COURT FILE NO.: 49487/06
DATE: 2013/11/22
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Donna Vachon (Plaintiff)
- and -
1307839 Ontario Limited, Tracy Powell, Todd Powell, Tricar Developments Inc. and Joseph Carapella (Defendants)
BEFORE: Justice H. A. Rady
COUNSEL: John Brennan, for the Plaintiff
Brian T. Daly, for the Defendants
HEARD: October 17, 2013
ENDORSEMENT
Introduction
[1] The defendants seek an order severing an issue in this lawsuit so that it may be determined in advance of any trial. They seek a preliminary determination of the plaintiff’s right or standing to bring this action. The plaintiff opposes such an order.
[2] The defendants rely on Rules 1.04, 27.08 and 37.13.
The Dispute
[3] The following facts are succinctly summarized in the defendants’ factum:
The plaintiff says in her statement of claim that money is due to her husband [the now deceased Paul Vachon] under an agreement made by her husband with the defendant corporation, and that through dealings with her husband she acquired a right of action on the agreement against the defendants.
The defendants question [whether] the plaintiff can bring this action. They say in their pleadings, among other things, that the purported domestic separation between the plaintiff and her husband was a sham and that the agreement between the plaintiff and her husband to assign any money due from the defendant corporation to the plaintiff, that was closely followed by the assignment into bankruptcy by the husband, was a fraud by the plaintiff and her husband on his creditors.
In the pleadings, the Trustee in Bankruptcy of the husband is a party, and it has obtained an order setting aside the bankruptcy discharge of the husband. The trustee of the husband claims any money due from the defendant corporation.
[4] This summary, however, does not capture the complicated background leading to this litigation, which is set out in Ms. Vachon’s affidavit sworn October 15, 2012 in response to this motion.
The Parties’ Positions
[5] The defendants submit that severance is sensible, cost effective and proportionate because the resolution of the issue of standing might obviate the need for a trial, narrow the issues or promote resolution. It could result in the elimination of either the plaintiff or the trustee from the proceedings. They estimate that a trial of the issue would take only three days.
[6] They say that there is a real benefit to be gained from such an approach and the plaintiff has not demonstrated any real prejudice. They rely primarily on Bourne v. Saunby, [1993] O.J. No. 2606 (Gen. Div.); Unwin v. Crothers, 2005 CanLII 23337 (ON SC), [2005] O.J. No. 2797 (S.C.J.) and Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler & Mills (1986), 1986 CanLII 2591 (ON CA), 55 O.R. (2d) 56 (C.A.).
[7] The plaintiff stresses that it is a basic right of a litigant to have all issues in dispute resolved in one trial. The power to bifurcate should only be exercised in the clearest of cases on cogent evidence that a severance will likely result in the just, expeditious and least expensive determination of the proceeding on its merits. If a party opposes severance, the moving party must demonstrate a clear benefit to be gained. The plaintiff relies on most of the same cases as the defendants.
The Law
[8] The seminal decision on bifurcation is likely Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler & Mills, supra. In that case, the trial judge, over the objection of the defence, bifurcated the issues of liability and damages. An appeal of that decision was allowed and a new trial ordered. In its judgment, the court made these observations:
…since it is a basic right of a litigant to have all issues in dispute resolved in one trial it must be regarded as a narrowly circumscribed power. This approach is supported by the familiar statutory admonition which is continued in s. 148 [now s. 138] of the Courts of Justice Act, 1984 (Ont.), c. 11:
- As far as possible, multiplicity of legal proceedings shall be avoided.
There is also the judicial admonition of Meredith C.J.C.P. in Waller v. Independent Order of Foresters (1905) 5 O.W.R. 421 at p. 422: “Experience has shewn that seldom, if ever, is any advantage gained by trying some of the issues before the trial of the others is entered upon…”. The power should be exercised, in the interest of justice, only in the clearest cases. We would think that a court would give substantial weight to the fact that both parties consent to the splitting of a trial, if this be the case. On the other hand, a court should be slow to exercise the power if one of the parties, particularly, as in this case, the defendant (see Emma Silver Mining Co. v. Grant (1878), 11 Ch. D. 918 at p. 928), objects to its exercise.
[9] In General Refractories Co. of Canada v. Venturedyne Ltd., [2001] O.J. 747 (S.C.J.), Justice Himel summarized the following factors taken from her review of the case law (including Bourne v. Saunby) to guide the court’s decision:
(a) Whether the issues for the first trial are relatively straightforward;
(b) The extent to which the issues proposed for the first trial are interwoven with those remaining for the second;
(c) Whether a decision at the first trial is likely to put an end to the action altogether, significantly narrow the issues for the second trial or significantly increase the likelihood of a settlement;
(d) The extent to which the parties already devoted resources to all of the issues;
(e) The timing of the motion and the possibility of delay;
(f) Any advantage or prejudice the parties are likely to experience; and
(g) Whether the motion is brought on consent or over the objection of one or more of the parties.
[10] In Unwin v. Crothers, supra, Justice Spies enumerated the relevant considerations as follows:
(a) Are the issues to be tried simple?
(b) Are the issues of liability clearly separate from the issues of damages?
(c) Can a better appreciation of the nature and extent of the injuries and consequential damage to the plaintiff be more easily reached by trying the issues together?
(d) If the issues of liability and damages are severed, are facilities in place which will permit the two separate actions to be tried expeditiously before one Court or before two separate Courts and the case may be?
(e) Is there a clear advantage to all parties to have liability tried first?
(f) Will there be a substantial savings of costs?
(g) Will splitting the case save time, or lead to unnecessary delay?
(h) Is it likely that the trial on liability will put an end to the action?
(i) Is the action so extraordinary and exceptional that there is a good reason to depart from normal practice requiring that liability and damages be tried together?
[11] She also made these observations:
The onus is on the party requesting bifurcation to establish that the case is one which the court’s discretion to bifurcate should be exercised. The evidence filed by a moving party in support of its motion for a bifurcation order must be extraordinary and the circumstances of the case must show that the preponderance of factors justify the court in departing from the general rule that all issues relating to litigation should be determined at the trial. Only if the court is satisfied on the balance of probabilities that severance will more likely than not result in the just, expeditious and least expensive determination of the proceedings on the merits, should the court order bifurcation, see Bourne v. Saunby (1993), 23 C.P.C. (3d) 333 (Ont. Ct. G.D.), at p. 344).
The Supreme Court of Canada has expressly held that “litigation by installment” is to be avoided wherever possible, so as to minimize the risk of multiplicity of proceedings and multiplicity of appeals. The plaintiffs argue that the master’s order offends this principle, (see Garland v. Consumers Gas 2004 SCC 25, [2004] 1 S.C.R. 629 at para. 90).
Analysis
[12] There is no question that Mr. Daly’s submission is an attractive one, particularly from a judicial resource standpoint. And I am not unsympathetic to the individual defendants who face very serious allegations and a very substantial claim for damages. One can well understand their desire to see these proceedings come to an expeditious end. However, for the reasons that follow, I have concluded that the motion must be dismissed.
[13] First, the plaintiff vigorously opposes the relief sought. One must remember that she has a fundamental right to have all issues determined in one proceeding, absent extraordinary evidence favouring a departure from the general rule.
[14] The evidence before the court simply does not persuade me that the plaintiff’s right to a single trial should be disturbed. This action involves allegations of breach of contract, breach of trust and conspiracy among other things. As the “case management” judge appointed pursuant to Rule 37.15, it has become apparent to me that the parties disagree on fundamental legal and factual issues, which are arguably interconnected. I cannot be certain on this record that the determination of standing in isolation will be the result of a fair and balanced adjudication.
[15] The trial of an issue will not result in the end of the action or a prompt trial. Rather, it will undoubtedly result in an appeal by the unsuccessful party, leading to an inevitable delay in any trial of the balance of the issues.
[16] Moreover, this action has been outstanding since 2006. It was commenced by statement of claim issued February 6, 2006. An amended, amended statement of defence and counterclaim was delivered by the defendants in November 2008. The plaintiff’s reply and defence to counterclaim and crossclaim was delivered in December 2008. A defence to the counterclaim by the trustee was delivered in January 2009.
[17] The issue of a conflict respecting Mr. Dantzer’s retainer was raised during the course of litigation and the plaintiff required independent legal advice. The parties have completed examinations for discovery and have devoted significant resources readying the matter for trial. It must be said that this motion is brought quite late in the proceedings and after the plaintiff has expended a great deal of time and expense. An order to sever at this time works a prejudice to her as a result.
[18] Having considered the various factors identified in the cases cited and the evidentiary burden placed on the moving party, I have concluded that the motion should be dismissed.
[19] If the parties cannot agree, I will receive brief written submissions on costs within 30 days.
“Justice H. A. Rady”
Justice H. A. Rady
Date: November 22, 2013