COURT FILE NO.: 04-CV-280219[^1]

DATE: January 22, 2013

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

THYSSENKRUPP ELEVATOR

(CANADA) LIMITED

J. Armel for plaintiff

Fax: 416-597-3370

Plaintiff

• and -

1147335 ONTARIO INC.

L. Bleta, for the defendant

Fax: 416-231-1280

Defendant

HEARD: October 11, 12, 16, 17, 18 and 19, 2012

Master C. Albert

PART I: INTRODUCTION

[1] 1147335 Ontario Inc., 1298781 Ontario Inc. and 1241676 Ontario Inc. are related companies that own five apartment buildings in Toronto. In these reasons I refer to these companies either as "Owner" or else by number of the company. Thyssenkrupp Elevator (Canada) Limited ("Thyss") supplied elevator maintenance and repair services to the fifteen elevators in the Owner’s five apartment buildings until December 2004.

[2] The ten lien claim actions tried together by reference under the Construction Lien Act, R.S.O. 1990, c.C.30 are collection claims for unpaid services and materials. Particulars of the ten lien claims are set out in Schedule "A" to these reasons. This decision and these reasons apply to all ten lien claim actions.

[3] The Owner’s defence is twofold: (i) Thyss failed to prove the amounts claimed and (ii) the Owner is entitled to set off $75,000.00 paid to Quality Allied Elevators Inc. (“Quality”) to upgrade the elevators after the contracts with Thyss ended.

[4] The issues are:

a) What amount, if any, does the Owner owe to Thyss for the supply of elevator maintenance and repair services? and

b) Is the Owner entitled to set off $75,000.00 (or some other amount) paid to Quality Allied Elevators to upgrade twelve of the fifteen elevators as part of the Owner’s 2005 elevator maintenance contract with Quality?

PART II: THE REFERENCE and BACKGROUND

[5] By orders dated October 23, 2006 Justice Matlow referred five of the ten Thyssenkrupp actions to the master[^2]. Pursuant to section 60 of the Construction Lien Act all liens against each property are heard together in the reference. Master Polika signed orders for trial on October 25, 2006. My order of November 17, 2006 reflects the consent of counsel to conduct a combined reference of all ten lien claim actions.

[6] The reference has had a long and complicated procedural history with multiple motions and appeals. The history and chronology of the reference are set out in Schedule "B".

[7] The result of the many motions and appeals is that the reference was narrowed to Thyss’ ten collection claims for unpaid accounts for the supply of elevator maintenance and repair services and the Owner’s $75,000.00 set-off claim for upgrades and repairs. The total amount claimed in all ten lien claim actions combined is $122,810.30. The Owner’s one million dollar counterclaim was struck, a decision upheld on appeal. Each individual lien claim is within or only slightly above the monetary jurisdiction of the Small Claims Court. However, lien remedies are not available in the Small Claims Court. The Act provides that lien remedies must be sought in the Superior Court of Justice.

[8] The Construction Lien Act and rule 55 require the references master to direct a procedure that is proportionate to the amount in issue:

Construction Lien Act, s.67:

Summary procedure

67. (1) The procedure in an action shall be as far as possible of a summary character, having regard to the amount and nature of the liens in question.

Interlocutory steps

(2) Interlocutory steps, other than those provided for in this Act, shall not be taken without the consent of the court obtained upon proof that the steps are necessary or would expedite the resolution of the issues in dispute.

Application of rules of court

(3) Except where inconsistent with this Act, and subject to subsection (2), the Courts of Justice Act and the rules of court apply to pleadings and proceedings under this Act.

Rule 55:

Simple Procedure to be Adopted

55.01 (1) A referee shall, subject to any directions contained in the order directing the reference, devise and adopt the simplest, least expensive and most expeditious manner of conducting the reference and may,

(a) give such directions as are necessary; and

(b) dispense with any procedure ordinarily taken that the referee considers to be unnecessary, or adopt a procedure different from that ordinarily taken.

[9] Once the reference trial date is fixed the practice in Toronto is for the parties to attend before the reference master, who gives pretrial directions necessary to prepare the reference for trial. Usually in a simple reference one or two pretrial hearings for directions are convened. In this case twelve such hearings were required. (See Schedule “B”).

[10] During the pretrial process counsel for Thyss advised the court that Thyss proposed to call three witnesses. Counsel for the Owner proposed to call one hundred and ten (110) witnesses, including numerous tenants, a politician and a tenant advocate who had appeared for the tenants at a tribunal hearing about rent. If all of the witnesses had been called the trial would have required 30 days or more for hearing. Invoking the reference powers of the court to imposed a process proportionate to the issues, I restricted the number of tenant witnesses that the Owner may call to nine[^3]. The Owner chose to call none. I also directed that the local municipal politician and the tenant advocate may not be called as witnesses. The reasons for disallowing these witnesses are set out in the procedural orders of October 17, 2011 and January 23 2012.

[11] In a further effort to reduce the length of trial, taking into account the quantum in issue and proportionality, I directed the parties to call evidence in chief by affidavit where witnesses were co-operative and I imposed time restrictions on viva voce evidence of all witnesses. I issued procedural orders that incorporated procedures similar to rule 76 summary trial procedures where appropriate.

[12] At the January 23, 2012 hearing for directions Owner’s counsel advised the court that the Owner proposed to summons several expert witnesses. My order of that date, more than eight months before the fixed trial date of October 11, 2012, provided as follows:

“Both counsel are reminded of the rules respecting evidence from experts. Any witness called as an expert must provide by the deadline ordered herein an expert report together with a curriculum vitae and statement of expert witness prescribed by the rules, failing which the witness may not testify as an expert.”

[13] Despite these clear directions Owner’s counsel failed to serve expert reports as required by my order and the rules. Instead, Owner’s counsel asked for leave at trial to permit two witnesses to testify as experts without having complied with rule 53 or the court’s orders. In Schedule “C” I set out rulings made throughout this trial on preliminary and procedural matters, including my ruling precluding the Owner from calling as a witness one of the two proposed experts.

[14] By the January 23, 2012 hearing for directions the Owner had reduced its list of witnesses from one hundred and ten (110) to ten (10). Three of the Owner’s witnesses testified in chief by affidavit, as directed. Thyss served notice of its intention to cross-examine all three witnesses. One of the three witnesses, Paula MacDougall, who is employed by the Owner as a property manager, failed to present herself to be cross-examined. Mr. Bleta advised the court that she had been present at the trial on the day that he had expected to call her but that she had not been reached. He did not arrange for her to return to be cross-examined on a subsequent date.

[15] There are two consequences of the Owner’s failure to produce Ms MacDougall for cross-examination. The first is that her affidavit evidence in chief is struck. Having been served with notice by Thyss of its intention to cross-examine, her evidence cannot be permitted to stand in the absence of cross-examination. The second consequence is that the court draws an adverse inference from her failure to appear to be cross-examined. The witness is in the Owner’s employ. Consequently it is within the Owner’s control to require the witness to attend at court during business hours. I draw the inference that the evidence that Ms MacDougall would have given had she been cross-examined would have been detrimental to the position taken by the Owner at trial and for that reason the Owner chose not to produce her for cross-examination.

[16] Four other witnesses listed on the Owner’s list of witnesses were not called by the Owner, notwithstanding that they had been summonsed by the Owner. The witnesses under summons who did not testify are:

a) David Sala, a City of Toronto building inspector;

b) Dave Balmer, of Quality Allied Elevator;

c) Mr. DeSouza, a Technical Standards & Safety Authority (TSSA) inspector[^4]; and

d) Joe Baranowsky, a TSSA inspector.

[17] These witnesses had been on the Owner’s witness list. It is unclear whether the Owner excused them or whether they simply failed to appear. The Owner did not ask for an adjournment or any other relief or sanction against witnesses who were summonsed and failed to appear. I draw the inference that the Owner chose not to call these witnesses.

PART III: THE TRIAL WITNESSES

[18] An important function of the trial judge is to assess credibility of the witnesses and make findings of fact based on their evidence, including their oral and written testimony and their documents.

[19] Mike Tate was called by Thyss as its first witness. He has been employed by Thyss as a credit manager since February 2005. He introduced and explained the account statements attached as exhibits to his affidavit evidence and also filed in another format as exhibit 7[^5]. Thyss relies on these account statements to show amounts charged, amounts paid and amounts unpaid by the Owner for each of the five buildings. Mr. Tate gave evidence in chief by affidavit and was cross-examined at trial. Although he was not employed by Thyss during the period reflected in the account statements, Mr. Tate explained the Thyss accounting and computer system and how Thyss generated account statements. His evidence was corroborated by the documents filed in evidence. I found Mr. Tate to be a credible witness, forthright in his testimony and unshaken in cross-examination.

[20] Fazil Shaw was formerly employed by Thyss as credit and legal manager from May 1989 to October 2004. His employ encompasses all but the last two months of the supply of services by Thyss to the Owner. He gave evidence in chief by affidavit and was cross-examined at trial. Thyss terminated his employment and he sued Thyss for wrongful termination, settling his claim shortly after it was issued. However, when cross-examined on that issue he was less than forthright, refusing to admit that he had sued Thyss for wrongful dismissal and instead characterizing his cessation of employment as a layoff. I attribute his evasive answers about his lawsuit against his former employer to his understanding that once he settled his claim against Thyss anything “wrongful” about his termination had been corrected.

[21] Mr. Shaw was the direct liaison from Thyss to the Owner regarding account issues. He instructed counsel to register the liens for unpaid accounts. In general I found that his evidence was helpful to the factual issues before the court. Apart from questions about his employment lawsuit against Thyss, his evidence was unshaken on cross-examination. He was a credible witness.

[22] The Owner called George Ronald Smith of Gemini Elevator as an expert witness. Mr Smith had inspected the elevators at the request of the Owner on two occasions. He had also prepared reports. Because the Owner had failed to serve Mr. Smith’s reports as required by rule 53 and the order for directions of January 23, 2012 fixing March 9, 2012 as the deadline for serving expert reports, the Owner required leave to introduce Mr. Smith’s reports, curriculum vitae and statement of acknowledgement of expert witness. I granted leave because the reports had been included in the Owner’s earlier productions and also because Thyss did not challenge Mr. Smith is an expert in elevator maintenance and repairs[^6].

[23] Mr. Smith testified in chief and was cross-examined at trial. He provided his opinion on the state of elevator maintenance on the dates of his inspections. He was a credible and knowledgeable witness.

[24] The Owner proposed to call Rick Sokoloff of Quality as an expert in elevator maintenance and repairs but had not served an expert report, curriculum vitae or statement of acknowledgement of expert witness as required by Rule 53.03 and the pretrial order of January 23, 2012. In contrast to Mr. Smith of Gemini, Mr. Sokoloff had not prepared a report setting out his opinions and nothing had been produced to Thyss prior to trial, as had been the case with Mr. Smith’s reports.

[25] After hearing submissions of counsel on whether to grant leave to permit Mr. Sokoloff to testify as an expert witness I delivered my ruling at trial disallowing the witness as an expert, but permitting him to testify as a fact witness. My reasons for refusing to grant leave are set out in Schedule “C”.

[26] Mr. Sokoloff was not an impartial witness. He is presently under contract with the Owner to provide elevator maintenance and repair services. As a condition of taking on the elevator maintenance contracts in 2005 he charged the Owner $5,000.00 per elevator for pre-maintenance upgrades to twelve of the fifteen elevators. It was in his interest to justify the charges and help the Owner recover these charges in the Owner’s set-off claim. I found his evidence coloured by his self-interest.

[27] Roslyn Brown, vice president of the Owner, manages the Ontario operations. She gave evidence in chief by affidavit and was cross-examined at trial. Her affidavit is fraught with hearsay and generalizations. Ms Brown’s credibility was undermined at trial by her evasive answers to simple questions.

[28] One example was her refusal to admit that the Owner had received four Schindler Elevator[^7] invoices dated January 2005. Ms Brown admitted that she was the only one who dealt with Schindler. She testified that she did not recall receiving the four Schindler invoices addressed to her attention, and she did not know whether the Owner had paid them.

[29] Ms Brown admitted that Schindler carried out work in January 2005 and invoiced for the work. Knowing in advance of trial that authenticity and admissibility of the Schindler invoices had been challenged by her counsel, she failed to inform herself and at trial admitting only that it was possible that the Owner paid them. When asked whether she disputed the authenticity of the four Schindler invoices she replied evasively:

“I cannot disagree or agree. It never crossed my mind that the documents would be fabricated”.

[30] Rather than testify that she had reviewed the Owner’s records and could not find any indication that the invoices had been received or paid, or admitting that the invoices had been received and paid, she evaded answering. A witness from Schindler was called and readily proved the invoices. Ms Brown’s refusal to admit the invoices undermined her credibility.

[31] I found some of Ms Brown’s evidence in chief vague. Examples include:

a) Paragraph 4: “I was troubled by the elevator problems…immediate concerns were those raised by municipal officials”. No examples or specifics were provided and the Owner called no municipal officials to testify at trial.

b) Paragraph 5: “I have also been privy to more of the ongoing saga of poorly run elevators than Mr. Barrasso”. She gave no specifics or examples.

c) Paragraphs 13, 22 and 23: Ms Brown referred to TSSA[^8] reports but did not attach any reports as exhibits. Nor were TSSA reports submitted through a TSSA inspector notwithstanding that the Owner had summonsed two TSSA inspectors but did not call either of them to testify at trial.

d) Paragraph 15: Ms Brown deposed in generalities but provided no examples or corroborating evidence. She generalized with statements such as “There are countless examples of situations where people can become frustrated when they are deprived of a properly functioning major amenity such as elevators”. She did not provide a single example.

e) Paragraph 21: Ms Brown referred to six elevators in two buildings with “constant and recurring problems” without identifying the buildings and without any corroborating evidence of service calls requested and failure by Thyss to respond. She deposed misleadingly incomplete facts such as: “up until the time that they (referring to Thyss) willfully and deceitfully abandoned us in December 2004”, without reciting the relevant fact that as of December 2004 the Owner owed Thyss over $122,000, a fact admitted by the Owner’s witness, Fatima Massri, at trial.

[32] Ms Brown’s answers on cross-examination were largely non-responsive and evasive. She testified that she had never seen the contracts between Thyss and the Owner yet she has been instructing counsel in these lien claim actions for over six years. The contracts were exchanged before trial in the document books and presumably produced early on when affidavits of documents were exchanged. Ms Brown’s testimony that she has never seen them is simply not credible.

[33] Ms Brown arrived in Ontario from Quebec in 2003. Her evidence at discovery in 2007 was different from her evidence five years later at trial. At discovery she testified that in 2004 she spent most of her time at the two Kipling buildings, but in paragraph 6 of her affidavit, sworn in 2012, she deposed “I visit and inspect each of the properties more than 7 times a week and usually spend between one and four hours at the three sites of the properties”. She provided no particulars or corroborating evidence of these visits, nor did she indicate when these seven visits a week started. The Owner’s relationship with Thyss ended in December 2004. Eight of the nine years that Ms Brown has worked in Ontario postdate the relationship with Thyss.

[34] At discovery in 2007 Ms Brown testified that the Owner had not received any complaints about the elevators in writing and that Thyss responded to service calls on a timely basis when called. She admitted that the Owner did not call any meetings with Thyss about service. She also admitted that the Owner was in arrears of payments owing to Thyss.

[35] Ms Brown’s evidence at trial provided no details of elevator problems, no examples of breakdowns, no evidence of failure by Thyss to attend for regular maintenance or failure to respond to service calls upon request. She provided no evidence to contradict the accounting relied on by Thyss to establish the amounts owing by the Owner to Thyss. She did not give any examples of any charge claimed by Thyss in these actions that was either improperly charged or paid and not credited.

[36] For all of these reasons I find that Ms Brown’s evidence lacks credibility. Where her uncorroborated evidence conflicts with that of another witness I generally prefer the evidence of the other witness.

[37] Enzo Barrasso, who resides in Quebec, is president of the Owner. He gave evidence in chief by affidavit and was cross-examined at trial. On several occasions he refused to answer questions asked, instead ranting about Thyss and Mr. Shaw being “crooks” (his word). He evaded questions put to him in cross-examination but when the same questions were asked of him in redirect examination by his own counsel he answered them. For example, when asked in cross-examination who looked after his operations in Toronto he did not give a direct answer. When asked the same question in redirect examination he replied that it was Ms Brown.

[38] Much of Mr. Barrasso’s affidavit evidence in chief is hearsay, with the source of information undisclosed. Ironically, he admitted in cross-examination that the source of much of his hearsay evidence was Mr. Shaw, who he repeatedly referred to as “a crook”.

[39] Examples of hearsay evidence in Mr. Barrasso’s affidavit in chief include:

a) Paragraph 6: he referred to information provided to him by Albert Audin, who was not called as a witness at trial. The hearsay evidence is inadmissible.

b) Paragraphs 7, 8, 11, 13, 14: Mr. Barrasso testified as to what Mr. Shaw knew but when Mr. Bleta cross-examined Mr. Shaw he did not put any of these facts to him. Pursuant to the rule in Brown v. Dunn the hearsay evidence has no weight. The reason for the rule is fairness.

c) Paragraph 10: This paragraph is fraught with generalities with no examples and no corroborating documents.

d) Paragraph 18: Mr. Barrasso’s evidence that Thyss did not perform the contracts in good faith is uncorroborated by any examples of failure on the part of Thyss to attend to carry out monthly maintenance or respond to service requests. The evidence is of no probative value.

e) Paragraph 21: Mr. Barrasso testified in chief about TSSA reports but did not attach any TSSA reports as exhibits to his affidavit nor did he introduce them through the TSSA inspector. I find it significant that the TSSA inspector, who was on the Owner’s witness list and who the Owner served with a summons to attend and given evidence at trial, was not called by the Owner as a witness at trial. Mr. Barrasso’s affidavit evidence about TSSA inspection reports is of no probative value. Further, I draw an adverse inference from the Owner’s failure to call a TSSA inspector as a witness.

[40] Mr. Barrasso’s evidence provides no particulars of elevator problems, no examples of breakdowns and no evidence of failure by Thyss to attend for regular maintenance or in response to service call requests for maintenance. His evidence does not contradict the account statements relied on by Thyss in these actions. He did not give a single example of a charge claimed by Thyss that was either improperly charged or that is claimed as owing when it has been paid.

[41] Mr. Barrasso’s affidavit evidence in chief is replete with generalities, innuendo and hearsay evidence without specifics or corroboration, undermining its probative value and Mr. Barrasso’s credibility as a witness. Where his uncorroborated evidence conflicts with that of another witness I prefer the evidence of the other witness.

[42] Fatima Massri, a former employee of Thyss, was summonsed as a witness by the Owner. She worked for Thyss for less than a year as credit manager, from September 2004 to early 2005 (January or February). She testified that she was brought into the company because she was bilingual (English and French) and Thyss wanted her to take responsibility for collections in Quebec as well as Ontario. She was offended that Thyss terminated her employment because she did not speak French fluently. Ms Massri sued Thyss after she was terminated. She settled her claim.

[43] As a witness under summons by the Owner her examination in chief was conducted orally at trial. Ms Massri contradicted herself in cross-examination. In chief she stated that Mr. Shaw left in September 2004, one week after she arrived,. In cross-examination she testified that Mr. Shaw may not have left until the end of October 2004 and that she may only have taken over dealing with the accounts of the Owner for the months of November and December 2004.

[44] She refused to admit instructing Thyss counsel, Mr. Armel, to garnish the bank accounts of the Owner to recover default judgments but acknowledged that default judgments were obtained. She testified that the Owner owed Thyss approximately $124,000.00 at the time.

[45] Ms Massri worked out of a central office. She complained that she found it challenging to reconcile the accounts on a building by building basis because in the case of two of the properties the accounting for two buildings was combined into a single statement.

[46] I find Ms Massri’s evidence less than credible. The account statements attached to Mr. Tate’s affidavit and those filed as exhibit 7 clearly identify the address of the building against which each debit and each credit is noted. Ms Massri’s assertion that she could not reconcile the accounts because two buildings were combined into one statement is simply not credible.

[47] Ms Massri confirmed that as of October 2004 the Owner’s accounts were approximately $65,000.00 overdue by 90 days or more and that by the end of her employment arrears were in the range of $124,000.00. She explained that unpaid accounts and requests for elevator maintenance service are not linked.

[48] Paula MacDougall is a property manager currently employed by the Owner. The Owner filed her affidavit evidence in chief but failed to have her attend to be cross-examined at trial, notwithstanding that Thyss had served notice of its intention to cross-examine. Her affidavit evidence in chief is struck.

PART IV: ACCOUNTING

[49] Thyss and the Owner entered into contracts to maintain fifteen elevators in five buildings. The contracts provided for periodic payments: monthly at first and then quarterly. Where repairs beyond regular maintenance were required the contract provided for Thyss to submit a quote for the work but the Owner was not required to hire Thyss to carry out such repairs.

[50] Thyss charged the Owner periodic payments for regular maintenance under the contracts and for repairs outside the scope of work covered by the contracts for which the Owner contracted with Thyss. The Owner submitted no evidence to challenge the accuracy of charges and payments reflected in Thyss’ account statements. There is no evidence that the Owner refutes any of the charges.

[51] Initially the contracts required payment monthly, in advance, on the first day of the month (paragraph 16 of each contract). Beginning April 1, 2003 the parties agreed to change the payment schedule to quarterly, with payment due on the first day of each quarter.

[52] At trial Thyss presented the accounting information by way of account statements attached as exhibits to the affidavit evidence in chief of Mike Tate[^9], who is employed by Thyss as a credit manager. Exhibit “A” is the account statement for 1011 Lansdowne Avenue. Exhibit “B” is the account statement for 1765 Weston Road and 1775 Weston Road, combined into one account statement. Exhibit “C” is the account statement for 2667 Kipling Avenue and 2677 Kipling Avenue, also combined into one account statement. This evidence was served before trial as required by the court’s procedural directions.

[53] The accounting is somewhat complex because of the Owner’s sporadic payment pattern. Payments were usually late and in amounts that did not match the amounts charged. Typically the arrears would accrue and the Owner would send a cheque to cover several months of arrears for multiple buildings. Mr. Tate testified that where the Owner’s cheques specified the invoice or invoices to which the payments were to be applied then Thyss applied the payments as directed. Where not specified Thyss applied the payments to the longest outstanding overdue charges, a practice that has been accepted by the Court of Appeal as appropriate (see: Colautti Construction Ltd. v Ashcroft Development Inc., 2011 ONCA 359 at paragraphs 55 and 56).

[54] Mr. Tate was cross-examined at trial and his evidence was unshaken. Mr. Shaw, employed by Thyss until October 2004, was also cross-examined about the accounting and his evidence was unshaken. Neither Ms Brown nor Mr. Barrasso identified any discrepancies in the account statements. Nor did they provide any evidence of any complaints made about the calculations and the accounting at or near the time that the charges were made. Ms Brown admitted that the Owner was usually in arrears and that payments were sent in lump sums from time to time. Neither Ms Brown nor Mr. Barrasso gave evidence of any disputed invoices or of any payments that were not credited. I find that the Owner did not dispute any of the charges either as improper or as duplication. Ms Massri, employed by Thyss in late 2004 and early 2005, and relied on by the Owner at trial, testified that when she left Thyss the Owner’s accounts were in arrears by approximately $124,000.00.

[55] Ten construction liens were registered on a building by building basis, five in 2003 and five in 2004. Even though in two cases two buildings are operated as a single residential complex, for construction lien purposes each building has a unique property identification (PIN) number and for construction lien purposes calculations must be made on a building by building basis, not a residential complex by residential complex basis.

[56] Because it is unwieldy to work with account statements that combine two buildings into one statement, even where the charges for each of the two buildings are clearly shown on the account statements, I directed Thyss to split the account statements by building so that I could perform the math more readily. In response Thyss produced exhibit 7, which is comprised of five account statements, one for each of the five buildings. The information of amounts charged and paid in the original exhibits to Mike Tate’s affidavit (exhibit 6) and in the account statements filed as exhibit 7 is the same. The only difference, other than the date of the statements, is that the information pertaining to two buildings in one residential complex has been split into two statements for the Weston Road buildings and two statements for the Kipling Avenue buildings.

[57] The account statements provide the following information:

a) invoice number: where the letter “M” appears in the invoice number the invoice is for maintenance; otherwise the invoice pertains to repairs;

b) invoice date;

c) amount charged;

d) building against which the charge is made;

e) amount credited where Thyss credits the Owner other than for payments received;

f) amounts paid;

g) the payment date of each payment;

h) the owner’s cheque number for each payment; and

i) the amount owing, on an invoice by invoice basis.

[58] Mr. Tate explained that the account statements are generated by the Thyss computer system, referred to as the Libra system, from source data input directly into the computer. The Libra system generates invoices in the same manner.

[59] The Owner did not lead any evidence to the contrary through Mr. Barrasso, Ms Brown or any other witness as to any of the charges or payments recorded in the account statements. Nor did the Owner challenge any of the charges and payments recorded in the account statements as incorrectly reflected in the statements.

[60] Ms Massri testified in chief that anyone could go into the accounting system and delete something at any time, but clarified under cross-examination that she was referring only to notes, not to account entries of billings and payments.

[61] The account statements are initially confusing because they do not provide a running balance. Rather, the reader must look to the far right hand column for each line to determine whether the charge recorded on that line has been paid or credit given. If the amount charged has been paid or credited fully then the “amount due” column reflects “0.00”. If the amount charged has not been paid or credited fully then the balance owing on the particular invoice recorded on that line will be shown as a positive number. For example, for 1011 Lansdowne Avenue invoice C110110815 issued February 22, 2002 for $6,860.84 was never paid in full. On December 17, 2004 the owner paid $5,000.00 by way of cheque #1201, leaving an unpaid balance for that charge of $1,860.84. To calculate the total amount that remains outstanding for a particular building one must tally the debits and credits in the far right column of each account statement in the column “Amount Due”.

[62] I conclude that the account statements for each building accurately reflect the charges made, the payments received and the credits applied as between Thyss and the Owner. I have reviewed the arithmetic in each of the account statements and am satisfied that each of the account statements is accurate.

[63] The account statements also provide the evidence required to calculate the amount owing as of the date that each of the ten construction liens was registered. The Owner asserts that the liens were improperly filed because the amounts claimed as owing were exaggerated or not owing at all. However, when the Owner’s counsel presented his calculations in argument at the end of trial he neglected to include on the debit side all of the unpaid charges for repairs, thus misrepresenting the true accounting as between the parties. He included in his calculation only invoices with the letter “M” in the invoice number, thereby ignoring all of the charges for repair services and materials supplied by Thyss in addition to monthly maintenance services that were not paid for by the Owner. The methodology underlying the Owner’s calculations is flawed and contrary to the evidence.

[64] To ascertain the accuracy of the amounts claimed as owing at the time the five construction liens were registered in 2003 I determined the charges made, payments received and credits applied for the period up until the day prior to the date the first liens for each PIN were registered. I am satisfied in each case that the amounts reflected in the construction lien claims registered in 2003 for each of the five buildings were accurate at the time the lien claims were registered. In calculating the amount owing for each of those lien claims at the time of trial I have taken into account payments made by the Owner after the first five liens were registered, as reflected in the account statements.

[65] Similarly I calculated the amounts owing as of the dates in 2004 that the second five lien claims were registered against each of the five buildings. Again, I am satisfied that the amounts claimed in the 2004 lien claims were accurate at the time the liens were registered, that they cover the period after the 2003 lien claims were registered, that they do not duplicate outstanding amounts claimed in the 2003 lien claims and that they reflect payments received between registration of the first five lien claims and registration of the second five lien claims.

[66] Where Thyss is exposed to criticism is in its failure (i) to release one of the 2003 lien claims which had been paid in full by the time this reference was underway, and (ii) to reduce the quantum of the 2003 lien claims and in some instances the 2004 lien claims, to reflect payments received after the 2004 lien claims were registered. However, considering the complex and lengthy path that these lien claims have taken and the manner in which the Owner has conducted the reference (see Schedule “B”), it was not unreasonable for Thyss to await the court’s adjudication before releasing or reducing any of the lien claims.

[67] During the course of the reference the Owner asked the court to schedule motions to release or reduce the quantum of the lien claims. I fixed a motion date to hear the Owner’s motions. However, the Owner failed to prepare its motion materials and did not proceed with its motions. (See Schedule “B”, particularly the entries for October 21, 2009, June 8, 2010 and September 21 - 22, 2010). Had the Owner proceeded with its proposed motions when scheduled the lien claims would have been reduced or discharged, as appropriate, after applying the applicable credits. Had the Owner pleaded section 35 of the Construction Lien Act (sanctions for registering an exaggerated lien claim) I would have found Thyss not liable under that section because at the time the liens were registered the amounts claimed were accurate. At trial Thyss only asks for the balance owing after crediting all payments.

Liens #1 and #2: 1011 Lansdowne Ave. (liens: $36,593.05 in 2003 and $32,345.04 in 2004)

[68] The account statement for 1011 Lansdowne includes a quarterly maintenance charge of $5,670.14 on January 1, 2005 that was reversed and credited in full. Based on the account statement for 1011 Lansdowne Avenue, including credits for payments made after the liens were registered, I find that:

a) the amount currently owing in respect of the lien claim registered on October 20, 2003 as instrument AT311421 is $2,982.10; and

b) the amount currently owing in respect of the lien claim registered on October 21, 2004 as instrument AT635037 is $32,345.04.

Liens #3 and #4: 1765 Weston Road (liens: $22,370.92 in 2003 and $30,334.16 in 2004)

[69] In the account statement for 1765 Weston Road the quantum of the maintenance charge on November 1, 2004 is for only two months ($4,046.65 for November and December 2004) rather than three. The account statement also includes a quarterly maintenance charge of $6,069.98 on February 1, 2005. That charge was reversed and credited in full. Based on the account statement for 1765 Weston Road, including credits for payments made after the liens were registered, I find that:

a) the amount currently owing in respect of the lien claim registered on October 20, 2003 as instrument AT311451 is $2,153.39; and

b) the amount currently owing in respect of the lien claim registered on October 21, 2004 as instrument AT635043 is $30,334.16.

Liens #5 and #6: 1775 Weston Ave. (liens: $16,690.11 in 2003 and $20,337.16 in 2004)

[70] In the account statement for 1775 Weston Road the quantum of the maintenance charge on November 1, 2004 is for only two months ($4,046.65 for November and December 2004) rather than three. The account statement also includes a quarterly maintenance charge of $6,069.98 on February 1, 2005. That charge was reversed and credited in full. Based on the account statement for 1775 Weston Road, including credits for payments made after the liens were registered, I find that:

a) the amount currently owing in respect of the lien claim registered on October 20, 2003 as instrument AT311445 is $2,689.69; and

b) the amount currently owing in respect of the lien claim registered on October 21, 2004 as instrument AT635001 is $20,337.16.

Liens #7 and #8: 2667 Kipling Ave. (liens: $9,802.51 in 2003 and $19,777.05 in 2004)

[71] In the account statement for 2667 Kipling Avenue the quantum of the maintenance charge on December 1, 2004 is for three months but then the account is credited back with $4,249.08 to reflect that Thyss only provided maintenance service for one of the three months covered by that charge. Based on the account statement for 2667 Kipling Avenue, including credits for payments made after the liens were registered, I find that:

a) the lien claim registered on October 8, 2003 as instrument AT302531 was paid in full by December 17, 20014; and

b) the amount currently owing in respect of the lien claim registered on October 21, 2004 as instrument AT635016 is $12,062.04.

Liens #9 and #10: 2677 Kipling Ave. (liens: $16,188.55 in 2003 and $18,959.37 in 2004)

[72] In the account statement for 2677 Kipling Avenue the quantum of the maintenance charge on December 1, 2004 is for three months but then the account is credited back with $4,247.30 to reflect that Thyss only provided maintenance service for one of the three months covered by that charge. Based on the account statement for 2677 Kipling Avenue, including credits for payments made after the liens were registered, I find that:

a) the amount currently owing in respect of the lien claim registered on October 8, 2003 as instrument AT302525 is $947.35; and

b) the amount currently owing in respect of the lien claim registered on October 21, 2004 as instrument AT635028 is $18,959.37.

[73] In argument the Owner asserted that Thyss ignored payments adding up to $50,000.00 that the Owner made in November and December 2004. The Owner filed no proof that payments made in November and December 2004 add up to $50,000.00. A review of the account statements filed as exhibits to Mike Tate’s affidavit (exhibit 6) and also as exhibit 7 disclose that Thyss credited the Owner with payments of $48,630.36 received in November and December 2004, after the second series of liens had been preserved, calculated as follows:

a) 1011 Lansdowne: on December 17, 2004 $5,000.00 was credited against the February 22, 2002 charge of $6,860.84 and on November 10, 2004 $537.25 was credited against the March 1, 2003 charge of $1,845.75 and $4,462.75 is credited against the April 1, 2003 charge of $5,537.25;

b) 1765 Weston Road: on November 9, 2004 $5,803.04 was credited against the February 1, 2004 charge of $5,803.04;

c) 1775 Weston Road: on November 9, 2004 $119.85 was credited against the November 1, 2003 charge of $5,803.04 and $4,077.11 was credited against the February 1, 2004 charge of $5,803.04; on December 17, 2004 $10,000.00 was credited against the July 30, 2002 charge of $12,840.00;

d) 2667 Kipling Avenue: on November 9, 2004 $3,559.50 was credited against the December 1, 2003 charge of $6,081.58 and $6,081.58 was credited against the March 1, 2004 charge of $6,081.58; on December 17, 2004 $1,000.00 was credited against the balance unpaid for the January 30, 2002 charge of $24,988.78 and $2,653.60 was credited against the August 29, 2002 charge of $1,369.60;

e) 2677 Kipling Avenue: on November 9, 2004 $358.92 was credited against the March 1, 2004 charge of $6,079.15; on December 17, 2004 $520.56 was credited against the February 13, 2004 charge of $520.56, $2,653.60 was credited against the June 26, 2002 charge of $2,653.60 and $1,802.64 was credited against the March 1, 2004 charge of $6,0791.15.

[74] The Owner’s argument that the $50,000.00 paid in December 2004 was not credited fails because it is contrary to the evidence which shows that payments received after the liens were registered have been credited to the Owner and are not claimed by Thyss at trial.

PART V: IS THE OWNER ENTITLED TO SET OFF $75,000?

[75] The Owner claims that it is entitled to set off $75,000.00 because Thyss failed to properly perform the maintenance contracts. The Owner quantifies the set-off as the amount it paid to Quality Elevators to upgrade to twelve of the fifteen elevators. The Owner claims that $75,000.00 was a “negotiated package price” based on $5,000.00 per elevator even though Quality did not upgrade three of the elevators.

[76] The basis of the Owner’s claim is that Quality would only take on maintenance of the elevators if the Owner agreed to upgrade them, thereby reducing the amount of maintenance required on a monthly basis. The Owner’s theory is that Thyss failed to perform the monthly maintenance duties required by its contracts with Thyss. The evidence does not support that theory.

[77] During examination for discovery Ms Brown admitted that Thyss responded to service calls when requested and that Thyss responded on a timely basis when elevators broke down. The Owner led no evidence to the contrary at trial. Nor did the Owner lead evidence of complaints made by the Owner (either by Mr. Barrasso, Ms Brown or any of their staff members) about the service provided by Thyss under the contracts. On discovery Ms Brown testified at question 152 that she was unaware of any complaints made in writing to Thyss about the service Thyss provided.

[78] Counsel for the Owner alluded to TSSA (Technical Standards & Safety Authority) inspection reports and deficiencies in his final argument but no such reports were properly tendered in evidence at trial.

[79] The Owner did not call the TSSA inspector as a witness despite having listed the inspector as a proposed trial witness and despite having served a summons on the TSSA inspector. The inference I draw is that the evidence of the TSSA inspector, had he been called, would not have advanced the Owner’s claim for set-off.

[80] The Owner relies on the evidence of Ronald Smith of Gemini Elevators. Mr. Smith is knowledgeable and an expert in his field. Thyss did not challenge his credentials.

[81] At the request of the Owner Mr. Smith inspected the elevators on two occasions: once in 2004 when Thyss was the elevator maintenance service provider and then again in February 2005, a little over a month after Thyss stopped servicing the elevators.

[82] The Owner submitted nine separate reports prepared by Mr. Smith. The following chart summarizes Mr. Smith’s conclusions (underlining added):

Building Address

1st report

2nd report

1011 Lansdowne

April 7, 2004: “In general the elevator installation and the level of maintenance being provided is marginally acceptable but has substantial room for improvement.”

February 22, 2005: “In general the elevator installation and the level of maintenance being provided is marginally acceptable but has substantial room for improvement.”

1765 Weston Road

February 17, 2004: “In general the elevator installation and the level of maintenance being provided is acceptable but has substantial room for improvement.”

December 7, 2005: “In general the elevator installation and the level of maintenance being provided is reasonably acceptable but has room for improvement.”

1775 Weston Road

February 17, 2004: “In general the elevator installation and the level of maintenance being provided is marginally acceptable but has substantial room for improvement.”

February 9, 2005: “In general the elevator installation and the level of maintenance being provided is reasonably acceptable but has substantial room for improvement.”

2667 Kipling Avenue

No report submitted

February 8, 2005: “In general the elevator installation and the level of maintenance being provided is marginally acceptable but has substantial room for improvement.”

2677 Kipling Avenue (incorrectly identified as 2667 Kipling on the cover page and in the report)

February 9, 2004: “In general the elevator installation and the level of maintenance being provided is acceptable but has substantial room for improvement.”

No report submitted

[83] In each case Mr. Smith’s conclusion in 2004 about the level of elevator maintenance is that it was acceptable. It was either marginally acceptable or acceptable. But for each property the Owner’s expert evidence is that the level of elevator maintenance supplied was acceptable. The Owner submitted no evidence to support a finding that in 2004 the level of elevator maintenance provided by Thyss was unacceptable.

[84] Based on the evidence of the Owner’s expert I find that the Owner has not proven that upgrades of $5,000.00 per elevator were needed because Thyss failed to properly perform maintenance services required by the elevator maintenance contracts.

[85] Nor do Mr. Smith’s reports attach a value to any upgrades and repairs recommended by him. He provided no opinion as to the whether the $5,000.00 per elevator pre-maintenance charge by Quality was a result of the manner in which Thyss carried out its duties under the contracts, whether it was a result of the age and design of the elevators, or whether it was required because of the manner in which the residents of the apartment buildings used or abused the elevators.

[86] Mr. Smith did not know what steps were taken to address the concerns outlined in his 2004 reports. The Owner did not terminate the Thyss elevator contracts after receiving Mr. Smith’s reports in February and April 2004.

[87] One indicia that elevators are not properly maintained would be penalties issued by TSSA, the elevator regulating authority. Mr. Sokoloff of Quality testified that TSSA can impose fines against a building owner of up to $500,00.00 for failure to comply with TSSA requirements. There is no evidence that TSSA imposed fines on the Owner for failure to comply with TSSA requirements during the period of the Thyss contracts or at all.

[88] Nor were any TSSA reports of deficiencies tendered in evidence. As already noted, the TSSA inspector, summonsed as a witness by the Owner, was not called upon to testify. The inference I draw is that Thyss addressed the concerns expressed by Mr. Smith in his report in a manner that was satisfactory to the Owner and to the TSSA inspector.

[89] The Owner did not retain Mr. Smith to re-inspect the elevators until February 2005, which coincides with when the Owner retained Quality to upgrade the elevators and take on the maintenance contracts.

[90] The Owner summonsed and tendered Mr. Sokoloff, principal of Quality, as an expert. Thyss objected on the basis that no expert report, curriculum vitae or statement acknowledging an expert’s duty of impartiality, had been served as required by rule 53 and by orders for directions made in this reference. I did not accept Mr. Sokoloff as an expert for reasons are set out in Schedule “C”. He testified as a fact witness.

[91] Mr. Sokoloff has visited each of the buildings. He described them as poorly maintained. In his words they “are not the nicest buildings in Toronto”.

[92] The summons served on Mr. Sokoloff required him to bring to court “all opinion letters, information and records, documents, reports and memoranda in your files and/ or any other information which you may possess in connection with this matter”. He failed to bring these documents to court. He is currently under contract with the Owner and provides ongoing elevator maintenance services. I draw the inference that any documents that he had in his possession about the matters in issue in this trial and which he failed to bring to court would not have advanced the Owner’s position.

[93] Quality had a prior relationship with the Owner, having provided repair services to the Owner prior to 2005 while Thyss was under contract for maintenance of the elevators (the Thyss contracts did not require the Owner to hire Thyss to carry out repairs beyond monthly maintenance services). Quality had also provided a repair quote after the December 2004 flood incapacitated three elevators.

[94] In late December 2004 or early 2005 Quality provided a quote for monthly maintenance services for all five buildings. As a precondition to taking on the monthly maintenance contract Quality required the Owner to authorize upgrades and repairs of $5,000.00 per elevator. Mr. Sokoloff testified that Quality could either “charge a lot up front” or else charge a larger monthly amount. He wanted the upgrades done because otherwise the monthly maintenance requirements would have been too high. Mr. Sokoloff explained that he did not keep records of the materials and services supplied by Quality for the $5,000.00 per elevator charge. He intermixed the work performed as upgrades with the monthly elevator maintenance services. I conclude from his evidence that Mr. Sokoloff merely required an up front lump sum payment to reduce monthly maintenance charges, much like a larger down payment on a car lease reduces monthly lease payments.

[95] He admitted in cross-examination that he only carried out the upgrades to 12 of the 15 elevators, excluding the 1765 Weston Road elevators that had been repaired by Schindler after the flood. The total value of the pre-maintenance repairs supplied by quality was $60,000.00[^10] but the Owner claims $75,000 as set-off based on a calculation of $5,000.00 per elevator for 15 elevators.

[96] Mr. Sokoloff confirmed under cross-examination that if the Owner had not upgraded the elevators then ongoing maintenance would have been more extensive and the monthly maintenance fee would have been higher. By upgrading the elevators the monthly maintenance required is less and monthly costs are lower. He would not have taken on the elevator maintenance contracts without the upgrades. He did not keep records of upgrades Quality performed in addition to monthly maintenance, testifying that he carried out upgrades and maintenance all at once. In other words, he required an upfront payment to defray the cost of maintenance. Ms Brown produced no records of any upgrades performed for the charge of $5,000.00 per elevator.

[97] Quality took over the monthly maintenance of the five buildings in February 2005, except for 1765 Weston Road, where Schindler Elevator continued to carry out repairs after the December 2004 flood damage. Mr. Sokoloff testified that Schindler had been providing repairs as required in all of the buildings and that Quality took over maintenance of the elevators from Schindler, not from Thyss.

[98] I find it notable that both Mr. Smith of Gemini and Mr. Sokoloff of Quality testified that an elevator maintenance contractor is required to keep a log book on site to record periodic maintenance service, but the Owner failed to produce any of the log books for the timeframe in issue at trial. I draw the inference that the evidence in the log books would have corroborated Thyss’ position that it carried out monthly maintenance and would not have advanced the Owner’s position. I draw the inference that for this reason the Owner, who has control over the log books, failed to produce them.

[99] Mr. Sokoloff testified that Quality carried out the elevator maintenance from 2005 through 2007 and then discontinued because the cost to Quality to maintain the elevators was too high. To continue maintaining the elevators Quality required the Owner to modernize them. The Owner subsequently modernized the elevators and Quality recently resumed the elevator maintenance contracts.

[100] The Owner’s position is that it is entitled to set-off the $75,000.00 it paid to Quality to upgrade the elevators because it could not find another elevator service provider, referring in particular to Schindler, to take on maintenance contracts after Thyss terminated service in December 2004. The Owner lead no evidence from Schindler or any other maintenance service provider, other than Quality, to corroborate that no other service provider had ben prepared to take over the maintenance contracts without capital upgrades. The evidence of Mr. Sokoloff is not sufficient to support the Owner’s theory.

[101] Mr. Smith’s reports raised the age of the elevators as an issue. I find that the elevators in the Owner’s buildings required an infusion of capital or modernization due to age and wear and tear. The onus of proof rests with the Owner to prove its set-off claim. The Owner has not proven that the manner in which Thyss maintained the elevators under the contracts caused the Owner to spend $5,000.00 per elevator for upgrades.

[102] I find that the Owner has not proven its claim for set-off of $75,000.00.

PART VI: DID THYSS BREACH THE CONTRACTS?

[103] The Owner argues that because Thyss breached the contracts the doctrine of equitable set-off precludes Thyss from recovering its unpaid accounts. The Owner relies on the decision of the Ontario Court of Appeal in Pierce v Canada Trustco Mortgage Co., 2005 CarswellOnt 1876, 5 B.L.R. (4th) 178, 254 D.L.R. (4th) 79, 197 O.A.C. 369 where Justice MacPherson, for the court, explains at paragraph 38 two categories of set-off: legal and equitable. The Owner relies on equitable set-off asserting that Thyss breached the contracts by (1) failing to provide maintenance services as required and (2) terminating service in December 2004.

[104] As to the first alleged breach, for reasons already stated, I find that the Owner has not proven that Thyss failed to provide the maintenance services required under the contracts. To the contrary, the evidence proves that the elevators were maintained in 2004 at an acceptable level.

[105] As to the second alleged breach, the issue is whether Thyss suspended or terminated the contracts and if so whether Thyss complied with the terms of the contracts in doing so. If not, the issue is whether Thyss is precluded from recovering its unpaid accounts for services and materials supplied prior to the breach.

[106] Thyss’ position is that it invoked paragraph 17 of the contracts when the Owner breached the contracts by failing to pay the arrears. The contracts provide:

“17. It is expressly agreed that payment of all sums due hereunder is a condition precedent to the rendering of services by THYSSEN and THYSSEN reserves the right at its option to suspend service until all payments due are made. Notice of suspension in writing will be forwarded to you by mail following suspension.”

[107] The contracts permit Thyss to suspend service for non-payment with written notice of suspension provided subsequent to the suspension. The issue is whether Thyss suspended service for non-payment and delivered notice in writing.

[108] On discovery Ms Brown was asked whether the contracts were “terminated” around December 21 (2004). She replied at question 1049:

“ The service stopped before that, but the letter explaining that came I think on the 21st of December from Fatima (Massri). Prior to that, the service had stopped.”

[109] Ms Brown admits in paragraph 31 of her affidavit that she had been informed by Ms Massri, Thyss’ collections clerk, that Thyss would discontinue service for non-payment. The contracts also provide for termination by Thyss at paragraph 17 which reads:

“THYSSEN may terminate this agreement upon written notice, effective immediately, without prejudice to any other rights or remedies which it may have at law or in equity, if the OWNER fails to remit payment due within 30 days of service or suspension notice.”

[110] The termination clause permits Thyss to terminate the contracts in writing without any advance notice (“effective immediately”) where payment is in arrears by more than 30 days. By December 21, 2004 the contracts were in arrears by more than 30 days.

[111] On discovery Ms Brown admitted receiving written notice from Thyss on December 21, 2004. Neither party produced the letter. Ms Brown’s evidence is an admission against interest and carries significant weight. The account statements show arrears of more than 30 days as of December 21, 2004 as follows:

a) 1011 Lansdowne Avenue: the July 1, 2003 charge of $5,537.25 was unpaid; the January 1, 2004 charge of $5,537.25 was unpaid by $2,768.75; the April 1, 2004, July 1, 2004 and October 1, 2004 charges of $5,537.25 on each of those dates was unpaid. Total arrears: $24,917.75

b) 1765 Weston Road: the July 30, 2002 charge of $3,909.78 was unpaid; the August 14, 2003 charge of $2,685.70 was unpaid; the August 14, 2003 charge of $9,972.40 was unpaid; the May 1, 2004 charge of $5,803.04 was unpaid; the August 1, 2004 charge of $6,069.98 was unpaid; the November 1, 2004 charge of $4,046.65 was unpaid. Total arrears $32,487.55

c) 1775 Weston Road: the May 1, 2004 charge of $5,803.04 was unpaid; the May 13, 2004 charge of $2,541.25 was unpaid; the August 1, 2004 charge of $6,069.98 was unpaid; the November 1, 2004 charge of $4,046.65 was unpaid. Total arrears: $18,460.92

d) 2667 Kipling Avenue: the June 1, 2004 and September 1, 2004 charges of $6,081.58 on each of those dates was unpaid; the December 1, 2004 charge of $6,373.50 was unpaid but not by more than 30 days and a credit of $4,249.08 was applied by Thyss to reflect that services ended after the first of the three months of the quarterly payment; (arrears of $12,163,16 more than 30 days. Total arrears $14,287.58.

e) 2677 Kipling Avenue: the June 1, 2004 and September 1, 2004 charges of $6,079.15 on each of those dates was unpaid; the December 1, 2004 charge of $6,370.95 was unpaid but not by more than 30 days and a credit of $4,247.30 was applied by Thyss to reflect that services ended after the first of the three months of the quarterly payment. (arrears of $12,158.30 more than 30 days. Total arrears: $14,281.95

[112] The question is whether the Thyss letter of December 21, 2004 gave notice of suspension of service or notice of termination of the contracts. If it was notice of suspension the Owner had 30 days to pay up the arrears. However, the Owner treated the letter as a termination of the contracts by Thyss and accepted the termination. Alternatively the Owner terminated the contracts. In her responding letter of December 23, 2004 Ms Brown wrote to Thyss to the attention of Ms Massri:

“We will now find a replacement maintenance contractor and hereby ask Thyssenkrupp to return any parts or elevator component they have taken from our properties”.

The letter of December 23, 2004 is clear: the Owner treated the contracts as at an end.

[113] At the time the letter was sent Thyss’ accounts for each of the contracts was in arrears by more than 30 days and total arrears were over $120,000.00. The Owner made arrangements for Schindler on an emergency basis and then Quality on a regular basis to service the elevators.

[114] I find that Thyss suspended the contracts for non-payment in accordance with the terms of the contract and gave written notice subsequent to the suspension. Had the Owner paid the arrears Thyss would have been required to resume its role as elevator maintenance contractor. However, instead of paying up the arrears the Owner terminated the contract with its letter of December 23, 2004. The Owner did not pay the arrears and the contracts were never reinstated.

[115] The contracts also permit Thyss to terminate them if the Owner is in arrears by more than 30 days. When Thyss gave written notice the Owner’s account was in arrears by more than 30 days. Notwithstanding that the text of the notice was not submitted in evidence, based on the surrounding circumstances I find that the notice was effective December 21, 2004, and that the termination was effected pursuant to the provisions of the contracts. The Owner accepted the termination by letter of December 23, 2004.

[116] In conclusion I find that the Owner breached the contracts by failing to pay for materials and services supplied by Thyss to repair and maintain fifteen elevators in five buildings.

[117] The Owner argues that Thyss breached the contracts by wrongfully terminating them. Having found that Thyss served notice effective December 21, 2004 as required under the contracts, the contracts were not wrongfully terminated and the Owner fails on this point.

[118] Had I found that Thyss had wrongfully terminated the contracts the onus rests with the Owner to prove damages flowing from wrongful termination. The Owner has not proven any damages.

[119] Had TSSA shut down the elevators or imposed fines on the building Owner then there would have been some evidence of damage. However Mr. Barrasso confirmed under cross-examination that TSSA never shut down the elevators and never imposed any fines against the Owner. As to the claim for $75,000.00 paid to Quality to upgrade the elevators, for reasons already given, the Owner has not proven that Thyss is liable for this capital infusion of elevator upgrades. Therefore, even if Thyss breached the contracts by terminating them improperly, which I have found it did not, there would be no damages for which Thyss is liable.

PART VII: LIENS VACATED

[120] By orders dated May 30, 2011 I vacated six of the 10 lien claims, the other four liens having been vacated earlier. With the consent of Thyss (provided by counsel, Mr. Drake), funds held in Mr. Bleta’s trust account[^11] were applied as security to vacate the six liens that were the subject of the motions before me on May 30, 2011.

PART VIII: ARE ADVANCE PAYMENTS LIENABLE?

[121] Maintenance charges were payable monthly in advance up until March or April 2003, then quarterly in advance. The Owner argues that advance payments cannot be included in the quantum of the lien claims because the fees are payable before services are supplied and liens may only be registered in respect of services and materials supplied, rendering advance payments ineligible.

[122] The Court of Appeal for Ontario disagrees. In Landmark II Inc. v 1535709 Ontario Ltd. 201 CarswellOnt 8789, 2011 ONCA 567, 5 C.L.R. (4th) 1, 283 O.AS.C. 239 Justice Laskin, speaking for the court, wrote at paragraph 24:

“Registering a lien for the entire amount of the contract before construction is completed is not necessarily improper. The claimant will be secured only for the actual value of the work done, which is typically determined at trial….a claimant can register a lien for the unpaid balance if it stays on the job and intends to finish the contract. It cannot do so when it has left the job and does not intend to finish it.”

[123] The Thyss liens registered in 2003 include payments due in advance. Thyss continued to supply the services and materials for which payments were claimed for:

a) October, November and December 2003, in the case of 1011 Lansdowne;

b) October 2003 in the case of 1765 Weston Road;

c) October 2003 in the case of 1775 Weston Road;

d) October and November 2003 in the case of 2667 Kipling Avenue; and

e) October and November 2003 in the case of 2677 Kipling Avenue.

[124] I find that in the case of the liens preserved in October 2003 Thyss registered lien claims that included the unpaid balance of materials and services to be performed and which it stayed on the job and performed.

[125] The liens registered in October 2004 included payments due in advance. Thyss supplied the services and materials for which payment were claimed for:

a) October, November and December 2004, in the case of 1011 Lansdowne;

b) October 2004 in the case of 1765 Weston Road;

c) October 2004 in the case of 1775 Weston Road;

d) October and November 2004 in the case of 2667 Kipling Avenue; and

e) October and November 2004 in the case of 2677 Kipling Avenue.

[126] I find that in the case of the liens preserved in October 2004 Thyss registered lien claims that included the unpaid balance of materials and services to be performed and which it stayed on the job and performed.

[127] Applying Landmark II Inc., supra, the Owner’s argument that advance payments cannot be liened fails.

CONCLUSION

[128] For the reasons given I find that 1298781 Ontario Inc. shall pay to Thyssenkrupp Elevator (Canada) Limited:

a) $2,982.10 in respect of the lien claim registered on October 20, 2003 as instrument AT311421 and

b) $32,345.04 in respect of the lien claim registered on October 21, 2004 as instrument AT635037.

[129] For the reasons given I find that 1147355 Ontario Inc. shall pay to Thyssenkrupp Elevator (Canada) Limited:

a) $2,153.39 in respect of the lien claim registered on October 20, 2003 against 1765 Weston Road as instrument AT311451 is;

b) $30,334.16 in respect of the lien claim registered on October 21, 2004 against 1765 Weston Road as instrument AT635043;

c) $2,689.69 in respect of the lien claim registered on October 20, 2003 against 1775 Weston Road as instrument AT311445; and

d) $20,337.16 in respect of the lien claim registered on October 21, 2004 against 1775 Weston Road as instrument AT635001.

[130] For the reasons given I find that 1241676 Ontario Inc. shall pay to Thyssenkrupp Elevator (Canada) Limited:

a) $12,062.04 in respect of the lien claim registered on October 21, 2004 against 2667 Kipling Avenue as instrument AT635016;

b) $947.35 in respect of the lien claim registered on October 8, 2003 against 2677 Kipling Avenue as instrument AT302525; and

c) $18,959.37 in respect of the lien claim registered on October 21, 2004 against 2677 Kipling Avenue as instrument AT635028.

[131] For the reasons given I further find that the lien claim registered by Thyssenkrupp Elevator (Canada) Limited on October 8, 2003 against 2667 Kipling Avenue as instrument AT302531 has been paid in full and shall be discharged.

[132] I further find that the Owner is not entitled to set off any amount against the amounts found owing.

[133] I further find that Thyssenkrupp Elevator (Canada) Limited is entitled to prejudgment interest up to the date the reference report is signed and post-judgment interest at the Courts of Justice rate thereafter.

[134] Generally costs follow the event. If the parties are unable to agree on costs counsel may file written submissions on costs. Submissions may not exceed four pages (typed, 8 ½” x 11” pages, double space, minimum font size 12), plus a Bill of Costs, copies of any relevant offers to settle, if any, and case law.

a) Thyss’ submissions must be filed[^12] by February 4, 2013.

b) The Owner’s submissions must be filed[^13] by February 18, 2013.

c) Thyss’ reply submissions must be filed by February 25, 2013.

[135] If the parties are unable to agree on the form of the final report an attendance may be required to settle the report.

Master C. Albert .

Released: January 22, 2013

Schedule “A”

Actions included in the reference

Court file no.

Title

Building Address

Quantum of lien claim

Lien particulars Date/Registration

03-CV-259248

Thyssenkrupp v 1298781 Ontario Inc.

1011 Lansdowne Ave.

$36,593.05

October 20, 2003

AT311421

04-CV-280276

Thyssenkrupp v 1298781 Ontario Inc.

1011 Lansdowne Ave.

$32,345.04

October 21, 2004

AT635037

03-CV-259251 .

Thyssenkrupp v 1147335 Ontario Inc.

1765 Weston Road

$22,370.92

October 20, 2003

AT311451

04-CV-280310

Thyssenkrupp v 1147335 Ontario Inc.

1765 Weston Road

$30,334.16

October 21, 2004

AT635043

03-CV-259249

Thyssenkrupp v 1241676 Ontario Inc. .

2667 Kipling Ave

$ 9,802.51

October 8, 2003

AT302531

04-CV-280284

Thyssenkrupp v 1241676 Ontario Inc.

2667 Kipling Ave.

$19,777.05

October 21, 2004

AT635016

03-CV-259250

Thyssenkrupp v 1147335 Ontario Inc.

1775 Weston Ave.

$16,690.11

October 20, 2003

AT311445

04-CV-280219

Thyssenkrupp v1147335 Ontario Inc.

1775 Weston Ave.

$20,337.16

October 21, 2004

AT635001

03-CV-259252

Thyssenkrupp v 1241676 Ontario Inc.

2677 Kipling Ave.

$16,188.55

October 8, 2003

AT302525

04-CV-280220

Thyssenkrupp v 1241676 Ontario Inc.

2677 Kipling Ave

$18,959.37

October 21, 2004

AT635028

Schedule “B”

Date

Event

Thyssenkrupp Disposition

Nov. 17 2006

Pretrial #1

order

All Thyss lien claims ordered tried together or consecutively.

Thyss and Schindler lien references to be managed together.

Thyss’s affidavits of documents due by Dec. 8, 2006.

Owner to provide particulars including particulars of its million dollar counterclaim for damages and punitive damages by Dec. 31, 2006.

Owner’s affidavits of documents due by Jan. 31, 2007.

All discoveries by March 31, 2007.

April 12, 2007

Pretrial #2

Order

Finding: “the (Owner’s) counterclaim is pleaded in a bare bones manner and is inadequate such that it is unreasonable to expect (Thyss) to know the case to meet”.

Finding: “Last chance” order for Owner to provide adequate particulars failing which sanctions may include striking pleadings.

Owner to provide position on quantum of each lien claim by June 1, 2007.

Undertakings deadline of June 1, 2007.

Owner required to provide particulars of allegations in January 11, 2007 letter by June 1, 2007.

Owner to (i) produce documents by June 1, 2007 (types of documents to be produced specified in the order); (ii) provide preliminary Scott Schedule by June 1, 2007 listing and quantifying each deficiency and failure alleged, (iii) produce revised Scott Schedule by September 30, 2007 after discoveries. Thyss’ responding Scott Schedule due by October 31, 2007.

June 6, 2007

Pretrial #3

order

Owner breached April 12, 2007 order. Owner’s request to extend time granted on a “last and final chance” basis to June 15, 2007 and to June 30, 2007 for Thyss to produce responding particulars and documents. Discovery deadline July 31, 2007. Owner’s Scott Schedule deadline extended sine die.

Findings: “The time has come and gone for the owner to take this litigation seriously and clearly state its position, the facts it relies on and intends to prove at trial and the allegations that the plaintiffs (defendants by counterclaim) must answer at trial. Notwithstanding that I stated in the last order that the owner would be allowed one final chance (which chance it now seeks to extend) to state its case through proper particulars, production of documents, and discovery, the order made today is truly the last chance for the defendant (plaintiff by counterclaim) to comply. The dates and deadlines are peremptory to the defendant (plaintiff by counterclaim) in each case. Cost sanctions are imposed for the breach of the April 12, 2007 order.”

Oct. 3, 2007

Related action

NOTE: Motion to strike Owner’s pleading brought only in the related Schindler reference. The Thyss reference could not proceed until the motion and Owner’s appeal were decided because cases proceeding together.

Nov 23, 2007

Pretrial #4

Order

Owner’s answers to undertakings inadequate. Owner’s 4th counsel asks for another extension of time to produce documents.

Order: “last extension of time” to December 31, 2008 for Owner to provide particulars and productions and to January 31, 2008 for Owner to answer undertakings and produce supplementary affidavit of documents.

Discovery deadlines: examine Owner on June 9-13, 2008 and Thyss by June 20, 2008.

June 23, 2008

Pretrial #5

Order

Undertakings deadline August 1, 2008. Additional discovery ordered completed by September 15, 2008. Deadline for discovery motions: November 28, 2008.Witness lists to be filed by December 8, 2008.

Owner to provide damages brief quantifying counterclaim in detail by category: July 11, 2008. Case conference fixed for August 12, 2008 to review damages brief, unless issues pertaining to damages brief resolved by counsel before then.

August 12, 2008

Pretrial #5A

order

Attendance to review damages brief. Owner’s counsel provided different versions of the damages brief to the court and to Thyss. Owner had not complied with directions, requiring additional extension of time to comply.

Directions issued: “in future in this and any other case before the courts, counsel providing a document brief to the court must provide a copy of the exact same document to all counsel involved in the proceeding.”

Deadline extended with detailed directions to permit Owner a final opportunity to provide a properly prepared damages brief by August 29, 2008. Discoveries ordered to continue on September 8-12 and 15, 2008.

Dec. 15, 2008

Pretrial #6

Order

Upon request of both parties a settlement conference[^14] was scheduled for February 2009.

Feb. 3, 2009

Settlement conference

Settlement conference with construction lien Master Polika. Not settled.

July 13, 2009

Pretrial #7

Order

Owner’s counsel announced intention to amend Owner’s pleading but did not produce a proposed pleading, causing delay by failing to bring the motion contemporaneously with a similar motion in the related Schindler action.

Timetable ordered scheduling Owner’s motion to amend pleading for October 5, 2009, requiring Thyss to provide an accounting by August 31, 2009, requiring discoveries by October 31, 2009 and undertakings by December 11, 2009.

Oct. 5, 2009

Pleadings motion

Unopposed, Owner’s pleading amended.

Oct. 21, 2009

Pretrial #7A

order

Case conference convened at the request of both counsel to discuss damages brief and conduct of examinations for discovery. Directions ordered regarding conduct of discoveries.

Thyss requested a date for a motion to strike the counterclaim

Owner requested a date for motions to dismiss five of the Thyss lien claims as having been satisfied.

Timetable ordered for all motions, with hearing dates scheduled for August 10 and 11, 2010, being the earliest dates available to counsel after the exchange of materials and cross-examinations[^15].

June 8, 2010

Adjourn-ment

Motion dates adjourned from August 10 and 11, 2010 to August 26 and 27, 2010, a 16 day delay, requested by Thyss’ counsel to allow him to fulfil his role as articling principal during articling interview week.

Despite deadline of December 31, 2009 to serve Owner’s motion records, by Jue 8, 2010 Owner had not yet served its motion records for the motions to strike five of Thyss’ lien claims.

Adjourn-ment

August 26 and 27, 2010 motion dates adjourned to September 21 and 22, 2010 at request of Thyss’ counsel (spouse gave birth to twins).

August 17, 2010

Owner’s motion to examine

Owner moved to compel non-parties to be examined for Thyss’ motion to strike the counterclaim. Motion refused. Owner to pay costs of $3,810.21.

August 18, 2010

Recusal

Motion

Owner advised Thyss of intention to move to recuse Master Albert as reference Master.

Sept. 13, 2010

Triage court

Owner attended before Justice Himel in triage court for a motion date before a judge to consolidate Owner’s claim against Aviva Canada (its bonding company) with the lien proceedings and to bring a motion to recuse Master Albert from these references.

Himel, J. endorsed, in part: “The No Co (numbered company) can bring the motion for the Master (to) recuse herself in advance. There is another matter before the Master scheduled for next Sept 21/22/10 and a case conference. Master Albert is the Master overseeing these motions. Costs are reserved to the master presiding.”

Owner’s counsel did not inform Master Albert of the proposed recusal motion or provide Master Albert with a copy of Justice Himel’s endorsement. Nor did the Owner prepare the motion for hearing on September 21 and 22, 2010.

Sept. 20, 2010

Case con-ference

Telephone case conference convened at the request of Owner’s counsel to ask to adjourn the Sept. 21 - 22, 2010 special appointment because Owner’s materials not ready. Owner’s counsel asked to adjourn all motions, not just the Owner’s motions. Owner’s counsel failed to inform Master Albert of the proposed recusal motion and Justice Himel’s endorsement.

Order: Thyss motions to proceed as scheduled. Owner’s proposed motions to be rescheduled when ready. Motions are not interdependent.

Sept. 21 -22, 2010

Motions to strike

Dates set aside for special appointment to hear Thyss’ motions to strike Owner’s defence of set-off for lost rents and counterclaim, and for Owner’s motions to dismiss five of the Thyss lien claims. Owner had not served any motion materials.

Owner’s proposed motion to recuse brought to Master Albert’s attention for the first time but no motion materials had been served. Owner’s counsel argued unsuccessfully that recusal motion be heard by a judge, contrary to Himel, J’s order and settled case law. Costs of the attendance before Himel, J. ordered against Owner, fixed at $3,120.00 to Thyss.

Thyss’ motions adjourned pending Owner’s recusal motion.

Nov. 24, 2010

Recusal Motion

Defendant’s motion to recuse heard and reserved

Dec. 21, 2010

Decision: Recusal Motion

Order released refusing Owner’s recusal motion, reasons to follow.

(Note: Defendant’s judicial review dismissed July 27, 2012 by Divisional Court, costs $9,500.00)

Jan. 24, 2011

Pretrial #8 Order

Decision in motion to strike counterclaim under reserve.

Owner’s motion for directions regarding conduct of Mr. Shaw’s cross-examination and five motions brought by Owner to strike 5 of the Thyss lien claims fixed for hearing on May 9, 2011.

Feb. 11, 2011

Reasons Recusal

Reasons for decision released for recusal motion

May 6, 2011

Motion to strike

Thyss’ motion to strike defence of set-off for lost rents and counterclaim, heard Jan. 6, 2011, granted for reasons released May 6, 2011.

May 9, 2011

Motion to prohibit motions

Thyss’ motion to preclude Owner from bringing interlocutory motions dismissed, costs of $500.00 payable by Thyss to Owner.

May 9, 2011

Motion to compel attendance

Owner’s motion to compel Mr. Shaw to re-attend cross-examinations and to compel production of hard drive refused, costs payable by Owner to Thyss fixed at $2,800.00.

May 9, 2011

Pretrial #9 order

Timetable for discovery of Thyss.

October 17, 2011

Pretrial #10 order

Limited additional discovery by Owner permitted.

Thyss lists 3 witnesses for trial.

Owner lists 112 (one hundred and twelve) witnesses for trial. (Note: Total of $122,000.00 in dispute in 10 actions.)

Directions issued limiting witnesses, time permitted per witness at trial and directing affidavit evidence from some witnesses.

Dec. 5, 2011

Appeal

striking counterclaim

Jennings, J. dismissed Owner’s appeal from Albert, M. order striking Owner’s claim of set-off for lost rents and counterclaim.

Jan. 23, 2012

Pretrial #11 order

Order: trial procedures, including time limits and affidavit evidence in chief.

April 12, 2012

Appeal order

Wilton-Segal, J. order granting Thyss’ motion to strike Owner’s appeal from Pretrial order #11 made Jan. 23, 2012.

Substantial indemnity costs ordered against Owner for $8,500.00 on basis appeal was vexatious.

July 9, 2012

Pretrial #12 order

Final procedural order.

July 13, 2012

U & R

Owner’s motion to compel answers to undertakings and refusals. Owner successful on 2 out of 31 undertakings and 5 out of 29 refusals. Costs to Thyss fixed at $2,000.00, 30 days.

July 27, 2012

Judicial Review decision

Divisional Court (Nordheimer, J. writing for Swinton, and Wilton-Siegel,JJ.) dismissed Owner’s application for judicial review of Master Albert’s refusal to recuse herself, costs $9,500.00 payable by Owner to Thyss.

October 1, 2012

Telephone conference

Conference call with counsel to address preliminary procedural issue of Owner’s challenge to authenticity and admissibility of 192 documents in Thyss’ document book; directions given that the issue would be dealt with as a preliminary issue at trial.

October 11, 2012

Trial

Trial commenced. Trial concluded October 19, 2012. Decision reserved.

Schedule “C”

Preliminary and procedural rulings made at trial

This schedule describes the many procedural issues that arose at trial, my rulings and reasons.

#1. Owner challenged authenticity and admissibility of 192 Thyss documents

[1] In a 14 page Notice of Objection the Owner challenged the authenticity and admissibility of 192 of the documents served and filed in Thyss’ document books.

[2] At the trial management stage of this reference the court gave directions regarding the exchange and filing of documents, including directions about proving documents. The purpose of these directions lies in section 67 of the Construction Lien Act and reference rule 55.01, which require the reference Master to devise as summary a process as is suitable to the case. These legislative provisions are based on principles of proportionality and authorize the reference Master to give directions as are necessary, to dispense with any procedure ordinarily taken that the referee considers unnecessary, and to adopt procedures different from those ordinarily taken where appropriate.

[3] On January 23, 2012 I gave the following directions:

Document books:

(a) Each party shall prepare four (4) sets of document books containing all documents to be relied on at trial. Documents attached as exhibits to affidavits filed as evidence in chief need not be duplicated in the document books but shall be treated as if they were included in the document book(s) for purposes of these directions. Each document book shall be titled “Document Book” and shall be indexed, tabbed and page numbered. Only documents contained in a document book prepared in compliance with these directions may be tendered in evidence at trial, except with leave of this court. Emphasis added

(b) Document books must be exchanged and filed with Assistant Trial Co-ordinator for construction liens, 6th floor, 393 University Avenue, Toronto by September 11, 2012.

(c) The authenticity of each document in the document books shall be deemed admitted, pursuant to rules 51.01, 51.02 and 51.03, and shall be admissible at trial unless the party objecting to authenticity or admissibility serves a written Letter of Objection, within 10 days following the date the document books are served, in which case the court will rule on authenticity or admissibility at trial. Otherwise the documents in the document books shall be admissible in evidence without further formal proof. Emphasis added

(d) Evidence and argument regarding the truth of the contents of documents may be presented at trial.

[4] Thyss served and filed a three volume document book with 548 tabs and more than that number of documents.

[5] Relying on section 35 of the Evidence Act, R.S.O. 1990, c.E.23, Thyss also served the Owner with notice of its intention to produce business records. Section 35 provides:

35. (1) In this section"business" includes every kind of business, profession, occupation, calling, operation or activity, whether carried on for profit or otherwise;

"record" includes any information that is recorded or stored by means of any device.

(2) Any writing or record made of any act, transaction, occurrence or event is admissible as evidence of such act, transaction, occurrence or event if made in the usual and ordinary course of any business and if it was in the usual and ordinary course of such business to make such writing or record at the time of such act, transaction, occurrence or event or within a reasonable time thereafter.

(3) Subsection (2) does not apply unless the party tendering the writing or record has given at least seven days notice of the party's intention to all other parties in the action, and any party to the action is entitled to obtain from the person who has possession thereof production for inspection of the writing or record within five days after giving notice to produce the same.

(4) The circumstances of the making of such a writing or record, including lack of personal knowledge by the maker, may be shown to affect its weight, but such circumstances do not affect its admissibility.

(5) Nothing in this section affects the admissibility of any evidence that would be admissible apart from this section or makes admissible any writing or record that is privileged.

[6] The challenged documents fall into six categories:

a) Category #1: Call back sheets, unknown personnel: 177 documents

b) Category #2: Scheduled maintenance work order, unknown personnel: 5 documents

c) Category #3: Faxes from Thyss: 3 documents

d) Category #4: Correspondence from Thyss: 1 document

e) Category #5: Maintenance report, unknown personnel: 2 documents

f) Category #6: Schindler invoices: 4 documents

[7] Categories #1 and #2 are call back sheets and scheduled maintenance work orders. The Owner’s notice of objection described its objection as “unknown personnel”.

[8] The Owner objected on two grounds:

a) Thyss failed to comply with the court’s order to answer a question refused on discovery. The Owner argued that pursuant to rule 31.07(2) the court should not permit Thyss to introduce at trial information that was not provided; and

b) Thyss is attempting to introduce evidence that it withheld from the Owner on discovery.

[9] I am not persuaded by the first ground for two reasons. Firstly, Thyss complied with the court’s order to answer question 260. In its letter dated August 24, 2012, filed as exhibit 4, Thyss listed the personnel who carried out elevator maintenance work and, where available, the employee code number of the worker. The fact that in some of the documents the code number or name of the worker is missing does not mean that the document is not an authentic business record or that Thyss failed to comply with the court’s order to answer question 260. Thyss provided as fulsome an answer as it could based on the information available to it.

[10] Secondly, the first ground of objection fails because Thyss did not have the missing information (employee names or code numbers) at the time of discovery or in August 2004 when it answered question 260, and it still does not have the information at trial. Thyss is not trying to introduce at trial information withheld from the Owner. There is no surprise at trial. Thyss simply does not have the information. Rule 31.07(2) does not apply to preclude the 177 call back sheets, or the five scheduled maintenance work order documents on grounds of attempting to introduce at trial information withheld at discovery.

[11] The second ground of objection by the Owner to the first two categories of documents is that the documents are not properly business records within the meaning of section 35 of the Evidence Act. That section provides that upon serving the proper notice a party may introduce as business records “any writing or record made of any act, transaction, occurrence or event” as evidence of the occurrence of that “act, transaction, occurrence or event” if the record is made “in the usual course of business at, or within a reasonable time thereafter, of the time of the act, transaction, occurrence or event”.

[12] Thyss served notice under the Evidence Act in the proper form and in sufficient time. The issue is whether the documents submitted as business records are documents that qualify as writings or records made of acts, transactions, occurrences or events made in the ordinary course of business in a timely manner.

[13] Thyss called Mike Tate as a witness to testify as to the record keeping practices of Thyss and the manner in which the company’s records are maintained and produced. Mr. Tate was not an employee of Thyss at the time of the events that give rise to these construction lien actions or at the time that the records in dispute were created. He has been employed by Thyss as credit manager since February 2007. As such he is responsible to manage accounts receivable, set up new accounts, verify new accounts, collect accounts, and administer accounts. He testified that he knows the record keeping and paper flow throughout the company. I found Mr. Tate to be credible and knowledgeable about the record keeping of Thyss. He testified that the category 1 and 2 documents were made in the ordinary course of business at or near the time of the events recorded.

[14] The Owner relies on the decision of Justice Hryn in R. v Felderhoff 2005 CarswellOnt 4726 at para 199 as standing for the proposition that “instructions, conditional instructions, suggestions, questions or advice” do not qualify as business records under section 35 of the Evidence Act because these types of documents are not the recording of purely objective data. Counsel for the Owner argues that the records submitted by Thyss as business records constitute opinions because they reflect what a maintenance worker, in his or her opinion, decided was required. I disagree with that submission. The call back sheets reflect the items of maintenance carried out by the maintenance worker on the call. The data reflected in the call back records is objective data that records the date, the property, the nature of the call, the reason for the call, and the work performed. The same applies to the scheduled maintenance work order documents.

[15] I find that the 177 call back sheets and the five scheduled maintenance work order sheets to which objection was taken are properly admitted as business records under section 35 of the Evidence Act. Where the call back records are silent as to the identity of the worker it goes to the weight to be given to the evidence. The fact that the records are admitted through a witness who does not have personal knowledge of the making of the record also goes to the weight to be given to the evidence, pursuant to section 35(4) of the Evidence Act.

[16] I turn next to categories 3 and 4, faxes and correspondence from Thyss to the Owner, found at exhibit 2, tabs 2, 8, 9 and 16. The faxes to which objection are taken do not include transmittal information. The Owner does not admit receiving them. Mr. Tate testified that the faxes reflect data that is conveyed in this way in the ordinary course of business to reflect interactions between Thyss and its customers, but he was not present at the time these particular faxes were created. I find that the faxes are admissible as business records for the purpose of establishing that the documents were created by Thyss, but not as evidence that they were transmitted to the defendant. This ruling applies to the faxes at exhibit 2, tabs 8, 9 and 16. As to the correspondence at exhibit 2, tab 2, again Thyss provided no evidence that the letter was sent to the Owner and the Owner does not admit receiving it. On that basis I find that the document is admissible as a business record to prove that the document was created by Thyss but not as proof that it was delivered to the Owner.

[17] Category 5 refers to two maintenance reports, filed at exhibit 2, tabs 21 and 22. These reports are summaries of the maintenance call back sheets and maintenance work orders prepared in the ordinary course of business by Thyss based on the information provided daily by maintenance workers. The Owner objects to these documents as business records on the basis that they are summaries and, relying on the Felderhoff decision, supra, the Owner argues that summaries are not business records. Mr. Tate’s evidence is that these reports are generated from the Thyss computer system data base. He testified that when mechanics submit their maintenance sheets the information is input into the Thyss computerized record keeping system, which then generates these types of maintenance reports. It is a report that is prepared in the usual course of business on a customer-by-customer basis. If the report had been a “one of” type of report created solely and subjectively for the purpose of analyzing data for trial or summarizing trial evidence, then I would have agreed with the Owner that it is not properly a business record. Rather it would have been a submission. However, the summaries at tabs 21 and 22 are in the nature of reports regularly maintained and generated by Thyss for its customers and on that basis it is not the objectionable type of summary that the court in Felderhoff rejected.

[18] On that basis I find that the maintenance reports at tabs 21 and 22 of exhibit 2 are admissible as business records under section 35 of the Evidence Act.

[19] Category 6 is made up of four documents on the letterhead of Schindler. They were included in Thyss’ document book for completeness, in anticipation that they may be required in reply evidence. The four documents are invoices addressed to the Owner, to the attention of Ms Brown. Because Ms Brown refused to acknowledge receipt of the documents when she was cross-examined Thyss called a representative from Schindler in reply to testify as to the authenticity of the four documents. I am satisfied that the documents are business records maintained by Schindler in the ordinary course of business and that the documents are admissible on that basis, notice having been given under the Evidence Act.

#2. Defendant asks court not to allow plaintiff’s witness Fazil Shaw to testify

[20] At the opening of trial counsel for Thyss advised the court that one of its two witnesses was not available on the first day of trial but would be available on the second day of trial. The Owner’s counsel asked the court to disallow the witness because he was not available to testify at the opening of trial.

[21] After hearing the many preliminary and procedural issues raised by counsel, which took up most of the first day of trial, the issue became moot.

#3. Owner’s motion to strike portions of the Thyss affidavits

[22] Owner’s counsel asked the court to strike paragraphs 8, 9 and 12 of the affidavit of Fazil Shaw on the basis that the facts recited are based on information and belief received from David Bond, who was not going to be called as a witness. The paragraphs depose as follows (challenged portions underlined):

8. Despite the defendants constantly being in arrears, Thyssenkrupp provided continual maintenance service throughout the term of my employment, and I have been advised by David Bond, the district manager of Thyssenkrupp, on or about March 30, 2010 and do verily believe him, and I have attested to same in my affidavit of April 1, 2010, that maintenance service continued past the final date of my employment until December 2004.

9. During my employment, until October 2004, Thyssenkrupp sent out invoices to the defendants on a regular basis and generally, invoices were delivered quarterly. I was advised by Mr. Bond on or about March 30, 2010 and do verily believe, and I have already attested to same in my affidavit of April 1, 2010, that this practice continued until the termination of the defendants’ contracts in December 2004.

10. Accordingly, where payments referenced specific invoices I attributed them to those specific invoices. Where invoices did not reference specific invoices I applied them to the oldest outstanding accounts. I am advised by Mr. Bond on or about March 30, 2010 and do verily believe him, and I have attested to same in my affidavit of April 1, 2010, that subsequent to the cessation of my employment with Thyssenkrupp, that Thyssenkrupp continued to account for all payments received from the defendants.

[23] The Owner also asked the court to strike the last three pages of exhibit B to the affidavit of Fazil Shaw on the basis that they were not properly attested to in the affidavit. In paragraph 3 of his affidavit Mr. Shaw deposed that exhibit “B” is the monthly contract for the property identified in it. The last three pages are proposals dated February 11 and 19, 2004 for a specific task and not monthly contracts.

[24] One of the difficulties in this trial is that the individuals who were employed by Thyss in 2003 and 2004, when the events in issue occurred, have moved on. It has taken over eight years to get to trial, due primarily to many interlocutory motions and appeals (see the chronology at Schedule “B” of these reasons). Thyss asked the court to accept these assertions for the fact that they were made and not for the truth of the contents of the hearsay statements which would be proven by other evidence.

[25] Paragraphs 8, 9 and 12 of the Shaw affidavit are not struck. The court will give them appropriate weight taking into account their hearsay nature, the best evidence rule and the following corroborating evidence given at trial:

a) the facts in paragraph 8 deposed on information and belief, that Thyss continued to provide maintenance service until December 2004, was not disputed;

b) the facts in paragraph 9 deposed on information and belief, that Thyss’ practice of invoicing quarterly, was otherwise proven at trial by testimony including that of Ms Massri and corroborated by exhibits 6 and 7;

c) the facts in paragraph 12 deposed on information and belief, that Thyss’ practice of applying payments as directed by the Owner but where not directed applying them to the oldest outstanding accounts, was otherwise proven at trial by testimony and corroborated by exhibits 6 and 7; and

d) The Owner had the opportunity to cross-examine Mr. Shaw on the February 2004 contracts attached as the last three pages of exhibit “B” of his affidavit.

[26] The last three pages of exhibit B to the Shaw affidavit are not struck because the Owner could have cross-examined Mr. Shaw on the documents at trial. However, these three pages are irrelevant to the outcome of trial.

#4. Thyss’ motion to strike portions of the Owner’s affidavits

[27] Thyss asked the court to strike paragraph 6 of the affidavit of Mr. Barrasso on the basis that it is hearsay, based on the information and belief of Mr. Audin. Mr. Audin did not testify at trial either by affidavit or in person. In paragraph 6 Mr. Barrasso deposes (challenged portions underlined):

6. At the time of entering into the contracts I was advised by Albert Audin, my construction and building maintenance contractor, and do verily believe that the Plaintiff was well aware of the quality of the individual elevators and that the plaintiff had experience with Dover elevators, such as those in place at the properties. The Plaintiff had acquired the Dover company previously and therefore had its technology. Mr. Audin is no longer working for the Defendants for reasons unrelated to the subject actions, and is now retired to my knowledge.

[28] Hearsay evidence includes statements by persons otherwise than in testimony at trial where the evidence is tendered as proof of their truth[^16]. In this case Mr. Barrasso asks the court to accept as truth information provided to him by a person not before the court, Mr. Audin, that Thyss “was well aware of the quality of the individual elevators” and “had experience with Dover elevators” and “had acquired the Dover company”. No corroborating or independent evidence of these facts was adduced by the Owner. The Thyss witnesses could have been cross-examined on these facts. The truth of these statements based on hearsay from Mr. Audin in the Barrasso affidavit is inadmissible and is struck. In any event, whether or not Thyss was familiar with Dover elevators was not determinative of whether they are liable to the Owner for the set-off claimed to upgrade the elevators at a cost of $75,000.00, or whether Thyss is entitled to be paid for services and materials supplied under the maintenance contracts.

[29] Thyss also asked the court to strike portions of paragraphs 9, 10, 12, 34 and 35 of the affidavit of Ms Brown on the basis that they are hearsay evidence given without revealing any source. The paragraphs state as follows:

9. As I received very little cooperation from the Plaintiff in servicing the elevators I was compelled to and undertook to obtain professional audits of the elevators. I retained Ron Smith of Gemini Consultants. Ron Smith knows most, if not all, of the leaders in the elevator industry. For instance, he was well acquainted with Jack Elias, the former President of Schindler Elevator Corporation.

10. I also had dialogue with Mr. Shaw and I understand that he and Mr. Smith knew each other, and following Mr. Shaw’s dismissal from the Plaintiff I know that Mr. Shaw and Mr. Smith have done business together.

11. I also caused the TSSA Reports to be regularly forwarded onto the plaintiff upon receipt. This work by law required an elevator maintenance provider’s skills, for the most part. As has been explained to me I understand that the law only allows elevator maintenance providers to access, handle and alter elevator equipment.

12. Mr. Shaw and I spoke subsequently as did he and Mr. Barrasso. …My letter of December 23, 2004 which is found in the request to Admit @ (sic) pages 124-125 was essentially dictated and re-drafted by Mr. Shaw over the telephone. This includes the contents of the letter which is more toned down than that which I had originally drafted; as well as Mr. Shaw’s knowledge and wording which I did not know about. For instance he knew and wrote that: the liens were not proper because…

13. Mr. Shaw told me that he always got along with Mr. Barrasso, that Mr. Barrasso was a perfect gentleman in their dealings, …”

[30] Paragraphs 9 and 10 will be allowed to stand on the basis that Ms Brown has personal knowledge of the relationship of Mr. Shaw and Mr. Smith. The last sentence of paragraph 12 is struck as hearsay evidence because it fails to reveal the source of the information and belief and Ms Brown has no personal knowledge of the facts deposed.

[31] The words in paragraph 34 “as did he and Mr. Barrasso” and “he knew” are struck as hearsay because the source of the information is not disclosed. The hearsay evidence in paragraph 35 that is based on information and belief from Mr. Shaw is allowed to remain and will be given appropriate weight, taking into account the hearsay nature of the evidence and the best evidence rule.

#5. Admissibility of “Request to Admit” as evidence at trial

[32] Rule 51 provides that a party may serve a request to admit (Form 51A) requesting another party to admit the truth of a fact or the authenticity of a document. The party receiving the request must respond by specifically denying or refusing to admit the truth of a fact or the authenticity of a document listed in the request, failing which that party is deemed to admit the truth of the facts and the authenticity of the documents in the request. Admitted facts and documents do not require further proof at trial.

[33] The Owner served a request to admit. Thyss responded, specifically denying and refusing to admit the truth of facts and authenticity of documents in the request.

[34] At trial the Owner sought to file the request to admit as an exhibit and rely on the facts and documents listed in it but not admitted by Thyss on the basis that the request to admit had been referred to in the affidavits of evidence in chief of Mr. Barrasso and Ms Brown. Thyss objected to the admissibility of the request to admit because Thyss had denied most of the facts and documents alleged such that they were not admissions.

[35] For decades references in Toronto under the Construction Lien Act have followed a pretrial procedure whereby the parties attend hearings called “pretrial hearings for directions” in which the reference master gives directions for the conduct of the reference prior to conducting the evidentiary portion of the reference trial. The chronology at Schedule “B” to these reasons shows that many such hearings for directions were convened in this reference and directions were issued.

[36] The directions given by order on January 23, 2012 provided at paragraph 6:

Document books:

(a) Each party shall prepare four (4) sets of document books containing all documents to be relied on at trial. Documents attached as exhibits to affidavits filed as evidence in chief need not be duplicated in the document books but shall be treated as if they were included in the document book(s) for purposes of these directions. Each document book shall be titled “Document Book” and shall be indexed, tabbed and page numbered. Only documents contained in a document book prepared in compliance with these directions may be tendered in evidence at trial, except with leave of this court. emphasis added

[37] All documents relied on at trial had to be included either in (1) the affidavit of a witness testifying in chief by affidavit, or (2) a document book. Documents attached to a request to admit are not admissible in evidence unless included in either (1) or (2) as described.

[38] I ruled at trial that only documents listed in the Owner’s request to admit that were also included in a document book or attached as an exhibit to an affidavit of evidence in chief may be admitted in evidence without leave of the court. The request to admit itself could not be admitted as evidence.

[39] The Owner did not provide any basis upon which to grant leave to admit the request to admit, or to admit documents listed in the Owner’s request to admit but excluded from the document books and affidavits of evidence in chief. Allowing such documents to be admitted at trial would be prejudicial to Thyss, having prepared for trial based on the court’s pretrial orders and directions. Leave to admit the request to admit at trial was refused. The only purpose to which the request to admit can be put is in respect of costs submissions after trial (rule 51.04).

#6. Reading in the transcript of examination for discovery

[40] At the close of its case in chief Thyss sought to read in excerpts from the examination for discovery of Ms Brown on behalf of the Owner. The Owner objected.

[41] Rule 31.11 provides that at the trial of an action a party may read into evidence as part of its own case any part of the evidence given by an adverse party on the examination for discovery. Both parties were allowed to read in portions of the examinations for discovery they conducted of each other.

#7. Leave sought by Owner to introduce expert reports of Gemini Elevator Consultants

[42] Rule 53.03(1) provides:

(1) A party who intends to call an expert witness at trial shall, not less than 90 days before the pre-trial conference required under Rule 50, serve on every other party to the action a report, signed by the expert, containing the information listed in subrule 2.1.

(2.1) A report provided for the purposes of subrule (1) or (2) shall contain the following information:

1. The expert's name, address and area of expertise.

2. The expert's qualifications and employment and educational experiences in his or her area of expertise.

3. The instructions provided to the expert in relation to the proceeding.

4. The nature of the opinion being sought and each issue in the proceeding to which the opinion relates.

5. The expert's opinion respecting each issue and, where there is a range of opinions given, a summary of the range and the reasons for the expert's own opinion within that range.

6. The expert's reasons for his or her opinion, including,

i. a description of the factual assumptions on which the opinion is based,

ii. a description of any research conducted by the expert that led him or her to form the opinion, and

iii. a list of every document, if any, relied on by the expert in forming the opinion.

7. An acknowledgement of expert's duty (Form 53) signed by the expert.

[43] The Owner sought leave to introduce into evidence reports prepared by George Ronald Smith of Gemini Elevator Consultants. Owner’s counsel did not have copies of the reports suitable for filing as exhibits as required by the directions issued before trial. Nor had expert reports been served as required by rule 53 and the court’s order of January 23, 2012. Nor were the reports included in a document book served before trial.

[44] Thyss did not object to Mr. Smith’s qualifications as an expert. The issue was whether leave should be granted to permit the Owner to serve at trial, for the first time, expert reports that it intended to rely on at trial. The court’s pretrial directions were clear. Rule 53 is clear. The Owner breached both.

[45] Thyss acknowledged that it had received copies of the reports at the production stage of the reference several years earlier. What it did not know was that the Owner intended to rely on those reports at trial.

[46] Mr. Smith was on the Owner’s list of trial witnesses. Counsel for Thyss was familiar with the reports and not taken by surprise. Rather than preclude the Owner from filing and relying on the Gemini reports the court adjourned the trial for the balance of the day to give the Owner’s counsel time to collate the expert reports into a format suitable for filing as an exhibit at trial, including the expert’s curriculum vitae and acknowledgement of expert duty.

[47] On that basis I granted leave to the Owner to file the expert reports of Mr. Smith of Gemini.

#8. Owner’s request for leave to call Rick Sokoloff of Quality as an expert

[48] The Owner asked the court for leave to adduce expert evidence from Rick Sokoloff of Quality Allied Elevator without an expert report. The Owner relies on rule 53.03(3), by which the court may grant leave to permit an expert to testify where the party seeking leave failed to serve an expert report summarizing his or her opinion. The test is whether granting leave would prejudice Thyss or cause undue delay in the trial.

[49] The Owner did not seek leave to introduce an expert report. Rather, counsel asks for leave to call Mr. Sokloloff as an expert without any report at all, without an acknowledgement of expert duty, without having disclosed in advance the proposed expert’s opinions, without a statement of instructions and without an analysis and reasons, all of which are required by rule 53 to be included in an expert report.

[50] The only authority Owner’s counsel relies on is the decision of Zelinski, J. in Brink v Timberjack Inc. [2004] O.J. No.4610. In that case the defendant, Timberjack, having already served two expert reports, sought to introduce a third one when the trial reconvened after an adjournment of over one and a half months. The new report advanced a different theory of causation, based on factual evidence that the expert first learned of at the trial, before the adjournment. The new report had been served one and a half months before the trial resumed.

[51] The Brink case is distinguishable for several reasons. It is distinguishable on its facts because in Brink the expert had already provided two written reports in compliance with the rule and had served the new report some six weeks before the trial was to resume. The plaintiff knew what opinions were being advanced and could prepare to respond. In the present case the proposed expert has not prepared a report. Nor has he provided any disclosure of his instructions, the issues about which he would be asked to opine, or his opinions on those issues. Rather, the Owner’s counsel proposes to have his witness provide opinions at trial without any prior disclosure. He did not even provided a witness statement or statement providing details of the anticipated opinions of the proposed expert as required by the pretrial directions and orders made in this reference. The Owner’s conduct in this regard is a flagrant disregard of the rules and the court’s process.

[52] Brink is also distinguishable on its facts because in that case the new theory of causation advanced in the expert report that was the subject of the motion was based on facts first learned at trial. In the present case the Owner proposed to call an expert to opine about the condition of elevator maintenance in 2004 and 2005, seven years ago. There were no new facts that prevented the Owner from serving an expert report before trial as directed.

[53] Brink is further distinguishable because the rules regarding expert witnesses have changed since that case was decided. Although the court retains jurisdiction to grant leave to hear from an expert without a report, the court must have regard to rule amendments since Bink was decided, increasing the obligations on a party before an expert may testify. The report must include specified information. An acknowledgement of expert duty is required. These amendments were imposed to ensure that expert evidence is impartial, not acting as an advocate for his or her client, and to ensure that all parties know the case they must meet at trial. If I were to grant leave and permit the Owner to call Mr. Sokoloff to testify as an expert without a report, in the absence of a very good reason for not having served a report, the form and substance of the rule regarding experts would be undermined.

[54] The first pretrial hearing for directions in this reference was held on November 17, 2006. I issued a procedural order. The chronology at Schedule “B” lists the dates of hearings for directions and procedural orders. In all of the hearings for directions I made procedural orders for the purpose of narrowing issues, to ensure that the parties would know in advance of trial the case they must meet at trial.

[55] The directions issued following the January 23, 2012 hearing, in which the Owner advised the court of its intention to summons several expert witnesses, provided:

“Both counsel are reminded of the rules respecting evidence from experts. Any witness called as an expert must provide by the deadline ordered herein an expert report together with a curriculum vitae and statement of expert witness prescribed by the rules, failing which the witness may not testify as an expert.”

[56] The Owner provided no explanation for not providing an expert report from Mr. Sokoloff, who was under contract with the Owner prior to and at the time of trial, and arguably within the Owner’s control. If the Owner could not obtain a written report from Mr. Sokoloff (no evidence to that effect was advanced) then the court’s pretrial directions allowed for other ways to provide disclosure.

[57] The court’s orders for directions provided that disclosure before trial is required for all of the evidence to be given at trial in one of the following formats:

1. Where the evidence of a witness in chief was to be by affidavit, the sworn affidavit was to be served by a specified date.

2. Where the witness was to be called as an expert, an expert report must be delivered. The rules govern the timeframe for the delivery of expert reports, as did my order of January 23, 2012.

3. Where the witness was to give oral evidence in chief at trial a witness statement summarizing the evidence of the witness and signed by the witness was required by the deadline ordered.

4. Where a witness had to be summonsed and would not sign a witness statement, a summary of the anticipated evidence of the witness was required to be served by the deadline date.

[58] The October 17, 2011 order for directions provided at paragraph 2(e):

(1) Witness statements provide a summary of the evidence proposed to be adduced from each witness at trial, to avoid surprise at trial. Only evidence summarized in a witness statement signed by the witness may be called at trial. Where the proposed witness is unco-operative and must be summonsed to trial a statement of anticipated evidence signed by counsel for the party calling the witness may be filed instead.

[59] The Owner summonsed Mr. Sokoloff as a witness. The summary of anticipated evidence filed for Mr. Sokoloff states:

1. as the maintenance provider for the 1765-1775 Weston Road, 2667-2677 Kipling Avenue and 1011 Lansdowne Avenue properties after the plaintiff abandoned the Defendant, as well as at certain points in time when called on to perform certain repairs to the elevator systems he will discuss the condition of the elevators as he found them;

2. he will discuss the generally poor condition of the elevators, the terms of the contract for service that was to be provided by Thyssenkrupp and how Thyssenkrupp’s services fell below the level required by the contract;

3. he will speak to the costs and work required as pre-maintenance when Quality Allied Elevators assumed its position as maintenance provider for each of the above three locations;

4. he will discuss the TSSA Directives and Orders issued and Thyssenkrupp’s responsibility for complying with Directives and Orders issued to the owners, how the items set out in specific Directives and Orders would affect the elevator system’s operations; and the standard to be expected of Thyssenkrupp as the self-reported leading elevator maintenance provider;

5. he will discuss the reasonable owner expectations of elevator service given Thyssenkrupp’s representations as the leader in elevator maintenance services and the contractual requirements;

6. he will provide his opinion as to the manner in which Thyssenkrupp stopped providing elevator maintenance services in light of the TSSA requirements;

7. he will discuss the effects on a maintenance provider’s knowledge of and ability to maintain, service and repair elevator systems after being the longstanding maintenance provider and how that position affects and assists the maintenance provider;

8. He will discuss the steps that could be taken as a maintenance provider to improve performance issues with or without a full modernization;

9. He will discuss the effect on the elevator system of not attending to repairs on the elevators in a timely manner

[60] The summary of anticipated evidence for Mr. Sokoloff identifies issues, but does not provide a summary of the evidence proposed to be adduced from him at trial, to avoid surprise at trial, as ordered. The summary is silent as to his expert opinions and the proposed factual evidence of the witness. The summary provides that Mr. Sokoloff “will discuss” or “will provide his opinion” without disclosing the substance of the anticipated evidence from this witness.

[61] Nowhere has the Owner disclosed Rick Sokoloff’s expert opinions: not in an expert report, a witness statement or a summary of anticipated evidence.

[62] If the court were to allow Mr. Sokoloff to testify as an expert Thyss would be taken by surprise in a reference hearing where the pretrial process was designed to eliminate the element of surprise at trial. The Owner provided no explanation why Mr. Sokoloff did not provided an expert report, why a witness statement was not forthcoming from him and why the summary of anticipated evidence of Mr. Sokoloff as a witness under summons failed to disclose the opinions that the Owner anticipated he would give. Mr. Sokoloff’s company provides elevator maintenance services under contract to the Owner. He has done so, on and off, for many years. I draw the inference that the Owner intended to rely on the element of surprise and “trial by ambush” expecting to spring the opinions of this witness on Thyss without notice, without warning and without giving Thyss an opportunity to prepare properly for cross-examination or to retain a responding expert.

[63] The test for leave in rule 53.08 suggests that leave be granted unless it would cause prejudice to the opposite party or undue delay in the the trial. If this trial had to be adjourned for Thyss to prepare to respond to Mr. Sokoloff’s expert opinions then the trial could not likely be resume before January 2014, taking into account the fixed trial dates already booked before me for 2013. That constitutes undue delay. Furthermore, adjourning this trial would be prejudicial to Thyss given the length of time it has taken to get to trial and the absence of any reasonable explanation by the Owner for failing to provide Mr. Sokoloff’s expert opinion in advance of trial either in the form of an expert report, witness statement or properly drafted summary of anticipated evidence of a witness under summons. Finally, it would be prejudicial because the Owner has disregarded court orders repeatedly throughout this reference. There is no reason to expect that if the trial is adjourned the Owner would comply with the court’s directions. The Owner has had sufficient time to comply with the court’s directions before trial and has repeatedly failed to do so. I find that the test in rule 53.08 is not met.

[64] Delay in asking for leave is another reason to refuse the Owner’s request for leave to permit Mr. Sokoloff to testify as an expert without a report. The Owner’s leave request ought to have been made before trial. On October 1, 2012, ten days before the date fixed for trial, I convened a telephone conference with both counsel to deal with preliminary and procedural trial issues. After discussing the specific issues for which the conference had been convened I asked both counsel whether there were any other procedural or preliminary issues that needed to be addressed.

[65] Mr. Bleta, Owner’s counsel, did not raise as a procedural or preliminary issue on October 1, 2012 that he would be seeking leave to call Mr. Sokoloff as an expert in the absence of compliance with rule 53 and the October 17, 2011 and January 23, 2012 orders. By October 1, 2012, Mr. Bleta knew that he intended to call Mr. Sokoloff as an expert. He had served a summons to appear on Mr. Sokoloff on August 23, 2012. He knew that he had not served an expert report from Mr. Sokoloff. If Mr. Bleta was going to tender Mr. Sokoloff as an expert witness then he knew by October 1, 2012 when the conference call to address preliminary issues was convened, that he would require leave of the court. Knowing this, Mr. Bleta remained silent and did not identify to the court or to Thyss’ counsel that he would be seeking leave pursuant to rule 53.03(3). I conclude from this omission that it was the Owner’s trial strategy to wait in the weeds and surprise Thyss at trial, denying Thyss time to properly prepare for cross-examination and rendering Thyss unable to provide a responding expert opinion. By this conduct the Owner is estopped from putting Mr. Sokoloff forward as an expert witness.

[66] The Owner has provided no relevant authority to support the proposition that an expert should be permitted to testify without a report, no explanation for the absence of a report, no summary in advance of trial as to the opinions that would be sought and given by Mr. Sokoloff, despite court orders to do so. At no time did the Owner suggest that Mr. Sokoloff was a hostile witness unprepared to provide a report. He is a contractor who, through his company, continues to supply services to the Owner.

[67] For these reasons the request for leave to allow Mr. Sokoloff to testify as an expert was refused at trial. Rick Sokoloff was permitted to testify as a fact witness about matters regarding which he has direct knowledge, without giving opinion evidence.

#9. Is Thyss permitted to question Ms Brown about Schindler’s invoices?

[68] Thyss included in its document book at tabs 542 through 545 four invoices dated January 25, 2005 that on their face appear to be invoices for elevator services issued by Schindler to the Owner, addressed to the attention of Ms Brown. The Owner objected to the authenticity of these documents, requiring Thyss to prove them either through a witness from Schindler or else through the Owner as recipient of the invoices.

[69] Owner’s counsel objected to Thyss questioning Ms Brown about the invoices on the basis of relevance. He did not argue that the invoices were not rendered by Schindler.

[70] Evidence was adduced at trial about a flood that occurred at one of the Weston Road buildings causing an elevator shut down in late December 2004. Schindler carried out the emergency repairs. The invoices that are the subject of the objection are for work performed on or before January 25, 2005, in the period immediately following the flood and after Thyss has discontinued providing maintenance services. Maintenance and repairs of elevators is directly relevant to the issues raised by the Owner in its amended statement of defence, in particular at paragraphs 38 and 39 for the Weston Road property. The Schindler documents were included in the Thyss document book and served before trial pursuant to the court’s directions. The Owner is not surprised by them. I find that it is proper cross-examination to question Ms Brown about the Schindler invoices. Under cross-examination Ms Brown did not admit that the Owner had received these invoices from Schindler, requiring Thyss to call a witness from Schindler to prove the documents.

#10. Recusal motion

[71] On the fourth day of trial the Owner asked the court to adjourn the trial for the Owner to bring a recusal motion. Two issues arose from the recusal request: timing of the motion hearing and the substantive recusal issue.

(i) Timing

[72] The Owner’s counsel sought to adjourn the trial to obtain a transcript of the trial thus far as evidence on the motion. He anticipated requiring several weeks to obtain the transcript and then additional time thereafter to prepare motion materials.

[73] Responding counsel argued that the motion should be dealt with by the court immediately or left to an appellate process, if one of the parties moved to oppose confirmation of the reference report. I ruled that the recusal motion proceed forthwith. Rule 55.01 requires the reference master to “adopt the simplest, least expensive and most expeditious manner of conducting a reference” and permits the reference master to “dispense with any procedure ordinarily taken that the referee considers to be unnecessary, or adopt a procedure different from that ordinarily taken.” Adjourning for a formal recusal motion to be brought would have been the opposite of “simple, least expensive and most expeditious”. That is particularly so in circumstances such as this where the Owner’s earlier recusal motion failed before me in 2010 and also failed on judicial review before a panel of three judges in 2012.

[74] I exercised discretion and dispensed with the requirement of a motion record and written materials and directed the parties to present their arguments.

(ii) Substantive issue: recusal

[75] I refused the defendant’s recusal motion and directed the trial to continue for the reasons that follow.

[76] The Owner asked me to recuse myself from this reference on grounds of bias or reasonable apprehension of bias. In support of the motion the Owner offered several grounds of complaint which I address seriatim in the order that the grounds were argued:

a) Complaint #1: Convening a case conference at Thyss’ request

The Owner argued apprehension of bias because I convened a case conference by telephone on October 1, 2012, 10 days before trial, to address preliminary matters raised in a letter from Thyss. One concern was that the letter from Thyss’ counsel requesting an attendance with the court was not copied to Owner’s counsel.

Findings: Thyss’ counsel’s failure to copy Owner’s counsel with correspondence to the court is clearly contrary to the rules and contravenes civility protocol. I admonished Thyss’ counsel, who apologized verbally and in writing, explaining that it had been an oversight. The court accepts Thyss’ counsel’s acknowledgement and apology.

The first issue raised by Thyss in the letter was that Thyss had not received copies of summonses to witnesses served by the Owner, contrary to the court’s pretrial directions. Thyss subsequently admitted that it had received copies of the summonses. The second issue raised in the letter concerned the Owner’s objection to the authenticity and admissibility of 192 of Thyss’ trial documents. Thyss sought directions on the process to be used to prove the documents at trial: whether it would be dealt with as a preliminary issue at trial or on a witness by witness and document by document during the evidentiary portion of the trial. This is properly a trial management issue and it was proper for Thyss’ counsel to ask the court to provide directions before trial. I issued directions that the proof of documents would be dealt with as a preliminary issue at trial. The court’s response to the request by convening a telephone conference call with both counsel does not give rise to bias or an apprehension of bias.

b) Complaint #2: Conference call requested by Thyss was unnecessary

The Owner argued apprehension of bias because a conference call before trial was not necessary to deal with a motion to admit business records when notice was served under the Evidence Act;

Findings: My findings regarding the Owner’s first ground applies equally to this ground.

c) Complaint #3: Owner’s requests for conference calls ignored

The Owner argued apprehension of bias alleging that the court refused requests by the Owner for conference calls but conducted conference calls when requested by Thyss. The Owner provided no examples of instances where a conference call requested by the Owner had been refused.

Findings: Each request for a conference call is considered by the court. If the proposed subject of the conference call is one that is properly dealt with by way of conference call then a conference call is scheduled with all counsel participating. Otherwise it is not. I find no bias or apprehension of bias on this ground.

d) Complaint #4: Court did not sanction Thyss for breach of rule 1.09

The Owner argued apprehension of bias because the court did not sanction Thyss’ counsel for failure to use neutral language and for arguing its point in the letter requesting a conference call for directions regarding the admissibility of documents.

Findings: In my view the letter from Thyss’s counsel requesting a conference call to address a trial management issue did not require court sanction except in regards to Thyss’ failure to copy Owner’s counsel, for which Thyss was admonished and apologized. I find no bias or apprehension of bias on this ground.

e) Complaint #5: Court sanctions unevenly

The Owner argued apprehension of bias because the Owner was sanctioned for not paginating a court document and the court treats Thyss counsel and Owner’s counsel differently.

Findings: Paragraph 6 of the court’s directions issued on January 23, 2012 provides as follows:

6. Document books:

(a) Each party shall prepare four (4) sets of document books containing all documents to be relied on at trial. Documents attached as exhibits to affidavits filed as evidence in chief need not be duplicated in the document books but shall be treated as if they were included in the document book(s) for purposes of these directions. Each document book shall be titled “Document Book” and shall be indexed, tabbed and page numbered. Only documents contained in a document book prepared in compliance with these directions may be tendered in evidence at trial, except with leave of this court.

If a document book submitted by a party was not paginated the court should have instructed that party to paginate the document for ease of use at trial. In this reference I instructed the Assistant Trial Co-ordinator to contact Thyss’ counsel before trial to paginate a document that had been filed without proper pagination. If the Owner filed a document without pagination counsel would also have been directed to paginate the document for use at trial so that witnesses could find the pages referred to when being questioned at trial. I find no bias or apprehension of bias arising from the reference master instructing the Assistant Trial Coordinator to instruct counsel to comply with procedural directions.

During the trial the Owner proffered as an exhibit a series of expert reports prepared by George Smith of Gemini Elevators, the Owner’s expert witness. The expert reports had not been served in accordance with the requirements of rule 53 nor had the Owner complied with the court’s directions. The proposed exhibits were not collated, paginated or reproduced in sufficient numbers of copies for the court, the witness and all parties, contrary to the court’s directions. Rather than refuse to allow the reports to be filed the court gave mid-trial directions allowing the Owner time to properly prepare the exhibits in a suitable format, tabbed, paginated and with sufficient copies. The Owner’s complaint that it is treated more harshly is unfounded and contrary to the facts.

f) Complaint #6: Permitting plaintiff to file exhibit 7

The Owner argued apprehension of bias because Thyss was permitted to file a new exhibit at trial but the Owner was not..

Findings: The document that Owner’s counsel refers to is exhibit 7. The information contained in exhibit 7 is identical to the information contained in the account statements filed as exhibits “A”, “B” and “C” attached to exhibit 6, the affidavit of Mike Tate, served and filed in advance of trial as directed. The only difference in the two versions of the account statements is one of format: where an account statement included two building addresses in one statement, the court asked Thyss to separate the information out into building-specific statements. The information is the same. The reason for separating the data on a building-by-building basis was for ease of calculation. The Owner is incorrect to assert that the court permitted Thyss to file new exhibits but did not afford the same accommodation to the Owner. Thyss’ exhibit 7 is not new information. There is no bias or apprehension of bias on this ground.

g) Complaint #7: Judging credibility of a witness

The Owner argued that by questioning Ms Brown about the four Schindler invoices in Thyss’ document book I created an apprehension of bias because, as presiding reference master, I “delved into the arena” and prejudged the credibility of a witness. Counsel also argued apprehension of bias because I referred to Ms Brown as “being coy”, indicating that I had made a finding of credibility against her.

Findings: Ms Brown was on the witness stand when Owner’s counsel brought the mid-trial recusal motion. The Schindler lien claim reference had been case managed together with the Thyss lien claim reference until the Schindler reference settled. Thyss’ document book included four invoices on Schindler letterhead, addressed to the Owner, to the attention of Ms Brown.

Under cross-examination Thyss’ counsel asked Ms Brown whether she had received each of the four Schindler invoices addressed to her attention. She responded in each case: “it is possible it was received”. She did not know whether the invoices were paid. Owner’s counsel objected to the questions as not relevant. I ruled that questions about the Schindler invoices were relevant because the Owner had contracted with Schindler to carry out repairs at Weston Road around the time that the Thyss contracts ended. The Schindler invoices were potentially relevant to the Owner’s set-off claim alleging that Thyss had not performed its contractual maintenance obligations.

Because the Owner objected to the authenticity and admissibility of the four Schindler invoices, had Ms Brown admitted receiving them Thyss would not have had to call a witness from Schindler to prove them as business records. The Owner had received Thyss’ document book in advance of trial and knew that the Schindler invoices were included in it. Ms Brown could have reviewed the Owner’s records before trial and informed herself as to whether the Schindler invoices matched her records. She admitted on cross-examination that she was the only person that Schindler dealt with and the only person to whom Schindler would address communications.

Ms Brown’s answers in response to questions about the invoices were evasive. She testified that she did not recall seeing the invoices, that it was possible that she did see them and that it is possible that the Owner paid them. When asked in cross-examination whether she disputes the authenticity of the four Schindler invoices Ms Brown responded that she could not agree or disagree, and that it never crossed her mind that the documents would be fabricated and that there was no reason to believe that the documents are fictitious. She acknowledged that Schindler carried out work in January 2005, which matches the dates of the invoices. But she evaded admitting that the documents are what they purport to be, requiring Thyss to call a witness from Schindler to prove the documents as business records.

Rule 55.01 provides:

(1) A referee shall…devise and adopt the simplest, least expensive and most expeditious manner of conducting the reference and may (b) dispense with any procedure ordinarily taken that the referee considers to be unnecessary, or adopt a procedure different from that ordinarily taken.

The rule gives a reference master wide powers as to the procedure on a reference. An inquisitorial style is one where the trier of fact asks questions. Rule 55.01 permits this approach where appropriate and, in my view, it was appropriate and necessary in this instance because the witness was evasive in her answers about the Schindler invoices.

One of the roles of a trial judge is to assess credibility of witnesses. I was concerned that Ms Brown was coyly refusing to answer the questions and admit the invoices, thus compromising her credibility. I pointedly used the word “coy” in court. Coy means “reluctant to give details about something sensitive”. “Sensitive” means “kept secret or with restrictions on disclosure”[^17]. In my view, observing Ms Brown in cross-examination about the Schindler invoices, I found her to be reluctant to give details about something (the Schindler invoices) that she wanted to keep from being disclosed (or proven). “Coy” is the proper English word to convey that concern to her. I was concerned that Ms Brown was misguided and under the impression that if she refused to admit the invoices they could not be relied on as evidence. In an effort to allow Ms Brown an opportunity to preserve her credibility I told her that her answers about the Schindler invoices were coy and gave her an opportunity to supplement her answers. She did not wish to do so.

Ultimately the four Schindler invoices were proven through a witness employed by Schindler who testified that the invoices are business records. As such they are records properly admissible under section 35 of the Evidence Act.

In my view, communicating to a witness that evasive answers undermine her credibility, and giving her an opportunity to cure it, is not bias nor does it give rise to an apprehension of bias. I find no bias or apprehension of bias on this basis.

h) Complaint #8: Requiring Owner to file proof of service of summonses

The Owner argued apprehension of bias because the Owner was required to file proof of service of summonses to witnesses but Thyss was not required to do so.

Findings: The simple answer is that at the trial management stage the Owner had included on its witness list multiple witnesses who were to be summonsed. None of the Thyss witnesses were under summons.

The purpose of requiring proof of service of summonses to witness was twofold: (i) to know how many witnesses on the Owner’s witness list were actually going to be summonsed to attend at trial to testify so that Thyss would not be put to the expense of preparing unnecessarily to cross-examine witnesses identified in the pretrial process as witnesses to be summonsed but who in fact had not been served with a summons, and (ii) to protect the Owner should a witness who was summonsed fail to appear, causing the Owner to seek relief from the court. I find no bias or apprehension of bias on this ground.

i) Complaint #9: Proposed expert rejected as expert

The Owner argued apprehension of bias because he was unsuccessful in his motion to have the court accept Mr. Sokoloff as an expert witness.

Findings: A party’s lack of success on a procedural ruling does not give rise to bias against that party or an apprehension of bias. In a contested matter there is a winner and a loser for every ruling. Detailed reasons (see procedural ruling #8) explain why the court refused to accept Mr. Sokoloff as an expert. I find no bias or apprehension of bias on this ground.

[77] The case law on apprehension of bias is well developed. The test for apprehension of bias is an objective one. It presupposes that a reasonable person knows and considers the context of the impugned behavior, including the length and difficulty of the proceedings. The test is set out succinctly by De Grandpré J. in his dissent[^18] in Committee for Justice and Liberty v. Canada (National Energy Board), 1978 1 S.C.R. 369:

“the apprehension of bias must be a reasonable one held by reasonable and right minded persons, applying themselves to the question and obtaining thereon the required information. … that test is "what would an informed person, viewing the matter realistically and practically--and having thought the matter through—conclude...The grounds for this apprehension must, however, be substantial”.

[78] This reference has been exceptionally long and complex, not because of the issues raised in the lien claims themselves but rather because of the Owner’s conduct throughout the reference, as described in the chronology at Schedule “B” of these reasons. It has been a lengthy and difficult process.

[79] A trial judge is entitled to make reasonable criticism respecting the conduct of counsel and witnesses who appear in court: R. v. McCullough, 1998 OJ 2914 (C.A.).

[80] This is the third attempt by the Owner to remove me as presiding reference master for bias or apprehension of bias. The first attempt was by motion heard November 24, 2010, decision released December 21, 2010 and reasons released February 11, 2011. I dismissed the motion and ordered the Owner to pay costs of $9,151.69 to Thyss. The Owner brought an application to the Divisional Court to judicially review the refusal to recuse. A panel of three judges of the Divisional Court dismissed the application with reasons released July 27, 2012, ordering the Owner to pay costs of $9,500.00 to Thyss.

[81] The Owner’s mid-trial motion to recuse fails. The Owner does not like the procedural rulings I have made throughout this trial. The Owner has been unsuccessful in many of the procedural rulings because the unsuccessful procedural challenges were ill founded. Displeasure over unsuccessful results is not grounds to disqualify the trial judge. The Owner tried this tactic previously and was unsuccessful before me and also unsuccessful before three judges of the Divisional Court. The Owner’s tactics have not changed. Rather than abiding by procedural orders, the rules of civil procedure and the rules of evidence, the Owner continues to seek relief and then asks for the maker of decisions not in its favour to recuse herself when the defendant is unsuccessful.

[136] In Rogers Wireless Inc. v Celluland Canada Inc.[^19] Master Haberman summarizes applicable principles that emerge from recusal motions, including:

• The grounds of apprehension of bias must be substantial;

• The onus of demonstrating bias lies on the party alleging it;

• The burden of proof is a heavy one in the midst of an ongoing proceeding…interference should only be in the ‘in the most extraordinary cases;

• There is a presumption that officers of the court will carry out their oaths of office, which can only be displaced by cogent evidence. A mere possibility or suspicion will not suffice;

• The presumption of impartiality carries considerable weight. The law should not carelessly evoke the possibility of bias in a judge whose authority depends on it;

• While litigants are entitled to a fair and impartial judge they are not entitled to a favourable one;

• An unfavourable disposition is not indicative of bias if it is objectively justifiable;

• The court must not be intimidated by a litigant who makes unfounded allegations because he is unhappy with decisions made against him. If a judge steps aside merely for the asking then justice would neither be done nor be seen to be done;

• Toronto case management is based on a single master hearing all motions, acquiring familiarity with the facts of the case, the issues, and the dynamics between the parties and their counsel. This level of familiarity is considered beneficial because it leads to efficiencies;

• The legislation that put case management in place is “prima facie fair and just” and one that permits a judge or master to take into account, in each motion, their accumulated knowledge of the case, gained from previous contact with the action;

• In the context of a case managed action the test of reasonable apprehension of bias is even more stringent. An applicant must demonstrate that the judicial officer is no longer capable of being persuaded by evidence and argument in subsequent motions; and

• The real question is whether the judge has demonstrated that he (or she) has decided a matter to the extent of no longer being capable of persuasion.

[82] Both counsel are familiar with the Rogers Wireless case because it was referred to extensively on the first recusal motion in this reference. Construction lien references are subject to a form of case management through the hearing for directions process pursuant to the reference rule (rule 55) and section 67 of the Construction Lien Act. Although Master Haberman’s reasons in Rogers Wireless were in respect of a case managed action that was subject to rule 77, the principles apply equally to the form of case management used in construction lien references in Toronto. I agree with Master Haberman and adopt her analysis of the applicable principles.

[83] Applying these principles I find that the Owner has not met the onus of demonstrating actual bias or that a reasonable and informed person would have reason to believe that it is more likely than not that I, as the decision maker, would not decide the matters fairly.

[84] For these reasons the Owner’s mid-trial recusal motion fails.

#11. Defendant’s request for leave to introduce TSSA reports

[85] The Owner asked the court to grant leave to permit the Owner to introduce into evidence TSSA reports notwithstanding that these reports were not served as exhibits to an affidavit of a witness or included in the Owner’s document book delivered before trial. As explained in procedural ruling #5, the pretrial order of January 23, 2012 clearly required documents that were to be relied on at trial to be served in a document book or as exhibits to an affidavit. Paragraph 6 of the order for directions issued on January 23, 2012 provided:

6. Document books:

(a) Each party shall prepare four (4) sets of document books containing all documents to be relied on at trial. Documents attached as exhibits to affidavits filed as evidence in chief need not be duplicated in the document books but shall be treated as if they were included in the document book(s) for purposes of these directions. Each document book shall be titled “Document Book” and shall be indexed, tabbed and page numbered. Only documents contained in a document book prepared in compliance with these directions may be tendered in evidence at trial, except with leave of this court. emphasis added

[86] In this case the TSSA reports that the Owner seeks to introduce were part of a “request to admit” that the Owner served on Thyss, but Thyss refused to admit the TSSA documents. In the absence of including the TSSA reports in a document book or as exhibits to an affidavit of evidence in chief served before trial, the TSSA reports are not evidence that may be adduced at trial without leave. Thyss understood that the TSSA reports would not be introduced into evidence at trial and prepared for trial on that basis. Thyss prepared for trial in reliance on the procedural orders. No TSSA inspector was called as a witness at trial.

[87] As previously explained, the reason for the pretrial process and orders for directions in a construction lien reference is to narrow the issues and ensure that all parties know the case that they must meet at trial. Parties develop the theory of their case and trial strategy, and prepare for trial, in reliance on the case as disclosed in the pretrial hearing for directions process.

[88] Counsel for the Owner did not ask for leave to admit the TSSA reports until day four of trial, after Thyss had closed its case in chief and cross-examined defence witnesses.

[89] The Owner offered no explanation for its failure to include in its document book the TSSA reports that it sought to introduce at trial. I find that there would be actual prejudice to Thyss if the court were to grant leave on the fourth day of trial to allow the TSSA reports to be admitted because Thyss cannot go back and restructure its case to take these additional documents into account at this late date. For these reasons the Owner’s request for leave to introduce the TSSA reports into evidence was refused.

#12. Scope of examination in chief of Ms Massri

[90] The Owner summonsed Fatima Massri to testify. The October 17, 2011 order for directions provided as follows:

Witness statements:

(1) Witness statements provide a summary of the evidence proposed to be adduced from each witness at trial, to avoid surprise at trial. Only evidence summarized in a witness statement signed by the witness may be called at trial. Where the proposed witness is unco-operative and must be summonsed to trial a statement of anticipated evidence signed by counsel for the party calling the witness may be filed instead.

(2) The plaintiff must serve all witness statements by November 30, 2011.

(3) The defendant must serve all witness statements by December 16, 2011.

(4) The plaintiff must serve all reply witnesses statements by a date to be fixed at the next pretrial.

(5) No witness may be called at trial unless a witness statement has been served as ordered.

(6) All witness statements must be filed with the court by January 16, 2012.

[91] The Owner failed to comply with the October 17, 2011 order. I extended the time for the Owner to comply in the January 23, 2012 order as follows:

7. At today’s hearing for directions Mr. Bleta told the court that he overlooked the deadline set out in the court’s October 17, 2011 order. Mr. Bleta filed unsigned statements at the hearing. The court will allow the defendant to call these witnesses provided the defendant files signed statements of anticipated evidence of witnesses to be summonsed no later than February 1, 2012. One purpose of requiring the witness (where co-operative) or counsel (where the witness is unco-operative) to sign witness statements is to avoid surprise at trial.

[92] The January 23, 2012 order also directed the parties as follows:

3. Trial:

a) Summary Trial: Trial shall be by way of modified summary trial. The summary procedures described in rule 76 apply unless otherwise ordered. Where a witness is not co-operative such that an affidavit of evidence in chief is not available and the witness must be summonsed then the witness may be examined in chief orally, provided a statement of anticipated evidence signed by counsel was served and filed as directed, subject to the time limits set out in Schedule “B” to this order. emphasis added

[93] The court clearly and unambiguously directed the parties to deliver, for each witness, either (i) affidavits of evidence in chief or (ii) where a witness was under summons, statements of anticipated evidence signed by counsel outlining the anticipated evidence. The purpose, as stated in paragraph 7 of the directions, is to avoid surprise at trial.

[94] The statement of anticipated evidence delivered by the Owner for Ms Massri, a witness under summons, is reproduced below:

FATIMA MASSRI -

1. as the Plaintiff’s representative to dealings with the Defendant from the latter ½ (sic) of 2004 she will give evidence as to her instructions on how to deal with the Defendants, and what the Defendants asked for and what the Plaintiff was prepared to do.

2. she will testify as to her various telephone calls with the Defendants in December 2004 and how she informed Ms Brown that the Plaintiff was terminating all the contracts with the Defendants, and that the Plaintiff had no intention of re-attending at the properties since a specific date in December 2004.

3. she will testify as to how her relationship ended with the Plaintiff and any discussions she had with the Plaintiff regarding her last conversations with the Defendants.

[95] Nowhere in the statement of anticipated evidence of Ms Massri does the Owner describe that the witness will be asked to give evidence about the state of accounts (charges and receipts) or the calculation of arrears as disclosed by the accounting statements attached as exhibits to Mr. Tate’s affidavits.

[96] At trial Owner’s counsel began to question Ms Massri about how the accounting statements attached as exhibits to Mr. Tate’s affidavits were generated. Thyss objected on grounds that the questions called for evidence outside the scope of the statement of anticipated evidence for Ms Massri. Thyss argued that if the Owner intended to question Ms Massri about how the accounting statements were generated then the Owner should have included that topic and the anticipated evidence on that issue in her statement of anticipated evidence.

[97] The Owner argued that accounts were under Ms Massri’s auspices when she was employed by Thyss so that the questions are proper ones. That argument fails because (i) Ms Massri did not prepare the accounting statements. As an employee her job was to collect arrears in customer accounts; and (ii) if the Owner had intended to question her about how accounting statements were generated and interpreted then her statement of anticipated evidence should have disclosed that topic and the anticipated evidence to be adduced on that topic.

[98] The purpose of the pretrial hearing for directions process in construction lien references is to narrow the issues and limit the scope of the reference trial. Rule 55 provides that a referee may dispense with any procedure ordinarily taken that the referee considers to be unnecessary, or adopt a procedure different from that ordinarily taken.

[99] The orders of October 17, 2011 and January 23, 2012 gave clear directions to counsel and parties that statements of anticipated evidence were required to avoid surprise at trial. The Owner was familiar with Thyss’ account statements. Owner’s counsel knew that Ms Massri had been Thyss’ collections clerk in late 2004. He knew or ought to have known prior to delivering her statement of anticipated evidence that he intended to question her about the account statements. That topic and the anticipated evidence about it ought to have been included in the statement of anticipated evidence of Ms Massri.

[100] For these reasons Thyss’ objection is valid and the line of questioning was not permitted.

End of Schedule “C”: Reasons for Procedural Rulings

COURT FILE NO.: 04-CV-280219

DATE: January 22, 2013

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

THYSSENKRUPP ELEVATOR

(CANADA) LIMITED

Plaintiff

• and -

1147335 ONTARIO INC.

Defendant

REASONS FOR JUDGMENT

Master C. Albert

Released: January 22, 2013

[^1]: and 9 other actions listed in Schedule “A”; note: original release had incorrect court file number

[^2]: Justice Matlow referred one action for each building: court file numbers 04-CV-280219, 04-CV-280220, 04-CV-280276, 04-CV-280284 and 04-CV-280310

[^3]: Three tenant witnesses from 1765 and 1776 Weston Road, three tenant witnesses from 2667 and 2677 Kipling Avenue and three tenant witnesses from 1011 Lansdowne Avenue.

[^4]: At trial Mr. Bleta advised that a different inspector would be attending but no inspector from TSSA was called by the Owner as a witness.

[^5]: The account statements attached to Mr. Tate’s affidavit as exhibits combine 1765 and 1776 Weston Road into one statement and 2667 and 2677 Kipling Avenue into one statement. I directed Thyss to break each of these statements into one per building address, which Thyss did and filed as exhibit 7.

[^6]: the reports were filed as exhibit 9

[^7]: Exhibit 2, tabs 542, 543, 544 and 545, served on the Owner before trial and challenged as to authenticity by the Owner

[^8]: Technical Standards & Safety Authority

[^9]: Exhibit 6

[^10]: $5,000.00 x 12 elevators = $60,000.00

[^11]: Originally default judgments had been issued in the lien claim actions and Thyss had executed on the judgments with garnishments. When the default judgments were set aside the funds garnished were placed into the trust account of the Owner’s counsel. The Owner changed counsel and ultimately the funds held in trust were placed in its counsel’s trust account.

[^12]: All submissions of Thyss and of Owner must be filed with ATC Backes at 6th floor, 393 University Ave.

[^13]: See footnote 12

[^14]: It is the practice in construction lien references in Toronto to make settlement conferences available upon request if the case is suitable and another construction lien master is available. Settlement conferences are not mandatory and are only available if requested by all parties.

[^15]: The timetable to prepare the motion provided for the motion record to be served by December 31, 2009, the responding motion record to be served by January 31, 2010, reply motion records to be served by February 28, 2010 and cross-examinations to be conducted by March 31, 2010. Thereafter dates available to the court to hear the motions in May, June and July, 2010 were not available to counsel.

[^16]: Sopinka, Lederman & Bryant: The Law of Evidence in Canada, 3rd edition, LexisNexis Canada Inc. 2009

[^17]: Concise Oxford Dictionary, 10th edition, pages 330 and 1305

[^18]: Despite that his opinion is a dissenting one, there is no dissent as to the applicable test for reasonable apprehension of bias

[^19]: [2010] O.J. No. 1631 at para. 111