COURT FILE NO.: 05-FD-304485 FIS

DATE: 20121010

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LISA LUDMER, Applicant

AND:

BRIAN LUDMER, Respondent

BEFORE: PENNY J.

COUNSEL: Edwin Flak for the Applicant

Gary Joseph for the Respondent

HEARD: October 3, 2012

ENDORSEMENT

[1] In this modern version of Dickens’s Bleak House, the applicant wife seeks an adjournment of her trial. I denied her motion by handwritten endorsement of October 3, 2012 with Reasons to follow. These are my Reasons.

Background

[2] Because the “long and tortured history” of this litigation is important context for the exercise of my discretion to deny the applicant’s motion, I will set out below the pertinent elements of that history.

[3] The parties separated in 2005 after a marriage of 20 years. The children’s issues were resolved in 2008, leaving the financial issues remaining to be resolved at trial. The case came on for trial in February 2008 before Conway J.

[4] Just prior to that trial, the applicant took the position that she would ask for adverse inferences to be drawn against the respondent from the fact that he had provided no information about his father’s (Irving Ludmer, who resides in Quebec) family trust and estate planning. The respondent sought an interprovincial subpoena from the Court to compel Irving’s attendance at the Ontario trial.

[5] In oral reasons delivered March 6, 2008, Conway J. said:

Is clear to me that the applicant wants me to sign the certificate as she considers Irving Ludmer to be a necessary witness in this case, and most of the documents and information listed to be relevant to an adjudication of this matter. However, she argues that this motion should have been brought by Mr. Brian Ludmer earlier than at the commencement of trial, and that by my granting the motion, she will be severely prejudiced in that she has prepared her case based on the disclosure to date.… She therefore requests an adjournment of this trial after the certificate is issued to permit her to evaluate and respond to whatever documents and information are produced by Irving Ludmer pursuant to the summons…

As I said, it appears to me that all parties consider Mr. Irving Ludmer to be a critical witness for this trial, and that the certificate should issue for him to attend with the documents and information listed in the summons…

[6] Initially, Conway J. did not adjourn the trial. However, the number of pretrial motions and a settlement conference created additional scheduling problems, such that it was not feasible to conduct the trial until August 2008. The trial was, on March 7, 2008, adjourned to September 29, 2008 for three weeks.

[7] On July 24, 2008, the applicant sought leave to bring a motion for an order authorizing her to dispose of or encumber the matrimonial home. Himel J. declined to grant leave to bring the motion. She said:

I am of the view that leave should not be granted to bring a motion compelling the sale of the house on what is essentially the eve of trial. The very issues that will be determined at trial would have to be argued at a motion for a court-ordered sale. The timing of such a motion is not appropriate in the circumstances of this case.

[8] Himel J. went on to say, however, that a motion for interim disbursements or expenses could be made.

[9] Thus, on August 26, 2008, the applicant moved before Pardu J. for payment of interim costs in the amount of $200,000. She also continued her request for leave to encumber the matrimonial home.

[10] At para. 1, Pardu J. outlined the context for the motion:

This trial is set to resume on September 29, 2008. [The applicant] says she cannot afford to pay her costs, which have reached an astonishing level. She has paid former counsel some $312,000, owes her current counsel $163,000 and expects the trial to generate a further $335,000 in legal fees, for a total of $810,000 in a case where the total equity in the matrimonial home may be around $900,000.

[11] Pardu J. dismissed the applicant’s motion, saying, at paras. 17 - 19:

The legal fees in this case are enough to bankrupt both parties and I am not satisfied that there is a power imbalance here that requires an interim costs payment. Any discretionary largesse provided to the husband by his father cannot be evaluated at this stage.

An order for advance costs here as asked would shift the risk of failure by the wife to set aside the marriage contract to the husband to the extent of $200,000 and I am not convinced that that would be appropriate in all of the circumstances I have outlined.

For these reasons, the wife’s motion for advance costs was dismissed.

[12] The trial did not proceed in September 2008. Litigation involving Irving’s document production obligations dragged on in Quebec. There was an attendance before Backhouse J. on September 10, 2008. Her endorsement says:

The issue of custody/access has been settled. The wife seeks an adjournment of the September 29/08 trial. The documents set out in the Summons issued by Justice Conway have not been produced. An appeal by Irving Ludmer from the Que. Superior Court is being brought. In the circumstances, the trial scheduled for September 29/08 is vacated. At such time as the wife receives the documents, counsel shall contact the trial co-ordinator to reschedule the trial.

[13] Ultimately, Irving was ordered to respond to the subpoena and to produce documents related to his family trust and estate plan at the Ontario trial. Later, Irving agreed to make the estate planning documents available to the parties prior to trial on certain terms and conditions. However, the matter was still not resolved until, by order of Perkins J. of November 4, 2010, the applicant was directed to sign an agreed form of confidentiality agreement in exchange for production of these documents.

[14] The respondent provided all of his expert reports by the middle of January 2012. On March 7, 2012, Czutrin J. directed a four week trial to commence October 9, 2012 and scheduled a further motion for advance costs by the applicant.

[15] In her affidavit of April 24, 2012 in support of her third motion for advanced costs, the applicant said, among other things:

My counsel have told me and I appreciate the fact that they cannot represent me at trial if at minimum a significant payment is not received of the outstanding amount due to them [about $340,000]. I fully accept this and appreciate their circumstances and know that they cannot and will not act on my behalf without receipt of at minimum payment of the majority of the amount due to them. I do not expect them to represent me if they do not receive payment of their fees and know that I may have to retain alternate counsel although I do not believe that I could do so and believe that I would be precluded from proceeding with this litigation and that I would have to at minimum certainly act on my own behalf which would in my opinion [would] be not in my best interest. My understanding is that I am not eligible for legal aid. My counsel has both told both the Court and the Respondent’s counsel they will not and cannot commit to being my trial counsel without the determination of this Motion and I know that and do not expect them to be my counsel at trial if such payment is not received.

[16] The applicant’s further motion for advance costs/encumbering the home was heard by Mesbur J. on July 5, 2012. By Reasons dated July 31, 2012, Mesbur J. dismissed the applicant’s motion with costs. She said, in concluding her Reasons:

The wife bears the onus on this motion. Numerous cases on interim costs have made adverse findings where this kind of particularity was not provided. I make a similar adverse finding here, especially when Czutrin J. specifically adjourn this motion to be brought “on better and proper material of the Wife outlining with greater detail and supported by evidence as to what disbursements she may have if she chooses to challenge the yet to be served expert reports.” The wife has failed to provide the necessary material she was ordered to produce. She has failed to meet her evidentiary burden, and as a result, her claim for interim costs must also be dismissed.

[17] Following the release of Mesbur J.’s reasons, Niman Zemans withdrew as counsel of record on August 17, 2012, when a notice of change was delivered notifying the parties of the applicant’s intention to appear in person. The evidence shows, however, that the notice of change was signed by the applicant in December 2010 (Applicant’s October 1, 2012 Affidavit, Ex. “E”). Thus, it is clear that since December 2010, the applicant has been aware of the realistic possibility that her lawyers would be unable to act during her trial without a successful motion for the prepayment of her litigation costs by the respondent or some other source of funds.

The Adjournment Request

[18] The applicant appeared before Czutrin J. on August 22, 2012 without counsel “and in light of recent ruling, she seeks adjournment of trial scheduled for four weeks commencing October 9, 2012. The request is adjourned to already scheduled TMC September 5/12.” Czutrin J. advised the applicant to seek legal advice before the return of the trial management conference.

[19] On September 5, 2012, the applicant appeared with new counsel seeking an adjournment of the conference. Czutrin J. adjourned the trial management conference to September 19, 2012 “to allow Mr. Flak to review files.”

[20] At the conference on September 19, 2012, Czutrin J. wrote, concerning the trial date, that “the [applicant] will be seeking an adjournment; Mr. Flak will be arguing the adjournment request.”

[21] In order to resolve the issue of an adjournment before the scheduled trial commencement date of October 9, 2012, Czutrin J. appointed me as trial judge. After a false start due to a miscommunication about the purpose of a September 27, 2012 attendance before me, the issue of the adjournment was argued on October 3, 2012.[^1]

The Test for an Adjournment

[22] In Ariston Realty Corp. v. Elcarim Inc., 2007 CarswellOnt 2371 (S.C.J.) at para. 34, Perell J. provided a list of factors for judge to consider when determining whether or not to grant an adjournment:

• the overall objective of a determination of the matter on its merits
• the principles of natural justice
• that justice not only be done but appear to be done
• the particular circumstances of the request for an adjournment and the reasons and justifications for the request
• the practical effect or consequence of an adjournment on both substantive and procedural justice
• the competing interests of the parties in advancing or delaying the progress of the litigation
• the prejudice not compensable and costs, if any, suffered by a party by the granting or refusing of the adjournment
• whether the ability of the party requesting the adjournment to fully and adequately prosecute or defend a proceeding would be significantly compromised if the adjournment were refused
• the need of the administration of justice to orderly process civil proceedings
• the need of the administration of justice to effectively enforce court orders.

[23] Similar considerations have been flagged by the Alberta Court of Queen's bench in Lamerman v. Alberta, 2011 ABQB 40, [2011] A.J. No. 82 at para. 33:

1. courts should make a just determination of the real matters in dispute and they should decide cases on their merits;
2. the prejudice caused by granting or denying the adjournment;
3. the applicant’s explanation for not being ready to proceed;
4. the length of the adjournment the applicant is seeking and the consequent disruption of the courts schedule;
5. the importance of effectively enforcing previous court orders;
6. the proper marshaling of evidence and prosecution of complex and multifaceted actions;
7. whether there is a realistic expectation that the adjournment will accomplish its stated purpose;
8. the history of the proceedings, including other adjournments and delays, and at whose instance those adjournments and delays occurred;
9. where a party is seeking the adjournment to amend pleadings, how long counsel has known of the issue to which the amendment is aimed and whether counsel has had previous opportunities to amend;
10. whether the application is merely an attempt to delay the proceedings; and
11. the party that seeks the adjournment should not bear the consequences of its counsel’s failures.

[24] The Ontario Court of Appeal, in Khimji v. Dhanani, 2004 CarswellOnt 525, has said that:

A trial judge enjoys wide latitude in deciding whether to grant or refuse the adjournment of a scheduled civil trial. The decision is discretionary and the scope for appellate intervention is correspondingly limited. In exercising this discretion, however, the trial judge should balance the interests of the plaintiff, the interests of the defendant and the interests of the administration of justice in the orderly processing of civil trials on their merits. In any particular case several considerations may bear on these interests. [Laskin J.A. at para. 14]

I would only add that in determining whether to grant an adjournment in this case, the trial judge had to consider not only the orderly processing of civil trials, but the need to effectively enforce court orders… Individual litigants have a right to pursue and defend their respective claims. They must do so, however, within a court structure that must accommodate thousands of individual litigants. That system can function effectively only when litigants take scheduling commitments seriously and make genuine efforts to comply with court orders relating to adjournments and related matters… If in the assessment of the trial court a litigant does not take reasonable steps to be prepared for the new trial date and does not make reasonable attempts to comply with the associated cost order, the trial court must have the authority to dismiss the claim. [Doherty J.A. at para. 35]

[25] It is with these principles in mind that I turn to the basis for the applicant’s request to adjourn the trial.

The Issues

[26] The applicant advanced essentially three reasons why the trial should be adjourned:

1. to require the respondent to comply with a September 25, 2012 disclosure request made by Mr. Flak;
2. because the applicant just started a new job; and
3. to give the applicant time to prepare for trial now that she appears to be without counsel.[^2]

Disclosure Request

[27] On September 25, 2012, just two weeks prior to the scheduled start date of the trial, Mr. Flak sent a letter to counsel for the respondent making demand for 22 categories of document disclosure.

[28] Mr. Flak argues that the obligation to make financial disclosure is ongoing and self enforcing. He says the respondent has failed to produce current documents relating to his present income, among other things. He argues that financial disclosure is the cornerstone of the support and equalization system. He further argues that, without this disclosure, the applicant is unable to pursue her remedies at trial.

[29] I agree in principle with these submissions. However, the trial date was set seven months ago. The applicant was for many years represented by Niman Zemans and, before that, by Epstein Cole, both well recognized firms in the family law bar. This matter was originally scheduled for trial in 2008 and was adjourned only to pursue documents in the hands of a non-party. There is no evidence that there were outstanding demands for the material listed in Mr. Flak’s September 25, 2012 letter by the applicant’s previous counsel of many years.

[30] As important as financial disclosure is, it cannot be used to “cause delay or to reap a tactical advantage.” The disclosure process cannot go on forever. The applicant’s interest in full financial disclosure must be balanced against other competing considerations, such as timeliness, the burden such requests place on the other party and the length of time over which the litigation has been conducted. There must be an element of common sense, proportionality and fairness to both parties built into the rules surrounding disclosure.

[31] All parties must act reasonably and on a timely basis in making requests for document disclosure. The applicant has had years to make these demands and months since the trial date was set. The 11th hour request for documents is, in my view, tactical in nature, designed to bolster the adjournment request.

[32] If the documents are truly necessary, they can be requested during the trial. In addition, adverse inferences may be drawn if relevant, material disclosure has not been made.

[33] The administration of justice would suffer if last-minute tactical requests such as this one, made by new counsel with a limited mandate on the eve of trial, constituted valid grounds for an adjournment. In this case, the litigation has dragged on for seven years and cost the parties about $1 million each in fees so far. There have been over 60 court orders and endorsements made in this matter to date. The trial has been adjourned already twice and the current trial date has been known for seven months.

[34] In these circumstances, I do not think the September 25, 2012 disclosure request constitutes valid grounds for an adjournment.

The New Job

[35] The applicant supports her request for an adjournment by deposing that she started a new job on September 4, 2012. She says that if she has to take off four weeks in October for the trial, her employment will be “placed in a very prejudiced position” and that she might be fired. She also speculates that if she could consolidate her new role for “a few months,” she would have a better chance of taking time off for the trial without adversely affecting her employment.

[36] I do not think any credence can be placed on this argument. The applicant has been gainfully employed throughout this litigation, earning over $100,000 per year. The trial date has been known since March 2012. It is hard to understand why the applicant would voluntarily start a new job weeks before the start of what she had to know would be, in any event, an all-consuming, lengthy trial.

[37] If the trial date creates a problem for the applicant in her new job, it is a problem entirely of her own making, based on a choice she made with full knowledge of the risks and conflicts it would entail.

[38] The applicant’s new job does not constitute legitimate grounds for an adjournment of trial.

Time to Prepare

[39] This appears to be the main reason the applicant seeks the adjournment.

[40] She says that the case will be long and complex. There will be many witnesses. They will include financial experts and experts in Québec law. She says there is an economic disparity because the respondent has resources and she does not. The applicant says that now that she is without counsel, she needs time to prepare her case and to prepare her cross examinations and arguments.

[41] In my view, the central flaw in the applicant’s argument on this point is that the withdrawal of her counsel on August 17, 2012 could not have been a surprise.

[42] The evidence is absolutely clear that the applicant has known for almost 2 years that she might end up in precisely the situation she is now in. In addition, in her own April 2012 affidavit in support of her motion for advance costs, the applicant admitted that she knew that if the motion was not successful, Niman Zemans would have to withdraw and could not conduct her trial.

[43] The applicant pinned her hopes on the third motion for advance costs. This was a motion which, given the history (and Mesbur J.’s findings that there was no “new” compelling evidence to support the motion), could only have been regarded as a “long shot.” The applicant ignored the potential for an unsuccessful outcome and developed no fallback plan. As a result, when the motion did not succeed, she was, entirely foreseeably, placed in a most difficult situation.

[44] The applicant’s approach to the pending trial, in the circumstances, was, in my view, unreasonable. The reasonable course would have been to take account of the risk of an unsuccessful outcome on the motion and have a plan that would enable her to proceed with the trial. The applicant appears to have made no efforts in this direction whatsoever.

[45] If the applicant had said at the March 7, 2012 trial management conference before Czutrin J., “Yes, set this trial for October 9, 2012 but if my motion for interim costs is not successful, I will need another six month adjournment to prepare for trial,” this would have been entirely unacceptable to the respondent and, I have no doubt, to the trial management judge.

[46] The applicant knew the risks she was facing. She did not take her scheduling commitments seriously, in my opinion. She failed to “take reasonable steps to be prepared for the new trial date.”

[47] Further, the applicant is quite vague in her affidavit about what she would do to prepare during a six-month adjournment. She has a new job. She cannot afford counsel. It is by no means clear that the situation will be materially different in six months than it is today from this point of view. In addition, Mr. Flak’s 11th hour document disclosure request can only be regarded as an indication of the shape of things to come. An adjournment will spawn more motions, more demands, more costs and, potentially, more delays.

[48] The respondent and his counsel have, in reliance on the March 7, 2012 order, prepared for trial, summoned and prepared witnesses and prepared for the arguments and examinations. An adjournment now (which, it was common ground, would have to be for at least six months) would create significant costs thrown away – costs which, on the applicant’s own admission, she cannot pay. This is non-compensable prejudice.

[49] Further, the non-financial toll on the parties, and the need to bring this odyssey to an end, are significant considerations. There has been seven years of litigation and at least two prior adjournments of this trial. The issues are clear and have been reasonably well-defined since at least 2008. People have to get on with their lives. In addition, my earlier allusion to the famous Jarndyce v. Jarndyce case from Bleak House was not without purpose. This is a case where the parties’ dissipation of assets on the mere cost of litigation alone is staggering.

[50] I also believe it would be contrary to the proper demonstration of justice, the interest in the orderly and timely disposition of civil proceedings and the need for effective enforcement of court orders to grant an adjournment in these circumstances. In my view, the grant of an adjournment on these facts would be unfair and create significant prejudice. It would, likewise, be perceived as unfair by the reasonable, informed bystander. The prejudice associated with granting an adjournment significantly outweighs any possible benefit.

[51] For all these reasons, the applicant’s motion to adjourn the trial is dismissed.

[52] Costs may address be addressed as part of the disposition of the trial proceedings.

PENNY J.

Date: October 10, 2012

[^1]: Mr. Flak has satisfied me that he was not advised by court staff that his client’s motion to adjourn was to proceed before me on September 27, 2012. Accordingly, my September 27, 2012 handwritten endorsement should not be interpreted to suggest that Mr. Flak, or his client, were “at fault” for not being ready to proceed on September 27, 2012.

[^2]: Mr. Flak advised that his retainer was limited to arguing the adjournment.