Court File and Parties

CITATION: Callidus v. Opes Resources Inc., 2019 ONSC 1288

COURT FILE NO.: DC-101/19 and CV-17-11712-00CL

DATE: 20190222

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

CALLIDUS CAPITAL CORPORATION

Plaintiff

• and -

OPES RESOURCES INC., RICHARD GEORGE MOLYNEUX AND DARRYL LEVITT,

Defendants

BEFORE: F.L. Myers J.

COUNSEL: John D. Leslie, lawyer for Callidus Capital Corporation Darryl Levitt, in person

HEARD: February 22, 2019

Endorsement

[1] Mr. Levitt moves for an urgent stay while he brings a motion for leave to appeal to the Divisional Court from the order of Chiappetta J. dated February 22, 2019.

[2] Mr. Levitt moved for a stay today before a single judge of the Divisional Court. Under Rule 63.02(1)(a) and (b), prior to the motion for leave to appeal being brought, the request for a stay ought to have been made to a judge sitting in the Superior Court and, in this case, on the Commercial List. As Mr. Levitt asserted that the matter was one of urgency, and Mr. Leslie was prepared to proceed today, I agreed to hear the matter in my capacity as a judge of the Superior Court.

[3] The plaintiff brought a motion for summary judgment more than one year ago. The motion was ordered to be heard in February of this year peremptory to the defendants. Those dates were lost due to an appeal to the Court of Appeal brought by another defendant from an order made by Chiappetta J. dated January 7, 2019 on an undertakings and refusals motion. The plaintiff asserts that the order is an interlocutory order that cannot be appealed to the Court of Appeal. It has brought a motion to quash that appeal. In the meantime, the motion for summary judgment has been re-scheduled for two days in April. In granting the adjournment of the summary judgment motion, Chiappetta J. noted that the motion has been delayed for too long. She expressed the hope that the motion to quash will be heard expeditiously so that the April dates can be used as intended for the hearing of the summary judgment motion.

[4] In para. 3 of Justice Chiappetta’s January 7, 2019 order, the court ordered Mr. Levitt to answer question 285 that he had taken under advisement on his cross-examination in relation to the same summary judgment motion. The order recites that it was made with the consent of Mr. Levitt.

[5] On February 12, 2019, the plaintiff moved for a contempt order against Mr. Levitt because he had yet to answer the questions that he had been ordered to answer - including question 285.

[6] Question 285 requires Mr. Levitt to produce “all” correspondence among himself and others who apparently also have litigation with the plaintiff. I do not know the substance of any of the claims or the relevancy of the communication that has been ordered produced. But in his Affidavit responding to the contempt motion, Mr. Levitt committed to his willingness to produce the correspondence except where it is privileged or confidential.

[7] Rather than proceeding with the contempt motion, Chiappetta J. determined to provide Mr. Levitt with a further opportunity to comply with the court’s January 7, 2019 order. She apparently told Mr. Levitt that if he had wanted to assert privilege over any documents, the time to do so was at the January 7, 2019 hearing. As the January 7, 2019 order already requires him to produce “all” of the correspondence among the listed individuals and was made on consent, she told him that the privilege ship has sailed. Put more formally, she interpreted his consent to the January 7, 2019 order as either a waiver of privilege or a failure to assert and meet the burden of proof of establishing privilege in response to the production and disclosure motion that had been brought against him.

[8] Paragraph 1 of Justice Chiappetta’s order dated February 12, 2019 provides:

THIS COURT ORDERS that Levitt shall, by no later than 4 p.m. on February 28, 2019, answer the following undertakings, questions taken under advisement and refusals arising from his cross-examination held June 21, 2018: Question numbers 285…regardless of any claim for privilege or confidentiality, failing which the plaintiff may move on 2 days notice to find Mr. Levitt in contempt. [Emphasis added]

[9] Mr. Levitt says that he needs to move urgently for leave to appeal from this order and he requests a stay because otherwise he will be in contempt of court in a very few days.

[10] Mr. Levitt’s evidence is that he did not consent to the January 7, 2019 order “in the form in which it was issued.” Orally in submissions, he says that he expressly reserved his right to assert privilege before Chiappetta J. that day and that she acknowledged his reservation. Nevertheless, he was present when the draft order that recites his consent was circulated and provided to Chiappetta J. for signing.

[11] Mr. Levitt asserts, in his submissions, that the correspondence include discussions about litigation strategy among a number of individuals who have claims against the plaintiff. He says that litigation privilege, common interest privilege, solicitor client privilege, and confidentiality will be lost if he has to disclose all of this material. He argues that he never waived privilege and that he had no ability or entitlement to waive bilateral privileges like common interest privilege for which agreement of all parties would be required for a valid waiver.

[12] The parties agree that the test applicable for an interim stay is the three-part interlocutory injunction test of: (a) serious issue to be tried; (b) irreparable harm; and (c) balance of convenience. Wilson v. Servier Canada Inc., [2000] O.J. No. 3722 (Quicklaw) (S.C.J.), at para. 3.

[13] I have no doubt that the type of harm faced by Mr. Levitt, were he required to produce material that was later found to be privileged, qualifies as “irreparable harm.” Privilege is fundamentally important to the legal system. The Supreme Court of Canada has made it clear that the protection of solicitor client privilege is as close to absolute as possible. In Alberta (Information and Privacy Commissioner) v. University of Calgary, 2016 SCC 53 at para. 34 of the majority decision, Côté J. wrote:

It is indisputable that solicitor-client privilege is fundamental to the proper functioning of our legal system and a cornerstone of access to justice (Blood Tribe, at para. 9). Lawyers have the unique role of providing advice to clients within a complex legal system (McClure, at para. 2). Without the assurance of confidentiality, people cannot be expected to speak honestly and candidly with their lawyers, which compromises the quality of the legal advice they receive (see Smith v. Jones, [1999] 1 S.C.R. 455, at para. 46). It is therefore in the public interest to protect solicitor-client privilege. For this reason, “privilege is jealously guarded and should only and should only be set aside in the most unusual circumstances” (Pritchard, at para. 17).

[14] Were Mr. Levitt required to produce privileged and confidential documents prior a successful appeal from the order requiring him to produce the documents, the protection would be irretrievably lost. One cannot re-establish confidentiality. However, I am satisfied that there is virtually no chance of that happening in this case.

[15] First, the order requiring Mr. Levitt to produce “all” of the correspondence is the January 7, 2019 order. Mr. Levitt has not appealed that order. He made no suggestion in his motion materials or orally that he was planning to seek leave to appeal from the January 7, 2019 production order. In fact, the time for doing so has long since expired.

[16] What Mr. Levitt seek leave to appeal from then is the order of February 12, 2019 made by Chiappetta J. in which she interprets her own prior order. That is, she told Mr. Levitt that the time to assert privilege was January 7th. She made clear in the wording of para. 1 of the February 12 order set out above that she viewed the January 7, 2019 order as already resolving the issue of privilege.

[17] Under Rule 62.02 of the Rules of Civil Procedure, RRO 1990, Reg. 194, to obtain leave to appeal, Mr. Levitt is required to show either that:

(a) there is a conflicting decision of another judge and it is otherwise desirable that leave to appeal be granted; or

(b) there is good reason to doubt the correctness of the order and the proposed appeal involves matters of such importance that leave to appeal should be granted.

[18] There cannot be a conflicting decision as no other judge has ruled on the scope and meaning of Justice Chiappetta’s January 7, 2019 order. While one might consider arguing more broadly about whether an order that requires disclosure of “all” communications includes privileged communications, Justice Chiappetta’s February 12, 2019 order leaves no doubt that, in the factual circumstances before her, privilege was not preserved despite Mr. Levitt’s protestations to the contrary.

[19] Moreover, Mr. Levitt has adduced no evidence before Chiappetta J. or today to establish there is any privileged or confidential information. Mr. Levitt bore the burden to prove that any relevant documents were immune from production disclosure at the time that the production and disclosure order was sought. He has not delivered an Affidavit of Documents with a particularized schedule “B” listing claims for privilege; he has not produced any confidentiality agreements; he did not bring a motion to seek determinations of any privilege that he claims or to have the court review any documents over which privilege is claimed as is often an option. In short, despite repeatedly committing to produce documents he has been ordered to produce, Mr. Levitt actually has failed to do so based on the baldest of assertions of privilege and confidentiality to justify his continuing non-compliance.

[20] Moreover, I agree with Mr. Leslie’s submission that while privilege is important generally, a single decision of whether privilege exists on the particular facts of a case is routine. I agree with J.R. McCarthy J. in Ernewein v. Honda Canada Inc., 2017 ONSC 3727, at para. 10:

Issues of lawyer-client and litigation privilege are routine and hardly out of the ordinary. Most decisions are made on the unique facts and circumstances surrounding the making of the document. I can see nothing novel, either in the manner in which or the basis upon which, the motion judge made his determination. Nor can I find that there is any reason to doubt the correctness of the decision of the motion judge. The motion judge correctly identified that the onus rested upon the Defendants to prove lawyer-client privilege.

[21] In this case, the issue is not whether privilege exists in certain documents. Mr. Levitt has never brought that motion. Rather, the issue involves a judge interpreting the intention and scope of her own prior consent order in a case among private parties. There is no public dimension at play.

[22] In my view therefore, there is no serious issue on which leave to appeal is at all likely. While the serious issue to be tried test is a light test, in all the circumstances set out above, the proposed motion for leave to appeal cannot overcome even that hurdle.

[23] Finally, and in any event, I would not find that the balance of convenience favours a stay in this case. Although Mr. Levitt asserts great urgency, he has allowed ten days to pass since the making of the order and he has no motion for leave to appeal prepared. While he is self-represented, he is also a practising lawyer. He is not a litigator. But he must be taken to have some ability to open the Rules of Civil Procedure and find the applicable rules. Showing up in the wrong court with minimal notice, minimal material for the proposed stay motion, no motion record for leave to appeal, and still no evidence to establish any of his underlying assertions does not strike me as a serious attempt to advance a claim for relief. Mr. Levitt advised me today that he has a lawyer on stand-by to prepare a motion for leave to appeal if a stay is granted today. That strikes me as a rather strategic approach and not one that bespeaks true urgency. If one needed to show a good case for a motion for leave to appeal, why hold the lawyer back for ten days while contemplating a sudden, urgent stay motion? Wouldn’t serving and filing a leave to appeal motion record be the best way to show a serious intention to appeal and to demonstrate the existence of a serious issue on which to obtain leave?

[24] I also note that the process for perfecting and hearing motions for leave to appeal takes approximately 60 days under the relevant rules.[^1] That would put the April dates for summary judgment at risk, yet again. I am weighing the lack of likelihood of any real harm to Mr. Levitt (because he has no realistic chance to assert privilege successfully on appeal) against the exacerbation of delays that have already been decried by Justice Chiappetta. In my view the balance tips away from a stay. A stay will cause more harm than good.

[25] The motion for a stay is therefore dismissed.

[26] Mr. Leslie seeks costs of $5,000. I am not yet prepared to find that Mr. Levitt engaged in reprehensible conduct in bringing this motion. Seeking an urgent stay after waiting ten days, moving in the wrong court, against the wrong order, and with no motion for leave to appeal in hand, could be a basis to infer ill-motive or other wrongdoing. But Mr. Levitt argues that he is self-represented and asks for allowances. It seems to me that the judge who hears the summary judgment motion will be best able to assess whether this motion process has been subject to a broader wrongful design. Accordingly, I order Mr. Levitt to pay costs on a partial indemnity basis to the plaintiff fixed in the amount of $2,000 all-in and forthwith. I reserve to the judge hearing the motion whether there ought to be a top-up to substantial or full indemnity costs in the circumstances.

F.L. Myers J.

Date: February 22, 2019

[^1]: The timeline is fully explained in Loiselle v. Violette, 2018 ONSC 6688,