SUPERIOR COURT OF JUSTICE – ONTARIO

(BANKRUPTCY AND INSOLVENCY)

COURT FILE NO.: BK 31-347546
DATE: 20130412

RE: IN THE MATTER OF THE BANKRUPTCY OF THOMAS PIRNER

OF THE CITY OF TORONTO IN THE PROVINCE OF ONTARIO

BEFORE: Newbould J.

COUNSEL:
Thomas Pirner, in person
John Legge, for Diane Pirner

HEARD: April 11, 2013

ENDORSEMENT

[1] Mr. Pirner applies to set a date for the hearing of his motion to expunge the claim of Diane Pirner. This matter was first raised before Registrar Donaldson on January 4, 2012 at a hearing for Mr. Pirner's discharge from bankruptcy. That application was adjourned by the Registrar. In her endorsement of January 6, 2012, the Registrar ordered that if Mr. Pirner wished to challenge Ms. Pirner's standing to oppose his discharge, he must take formal steps to apply to expunge or reduce her claim. She also held that such application should be heard and determined before the discharge application proceeded because if the application was resolved against Mrs. Pirner, she would have no standing as a creditor to oppose the discharge application.

[2] Mr. Pirner's motion to expunge the claim of Ms. Pirner was delivered January 20, 2012. It was eventually brought on for hearing in June 2012 on the same date that a motion by Ms. Pirner to annul the bankruptcy was heard. I adjourned the motion to expunge as material had just been served and needed to be dealt with. I dismissed the motion of Ms. Pirner to annul the bankruptcy.

[3] On October 24, 2012 at a 9.30 a.m. scheduling conference, I stated that the motion to expunge would be heard together with Mr. Pirner's discharge application. At the time, that seemed to make sense. However, it was not a decision made based upon any formal motion that it be heard together with the discharge application. Mr. Pirner has now decided with the benefit of legal advice to act under the order of Registrar Donaldson and cause the motion to expunge the claim of Ms. Pirner to be dealt with before his application for discharge is dealt with.

[4] The order of registrar Donaldson was not appealed by either party. Mr. Pirner takes the position that he is entitled to have his expungement motion dealt with now.

[5] Mr. Legge took a preliminary objection to Mr. Pirner's motion being dealt with on the basis that he was originally served with an unsworn copy of Mr. Pirner's affidavit. After being served with that affidavit, Ms. Pirner delivered an affidavit saying that the material served by Mr. Pirner contained an unsworn affidavit. A sworn copy of the affidavit was subsequently served on Mr. Legge on April 2, 2013. There is no basis for refusing to hear the motion for this reason. Mr. Legge acknowledged in argument that he did not call Mr. Pirner or otherwise ask him for a sworn copy, which would have been the normal thing to do. Going to the lengths of having an affidavit of his client sworn saying that the affidavit served was not sworn and taking a technical position as he has was completely counter-productive. Communication is one of the three C's of the Commercial List, which I have unfortunately had to refer to before now in this matter as not being complied with. Mr. Legge also took preliminary objections on two other grounds, neither of which were the basis for any preliminary procedural objection.

[6] Mr. Legge in argument accepted that the result of the order of Registrar Donaldson not being appealed means that Mr. Pirner is entitled to have his expungement motion dealt with before his application for discharge. It therefore comes down to a question as to how that motion should be dealt with.

[7] Mr. Pirner said that he believes, but is not certain, that Ms. Pirner file responding material on his motion and that she was cross examined. This would have been at a time when Mr. Pirner was represented by Mr. Klotz. Mr. Pirner said that he thought that the matter could be dealt with so far as he was concerned in 90 minutes.

[8] Mr. Legge had three points to make with respect to the conduct of the motion to expunge the claim of Ms. Pirner.

[9] First, he referred to a number of proceedings that have taken place since the bankruptcy of Mr. Pirner and said that Mr. Pirner should be required to file on his motion all of those proceedings which he said amounted to five banker’s boxes full of documents. As to this, I do not accept that any order should be made requiring Mr. Pirner to file affidavit material or other documents in support of his motion. If he fails to produce relevant documentation, that may negatively affect his motion. If there is relevant material in that litigation that has not been produced by Mr. Pirner, it is open to Ms. Pirner to produce that documentation. I am not prepared to make any order at this stage requiring Mr. Pirner to produce any documentation. If there is something in particular that should be produced ahead of the hearing, and there is objection to it being produced, a motion on proper material could be brought.

[10] Second, Mr. Legge said that one of Mr. Pirner's former solicitors, Mr. William McKenzie, was apparently examined in some preceding with respect to a promissory note and that Mr. McKenzie’s evidence leaves open some issue relevant to the expungement motion. Therefore he asserts that Mr. Pirner should be required to call Mr. McKenzie as a witness on the expungement motion. Again, it seems to me that if Mr. Legge wishes Mr. McKenzie to provide evidence, he can do so either by serving a notice to examine Mr. McKenzie as a witness on a motion or, if it turns out that an oral hearing is required, to subpoena Mr. McKenzie to give evidence at that hearing.

[11] Third, Mr. Legge said that any cross-examination of Mr. Pirner must take place at an oral hearing and not ahead of time in some examiner's office as his credibility will be an issue. I am not in a position to make any such order at this time. Ordinarily, if competing affidavits are filed on a motion or application, cross-examination of the deponents may or may not indicate a difference of evidence that would be better determined by a trier of fact hearing the witnesses give viva voce evidence. If Mr. Legge chooses not to cross-examine Mr. Pirner on his affidavit, that is a matter for him to determine, but at this stage I am not prepared to order a hearing of the motion with viva voce evidence. Whether that becomes necessary in the future remains to be seen.

[12] I have a concern based upon what I heard during the argument as to what exactly the issues will be on the motion to expunge the claim of Ms. Pirner. At first blush a number of things raised by Mr. Legge appeared to raise matters long after the date of bankruptcy that would not be relevant to a motion to expunge the claim of Ms. Pirner as of the date of bankruptcy. However, Mr. Legge said the matters he raised would be relevant, and that may or may not be so. In order to try to deal with the motion as efficiently as possible I direct that the following steps take place:

(i) Mr. Pirner is to deliver within 10 days a document entitled "Mr. Pirner's position on the motion to expunge the claim of Ms. Pirner". It is to be brief, no longer than three pages and preferably shorter, and is to set out the order he seeks and the grounds that he intends to rely upon for the order. It is not to contain a recitation of evidence but, as with a pleading, only the material facts upon which he relies in accordance with rule 25.06(1) of the rules of practice.

(ii) Ms. Pirner is to deliver a document within a further 10 days entitled “Ms. Pirner's position on the motion to expunge her claim". It is to be brief, no longer than three pages and preferably shorter, and is to set out the material facts upon which she relies in opposition to the motion to expunge. It is not to contain a recitation of evidence but, as with a pleading, only the material facts upon which she relies in accordance with rule 25.06(1) of the rules of practice.

(iii) Mr. Pirner will be entitled, if he deems fit, to deliver within a further 10 days a reply document entitled "Mr. Pirner's position on Ms. Pirner's defence to the motion to expunge her claim". It is to be brief, no longer than three pages and preferably shorter, and is not to contain a recitation of evidence but, as with a pleading, only the material facts upon which he relies in accordance with rule 25.06(1) of the rules of practice.

(iv) If Mr. Pirner wishes to deliver any further material in support of his motion, it must be delivered within 10 days following the completion of the delivery of the aforesaid pleadings.

(v) If Ms. Pirner wishes to deliver any further material in support of her defence to the motion to expunge her claim, it must be delivered within a further 10 days.

(vi) If either party wishes to cross-examine on the affidavit material delivered, that is to take place within a further 30 days at the office of a special examiner.

(vii) No motion may be brought to require the other party to produce any documents prior to the completion of any cross-examinations.

(viii) After the completion of the foregoing, a motion should be scheduled to set the date for the hearing of the motion to expunge and any directions regarding the hearing of the motion as may be required.

Newbould J.

Date: April 12, 2013