Court File and Parties

COURT FILE NO.: 60/09 07-CV-336760PD1

DATE: 20090227 AMENDED: 20090202

SUPERIOR COURT OF JUSTICE - ONTARIO (DIVISIONAL COURT)

RE: 1086471 Ontario Ltd. Plaintiff

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2077060 ONTARIO INC., 1171005 ONTARIO INC., TROW ASSOCIATES INC. AND BAY-WALL CAPITAL PARTNERS INC. Defendants

AND RE: 2077060 ONTARIO INC., 1171005 ONTARIO INC. Plaintiffs by Counterclaim

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1086471 Ontario Ltd., JACK ADRIAN POUW, 1678543 ONTARIO INC., NICK RESCINITI and CAMILLO RESCINITI Defendants by Counterclaim

BEFORE: Justice D. Aston (Amended)

COUNSEL: William A. Chalmers, for the Plaintiff/Moving Party Sam R. Sasso, for the Defendants/Respondents

HEARD AT TORONTO: February 20, 2009

A M E N D E D E N D O R S E M E N T

Aston J.

[1] This is a motion for leave to appeal the Order of Kelly J of December 18, 2008 by which she dismissed an appeal from the Order of Master Dash dated December 16, 2008.

[2] This action arises out of a failed real estate transaction. Within the proceeding, the plaintiff has brought a motion for summary judgment. In the context of that motion, the defendant has brought a motion to compel answers to questions refused on cross-examination (the “refusals motion”). On October 31, 2008, the parties appeared before Master Dash at the return of the refusals motion. Rulings were made on a number of the specific questions, but the matter could not be completed in the allotted time. The Master adjourned the matter to December 19th for continuation. He set aside a full day. Pending that return of the refusals motion, the defendants served a Trial Record including the usual Certificate of Lawyer. As a consequence of that step, counsel for the plaintiff took the position that the defendants could no longer continue the refusals motion without leave of the court as required by Rule 48.04(1). In fact, Mr. Chalmers went further than that and originally took the position that the consequence of serving the Trial Record was that the defendants had abandoned their motion, so that the only outstanding issue would be that of the costs the plaintiff would be entitled to under Rule 37.09(3). Counsel for the defendant took the position that leave was not required to continue the refusals motion, but if it was then leave ought to be granted.

[3] On December 16, 2008, Master Dash ordered that the defendants’ motion to compel answers to questions arising out of the cross-examination of the affiants for the plaintiff would continue on December 19th before him, as scheduled. The appeal to Kelly J is from that decision.

[4] Rule 48.04(1) reads:

Any party who has set an action down for trial and any party who has consented to the action being placed on a trial list shall not initiate or continue any motion or form of discovery without leave of the court. R.R.O. 1990, Reg. 194, r. 48.04 (1). (emphasis added)

[5] In his December 16th endorsement, the Master found that in the circumstances before him leave was not required under Rule 48.04(1). He went on to say “the circumstances of this case would lead me to conclude that if necessary to obtain leave, leave should be granted”.

[6] On the appeal, Kelly J held:

“This court is not required to determine whether Master Dash made an error in law in finding that it was not necessary to obtain leave to continue the Refusals Motion. Master Dash granted leave. I am of the view that Master Dash did not exercise his discretion on wrong principles or misapprehend the evidence such that there is a palpable and overriding error. Accordingly the Appeal is dismissed.”

[7] The test on this motion for leave to appeal the decision of Kelly J is set out in Rule 62.02(4) which reads as follows:

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. R.R.O. 1990, Reg. 194, r. 62.02 (4).

[8] Counsel for the plaintiff submits the Master’s conclusion that leave was not required (a decision which he submits has been tacitly approved by Kelly J) sets a dangerous precedent because it effectively amends the plain language of Rule 48.04(1) and introduces procedural uncertainty to an issue that has heretofore been clear and certain. He submits that litigants in Ontario would benefit from clarification by the Divisional Court as to whether there are any circumstances in which leave is not required for a party to continue a motion when that party has delivered a Notice of Trial, and on the secondary question of what the test is for granting leave.

[9] In my view, Kelly J was not obliged to decide an issue she did not need to decide to dispose of the appeal – i.e. whether the Master erred at law in deciding leave was not required. Furthermore, I agree with Kelly J’s conclusion that the Master’s discretion in granting leave is unassailable in the particular circumstances of this case. It was within the Master’s discretion to grant leave, which he did, and it was not necessary on the appeal to give a seal of approval or otherwise, to the Master’s parallel conclusion that leave was unnecessary. The present motion is therefore dismissed.

[10] However, the submissions of counsel for the plaintiff deserve further comment.

[11] The Master held that “In my view, the motion prohibition in Rule 48.04(1) does not apply to motions brought in response to, and in the context of, an underlying motion brought by another party”. (para. 7) It is unfortunate that he expressed his conclusion so broadly, but it is clear from his detailed analysis that his conclusion is based on the narrow circumstances and limited scope of this particular case. The circumstances in which the Master found that leave was either unnecessary, or ought to be granted, include the following significant and limiting particulars:

(a) the Trial Record was filed by a respondent to a pending motion for summary judgment; but presumptively by a party ready for trial.

(b) the motion is a refusals motion; not related to discovery or further discovery but on an acknowledged right to cross-examine on the material of the opposite party moving for summary judgment;

(c) the Master had already begun to hear the refusals motion, was seized of it and adjourned it to himself for continuation;

(d) the continuation was to address the same relief already heard in part, not some separate issue;

(e) to accept the plaintiff’s position would have given the plaintiff the ability to refuse to answer proper questions without recourse by the defendant, a result the Master and Kelly J both characterized as “absurd”.

[12] Counsel for the plaintiff submits that this latter conclusion ignores the fact that the defendant itself created that possibility by voluntarily delivering a Notice of Trial and should therefore not be heard to say the consequence is “absurd”, “manifestly unjust” or even “prejudicial” in the absence of explanatory evidence.

[13] The authorities are clear that setting a matter down for trial is not a mere technicality of procedure. See, for example, Machado v. Pratt and Whitney, et al (1993) 1993 5492 (ON SC), 23 C.P.C. (3d) 115, 16 O.R. (3d) 250 and in particular para. 8.

[14] On the other hand, a party who is ready for trial and wishes to move the case forward, as is the case here, should not be delayed by the other side’s long outstanding motion for summary judgment and 270 refusals on the cross-examination on motion material. The Master was fully familiar with all the circumstances of both the motion for summary judgment and the refusals motion. He was not only familiar with the refusals motion, he was seized of it. He articulated sound reasons for granting leave.

[15] I find that an appeal of the decision of Kelly J does not meet either branch of the threshold test under Rule 62.02(4).

[16] If counsel are unable to agree on costs, brief written submissions may be made in the next 20 days.

Aston J.

DATE: February 27, 2009