SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-12-445000

DATE: 20130611

RE: Mark C. Stever, Plaintiff

– AND –

Rainbow International Carpet Dyeing & Cleaning Co., Frederick Rosen, Cliff Alberti and John Appel, Defendants

BEFORE: E.M. Morgan J.

COUNSEL:
David Alderson, Robert Kalanda, and Min Kim, for the Plaintiff

Tariq Remtulla and Antonio Turco, for the Defendants, Rainbow International Carpet Dyeing & Cleaning Co. and John Appel

HEARD: June 10 and 11, 2013

ENDORSEMENT

[1] Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, [2011] OJ No 5431, at para. 50 (Ont CA) requires that a judge achieve a full appreciation of the issues and the evidence in granting summary judgment. This requires the moving party to put its best foot forward.

[2] The courts have generally found that, given these elements of the summary judgment test, the “best evidence” rule must be adhered to by including in the record affidavit evidence, and, potentially, cross-examination transcripts. In fact, this court found in Wynn v Belair Direct, 2003 CarswellOnt3433, at para 66, “summary judgment could not be granted on the evidence of the law clerk employed by the plaintiff’s counsel and be based on evidence of attached documents given to the plaintiff by the defendant.” That kind of nominal affiant is really no affiant at all.

[3] That is the situation which the Defendants as moving parties present here. They have provided no substantive affidavit, and no affidavit that indicates that all of the relevant documents have been produced. The cross-examination of the Plaintiff indicates that all of the correspondence between the parties during the relevant period is now in the record, but we know nothing of any other documents in the possession of the Defendants.

[4] In answer to my question as to why the Defendants have not produced a supporting affidavit, they have indicated that they are relying on the pleadings and correspondence referenced in the pleadings. I am mindful, however, that this is a summary judgment motion under Rule 20, not a pleadings motion under Rule 21 where there would not be a need for an evidentiary record. Although a Plaintiff will have the ultimate onus of proof in the action, the record on a Rule 20 motion brought by Defendants should go beyond documents in the possession of the Plaintiff.

[5] Cumming J. addressed a similar issue in the context of a motion for better production in Cole v Hamilton, 1999 14820, at para 3, where he commented that, “a party will often require production of documents by the opposition to prove the party’s case.” For that reason, summary judgment motions typically proceed either after discoveries are complete, or with affidavit evidence and cross-examinations that go a long way to replicating what will be produced in discoveries.

[6] In countering this, Defendants’ counsel points to the decision of Himel J. in Natural Resources Gas Ltd. v IGPC Ethanol Inc., 2011 ONSC 3529, at para 13, where it is indicated that full documentary discovery may not be necessary where the summary judgment is based on a limitation period. In response, Plaintiff’s counsel points to the decision of Wilcox J. in McLelland v Farquhar Plymouth Chrysler Ltd., 2013 ONSC 1216, at para 28, where it is indicated that, “disclosure may be necessary for the Plaintiff to properly deal with a motion for summary judgment”.

[7] What I take from all of this is that the courts have counseled flexibility, with every case being considered with its unique circumstances and factual matrix in mind. I certainly appreciate that the motion before me deals with the limitation period and not the merits of the Plaintiff’s claim. Nevertheless, the Plaintiff’s position is that the ultimate limitation period has not elapsed, and that the discoverability doctrine is engaged, if the franchise contract between the parties was renewed and is ongoing due to a course of conduct by the parties over time. Given this position, some evidentiary record appears necessary.

[8] It may be, of course, that there is simply no evidence anywhere – including in the Defendants’ files – that supports the Plaintiff’s claim. The terms of the renewed contract that the Plaintiff submits were put in place, which include the Plaintiff being permitted to continue to run his franchise without paying any royalties to the Defendants, suggests that the Defendants may turn out not to have anything in their possession that supports the Plaintiff. Likewise, the fact that the Plaintiff apparently has not heard from the personal Defendant John Appel since 1995 suggests that his limitation defense may turn to be a cogent one. But the non-production by the Defendants at this stage, and the fact that they have put forward a legal assistant from their counsel’s law firm as their sole affiant in support of summary judgment, makes me pause. The Defendants seek to end the case having produced nothing and having proffered no witnesses.

[9] The need for affidavits of documents and discoveries in this case was canvassed by Goldstein J. in a prior motion herein at 2013 ONSC 241, 114 OR (3d) 473. He concluded, at para 21, that, “[a]lthough, as the Court of Appeal cautioned in Combined Air Mechanical, affidavits and cross-examinations are not always an appropriate substitute for the discovery process, in this case I am satisfied that a record can be built that would leave a judge with sufficient evidence to make a decision on a summary judgment motion.” On that basis, Goldstein J. was willing to say that the summary judgment should go ahead without discoveries having taken place.

[10] The evidentiary record that Goldstein J. appears to have envisioned has not materialized. The Defendants have put forward a strong argument that the limitation period has passed, based on the pleadings and the limited record. In my view, however, it is dangerous for a motions judge to grant summary judgment and dispense with a party’s rights in a final way in the absence of any evidence from the moving party. The motion is therefore premature.

[11] The day before this motion began, the Plaintiff sought to have discoveries ordered by a Master. Given the compressed timing, Master Abrams was unwilling to consider that motion and speculated that it may have been brought by the Plaintiff for “strategic reasons”. I understand why she may have had that first impression given that the motion was brought so late in the day. But on reflection, I see good reason for affidavits of documents to have been exchanged and discoveries to have taken place before ruling on the summary judgment motion.

[12] I therefore adjourn this motion to a date to be set at the first motion scheduling court that is practicable for all counsel to attend in September 2013. I trust that counsel will be able to work out among themselves a mutually convenient date for that appearance. I remain seized of the motion, and so any new return date must be made returnable before me.

[13] I have now heard the entire summary judgment motion, such as it is to date. At the next appearance the parties should file whatever new and relevant evidentiary material has come out at discoveries, and should produce limited supplementary factums that incorporate and apply the law to the new evidence. There is no need to replicate or repeat what they have already submitted. Likewise, I am hopeful that the next hearing can be a relatively short one, as there will be no need to review that which I have already heard and read.

[14] It is difficult for me (or, for that matter, for counsel) to estimate the amount of time that will be needed at the next hearing, as we do not know how extensive the discovery evidence will be. However, the parties will not be re-inventing the wheel that they have already constructed over the past day and a half in front of me. The judge presiding at motion scheduling court can be advised that they only need enough time to make submissions on any new material and issues.

[15] The parties are to make best efforts to complete documentary and oral discovery by August 31, 2013. Counsel for the Defendants has assured me that they will produce Mr. Appel and a representative of the corporate Defendant for discovery; the parties can work out for themselves whether that will be in Texas, where I gather Mr. Appel lives, or in Ontario.

[16] I note that the Plaintiff has included a proposed discovery plan in his Responding Motion Record and, in addition, has set out at paragraph 43 of his affidavit a speculative list of documents that he thinks the Defendants may have in their possession. I am not ruling on the merits of the discovery plan and am not making any comment on the relevance or discoverability of any of the documents that the Plaintiff describes and hopes to find.

[17] Although I remain seized of the summary judgment motion, I am not case managing the discovery process. If any contentious issues arise about who is to be discovered, or where, when, and what the discoveries are to include, the parties must bring the matter to a Master in the ordinary course. My only point here is that the discovery process should be concluded by the end of August in order to allow for the summary judgment motion to be spoken to and re-scheduled in September. If there are still discovery issues to be resolved in September, the timing of those may be further addressed at motion scheduling court.

[18] Costs of this adjournment and the motion to date, including any costs thrown away, will be determined at the end of motion.

Morgan J.

Date: June 11, 2013