Citation and Court Information

CITATION: BNP Paribas (Canada) v. Bartlett, 2012 ONSC 5604

DIVISIONAL COURT FILE NO.: 467/12

DATE: 20121002

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

BNP PARIBAS (CANADA) Plaintiff Defendant by Counterclaim (Responding Party)

– and –

DONALD S. BARTLETT INVESTMENTS LIMITED, DONALD SINCLAIR BARTLETT, LILLY MALENE BARTLETT, MARGARET BARTLETT, INGER ANNE BARTLETT, BRENDA BARTLETT and DONALD BARTLETT JR. Defendants Plaintiffs by Counterclaim (Moving Party)

Counsel:

Junior Sirivari and Lisa M. Filgiano, for the Plaintiff/Respondent

Ian C. Wallace, for the Defendant/ Respondent, Donald Bartlett Jr.

HEARD at Toronto: October 2, 2012

Oral Reasons for Judgment

KITELEY J. (ORALLY)

[1] This is a motion for leave to appeal the order of Goldstein J.[^1] dated September 20, 2012.

[2] This action was started in 1990 against the Bartlett Corporation and members of the Bartlett family to realize on security. Specifically with respect to Donald Bartlett Jr. it was alleged in paragraph 11 of the statement of claim that by written agreement dated December 20, 1982, Donald Bartlett Jr. had jointly, severally and unconditionally guaranteed to BNP the due repayment by Arctic Gardens Inc. of all amounts owed or owing to BNP to a limit of $300,000 and interest thereon from the date of demand for payment. BNP made a demand on or about May 7, 1984.

[3] A statement of defence dated November 16, 1990 was filed at about that time on behalf of all defendants. Amongst other things, paragraph 11 was admitted as was the making of the demand. A counterclaim was asserted seeking damages for negligent realization of assets.

[4] In a motion returnable August 8, 2012, Mr. Bartlett Jr. sought leave to amend the statement of defence in several respects: by denying paragraph 11 of the statement of claim; by raising defences against the plaintiff related to the guarantee namely duress, undue influence and lack of independent advice; by raising defences against the plaintiff related to improvident realization of assets; by deleting the counterclaim. On September 20, 2012, Goldstein J. dismissed the motion.

[5] In this motion for leave to appeal, Mr. Wallace relies on rule 62.02(4) (b) and he argues that there is good reason to doubt the correctness of the decision and the case involves matters of such importance that leave should be granted. The motion is opposed by the plaintiff.

[6] The motion was launched as under rule 26 which is mandatory. On behalf of the Bank counsel took the position that it should be properly under rule 51.05 as a withdrawal of an admission. Goldstein J. concluded that it was a rule 51.05 motion. He identified the 3 requirements, found that none had been established and declined to grant leave.

[7] Mr. Wallace does not concede that the matter is one of withdrawal of an admission. I am satisfied that it was proper to characterize the motion as such. Accordingly, I agree with counsel for the bank that the standard that I must apply to my consideration of rule 62.02(4)(b) in a motion seeking leave to appeal an interlocutory discretionary decision is whether the decision is wholly erroneous, palpably wrong and having applied an incorrect principle or law.

[8] The first element is whether the fresh as amended statement of defence demonstrated a triable issue. In his analysis, Goldstein J. approached the issue on the basis of whether the pleading would succeed at trial. He commented on the inconsistent positions Mr. Bartlett Jr. had taken since 1990 and pointed out that his credibility would be undermined. It appears that Goldstein J. did not turn his mind to the essence of this factor. It is not whether the defence will succeed. It is whether the defence is triable. I agree that there is reason to doubt the correctness of the conclusion he reached on the first element.

[9] The second element is whether the request for the amendment arose from inadvertence or wrong instructions. Based on his review of the evidence, Goldstein J. held that that element had not been made out. That was a question of fact. I am not persuaded that there is reason to doubt the correctness of the conclusion he reached on the second element.

[10] The third element is prejudice. The burden is on the moving party to establish that the withdrawal will not result in any prejudice that cannot be compensated for in costs. In his affidavit sworn August 8, 2012, Mr. Bartlett Jr. said that there was no prejudice. There was no evidence to the contrary. Goldstein J. concluded that there was “obvious” prejudice to the plaintiff that “clearly” could not be compensated by costs. He considered the prospects of the plaintiff successfully third-partying Mr. Bartlett Jr.’s original lawyers or Mr. Bartlett Sr. He concluded that it would be unfair to permit the amendments and place BNP in the position of having to risk that limitation periods had not expired and that solicitor’s files from 1982 would be available. He also noted that it would be “reasonable” that the plaintiff would not have agreed to hold the BNP litigation in abeyance in 1992 had it been known that the enforceability of the guarantee was in issue.

[11] I am persuaded that there is reason to doubt the correctness of the conclusion he reached on the third element in that the plaintiff did not provide evidence in opposition to the defendant’s evidence that there was no prejudice and in that all of the elements of prejudice that he identified were speculative.

[12] The three stage test for withdrawal of an admission is conjunctive. All must be established. Although I have good reason to doubt the correctness of his decision on two of the three elements, I have no such concern about the third.

[13] After finding that the moving party had failed to establish the three elements, Goldstein J. nonetheless dealt with abuse of process. Goldstein J. had a wide discretion whether to grant leave to amend even if he had found the three elements of the test had been satisfied. I am not persuaded that there is good reason to doubt the correctness of his decision not to exercise his discretion on the basis of abuse of process.

[14] I turn to the second part of the test in rule 62.02(4)(b). I agree with counsel for the plaintiff that there is no aspect of this that attracts public interest. The circumstances are unique to this case.

[15] In the notice of motion before Goldstein J., Mr. Bartlett Jr. asked for leave to file a fresh as amended statement of defence. In various places in his reasons, Goldstein J. referred to the matter as a motion to amend by withdrawing admissions made in 1990 (paragraphs 1, 18 and 27). In the motion for leave, Mr. Wallace pointed out that the fresh as amended statement of defence contained other aspects as indicated above. Counsel agree that during the submissions, Mr. Wallace did point out those separate aspects. Mr. Wallace took the position that Goldstein J. erred by failing to consider those aspects separately pursuant to rule 26.

[16] There is no reference in his reasons for decision to those other aspects. The notice of motion sought leave to file a fresh as amended statement of defence. Simply because there was an exchange during submissions as to some aspects of the proposed pleading did not mean that the judge was required to consider the request as an alternative. He had a motion for leave to amend. He properly characterized it as seeking leave to withdraw admissions. He dealt with it on that basis. I am not persuaded that there is good reason to doubt the correctness of his decision in that he did not explicitly turn his mind to those “non-withdrawal of admission” aspects. If I had been so persuaded, I would not have accepted that there was any public importance that transcended the interests of the parties.

[17] Given the effort that was required to bring this matter forward on an urgent basis (in light of the motion for summary judgment returnable October 3rd) and the approximately half day for submissions and decision, I fix costs at $7,000. Mr. Wallace asks that his client be given four months to pay. Mr. Sirivar is content that payment not be immediate but that it be required before the representative of the plaintiff is examined for discovery which is likely to be in December 2012. I accept the representation that Mr. Bartlett Jr. requires time to pay and that four months is reasonable.

ORDER TO GO AS FOLLOWS:

[18] Motion for leave to appeal is dismissed. Defendant Donald Barlett Jr. shall pay costs in the amount of $7,000 provided that payment is required after February 2, 2013 with interest at 3% from October 2, 2012.

KITELEY J.

Date of Reasons for Judgment: October 2, 2012

Date of Release: October 5, 2012

CITATION: BNP Paribas (Canada) v. Bartlett, 2012 ONSC 5604

DIVISIONAL COURT FILE NO.: 467/12

DATE: 20121002

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

KITELEY J.

BETWEEN:

BNP PARIBAS (CANADA) Plaintiff Defendant by Counterclaim (Responding Party)

– and –

DONALD S. BARTLETT INVESTMENTS LIMITED, DONALD SINCLAIR BARTLETT, LILLY MALENE BARTLETT, MARGARET BARTLETT, INGER ANNE BARTLETT, BRENDA BARTLETT and DONALD BARTLETT JR. Defendants Plaintiffs by Counterclaim (Moving Party)

ORAL REASONS FOR JUDGMENT

KITELEY J.

Date of Reasons for Judgment: October 2, 2012

Date of Release: October 5, 2012

[^1]: BNP Paribas v. Bartlett 2012 ONSC 5315