SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV 12-107902
DATE: 20140725

RE: Brent Chapman, Plaintiff/Defendant by counterclaim

AND:

GPM Investment Management and Integrated Asset Management Corp., Defendant/Plaintiff by counterclaim

BEFORE: The Honourable Mr. Justice M. McKelvey

COUNSEL: Lionel J. Tupman, for the Plaintiff/Defendant by counterclaim

Christopher J. Cosgriffe, for the Defendant/Plaintiff by counterclaim

HEARD: July 22, 2014

Endorsement

Introduction

[1] This action is scheduled to proceed to trial during the fall sittings which commence on November 17, 2014. The plaintiff has brought a motion for leave to bring a summary judgment motion to dismiss the defendant’s counterclaim and to direct the trial coordinator to employ their best efforts to obtain a judge to hear the plaintiff’s motion for summary judgment which is estimated to take approximately three hours or a half day to argue. Leave is required to bring the motion for summary judgment as the action has been set down for trial by the plaintiff.

[2] In addition the plaintiff seeks an order striking out the affidavit relied upon by the defendant in opposing the motion for leave on the basis that the affiant, Stephen Johnson, did not make himself available for cross-examination on his affidavit.

The Nature of the Plaintiff’s Claim and the Defendant’s Counterclaim

[3] The plaintiff alleges that he was employed by the corporate defendant and that his compensation consisted of a salary as well as a payment based on 10% of the profits of the corporate defendant. The plaintiff asserts that he was constructively dismissed when his employer refused to pay him a 10% bonus relating to the sale of a property located in Edmonton. The plaintiff claims damages relating to the alleged constructive dismissal which include the bonus he says was payable from the sale of the Edmonton property. The plaintiff claims in the alternative that if he is not entitled to this bonus on the sale of the Edmonton property then the defendants are liable to him for the value of his services relating to the development and sale of the Edmonton property on the basis of quantum meruit.

[4] The defendant denies that the plaintiff was entitled to a bonus on the sale of the Edmonton property and further denies that the plaintiff was constructively dismissed. The defendant further counterclaims against the plaintiff alleging that the plaintiff breached the fiduciary duties he owed to the corporate defendant in connection with the Edmonton property when he failed to have the corporate defendant enter into an asset management agreement. It is asserted that such an agreement would have resulted in significantly higher profits for the corporate defendant.

Chronology of the Action to Date

[5] In considering the issues before me I have prepared a brief chronology of the important steps which have been taken in this litigation:

(a) January 3, 2012: Statement of claim issued;

(b) February 28, 2012: Statement of defence and counterclaim delivered;

(c) May 24, 2013: A motion for summary judgment was filed by the plaintiff for the same relief as sought on the motion which is currently before the Court. This motion for summary judgment was subsequently withdrawn on June 7, 2013 at the time the plaintiff served his trial record;

(d) June 7, 2013: The plaintiff served the trial record in this action;

(e) November, 2013: The action was scheduled to go to trial at the fall sittings. However, due to the unavailability of certain defence witnesses who were not available the trial in this action was adjourned;

(f) March 26, 2014: On this date there was an attendance before Justice Minden by counsel for the plaintiff and defence. Plaintiff’s counsel advised that he might not be able to deal with the trial of this matter in the May, 2014 sittings due to involvement in other matters. The plaintiff’s counsel further advised that they were planning to seek leave (on June 24, 2014) to bring back their summary judgment motion. The defendants were opposed to this. Justice Minden notes, “At present there are no available dates for a three hour summary judgment motion prior to December 2014. Assuming the trial does not proceed in May, 2014, and were leave to be granted, depending on submissions of counsel thereafter, the Court will make all reasonable efforts to fix a date for this motion in advance of November 2014 trial sittings”;

(g) April 23, 2014: At the trial scheduling court the trial in this action was put over to proceed during the fall, 2004 sittings; and

(h) June 24, 2014: The plaintiff’s motion for leave to bring the motion for summary judgment was scheduled to be heard on this date. However, there was not sufficient time on that date for the motion to be heard and it was therefore adjourned to July 22, 2014.

Should the Defendant Be Entitled To Rely Upon the Affidavit of Stephen Johnson Filed in

Opposition to the Motion for Leave

[6] The plaintiff asserts that Stephen Johnson’s affidavit should be struck on the basis that he did not make himself available for cross-examination. They rely upon Rule 34.15(1) which states, in part:

“Where a person fails to attend at the time and place fixed for an examination in the notice of examination or summons to witness or at the time and place agreed on by the parties, or refuses to take an oath or make an affirmation, to answer any proper question, to produce a document or thing that he or she is required to produce or to comply with an order under rule 34.14, the court may…

(c) Strike out all or part of the person’s evidence, including any affidavit made by the person”.

[7] The plaintiff takes the position that it would be unfair and prejudicial to the plaintiff to allow Stephen Johnson’s affidavit to be admitted on this motion when the plaintiff has been unable to exercise its right to cross-examine Stephen Johnson.

[8] The evidence before me indicates that on June 6, 2004 plaintiff’s counsel telephoned defence counsel with a request to schedule a cross-examination of Stephen Johnson on his affidavit on the motion which was then pending on June 24, 2014. As no response was received from the defendants counsel to this request plaintiff’s counsel followed up with a letter to defence counsel on June 7, 2014 suggesting some proposed dates for the cross-examination. Defence counsel responded and suggested that Stephen Johnson would be available on June 17 or 18, 2014. Arrangements were made for Stephen Johnson to be cross-examined on June 17, 2014. On June 17, 2014 defendant’s counsel advised that Stephen Johnson was unwell and that he would be unable to attend for cross-examination. June 18 was proposed as an alternate date for the cross-examination. Unfortunately, when further enquiries were made it turned out that Stephen Johnson was not available on June 18. He was available on June 23, 2014 but this date was not acceptable to the plaintiff given that the motion was scheduled for the following day.

[9] In the end no cross-examination of Stephen Johnson was conducted and there is no evidence before me to suggest that either party followed up following the adjournment of the motion to try and schedule a cross-examination of Stephen Johnson prior to the hearing date on July 22. It is apparent that his cross-examination could have been re-scheduled prior to the actual hearing of the motion.

[10] Given that Stephen Johnson initially cancelled the appointment for his cross-examination on June 17 because he was unwell I would have expected that defence counsel would have taken the initiative in proposing alternate dates for his cross-examination after the motion adjourned on June 23. However, the evidence falls short of establishing that there was any unjustified refusal by Stephen Johnson to attend for cross-examination. I am not satisfied in the circumstances that the affidavit of Stephen Johnson should be struck. However, in reviewing the evidence before me I have taken into account that his evidence was not subject to cross-examination and that the plaintiff takes serious issue with some of the statements which are contained in his affidavit.

Should the Motion for Leave to Bring the Motion for Summary Judgment Be Granted

[11] Rule 48.04(1) provides that any party who has set an action down for trial shall not initiate or continue any motion or form of discovery without leave of the Court. There are certain exceptions set out under Rule 48.04 which do not apply in this case. Thus, it is clear under the rules that the plaintiff is required to obtain leave of the Court to bring his motion for summary judgment.

[12] Rule 1.04 provides that the rules shall be liberally construed, “to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits”.

[13] The plaintiff acknowledges that a party who seeks to bring a motion after setting a matter down for trial is normally required to show a “substantial change” in the circumstances which justify the leave sought. However, they argue that this is not the test on a motion for summary judgment and refer to the decision of Justice Quinn in Fruitland Juices Inc. v. Custom Farm Service Inc. (2012) 111 O.R. (3rd) 453 where he sates,

“The requirement for a substantial and unexpected change in circumstances is not a helpful or logical test where the motion for which leave is requested seeks summary judgment. The primary purpose of such a motion is to spare the parties and the legal system the expense and intrusion of an unnecessary trial or, at least, unnecessary issues within the trial. A party is not obliged to bring a summary judgment motion at the earliest opportunity: neither must there be a precipitating event such as a change in circumstances. So long as the motion, if successful, will be less costly and time consuming than the trial, and will not unduly delay the start of the trial, I do not see why the moving party must explain his or her choice of timing. In other motions (such as to add parties, raise new issues or amend pleadings), the explanation for a delay in so moving is relevant, as is the issue of prejudice to the opposing party. However, none of that is relevant or required in a motion for summary judgment, at least in the circumstances of this case. A summary judgment motion brought at any time is a potential blessing for the administration of justice.”

[14] I do not interpret the decision in Fruitland Juices to mean that a party is entitled to bring a motion for summary judgment as of right even after an action has been set down for trial. Otherwise a motion for summary judgment would be excluded as one of the exceptions under Rule 48.04(2). There are a number of considerations which a Court is entitled to consider in exercising its discretion on whether or not leave should be granted. These would include the expected date of trial. This was a consideration considered by the Court in Theodore Holdings Ltd. v. Njanjay Ltd. (1993) 18 C.P.C. (3rd) 160 where the Court held that it would not be appropriate to bring a motion for summary judgment where the action was expected to proceed to trial in the near future and is also referenced in the quotation above. I note in the Fruitland Juices case there is no indication that a trial date had been scheduled. Further it is noted in that decision that the rationale behind subrule 48.04(1) is to discourage actions being set down for trial when they are not ready to be tried and also, “to avoid delay occasioned by further discoveries or by additional steps in the action once the matter is set down for trial”. I therefore conclude that a significant factor in exercising my discretion is whether granting leave is likely to result in a delay in the trial.

[15] Other relevant considerations in my view are whether the summary judgment motion is likely to significantly simplify or shorten the trial and whether the motion is the most appropriate way to adjudicate the dispute, taking into account the nature and complexity of the litigation. Rule 1.04 emphasizes the importance to secure the just, most expeditious and least expensive determination of a proceeding on its merits. This is reflected as well in a recent Supreme Court of Canada decision in Hryniak v. Mauldin, 2014 SCC 7, 2014 S.C.C. 7 where the Court notes that applying the rules of court involves discretion which includes the principle of proportionality. This means taking into account the appropriateness of the procedure, its costs and impact on the litigation, as well as its timeliness, given the nature and complexity of the litigation. The Court notes that this requires judges to actively manage the legal process in line with the principle of proportionality. In particular, the Court states,

“While summary judgment motions can save time and resources, like most pre-trial procedures, they can also slow down the proceedings if used inappropriately.”

[16] An additional factor to consider is whether the use of a summary judgment motion runs the risk of duplicative proceedings or inconsistent findings of fact. This is specifically referred to in the Hryniak decision.

[17] The above list of factors which might be considered on a motion for leave in connection with a motion for summary judgment is not meant to be exhaustive. There may be other relevant factors to take into consideration in other cases.

[18] In the circumstances of this case I decline to exercise my discretion to grant leave for a motion for summary judgment for the following reasons:

• I do not consider a motion for summary judgment to be the most expeditious and least expensive method for a determination of the issues which are raised in the defendants’ counterclaim. In the supporting material of the plaintiff it is suggested that if the summary judgment motion is granted one to two days of trial time could be saved. However, this must be balanced against the time that will be spent on the summary judgment motion itself. The argument on the motion will take at least a half day to argue. In addition, it was acknowledged that there will be cross-examinations of at least five individuals who are expected to file affidavits on the motion. It is likely that cross-examinations will take at least a day. In my view there is no reason to conclude that a motion for summary judgment will be any less expensive than leaving the matter to be adjudicated at trial. And if the motion for summary judgment is not successful there will be a substantial increase in cost to the litigants. It would also increase the judicial resources required to adjudicate the dispute.

• I am not satisfied that the hearing of this summary judgment motion will significantly simplify or shorten the trial. The factual matrix for the defendants counterclaim has substantial overlap with the plaintiff’s claim. As is apparent from the pleadings, the issues relating to the role played by the plaintiff in the management and sale of the Edmonton property will be an issue both with respect to the defendant’s counterclaim and the plaintiff’s claim for payment of the bonus either in contract or on a quantum meruit basis. Further, the factual matrix for both the plaintiff’s claim and the counterclaim overlaps so that there is the potential for inconsistent findings of fact to be made at trial.

• As a practical matter it will be difficult for the court to accommodate the motion prior to the scheduled trial date. As Justice Minden noted in his endorsement, there are no long motion dates available prior to the scheduled trial date. While it is possible the trial coordinator may be able to free up a date with a judge who is not currently assigned to long motions, there is considerable uncertainty about whether a date can be found before the November sittings. In this regard it is relevant in my view to take into account that the plaintiff had the opportunity to pursue its motion for summary judgment over a year ago and chose to withdraw the motion for judgment in favour or setting the action down for trial.

• Allowing the motion for summary judgment to proceed carries a significant risk that it will cause an adjournment of the trial. If the motion for summary judgment succeeds and the defendants’ counterclaim is dismissed, the defence is on record as saying they will appeal that decision. This is not surprising given that the effect of a successful motion for summary judgment would be to dismiss the defendant’s counterclaim (where the amount claimed is just under $1.7 million) entirely. If an appeal were taken it would necessitate an adjournment of the trial in a case where the trial has already been adjourned on two occasions previously.

[19] For the above reasons I have concluded that allowing the matter to proceed to trial on all issues will provide the most timely, efficient and appropriate alternative to determine the issues relating to the defendants’ counterclaim.

Conclusion

[20] The plaintiff’s motion for leave is dismissed.

[21] If the parties are not able to agree on costs they may speak to the trial coordinator within 30 days of the release of these reasons to take out an appointment to address the issue of costs. In such event, the parties will deliver brief written decisions at least two days before their attendance. If no arrangements are made within 30 days for an appointment to speak to costs there will be no order for costs on this motion.

McKelvey J.

Date: July 25, 2014