| Date: | 2009-02-26 |
| Docket: | CV-08-00360497-0000 |
| URL: | http://canlii.ca/t/22p3l |
| Citation: | Mercedes-Benz Financial (DCFS Canada Corp.) v. Kovacevic, 2009 CanLII 9368 (ON SC), <http://canlii.ca/t/22p3l> retrieved on 2014-02-16 |
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| Noteup: | Search for decisions citing this decision |
| Reflex Record | Related decisions, legislation cited and decisions cited |
COURT FILE NO.:
CV-08-00360497-0000
DATE: 20090226
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Mercedes-Benz
Financial, a business unit of DCFS Canada Corp. v. Ivica Kovacevic also known
as John Kovacevic
BEFORE: Justice
D. M. Brown
COUNSEL: E.
Gray, for the Plaintiff/Moving Party
I.
Kovacevic, defendant in person
DATE
HEARD: February 19, 2009
E N D O R S E M E N T
I. Overview
[1] Mercedes-Benz
Financial moves to find Mr. Ivica Kovacevic, also known as John Kovacevic, in
contempt of the order of Master Peterson made August 19, 2008. Mr. Kovacevic
bought a 2007 Mercedes-Benz E63 in September, 2007, under a conditional sales
contract. He made the first seven monthly payments, then stopped. He refused
to make any further payments or return the car to MBF. The plaintiff obtained an
Order from Master Peterson requiring Mr. Kovacevic to deliver up the car and to
inform the Sheriff of the Peel Region, or any other region, where the car was
located. He has failed to do so.
[2] The
question I must determine is whether Mr. Kovacevic’s failure constitutes a contempt
of court.
II. The record before the court
[3] Prior to reviewing
the evidence and making findings of fact, it is important that I identify the
evidence before me. MBF filed a motion record in support of the contempt order
containing an affidavit from Dale Brezinski, an employee of MDF, sworn January
12, 2009. The plaintiff also filed the record that was before Master Peterson
in August, 2008.
[4] When this
matter first came before me on February 9, 2009, Mr. Kovacevic had not filed
any responding materials, although properly served. As I will describe in more
detail below, I adjourned the motion until February 19, 2009, to provide Mr.
Kovacevic with an opportunity to file materials. I also encouraged him to
retain counsel, but he has decided not to do so. Mr. Kovacevic has filed an
affidavit affirmed February 11, 2009. At the February 9 hearing Mr. Kovacevic
filed four documents regarding his identity, which were marked as Exhibit 1.
[5] Mr.
Kovacevic’s affidavit did not question or contradict the facts set out in MBF’s
affidavit. As a result, on the record before me I do not see any controverted
facts relating to matters essential to this motion. At the commencement of the
February 19 hearing I asked both parties whether they wished me to direct a
trial of any issue; neither asked me to do so. Accordingly, I consider it
appropriate to proceed to consider this motion on the basis of the affidavit
evidence filed: R. v. B.E.S.T. Plating Shoppe Ltd. 1987 CanLII 4056 (ON CA), (1987), 59 O.R. (2d)
145 (C.A.).
III. Facts
[6] Based on
the evidence filed I have no hesitation in finding that MBF has established the
following facts beyond a reasonable doubt:
(i)
On September 7, 2007, Mr. Kovacevic entered into a Conditional Sales
Contract with Mercedes-Benz Mississauga under which he purchased a 2007
Mercedes-Benz E63 for $145,769.81. Of the total purchase price, $120,769.81
was financed. Under the Contract Mr. Kovacevic was required to make 84 monthly
payments of $1,967.06 each;
(ii)
Mercedes-Benz Mississauga assigned the Contract to the plaintiff,
Mercedes-Benz Financial;
(iii)
In the event of default, including failing to make payments when due,
the Contract entitled MBF to sue for amounts owed under the Contract and also
to repossess the car;
(iv)
Mr. Kovacevic made seven monthly payments from October 7, 2007 until
April 7, 2008;
(v)
Mr. Kovacevic has not made any payments since April 7, 2008, despite
frequent demands by MBF to do so;
(vi)
MBF commenced this action on August 12, 2008, seeking payment of
$116,950.01 pursuant to the Contract, as well as interim and permanent possession
of the car;
(vii)
On August 12, 2008, Master Peterson made an ex parte order
granting MBF interim possession of the car, which was valued at $80,300.00. Paragraphs
2 and 3 of the Order provided as follows:
2.
THIS COURT FURTHER ORDERS that the Defendant or any other person in
possession of or with the custody or having control over the Vehicle shall
forthwith deliver up possession of the Vehicle to the Sheriff of the Regional Municipality
of Peel and/or the Sheriff of any other jurisdiction in which the Vehicle may
be situate (the “Sheriff”).
3.
THIS COURT FURTHER ORDERS that forthwith after service of a copy of this
Order, the Defendant shall inform the Sheriff of the exact location of the Vehicle.
(viii)
Notwithstanding service of the Order on Mr. Kovacevic, he has refused to
deliver up possession of the car and he has failed to inform the Sheriff of its
exact location.
(ix)
Mr. Kovacevic failed to file a statement of defence. On February 4,
2009, Mr. Kovacevic was noted in default.
(x)
On February 5, 2009, the Local Registrar signed default judgment against
Mr. Kovacevic for the amount of $125,163.65, and $1,100 for costs.
IV. Analysis
A. Governing principles
[7]
The Court of Appeal described the elements required to find a person in
contempt of court in Hobbs v. Hobbs, [2008] O.J. No. 3312 (C.A.), at paragraph 26:
In Prescott-Russell Services for Children and Adults v. G. (N.) et al
2006 CanLII 81792 (ON CA), (2007), 82 O.R. (3d) 686, at para. 27 (C.A.), Blair J.A. set out the test for a
finding of contempt of court:
The criteria applicable to a
contempt of court conclusion are settled law. A three-pronged test is required.
First, the order that was breached must state clearly and unequivocally what
should and should not be done. Secondly, the party who disobeys the order must
do so deliberately and wilfully. Thirdly, the evidence must show contempt
beyond a reasonable doubt. Any doubt must clearly be resolved in favour of the
person or entity alleged to have breached the order.
B. Identity of the Mr. Kovacevic
[8] On the initial
return of the motion on February 9, 2009, Mr. Kovacevic refused to come forward
to the counsel area when the case was called. Instead, he stood at the rear of
the courtroom and refused to cross the bar into the court, notwithstanding my
direction that he come forward. When I asked Mr. Kovasevic whether he was the defendant,
he refused to give a straight answer, stating that he appeared as a friend of
the court with a beneficial interest in the proceeding and he wanted to see the
matter resolved.
[9] After some
further exchanges Mr. Kovasevic then asked me to look at several documents. I
asked him to come forward and hand them to the Registrar. Initially he
refused, stating that he would hand the documents to the police officer in
attendance who could give them to me. I informed Mr. Kovacevic that was not the
procedure used in our courts, and I asked him to come forward and hand the
documents to the Registrar. He did so, all the while stating that he was
entering into the counsel area without prejudice to his rights.
[10] Mr. Kovacevic handed up four documents,
which together were marked as Exhibit 1. The first document is a Province of
Ontario Statement of Live Birth for the child Ivica (Johnny) Kovacevic,
recording that he was born at the Toronto East General Hospital on June 20,
1974. His parents lived in Rexdale. In the bottom right-hand corner of the Statement
of Live Birth, Mr. Kovacevic had printed the following language:
Accepted for value returned
for value for settlement and closure in this matter. Release the order of the
court to me immediately.
Below that language appeared Mr. Kovacevic’s signature,
the date - February 6, 2009 - and the notation, “EIN 501537385”.
[11] The second document contained in
Exhibit 1 is a photocopy of an Ontario Birth Certificate for Ivica Kovacevic, showing
a date of birth of June 20, 1974. The attachment to the certificate indicates
that at the time of the document’s issuance Mr. Kovacevic resided at 34 Bushberry
Road, Brampton. On the face of the Birth Certificate Mr. Kovacevic had
printed, “Accepted for value returned for value for settlement and closure in
this matter”, followed by his signature, the date - October 6, 2008 - and the
following “ACCT # 501537385”. In the body of the photocopy appeared the same “accept
for value” language which Mr. Kovacevic had endorsed on his Statement of Live
Birth, except that the date noted was February 9, 2009.
[12] The third document handed up to me
by Mr. Kovacevic was one entitled “Claim-of- Right”, dated February 6, 2009.
At the top of the document appeared a photograph of Mr. Kovacevic, under which was
printed, “flesh:bone:likeness”. To the right of the photograph were a
fingerprint and a red blob, under which appears the title “blood of the life”.
Mr. Kovacevic signed the document in two places and affixed what appears to be
a Canadian postage stamp.
[13] The Claim-of-Right contains a
combination of statements made by “Ivica-John: Kovacevic”, some of which are
followed by Old and New Testament passages. The statements are preceded by the
following recital:
For this claimANT’s-knowledge of
this physical-life/sovran-charter-vessel is with this claim of the livebirth-appellation:
I,:Ivica-John: Kovacevic., ON THIS DATE – SIXTH DAY, OF THE MONTH-FEBRUARY, IN
THE YEAR – 2009, BY THIS WITNESS CLAIMANT.
The text continues with Mr. Kovacevic recognizing God as
the creator of all things and he then makes the following statements:
(i)
He is made in the image of the creator;
(ii)
He claims dominion over all the earth;
(iii)
He loves the creator, and his brother and sisters as himself;
(iv)
It is a violation of his faith to serve two masters;
(v)
He is a child of the creator and “an heir to the [pre-]paid covenant,
although not of this world – to be in his world in peace without worship to false
idols”; and,
(vi)
He claims “that my volition and relationship with the Creator supersedes
the fictitious language(s) of this world.”
[14] The fourth document forming part
of Exhibit 1 is a “Security-Agreement SA-IK-1112-007” signed twice by Mr.
Kovacevic: once in his capacity as “secured-party, first-party”, and then again
as “debtor, second-party”. Dated December 11, 2007, the Security Agreement is
a most unusual document but, since it seems to lie at the heart of Mr.
Kovacevic’s strategy on this motion, I will set it out in full:
This Commercial-Security-Agreement
is made and entered into on the 11th day of December, in the year
2007, effective ab initio dob June 20th, 1974, by and between the flesh
and blood living man Ivica: Kovacevic, c/o General Delivery Brampton Post
Office (referred to hereinafter as “Secured-Party”, and also known as the
creditor and\or holder-in-due-course), of the First Part, and the juristic person\strawman\legal
entity IVICA KOVACEVIC of 34 BUSHBERRY ROAD, BRAMPTION, ONTARIO L7A 1L3 (and\or
any alphanumerical variation(s) and\or derivative(s) thereof) (referred to
hereinafter as “Debtor”), of the Second-part. This Commercial-Security-Agreement
supersedes and replaces, nunc pro tunc, any presumed, implied, assumed,
or actual co-business partnership, attorney-in-fact, trustee, fiduciary, or
accommodation party arrangements that may have existed between the
Secured-Party and the Province created Debtor, and\or any third party.
For the sum of one (1)
dollar, and other valuable consideration already received (labour), all
property of Debtor (party of the Second-Part) now owned and\or hereafter
acquired, including but not limited to: all instruments, assets, accounts,
property, products, proceeds, and fixtures, etc. (hereinafter jointly and
severally “Property”) is transferred to and hereby the property and security of
the Secured-Party, (party of the First-Part). Any\all Property not specifically
listed, named or referenced, is included in the same. All Property is accepted
for value and is exempt from levy. All Property and the Orders therefrom are
released to the Secured-Party’s strawman, and before any of said property can be
exchanged, sold, tendered or in any manner disposed of, Secured-Party must be
compensated no less than ninety-nine billion (99 0000 000 000.00) in fuctional
currency of Canada(sic).
The Debtor agrees to notify
all employers and creditors of the same, as all Debtor’s Property is as of this
date, property of the Secured-Party. Debtor is a Transmitting-Utility for Secured-Party,
and the Secured-Party is herby granted Power-of-Attorney. Debtor agrees to Hold-Harmless
the Secured-Party of any\all actions taken, and indemnifies the same by way of
Bond.
The Secured-Party is with the
common-law copy-claim of IVICA KOVACEVIC © (and any\all alphanumerical
variation(s)\derivative(s) thereof).
This privately held Security-Agreement
is not dischargeable in bankruptcy court (or otherwise) as the property of the Secured-Party
is exempt from levy.
The Secured-Party reserves
the right to amend the terms and conditions of this Security-Agreement at any
time.
The Secured-Party expressly
Reserves All Rights.
[15] It appears that by this document
Mr. Kovacevic has attempted to split himself into two separate persons – a
“flesh and blood living man”, and a “juristic person\strawman\legal entity”
created by the Province of Ontario. If one takes the document at face value, then
Mr. Kovacevic impliedly acknowledges that up until December 11, 2007 – i.e.
three months after he had purchased the Mercedes-Benz - he was a “juristic
person”. He then attempts to transfer to his newly created “flesh and blood
living man” all his property then owned. The document notably is silent as to
what happened to the debt held at that time by the “juristic person”.
[16] I will return later to the role
played by this document in Mr. Kovacevic’s response to this motion. For
present purposes, I find that the four documents filed with the court by Mr.
Kovacevic and marked as Exhibit 1 prove, beyond a reasonable doubt, that the
person who appeared before me on February 9 and 19, 2009, was one and the same person
as the defendant in this action, Ivica Kovacevic, also known as John Kovacevic.
[17] Rule 60.11(2) of the Rules of
Civil Procedure requires that the notice of motion for a contempt order be
served personally on the defendant. I am satisfied that MBF complied with this
rule. The plaintiff filed an affidavit of service from a process server
attesting to personal service of the motion record on “John”, a resident of 34
Bushberry Road, on January 22, 2009. MBF also filed a copy of the motion
record on which Mr. Kovacevic endorsed, on both the front and the back, the
following:
Accepted for value front and
back, returned for value without dishonour for settlement and closure in this
matter. Release the order of the court to me immediately.
(signed) Ivica Kovasevic
February 6, 2009
EIN #50153737385
Although Mr. Kovacevic endorsed that he wanted the Order
released to him, in fact the record on which he made the notation contained a
copy of the Order. Mr. Kovacevic received that which he demanded.
[18] A copy of the August, 2008, motion
record was also served personally on Mr. Kovasevic on February 6, 2009, and he
endorsed the same language on it.
[19] Mr. Kovasevic appeared on the
returns of the motion on February 9 and 19, 2009.
[20] I am satisfied that MBF has
complied with the service requirements of Rule 60.11(2).
D. Adequacy of notice
[21] On a motion for contempt the
notice of motion must set forth concrete facts of a nature to identify the
particular acts alleged to constitute contempt with sufficient particularity to
permit the defendant to purge the contempt: Dare Foods (Biscuit Division)
Ltd. v. Gill, 1972 CanLII 506 (ON SC), [1973] 1 O.R. 637 (H.C.J.).
[22] MBF’s notice of motion contains a
clear allegation that Mr. Kovacevic is in contempt of the Order because he
failed to return the car to MBF and failed to inform the Sheriff of its
location. Adequate notice of the alleged contempt has been given.
E. Evidence filed by MBF
[23] The affidavit of Mr. Dale
Brezinski contains evidence of which the affiant has direct knowledge, as well
as some evidence to which he swears on information and belief. Rule 60.11(3)
permits statements of information and belief “only with respect to facts that
are not contentious” as long as the source of the information and fact of the
belief are specified. On this motion Mr. Kovacevic has not disputed any of the
facts asserted by MBF. The sources of the statements made on information and
belief contained in the plaintiff’s affidavit are identified and the fact of
the belief specified. I conclude that the evidence filed by MBF meets the
requirements of Rule 60.11(3).
F. Order
[24] The Order of Master Peterson
stated clearly and unequivocally what Mr. Kovacevic was required to do: Prescott-Russell
Services for Children and Adults v. G.(N.) et al 2006 CanLII 81792 (ON CA), (2007), 82 O.R. (3d) 686
(C.A.), para. 27.
G. Knowledge of order of Master Peterson
[25] On a motion seeking to find a defendant
in contempt of a court order, the moving party must prove that the defendant
was aware of the terms of the order: College of Optometrists of Ontario v.
SHS Optical Ltd. 2008 ONCA 685 (CanLII), (2008), 93 O.R. (3d) 139 (C.A.), at para. 71. Generally a
copy of the order must be served on the person affected by it in sufficient
time to enable the defendant to perform the ordered act: Donald Ferguson, Ontario
Courtroom Procedure, 2009, pp. 540-541.
[26] I have no hesitation in finding
that Mr. Kovacevic was aware of the Order as early as August 26, 2008.
[27] On that day, Mr. Andrew McNaught,
an employee of MBF, sent a copy of the Order to Mr. Kovacevic by email at his
work email address: john@tampainterior.com. Mr. McNaught explained that
MBF had been unable to locate Mr. Kovacevic to serve him and requested that Mr.
Kovacevic contact him “so that appropriate arrangements can be made to serve
this court order.”
[28] There is no doubt that Mr.
Kovacevic received the email, for later on August 26 he responded to Mr.
McNaught, from his work email address, writing:
I fully accept your offer for
value and return it for value. I will be going to the court this week to
settle this matter as required. I expect that you will be returning my note?
I will be seeking the return of my note immediately with accrued interest
applied at [?]2% interest per moth (sic) holding you personally liable, as my
fiduciary agent, applied from the date of receipt of the instrument.
Mr. Kovacevic signed himself as “John”. I will deal
later in these reasons with the “note” to which the Mr. Kovacevic referred.
[29] On September 4, 2008, MBF served
on Mr. Kovacevic a copy of the motion record used before Master Peterson. On
the front of the record appears a stamp, signed by Mr. Kovacevic, which reads:
Non-Negotiable
Accepted for value
Approved for payment
Accepts for value this
presentment and ALL related endorsements front and back, in accordance with the
Bills of Exchange Act §54, the Uniform Commercial Code 3-419, Order in Council
#16 of April 10, 1933, House Joint Resolution 192 of June 5, 1933, and 1 S.C.R.
1148. Please release ALL proceeds, products, accounts and fixtures to me
immediately.
Exempt from Levy
Priority – Prepaid
(signed) Ivica Kovacevic
September 4, 2009
Employer ID#: 501537385
[30] On November 7, 2008, Mr. Kovacevic
sent an email to Officer Matthew Pelissier of the Peel Regional Police and Mr.
Brezinski of MBF. He signed the email as John Kovacevic, and attached the
electronic signature of his place of work, Tampa Interior Systems Inc., 1900
Sismet Road, Mississauga. In that email he took the following position:
I have accepted [Mr.
Brezinski’s] request to surrender the car upon presentation of the originally
signed court order which he fail (sic) to produce. I requested once again for
him to come back again with the required paper work.
As I have previously stated, I
am NOT refusing to return the car. On the contrary, I fully accept my
responsibility to return the car providing I am legally and lawfully bound to
do so. I believe I have acted in good faith and have already fulfilled all
obligations on the car. I understand that it is the position of Mercedes-Benz
that I have not. I do however want to remain in honour, so please allow me to
extend another opportunity to settle this matter once and for all without
wasting anyone’s time. Please make sure the next person that comes for the car
brings with them a certified true copy of the Court Order requiring me to do so
and I will surrender it. Simple as that.
(emphasis in original)
[31] On December 10, 2008, Mr.
Kovacevic, using the name Ivica Kovacevic, wrote to Mr. Klaus Entenmann, CEO of
Daimler Financial Services in Michigan, stating:
During a police visit, I
instructed Officer MATTHEW PELISSIER #1561 of the Peel Region Police on
September 8th, 2008 that I was in peaceful possession of the vehicle
and that I would immediately comply with any ORDER OF THE COURT to surrender
the vehicle upon presentment of a certified true copy of the court order signed
by a Judge. I followed that conversation up with an email to Officer MATTHEW
PELISSIER #1561 stating the same. I also informed a supposed agent of
MERCEDES-BENZ FINANCIAL, who identified himself as Dale Brezinski, of the same
on November 7th, 2008. I do not consent to surrendering the vehicle
without proper validation of claim or authority and will consider any further
attempts to do so by MERCEDES-BENZ FINANCIAL or any of its agents as acts of
intimidation, fraud, extortion, and/or theft causing harm to me, the living
man.
His letter concluded with the following language, placed
in bold type in the original:
This letter serves as notice
that, absent the validation of a claim within ten (10) days, you must cease and
desist any and all activity and are prohibited from contacting me, through the
mail, by telephone, in person, at my home or at my work. You are further
prohibited from contacting my employer, my bank, or any other third party.
Each and every attempted contact, in violation of this Act, will constitute
harassment and defamation of character and will subject your agency and/or
board, and any and all agents in his/her/their individual capacities, who take
part in such harassment and defamation, to a liability for actual damages, as
well as statutory damages of up to $100,000 for each and every violation and a
further liability for legal fees to be paid to any counsel which I may retain.
[32] That letter elicited a response
from plaintiff’s counsel to Mr. Kovacevic by letter dated December 29, 2008.
The letter was mailed to Mr. Kovacevic’s work address and emailed to him. Counsel
wrote:
Please confirm a convenient
time and place for our process server to meet with you and hand deliver a
Certified True Copy of the Order of Master Peterson dated August 19, 2008 (the
“Order”). I enclose a copy of the Certified True Copy of the Order for your
information. As you have already noted, the Order requires you to deliver up
possession of the Vehicle to the Sheriff of the Regional Municipality of Peel
and/or the Sheriff of any other jurisdiction in which the Vehicle may be
situate.
MBF filed the email messages proving that the email was
received and read.
[33] As I have noted, MBF served Mr.
Kovacevic with the motion record for the contempt order on January 22 and
February 6, 2009. Each record contained a copy of the Order.
[34] MBF has established that it served
Mr. Kovacevic four times with the Order – August 26 and December 29, 2008, and
January 22 and February 6, 2009. His email of November 7 and letter of
December 10 indicate that he was well aware of the Order and was simply playing
a game with MBF and the Peel Regional Police, insisting on service of a
certified copy of the order (which is not a requirement of the Rules).
Notwithstanding service of a certified copy of the Order by counsel’s letter of
December 29, 2008, Mr. Kovacevic did not return the car.
H. Failure to comply with the order
[35] To establish contempt of court the
moving party must prove, beyond a reasonable doubt, that the person who
disobeyed the order did so deliberately and willfully: Prescott-Russell
Services, supra.
[36] In his email of November 7 and
letter of December 10, 2008, Mr. Kovacevic acknowledged that he retained
possession of the car. MBF has filed evidence that Mr. Kovacevic continues to
refuse to deliver up the car or inform the Sheriff of its location. In my
endorsement of February 9 I afforded Mr. Kovacevic an opportunity to file
responding materials, if he so wished. He filed an affidavit affirmed February
11, 2009. In it he made no mention of the car. At the hearing on February 19,
2009, Mr. Kovacevic made no mention of the car during his submissions.
[37] The evidence before me is clear
and uncontradicted: notwithstanding his knowledge of the Order, Mr. Kovacevic
has not returned the car, nor has he informed the Sheriff of its location.
[38] In this case Mr. Kovacevic
represented himself. He did so by choice. I urged him at the February 9
hearing to retain a lawyer; he did not do so. Although it is not the role of a
judge to assume, or appear to assume, the role of counsel for a
self-represented litigant, a judge must ensure that such a person receives a
fair hearing: College of Optometrists, supra.,
para. 59. Notwithstanding the legal incoherence of Mr. Kovacevic’s submissions
during the February 19 hearing, I think it is incumbent upon me to attempt to
identify from the materials which he filed, and the submissions he made, the
various justifications Mr. Kovacevic advanced for his conduct.
H.1 Jurisdiction over Mr. Kovacevic: the
Sovereign Man explanation for non-compliance
[39] From his conduct and submissions Mr.
Kovacevic made it clear that he denied any right of this court to exercise
authority over him. When, on February 19, 2009, I asked Mr. Kovacevic whether
he wanted to make any submissions, he replied:
Your Honour, if you can
address me as beneficiary, I’d be more than happy to respond. I cannot respond
to Mr. or any kind of legal fiction name that you may apply or presume or
assume I am and clearly not.
That position was in line with the one taken by Mr.
Kovacevic in his Claim-of-Right where he professed that his “volition and
relationship with the Creator supersedes the fictitious language(s) of this
world”. It was also consistent with the document Mr. Kovacevic attached to his
affidavit entitled, “Denial of Corporate Existence”. In it he denied participating
“in any commercial activity in de facto corporate Canada”, stated that he was “not
liable for any debts, charges or liabilities imposed by the Crown upon its own
creation”, and asserted that he was “not subject to the jurisdiction of the
corporate, administrative Courts of Canada or the United States of America, or
of a Province of Canada or a State of the United States in any civil, criminal
or contractual mater arising from a Statute of the Federal or Provincial de
facto governments of Canada and or the United States of America”.
[40] Whatever may be the role of legal
fictions in Canadian law, our law is clear on one point: once a person is born
alive, the law accords recognition to, and imposes legal obligations on, the
person by reference to the legal name the parents give to the person, or by
reference to any change of name the person makes in accordance with the law.
In his Commercial-Security-Agreement Mr. Kovacevic purported to divide himself
into two – the real, “flesh and blood living man”, and the fictitious,
“juristic person\strawman\legal entity”. Our law does not recognize any such
distinction – the flesh and blood person is one and the same as the legally
recognized person.
[41] In R. v. Klundert 2008 ONCA 767 (CanLII), (2008),
93 O.R. (3d) 81 (C.A.) the Court of Appeal considered, and rejected, an
argument by a taxpayer that a legally-significant difference existed between
the concepts of “natural person” and “person”. Although that case involved
defences to criminal charges, the reasoning of the Court of Appeal in paragraph
20 of its decision applies equally to the present case:
More important, the essence of
his argument is that "the Act does not apply to me because I choose to
have it not apply to me". Contrary to what Mr. Christie says, this is a
jurisdictional argument (and one which is void of merit) that leads to a
mistake of law which does not afford a defence. This court has already said in
Klundert No. 1 -- this kind of mistake of law is irrelevant to the fault
requirement of the charge of tax evasion.
[42] Mr. Kovacevic couched his
independence from the authority of Canadian law in terms of exclusive obedience
to his creator, and his Claim-of-Right recited seven verses from Biblical
scripture in support. Canadian law draws on a rich heritage of recognizing the
seminal role religion plays in the lives of many people. We enjoy a robust
jurisprudence that protects freedom of religion. Indeed the opening recital of
our Canadian Charter of Rights and Freedoms affirms that “Canada is
founded upon principles that recognize the supremacy of God and the rule of
law.” While the spheres of the temporal and the spiritual have co-existed
throughout our legal history, adherence to transcendent precepts does not
relieve a person of temporal obligations. In this regard I observe that Mr.
Kovacevic’s Claim-of-Right, which recited verses from the Bible, omitted the most
significant scriptural reference upon which Christian political thought has
rested over the centuries: “Render unto Caesar the things which
are Caesar’s, and unto God the things that are God’s”: Matthew 22:21. The
Mercedes Benz, and Mr. Kovacevic’s obligation to return it, belong to the realm
of Caesar.
[43] In sum, during this proceeding I
had before me a person who, through the documents he presented as Exhibit 1, established
that he was the defendant, Ivica Kovasevic, and that he resided in Ontario.
Under our law this court has jurisdiction over his person, and I therefore do
not give effect to Mr. Kovasevic’s argument that he is not subject to the
authority of this court or the laws of this country.
H.2 Transfer of goods, but not debt, to the “flesh
and blood living man”
[44] As I read the Commercial Security
Agreement tendered by Mr. Kovacevic, he purported to transfer all the property
owned by his “juristic person” to his “flesh and blood living man”, leaving him
free of the debt incurred by his “juristic person”. He created this document
three months after he had purchased the Mercedes-Benz.
[45] Of course this document has no
legal effect. In the eyes of the law it is rubbish. However, when read
together with the other documents created by Mr. Kovacevic it forms part of
what I conclude to be a deliberate effort on his part to avoid payment of his
debt obligations.
H.3 The Sovereign Man debt elimination process
[46] Mr. Kovacevic’s purported transfer
of his property from his “juristic person” to his “flesh and blood living man”
forms only part of the documentation created by him in an effort to avoid his
debt.
[47] When MBF first pressed Mr.
Kovacevic to resume making his monthly car payments, he responded by sending it
a June 26, 2008, document entitled, “Bonded Promissory Note”. I do not intend
to reproduce the document. By way of summary, in his $200,000.00 Bonded
Promissory Note Mr. Kovacevic purported to extinguish unilaterally his debt to
MBF and, in its place, set up the Note as “evidence as a debt to the Payee”.
Although the note referred to the “Payee”, the Note did not define that term.
However, the Note purported to be payable to the Secretary of the United States
Treasury “for the credit to” MBF. The Note required the “Payee” to charge a
certain account of Mr. Kovacevic “for the purpose of terminating any past,
present, or future liabilities express or implied attached or attributed to
IVICA KOVACEVIC”. The Note also required the Payee to “ledger this NOTE for a
period of twelve months …. until…June 26, 2009” at an interest rate of 8%. It
continued:
Upon maturity, this Note
shall be due and payable in full with interest and any associated fees. Payment
shall be ledgered against Private Offset Bond No. LE73807813CA (CANADA POST
REGISTERED DOMESTIC MAIL TRACKING NO. LE 073 807 813 CA held and secured by
Henry M. Paulson, Jr., Secretary of the US Treasury.
[48] So, with the stroke of his pen,
Mr. Kovacevic purported to extinguish his debt to MBF and require the plaintiff
to look to the Secretary of the US Treasury for payment. The Note referred to
an account 501537385, which is the same number Mr. Kovacevic wrote on his
various admissions of service of the motion records. He did not explain what
that number signified.
[49] After MBF informed Mr. Kovacevic
that his self-created note extinguishing his debt was no substitute for making
monthly payments, Mr. Kovasevic sent MBF a further package of materials. The
cover document was styled an “Acceptance”, and it bore this action’s style of
cause. Signed by Mr. Kovacevic as “Authorized Representative, Principal In
Fact – Secured Party”, it commenced:
In peace, by special
visitation, I, Ivica Kovacevic, a living, breathing, sentient, Christian man,
the undersigned, am the verified holder of an attached perfected security
interest and the acknowledged representative for the debtors herein named as
IVICA KOVACEVIC, the defendant in this action (See Exhibit 1 and 2). There is
no dispute with any of the facts in the instant matter. The facts of this case
and all charges/offers/dishonors are accepted for value and returned in
exchange for settlement and closure (See Exhibit 3). This property is exempt
from levy (See Exhibits 3).
His “Acceptance” was then followed by a set of
documents: (i) a Claim Reduced to Summary Judgment under the Uniform Commercial
Code purporting to give him priority “over a creditor lien judgment”; (ii) a
“Notice of Settlement” in which he purported to settle this action “without
need for attachment of additional collateral fixtures”; (iii) a UCC Financing
Statement as between his various persons; (iv) a copy of a MBF pay-out
statement on which Mr. Kovacevic stamped “accepted for value, returned for
value without dishonor” with directions to offset the amount through
“ledgering” it against some instrument purportedly lodged with the Secretary of
the US Treasury; (v) something called a “Certificate of
Non-Performance/Dishonour” which is incomprehensible; (vi) a “Notice of Default
Judgment” against MBF; and (vii) a Discharging and Indemnity Bond signed by Mr.
Kovacevic, as well as by two Toronto residents, Allan David Abanilla and George
Nabil Mittias.
[50] In sum, in response to MBF’s
demands that he honour his contractual obligations, Mr. Kovacevic sent the
company sets of documents in which he purported to extinguish unilaterally the
debt he owed and to direct MBF to accept as payment paper created by him
purporting to draw on some account lodged with the Secretary of the US
Treasury. None of these documents has any legal effect. From a legal point of
view they are worthless garbage.
[51] As noted, Mr. Kovacevic stamped on
the MBF pay-out statement the language “accepted for value, returned for value
without dishonour.” That language also appeared on Mr. Kovacevic’s admissions
of service of the motion records. It surfaced again during the February 19
hearing when I read to Mr. Kovacevic the several forms of relief sought by MBF
in its Notice of Motion and asked whether he wanted to make any submissions on
each. In response he replied:
“Your Honour, I accept it for
value and return it for value for settlement closure in this matter.”
His responses prompted the following exchange:
THE COURT: Sir, in response
to paragraphs four, five, six, seven and eight of the notice of motion that I
read to you and asked for your submissions on, you responded in each case that
you accepted for value and return for value for settlement closure in this
matter. I must confess that that’s not a phrase that I’m familiar with. Is
there anything that you’d like to say to me? You are not obliged to, but is
there anything that you’d like to say to me by way of explanation as to what
you understand that phrase to mean?
MR. KOVACEVIC: Hum. Your
Honour…
THE COURT: As I say, you are
under no obligation. The Court of Appeal has made it clear. You are under no
obligation to say anything, but if you do wish to say something, I’m affording
you an opportunity now sir to do so.
MR. KOVACEVIC: I’m not here to
testify or submit any admissions for that, Your Honour.
[52] The phrase, “accept for value and
return for value for settlement closure” has no recognized meaning or effect
under our law. Nor do the documents signed by Mr. Kovacevic extinguish his
debt to MBF or relieve him of his obligation to return the car or inform the
Sheriff of its location.
[53] I should note that on this motion
MBF filed evidence that the approach adopted by Mr. Kovacevic in response to
its demand for payment resembles a scheme promoted through radio shows and hotel
seminars called the Sovereign Man debt elimination process. Transcripts from a
September 21, 2008 radio program hosted by a Sam Kennedy contained advice on
“handling contempt and defending immediate payment” by the “direct simple
sovereign method of engaging the judge when you immediately enter that
courtroom.” The broadcast gives advice on how to use UCC documentation to
extinguish one’s debt. While I have no evidence that Mr. Kovacevic ever
listened to this program, Mr. Kennedy’s advice about “the sovereign method for
deconstructing the courtroom” by questioning the authority of the court and
asserting the immunity of a “sovereign man” bears a striking resemblance to the
tactics adopted by Mr. Kovacevic when he appeared before me. His flagrant
disrespect of the court on February 9 led me to find him guilty of contempt in the
face of the court and I sentenced him to spend the lunch hour in the holding
cells at the University Avenue courthouse.
[54] MBF also filed an announcement of a
June 9 presentation at the Admiral Inn Suites in Mississauga on the topic,
“Sovereign Trust, Debt Elimination-Debt Remedy process”. A Mr. Domo Kovacevic
was listed as a contact person for that event, at telephone number 416.953.5095.
On September 5, 2007, Mr. Ivica Kovacevic filled out a MBF Credit/Lease
Application for his car purchase. One reference he gave on his application was
“Domo Kovacevic, 3562 Silverthorne Cres., Mississauga, 416.953.5095”.
[55] For the purposes of this motion it
is not necessary for me to determine whether Mr. Kovacevic’s sovereign man/debt
elimination strategy with MBF is part of a larger, organized debt-avoidance
scheme. However, the evidence filed by MBF certainly suggests that Mr.
Kovacevic’s strategy may well have wider roots.
H.4 Effect of Peace Bonds created and tendered
by Mr. Kovacevic
[56] The final set of documentation
filed by Mr. Kovacevic consisted of a set of “Peace Bonds” and “Bills of
Exchange (Documentary Draft)” variously addressed to the federal Minister of
Justice, the provincial Attorney General, this Court, the RCMP and the Toronto
Police Service. The main message of this documentation appeared to be that
unless the Court accepted the various papers filed by Mr. Kovacevic as
settlement of his liability, the Court would transform Mr. Kovacevic into
“public property as the result of enticement into involuntary slavery,
kidnapping and plunder.”
[57] I conclude from this documentation
that Mr. Kovacevic is not happy that MBF will not let him keep the car without
paying for it and he is upset that MBF can seek the assistance of the Court to
enforce its rights. Of course, the documents provide no legal excuse for Mr.
Kovacevic’s refusal to return the car to MBF.
H.5 Conclusion
[58] In conclusion, the Claim-of-Right,
Commercial Security Agreement, Bonded Promissory Note, Acceptance (and attached
documents), Peace Bonds and Bills of Exchange (Documentary Draft) created and
signed by Mr. Kovacevic have no legal effect. None of those documents provides
him with any legal excuse for failing to return the car or to disclose its
whereabouts. Mr. Kovacevic’s debt to MBF remained outstanding, unaffected by
that documentation, as does his obligation to comply with the Order.
[59] In his email of November 7 and
letter of December 10, 2008 Mr. Kovacevic acknowledged that he had possession
of the car, but refused to return it until he was provided with a certified
copy of the Order. I have found that he knew of the Order by that time. He
was provided with a certified copy of the Order on December 29, 2008, yet still
failed to return the car.
[60] I have no hesitation in concluding
that the evidence establishes, beyond a reasonable doubt, that Mr. Kovacevic
deliberately and willfully failed to deliver up the car and inform the Sheriff
of its location, notwithstanding his knowledge of the terms of the Order of
Master Peterson. I therefore find Mr. Kovacevic in contempt of court.
V. Opportunity to purge contempt and
sentencing hearing
[61] Once a person is found in civil
contempt of court, the court usually affords a contemnor, such as Mr.
Kovacevic, an opportunity to purge his contempt before the penalty or
punishment phase of the proceeding begins: College of Optometrists,
supra., para. 73. If, after being found in contempt of court, a party
purges his contempt by subsequently complying with the court order, his
compliance may be taken into account as a mitigating factor on sentence: Re
Chiang, 2009 ONCA 3 (CanLII), 2009 ONCA 3, paras. 50 to 52.
[62] It is important to remember,
however, that the purging of a contempt by compliance does not deprive a court
of the power to punish the person who has flouted its orders; a purging of the
contempt is a matter for the court to take into account in assessing the
penalty to be imposed on the contemnor: Chiang (Trustee of) v. Chiang,
[2007] O.J. No. 1409 (S.C.J.), para. 30.
[63] MBF submits that the court should
give Mr. Kovacevic ten days in which to purge his contempt by delivering up the
car and telling the Sheriff where it is located. I see no reason to give Mr.
Kovacevic that much time. Mr. Kovacevic’s November and December correspondence
acknowledged that he retained possession of the car. Compliance with the Order
does not require any complicated act by Mr. Kovacevic. In order to purge his
contempt all Mr. Kovacevic has to do is deliver up the car to MBF and to inform
the Sheriff of Peel Region where the car is located. Those are simple tasks. There
is nothing in the evidence before me to suggest that Mr. Kovacevic could not
hand the car over to MBF this afternoon.
[64] However, I will give Mr. Kovacevic
some further time to comply with the Order. Specifically, I will give Mr.
Kovacevic five (5) days to purge his contempt by delivering up the car to MBF
and informing the Sheriff of Peel Region where the car is located. Mr.
Kovacevic can deliver the car to MBF by driving it to the Mercedes Benz
Mississauga dealership located at 6120 Mavis Road, Mississauga, and handing
over the keys to the manager of the dealership.
[65] Accordingly, I adjourn this motion
until Tuesday, March 3, 2009, at 10 a.m., in this Courthouse, 361 University
Avenue, Toronto. At that time I will conduct the sentencing hearing in this
matter during which the parties may present evidence as to whether Mr.
Kovacevic has complied with the Order.
[66] As I have done each time you have
appeared before me Mr. Kovacevic, I would encourage you to retain a lawyer.
You have elected not to do so. I have found you in contempt of court. Next
Tuesday I will sentence you. Under the Rules of Civil Procedure the court
possesses the power to impose a broad range of sanctions, including ordering
you to pay a fine or sending you to jail for a period of time. Given the
importance of next week’s sentencing hearing to you, I again encourage you to retain
a lawyer to assist you in this proceeding.
[67] Before I conclude I should remind
Mr. Kovacevic about one aspect of the law regarding sanctions for contempt of
court. In Chiang (Trustee of) v. Chiang, supra., Lax J., stated, at
paragraph 29 of her reasons:
[A] contemnor is not immune
from further sanction if there is continued non-compliance with a court order
as contempt is not one continuing failure to comply, but a number of repeated
refusals to comply. Otherwise, a contemnor would gain immunity by fulfilling
the sanction, but refusing to obey the court order.
In other words, Mr. Kovacevic, do not think that if you fail
to turn over the car to MBF, but fulfill whatever penalty I impose on you next
Tuesday, you will then be free to keep the Mercedes-Benz without further
trouble from the law. That is not the case. A court retains the power to
impose further sanctions on a person who is in contempt of a court order until
such time as the person complies with the order. Until you deliver up the car
to MBF and tell the Sheriff of Peel Region where the car is located, you will
continue to be in breach of the Order.
V. Other matters
[68] Let me deal finally with the rest
of the relief sought by MBF in its notice of motion. First, MBF sought to
amend the style of cause to include the following aliases for the defendant:
Ivica Kovacevic, a living, breathing, sentient, Christian man; Ivica Kovacevic
501537386; Ivica Kovacevic TM;
Ivica Kovacevic UCC1-308; Mark Kovacevic; and, Marija Kovacevic. No evidence
was filed to support an amendment to include the last two names. As to the
rest, I am not going to countenance the game being played by Mr. Kovacevic by
amending the style of cause to include monikers that possess no legal meaning.
[69] Second, MBF requests a further
order requiring Mr. Kovacevic to disclose the location of the car. There is no
need for such an order; the Order of Master Peterson remains in effect.
[70] Finally, MBF seeks to amend the
Order by dispensing with the requirement that it post security to obtain
possession of the car. I grant such an order. MBF clearly retains title to
the car and Mr. Kovacevic no longer has any lawful claim to the car. Any money
MBF has paid into court pursuant to the Order should be paid out to it.
[71] Costs of the attendances to date
on this motion are reserved to next week’s sentencing hearing.
___________________________
D. M. Brown J.
DATE: February
26, 2009
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