil A. Lymer.” [ 113 ] I think it is fair to depict Mr. Lymer’s characterization of others involved in this process, including me, as ‘passive/aggressive’. It also betrays the way vexatious litigants often exaggerate themselves as unblemished but faced with a dark and evil design. The passages I have cited are only examples. Mr.

Lymer’

[…]