ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 11-CV-430602
DATE: October 2, 2013
BETWEEN:
MARIA KONSTAN, JIM KONSTAN, ELAINE KONSTAN, ETTA KONSTAN
Plaintiffs
– and –
SAMUEL JACOB BERKOVITS, SAEED HOSSEINI, TED FRITZ, WILLIAM BLAIR, TORONTO POLICE SERVICES BOARD
Defendants
- and –
SAMUEL JACOB BERKOVITS
Plaintiff by Counterclaim
- and –
MARIA KONSTAN and HAROLD GERSTEL
Defendants by Counterclaim
W.C. McDowell for the Defendant, Plaintiff by Counterclaim, Samuel Jacob Berkowitz
Morris Manning, Q.C. for the Defendant by Counterclaim, Harold Gerstel
HEARD: September 20, 2013
PERELL, J.
REASONS FOR DECISION
A. INTRODUCTION
[1] In this action, the defendant Samuel Berkowitz brought a counterclaim against Maria Konstan, and he joined Harold Gerstel as a defendant to that counterclaim. At this moment, Mr. Gerstel has a pending motion to have Mr. Berkowitz’s counterclaim struck out and to have Mr. Berkowitz found to be in contempt of court because, in circumstances that I will describe below, Mr. Berkowitz admittedly breached the deemed undertaking by broadcasting on his radio show an audio recording that had been produced in the discovery phase of the litigation.
[2] As a part of his motion to sanction Mr. Berkowitz, Mr. Gerstel served a summons to examine Mr. Berkowitz’s lawyer, Brian Shiller.
[3] Now before the court is a motion to quash the summons. For the reasons that follow, I grant the motion.
[4] The factual background to the main action and to the counterclaim is salacious, but very little of the sensational facts are pertinent to the motion to quash the summons, and so I can be relatively brief in describing the underlying litigation, which involves a bizarre and nasty dispute between Mr. Berkowitz and Mr. Gerstel, who are business competitors and rivals in the business of buying used gold jewelry.
[5] In the main action, Maria Konstan, who is Mr. Gerstel’s employee, claims that she was wrongfully accused by Mr. Berkowitz and wrongly prosecuted in criminal proceedings for allegedly hiring a felon to kill Mr. Berkowitz. In defence of Ms. Konstan’s claim in the main action and by way of a counterclaim, Mr. Berkowitz states that it is true that Ms. Konstan conspired with Mr. Gerstel to hire an assassin.
[6] Ms. Konstan’s action commenced in the summer of 2011, and in December 2012, she served a copy of her affidavit of documents on Mr. Berkowitz’s lawyers.
[7] Copies of the documents in the affidavit of documents were disclosed and produced in two stages, and on December 14, 2012, Mr. Berkowtiz’s lawyer received 2 CDs of conversations between Mr. Gerstel’s wife and two rabbis who were attempting to bring an end to the Berkowitz and Gerstel dispute, because it was an embarrassment to the community.
[8] On December 19, 2012, Mr. Berkowitz went to Mr. Shiller’s office to pick up a package. The package contained a brief of documents about the litigation. The package contained the 2 CDs, which Mr. Berkowitz listened to in his care as he returned from his visit to his lawyer’s office.
[9] The next day, Mr. Berkowitz broadcast excerpts from the audio recordings on the radio show that he has hosted on CFRB since 2009.
[10] On December 28, 2012 and again on December 31, 2012, Mr. Manning, Mr. Gerstel’s lawyer wrote Mr. Shiller and asked for an explanation for Mr. Berkowitz’s apparent breach of the deemed undertaking rule and for an explanation for what appeared to be a contemptuous breach of the Rules of Practice.
[11] On January 8, 2013, Mr. Shiller wrote Mr. Manning, and Mr. Shiller advised that given the threat of contempt proceedings, he had instructed Mr. Berkowitz to remain silent.
[12] On January 31, 2013, Mr. Manning wrote Mr. Shiller again asking for an explanation and information about Mr. Shiller’s firm’s involvement, and when no answer was forthcoming, on February 14, 2013, Mr. Gerstel brought a motion to stay the counterclaim, strike out Mr. Berkowitz’s counterclaim, and for contempt proceedings.
[13] On May 15, 2013, Mr. Berkowitz delivered an affidavit in response to Mr. Gerstel’s motion for sanctions for breach of the deemed undertaking. In his affidavit, Mr. Berkowitz provides an explanation for what he admits was a breach of the implied undertaking. For present purposes, the following paragraphs from his affidavit are the most pertinent:
Prior to the commencement of these proceedings, I was aware of the implied undertaking rule. It was my understanding that this rule mandated that I was not permitted to provide to third parties documents generated in a proceeding if those documents were or could potentially be injurious to the provider.
It was my understanding that the recordings provided to me were in the public domain. It was also my understanding that they did not belong in the Konstan lawsuit and had been provided in error. Also it was my understanding that the recordings did not contain evidence of any kind and that in the event of their release the only party who could suffer injury from their release would be me. I was wrong. I learned following the Broadcast that the Recordings were not in the public domain and were subject to the implied undertaking rule. ….
Had I been aware that the Recordings were subject to the implied undertaking rule, I would not have aired them. I sincerely apologize to the parties and to this Honourable Court for this inadvertent error on my part. I accept full responsibility for this error. I had no intention to act in a contemptuous manner. …
I offer no excuses for my conduct. It was a mistake and I accept full responsibility for it. While I was in contact with my lawyers, it never dawned on me that I should ask them about the issue as I could not fathom that there would be a problem. Accordingly, my lawyers did not know that the clips would be aired. My lawyers have explained to me that it does not matter that the recordings would ultimately become part of the public record at trial. They were not part of the public record when I aired them.
[14] On May 22, 2013, Mr. Gerstel served a summons to cross-examine Mr. Berkowitz. At the same time, Mr. Gerstel served a summons to examine Mr. Shiller as a witness pursuant to rule 39.03.
[15] Mr. Berkowitz now seeks an order quashing the summons to cross-examine his lawyer as a witness for the sanctions motion.
[16] There was no dispute between the parties about the law applicable to a motion to quash a summons. As will appear from the discussion below, there is general jurisprudence, which I will discuss first, and also special jurisprudence for the situation where the target of the summons is a lawyer acting for a party in the proceedings, which jurisprudence I will discuss after applying the general jurisprudence.
[17] Where a party serves a summons to examine a witness for a pending motion or application, an opposing party may move to quash the summons for the examination of the witness on the ground that the evidence sought is not relevant to the application or motion or that the examination or the underlying proceeding would amount to an abuse of process: Canada Metal Co. v. Heap (1975), 1975 675 (ON CA), 7 O.R. (2d) 185 (C.A.); Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1995), 1995 7258 (ON SC), 27 O.R. (3d) 291 (Gen. Div.); Schreiber v. Mulroney (2007), 2007 82797 (ON SC), 87O.R. (3d) 643 ( S.C.J.).
[18] If the summons to the witness is challenged, the party seeking the examination should be prepared to show that the evidence is relevant to the pending application or motion and that the party to be examined is in a position to provide the evidence: Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1995), 1995 7258 (ON SC), 27 O.R. (3d) 291 (Gen. Div.); Heslin v. Verbeeten, [2001] O.J. No. 1602 (S.C.J.); Siegel v. Mulvihill Capital, [2009] O.J. No. 265 (S.C.J.).
[19] If the party seeking the examination cannot satisfy the relevancy and evidentiary screening, then the summons is regarded as a fishing expedition and an abuse of process: Canada Metal Co. v. Heap (1975), 1975 675 (ON CA), 7 O.R. (2d) 185 (C.A.); Schreiber v. Mulroney (2007), 2007 82797 (ON SC), 87 O.R. (3d) 643 (S.C.J.); René v. Carling Export Brewing & Malting Co. (1927), 1927 382 (ON SC), 61 O.L.R. 495 ( S.C.); Agnew v. Ontario Assn. of Architects (1988), 1987 4030 (ON SC), 64 O.R. (2d) 8 (Div. Ct.); Bettes v. Boeing Canada/DeHavilland Division (1992), 1992 7789 (ON SC), 10 O.R. (3d) 768 (Gen. Div.); Beck v. Bradstock (1976), 1976 874 (ON SC), 14 O.R. (2d) 333 (H.C.J.); Lauzon v. Axa Insurance (Canada) 2012 ONSC 6730 (S.C.J.) at paras. 27-28. Similarly, if the examination is being used for an ulterior or improper purpose, or if the process is itself an abuse, it will be set aside on that ground: Beck v. Bradstock (1976), 14 O.R. (2d) 333 (H.C.J.).
[20] If the evidence would be possibly relevant to the issues, the burden is on the party challenging the summons to show that the examination or the underlying application is an abuse of process: Manulife Securities International Ltd. v. Société Générale (2008), 2008 13367 (ON SC), 90 O.R. (3d) 376 (S.C.J.), leave to appeal to Div. Ct. refused [2008] O.J. No. 1698 (Div. Ct.); Heslin v. Verbeeten, [2001] O.J. No. 1602 ( S.C.J.).
[21] In considering whether to strike a summons to a witness, the court will consider the nature and grounds for the application to determine what are the issues for which the examination is in aid: Ontario Federation of Anglers & Hunters v. Ontario (Ministry of Natural Resources), 2002 41606 (ON CA), [2002] O.J. No. 1445, (C.A.), leave to appeal refused [2002] S.C.C.A. No. 252 (S.C.C.); Ashley v. Marlow Group Private Portfolio Management Inc., [2005] O.J. No. 4941 ( S.C.J.); Alpha Forest Products Inc. v. Hanna, [2006] O.J. No 3212 (S.C.J.); Teranet Inc. v. Canada Marketing Corp., [2007] O.J. No. 745 (S.C.J.).
[22] Applying the general jurisprudence, in my opinion, Mr. Gerstel has not met the onus of showing that that Mr. Shiller is in the position to provide relevant evidence for the pending motion. I say this for three reasons.
[23] First, it appears that Mr. Shiller had nothing to do with Mr. Berkowitz’s breach of the deemed undertaking, apart from advising Mr. Berkowitz after the fact that he had breached the undertaking. This after-the-fact legal advice is not a relevant fact to the sanctions motion now pending before the court.
[24] Mr. Gerstel submits that there is an issue about Mr. Berkowitz’s state of mind and whether he intentionally or inadvertently breached the deemed undertaking and, therefore, Mr. Gerstel argues that Shilling has relevant evidence to offer. Since Mr. Berkowitz did not discuss the CDs with Mr. Shilling at any time between the time he picked up the package and broadcast excerpts over the radio, Mr. Shilling can have nothing relevant to say about these issues.
[25] Second, it appears that anything else Mr. Shiller might have to say about the events leading to the breach of the implied undertaking would be immaterial and hence irrelevant. In this regard, Mr. Gerstel submits that Mr. Shiller’s evidence is relevant because it will enable the court to have a complete picture of the events relating to the misuse of the materials provided as part of the discovery process. The problem with this submission is that relevant evidence must be material, and materiality is something different than having a complete picture of the events.
[26] What facts are in issue, which is to say, what facts are contested or disputed, is explained by the idea of materiality. Evidence that does not address any issue arising from the motion or the credibility of a witness (perception, memory, narration, or sincerity) is immaterial, and it is inadmissible: Sopkina, Lederman, Bryan, The Law of Evidence in Canada (2nd ed.), paras. 2.36, 2.50. I do not see how Mr. Shiller can have anything material to say about the genuinely contested facts that are matters to be determined in the pending motion.
[27] Third, assuming that Mr. Shiller had something material and relevant to say, it would appear to be inadmissible as privileged, unless Mr. Berkowitz waives solicitor-client privilege, which, notwithstanding Mr. Gerstel’s arguments to the contrary, Mr. Berkowitz has not done and which he cannot be compelled to do. In other words, even if Mr. Shiller had material and relevant evidence, he is not in the position to provide it to the court, because Mr. Berkowitz has not waived privilege.
[28] Mr. Gerstel submits that Mr. Berkowitz waived privilege because he refers to the fact that he received a telephone call from his lawyer’s office to pick up the package with the CDs and because he deposes that Mr. Shiller told him after the fact that Mr. Gerstel was correctly calling him out for breaching the deemed undertaking. I fail to see how these references in Mr. Berkowitz’s affidavit can be regarded as an advertent or inadvertent waiver of the lawyer-client privilege for the entirety of all communications about the breach of the implied undertaking, assuming there were such communications.
[29] Therefore, based on the general jurisprudence, I quash the summons.
[30] I also quash the summons based on the special jurisprudence about a summons to examine a lawyer for one of the parties.
[31] In R. v. 1504413 Ontario Ltd. 2008 ONCA 253 at paras. 13-17 (C.A.), the Ontario Court of Appeal held that the issuance of a summons to opposing counsel should not be done absent exceptional circumstances that relate to the materiality and the necessity of the lawyer’s evidence. See also: Laboratoires Servier v. Apotex Inc., [2008] F.C.J. No. 431 (T.D.); George Forrest International Afrique S.P.R.L. v. Forsys Metals Corp., 2010 ONSC 5670, [2010] O.J. No. 4546 at para. 25-27 (S.C.J.); Neger v. Dalfen, [2009] O.J. No. 4821 (O.C.J.); R. v. Sinclair, [2010] O.J. No. 4821 (S.C.J.); Ocean v. Economical Mutual Insurance Co., [2010] N.S.J. No. 15 (S.C.).
[32] In R. v. 1504413 Ontario Ltd., supra, the Court of Appeal stated at paras. 16-17:
- Whether as a matter of custom or policy, issuing a summons to counsel for the opposite party to testify against his or her client is virtually unheard of and should not be done absent the most exceptional circumstances.
17 At a minimum, such circumstances would require a showing of high materiality and necessity (assuming that the proposed evidence is otherwise admissible). Although not exhaustive, necessity in this context will involve considerations such as the importance of the issue for which the testimony is sought, the degree of controversy surrounding the issue, the availability of other witnesses to give the evidence or other means by which it may be accomplished (such as the filing of an agreed statement of fact), the potential disruption of the trial process and the overall integrity of the administration of justice.
[33] While the alleged events of the underlying litigation are extraordinary, the circumstances of the breach of the implied undertaking do not show a high materiality and necessity to learn what Mr. Shiller might have said or done or observed. There is no extraordinary justification to summons Mr. Shiller.
[34] I conclude that the summons served on Mr. Shiller should be quashed.
[35] If the parties cannot agree about costs, they may make submissions in writing beginning with Mr. Berkowitz’s submissions within 20 days of the release of these Reasons for Decision, followed by Mr. Gerstel’s submissions within a further 20 days.
Perell, J.
Released: October 2, 2013
COURT FILE NO.: 11-CV-430602
DATE: October 2, 2013
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MARIA KONSTAN, JIM KONSTAN, ELAINE KONSTAN, ETTA KONSTAN
Plaintiffs
‑ and ‑
SAMUEL JACOB BERKOVITS, SAEED HOSSEINI, TED FRITZ, WILLIAM BLAIR, TORONTO POLICE SERVICES BOARD
Defendants
- and -
SAMUEL JACOB BERKOVITS
Plaintiff by Counterclaim
- and –
MARIA KONSTAN and HAROLD GERSTEL
Defendants by Counterclaim
REASONS FOR DECISION
Perell, J.
Released: October 2, 2013.