Court File and Parties

COURT FILE NO.: 321/06

DATE: 20060731

SUPERIOR COURT OF JUSTICE - ONTARIO

DIVISIONAL COURT

RE: bertina alfano, trustee of the carmen alfano family trust, bertina alfano, italo alfano, trustee of the italo alfano family trust, italo alfano, ulti alfano trustee of the ulti alfano family trust and ulti alfano (plaintiffs) v. christian piersanti, piersanti and co. barristers and solicitors, gold financial corp., osler paving ltd., 758626 ontario limited now known as diligent financial corporation, 1281111 ontario limited, 1269906 ontario limited and 1281632 ontario limited, 1212700 ontario limited and terry piersanti, also known as terry scatcherd, 1281038 ontario limited, 3964400 canada inc. (defendants) and between: christian piersanti, diligent financial corporation and 1212700 ontario limited (plaintiffs by counterclaim) and bertina alfano, italo alfano, ultimino alfano, joe alfano, 815748 ontario limited, ontario power contracting limited, puslinch investments inc., 1026864 ontario limited (defendants by counterclaim)

BEFORE: Justice Then

COUNSEL: M. Boussidan and J. Diamond, for the Plaintiffs

K. Rosenberg and M. Waddell, for the Defendants

HEARD: July 19, 2006

E N D O R S E M E N T

Then J.

[1] The Gold defendants seek leave to appeal under Rule 62.04(4) the order of Spence J. made on June 21, 2006 in which he refused to permit the Gold defendants to file a factum or make argument in support of their co-defendants motion for summary judgment nor to file a motion for summary judgment in their own right.

[2] The order made by Spence J. arises in the context of his role as the case management judge in a long and complex dispute between the Alfano and Piersanti families with respect to a now bankrupt shared business venture.

[3] By way of background it should be noted that the Gold defendants prepared a timetable which was ultimately accepted by the court whereby the defendant's summary judgment motions were to be filed. Pursuant to the timetable, the Piersanti co-defendants filed a summary judgment motion on March 6, 2006 which was served on the plaintiff and the Gold defendants. At no time prior to June 13, 2006 did the Gold defendants indicate their intention to participate in the co-defendants motion for summary judgment and the plaintiffs proceeded to prepare their motion materials on the basis of the Piersantis' co-defendants representations as to what would constitute the record on the motion.

[4] Spence J. set aside 1 ½ days between June 21-22, 2006 to hear the Piersantis' defendants motion for summary judgment and oral costs submissions, if necessary, owing from the previously decided motions.

[5] On June 1, 2006, counsel for the plaintiffs proposed a timetable for the delivery and exchange of facta between the plaintiff and the Piersanti defendants which was copied to the Gold defendants who did not respond.

[6] On June 13, 2006 the Gold defendants advised the plaintiffs for the first time that they intended to deliver a factum and to make submissions on the Piersanti defendants motion for summary judgment. On June 15, 2006 the Gold defendants served the plaintiff with a factum in support of the Piersanti defendants motion for summary judgment but over the objection of the plaintiff to the participation of the Gold defendants in the Piersanti defendants motion for summary judgment.

[7] On June 19, 2006, the Gold defendants without prejudice to their position that they had a right to participate in the Piersanti motion for summary judgment filed their own motion for summary judgment seeking the identical relief sought and relying upon the identical material filed by the Piersanti defendants.

[8] On June 21, 2006, Spence J. was required to determine the standing of the Gold defendants to participate in the Piersanti defendants' motion and to bring their own motion.

[9] After submissions by all counsel Spence J. ruled as follows:

"The Piersanti Defendants filed on June 19 an Endorsement Book which the Plaintiffs apparently objected to but do not now object to, so that filing is unopposed and is acceptable.

My endorsement of August 18, 2005 set out the timetable to be followed including for the "summary judgment motions" which the endorsement said should be argued in mid-June. The Piersanti Defendants delivered to the other parties on March 31, 2006 their Notice of Motion for partial summary judgment returnable on June 21, 2006. By letter May 8, 2006, the Piersanti Defendants advised of the additional material on which they would rely. Apparently Mr. Richards was re-examined, which was in keeping with the correspondence between the parties.

The Piersanti Defendants advised on June 15 that they would file 37 more pages from an Ultimino Alfano transcript and they filed a Supplementary Motion Record on June 19. The additional transcript pages in the Supplementary Motion Record go beyond the May 8 letter. No reason is given why they were not mentioned at the earlier time. Also on June 15, the Gold Defendants advised of their intention to file a Factum and make submissions on the motion. They had given no such indication earlier, although they received the Notice of Motion on March 31, 2006 and were copied on correspondence so they had ample opportunity. No reason is given why they did not advise earlier. Ms. Waddell did not attend today. The Gold Defendants seek as an alternative to bring their own motion for partial summary judgment but without new evidence or new grounds, other than those of the Piersanti Defendants.

If the requests of the Defendants were granted, there would potentially be a very considerable loss of time. The timetable was set after full submissions in order to move this case forward on a basis that was reasonable and no reason is given as to why the Defendants could not have been ready much earlier, particularly in view of the Notice of Motion having been served on March 31 and the advice as to the basis of the motion having been given on May 8.

In my endorsement of August 18, 2005, I said "the parties should cooperate on a regular and continuing basis so that there are no unnecessary delays". The Defendants have not complied with this order. They give no reason for their non-compliance. It is a virtually compelling inference that they are simply engaged in a delaying tactic and one that involves deliberate disregard of the Court's order, which is shameful.

The additional pages of Alfano transcript are not permitted. The Supplementary Motion Record of the Piersanti Defendants are not Piersanti Defendants may not be used on the motion. The Gold Defendants may not make submissions on the motion. The Gold Defendants may not bring on their motion.

Costs to the Plaintiffs against the Defendants jointly on a substantial indemnity basis for $4,000.00 for today, payable forthwith."

(my emphasis)

[10] On June 22, 2006, the Piersanti defendants' motion was then adjourned to September 18, 2006 as there was no time left to deal with it on June 22, 2006.

[11] The test for the granting of leave to appeal is contained in Rule 62.02(4) which provides that leave to appeal shall not be granted unless:

a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or,

b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

[12] The Gold defendants submit that to the extent that the ruling of Spence J. is founded on an alleged abuse of process on the part of the Gold defendants, Spence J. has erred by focusing solely on the motivation of the Gold defendants and that he has also erred in overlooking such principles as judicial economy, consistency finality and the integrity of the administration of justice given that the interests of the Piersanti and Gold defendants are inextricably bound up. (See: Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.), Local 79, [2003] 3 S.C.R. 71 at paras. 37, 51).

[13] Moreover, the Gold defendants submit that the jurisprudence clearly gives the Gold defendants who would be affected by the outcome of the Piersanti summary judgment motion a full right of participation pursuant to Rule 37.07 (see: Greymac Trust Co. v. Burnett (1987), 59 O.R. (2d) 50, [1987] O.J. No. 2240 at p. 4; Royal Bank of Canada v. Société Générale (Canada), No. 2030 (SCJ) at para. 4).

[14] The plaintiffs rely on Rule 77.10(7) which states:

(7) If a party fails to comply with a time requirement set out in a timetable established under this rule, a case management judge or case management master may,

(a) strike out any document filed by the party;

(b) dismiss the party's proceeding or strike out the party's defence;

(c) amend the timetable and order the party to comply with it;

(d) order the party to pay costs; and

(e) make any other order that is just.

Rule 77.11(1) states:

A case management judge or case management master may,

(a) extend or abridge a time prescribed by an order or the rules;

(b) transfer a proceeding from one track to the other;

(c) adjourn a case conference;

(d) set aside an order made by the registrar; and

(e) make orders, impose terms, give directions and award costs as necessary to carry out the purpose of this Rule.

[15] The plaintiffs submit that under Rule 77.10(7)(e) and 77. 11(1)(e) Spence J. had the jurisdiction to make the orders that he made both with respect to the participation of the Gold defendants in the Piersanti motion for summary judgment and in refusing to permit the Gold defendants to bring their own motion for summary judgment in egregious breach of the timetable which the Gold defendants had themselves devised. The plaintiffs submit that in order to protect the integrity of the case management process Spence J. exercised his discretion in a principled fashion given the egregious conduct of the Gold defendants. Moreover, the situation in which discretion has been exercised is so fact specific that it is not desirable that leave be granted as the appeal involves matters specific to the conduct of the Gold defendants and not matters of general importance.

[16] In my view, leave to appeal ought not to be granted as I am not persuaded that the Gold defendants have not met the criteria for leave required under either Rule 62.02(4)(a) or (b).

[17] Insofar as Rule 62.02(4)(a) is concerned, the order of Spence J. does not conflict with those authorities which would grant to the Gold defendants full participation in the Piersanti co-defendants summary judgment motion pursuant to Rule 37. Spence J. has merely exercised his jurisdiction under Rule 77.10(e) to carry out the purpose of the rule in circumstances where he had ordered "the parties should co-operate on a regular and continuing basis so that there are no unnecessary delays". He found the Gold defendants had without explanation deliberately breached the court's order in order to delay the matter. The decision of Spence J. is not in conflict with the Rule 37 jurisprudence but simply constitutes an order under Rule 77.11(1)(e) in the exercise of discretion. In the particular circumstances it is not desirable to grant leave to appeal.

[18] With respect to the criteria under Rule 62.02(4)(b), I have no reason to doubt the correctness of the order as I am not persuaded that in seeking to protect the integrity of the case management system in the circumstances of this case, Spence J. proceeded upon the wrong principle in exercising his jurisdiction under Rule 77.11(1)(e) with respect to the participation of the Gold defendants in the Piersanti motion for summary judgment and under Rule 77.10(7) in refusing the Gold defendants leave to bring their own summary judgment. Further, I agree with the plaintiffs' submission that the appeal does not raise matters of such importance that leave be granted. The matter is only of importance to the Gold defendants whose conduct under the timetable they themselves have devised and in apparent deliberate and unexplained disregard of the orders of the court has precipitated the situation they find themselves in.

[19] The motion for leave to appeal is dismissed with costs.

[20] If the parties are unable to agree as to the quantum of costs brief submissions from the plaintiffs should be filed with the court within three weeks of the release of the judgment and by the Gold defendants within a week thereafter.

Then J.

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