ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 11-51631
DATE: 2012/10/10

BETWEEN:

ROBERT VEILLETTE and ANTHONY DISIPIO HOLDINGS INC. and ZAGARIA HOLDINGS INC. and MICHELE ZAGARIA IN TRUST, SAVINO ZAGARIA IN TRUST and GIANFRAN HOLDINGS INC. Plaintiffs – and – THE PIAZZA FAMILY TRUST, THE BROOKS FAMILY TRUST, NORTH AMERICAN REALTY INC., JOHN PIAZZA, RICK BROOKS and GIUSEPPE REITANO Defendants

Keith MacLaren, for the Plaintiffs

Leonard Max, for the Defendant, Giuseppe Reitano

HEARD: August 24, 2012

REASONS FOR JUDGMENT

kane j.

[ 1 ] The plaintiffs bring this motion under rules 30.04 , 30.06 , 34.15 , 37.10(10) , 60.18(2) of the Rules of Civil Procedure , R.R.O. 1990, Reg. 194, as amended, for an order that Mr. Reitano:

(1) Answer the undertakings he gave on the examination in aid of execution of himself on December 22, 2011.

(2) Answer questions in the above examination which he objected to or took under advisement.

(3) Re-attend upon the above examination to provide answers to the above questions and in relation thereto.

(4) Pay the plaintiffs their costs of this motion on a substantial indemnity scale.

BACKGROUND

[ 2 ] The plaintiffs hold a 2011 judgment against Mr. Reitano, Mr. Piazza and others in an amount exceeding $500,000, plus interest, which remains unpaid.

[ 3 ] The plaintiffs in 2010 commenced a second amended action against Mr. Piazza, Mr. Reitano and the mother, sister and brother-in-law of Mr. Reitano wherein it is alleged that Mr. Reitano fraudulently transferred money or property to such family members in order to defeat his creditors (the “Second Action”). The plaintiffs in the Second Action seek to set aside such transfers of property and money for the benefit of these judgment creditors. This Second Action was recently amended to add defendants. It is at its initial stage.

[ 4 ] The parties in this action and in the Second Action are not identical.

[ 5 ] Some of the information sought from Mr. Reitano on the above examination in aid of execution, may well be relevant and require production by one or more of the defendants in the Second Action.

[ 6 ] The plaintiffs by letter in February, 2012, requested Mr. Reitano to answer his undertakings and the questions taken under advisement within three weeks, failing which this motion would be brought.

[ 7 ] This motion is dated July 19, and was returnable on August 24, 2012.

[ 8 ] On August 20, 2012, Mr. Reitano sent a signed direction to CIBC and Bank of Montreal directing them to release to plaintiffs’ counsel any statements or documents related to the corporate bank accounts of North American Reality Inc. (NA Realty), 1384522 Ontario Incorporated, (138) and 4016912 Canada Inc. (401) and copies of any statements related to Mr. Reitano’s CIBC credit card provided that any expense as to such production to be at the cost of the plaintiffs only.

UNDERTAKINGS

[ 9 ] Undertakings given on discovery or during an examination in aid of discovery must be answered. Mr. Reitano does not dispute this principle nor argue that his August 20, 2012 affidavit limits that obligation. The remaining undertakings therefore are to be answered within 30 days from the date hereof. They are set out as items numbered 15 to 23 on the moving party’s undertaking and chart at tab 4 of the motion record, (the “Chart”), namely:

(1) To provide the plaintiffs with a copy of Mr. Reitano’s annual income tax returns for the years, 2004 through to 2011. (Q. 171)

(2) To produce a copy of the registered Quebec $320,000 mortgage from Carmella Reitano and James Clink to 138 dated October 1, 2004. (Q. 255)

(3) To request from Notary Trepanier and provide the plaintiffs with any document from his file signed by Mr. Reitano personally or as a representative of any corporate entity related to the above $320,000 mortgage. (Q. 300)

(4) To advise whether $125,000 or any of the proceeds of sale of the Metcalfe property were, in 2004 or later, paid to his mother and if so, the details thereof including what was the consideration for that payment. (Q. 357)

(5) To provide documentation evidencing to whom and where the proceeds of sale of the Waverly and Cooper Street properties were paid and deposited. (Q. 370)

COST OF PRODUCING FINANCIAL RECORDS

[ 10 ] Mr. Reitano has provided the above directions to the listed financial institutions to provide the plaintiffs with copies of the above monthly bank account and credit card statements. Production back to 2004 is not in issue. His stipulation that the plaintiffs must pay any charges by the financial institutions to produce the same is based on his allegation that he cannot afford to pay as he has no money.

[ 11 ] Mr. Reitano’s August 20, 2012 affidavit comments upon his lack of money as follows:

(1) It will cost approximately $1,500 to obtain copies of the financial statements requested.

(2) He has had no income or financial resources for the past three years. He is financially dependent on his two sisters.

(3) He lives with family members in the family home registered in the name of one or more of his family.

(4) He holds a LLB degree, articled for no consideration, has failed the bar admission exams on three occasions and intends to write such exams one more time.

(5) He has an anti-immune disease with potential side effects.

(6) His lawyer in this and the Second Action provides legal services on a “ pro bono ” basis because Mr. Reitano has no money.

(7) His mother is ill and requires a personal care attendant, services Mr. Reitano has performed for the last three years.

[ 12 ] The above affidavit does not address how much money is received by Mr. Reitano from his sisters or elsewhere, his current liabilities, his current expenses, his current credit card balances, his current bank balances, what assets he owns or whether he is on public assistance.

[ 13 ] The above statements of no financial capacity are to be contrasted with several of the following answers given during the December, 2011 examination, namely:

(1) Mr. Reitano acknowledges that “he thinks” in 2005, he received as one of two vendors of the Waverly property “maybe $200,000” which he “possibly” “spent on his family”. (Q.363 to 370)

(2) As one of two co-tenants of the Metcalfe Street property, part of the proceeds of sale thereof, as much as $125,000, was paid to the ill mother of Mr. Reitano in consideration for his parents raising him and as a gift.

(3) Some of the proceeds of sale of 309 Cooper Street went into NA Properties bank account and some of it was then transferred into Mr. Reitano’s bank account. (Q. 324 to 326)

[ 14 ] With this historical access to larger sums of money, it is insufficient to simply state that one is unemployed and has no money. Rule 34.10 (4), pursuant to rule 34.01(e), requires Mr. Reitano on this rule 60.18 examination to produce all non-privileged documents in his power or control relevant to a matter in issue. Mr. Reitano by his direction to the financial institutions admits the relevancy of these documents and his control as to production thereof. The production obligation under this rule is his.

[ 15 ] The Rules of Civil Procedure do not specify who bears the production cost of documents for production, examination for discovery or on an execution examination. I have been provided with no case law as to execution examinations. Some case law on the other two instances, although not directly on point, provides some assistance as to basic principles.

[ 16 ] The starting point is the Courts of Justice Act , R.S.O. 1990, c. C.43. The jurisdiction of the court to determine which party shall pay for the costs of or incidental to a step in an action as stated in s. 131 of the Act has been relied upon as authority that the court has a discretion to determine which party will bear the cost of obtaining production of documents.

[ 17 ] Prior to trial, it has been held that a person’s modest means cannot serve as an excuse to play by a different set of procedural rules or ignore orders of or the rules of the court. Unreasonable conduct should not be rewarded by denying costs to the innocent defendant or by deferring payment until after trial, see Burrell v. The Regional Municipality of Peel Police Services Board , 2007 46173 (ON SC) .

[ 18 ] The general rule that costs awarded in an action are paid at the end of litigation is consistent with the practice that initially parties are required to bear their own cost of organizing productions, preparing an affidavit of documents and making them available for inspection, see Barker v. Barker , 2007 13700 , para. 14 (ON SC).

[ 19 ] In cases involving the costs of production before trial, the courts in Ho v. O’Young-Lui , 2002 6346 (ON SC) and Traverse v. Turnbull , [1996] N.S.J. No. 212 N.S.C.A. held that the general rule is that the party in possession or control of the documents is to produce those documents at their expense however the court has a residual discretion to depart from that rule where fairness and justice so require.

[ 20 ] The non-application of the general rule is at times altered if its application would financially prevent a party from presenting their case in the action. That is an important distinction in the case of an execution examination where judicial determination of the merits of the parties has already been determined in which case, departure from the general rule should be less frequent.

[ 21 ] The evidence on this motion does not justify departing from the general rule. This Court is not satisfied Mr. Reitano lacks the financial capacity to pay these production costs.

[ 22 ] Mr. Reitano therefore shall bear the cost of and produce from the financial institutions a copy of the records reflected in items numbered 1, 3, 6 and 10 on the Chart.

OBTAINING THIRD PARTY FILES

[ 23 ] The plaintiffs in the Second Action allege that Mr. Reitano personally and through companies he controlled, transfer assets to members of his family for no consideration to avoid creditors. That same issue however is contained directly in rule 60.18(2) (d) and may be address as part of the execution examination.

[ 24 ] An execution examination is broad in nature as reflected under rule 60.18. For these reasons, answers are to be provided to items 2, 8 and 9 of the Chart within 30 days.

[ 25 ] Mr. Charbot is an accountant who did work in the past for Mr. Reitano personally and for his companies. Any such files in the possession of Mr. Charbot are to be provided to counsel for the moving parties for review and copying within 30 days. Any required direction to so produce such files is to be sent by Mr. Reitano immediately. Items 6 and 7 of the Chart are to be so answered.

[ 26 ] Mr. Reitano’s dislike of Mr. Piazza is irrelevant. The solicitor-client privilege associated with such relationship is relevant.

[ 27 ] The files of the lawyer and notary referred to in items 4, 11, 12, 13 and 14 of the Chart are to be sent to counsel for Mr. Reitano within 30 days of this decision for removal of any solicitor-client communication. The balance of such files is to be made available to counsel for the creditors within 10 days thereafter for examination and copying.

COSTS

[ 28 ] Subject to any written offers, the plaintiffs should be entitled to their costs of this motion. No grounds are presently known which would justify a scale higher than partial indemnity. If necessary, the parties may make brief written submissions as to costs within two weeks after the date of this decision.

Kane J.

Released: October 10, 2012

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: ROBERT VEILLETTE and ANTHONY DISIPIO HOLDINGS INC. and ZAGARIA HOLDINGS INC. and MICHELE ZAGARIA IN TRUST, SAVINO ZAGARIA IN TRUST and GIANFRAN HOLDINGS INC. Plaintiffs – and – THE PIAZZA FAMILY TRUST, THE BROOKS FAMILY TRUST, NORTH AMERICAN REALTY INC., JOHN PIAZZA, RICK BROOKS and GIUSEPPE REITANO Defendants REASONS FOR JUDGMENT Kane J.

Released: October 10, 2012