ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 11-CV-442427
DATE: 20120416

BETWEEN:

MCFADDEN LYON ROUSE LLC Applicant – and – ANDERSON LOOKKIN and AZIZ DAMJI Respondents

Heenan Blaikie LLP - Bonnie Roberts Jones and Ryan Treleaven, for the Applicant

Unrepresented

CIT COMMUNICATIONS FINANCE CORPORATION. Intervener

Miller Thomson LLP - E. Peter Auvinen and Eric Sherkin, for the Intervener

HEARD: March 21, 2012

J.S. O’NEILL

REASONS ON APPLICATION

Introduction

[ 1 ] The Applicant, McFadden Lyon Rouse LLC (“McFadden”), seeks an order enforcing the Letters Rogatory issued by the Circuit Court of Mobile County, Alabama, (the “Alabama Court”) by the Honourable John R. Lockett, Circuit Judge (“Judge Lockett”) on December 19, 2011.

[ 2 ] Through the Letters Rogatory, the Applicant seeks to orally examine, under oath, the Respondents, Anderson Lookkin (“Lookkin”) and Aziz Damji (“Damji”). The evidence will be used at the trial of an action styled as McFadden, Lyon & Rouse, LLC v. Avaya Financial Corp. (CV-03-2072) in the Alabama Court (the “Alabama Action”).

[ 3 ] Lookkin has consented to the Application and has agreed to submit to a deposition, to be scheduled by counsel. Damji has not opposed this Application. The only party opposing the enforcement of the Letters Rogatory is the intervener, CIT Communications Finance Corporation (“CITFC”), who is the Defendant in the Alabama Action.

[ 4 ] CITCFC opposes the Application on the grounds that any evidence that the Respondents might give would be redundant and duplicative of both oral testimony and copious documentary evidence produced by CITCFC and third parties in the Alabama Action over the course of the past eight and a half years. In addition, CITCFC submits that the untimely effort to compel these depositions is delaying the resolution of the Alabama Action, either through a decision on CITCFC’s motion for summary judgment which has been pending since November of 2011, or through a trial of the Alabama Action. Finally, CITCFC disputes that McFadden has established that the evidence sought from the Respondents cannot be obtained elsewhere, and has failed to establish that the evidence sought from the Respondents is relevant.

Background Facts

[ 5 ] The evidence sought through the Letters Rogatory relates to a class action lawsuit in the Circuit Court of Mobile, Alabama styled as McFadden, Lyon & Rouse, LLC v. Avaya Financial Corp. (CV-03-2072). After the initial class action complaint was filed, CITFC answered the complaint indicating it has been incorrectly named in the complaint as Avaya Financial Corp.

[ 6 ] The Applicant has been designated as the class representative in the Alabama Action. The Alabama Action relates to CITFC’s management, execution and pricing of its lender-placed insurance program for equipment leased to the Applicant and Class Members. A central issue in the Alabama Action is the amounts the Applicant and Class Members were charged in fees and premiums while participating in CITFC’s lender-placed insurance program. The class action covers the period from July 1, 1997 through June 30, 2003.

[ 7 ] Lookkin and Damji are former employees of CITFC, who currently reside in Ontario. Lookkin and Damji were primarily responsible for handling the transaction of CITFC’s insurance program between LISC and American Bankers.

[ 8 ] Other witnesses provided by CITFC in the Alabama Action have confirmed that Lookkin and Damji possess the most relevant and complete knowledge of the transaction of CITFC’s lender-placed insurance program to American Bankers.

The Letters Rogatory Issued in Alabama

[ 9 ] On December 12, 2011, the Applicant filed Petitions of Letters Rogatory with the Alabama Court related to the depositions of Lookkin and Damji. These Petitions include a detailed description of the areas of examination for Lookkin and Damji and the need for their evidence.

[ 10 ] CITFC was provided with a copy of McFadden’s Petition for Letters Rogatory in the Alabama Action. CITFC did not file any objection to the Petitions and did not otherwise oppose the Petitions in any way.

[ 11 ] Upon receiving the Petitions, the Alabama Court waited seven days before ruling to give CITFC an opportunity to oppose the Petitions. CITFC never objected and the Alabama Court granted the Petitions for Letters Rogatory, citing the necessity and relevance of Lookkin and Damji’s evidence.

[ 12 ] On December 29, 2011, CITFC declared its intention to apply for intervener status on the within Application. Shortly thereafter, the Applicant filed a motion to the Alabama Court before Judge Lockett to bar CITFC from opposing the Ontario Application.

[ 13 ] At this motion, CITFC argued that Lookkin and Damji’s testimony was not necessary in light of the pending motion for summary judgment before Judge Lockett in the Alabama Action and that Judge Lockett should hear the arguments on that motion before Lookkin and Damji were deposed. Judge Lockett stated that he would not hear arguments on the motion for summary judgment until the Applicant had an opportunity to have the current Application heard.

[ 14 ] CITFC also argued that it opposed the Ontario Application because the discovery cut-off in the Alabama Action would expire before the Ontario Application was heard. Judge Lockett stated that he was extending all deadlines in the Alabama Action until this Court had an opportunity to rule on the Ontario Application. Judge Lockett instructed the parties to report back to him once the Ontario Application was disposed of and/or the depositions of Lookkin and Damji had taken place.

Issues and Legal Analysis

[ 15 ] As outlined by counsel for the Applicant, the issue before this court is whether it should enforce the Letters Rogatory granted by the Alabama Court in the Alabama Action.

[ 16 ] In the interests of international comity, an Ontario Court may give effect to a foreign court’s letters of request if:

(a) the obtaining of the evidence has been duly authorized by the foreign court;

(b) the witness whose evidence is sough is within the jurisdiction of the enforcing court;

(c) the evidence sough is in relation to a proceeding pending before the foreign court; and

(d) the foreign court is a court of competent jurisdiction.

Evidence Act, R.S.O. 1990 , c.. E.23 as am., Section 60(1) .

Canada Evidence Act , R.S.C. 1985, c. C-5, as am., section 46(1) .

France (Republic) v. De Havilland Aircraft of Canada Ltd ., 1991 7180 (ON CA) , [1991] O.J. No. 1038, 3 O.R. (3d) 705 (CA.), Applicant’s Book of Authorities, Tab 2, at para. 10.

[ 17 ] Once these preconditions are met, the Ontario Court has the discretion to grant or deny a request from the foreign court. In exercising this discretion, the Ontario Court shall consider whether:

(a) the evidence sought is relevant;

(b) the evidence is necessary for pre-trial discovery or trial of the foreign action;

(c) the evidence is not otherwise obtainable;

(d) the documents sought are identified with reasonable specificity;

(e) the order sought is not contrary to Canadian public policy; and

(f) the order sought is not unduly burdensome.

Presbyterian Church of Sudan (Re) , 2006 32746 (ON CA) , [2006] O.J. No. 3822, 275 D.L.R. (4 th ) 512 (C.A.), Applicant’s Book of Authorities, Tab 6, at para. 20.

Friction Division Products Inc. v. E.I. DuPont de Nemours & Co . (No. 2), 1986 2827 (ON SC) , [1986] O.J. No. 1029, 56 OR. (2d) 722 (Sup. Ct.), Applicant’s Book of Authorities, Tab 3, at para. 25.

AstraZeneca LP v. Wolman , 2009 69793 (ON SC) , 2009 CarswellOnt 7787 (Sup. Ct), Applicant’s Book of Authorities, Tab 1, at para. 22.

[ 18 ] In my view the within application meets the preconditions for enforcement of the Letters Rogatory. In this regard, I accept the position of the Applicant set out at paragraphs 31(a) and (b) of its Factum:

(a) The request to compel Lookkin and Damji to attend at oral examinations has been duly authorized by the Alabama Court. Moreover, the purpose of the Letters Rogatory to take evidence before trial is a purpose for which Letters Rogatory could be issued under Ontario’s Rules of Civil Procedure .

Pecarsky v. Lipton Wiseman Altbaum & Partners , [1990] O.J. No. 2004 (Sup. Ct. J.) , Applicant’s Book of Authorities, Tab 5 at paras. 13.

(b) Lookkin and Damji, Canadian Residents located in Ontario, are within the jurisdiction of this Court.

[ 19 ] In the interest of international comity, Canadian courts have a predisposition to accommodate requests made by foreign courts.

Zingre v. The Queen et al ., 1981 32 (SCC) , [1981] 2 S.C.R. 392.

[ 20 ] It was argued by counsel for the Intervener that the evidence sought herein is not necessary or relevant, and that this evidence is otherwise obtainable through other insurers in the United States, either by analyzing the great amount of written documents produced to date, or if necessary by subpoenaing representatives of American Insurers to give further evidence on these points

[ 21 ] The Letters Rogatory outline, in part as follows, the Canadian evidence sought:

Anderson Lookkin resides in your jurisdiction. He was formerly employed or retained by the Defendant to manage and execute Defendant’s lender placed insurance program. Accordingly, in the interests of justice and to assure a complete record, it is necessary for Anderson Lookkin to be examined as a witness under oath. It is anticipated and expected that Anderson Lookkin will be examined on the following topics:

• The amount of fees charged to and collected from the Plaintiff and Class Members during the Premier and American Bankers Programs;

• The scope and nature of the services covered by fees charged to and collected from Plaintiff and Class Members during the Premier and American Bankers Programs;

• Discussions between Anderson Lookkin, Defendant, or third-parties regarding the fees charged to and collected from Plaintiff and Class members during the Premier and American Bankers programs;

• The nature, basis and reasons Defendant switched its lender placed insurance program from Premier to American Bankers;

• Discussions between Anderson Lookkin, Defendant, or third-parties regarding the premiums charged to and collected from Plaintiff and Class members during the Premier and American Bankers programs;

• The past, present, and current relationship between Anderson Lookkin, Defendant, and any other person or entity that participated in Defendant’s lender placed insurance program.

[ 22 ] I agree with the Applicant’s submission that because the Respondents were actually on the ground, as it were, at key times in the transition process, and to the extent that they may have unique and firsthand knowledge of the information sought and the nature of discussions that occurred and transactions that were completed, their evidence is relevant for these purposes. As stated by Brown J. in AstraZeneca LP v. Wolman , 2009 69793 (Ont. S.C.J.) at para. 24 :

Any assessment of relevance must centre on the issues raised in the foreign litigation: Presbyterian Church , para. 34. Consequently, when considering relevance an Ontario court generally will ascertain whether a link exists between the evidence sought from the Ontario entities and the claims asserted in the foreign litigation.

[ 23 ] In my view, a link does exist between the evidence sought from the Ontario Respondents and the claims asserted in the foreign litigation. The Respondents have consented to, or do not oppose an Ontario examination. I believe that having examined the Letters Rogatory, they may well be able to provide relevant evidence in the proceeding.

[ 24 ] As to the issue of evidence not otherwise not obtainable, I reproduce from Astra, supra, para. 27:

This factor considers whether the evidence is possessed by the targeted witness alone. A court can go behind the language of the letters of request which merely recite the foreign court’s acceptance of counsel’s representations on the point to examine what necessity in fact exists: Presbyterian Church , para. 41. Evidence being otherwise unavailable does not mean no evidence on the subject in issue is otherwise available. The criterion means that evidence of the same value as that sought from the person to be examined cannot otherwise be obtained: Connecticut Retirement Plans , para. 19.

[ 25 ] I accept the Applicant’s submission, that oral evidence from two people who were, at relevant times, actually on the ground and involved in key discussions or decisions or transactions, is valuable evidence not otherwise obtainable. At paras. 17 to 33 inclusive in his supplemental affidavit sworn February 13, 2012, William Bonner sets out a summary of the reasons why the evidence herein sought from the named Respondents is important in the litigation.

[ 26 ] I am satisfied that this summary sufficiently describes the importance and value of Mr. Damji’s and Mr. Lookkin’s role in the management, execution and pricing of CITFC’s lender placed insurance program during and following the transition of the program to American Bankers.

Conclusion

[ 27 ] Accordingly, for these reasons, the within Application is allowed and an order shall issue for the relief as outlined in para. 1 of the Notice of Application issued December 20, 2011. The Applicant is entitled to its costs of the within application, on the partial indemnity scale. If these costs cannot be agreed to, counsel may contact the Trial Coordinator at Parry Sound 1-705-746-8644 to convene a telephone conference with me to discuss the costs issue so as to determine whether oral submissions or written submissions will be required to finalize the costs issue.

[ 28 ] Order accordingly.

JUSTICE J.S. O’NEILL

Released: April 16, 2012

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: MCFADDEN LYON ROUSE LLC Applicant – and – ANDERSON LOOKKIN and AZIZ DAMJI Respondents CIT COMMUNICATIONS FINANCE CORPORATION. Intervener REASONS on application JUSTICE J.S. O’NEILL

Released: April 16, 2012