NEWMARKET
COURT FILE NO.: CV-14-117399-00
DATE: 20140829
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SOUTHLAKE REGIONAL HEALTH CENTRE
Applicant
– and –
BESWICK GROUP PROPERTIES INC.
Respondent
A.V. Nosko, for the Applicant
K.L. MacDonald, for the Respondent
HEARD: August 29, 2014
REASONS FOR DECISION
HEALEY, J.
[1] This is a motion for directions arising from a prior order made by this court, summarized at paragraph 5 of Southlake Regional Health Center's ("Southlake") notice of motion dated August 19, 2014.
[2] The primary dispute between the parties was whether that order necessitates commencement of a fresh action, with new pleadings, productions and examinations for discovery. If so, which was the position urged by Southlake, the trial cannot proceed before May, 2015. Beswick Group Properties Inc. ("Beswick") resisted these fresh steps, arguing that they are unnecessary given the issues before the court. Beswick sought a trial date during the November, 2014 trial sittings.
[3] As stated orally in court, this motion was decided in favor of Beswick for the following reasons:
I disagree with Southlake's position that the issues to be tried relate to the parties’ intentions and expectations from 2005 forward as they may relate to a determination of the gross rentable area of the building. Nowhere in its initial application did Southlake raise the validity of the lease as an issue, and only after receiving the report of Beswick's expert, RAW Designs, did it decide that the high number assigned to "gross rentable area" by RAW Designs raised an issue as to the parties’ intentions with respect to the lease. The lease contains a mechanism for a determination of the gross rentable area. The dispute in this case is not centered on the parties' intentions, but rather a disagreement over the methodology used by RAW Designs to calculate such. There is no ambiguity in the lease that would trigger the parole evidence rule to be invoked to require evidence of the parties' negotiations and conduct following the signing of the lease or its subsequent amendments. This is highlighted by the fact that Southlake had applied for a final order in its application heard on February 20, 2014 on the strength of the evidence then existing, including its own expert report. It is a case to be tried primarily on the strength of expert reports.
I find there is ongoing prejudice to the owner, which is a corporation related to Beswick, the latter being the landlord. The evidence is clear that the property cannot be sold as long as the current litigation is ongoing, even if there are no active agreements of purchase and sale or letters of intent. Throughout this litigation's history there has been ongoing urgency to have the issue of rents resolved, as the owner has always intended to sell the Medical Arts Building. As set it in my Reasons released February 27, 2014, at paragraph 14, in October, 2013 the owner had entered into a conditional sales agreement for $85 million, subject to Southlake's right of first refusal. Although that offer has expired, the owner cannot sell without this litigation being resolved.
[4] This court orders:
Southlake shall be the plaintiff and Beswick shall be the defendant in the trial of the issues (the "Action") ordered on February 27, 2014.
The title of proceedings in the Action shall be as follows:
Court File No. CV-14-117399-00
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SOUTHLAKE REGIONAL HEALTH CENTRE
Plaintiff
-and-
BESWICK GROUP PROPERTIES INC.
Defendant
- Pursuant to Rule 38.10 of the Rules of Civil Procedure:
(a) The affidavits filed, and transcripts from the examinations held in connection with these applications, including that of Mr. Beswick held on August 27, 2014, shall be treated as partial examinations for discovery in the Action, and that on any further examinations for discovery in the Action the parties shall be prohibited from asking the same questions that were previously asked;
(b) The cross-examination transcripts shall be treated, at trial, as examination for discovery transcripts;
(c) The Action shall proceed to trial, on an expedited basis, in accordance with the following timetable:
Step to be completed
By which party
Completion date
Serve reply expert report
Southlake
September 15, 2014
Serve any additional documents
both parties
September 15, 2014
Complete examination for discovery
(limited to two hours per party)
both parties
September 30, 2014
Answer undertakings
both parties
October 15, 2014
Attend trial scheduling court
both parties
October 22, 2014
Attend pretrial
both parties
To be scheduled
Trial
both parties
November 2014
Each party shall ensure the attendance at the pretrial of the author of any expert report on which it intends to rely at trial.
Southlake shall pay to Beswick its cost of this motion fixed on a partial indemnity basis in the amount of $5,000 inclusive and payable within 30 days.
[5] The outcome of this motion for directions was not obvious, and Southlake advanced an arguable case. It cannot be said that Southlake's position was unreasonable, but only that at the end of the day the court could not find ample grounds to concede to its requested timetable in order to allow a fresh action to run its course. Ultimately, Beswick's success should result in cost consequences, particularly because this motion saved it the expense of prolonged litigation, but those costs are reduced to reflect the procedural nature of this step, and the reasonable expectation of the parties.
HEALEY J.
Released: August 29, 2014