Court File and Parties
COURT FILE NO.: CV-20-85354 DATE: 2023/03/30
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
Jean Jacquelyn Saint-Fort, Audrey Pierre, Blaise Tongace Traore, Briana Brissette, Mario Pleau, Fatoumata Diallo, Naji Youssef Zourob, Ziad Jaber, Tania Maruf, Michel Lebeau, Jeremy Nantel Saint-Fort, Samuel Stewart, Eyr Technologies Inc., Abbas Sobh, Hanadi Dawi, Tania Dawi, Bilal Balaa, Haissam Balaa, Mounawar Jammal, Abd El Hadi Balaa, Nada Nasri, Fraz Tabassam, Nasr Balaa, Ghulam Hakim, Luc Boudreau, Sheri Boudreau, Lise-Anne Boal, Kenneth Boal, Asjad Mahmood Malik, Moazzam Iqbal, Jean Denis Labrosse, Lise Labrosse, Hanan Talabeh, Samer Mardini, Rahaf Seahdh, Summera Azam, Najma Kouser, Mushtaq Ahmed Shahid, Fahmida Jahangir, Michel Brissette, Khaled Makkouk, Nooraddin Albaghjati, Muhammad Aamir Shehzad, Sumera Ameer Khan Plaintiffs
– and –
Ashcroft Homes – Eastboro Inc. Defendant
COUNSEL: Pierre Champagne and Louis-Pierre Grégoire for the Plaintiffs Brett Hodgins for the Defendant
HEARD: March 22 and 23, 2023
Rulings on mid-trial motions
RYAN BELL J.
Introduction
[1] Ashcroft Homes – Eastboro Inc. moved for leave under r. 31.07(2) of the Rules of Civil Procedure to introduce information at trial related to undertakings deemed to have been unanswered by virtue of their late delivery. The plaintiffs moved for leave to amend their statement of claim. Both motions were brought mid-trial, following the close of the plaintiffs’ case and after the examination in chief of Ashcroft’s representative and first witness, Mr. DiFilippo.
[2] On March 24, 2023, I gave my rulings on both motions and provided brief oral reasons, with more detailed written reasons to follow. These are my reasons for a) granting leave to Ashcroft under r. 31.07(2), on terms, and b) granting leave to the plaintiffs to amend the statement of claim.
Ashcroft’s motion for leave under r. 31.07(2)
[3] Rule 31.07(1)(c) provides:
(1) A party, or a person examined for discovery on behalf of or in place of a party, fails to answer a question if,
(c) the party or other person undertakes to answer the question, but no answer is provided within 60 days after the response.
[4] The effect of a failure to answer a question on discovery is set out at r. 31.07(2):
(2) If a party, or a person examined for discovery on behalf of or in place of a party, fails to answer a question as described in subrule (1), the party may not introduce at the trial the information that was not provided, except with leave of the trial judge.
[5] Rule 53.08(1) provides:
(1) If evidence is admissible only with leave of the trial judge under a provision listed in subrule (2), leave may be granted if the party responsible for the applicable failure satisfies the judge that,
(a) there is a reasonable explanation for the failure; and
(b) granting the leave would not,
(i) cause prejudice to the opposing party that could not be compensated for by costs or an adjournment, or
(ii) cause undue delay in the conduct of the trial.
[6] Rule 53.08(2) includes r. 31.07 (failure to answer on discovery).
[7] Even where the requirements for leave are met, the granting of leave is not mandatory; r. 53.08(1) provides only that the trial judge “may” grant leave where the rule’s requirements are satisfied.
[8] It is not necessary to review in detail the facts relating to the answers to undertakings provided by Ashcroft and the very late delivery of those answers. Mr. DiFilippo as the representative of Ashcroft, was first examined for discovery on April 20, 2022. He was examined for a second day on October 4, 2022. At the conclusion of the second day of discovery, plaintiffs’ counsel advised they would require an additional day of examination with Mr. DiFilippo.
[9] The pre-trial conference was conducted on December 5, 2022. The plaintiffs advised they were ready to proceed to trial. Following the pre-trial conference, at Ashcroft’s request, the plaintiffs confirmed they had completed their examination for discovery of Mr. DiFilippo.
[10] Plaintiffs’ counsel first wrote to Ashcroft’s counsel on August 18, 2022 regarding the undertakings given on Mr. DiFilippo’s examination for discovery. From August 18 until December 7, 2022, Ashcroft’s counsel took the position that because Mr. DiFilippo’s examination was not concluded, counsel was precluded by the Rules of Professional Conduct from communicating with his client about the issues in the proceeding, including with respect to the undertakings given on his examination for discovery. Plaintiffs’ counsel repeatedly advised that they disagreed with the position taken. Plaintiffs’ counsel also advised Ashcroft’s counsel, “we hereby release you from any such restrictions to the extent that it is required to answer undertakings.”
[11] Many of the undertakings given by Mr. DiFilippo on his examination for discovery required him to “confirm with Stantec and advise.”
[12] The trial was originally scheduled to commence on January 30, 2023. On January 19, counsel for Ashcroft advised plaintiffs’ counsel “that while they [Stantec] may be able to provide answers to some of the undertakings, they do not anticipate being able to provide answers to all of the undertakings prior to January 30, 2023.” Counsel for Ashcroft offered to postpone the trial. Plaintiffs’ counsel did not respond – “as we did not think that demanding the answers as soon as possible one more time would change anything.”
[13] The trial did not proceed on January 30, 2023 as scheduled. On January 27, the trial was adjourned by the court due to a lack of judicial resources. The trial was rescheduled to commence on March 20, 2023.
[14] Ashcroft did not provide the plaintiffs with any of the answers to the undertakings given on Mr. DiFilippo’s examination for discovery until March 16, 2023. There were approximately 70 to 80 answers to undertakings from Ashcroft and another 40 answers to undertakings that required input from Stantec. Approximately 500 pages of documents (not including the emails purporting to terminate the plaintiffs’ agreements of purchase and sale with Ashcroft) were delivered.
[15] There is no dispute that, because the undertakings were not responded to within 60 days from the date they were given and, indeed, were not delivered until the eve of trial, Ashcroft, by virtue of r. 31.07(1)(c) is deemed to have failed to answer those questions. As a result, Ashcroft is not permitted to introduce at trial the information that was not provided except with leave of the trial judge: r. 31.07(2).
[16] Ashcroft does not seek leave to introduce at trial any documents delivered with its answers to undertakings with the exception of the Drainage Report for the purpose of showing the date on which it was received. It is not clear to me why the date itself cannot be agreed upon between counsel, without prejudice to the plaintiffs’ position that the date on which it was received is irrelevant.
[17] Ashcroft’s second witness (of two) is Mr. Kilborne of Stantec. Ashcroft submits that unless leave is granted in relation to the information contained in the undertakings, Mr. Kilborne will, effectively, be precluded from being able to give evidence in relation to any subject that touches on or relates to the topics raised in the answers to undertakings. Ashcroft is concerned that unless leave is granted, Mr. Kilborne’s testimony will be interrupted with numerous objections.
[18] With this background, I turn to a consideration of r. 53.08(1). The obligation rests with Ashcroft to satisfy me that a) there is a reasonable explanation for the failure to provide answers to the undertakings within 60 days; and b) granting leave would not cause prejudice to the plaintiffs that could not be compensated for by costs or an adjournment or cause undue delay in the conduct of the trial. In considering these matters, I am also mindful of r. 1.04 which provides, “These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.”
[19] Ashcroft has provided an explanation for the failure to answer the undertakings in a timely manner. The fact that counsel for Ashcroft may have been overly cautious and, frankly, incorrect in law regarding his ability to communicate with his client to initiate the process of responding to undertakings in a timely fashion (see Iroquois Falls Power Corp. v. Jacobs Canada Inc.), does not, in my view, render the explanation unreasonable. This was not a case where, and the plaintiffs do not allege that, Ashcroft deliberately held back information. I am satisfied that Ashcroft has met the first part of the test in providing a reasonable explanation for the failure.
[20] I am also satisfied that granting leave would not cause prejudice to the plaintiffs that could not be compensated for by costs or an adjournment. On the issue of prejudice and the approach under r. 53.08, Ashcroft relied on Gardner v. Hann, 2011 ONSC 3350, where the court, at para. 14, cited with approval the following passage from the earlier decision of Hunter v. Ellenberger, 1988 CarswellOnt 340:
In my view, it should be remembered that any time a Court excludes relevant evidence the Court’s ability to reach a just verdict is comprised. Relevant evidence should not be excluded on technical grounds, such as lack of timely delivery of a report, unless the Court is satisfied that the prejudice to justice involved in receiving the evidence exceeds the prejudice to justice involved in excluding it.
[21] I agree with the comments of the court in Hunter; they are in keeping with the approach to the interpretation of the rules mandated by r. 1.04. While the issue in Gardner was the late delivery of certain expert reports by the plaintiff following the pre-trial conference and, at the time Gardner was decided, the granting of leave was mandatory under r. 53.08(1) unless doing so would cause prejudice that could not be overcome by an adjournment or costs, in my view, the underlying consideration remains the same. That is, in weighing whether to exclude relevant evidence, the court must consider “whether in all of the circumstances and in order to ensure a fair adjudication of the matters before the Court it is in the interests of justice to allow the evidence in”: Gardner, at para. 14.
[22] The plaintiffs have referred me to Wray v. Pereira, 2018 ONSC 4623 which, in turn, refers to the Court of Appeal’s decision in Iannarella v. Corbett, 2015 ONCA 110. Both cases were concerned with the admission of surveillance evidence. At para. 17 of Wray, the court cited from Iannarella regarding the significant prejudice and the lost benefits to the appellants occasioned by the late disclosure of the surveillance:
The appellants did not have the benefit of considering the surveillance in assessing the possibility of pre-trial settlement, and their counsel had little time to prepare an appropriate examination in chief of Mr. Iannarella. The prejudice was baked in and the trial was well under way. In my view, the application of the test for leave to introduce the surveillance should have led the trial judge to refuse its admission even for the purpose of impeachment.
[23] The plaintiffs say the same is true here – that the prejudice is “baked in”, that the answers to undertakings are a “total package”, and that the information received from Stantec impacts their trial strategy and, in particular, their expert witness who has already testified. The plaintiffs’ trial strategy was predicated on the non-delivery of the undertakings. The plaintiffs go so far as to say that if leave is granted, the trial needs to “start over”; in other words, the plaintiffs are asking for a mistrial, with the costs thrown away payable by Ashcroft.
[24] It is important to bear in mind r. 31.07(2): “If a party fails to answer a question, the party may not introduce at the trial the information that was not provided, except with leave of the trial judge.” Leave will only be granted if the requirements of r. 53.08(1) are met. It follows that if the solution is a mistrial, there is non-compensable prejudice and leave would not be granted.
[25] In this case, granting leave to Ashcroft would not cause prejudice to the plaintiffs that could not be compensated for by an adjournment and costs thrown away. Because of the submissions on both motions, an adjournment to continue and complete the trial would have been necessary in any event. At the same time, determination of this proceeding without Mr. Kilborne’s testimony would not ensure a fair and just adjudication of the proceeding on its merits.
[26] The adjournment will permit the plaintiffs to thoroughly review and consider the information disclosed in the answers to undertakings. The plaintiffs will be permitted to reopen their case, should they choose to do so, to recall their expert witness to address any new areas raised by the information given in the answers to undertakings. The adjournment will also give the plaintiffs time to consider their approach to the cross-examination of Mr. DiFilippo, and of course, the upcoming testimony of Mr. Kilborne on behalf of Stantec. If, after reviewing the answers to undertakings, the plaintiffs determine that there are additional lay witnesses they would like to call as part of their case, I am prepared to entertain a motion in this regard, bearing in mind the purpose of r. 31.07(2).
[27] For these reasons and on these terms, Ashcroft is granted leave to introduce at trial, information related to the undertakings given on Ashcroft’s examination for discovery.
The plaintiffs’ motion for leave to amend the statement of claim
[28] Rule 26.01 provides “[o]n motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.”
[29] After hearing the plaintiffs’ submissions, Ashcroft advised that it no longer objected to the proposed amendments at paragraphs 42 and 51 of the statement of claim. The proposed amendment to each of these paragraphs is the same and is in the nature of particulars.
[30] Ashcroft maintained its objection to paragraph 44.1 of the statement of claim. Draft paragraph 44.1 reads:
If the agreement was subject to early termination conditions and such were appropriate, then the early termination conditions was [sic] not exercised within the time allowed to do so under the APS.
[31] Ashcroft says that the proposed amendment at paragraph 44.1 (the “non-compliance with Schedule “A” argument) pleads a new cause of action and there is non-compensable prejudice because the limitation period has expired.
[32] I disagree. The plaintiffs’ claim is for breach of contract. In the current statement of claim, the plaintiffs have pleaded the factual matrix relating to Ashcroft’s alleged breach of contract of various terms and conditions of the agreements of purchase and sale and the alleged failure to contract honestly and in good faith. In particular, the plaintiffs plead that the “first purported termination” of the agreements of purchase and sale on July 6, 2020 pursuant to Schedule U was contrary to the terms of the agreements which limited the types of early termination conditions that could be included in the agreements. The proposed amendment pleads, apparently in the alternative, that if the agreements were subject to early termination conditions, then those conditions were not exercised within the time permitted under the agreements.
[33] In their opening statement, the plaintiffs stated that they were asking the court to find a breach of contract based on five particulars. Those particulars included the non-compliance with Schedule “A” argument. No objection was raised by Ashcroft. Three of the four plaintiffs who testified were asked questions during their examinations in chief relating to the non-compliance with Schedule “A” argument. No objection was taken by Ashcroft and Ashcroft had the opportunity to cross-examine on this issue.
[34] The proposed amendment to paragraph 44.1 does not assert a new cause of action. As Master Dash observed in Ascent Inc. v. Fox 40 International, at para. 3:
A new cause of action is not asserted if the amendments simply plead an alternative claim for relief arising out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon which the original right of action is based.
[35] In Beauchamp v. Gervais, 2015 ONSC 5848, Healey J. reviewed the relevant jurisprudence on when amendments will be permitted under r. 26.01, including Dee Ferraro Ltd. v. Pellizzari, 2012 ONCA 55, A1 Pressure Sensitive Products Inc. v. Bostik Inc., 2013 ONSC 4734 (Div. Ct.), and 1309489 Ontario Inc. v. BMO Bank of Montreal, 2011 ONSC 5505. Justice Healey then summarized at para. 23 of Beauchamp:
The preceding authorities establish that in order to qualify as something other than a new cause of action the proposed amendments must, in substance, be: (i) an alternative claim for relief, or a statement of different legal conclusions based on no new facts or not going beyond the factual matrix from which the original claim arose; (ii) better particulars of the claims already made; (iii) a correction of errors in the original pleading; or (iv) the assertion of a new head of damage arising from the same facts. If the amendments cannot be characterized in one of these ways, the amendments should not be permitted, in order to not deny a defendant the right to rely upon a limitations statute.
[36] Proposed paragraph 44.1 is an alternative basis for breach of contract, which does not go beyond the factual matrix from which the original claim arose. Alternatively, paragraph 44.1 could be viewed as providing additional particulars of the breach of contract claim already made. Either way, there is no expiry of a limitation period because the factual matrix necessary for the cause of action of breach of contract has already been pleaded. There is therefore no prejudice to Ashcroft in allowing the amendment contemplated by paragraph 44.1.
[37] For these reasons, the plaintiffs are granted leave to amend the statement of claim in the form attached as exhibit “A” to the affidavit of Graeme Macpherson, with costs of the motion to the plaintiffs in any event of the cause.
Conclusion
[38] The costs associated with both motions will be determined following the completion of the trial.
[39] The trial is now scheduled to continue on June 5 to 7, 2023. If required, a trial management conference may be scheduled before me prior to the resumption of the trial.