Court File and Parties
COURT FILE NO.: CV-17-2408-00, CV-17-5302-00 DATE: 2019 02 26
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Peter Pichelli, Todd Leslie, Frank Toth and 958041 Ontario Limited Plaintiffs
Douglas M. Cunningham, for the Plaintiffs
- and -
Adair Barristers LLP, Geoffrey D.E. Adair, and Tracy Adair Defendants
William Pepall and Alan Melamud, for Geoffrey D.E. Adair and Adair Barristers LLP, David Steinberg for Tracy Adair
AND BETWEEN:
Peter Pichelli, Todd Leslie, Frank Toth and 958041 Ontario Limited Plaintiffs
Douglas M. Cunningham, for the Plaintiffs
- and -
Ante Kegalj, Anthony Vuletic, John Vuletic, Embleton Properties Corp., 1857325 Ontario Ltd. and Brampton G&A Holdings Inc. Defendants
Neil Paris for Ante Kegalj, Ed Hiutin for Brampton G &A Holdings Inc., Paul Pape for Anthony Vuletic, John Vuletic, Embleton Properties Corp. and 1857325 Ontario Ltd.
AND BETWEEN:
Aleardo Caroti, Jacinta Caroti, Ian Grounds, Moraig Grounds, Nancy Kostelac, Brian McDowell, Biljana Nizalek, Marielle Pelchat-Morris, Wilma Jesus, Monica Savona, Milena Boland, Jurica Biondic, Renato Biondic and Boris Klecina Plaintiffs
Bonnie Roberts Jones and Martin Mendelzon, for the Plaintiffs
- and -
Ante Kegalj, Anthony Vuletic, John Vuletic, Mira Vuletic, Embleton Properties Corp., 1857326 Ontario Ltd., and Brampton G & A Holdings Inc. Defendants
Neil Paris for Ante Kegalj, Ed Hiutin for Brampton G &A Holdings Inc., Paul Pape for Anthony Vuletic, John Vuletic, Embleton Properties Corp. and 1857325 Ontario Ltd.
HEARD: February 19, 2019
REASONS FOR DECISION
LEMAY J
[1] On January 8th, 2019, I released reasons in this matter (reported at 2019 ONSC 168). In those reasons, I determined that the summary judgment motion brought by the Defendant Ante Kegalj against the Plaintiffs (hereinafter “the Pichelli Parties”) should be granted.
[2] After being contacted by the parties about an error in my reasons, I directed the Plaintiffs (hereinafter “the Pichelli Parties”) to bring a motion to have the error placed before me to determine whether I had the jurisdiction to revise that error.
[3] In essence, the error was that, on April 9th, 2018, after discussion with counsel, I had determined to adjourn the summary judgment motion brought by Mr. Kegalj rather than deciding it. As a result, although there was a complete record before me (including extensive factums), counsel for the Pichelli Parties had not had the opportunity to make oral submissions on the motion.
[4] The Pichelli Parties duly brought this motion returnable on February 19th, 2019, arguing that the decision was a nullity because I had adjourned the motion and therefore I did not have jurisdiction to issue the decision. In the alternative, the Pichelli Parties argued that I had the ability to correct the decision, as a formal Order had not been issued or entered and that not correcting the decision would result in a miscarriage of justice. Finally, the Pichelli parties argued that I should not be the judge who heard the motion when it was re-argued, as a reasonable apprehension of bias exists.
[5] Mr. Kegalj opposed the motion, arguing that the most the Pichelli Parties were entitled to was the opportunity to make oral submissions before me and have me re-consider my reasons. Mr. Kegalj also argued that there was no specific injustice that the Pichelli Parties could point to that would justify re-arguing this motion. Finally, Mr. Kegalj argued that there was no reasonable apprehension of bias and that, in any event, no formal recusal motion was before the Court.
[6] For the reasons that follow, I have determined that the motion brought by the Pichelli Parties should succeed on the basis that I have the jurisdiction to amend my decision since a formal order has not been issued and entered. Further, I am of the view that it would be appropriate to exercise that jurisdiction. Allowing my decision to remain unamended would amount to a miscarriage of justice. Finally, I have determined that another judge should hear the summary judgment motion when it is brought back on for hearing, although I will remain the case management judge.
Background Facts
[7] This is a complex series of legal proceedings brought to address the management, subdivision and sale of a property at 78 Cliffside Drive in Brampton. The relevant history is set out in pages 1 to 11 of my revised reasons (reported at 2019 ONSC 168). In addition to the parties and actions listed in the style of cause above, there is a further action involving a different group of Plaintiffs and some of the same Defendants.
[8] The further action, which was not addressed in the summary judgment motion, is in Court File No. CV-17-5302. It was brought by a group of different Plaintiffs (“the Caroti Plaintiffs”) against the Vuletics, their companies and Mr. Kegalj.
[9] I have been case managing this action since the fall of 2017. As part of the case management process, the Defendants determined that four separate summary judgment motions should be brought, as follows:
a) A summary judgment motion brought by Geoffrey Adair and Adair Barristers to dismiss the claims advanced against those Defendants by the Pichelli Parties. b) A summary judgment motion brought by Tracy Adair to dismiss the claims advanced against her by the Pichelli Parties. c) A summary judgment motion brought by the Vuletics to have the action brought against them by the Pichelli Parties dismissed. d) A summary judgment motion brought by Mr. Kegalj to have the action brought against him by the Pichelli Parties dismissed.
[10] In my reasons released on January 8th, 2019, I dismissed the summary judgment motion brought by the Vuletics and granted the remaining three motions. On January 15th, 2019, I received correspondence from Mr. Cunningham, counsel to the Pichelli Parties. In that correspondence, Mr. Cunningham suggested that I should not have made a decision in respect of the Kegalj motion for summary judgment, as that motion had been adjourned and not argued.
[11] On receipt of this correspondence, I asked the other counsel who had been present to confirm their positions on this motion. Counsel for the Caroti parties confirmed that their understanding of events was the same as Mr. Cunningham’s understanding. Counsel for Mr. Kegalj did not dispute that the motion had been adjourned, but took the position that the decision I made should not be changed in any way. The remainder of the parties took no position on Mr. Cunningham’s request.
[12] As a result of this correspondence, I ordered the transcript of the argument before me to determine what had actually transpired. On a review of the transcript, it was clear that, after discussion with the parties, I had confirmed that a summary judgment motion was being brought by Mr. Kegalj against the Caroti parties and that disposition of the summary judgment motion brought by Mr. Kegalj should be left until all of the summary judgment motions respecting Mr. Kegalj in all actions could be heard together.
[13] I provided the transcript to all counsel, and invited counsel for the Pichelli Parties to bring a motion to have my judgment varied. I also directed Court staff and the parties that no Orders on this file could be taken out without my signature, and that I would not be signing an Order to reflect my judgment until after I heard any motion that the Pichelli Parties brought.
[14] The Pichelli Parties duly brought a motion to have my reasons amended. They were supported in this motion by the Caroti parties. Mr. Kegalj opposed the motion to amend my reasons. This motion was argued on February 19th, 2019. None of the other parties attended at this motion.
Issues
[15] There are three issues to be determined on this motion:
a) Do I have the jurisdiction to amend my January 8th, 2019 reasons? Should I exercise that jurisdiction? b) If I do exercise jurisdiction to amend my January 8th, 2019 reasons, should I preside over the subsequent hearing of the motion when it is brought back on? c) What further steps should be taken in respect of case management for this matter?
[16] I will deal with each issue in turn.
Issue #1- Jurisdiction to Amend
[17] Counsel for the Pichelli Parties identifies five separate issues in his factum. In my view, these can be summarized in three separate questions, as follows:
a) Is the decision a nullity because the case was adjourned? b) Do I have the jurisdiction to amend my reasons? c) If I have the jurisdiction to amend my reasons, should I exercise that jurisdiction?
[18] I will deal with each question in turn.
a) Is the Decision a Nullity
[19] Counsel for the Pichelli Parties argues that the Kegalj summary judgment motion was adjourned by the Court on April 9th, 2018. As a result, the questions raised by that motion were no longer before the Court for a determination and the decision is a nullity. Counsel further argues that, since there was no such motion before the Court for determination, there was no matter on which the Court could subsequently render a decision.
[20] I reject this argument for both legal and practical reasons. Starting with the legal reasons, I note the following:
a) The Court is a Court of inherent jurisdiction. It is possible for the Court to address matters on its own motion, and without notice to any of the parties (on this point, see as an example B.C.G.E.U. v. British Columbia (Attorney General), [1988] 2 S.C.R. 214). b) In this case, I am the case management judge. As a result, the powers that I have under Rule 37.15 of the Rules of Civil Procedure (“the Rules”) permit me to give such directions and make such procedural orders as are necessary. c) The Court has an express jurisdiction to hear motions, including ex parte motions, and has the authority to make an order without notice (see Rule 37.07(2) of the Rules).
[21] In light of these factors, I am of the view that the decision was, from a legal perspective, not a nullity when it was made.
[22] In addition, however, there is a practical reason for rejecting counsel’s argument on this point. Simply put, if the decision was a nullity, then I did not have the jurisdiction to make it in the first place. If I did not have the jurisdiction to make the decision in the first place, then I do not have the jurisdiction to change the decision. The reason that this argument cannot succeed is that this Court, as a Court of inherent jurisdiction, must have some ability to change its decisions and address errors in those decisions. That jurisdiction should not be limited by technical arguments.
b) Do I have the Jurisdiction to Change My Decision?
[23] I do have the jurisdiction to change my decision, in certain limited circumstances. My consideration of this issue starts with two key decisions, Montague v. Bank of Nova Scotia (2004), 69 O.R. (3d) 87 (C.A.) and Brown (Trustee Of) v. Municipal Property Assessment Corp. (2014 ONSC 7137 (Div. Ct.)).
[24] In Montague, the Court of Appeal stated (at paragraph 34):
[34] I cannot agree that the rule prohibits the trial judge from changing her order. There can be no doubt that until a judgment is formally entered in the court record, the judge has a very broad discretion to change it. In Holmes Foundry Ltd. v. Village of Point Edward; Caposite Insulations Ltd. v. Village of Point Edward, [1963] 2 O.R. 404 (C.A.), Laidlaw J.A. put it this way, at p. 407 O.R.:
It is well settled in law that an order can always be withdrawn, altered or modified by a Judge either on his own initiative or on the application of party until such time as the order has been drawn up, passed and entered. I refer to Re Harrison’s Share under a Settlement, Harrison v. Harrison [1955] 1 Ch. 260.
[25] In Brown, supra Nordheimer J. (as he then was) acknowledged the principle in Montague, but provided some cautionary guidance for judges. At paragraphs 20 and 21, he stated:
[20] I acknowledge there is a fairly broad power, in a judge, to change an order after it has been announced but before it has been signed and entered. Any such change should only be made, however, if it is either technical (e.g. to correct an arithmetic error) or it is necessary to avoid a miscarriage of justice: Clayton v. British American Securities Ltd., [1935] 1 D.L.R 432 (B.C.C.A.) at pp. 440-441. Even then, if a change is to be made, it must be fully explained to ensure that the authority is not abused. The concern that arises from changes being made by a judge to an order, that has already been pronounced, has been expressed in other cases. For example, in Montague v. Bank of Nova Scotia (2004), 69 O.R. (3d) 87 (C.A.), Goudge J.A. said that, notwithstanding the very wide discretion a judge has to change his or her judgment before it is entered, that discretion had to be exercised cautiously and for very good reasons. He commented, at para. 40:
Any change to a judgment once given, no matter how soundly based, runs the risk of evoking suspicions of abuse on the part of those adversely affected. It is at the least disquieting, and to that extent can put a cloud over the administration of justice. A judge exercising this discretion bears a significant onus to explain the change.
[21] The onus on a judge to clearly explain the basis for a change to an order already given was repeated in 1711811 Ontario Ltd. v. Buckley Insurance Brokers Ltd. 2014 ONCA 125, [2014] O.J. No. 697 (C.A). where Gilles J.A. said, at para. 73:
A clear explanation for the change to the order was required so that the parties, and this court on review, could know the reason for the change. It was an error to fail to give that explanation.
[26] When these decisions are read together, it is clear that judges have a jurisdiction to change an Order that has been announced (either orally or in writing) but has not been issued and entered. That discretion has to be exercised sparingly and with great care, however, as doing otherwise would bring the administration of justice into disrepute.
[27] I acknowledge the decision in He v. Furney (2018 ONSC 1812). In that case, Monahan J. was dealing with an appeal of a Master’s Order regarding a Certificate of Pending Litigation. The Defendants sought to have Monahan J.’s Order varied in a manner that would allow them to refinance the property and not prejudice the rights of the Plaintiff. Monahan J. concluded that he had no jurisdiction to vary his Order once it was made.
[28] I am of the view that this case is distinguishable from the facts before me as Monahan J. had already signed the Order in his case and I have not signed any Orders in my case. In any event, however, I am not persuaded to apply this reasoning to the facts before me for three reasons, as follows:
a) It is against the weight of authority, including the binding authority of both Montague and Brown. I note that neither decision was cited in Furney. b) The limited circumstances in which judges can adjust their Orders before they are issued provide important procedural protections to the parties. Judges can only change their decisions if there is a “slip” or if not doing so would result in a miscarriage of justice. These are important reasons for providing judges with a limited discretion to revisit Orders that they have announced but that have not been issued and entered. c) While judges cannot always control the issuance of an Order, if one party objects (as happened in this case), the issue returns before the judge that made the Order to settle the terms of the Order. As a result, judges do have a residual jurisdiction over the terms of their Order until it is issued and entered.
[29] Adopting the reasoning in Montague and Brown, I conclude that I do have the jurisdiction to change my Order in circumstances where there would be a miscarriage of justice. This brings me to the next issue.
c) Should I Exercise my Jurisdiction?
[30] The Pichelli Parties argue that not exercising my discretion would result in a miscarriage of justice because they did not have the chance to make oral submissions. Mr. Kegalj argues that the Pichelli Parties have not identified any actual prejudice that they suffered and that I should not exercise my discretion.
[31] In essence, Mr. Kegalj’s argument is that the Pichelli Parties have not advanced any arguments beyond the ones that were contained in their factum that would have (or even could have) changed the outcome of the motion. The problem with this argument is that it misses a key issue, the audi alteram partem rule.
[32] This is a basic principle of fairness that requires all parties a full opportunity to present their respective cases before the Court. In this case, the principle is particularly important because granting the Kegalj summary judgment motion ends the Pichelli Parties’ action.
[33] The audi alteram partem rule has been described in Ontario (Provincial Police) v. Mosher (2015 ONCA 722) at paragraphs 60 to 63, where Watt J.A. stated:
[60] Two brief points about the audi alteram partem principle are adequate to mark out the boundaries of the principle.
[61] The principle is an amalgam of two components. Each is a right accorded to a part in a proceeding.
[62] First, a right of audience. Said in another way, the right to be heard by the decision-maker. This right compels the decision-maker to allow the party to be heard so that the party has the opportunity to present his or her point of view: Suermarchés Jean Labrecque Inc. v. Flamand, [1987] 2 S.C.R. 219, at pp. 234-35.
[63] Second, and this arises out of the right to be heard, notice of the hearing sufficient in time and substance to enable to party to present his or her case on the issues to be decided: Telecommunications Workers Union v. Canada (Radio Television and Telecommunications Commission), [1995] 2 S.C.R. 781, at para. 29; Supermarches Jean Labrecque, at p. 235.
[34] A relevant example of the application of this rule can be found in Levac v. James (2017 ONCA 842). In Levac, the motions judge was considering a certification motion on a class action. The motions judge granted summary judgment on a formulation of the common issue that was different from the formulation that he had approved in an oral ruling. The Defendant appealed, alleging that the motion judge had compromised procedural fairness. The Court of Appeal allowed the appeal on that basis, and remitted the matter to a different judge. In doing so, the Court of Appeal rejected arguments similar to the ones being made by Mr. Kegalj in this case (see paragraphs 39-43 of Levac).
[35] The key principle that flows from these cases is that, prior to rendering a decision, judges are required to permit the parties a full opportunity to be heard. That was not done in this case, as the Pichelli Parties did not have the opportunity to make oral submissions. In my view, the audi alteram partem principle is so significant in this case that it does not matter if the oral arguments would not have added anything to my consideration of the case.
[36] A party must have an opportunity to make submissions, and know the extent of that opportunity in advance. While Courts can limit the submissions of parties, it must be done in a clear way in advance. That opportunity was not afforded here, and it would be a miscarriage of justice to permit the decision to stand as is.
[37] In addition, there is one final consideration that bears mentioning. Counsel for the Caroti parties attended at the motion on April 9th and 10th, 2018 and made submissions on any issues that affected them. Counsel for the Caroti parties points out that they have an action against Mr. Kegalj, and that they may have clients who are affected by my original decision. As a result, they may also have suffered prejudice as a result of not being heard.
[38] For the foregoing reasons, I conclude that it would be a miscarriage of justice to permit my reasons of January 8th, 2019 to stand without revision. The revisions that I am directing be made are contained in the attached Appendix “A”.
Issue #2- Should I Re-Hear the Motion?
[39] The Pichelli Parties argue that I should not re-hear the motion, as there would be a reasonable apprehension of bias if I were to do so. This reasonable apprehension of bias flows from the fact that I provided detailed reasons for rejecting the position of the Pichelli Parties, and it would be difficult for me to be seen to be impartial at this late stage.
[40] Mr. Kegalj argues that I should re-hear the motion for two reasons. First, he argues that in none of the cases put forward by the Pichelli Parties is a re-do given as a result of this type of issue. Instead, Courts generally permit the arguments to be made. Second, he argues that placing this matter before a different judge might result in inconsistent findings, which would bring the administration of justice into disrepute. I reject both arguments.
[41] First, the Levac decision cited above is an example of a case where a similar procedural fairness defect resulted in the matter being remitted to another judge. In my view, this is also the appropriate approach to adopt in this case. It does not matter if I am actually able to put aside my previous decision. What matters is what the Pichelli Parties perceive. Having rendered my decision on the point, it would be reasonable for the losing party to believe that I would not be able to accept any new or additional arguments that they would make. In other words, there is a reasonable apprehension of bias in this case.
[42] This brings me to the question of whether inconsistent findings would bring the administration of justice into disrepute. I am of the view that they would not, for the simple reason that an inconsistent finding would be based on a more complete argument. As a result, it would be easily explainable.
[43] For the foregoing reasons, when this motion proceeds, including the motion for the Caroti parties, I will not be the judge to hear it. I will refer the assignment of this motion to the Regional Senior Justice (Daley R.S.J) for him to either hear himself or to assign another judge to hear the matter.
[44] However, I will remain as the case management judge. I did not hear any party asking that for me to be replaced in that role, and such a request would require a formal recusal motion.
Issue #3- Further Directions
[45] Given the foregoing reasons, I must now proceed to provide further directions to the parties about what steps are necessary to proceed with this action.
[46] First, the deadlines in paragraphs 212 and 213 of my original reasons (now paragraphs 143 and 144) start to run as of the date of the release of these reasons. Costs submissions are not, however, required on the Kegalj motion.
[47] Second, the parties are directed to canvass dates the week of March 18th and April 1, 2019 when they would be available for a 9:00 a.m. in-person appearance. I should advise the parties that the lack of space in Brampton means that I could be assigned to a different Courthouse and the appearance would have to be moved.
[48] Third, the parties (including the Caroti parties) are directed to consider the issues raised in paragraph 217 of my original reasons (now paragraph 147). In addition, any party who is considering bringing a summary judgment motion should be prepared to advise me of that fact at our next appearance so that this can be built into the schedule.
Conclusion and Costs
[49] For the foregoing reasons, I have amended my reasons of January 8th, 2019 in accordance with Appendix “A”. I will not hear the Kegalj summary judgment motion when and if it is brought.
[50] In terms of the costs of this motion, any party seeking costs may provide submissions of not more than two (2) double spaced pages exclusive of bills of costs, case-law and offers to settle in accordance with the timetable for costs on the summary judgment motions. Any reply submissions are limited to the same page lengths, and are also to be provided in accordance with the timetable for costs on the summary judgment motions.
[51] Finally, I thank all counsel for their grace and professionalism in dealing with a difficult issue that was entirely my responsibility.
LEMAY J
Released: February 26, 2019
Appendix “A”
Schedule A
Paragraphs 4, 5, 38, 40 and 211 from the January 8, 2019 decision will be replaced with the following:
[4] The parties have come to an agreement that allows for Brampton G & A not to have to participate in this action any further. The parties have then asked for summary judgment in three parts of the action. First, the Adair Defendant ask for summary judgment in the claim against them. That claim is only being advanced by on group of investors, a group that I will refer to as the Pichelli Plaintiffs. Second, Mr. Kaglj asks for summary judgment in the claim being advanced against him by the Pichelli Plaintiffs, although the Plaintiffs in the other action (“the Caroti action”) are also advancing a claim against him. Since Mr. Kagalj is likely to bring a motion for summary judgment once the pleadings in the Caroti Action have been finalized, I adjourned his summary judgment motion against the Pichelli Plaintiffs so that both motions for summary judgment can be heard together. Finally, the Vuletics are seeking summary judgment on their counterclaim, which they argue would end the action by the Pichelli Plaintiffs.
[5] For the reasons that follow, the summary judgment motions of the Adair defendants are granted. The Vuletics’ summary judgment motion is dismissed.
[38] After some discussion with counsel, it was determined that four summary judgment motions were going to be brought. None of these motions involved the Caroti Plaintiffs. As a result, it was also agreed that I would not make any findings with respect to the meaning of the Lot Purchase Agreements without giving counsel for the Caroti Plaintiffs the opportunity to provide submissions. Ultimately, I adjourned Mr. Kegalj’s motion for summary judgment so that it would be heard with Mr. Kegalj’s proposed motion for summary judgment in the Caroti Action.
[211] [now paragraph 142] For the foregoing reasons, the summary judgment motion of the Adair parties succeeds, and the actions against them are dismissed. The Vuletics’ summary judgment motion is dismissed, and the action against them will continue.
The Reasons including all of the text and headings found at paragraphs 117 to 186 are to be deleted.
The third sentence in paragraph 42 of the original judgment will be deleted and replaced with:
“I reject it in both of the motions I am deciding for three reasons”.
COURT FILE NO.: CV-17-2408-00, CV-17-5302-00 DATE: 2019 02 26 ONTARIO SUPERIOR COURT OF JUSTICE BETWEE N: Peter Pichelli, Todd Leslie, Frank Toth and 958041 Ontario Limited Plaintiffs - and - Adair Barristers LLP, Geoffrey D.E. Adair, and Tracy Adair Defendants -AND BETWEEN- Peter Pichelli, Todd Leslie, Frank Toth and 958041 Ontario Limited Plaintiffs Ante Kegalj, Anthony Vuletic, John Vuletic, Embleton Properties Corp., 1857325 Ontario Ltd. and Brampton G&A Holdings Inc. Defendants -AND BETWEEN- Aleardo Caroti, Jacinta Caroti, Ian Grounds, Moraig Grounds, Nancy Kostelac, Brian McDowell, Biljana Nizalek, Marielle Pelchat-Morris, Wilma Jesus, Monica Savona, Milena Boland, Jurica Biondic, Renato Biondic and Boris Klecina Plaintiffs Ante Kegalj, Anthony Vuletic, John Vuletic, Mira Vuletic, Embleton Properties Corp., 1857326 Ontario Ltd., and Brampton G & A Holdings Inc. Defendants REASONS FOR JUDGMENT LEMAY J Released: February 26, 2019