ONTARIO
SUPERIOR COURT OF JUSTICE
Court File No.: CV-12-446291
Date: 2012-07-24
Between:
FANNY YUET YING YUNG Applicant – and – DAVID POU-MING LAM Respondent
Counsel:
Edward F. Hung, for the Applicant
Joel E. Levitt, for the Respondent
Heard: July 23, 2012
Goldstein J.
[1] Ms. Yung, the Applicant, is an elderly lady who is now living in a nursing home. Mr. Lam, the Respondent, is her grandson. Mr. Lam lives in, and has title to, a condominium unit at 28 Empress Walk, Toronto. Ms. Lam says that when the unit was purchased in 2000 she loaned $180,000 to Bolivar Lam, her son and David’s father, in order to purchase the unit. She claims that she has never been paid back. She brings an application for a declaration from this Court that she is the beneficial owner of the unit, based on principles of constructive trust. Bolivar died of cancer in 2006. Mr. Lam says that the loan was paid back by Bolivar in 2005, when he realized that he was dying. Mr. Lam has produced cheques and a bank draft that support his position. Mr. Lam has been paying the taxes, fees, and utilities on the unit since it was purchased. He has subsequently placed a mortgage on the unit and has been paying the interest.
[2] The parties exchanged pleadings and conducted cross-examinations on the affidavits. Subsequent to the cross-examinations, Mr. Hung, for Ms. Yung, sought leave to introduce a further affidavit pursuant to Rule 39.02(2). Briefly, after the delivery of the Application Record, Mr. Lam, the Respondent, obtained copies of cheques and a bank draft indicating that his father, Bolivar, had paid the Applicant a total of $130,000 in 2005. Mr. Lam stated in his affidavit that Bolivar had told him that the payments were to repay the loan for the condominium. During the cross-examination of Mr. Lam, Mr. Hung attempted to ask questions about the possibility of other loans from Ms. Yung to Bolivar. Mr. Levitt objected. Mr. Levitt did not ask Ms. Yung about other loans during his cross-examination on her affidavit. He was not, of course, obliged to ask such questions.
[3] The supplementary affidavit that Mr. Hung now seeks leave to introduce states that the $130,000 that Bolivar had paid to Ms. Yung in 2005 was actually in repayment of another loan made in relation to other properties. She states that she gave Bolivar approximately $120,000 in cash from her safety deposit box at the bank and that the $130,000 had nothing to do with the condominium unit.
[4] At the conclusion of the argument on Mr. Hung’s motion to introduce the supplementary affidavit I indicated that I would grant the motion on strict conditions with reasons to follow. These are those reasons.
[5] Rule 39.02(2) states:
39.02 (1) A party to a motion or application who has served every affidavit on which the party intends to rely and has completed all examinations under rule 39.03 may cross-examine the deponent of any affidavit served by a party who is adverse in interest on the motion or application.
(2) A party who has cross-examined on an affidavit delivered by an adverse party shall not subsequently deliver an affidavit for use at the hearing or conduct an examination under rule 39.03 without leave or consent, and the court shall grant leave, on such terms as are just, where it is satisfied that the party ought to be permitted to respond to any matter raised on the cross-examination with evidence in the form of an affidavit or a transcript of an examination conducted under rule 39.03.
[6] The factors that I must consider on a motion for leave pursuant to Rule 32.02(2) are:
Is the evidence relevant?
Does the evidence respond to something raised in cross-examination?
Will granting leave result in non-compensable prejudice?
Is there a satisfactory explanation for not presenting the evidence at the outset?
[7] See: First Capital Realty Inc. v. Centrecorp Management Services Ltd. (2009), 258 O.A.C. 76, 83 C.P.C. (6 th ) 310, [2009] O.J. No. 4492 (Div.Ct.) ; Re Nolan and Attorney General of Canada (1997), 38 O.R. (3d) 722, [1997] O.J. No. 5421 (Sup.Ct.); Brock Home Improvement Products v. Corcoran (2002), 58 O.R. (3d) 722, [2002] O.J. No. 931 (Sup.Ct.).
[8] Mr. Levitt argues on behalf of the Respondent, Mr. Lam, that the supplementary affidavit meets none of the criteria of the test. Without examining his points in detail, let me state that he makes a very strong case. Mr. Hung, for his part, admits that he erred. He should have put forward the supplementary affidavit prior to the cross-examination. He states that he expected that the other loans would come up in cross-examination and that his client could provide her evidence and explanation. The problem with this tactic, as was pointed out to Mr. Hung, is that it depended on Mr. Levitt to bring out the evidence on cross-examination. Mr. Levitt did not do so and was under no obligation to do so. Indeed, other than Mr. Hung’s attempt to put theoretical questions to Mr. Lam, the Respondent, Mr. Levitt had no idea that Ms. Yung, the Applicant, might put forward this explanation.
[9] I find very helpful the comments of Stinson J. in Brock Home Improvement Products , supra :
[8] Rule 39.02(1) and (2) are an important and integral part of the procedural code governing the conduct of motions and applications. These rules are designed to place finite limits on the evidentiary element of those proceedings, an element that is all too frequently time-consuming, expensive and drawn-out. These rules oblige the parties to consider the issues and to put all relevant evidence forward before embarking upon cross-examination of the opposite party's witnesses. This is the approach mandated by the rules to achieve the "just, most expeditious and least expensive determination" of motions and applications. Consistent with that approach, it is only in exceptional cases that resort should be had to rule 39.02(2).
[9] I believe that the words "ought to be permitted to respond" found in rule 39.02(2) impose a burden on a party who seeks leave to show more than an absence of non-compensable prejudice to the opposite party. In my view, those words import a requirement for the party who seeks leave under rule 39.02(2) to provide, by way of evidence on the motion for leave, a satisfactory explanation for its failure to include the proposed additional evidence as part of its pre-cross-examination case. The court should scrutinize carefully the reasons for the omission and the evidence offered in support of that explanation. To approach the issue otherwise undermines the integrity of the evidentiary framework for motions and applications that is mandated by the rules. Absent some reasonable explanation for the original omission, leave should be refused.
[10] I am satisfied with Mr. Hung’s explanation that it was his oversight that caused the necessity for the filing of a supplementary affidavit. I am mindful of the Divisional Court’s comment in First Capital Realty, supra, that a client should not be punished for the errors of his or her counsel:
14 A flexible, contextual approach is to be taken in assessing the criteria relevant to rule 39.02(2), having regard to the overriding principle outlined in Rule 1.04 of the Rules of Civil Procedure that the rules are to be interpreted liberally to ensure a just, timely resolution of the dispute. An overly rigid interpretation can lead to unfairness by punishing a litigant for an oversight of counsel. See: Arfanis v. University of Ottawa (2004), 7 C.P.C. (6th) 371 (Ont. S.C.) at paras. 8 and 15 ; BFC Construction Group Inc. v. Ontario Realty Corp. (2001), 17 C.P.C. (5th) 288 (S.C.) at para. 24 ; Nolan v. Canada (Attorney General).
[11] That said, Mr. Levitt’s points all carried considerable force. Absent Mr. Hung’s error and explanation I would not have granted leave to submit the supplementary affidavit.
[12] I was also not persuaded that Mr. Lam would suffer prejudice that could not be compensated; hence my insistence on a rigid timetable and costs
[13] In granting leave, I make the following observation: the supplementary affidavit provides evidence that is not susceptible of thorough investigation. As I said to Mr. Hung during his submissions, it smacks of contrivance and raises serious questions of credibility, although I obviously make no findings in that regard.
DISPOSITION:
[14] Leave is granted to file the supplementary affidavit with costs and a timetable as follows:
Delivery of any responding affidavits from the Respondents by August 10, 2012;
Cross-examinations to be conducted by September 14, 2012;
Costs of the motion and further examination of the Applicant fixed at the sum of $5,500.00 to be paid to the Respondent’s solicitor in trust by no later than August 30, 2012;
[15] Costs of further examination of the Applicant invoiced by the Court Reporter including the cost of the examination and the cost of the transcript to be borne by the Applicant.
Goldstein J.
Released: July 24, 2012
COURT FILE NO.: CV-12-446291
DATE: 20120724
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
FANNY YUET YING YUNG Applicant – and – DAVID POU-MING LAM Respondent
REASONS FOR JUDGMENT
Goldstein J.