SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 09-CV-380299

MOTION HEARD: June 5, 2012

RE: 09-CV-380299

Montrose Hammond & Co. et al. v. CIBC et al.

BEFORE: Master Joan Haberman

COUNSEL:
Kotsopoulos, M. for the plaintiff
Brammall, B. for CIBC

REASONS

Master Haberman:

[ 1 ] This motion to vary a timetable and to extend the date by which this action must be set down for trial initially came before Master Glustein as a walk-in motion on May 29, 2012. The matter was urgent at that time as the date by which the action had to be set down was about expire and this defendant was not prepared to consent to what was proposed.

[ 2 ] At that time, it was agreed the motion would be put off until June 15, 2012 and the set-down date was extended to June 18, 2012 to enable the plaintiff to put its position forward before its action was administratively dismissed by the registrar.

[ 3 ] Having reviewed the materials and after having heard the submissions of counsel for both parties, I agreed that it was appropriate to vary the timetable as sought, indicating my reasons would follow. These are my reasons.

Preliminary issue

[ 4 ] CIBC filed the responding affidavit of Katherine Stubits, a law clerk for CIBC’s counsel. However, in many instances, Ms. Stubits notes that the source of her information was Mr. Brammall, who appeared as CIBC counsel before me.

[ 5 ] It is trite law that counsel cannot be both a witness and advocate in the same matter. The prohibition against appearing on one’s own affidavit cannot be circumvented by having ones clerk swear the evidence based on what counsel has told her.

[ 6 ] I pointed this out to Mr. Brammall at the outset, noting that to the extent that Ms. Stubitz conveyed anything of a contentious manner or which could not be otherwise verified, I would have to disregard her evidence if she cited Mr. Brammall as her source.

[ 7 ] No adjournment was sought and we proceeded.

The action and how we got here

[ 8 ] This is a relatively complex piece of litigation, sounding in breach of contract, negligence, misrepresentation, loss of opportunity and loss of business reputation, brought against both the CIBC and Belzberg Technologies. The plaintiffs claim over $4 million, as well as aggravated and punitive damages. The claim revolves around trading activities that were performed in a manner that allegedly caused losses to the plaintiffs in several detailed respects, and includes allegations of unauthorized access to computerized data.

[ 9 ] The action was started by statement of claim, issued on June 5, 2009 and amended three times to allege further damages. CIBC delivered its defence in mid-August 2009. On September 2009, the plaintiffs first raised the issue of affidavits of documents, advising that theirs was being prepared and inquiring, in view of its anticipated length, if a hard copy or a disc was preferred. A mid October date was targeted for the defendants to have theirs ready. CIBC’s response of the same date indicated that they had yet to begin theirs and that they thought production in electronic form made more sense.

[ 10 ] On March 5, 2010, the plaintiffs finally had their finished product in hand and their affidavit of documents was served, along with an inquiry as to whether copies of schedule “A” documents were now sought.

[ 11 ] As no response was received, the plaintiffs wrote again two weeks later on March 19, 2010, seeking service of the defendants’ affidavit of documents and providing their available dates for motion in the event that the parties could not agree on a date for service of the affidavits of documents.

[ 12 ] The response from Mr. Brammall, dated March 22, 2012 indicated that CIBC had begun the process but he did not say how far along they were at that point or how much time he believed they required in order to complete the step. Brammall simply advised that an estimate for delivery would be provided and he asked for an “indulgence” and a “reasonable: time to fulfill this obligation.

[ 13 ] The plaintiffs noticed the obvious gap in Mr. Brammall’s e-mail and asked, the following day, that they be advised by week’s end when CIBC would be serving their affidavit of documents, stating that assuming the indulgence is reasonable, we will grant the indulgence. Clearly, the plaintiffs were cooperative, but also anxious to move forward. All they sought at this point was some indication of what to expect.

[ 14 ] On March 26, 2010, Mr, Brammall advised he needed a few more days before he could say when the affidavit would be ready. He advised he would be in touch on April 1 with an “estimated delivery date”. On April 1, however, Mr. Brammall continued to sing the same song. Yet again he stated that he needed more time before he could even provide an estimated delivery date.

[ 15 ] The plaintiffs apparently lost patience in light of CIBC’s failure to commit to any date at all. Possible motion dates in May 2010 were therefore provided by the plaintiffs, but the plaintiffs made it clear they would not serve their record until April16, 20120 so there was still time for CIBC to avoid the motion by serving the affidavit of documents. Once again, it appears that the plaintiffs were acting in a cooperative manner, while making it clear that their intention was to proceed with some dispatch.

[ 16 ] Belzberg’s counsel finally got into the picture on April 1, advising their client was still pulling together the documents and that he would have to review them thereafter, which he believed would take a further 4-5 weeks. Again, the only time frame he proposed for service was a “reasonable timeline”, presumably within the context of his various commitments which he outlined.

[ 17 ] Not surprisingly, the plaintiffs were not satisfied with this response. Later that day, they wrote to say that a motion would not be needed if they could agree of what that reasonable timeline looked like. Their counsel assured both defence counsel that he was willing to be cooperative but he did not want to leave the indulgence he had provide “open ended.”

[ 18 ] Belzberg’s counsel then suggested a May 4, 2010 deadline and the plaintiffs agreed to wait until May 4 before serving their record for a motion to compel service of an affidavit of documents.

[ 19 ] On April 7. 2010, in anticipation of receiving the affidavits of documents from both parties by May 4, the plaintiffs proposed various possible mediators, asking for counsels’ dates in July 2010 in the event they wished to mediate before undertaking oral discoveries. At this point, counsel made it clear that if he did not hear back, he would assume the defendants preferred to conduct discoveries before mediation, and he would serve notices of examination for July dates.

[ 20 ] I want to make it clear at this junction that I have no difficulty as all with how plaintiffs’ counsel approached this issue. He had behaved and continued to behave with civility towards other counsel at all times, while looking after his clients’ best interests. In the context of the factual matrix leading up to this fax, his approach cannot be criticized.

[ 21 ] CIBC counsel responded that he wanted to conduct discoveries first, though he felt July dates were premature. He then asked for the plaintiffs’ proposed discovery plan. The plaintiffs provided the proposed plan on April 27, 2010.

[ 22 ] By this time, CIBC’s senior counsel had repeatedly written to state that that he objected to the plaintiffs’ unilateral imposition of deadlines. This was an odd position for him to have taken in view of the repeated requests for CIBC to select and commit to their own self-imposed deadline for service of their affidavit of documents. In the face of Mr. Brammall’s inability to commit to a date or engage his principal in the discussion, it is not surprising that plaintiffs’ counsel, who had been completely reasonable up to that point, to have begun to take a more assertive approach. If anyone was behaving like a bully here, it was CIBC counsel.

[ 23 ] While CIBC’s letters from counsel were full of “I object”, plaintiffs’ counsel did not to rise to the bait and continued to take the high road to do what he could to move matters forward. In that vein, on June 10, 2010, he suggested possible discovery dates between mid-October and mid-November 2010.

[ 24 ] Again, CIBC tried to buy time, asking that the dates be moved to January 2011 to accommodate their counsel’s schedule.

[ 25 ] CIBC did not serve their affidavit of documents until July 15, 2010. This was four months after having received the plaintiffs’, 10 months since the subject was raised and following the plaintiffs’ motion for service of same. The motion was eventually settled on the basis of this deadline and payment of costs to the plaintiffs.

[ 26 ] Apparently, the matter did proceed to discoveries though neither party indicates in their evidence when that event took place.

[ 27 ] On June 29, 2011, CIBC served a motion record seeking security for costs, without having first provided any notice of its intention to do so. Belzberg followed suit. The motions were scheduled to be heard on October 11, 2011.

[ 28 ] In the meantime, a Status Notice was issued by the court in mid-June 2011. The plaintiffs provided a proposed timetable to both defence counsel with their request for consent. Belzberg’s counsel wrote as follows in response:

We will cooperate to deal with the Status Notice but we will not consent to any further steps being taken in this action until the issue of security for costs is resolved.

[ 29 ] A counterproposal, with which CIBC apparently agreed, was presented. This required the security for costs motion to be heard by mid September, 2011.

[ 30 ] All further dates proposed were stated to be subject to security being ordered/posted , including:

• all discovery-related motions to be completed by October 31, 2012;

• mediation to be completed by March 3, 2012; and

• the action to be set down for trial by April 30, 2012.

[ 31 ] In case there was any doubt about his position, CIB counsel wrote, too, to state that he concurred with what had been proposed by his co-defendant, adding:

We definitely want to proceed with the motions for security for costs and they should be dealt with before any other steps are taken.

[ 32 ] Thus, both defendants made it clear that they would not engage further in the litigation until after their motions for security for costs had been completed and the security they anticipated would be ordered had been posted.

[ 33 ] Counsel eventually agreed on a timetable, which was embodied in the consent order of Master Short on July 27, 2012. The deadline for completion of discovery-related motions was set for October 31, 2011, mediation was to be completed by April 30, 2012 and the action was to be set down for trial by May 30, 2012.

[ 34 ] Unfortunately, the security for costs motion – the lynchpin event for all that followed – was not heard by mid-September, 2011 as defence counsel had hoped. It was not heard until October and not completed at that time, so it was put over until December 13, 2011 for completion. The master reserved his decision, releasing a decision on January 30, 2012, in which he dismissed both motions for security for costs. The defendants have both appealed from that decision and the appeals are set for August 21, 2012.

[ 35 ] In the interim, the deadline for completion of discovery-related motions expired before the security for costs motion was even completed and well before the decision was released. All other targets agreed to in the timetable have also become unattainable in view of the defendants’ refusals to move forward until the security for costs issue has been determined.

[ 36 ] Despite that, and though the parties agreed to move the deadline for completion of mediation to mid September 2012, Mr. Hall for CIBC wrote to plaintiffs’ counsel on May 8, 2012 to advise that he intended to enforce the deadline for setting the action down for trial. He stated further that CIBC was not prepared to extend the time to allow plaintiffs’ counsel to pursue their motion then scheduled for June 15, 2012 dealing with documentary disclosure.

[ 37 ] Mr. Hall’s e-mail was an attempt to put the plaintiffs in a little box. He made it clear that neither of the defendants would set the action down and noted that if the plaintiff did so, the CIBC would object to any further interlocutory motions.

[ 38 ] CIBC, along with Belzberg, had set the stage by refusing to participate in any further litigation steps pending completion of their motion. Mr. Hall then took what, in my view, was a completely unreasonable position, by refusing to agree to extend deadlines imposed by a timetable that cannot be fulfilled in view of this position. I note that Belzberg did not appear to oppose the relief sought.

The motion

[ 39 ] CIBC now appear to have these plaintiffs over a proverbial barrel. If there is no extension of the “set down” deadline, the action will be administratively dismissed. If the plaintiff sets the action down now, however, they will be precluded from seeking the tape recordings that were the have been the subject of the June 15, 2012 motion. This appears to be the motivation for CIBC’s position, as is clear from Mr. Hall’s May 8 e-mail. The fact that he was agreeable to moving the mediation deadline highlights this fact.

[ 40 ] CIBC was the catalyst for this turn of events, as they refused to engage in the litigation pending completion of their motion for security for costs. It is therefore odd that Mr. Hall expected the court would sit idly by and allow this result.

[ 41 ] A party who “plays hard ball” or devises an effective strategy are expected in litigation of this nature. The oft heard quote “litigation is not a tea party” comes to mind. But CIBC’s conduct in this litigation goes well beyond good strategy. Their position led to this state of affairs, yet they now seek to turn what has transpired into an unfair advantage. That is not something the court can condone.

[ 42 ] The only legal leg CIBC has to stand on for their position is that a party cannot expect the court to assist them in deviating from an order to which they consented. In this regard, CIBC has filed several cases. None of the cases, however, involves an extension of a litigation timetable, the kind of order I sign regularly through the week, each and every week, as do my colleagues, though the initial timetable is in, most cases, the result of a consent order.

[ 43 ] This situation is quite different, for example, from a party who failed to comply with a consent order to serve an affidavit of documents by a certain date who then seeks the court’s indulgence.

[ 44 ] A timetable is not something over which the plaintiff has control. While he may agree to comply with it, after having considered the various events and logical sequence, he can’t make it happen unless the others cooperate. A timetable is a “group project” and if the others don’t work with the plaintiff to make it happen, parties fall off track quickly.

[ 45 ] That is, in part, what occurred here. First, the parties set up a timetable that had to fail in view of the defendants’ security for costs motions that took far longer than anticipated. They were not done by mid-September as projected. They were only argued in October and December, the decision released on January 30 of the following year. Even if everyone had done as they agreed to do, they would have been offside the timetable.

[ 46 ] The further complication here was the position adopted by the defendants to do nothing until their motions were resolved.

[ 47 ] Those of us who work with timetables daily understand that predicting the time frame within which certain steps can be completed in not an exact science, nor a precise art. There are a multitude of events that can intervene and throw a timetable into chaos – getting a date from the court for one’s motion; the motion exceeding the time for which it was scheduled so that it must be put it over to complete; and the master reserving their decision are but a few obvious examples of what can occur to make it impossible to meet timetable deadlines.

[ 48 ] Counsels’ schedules is another aspect that can be problematic – Mr. Hall repeatedly refers to his in various e-mails to explain why CIBC’s affidavit of documents cannot come any sooner and why discovery dates have to be later. Hr is a busy counsel.

[ 49 ] Then there is the fact that all components of the systems are human. Counsel come down with the flu and worse; their family members take ill or pass away; their secretaries fail to come in so that factums can’t get typed. All of this leads to adjournments and, unfortunately, delays – unfortunate, but perfectly justifiable delays.

[ 50 ] Court resources means only a certain number of motions can be heard on any given day and after a long one, a master cannot be expected to shoot for the hip and toss out an important decision without taking the time to consider it. Reserves also cause delays- perfectly legitimate ones in most cases.

[ 51 ] That is why the precedent timetable order states that the parties are free to extend all dates on consent except the set down date on consent. Most parties in all but the most straightforward of cases have to do that at some point in the life of most timetables. Sometimes, they can still manage to still meet the set down date initially selected despite some internal tinkering with other dates. But often, they cannot, and the date by which the action must be set down must also be extended. For that, and only that, leave of the court is required

[ 52 ] This is a 2009 action. There has been no undue delay by the plaintiffs. To the extent that there has been any foot dragging, it has been on the part of the defendants, who having failed to cooperate, are now relying on the result of that position as the basis to oppose the plaintiffs’ motion. The only word I can think of that describes CIBC’s approach to this case is one of pure “chutzpah”.

[ 53 ] I note further that the action cannot be set down for trial until after the completion of mediation – currently scheduled for September 2012.

[ 54 ] The motion is therefore granted as per the draft order provided, revised and endorsed, with costs to the plaintiffs fixed at $4,000 and payable within 30 days.

Master Haberman

Released: June 19, 2012