ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO. : Court File No. 98-CV-145809
COURT FILE NO. : Court File No. 97-GD-39574

DATE : December 20, 2013

BETWEEN:

DELOITTE & TOUCHE INC., IN ITS CAPACITY AS TRUSTEE OF THE ESTATE OF BRE-X MINERALS LTD., A BANKRUPT
Plaintiff

– and –

JOHN B. FELDERHOF, J.P. MORGAN & CO. INC., REPUBLIC NATIONAL BANK OF NEW YORK, DAVID G. WALSH, JEANETTE WALSH, T. STEPHEN McANULTY, NANCY JANE McANULTY, JOHN B. THORPE, ROLANDO C. FRANCISCO, HUGH C. LYONS, PAUL M. KAVANAGH, SNC-LAVALIN GROUP INC., SNC-LAVALIN INC., KILBORN ENGINEERING PACIFIC LTD., KILBORN SNC-LAVALIN INC., P.T. KILBORN PAKAR REKAYASA AND BRESEA RESOURCES LTD.
Defendants

Angus T. McKinnon for the Trustee for Bre-X Minerals Ltd.

AND BETWEEN:

DONALD CAROM, 3218520 CANADA INC., 662492 ONTARIO LIMITED and OSAMU SHIMIZU
Plaintiffs

– and –

BRE-X MINERALS LTD., BRESEA RESOURCES LTD., now known as SASAMAT CAPITAL CORPORATION, JOHN B. FELDERHOF, JEANNETTE WALSH, Estate Trustee of the Estate of DAVID G. WALSH, deceased, JEANNETTE WALSH, personally, T. STEPHEN MCANULTY, NANCY JANE McANULTY, JOHN B. THORPE, ROLANDO C. FRANCISCO, HUGH C. LYONS and PAUL M. KAVANAGH
Defendants

Paul J. Pape for the Plaintiffs

HEARD: December 18, 2012

REASONS FOR DECISION

PERELL, J.

[1] Deloitte & Touche Inc., in its capacity as Trustee of the Estate of Bre-X Minerals Ltd., a Bankrupt , has brought motions in the Alberta and Ontario Courts seeking leave to discontinue litigation that it has been prosecuting against John Felderhof and the Estate of David Walsh. There is also related litigation involving a Mareva injunction against Ingrid Felderhof that Deloitte wishes to discontinue.

[2] It will be important to note that until recently, Deloitte’s action, which I will refer to as the derivative action, was in a litigation partnership with a class action brought by Donald Carom and others against the selfsame John Felderhof, the Estate of David Walsh , and indirectly against Ingrid Felderhof .

[3] Deloitte no longer wishes to litigate its derivative action and the related action against Ingrid Felderhof for two reasons: (1) Deloitte no longer has the financial resources to prosecute the derivative action; and (2) it thinks that there is no reasonable prospect of a significant recovery from the Felderhofs or from the Walsh Estate. Hence its motion to discontinue.

[4] It seems, however, that Mr. Carom parts company with the idea of discontinuing the litigation, and, for the moment at least, he wishes to continue to prosecute the class action. He opposes his former ally leaving the litigation battlefield.

[5] Deloitte’s discontinuance motion will be heard on March 4, 2013, and Mr. Carom now brings a cross-motion seeking an order: (1) that Ingrid Felderhof and Jeannette Walsh attend to be examined as witnesses for the pending motion pursuant to rule 39.03; and (2) that Ingrid Felderhof co-operate in allowing Class Counsel to obtain an appraisal of a property in the Cayman Islands, the Vista Del Mar property, at the expense of the class action.

[6] Mr. Carom’s request for relief is narrower than the relief requested in his notice of motion. In his notice of motion, he requested an order that certain unfiled affidavits in the possession of Deloitte, which were shown to Class Counsel, be filed with the court and that Ingrid Felderhof and Jeannette Walsh attend to be cross-examined on their affidavits.

[7] On the recast narrower motion, which is a putative rule 39.03 motion, Deloitte takes no position with respect to Mr. Carom’s desire to obtain an appraisal of Ingrid Felderhof’s Vista Del Mar property at the expense of the class action.

[8] Deloitte has no brief to protect Ingrid or Jeannette Walsh from being cross-examined. However, Deloitte is concerned that its motion to discontinue not be imperilled should it turn out that Ingrid Felderhof or Jeannette Walsh do not comply with any order that this court should make on Mr. Carom’s recast motion.

[9] Thus, although Mr. Carom’s motion did not start out to be a rule 39.03 motion, it morphed into such a motion with Deloitte opposing the proposed examinations of Ingrid Felderhof and Jeannette Walsh.

[10] Under rule 39.03, a person may be examined as a witness before the hearing of a pending application for the purpose of having a transcript of his or her evidence available for use at the hearing.

[11] Although a service of a summons has not yet occurred in this action, where a party serves a summons to examine a witness for a pending motion, an opposing party may move to quash the summons for the examination of the witness on the ground that the evidence sought is not relevant to the motion or that the examination or the underlying proceeding would amount to an abuse of process: Canada Metal Co. v. Heap (1975), 1975 675 (ON CA) , 7 O.R. (2d) 185 (C.A.); Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1995), 1995 7258 (ON SC) , 27 O.R. (3d) 291 (Gen. Div.).

[12] If the summons to the witness is challenged, the party seeking the examination should be prepared to show that the evidence is relevant to the pending application and that the party to be examined is in a position to provide the evidence: Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. , supra ; Heslin v. Verbeeten , [2001] O.J. No. 1602 (S.C.J.) ; Siegel v. Mulvihill Capital , [2009] O.J. No. 265 (S.C.J.) . If the party seeking the examination cannot satisfy the relevancy and evidentiary screening, then the summons is regarded as a fishing expedition and an abuse of process : Canada Metal Co. v. Heap , supra ; Agnew v. Ontario Assn. of Architects ( 1988 ), 1987 4030 (ON SC) , 64 O.R. (2d) 8 (Div. Ct.) .

[13] In considering whether to strike a summons to a witness, the court will consider the nature and grounds for the application to determine what are the issues for which the examination is in aid: Ontario Federation of Anglers & Hunters v. Ontario (Ministry of Natural Resources) , 2002 41606 (ON CA) , [2002] O.J. No. 1445(C.A.) , leave to appeal refused [2002] S.C.C.A. No. 252 (S.C.C.).

[14] Once the party seeking to conduct the examination shows that the proposed examination is about an issue relevant to the pending application and that the party to be examined is in a position to offer possibly relevant evidence, it is not necessary for the party to go further and show that the proposed examination will provide evidence helpful to that party’s cause: Manulife Securities International Ltd. v. Société Générale ( 2008 ), 2008 13367 (ON SC) , 90 O.R. (3d) 376 (S.C.J.) , leave to appeal to Ont. Div. Ct. refused [2008] O.J. No. 1698 (Div. Ct.) ; Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. , supra .

[15] As I view the matter, Mr. Carom does not need leave to serve a summons under rule 39.03 to examine Ingrid Felderhof or Jeannette Walsh as witnesses, but he would have to comply with rule 53 to secure the attendance of the witnesses. Had a summons been served, I see no basis for striking out the summons.

[16] However, in the circumstances that no summons has actually been served on Ingrid Felderhof or Jeannette Walsh and since it does not appear that Ingrid Felderhof was given formal notice of Mr. Carom’s motion, although she probably has informal notice, I am simply adjourning the putative rule 39.03 motion to give Mr. Carom the opportunity to serve a summons on Ingrid Felderhof or Jeannette Walsh. He should also serve a copy of these Reasons for Decision on them.

[17] As far as the motion to compel Ingrid Felderhof to assist in Mr. Carom’s plan to obtain an appraisal of Vista Del Mar property, I am dismissing the motion without prejudice because I was not informed about what jurisdiction I might have to make such an order. In this regard, I note that Ingrid Felderhof is not a party to the Ontario litigation. Assuming I have the jurisdiction, perhaps under s. 12 of the Class Proceedings Act , I would not exercise that jurisdiction absent evidence that Ingrid Felderhof was shown the courtesy of asking whether she is prepared to co-operate in having her property appraised.

[18] Order accordingly.

Perell, J.

Released: December 20, 2012