Dealing With a Breach of a Court Order

When a party fails to abide by an interlocutory court order, there can be several consequences. For instance in Ontario, Rule 60.12 of the Rules of Civil Procedure states that “…the court may, in addition to any other sanction provided by these rules, (a) stay the party’s proceeding; (b) dismiss the party’s proceeding or strike out the party’s defence; or (c) make such other order as is just.”

In the recent case, Buduchnist Credit Union Limited v. 2321197 Ontario Inc., 2024 ONCA 57 at para 53, the Ontario Court of Appeal reaffirms that the court’s discretion to respond to a breach of a court order is broad. This broad discretion comes from the court’s inherent jurisdiction to prevent an abuse of process.

This broad jurisdiction is not currently limited by legislation. Section 140(5) of the Courts of Justice Act, which deals with vexatious proceedings, states that “Nothing in this section limits the authority of a court to stay or dismiss a proceeding as an abuse of process or on any other ground.”

When attempting to vary a court order to avoid non-compliance, parties should consider their past behaviour. At para 47, the court states that “a party seeks a discretionary exercise of the court’s equitable jurisdiction, the court may deny relief if the party is in default of a court order or has otherwise acted inequitably”. Parties must come to court with “clean hands” (see para 49).

Buduchnist Credit Union Limited v. 2321197 Ontario Inc. serves as a reminder that court orders are to be respected, followed, and come into force immediately (unless stated otherwise).