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. 4A

I. An alternative to scheduling refusals motions

[1] In my Case Conference Memorandum No. 4 released on September 17, 2013 (2013 ONSC 5848), I dealt in the following way with the issue of potential refusals motions in this case:

II. 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.

[2] Following the release of the memorandum counsel sent me an email asking for the following clarification:

Your Honour,

Under Option A, you had indicated at the case conference that if a refusal was found to be improper an adverse inference may be drawn by the trial judge. The Case Management Conference Memorandum #4 provides that an adverse inference would be drawn which might bind the hands of the trial judge. I write to confirm whether that was intentional so that counsel for BDO and I may consider the 2 options presented.

I responded to counsel:

Counsel,

I cannot bind the trial judge, so an adverse inference could be drawn, if the trial judge was so inclined.

[3] On further reflection, let me rephrase my response to counsel. I have concluded that in the context of dealing with a request for the allocation of judicial time to hear a refusals motion, a judge managing a case on the Toronto Region Commercial List in fact does possess the power to give directions, such as those found in Option A to yesterday’s Case Management Memorandum, which would bind the parties at trial on the issue of the consequences of not scheduling a refusals motion. To put the matter less cumbersomely, if during the course of managing a case on the Commercial List a judge concludes that, in the specific circumstances of a case, scheduling a refusals motion would not represent a proportionate use of the court’s time and would not achieve a fair, timely and cost-effective determination of the proceeding on its merits,[^1] then the judge possesses the power to:

(i) decline to schedule the refusals motion;

(ii) direct that the fact a refusals motion was not scheduled cannot be used at trial to prejudice the party who had asked the questions which were refused by using the oft-heard argument that the party had failed to move on the refusals; and,

(iii) direct that if, at trial, an issue arises about a question refused, then the trial judge should consider the matter and, 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, with such a direction binding the parties at trial unless the trial judge determined “otherwise to prevent injustice”.[^2]

[4] I reach that conclusion for several reasons. First, a judge possesses the inherent power to manage a civil case in a manner which ensures the “just, most expeditious and least expensive determination of every civil proceeding on its merits”. That power enables a judge, in an appropriate case, to refuse to schedule interlocutory motions, such as refusals motions, where alternate means are available to ensure the case proceeds to a fair trial in a timely manner.[^3]

[5] Second, the 2010 amendments made to the Rules of Civil Procedure concerning pre-trial conferences and judicial directions following unsuccessful summary judgment motions expressly gave pre-trial judges the power to make orders regarding trial evidence which would bind the parties at trial: see Rules 20.05(2) and 50.07(1)(c). Now, as Rule 50.07(2) makes clear, a trial judge may take a different course at trial “to prevent injustice”. But, drawing an adverse inference against a party in respect of a material fact in dispute for which the party had refused to disclose relevant information does not strike me as venturing into the realm of creating an injustice.

[6] Third, given that a formal pre-trial conference structure generally is not employed on the Toronto Region Commercial List, with trial preparation forming part of any on-going case management process, judges engaging in case management on the Commercial List possess the same powers as formally given to a pre-trial conference judge under Rule 50 by analogy and by virtue of their inherent powers.

[7] Finally, as a practical matter – and in civil litigation practicality and common sense must play a large role in preparing a case for trial - as I wrote in my earlier case management memorandum:

[F]requently 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.

Why schedule a lengthy refusals motion, imposing costs and delay on all parties, when more often than not the issue of refusals will play little or no role at the trial? Of course, in a small number of cases some refusals may raise issues which could go to the fairness of the trial, but that is where case management judges must exercise their powers in light of the circumstances of the particular case.

[8] Accordingly, notwithstanding my subsequent email to counsel, Option A as worded in Case Management Memorandum No. 4, remains in place.

D. M. Brown J.

Date: September 18, 2013

[^1]: Rules of Civil Procedure, Rules 1.04(1) and (1.1).
[^2]: Rule 50.07(2).
[^3]: Abrams v. Abrams, 2010 ONSC 2703; leave to appeal refused 2010 ONSC 4714 (Div. Ct.).