The legal history of Neil Alan Lymer and his interactions with the Alberta court system is a lengthy narrative that spans more than a decade, involving complex bankruptcy proceedings, multiple findings of contempt, and a brief period of incarceration1. This long running saga reached a new milestone on October 11, 2023, when Justice R. Paul Belzil of the Court of King’s Bench of Alberta issued a decision regarding Mr. Lymer’s attempt to have the ongoing contempt proceedings against him stayed. Mr. Lymer had argued that the significant delays in the legal process violated his rights under the Canadian Charter of Rights and Freedoms and the Alberta Rules of Court. However, the court ultimately determined that the proceedings must continue, primarily because the underlying questions regarding missing investment funds remained unanswered.
The origins of this case date back to March 4, 2011, when Mr. Lymer was deemed to have made an assignment in bankruptcy. This occurred after his application to file a proposal under the Bankruptcy and Insolvency Act was rejected. As the bankruptcy process unfolded, the focus shifted to the financial records of Mr. Lymer and several entities referred to as the Lymer Companies. On October 2, 2013, a Registrar in Bankruptcy, L.A. Smart, issued a formal order requiring Mr. Lymer and his companies to prepare and file affidavits of records by January 2014. This was followed by a further order in March 2014 providing specific instructions on how those records were to be organized. Despite these clear judicial directions, the deadlines passed without the required documents being produced to the satisfaction of the creditors.
By June 2014, the frustration of the creditors led them to apply for an order declaring Mr. Lymer in civil contempt of court. In the Canadian legal system, a finding of contempt is a serious matter, as it signifies that an individual has willfully disobeyed a court order, thereby undermining the authority of the judicial system. On November 6, 2014, Registrar Smart found that Mr. Lymer was indeed in contempt. Because the registrar did not have the authority to impose a final sentence or sanction for this contempt, the matter was referred to Justice D. Lee, who was at that time the case management justice overseeing the file.
Throughout 2015 and 2016, the legal process continued with several attempts to resolve the issue. Justice Lee issued an order in January 2015 providing Mr. Lymer with specific directions intended to help him purge his contempt. In legal terms, purging contempt refers to the process where a person corrects their previous disobedience, such as by finally producing the ordered documents, to avoid further punishment. However, the creditors remained unsatisfied. In May 2016, the respondents filed new allegations, claiming that Mr. Lymer had failed to purge his contempt and had committed further violations. While Registrar Smart dismissed the new allegations in early 2017, he confirmed that the original contempt had not been fully purged.
The situation reached a peak on October 22, 2018, when Justice Lee issued a sanction decision. Mr. Lymer was sentenced to a term of incarceration as punishment for his ongoing failure to comply with court orders. He served approximately two weeks in jail before he was able to secure a stay of the sentence from the Alberta Court of Appeal, leading to his release. The Court of Appeal eventually reviewed the matter and, on May 1, 2020, reversed the sanction decision. The appellate court ruled that while the finding of contempt itself remained valid, the question of what the appropriate punishment or sanction should be needed to be heard again. The court ordered that a fresh hearing be conducted before a different judge of the Court of King’s Bench.
Following this appellate intervention, the case moved into a new phase. Justice Belzil was appointed as the case management judge in September 2022. By this time, the group of creditors pursuing the matter had dwindled. While several individuals and numbered companies were originally involved, by the time the matter came before Justice Belzil in 2023, Diane Jonsson was the only remaining creditor actively seeking the imposition of contempt sanctions against Mr. Lymer. This set the stage for Mr. Lymer’s application for a judicial stay of the proceedings, which was the focus of the October 2023 decision.
Mr. Lymer’s application for a stay was based on two primary legal grounds. First, he cited section 11(b) of the Charter, which guarantees that any person charged with an offence has the right to be tried within a reasonable time. This argument relied heavily on the landmark Supreme Court of Canada decision in R. v. Jordan, which established a presumptive ceiling of 30 months for the completion of criminal trials in superior courts. Mr. Lymer argued that the extreme delay in resolving the sanctions for his contempt violated this constitutional standard. Second, he relied on Rule 4.31 of the Alberta Rules of Court, which allows a judge to dismiss a claim if there has been an inordinate and inexcusable delay that results in significant prejudice to a party.
Justice Belzil began his analysis by addressing the Charter argument. While some legal precedents suggest that Charter protections can apply to contempt proceedings because they involve the potential for imprisonment, the judge found significant hurdles in applying the Jordan framework to this specific case. He noted that no legal authority had been presented to him that applied the 30 month Jordan ceiling specifically to the sanctions phase of a civil contempt proceeding. Furthermore, a key component of the Jordan analysis involves subtracting delays caused by the defense. In this case, Justice Belzil noted that it was impossible to clearly determine how much of the decade long delay was attributable to the creditors and how much was the fault of Mr. Lymer himself.
A critical point in the judge’s reasoning was that in a criminal prosecution, the Crown is responsible for moving the case forward. In a civil contempt situation, however, the person in contempt has a degree of control over their own fate. Justice Belzil observed that at any point after the 2020 Court of Appeal decision, Mr. Lymer had the right to schedule a hearing to seek to purge his contempt. The fact that he had not done so weighed heavily against his claim that the delay was a violation of his rights. Consequently, the court rejected the idea that the criminal law time limits set out in Jordan could be used to stop the contempt proceedings.
The court then turned to Rule 4.31 of the Alberta Rules of Court. This rule is designed to prevent cases from languishing indefinitely and to ensure that the litigation process remains fair. To succeed under this rule, a party generally must show that a delay is both inordinate and inexcusable. Justice Belzil acknowledged that the delay in this case was certainly lengthy, but he identified several reasons why a stay was not appropriate. Most importantly, he pointed out that Mr. Lymer remains in a state of contempt. While the Court of Appeal had set aside his jail sentence, they had not vacated the underlying finding that he had disobeyed court orders. The responsibility to fix that situation rested entirely with Mr. Lymer, not the creditors.
The judge also focused on the nature of the missing evidence. The core of the dispute since 2013 has been the disclosure of financial records. These records were created by Mr. Lymer and were under his control. Justice Belzil noted that if Mr. Lymer had made a full and transparent disclosure of these records at the beginning, the legal proceedings could have been finished years ago. The court found that Rule 4.31 was clearly engaged by Mr. Lymer’s own role in the delay. The judge highlighted that even after all this time, a master list of financial records had not been produced, and the parties still disagreed on whether the documents provided to date were complete.
The decision also touched upon a specific factual dispute regarding the location of certain files. Mr. Lymer alleged that some of his financial records had been lost while they were in the possession of the bankruptcy inspectors or the creditors’ lawyers. The creditors and their counsel rigorously denied this allegation. Justice Belzil concluded that this was a matter that needed to be fully explored in a hearing rather than being used as a reason to end the case prematurely. He emphasized that an order under Rule 4.31 is discretionary, meaning the judge must consider what is just and equitable in the specific circumstances of the case.
At the heart of the ongoing litigation is a fundamental question of accountability. The creditors, including Ms. Jonsson, provided funds to Mr. Lymer as part of an investment scheme. To this day, they have never received a complete accounting of where that money went. While Mr. Lymer maintains that there is no money left to be recovered, the judge found that this did not absolve him of the duty to explain the loss. Justice Belzil stated that it would be grossly unfair to Ms. Jonsson to grant a stay of proceedings when she has yet to receive an explanation for what happened to her investment.
The court noted that Mr. Lymer was the guiding mind of the investment scheme and that Ms. Jonsson had no control over the decisions made regarding her funds. In the judge’s view, only Mr. Lymer could provide the necessary answers. Whether the funds were lost due to simple mismanagement or something more serious, such as malfeasance, remains a mystery that the court feels must be solved. Granting a stay would effectively terminate Ms. Jonsson’s claim and leave her with no recourse and no answers.
Finally, the judge mentioned that Mr. Lymer had filed a separate application in June 2023 to have his bankruptcy annulled. While some other creditors supported that application, Ms. Jonsson did not. Justice Belzil decided that it would be inappropriate to speculate on the outcome of the annulment application, but its existence provided another reason to let the current process play out rather than shutting it down. He also rejected the argument that Mr. Lymer was suffering prejudice due to pending allegations of contempt, reminding the parties that the finding of contempt is already a settled fact that Mr. Lymer has failed to address.
In his concluding remarks, Justice Belzil affirmed that it would not be just or equitable to issue a judicial stay. The uncertainty surrounding the reasons for the delay and the need for a final accounting of the missing investment funds outweighed Mr. Lymer’s arguments regarding the passage of time. As a result, the application was dismissed, and the contempt proceedings will move forward toward a fresh sanctions hearing. This decision ensures that the court maintains its focus on the enforcement of its own orders and the protection of creditors who are seeking transparency in the bankruptcy process.
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