SUPERIOR COURT OF JUSTICE - ONTARIO
(Divisional Court)
RE: MORRIS WAXMAN et al. v. CHESTER WAXMAN et al.
- and -
I. WAXMAN & SONS LIMITED et al. v. MORRIS WAXMAN et al.
BEFORE: Justice MacFarland
COUNSEL: Lorne S. Silver, for the Applicant, Robert Waxman
Richard B. Swan, for the Respondents
HEARD: May 28, 2004
E N D O R S E M E N T
MacFarland J.
1This is a motion for leave to appeal the interlocutory decision of Sanderson J. made April 22, 2004 which required Robert Waxman to answer questions he refused to answer in relation to paragraph 13 of the formal Judgment of Sanderson J. following a lengthy trial.
2Paragraph 13 of the Judgment provides a tracing remedy to the Plaintiffs and is extremely detailed. The formal Judgment was ultimately settled by the trial judge after the release of Reasons in June, 2002 and, following further submissions, the release of Supplementary Reasons in September, 2002.
3In paragraph 37 of her Supplementary Reasons, which Reasons dealt principally with the tracing remedy ordered, Sanderson J. detailed the broad scope of the inquiry her Reasons authorized.
4The Judgment was appealed to the Court of Appeal and counsel for the Defendants sought a stay – as Goudge J.A. described it:
The orders sought to be stayed are those providing for a tracing procedure to determine whether certain funds to which Morris Waxman was found to have a claim as beneficiary of a constructive trust can be traced into the hands of persons who are not bona fide purchasers for value without notice.
The orders require significant compilation and disclosure of information by the appellants and oblige them and others to attend to be examined as part of the tracing process.
5The motion for stay was refused by the Court. Consequently, while the money Judgments were automatically stayed by Rule 63.01(1), the tracing procedure ordered was not.
6Robert Waxman attended to be examined in relation to paragraph 13 of the Judgment as he was required to do but refused to answer any questions which generally related to his current holdings. The questions which Robert Waxman refused to answer and those he took under advisement are set out in Schedules B and C of the Notice of Motion returnable before Sanderson J. on March 8, 2004.
7The position of Robert Waxman is that he cannot as part of the tracing exercise, be compelled to divulge information in relation to any assets unless and until the Plaintiff first demonstrates an evidentiary foundation for the question by establishing a tracing connection. He cannot, he says, be compelled to disclose assets other than those in respect of which the Plaintiff has shown a tracing connection.
8The Plaintiff accepts that for the purpose of achieving a tracing remedy he is obliged to establish first a proprietary fund and thereafter a tracing of value into whatever form it may take by acquisition, transfer, etc. However, the Plaintiff is not required to follow any such rigid process in the examinations conducted in aid of establishing his right to a tracing remedy.
9In my view it is clear from a reading of the Supplementary Reasons of September, 2002 and in particular paragraphs 37 and 72 thereof, with paragraph 13 of the formal Judgment that the intention of the trial judge was NOT that the Plaintiff be required to first establish an evidentiary link before being entitled to ask about any assets.
10Paragraph 13 of the Judgment requires the production of all sorts of information “to the present” and hand in hand with the production is the right to examine on that information.
11In my view paragraph 3 of the Respondents’ Factum accurately summarizes the present status:
- Robert’s clear obligation to produce these documents flows from the express terms of the Judgment. Robert’s refusal to produce the subject documents and answer questions relating to them was and is a violation of that Judgment. Justice Sanderson’s March 22, 2004 Order (in respect of which leave to appeal is sought) merely requires Robert to do what he is obligated to do under the Judgment. There is nothing novel about requiring a party to obey a Judgment of the Court, especially one that has now been affirmed on appeal. Indeed the issue is res judicata.
12Since the filing of this motion for leave to appeal the Court of Appeal released its Judgment and unanimously upheld the decision of the trial judge with only minor variations not relevant to for today’s purpose.
13The Applicant produced no case law contrary to the decision in issue. The case law upon which the Applicant relies relates to the ultimate tracing remedy where a party, to be entitled, must trace from the proprietary base forward to the asset or thing sought. They do not relate to the evidence gathering process which necessarily precedes that exercise.
14In my view there is no good reason to doubt the correctness of the decision in issue. The Judgment – and for present purposes in particular paragraph 13 thereof, has been upheld by the appellate court. There simply can be no doubt that Robert Waxman is required to comply with that Judgment.
15Further I agree that to permit Robert Waxman to re-argue whether he is required to produce all of his financial records up to the present date would be to permit a collateral attack on the Judgment of Sanderson J., which Judgment has now been upheld by the Court of Appeal – an authority binding on this Court.
16In conclusion, even if the matter were not res judicata for the reasons given, a case is not made out on these facts for leave. There are no conflicting decisions, there is no reason to doubt the correctness of the decision and, in any event, there is no public issue raised. These issues are unique to these parties and this litigation and are not issues of public or general importance.
17Costs to the Respondents fixed in the sum of $5,000.00 inclusive of GST and disbursements.
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MacFarland J.
DATE: June 1, 2004