Court File and Parties

COURT FILE NO.: 11-CV-436620

Heard: November 6, 2013

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 11-CV-436620

Deutsche Bank AG v. O’Keefe

BEFORE: Master Joan Haberman

COUNSEL:
Mayzel, E. and Ward, D. for the moving party
Mr. O’Keefe, on his own behalf

JUDGEMENT

Master Haberman:

[1] By order of Perell J., dated June 25, 2012, the defendant, O’Keefe, was ordered to deliver vacant possession of 117 Rosethorn Avenue, Toronto to the defendant. It was further ordered that there would be a reference to the master to determine the amount of the debt owing by O’Keefe to the plaintiff under the mortgage. That reference was assigned to me on April 13, 2013 by order the current masters’ team leader.

Preliminary Issues

[2] An initial case conference was scheduled and adjourned at Mr. O’Keefe’s request. I then learned that Mr. O’Keefe was pursuing an appeal from Perell’s J’s order, so the matter was put on hold pending resolution of that event.

[3] The Court of Appeal ultimately dismissed the appeal on June17th, 2013. On being so advised, on June 27, 2013 I ordered the Bank to deliver a Notice of Hearing for Directions, returnable on August 7, 2013. This date was canvassed with and agreed to by both Bank counsel and Mr. O’Keefe.

[4] Despite that, Mr. O’Keefe sought to adjourn this date at the 11th hour. The request was refused. The following is an excerpt from my order that day regarding the adjournment request and the basis for my refusal:

On June 27, 2013, I learned from bank counsel that the appeal was dismissed on June 25, 2013 and at that time, I set a new date of today, at 2:00. My order putting this arrangement in place was sent to bank counsel, and he, in turn, prepared and served a Notice of Haring for Directions in this matter on June 28. 2013.

Mr. O’Keefe has, therefore, been aware of this scheduled date since that time, as he was served with the notice by fax that day.

I heard nothing at all from Mr. O’Keefe in the weeks that have passed. It was only today, only four hours before the scheduled start time of the conference that Mr. O’Keefe wrote to say that he was now seeking representation to advise him regarding a potential leave to appeal application to the Supreme Court of Canada.

In view of the fact that this is the second time that Mr. O’Keefe has sought to adjourn at the 11th hour (in this case, at the fourth hour, in fact). Further, the basis he raises for the request is something that he has had well over a month to consider. The fact that the request only came today, in my view, suggests an attempt to derail this proceeding. This adjournment request was not motivated by new or urgent circumstances. I was therefore not prepared to allow Mr. O’Keefe to dictate the timing of these events.

Mr. O’Keefe e-mailed again to say that he would be at the Court of Appeal and hence unavailable for “the next two hours”. That e-mail was sent at 10:20. As I made it clear by order issued and sent to Mr. O’Keefe before the scheduled time that we would be proceeding as scheduled, I expected he would have made himself available to address these issues. However, attempts to join him to the conference call were not successful. Accordingly, we proceeded in his absence.

[5] In my view, Mr. O’Keefe had every opportunity to participate in the Hearing for Directions, but he chose not to do so. He had no urgent matter before the Court of appeal, but appears to have chosen that time to attend at the court office, despite this prior commitment.

[6] Accordingly, Mr. O’Keefe had no input into the order that was made at the conclusion of the Hearing for Directions. The following is an excerpt from that order:

1. The bank will serve and file the affidavit on which it relies to establish its case, along with all exhibits referred therein no later than the end of August 2013;

2. The bank has leave to affect service on Mr. O’Keefe by e-mail at onewith@rogers.com, the e-mail address he has been using to communicate with counsel and with the court;

3. While I do not expect the deponent to append all source documents to her affidavit, I do expect her to review them to be in a position to confirm the accuracy of the numbers in her affidavit and this fact should be mentioned in the affidavit;

4. If Mr. O’Keefe wishes to view the source documents prior to the hearing, he can make arrangements directly with counsel to do so and they will be made available to him at a mutually convenient time at counsels’ offices for his review. He may then request that copies of those he requires be made but he must pay for those copies in advance;

5. If Mr. O’Keefe wishes that originals of the source documents he has sought copies of be made available at the hearing, he shall provide bank counsel with at least 7 clear days’ notice of that fact;

6. No originals of the source documents will be made available at the hearing unless:

• Mr. O’Keefe seeks this review;

• Mr. O’Keefe seeks copies of those documents he wants to be made available at the hearing;

• Mr. O‘Keefe pays for those copies in advance of their being made; and

• Mr. O’Keefe asks that the originals be made available at the hearing at least 7 clear days in advance of the hearing date;

7. The reference hearing is scheduled to take place for half a day, commencing at 10:00 on November 6, 2013 at 393 University Avenue, 6th floor, courtroom 603.

8. At that time, Mr. O’Keefe will be able to cross-examine the bank’s deponent on her affidavit in open court. If he decides in advance that he has no questions to ask or comments to make, he shall so advise bank counsel as well as me forthwith; and

9. This date is peremptory to both parties. An adjournment will only be granted in the event of an exceptional and unforeseeable emergency, for which the court may require documentary proof.

[7] There were two aspects to that order which are important to note. The first involves paragraph 9, where I made it clear that the date set was made peremptory to both parties, to be adjourned only in the event of exceptional and unforeseeable emergency.

[8] Despite the wording of the order, Mr. O’Keefe has repeatedly sought to adjourn this hearing. His latest efforts centre on his motion returnable in December 2013 to add his common law spouse as a defendant to the action, though what benefit he hopes to achieve from such a manoeuvre at this time remains to be seen. He also seeks to have Perell J’s order declared a nullity, something no court will do in view of the appeal from that order that was brought and lost.

[9] In view of the above, I formed the view that nothing that was going to happen in court in December 2013 would in any way affect what was scheduled to proceed before me at this time. Accordingly, I refused to adjourn the hearing date.

[10] The second item of note in my previous order is the direction to Mr. O’Keefe as regards how he can access the source documents if he so chooses. Again, despite the clear wording of the order, Mr. O’Keefe appears to have taken no steps to see or obtain copies of any of the source documents, yet his alleged lack of access to them was a source of complaint at the hearing. In view of the terms of my order, Mr. O’Keefe had no cause to complain.

Issues with Respect to How the Hearing Proceeded

[11] I explained to Mr. O’Keefe that the one witness present would be examined in chief by Bank counsel and that he would then have a right to cross-examine her, to be followed by re-examination by the bank. Mr. O’Keefe is a thoughtful and articulate man so I had no reason to expect that he did not understand this process. In any event, a party who is self-represented is under some obligation to familiarize himself with court procedure before engaging in the conduct of a hearing. If in doubt, Mr. O’Keefe could have sought clarification from me at any time.

[12] In view of Mr. O’Keefe’s repeated requests to adjourn the hearing, his presence at it was not anticipated. As a result, it appears that counsel prepared for a rather perfunctory hearing such that examination of the witness, Ms. Sato, was initially very brief. Once Mr. O’Keefe got into his cross-examination, however, it seemed to me that to be fair to him, it would be preferable for Bank counsel to do a more thorough examination in chief, which would then give Mr. O’Keefe a basis on which to found his cross-examination, rather than having to take stabs in the dark. I explained to Mr. O’Keefe that I was making this proposal as it would be helpful to him. Once the basic information came out in chief, he would then be able to cross-examine on it. On the other hand, if it came out during his cross-examination, the bank would have a right to re-examine and he would not be able to seek further clarification thereafter. This seemed to make sense to all parties and all agreed.

[13] However, part way through the process, Mr. O’Keefe suddenly objected so Bank counsel was seated and Mr. O’Keefe resumed his cross-examination. He then objected to Bank counsel having a right to re-examine. This objection was overruled as re-examination is an enshrined part of the trial process.

Attempt to Introduce Expert Evidence

[14] Early in his cross-examination of Ms. Sato, Mr. O’Keefe sought to put to her a sheet containing various figures. He advised it was a running balance sheet of his account which he had had prepared by a chartered accountant. The figures did not appear in report form or on a firm letter head. The sheet on which they were contained was neither signed nor dated so there was no indication who prepared it or when it was prepared. This was the first time either Ms. Sato or Bank counsel had seen the document.

[15] More importantly, there had been no compliance with Rule 53.03(1), which requires a party who plans to call an expert witness at trial to file the expert’s report at least 90 days before trial. Finally, the accountant was not present in court to be cross-examined.

[16] The bank objected to the introduction of this sheet for the purposes of cross-examination and I agreed, on the basis of the above, that it was not appropriate to allow Mr. O’Keefe to use it. We do not have trial by ambush in Ontario. The document was therefore excluded.

The Evidence

[17] On the basis of Ms. Sato’s testimony and the exhibits filed, I am satisfied that the amount outstanding on the mortgage stands at $311,262.09 as at August 30, 2013. This includes all proper recoverable costs, but does not include cost awards made by Perell J. and the Court of Appeal and the interest that had accrued and continues to accrue on both costs awards, which I understand remain outstanding.

[18] There was considerable time devoted during the course of the hearing to the sum of $7441.50 currently sitting in the Cassels Brock trust account, as per the order of Hoy J.A. Ms. Sato explained that this had been erroneously added to the outstanding debt in an early version of the running balance but that she had revised the sheet and had now deducted it in the version marked as exhibit 2.

[19] Mr. O’Keefe’s position was that all of Ms. Sato’s calculations should now be revised, as this amount - funds he had paid towards the outstanding debt - could not simply be deducted from the total balance. Rather, he asserted that had the sum been credited to the outstanding interest balance as it ought to have been, there would have been an ongoing reduction of interest going forward. Ms. Sato agreed with him and also agreed that she was not able to provide the revised calculations at the hearing, though she noted that the difference would be marginal.

[20] On re-examination, however, bank counsel took Ms. Sato to exhibit 5, the Standard Charge Terms, and more particularly, to clause 7/1(b) which provides that any money paid to MNFB under the mortgage shall be applied to the outstanding balance in any manner MNFC chooses after a default. As this was a default situation, the bank was not obligated to apply these funds towards the reduction of interest. If they were applied to recoverable costs instead, by way of example, a straight line deduction as was done here, would be completely appropriate. I therefore have no difficulty accepting that the figures presented by the bank are accurate.

ORDER

[21] It is therefore ordered that:

1. The amount of the debt owing by Mr. O’Keefe under the mortgage is $311,262.08 as at August 30, 2013;

2. In that the property in issue has yet to be sold, there shall be no execution towards collection of this sum at this time;

3. To the extent that the eventual disposition of the property generates a surplus, that surplus shall be paid out to Mr. O’Keefe or to his debtors, on the basis of their legally proven priorities;

4. To the extent that the disposition of the property leads to a shortfall, such that the bank will be looking to Mr. O’Keefe to make up the difference, I can be asked to assist at that time to determine the actual amount owing;

5. In view of clause 1.1(s) of exhibit 5, “legal’ costs” is defined as actual legal costs, on a solicitor and own client basis. I therefore award costs to the plaintiff on that scale, fixed at $24,000 and payable within 30 days.

Master Joan M. Haberman

Released: November 7, 2013