The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

CANADIAN fashion mogul Peter Nygard’s three-month prison sentence for publishing sensitive emails stolen from a local advocacy group has been stayed out of fairness to allow him to appeal his conviction.

Court of Appeal Justice Roy Jones, in a written ruling, said to “remove any risk of unfairness”, he would stay Nygard’s 90-day sentence for breaching an injunction preventing him from publishing private correspondence that were stolen from Save the Bays.

Justice Jones granted the stay primarily because if Nygard ends up winning his appeal, the 90 days he would have spent in prison “cannot be undone” and the sentence would in turn render his appeal pointless.

However, Justice Jones said his decision to stay the custodial sentence was because Nygard has since “partially” purged his contempt by paying a $150,000 fine as well as the $15,000 penalty for late payment.

Additionally, Nygard apologising in writing to the court for failing to attend the mitigation and sentencing hearings in the matter, as well as an undertaking not to breach the injunction going forward, worked to his benefit.

Additionally, Nygard apologising in writing to the court for failing to attend the mitigation and sentencing hearings in the matter, as well as an undertaking not to breach the injunction going forward, worked to his benefit.

Justice Jones’ decision comes just over a month after Supreme Court Justice Ruth Bowe-Darville sentenced Nygard to 90 days in prison and fined him $150,000 for breaching the injunction. That fine was ordered to be paid within seven days.

Justice Bowe-Darville further ordered that if Nygard, who was not present for the decision, did not turn himself over to the police voluntarily or pay the fine, he would spend an additional 30 days in prison and be fined $5,000 for each day the fine was unpaid.

Nygard was further ordered to apologise for breaching the attendance order and give verifiable reasons for his non-attendance within seven days of the order; undertake to discontinue his use of the emails in a legal matter in New York with seven days of the order; and pay a daily fine of $5,000 for each day the apology and the undertaking were unfulfilled.

It stemmed from claims by Fred Smith, QC, that a number of emails containing precious client/attorney information were stolen from his law firm, Callenders & Co, via some unknown means.

According to Justice Jones’ ruling, sometime in February of this year, Nygard’s attorney Keod Smith displayed emails between Fred Smith and others that contained privileged discussions about STB’s, Fred Smith’s and his law firm’s legal affairs with their attorneys.

The emails were later exhibited in an affidavit by Keod Smith, which was in support of various applications by Nygard to set aside various orders concerning the mogul’s other contempt of court convictions and to be used in his own mitigation and sentencing hearing.

According to the ruling, one of Nygard’s attorneys in New York contacted Fred Smith and informed him that he had obtained some documents that appeared to have come from his file. Fred Smith subsequently requested that Nygard’s lawyer send him copies of those documents and asked that he not distribute them.

STB, via its attorneys Harry B Sands, Lobosky and Co, consequently launched a new action in pursuit of an injunction that would prevent Nygard and Keod Smith from perusing, publishing, or disseminating that correspondence.

Justice Keith Thompson granted the injunction in February. It forbade Nygard from, either directly or through others acting on his behalf, using documents or correspondences belonging to Fred Smith, Callenders & Co and STB not already in the public domain.

On September 6, Wilson Elser, Nygard’s attorney in his New York lawsuit against fellow billionaire Louis Bacon, wrote to a judge in New York asking for permission to use the documents in that case. Mr Elser had requested a pre-trial conference because Nygard’s attorneys wanted to amend their claims based on those very same emails. They wanted to use the documents in the New York proceedings.

Nonetheless, Mr Wilson’s access to the prohibited documents on Nygard’s behalf was a breach of the injunction issued in the Bahamas, and as such, Fred Smith, Callenders & Co and STB applied to have Nygard committed to prison for the act.

After a review of the evidence before her, Justice Bowe-Darville found that Nygard and his agents breached the injunction and that he was in contempt of court.

According to Justice Jones’ ruling, Nygard has since “partially purged his contempt” by paying the $150,000 fine as well as $50,000 that represents the daily amount to be paid while the fine is outstanding. He also apologised as ordered, claiming that his non-attendance was due to him not being cleared by his doctor, Patrick Lynden.

Nygard said as soon as Dr Lyden returns from a business and medical tour, he would take a medical examination and give the court an update and additional information from Dr Lynden about the “state of my health and ability to travel for the purpose of attending court”.

Nonetheless, Nygard appealed the judge’s decision, asserting that the sentencing and the other requirements were “excessive”.

Jay Prober, Nygard’s Canadian attorney, echoed his client’s sentiments. He criticised Justice Bowe-Darville’s judgment and told The National Post that the degree of punishment was uncalled for.

“The decision is unfair, it is unreasonable and it’s unnecessary, and quite frankly it’s unheard of. I have never seen in civil contempt proceedings a jail sentence or a fine of that magnitude,” he said.

According to the appeal application, Nygard did not violate the February injunction. His lead attorney Carlton Martin insists not only that he abided by the February New York court injunction, but that he never dealt with the documents in question or correspondence.

Mr Martin further submitted that if Nygard was to serve the 90-day sentence or any part of it, and then win his appeal, the damage could not be undone. Mr Martin further charged that Nygard’s reputation as a businessman would be damaged and his business would be irretrievably harmed.

Meanwhile, Julian Malins, QC, and Ferron Bethel, attorneys for Fred Smith and Callenders & Co accepted that Nygard’s appeal might be made partly futile if he were to serve his sentence before his appeal is concluded.

However, Messrs Malins and Bethel were quick to point out that staying Nygard’s 90-day sentence would be useless because he is determined to remain out of the court’s jurisdiction. They further pointed out the fact that several bench warrants have been issued for Nygard’s arrest from other committal proceedings that would effectively place him in custody should he enter the Bahamas.

Ultimately, Justice Jones ruled: “Undoubtedly, the giving by (Nygard) of the undertaking, apology and explanation with the payment of the $150,000 fine, can be reversed on a successful appeal. It is self-evident that serving a 90-day sentence cannot be undone.

“(Nygard’s) compliance with the court’s orders in this case, even at this late stage, show in my view a willingness to respect the courts processes and some remorse for past behaviour. For all these reasons, and to remove any risk of unfairness I grant Mr Nygard a stay of execution of the 90-day custodial sentence until the hearing of his appeal in this court.”