SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: Bank of Montreal, Plaintiff

AND:

Mair Faibish et al., Defendants

BEFORE: D. M. Brown J.

COUNSEL:
M. Mohamed and J. Woycheshyn, for the Plaintiff

R. Quance, for the defendants, Taragh Bracken and Tarbrac Holdings Inc.

G. Bowley, for the defendants, Mair Faibish, and as agent for Renee Faibish and Libra Marketing Inc.

M. Cooper, for the defendant, Bektrom Foods Inc.

H. Wright, for the defendant, Terry Mak

G. Chouest and A. MacDonald, for the defendant, BDO Canada Limited

J. Philpott, for Giuseppe Gatti

J. DiFederico, for the defendants, Michael Falcone, Michael Falcone Professional Corporation and FalconeTurnerMoore LLP

HEARD: September 16, 2013

case conference memorandum no. 4

I. Examinations for discovery

[1] Discoveries are nearing completion. Two non-parties will be examined this week; Mr. Gatti will be examined on October 17. Wrap-up discoveries on undertakings are scheduled for October 17/18. Parties can agree to conduct wrap-up discoveries by way of written questions delivered by the end of October and answered by the end of November.

[2] All parties must deliver answers to undertakings by October 15, 2013.

II. Mediation

[3] The parties remain committed to the mediation before the Honourable Ian Binnie for December 9 and 10, 2013.

III. Expert reports

[4] BMO’s forensic accounting expert report is done. The following parties indicated that they might file responding reports on that topic: BDO; Gatti; Faibish.

[5] BDO intends to file an expert report or reports on the issues of (i) the standard of care for operating lines of credit and (ii) the standard of care for factoring arrangements. The Falcone Defendants intend to file an expert report on the issue of reasonable reliance on audited statements.

IV. Refusals

[6] In these times of very constrained judicial resources, I am loath to schedule refusals motions, in large part because experience shows that in most cases they have little tangible impact on the evidence adduced at trial. Dare I say that frequently refusals are no more than tactical posturing by a party, and when the party is faced with the issue of what a trial judge likely will want to hear by way of material evidence, advisements or refusals often crumble in the weeks just before trial.

[7] Accordingly, I offer the parties a choice on the issue of any remaining refusals:

(i) Option A: I am prepared to write an endorsement which states that the parties have agreed to refrain from bringing refusals motions, but on the clear understanding that by so doing they will not be faced at trial with the submission by an opposite party that their failure to move on refusals should work against them. Under this scenario, if, at trial, an issue arises about a question refused, then the trial judge can consider the matter. If the trial judge concludes that the refusal was proper, so be it. If the trial judge concludes that the refusal was improper, then an adverse inference would be drawn against the refusing party for failing to disclose material evidence; or,

(ii) Option B: Alternatively, if the parties cannot agree on that approach, they should let me about the volume and the nature of the refusals on which they wish to move. I will consider whether or how to schedule a refusals motion. I should observe that in light of the offer of Option A, if the parties insist on a refusals motion, they risk cost consequences if their positions turn out to be incorrect.

The parties shall send me a joint letter no later than September 30 advising which option they choose.

V. Setting a trial date

[8] I think the parties have reached the stage where they are ready to discuss potential trial dates with Morawetz J. The parties contemplate a 6 to 8 week trial. The parties shall contact Morawetz J. to secure an appointment with him to discuss trial scheduling.

VI. Next case conference

[9] If the December mediation does not result in a settlement, the parties shall book a two hour case conference before me for January, 2014 to discuss any remaining pre-trial issues, with the conference starting around 3 p.m. or so.

_________(original signed by)

D. M. Brown J.

Date: September 17, 2013