ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FS-10-156565
DATE: 20121015

BETWEEN:

Rose Mayerovitch and Rushard Enterprises Limited Plaintiffs – and – Richard Breslin, Neutron Telecommunications Inc., Corporate Identity Marketing Inc., 1292710 Ontario Limited, and Swift Oceanics Canada Limited Defendants

Arie Gaertner and Howard J. Feldman , counsel for the Plaintiffs

Howard E. Warren , counsel for the Defendants

Jang Sung Lee and 7347481 Canada Inc. Intervenors

David Rubin , for the Intervenors

HEARD: May 29, 30, 31, June 1, 4, 5, and 19, 2012

kiteley j.

REASONS FOR DECISION

[ 1 ] This was a trial of the plaintiffs’ motion to enforce the Memorandum of Understanding signed on March 9, 2010 and of Mr. Breslin’s motion to set aside the orders of Justices Backhouse (February 12, 2010), Czutrin (March 5, 2010) and Spies (March 30, 2010). For the reasons that follow, I grant judgment for the plaintiffs and dismiss the claim by the defendant Richard Breslin.

[ 2 ] The procedure used was unusual. The plaintiffs’ motion was originally returnable September 13, 2011. On the return date, I dealt with one aspect of the motion, namely the title of proceedings. I deleted Swift Oceanics Canada Limited as a plaintiff and added it as a defendant. While there was no formal motion before me, I granted Mr. Breslin’s request that he was authorized to act for Swift, Neutron, Corporate Identity and 1292710. I set a timetable for filing of materials and questioning, and adjourned what was to be a one hour motion to October 27, 2011.

[ 3 ] By October 27 th , Mr. Warren had been retained on behalf of all defendants and had brought a motion for leave to file an Answer and Claim. Greer J. adjourned both motions to December 20, 2011 for a full day, peremptory to both parties, and she set a timetable.

[ 4 ] On December 8, 2011 Mr. Warren served a notice of motion returnable December 15, 2011 in which he sought to set aside the three orders referred to above and to remove Mr. Feldman as solicitor of record. On December 15, 2011, Justice Herman’s endorsement included her concern that the motion had been brought one week before the adjournment of the full day set for December 20 th . She adjourned Mr. Breslin’s motion to April 16, 2012 for a full day. She did not adjourn the motions scheduled to be heard December 20 th . She directed that counsel in the civil action involving the intervenor (Mr. Lee) should be given notice.

[ 5 ] On December 20, 2011, Perkins J. dealt with the Ms. Mayerovitch`s motion to enforce the settlement and Mr. Breslin’s motion for leave to file the Answer and Claim. Counsel for Mr. Breslin asked that those motions be adjourned to April 16 th . Perkins J. adjourned all motions to April 16 th and indicated as follows:

The factual contests on these t hree motions are all matters of knowledge and intention involving credibility of the parties. I think the only satisfactory method of resolving them is a trial of the issues raised in the three motions. The issue of A’s lawyer’s ability to continue representing her needs to be determined first and may properly be determined without hearing oral evidence, but the other issues on R’s second motion and those on A’s motion should proceed together with a limited amount of oral testimony.

Accordingly my determination is that the motions before me today are to be adjourned to be heard on April 16, 2012 together with the other motion already adjourned to that date as a trial. The scheduled one day hearing is to be expanded to two days. The directions for trial are to be determined by agreement of counsel or by order but should include the names of the witnesses and the time limits for each. The Family Team Leader should appoint a judge to deal with this trial and the directions for it as soon as possible. I am informed that this case has never been conferenced, as it went directly from urgent motions in February, 2010 to an apparent settlement in March, 2010, and then back to motions. A case management judge should also be appointed for any conferences that may be required.

[ 6 ] Perkins J. directed that the motion dealing with the plaintiffs’ counsel should be set on a date fixed by the trial co-ordinator.

[ 7 ] On March 27, and 29, 2012 Goodman J. heard submissions on the motion by Mr. Breslin to remove Mr. Feldman as solicitor for the plaintiffs and the plaintiffs’ motion for security for costs. On April 4, she issued a short endorsement dismissing both motions. She noted that Perkins J. had directed a trial on “limited oral evidence”. Having reviewed 18 volumes of material relating to the matters before her, having heard submissions, having been advised that the purchaser of the building had been granted permission to intervene in the trial, she expressed doubt that the matter could be tried in two days. She encouraged the Trial Management Conference Judge to take on the role of case management to ensure that the trial proceeded as soon as reasonably possible.

[ 8 ] On that same day, Kruzick J. began a Trial Management Conference and he adjourned it to May 16 th . At the conclusion of the first TMC, Kruzick J. reported that the trial would commence on May 29 th for 10 days to 2 weeks, that this was “one trial” with the plaintiff to proceed first. He directed counsel to file a trial record “jointly”. He endorsed that the record filed for obtaining the Certificate of Pending Litigation in the civil action could be filed with the deponent (Mr. Lee) being cross-examined at trial. He directed counsel to provide an agreed statement of facts and to exchange witness lists before May 14 th . He noted that Mr. Lee would require a Korean interpreter. He permitted the affidavit of Mr. Spilak to be filed subject to cross-examination at the trial. [1] He directed that the evidence in chief of witnesses be by affidavit.

[ 9 ] On May 16 th , Kruzick J. was not available. Penny J. dealt with the TMC/CC. He noted with Mr. Warren’s witness list included Mr. Feldman. In his endorsement, he suggested that the trial judge should deal with Mr. Feldman’s compellability at the outset of the trial. He directed counsel to prepare briefs that included the affidavits on which they relied as examination-in-chief and noted that supplementary oral evidence would be “minimal”. He also noted that two counsel had pre-existing commitments during the course of the trial anticipated by Kruzick J.

[ 10 ] When the matter came before me on May 29 th , having mushroomed from a two day trial on “limited oral evidence” to a two week trial, much of the first day and part of the second day was occupied with trying to bring order out of apparent chaos. There was no trial record, no agreed statement of facts, no agreed document briefs, no comprehensive written witness list, no agreement as to the time necessary for cross-examination for those with affidavits and several witnesses with no affidavits, and no explanation for the exponential increase in the trial. On the morning of the first day, Goodman J. released comprehensive reasons for decision for having dismissed the motions heard March 27 and 29. On the afternoon of the first day and the morning of the second day, counsel participated in settlement discussions with Kruzick J.

[ 11 ] I made several preliminary rulings. On consent, I gave leave to file the Answer and Claim. After hearing submissions from counsel, I made an oral ruling in which I imposed a maximum time for each side, namely 10 hours for Mr. Gaertner, Mr. Feldman and Mr. Rubin and 10 hours for Mr. Warren. The allotment included evidence but not submissions.

[ 12 ] I heard opening submissions on the afternoon of May 31 st . The evidence began on the morning of June 1 st . With interruptions to accommodate witnesses and my schedule, the evidence finished on the afternoon of June 5 th . I heard submissions on June 19 th .

[ 13 ] According to the Trial Management Conference Report, it was expected that the evidence in examination-in-chief of witnesses would be by affidavit. That was not the case. Mr. Gaertner and Mr. Warren called witnesses for which no affidavit had been provided. Furthermore, just before Mr. Breslin was to give evidence, Mr. Warren asked for leave to examine his client in chief to address issues that he had not dealt with in his December 6 th affidavit. After hearing submissions, including vigorous objections from Mr. Gaertner, I allowed Mr. Warren 30 minutes as examination-in-chief and I specified that he must not ask leading questions.

[ 14 ] As indicated above, Mr. Warren proposed to call Mr. Feldman as a witness. In the end, he did not do so. Mr. Warren said that he was unable to call him because of the time allocation. I note however that I did not hear submissions as to whether he would be permitted to call him as a witness, again because those submissions would have eaten into his 10 hours. I do not want to leave the impression that the time constraints I imposed meant that Mr. Breslin was prejudiced. At the outset of his closing submissions, Mr. Warren said that his client wanted to thank me for the opportunity to have been heard, from which I drew the inference that he was satisfied as to the sufficiency of the evidence. Before hearing Mr. Feldman’s evidence, I would have heard submissions from counsel as to whether the attempt to call Mr. Feldman as a witness was an end run around the ruling by Goodman J. that the motion to remove him as counsel for the plaintiffs be dismissed. Furthermore, by the conclusion of the trial, for reasons indicated below as to my analysis of the issues, I was satisfied that Mr. Feldman’s evidence would not have had an impact on the outcome.

(Decision continues exactly as in the source text.)

...

KITELEY J.
Released: October 15, 2012

JUDGMENT

COURT FILE NO.: FS-10-156565
DATE: 20121015

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Rose Mayerovitch and Rushard Enterprises Limited Plaintiffs – and – Richard Breslin, Neutron Telecommunications Inc., Corporate Identity Marketing Inc., 1292710 Ontario Limited, and Swift Oceanics Canada Limited Defendants
Jang Sung Lee and 7347481 Canada Inc. Intervenors

JUDGMENT

KITELEY J.

Released: October 15 , 2012

Footnotes

[1] Mr. Spilak was not called as a witness at trial, nor was an affidavit filed.

[2] 78 Martin Ross Avenue will be referred to as “the building”.

[3] This letter was marked as Exhibit 15 during the evidence of Mr. Toyne.

[4] This email was marked as Exhibit 16 during the evidence of Mr. Toyne.

[5] This was marked as Exhibit 17 during the evidence of Mr. Toyne.

[6] This was marked as Exhibit 20 during the evidence of Mr. Toyne.

[7] This was marked as Exhibit 26 during the evidence of Mr. Toyne.

[8] This was marked as Exhibit 21 during the evidence of Mr. Toyne.

[9] The affidavit of Mr. Mahadeo is attached as Exhibit N to Mr. Breslin’s affidavit sworn September 24, 2011 which was marked as Exhibit 36. The contents of the affidavit are inadmissible hearsay because Mr. Mahadeo was not called as a witness.

[10] The initials JK are used to protect the identity of this person. He was not called as a witness. Mr. Breslin alleged wrongdoing against him. I see no need to disclose his name.

[11] This document was located in volume 2, tab 41, page 381. It does not appear in the consolidated Exhibit 27.

[12] On May 30 th , Mr. Warren provided 5 volumes of documents that had been assembled by Mr. Breslin and had been served on counsel for Ms. Mayerovitch. Mr. Warren described them as the equivalent of Mr. Breslin’s affidavit of documents. Mr. Gaertner had selected 13 documents and had indicated an intention to rely on them through the evidence of Mr. Breslin’s lawyers and of Mr. Breslin. Mr. Warren objected that those 13 were solicitor/client privileged. I heard submissions and ruled that 6 of them were protected by solicitor/client privilege, namely Exhibit 6 Tabs G, I, J, K, L and M. I heard further submissions and I ruled that privilege had been waived by reason of having been voluntarily disclosed by Mr. Breslin and that questions arising from the documents were permitted.

[13] This is the letter dated March 12, 2010 on the letterhead of Forestwood Tech Inc. to which reference was made in Exhibit 15.

[14] Tab 54 was not made an exhibit.

[15] Page 145 is a letter from the Ministry of Government Services to JK at 78 Martin Ross Ave. enclosing an order cancelling the Certificate of Dissolution dated October 24, 2003.

[16] Tab 33 indicates that JK and his wife guaranteed a third mortgage in favour of Rushard Enterprises Inc. in the amount of $25000 with 0% interest for 6 months; then 18% interest for the 7 th to 12 th month; thereafter interest at 48%.

[17] Tab 34 was not made an exhibit.

[18] Exhibit 6 Tab A

[19] No such letters were produced.

[20] Those two emails are also in Exhibit 20 introduced through the evidence of Mr. Toyne.

[21] Fridman, The Law of Contract 4 th Edition at page 335- 336 quoting from Pao On v. Lau Yiu Long [1979] 3 All E.R. 65 (P.C.)

[22] CED on Contracts, at p. 1 citing Winfield Developments Ltd. V. Winnipeg (City) (1989) CarswellMan 167 (Man. C.A.)

[23] Kirstie J. MacLise and Hugh G. Stark, Domestic Contracts (Carswell: on-line DOMESCON 11)

[24] James G. McLeod and Alfred A. Mamo, McLeod Matrimonial Property Law in Canada (Carswell: Online MPLCAN ON-9)

[25] Exhibit 20

[26] (1988) 66 O.R. (2 nd ) 610

[27] [2010] ONCJ 41

[28] (1889) 14 App. Cas. 337