Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20200414 DOCKET: M51430 (C67918) Paciocco J.A. (Motion Judge)

BETWEEN

George Volk Applicant (Respondent/Moving Party)

and

Doris Volk, Darlene Mussato, Lisa Volk, Felicia Mussato and Public Guardian and Trustee Respondents (Appellants/Responding Parties)

Counsel: Ellen Ann Brohm, for the moving party Jerry W. Switzer, for the responding parties

Heard: April 14, 2020

Reasons for Decision

[1] Litigation under the Substitute Decisions Act, 1992, S.O. 1992, c. 30, is underway relating to the property of Doris Volk, who is not competent to handle her legal affairs. Included in the dispute is real property registered in the name of Doris Volk (1%) and her granddaughter, Felicia Kowalski (née Mussato) (99%), as tenants-in-common (“the home”). The home is currently occupied by Doris Volk’s daughter, Darlene Mussato, who is Felicia Kowalski’s mother.

[2] George Volk, Doris Volk’s husband, instituted the action by application claiming that Darlene Mussato, a co-attorney of Doris Volk’s property along with her sister Lisa Volk, abused her power of attorney in order to enrich herself and her daughter, Felicia Mussato, and that property of Doris Volk was improperly disbursed to Darlene Mussato and Lisa Volk. George Volk contends that the considerable, ongoing expenses relating to the operation and maintenance of the home are being paid for with Doris Volk’s money, in further breach of trust.

[3] On January 7, 2020, George Volk brought an interlocutory application for an order freezing various assets, ordering the transfer of other assets into the name of George Volk in trust for Doris Volk, and providing for the sale of the home, with the deposit of the proceeds to be paid to George Volk in trust for Doris Volk. The respondent to the application, Lisa Volk, consented to the order. The respondents Darlene Mussato, Felicia Kowalski and the Public Guardian and Trustee, did not appear or file opposing materials. The order was granted. Pursuant to that order, an agreement of purchase and sale has since been entered relating to the home, with a closing date of May 16, 2020. This agreement of purchase and sale gives the stay motion added urgency.

[4] Darlene Mussato and Felicia Kowalksi are now appealing the order of January 7, 2020, in appeal C67918. Included in the grounds of appeal is that the order was made in the absence of Darlene Mussato and Felicia Kowalski, who were not properly served or provided with adequate notice of the application.

[5] Darlene Mussato and Felicia Kowalski now bring a motion before this court, M51316, to stay the order of January 7, 2020, relating to the sale of the home. Filed in support of that stay motion is an affidavit of Felicia Kowalski, dated February 3, 2020.

[6] On February 26, 2020, Felicia Kowalski was cross-examined on her affidavit of February 3, 2020. On the advice of counsel, she refused to answer several of the questions, and an undertaking that was provided has yet to be answered. As a result, George Volk brought a “refusals motion”, seeking to compel the refused questions and the undertaking to be answered, either through further cross-examination or in writing. George Volk has also requested the adjournment of the stay motion brought by Darlene Mussato and Felicia Kowalksi, contending that the refusals by Felicia Kowalski have prejudiced his ability to respond to the stay motion.

[7] Both the refusals motion and the stay motion were scheduled to be heard before me on April 14, 2020. I heard the refusals motion and the adjournment application relating to the stay motion during a hearing in which counsel for Darlene Mussato and Felicia Kowalksi attended by teleconference and counsel for George Volk attended by videoconference. At the completion of the hearing I advised the parties that I would be granting the refusals motion in part, adjourning the stay motion, and establishing a timetable for compliance with this order and for the hearing of the stay motion. I ordered that Felicia Kowalski is to provide answers in writing to the questions I identify within seven (7) days of the receipt of my written decision, as well as related orders. This is the written decision and the timetable I am ordering.

[8] The refused questions and undertaking can be grouped thematically, using the question numbers employed in the “Chart of Refusals and Undertakings” found at pp. 12-19 of George Volk’s Motion Record, filed in motion M51430, dated March 7, 2020, as follows:

(a) Questions pertaining to the non-attendance of Darlene Mussato and Felicia Kowalski at the January 7, 2020 application: Questions 7,8,11,43,44,45, 47; (b) Questions pertaining to the use of funds provided by Doris Volk: Questions 12, 13, 40; (c) Question pertaining to the operation/ownership of the hairdressing business: Question 39; (d) Questions pertaining to utility payments: Question 76; (e) The undertaking pertaining to Doris Volk’s contribution to the property: Question 156; (f) Questions pertaining to other gifts from Doris Volk to Felicia Kowalski: Question 12, 13; (g) Question relating to other support and help Felicia Kowalski provided to Doris Volk: Question 167; (h) Questions relating to Doris’s state of mind or actions: Question 111, 164; and (i) Questions seeking undertakings relating to future use of the property: Question 159, 160, 161.

[9] On the advice of counsel, Felicia Kowalski refused to answer these questions because, in counsel’s view, they did not fall within the four corners of Felicia Kowalski’s affidavit. Felicia Kowalski’s conception of the questions that need to be answered when an affiant is being cross-examined on an affidavit in support of a motion is unreasonably narrow and wrong in law.

[10] As Borins J. noted in Moyle v. Palmerston Police Services Board, [1995] O.J. No. 627 (Div. Ct.), at para. 11, “the nature of the relief sought on an interlocutory motion often plays a significant role in determining the proper scope of cross-examination”. This is because the cross-examination is meant to serve the fact-finding needs that the motion requires. Accordingly, as Borins J. affirmed, quoting Gale J. from Thomson v. Thomson, [1948] O.W.N 137 (H.C.) at 138, a person cross-examining on an affidavit is not confined to the four corners of the affidavit but may cross-examine on matters that are relevant to the issue in respect of which the affidavit was filed. Therefore, although the cross-examiner is not free to cross-examine on all matters that touch upon the underlying action, if the cross-examiner has a bona fide intention to direct questions to the issues relevant to the resolution of the motion and those questions are fair, the question should be answered, not refused. This includes questions relevant to credibility determinations that are within the competence of the motion judge, which would include questions intended to expose “errors, omissions, inconsistencies, exaggerations or improbabilities of the deponent’s testimony contained in his or her affidavit”: Moyle, at para. 14.

[11] The motion in this case is for the stay of an order to preserve the disputed asset. A motion for a stay pending appeal engages the same general legal standards from RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, which are employed in granting interlocutory injunctions, namely, consideration of whether the appeal raises a serious issue, whether the applicant will suffer irreparable harm if the stay is not granted, and the balance of convenience: see Buccilli v. Pillitteri, [2013] O.J. No. 6110 (C.A.), at para. 34 (Gillese J.A., in Chambers). In Moyle, Borins J. noted that because of the nature of the discretionary remedy to grant in interlocutory injunction, the scope of cross-examination for such motions is apt to be broader than in respect of many motions for other remedies: at para. 18. The same is necessarily true of motions for a stay pending appeal.

[12] I would therefore order Felicia Kowalski to answer, in writing, the questions listed above in (a), (b), (c), (d), and the undertaking in (e), for the following reasons.

[13] The questions related to topic (a), the non-attendance of Darlene Mussato and Felicia Kowalski, are relevant to the seriousness of the issues to be tried, given that Darlene Mussato and Felicia Kowalski seek to rely in their appeal on their absence from the January 7, 2020 application hearing where the disputed order was made.

[14] Questions related to topic (b) are relevant to the use of Doris Volk’s funds, which use is relevant to Felicia Kowalksi’s description of the use of funds set out in her affidavit, and to the balance of convenience in granting the stay sought.

[15] Question (c) is relevant to the claim made by Felicia Kowalski in her affidavit that she “has a small hair salon business” which she operates from the home.

[16] Question (d), relating to the utilities payments, is relevant to the claim made by Felicia Kowalski in her affidavit that she paid for the utilities and upkeep of the home.

[17] The undertaking in (e) was provided and should be answered. I do not accept Felicia Kowalski’s position, taken through her counsel, that this undertaking can be answered later as part of the responding materials in the application. This undertaking was furnished during the cross-examination on the affidavit filed in support of the motion for a stay and the information is relevant to the seriousness of the issue to be tried, and to the balance of convenience in determining whether the stay should be granted.

[18] I would not order questions (f) and (g) to be answered. They do not relate to the issues raised in the motion. I recognize that the answers provided to question (f) could raise questions about the plausibility of some of the facts represented in Felicia Kowalski’s affidavit, but this is not the kind of credibility factor a motion judge could properly consider during a stay motion, as described in para. 10 of these Reasons for Decision.

[19] I would not order questions (h) or (i) to be answered. The questions in (h) relating to what Doris Volk could have done were unfair to Felicia Kowalski, who is not poised to speak to other steps Doris Volk could have taken in accomplishing her goals. The questions in (i) are irrelevant and unfair. Felicia Kowalski’s position is that she has done nothing wrong. There is no reason for her to give the kinds of undertakings sought in those questions.

Order

[20] As counsel for George Volk recognizes, it is not feasible in the current COVID-19 crisis to order the parties to reconvene for cross-examination. I therefore direct that the erroneous refusals are to be remedied, in the following manner, and on the following schedule:

(1) Questions (a), (b), (c) and (d) are to be answered in writing by Felicia Kowalski, with the answers delivered electronically to counsel for George Volk, by 10:00 a.m. on April 22, 2020;

(2) Counsel for George Volk may deliver follow-up questions arising from the answers to questions (a), (b), (c) and (d), in writing to counsel for Felicia Kowalski by electronic transmission by 10:00 a.m. on April 24, 2020;

(3) Unless the information being sought is privileged or otherwise protected by law, Felicia Kowalski will answer in writing any and all follow-up questions received by her counsel according to paragraph (2) above, by electronic transmission by 10:00 a.m. on April 28, 2020, along with the undertaken information described above in question (e) at para. 8 of these Reasons for Decision. Disputes about the propriety of the answered questions shall be resolved by the motion judge hearing the stay motion. If those questions prove to have been improper the motion judge can disregard the answers as inadmissible;

(4) George Volk may serve and file an amended factum relating to the stay motion incorporating information arising from paragraphs (1) and (3) above, by joint electronic transmission to counsel for Felicia Kowalski, and the court, by 10:00 a.m. on May 1, 2020. No further proof of service shall be required.

(5) George Volk shall serve and file electronic copies of the answers, follow-up questions, answers to follow-up questions, and the response to the undertaking described in paragraphs (1), (2), and (3) above, by joint electronic transmission to counsel for Felicia Kowalski and to the court, by 10:00 a.m. on May 1, 2020. No further proof of service shall be required.

(6) The stay motion, M51316 shall be adjourned to May 6, 2020, peremptory on Darlene Mussato and Felicia Kowalski. The parties shall confirm in advance whether the motion will be heard in person, or electronically, and shall be responsible for ensuring that proper arrangements have been made for their attendance.

[21] Costs in this motion are reserved to the motion judge hearing the stay motion. If the stay motion is abandoned, costs will be reserved to the panel hearing the appeal. If the appeal is abandoned, the parties may bring a costs application before me in writing, not to exceed 3 pages in length plus supporting bills of costs, within 10 days of the notice of abandonment of the appeal being filed.

“David M. Paciocco J.A.”