720441 Ontario Inc. v. The Boiler et al

COURT FILE NO.: 03-CV-254717

Heard (on the issue of alleged impecuniosity): November 7, 2014

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 720441 Ontario Inc. v. The Boiler et al

BEFORE: Master Joan Haberman

COUNSEL: Dobson, C. for Dominion of Canada General Insurance Company Davis J. and Ottaway, A. for the Bioler Inspection and Insurance Company of Canada et al Esterbauer, A.J. as agent for the plaintiffs Forrest, B. for Dynes Insurance Brokers Limited et al. Van Zandvoort, M. for Carpenter Co. et al.

REASONS – The New Materials

Master Haberman:

[1] The plaintiffs face four motions seeking security for costs. I was asked to hear all four together in view of the overlapping issues, and was assured by counsel they could complete all 4 in one day. Accordingly, one day was booked. That, however, turned out to be far from an accurate assessment of the time needed for these 4 motions.

[2] Despite the overlapping issues, each of the moving defendants is in a different relationship with Comatec and they have not all moved under the same subrules of Rule 56.01(1). As a result, different considerations apply among the group of motions, such that the revised estimate, which counsel advised me of only at the time they attended to argue the motion, is 2-3 days.

[3] I came to the same conclusion a few days earlier when I saw the piles of materials that had been filed. I therefore asked for counsel to come in to put it in some order to it all, as it had been filed in bits and pieces. It seems to me that plaintiffs’ counsel, as the responding parties on all of these motions, would have seen these materials in their entirety, which now fill three boxes, long before I did, and ought to have been alive to the need for more time. It is unfortunate that no one thought to raise this with me earlier so that additional time could have been allocated for the matter once it was apparent more would be needed.

[4] In the interests of getting on with this matter, Mr. Forrest suggested that we deal first with the issue of impecuniosity, which is common to all four motions, as a decision in that area could abridge the time needed for the remainder of the motions. It was agreed by all that this was a sound approach.

[5] Before dealing with impecuniosity, however, there was a preliminary issue regarding late service of materials that had to be resolved. I heard submissions on the issue, as well as on impecuniosity, and advised I would reserve my decisions regarding both in the interim.

[6] I have now determined that the new materials which the plaintiffs served late and tried to file should not be admitted. The Reasons that follow deal with this issue, only.

BACKSTORY

[7] Comatec manufactured metal shelving units, and operated out of premises leased from the defendant, Carpenter. The plaintiff, Ella Conen, and her late husband, Joseph Broner, were the principals and sole shareholders of the corporate plaintiff. It appears that Comatec is no longer operating.

[8] On January 26, 2003, a high- pressure waterline which formed part of the overhead piping system at Comatec’s premises ruptured, causing water to pour in to a depth of 3-4 inches. The water allegedly damaged inventory, stock, the physical premises, furniture and chattels, and rusted metal surfaces.

[9] Comatec had acquired two policies of insurance through their insurance brokers, the defendant, Dynes, prior to the loss. The first was a tenant’s property and contents policy, placed with the defendant, Dominion and the second was a boiler and machinery policy, obtained with the defendant, Boiler.

[10] Comatec reported the incident to Dominion, only. Two days later, Urban Clean Limited attended on behalf of Dominion with the latter’s adjuster to assess the damages. Among other things, Urban Clean concluded that there had been a rupture in the sprinkler system contained in the overhead piping system, which resulted in the entire building being flooded. Thereafter, Dominion advanced $250,000 towards remedying the loss and avoiding interruption of business.

[11] Notwithstanding Dominion’s initial response, Comatec claims that the insurer and its remediation contractor withdrew from the scene early on, and provided no other assistance thereafter despite a contractual obligation to do so. This, they claim, exacerbated their damages.

[12] Dominion now claims in its statement of defence that Boiler should be covering this loss, so Comatec has jumped on that bandwagon and included Boiler in their statement of claim, which is short on particulars regarding Boiler. Aside from what Dominion has alleged, which they have not backed up with a counterclaim, it is unclear why Boiler remains in the action. This issue is for another day.

[13] This represents a sufficient part of the backstory to enable me to deal with the preliminary issue as well as impecuniosity, which I will address in the next tranche of this decision. A more in depth factual review will follow when each motion is dealt with on its own.

PRELIMINARY ISSUE – the new CONEN AFFIDAVIT

[14] The plaintiffs bring a motion for leave to file an affidavit served on October 31, 2014, only a week before the scheduled motion date. Their factum and brief of authorities dealing with this issue were delivered only days before the main event.

[15] It has long been my practice, when dealing with long motions, to convene a telephone case conference with counsel, in order to put a timetable in place for all preliminary steps that must take place before the motion can be heard. The purpose of doing this is to ensure that the parties are, indeed, ready to proceed on the date the court is holding for them, so that last minute adjournments – and a waste of court time- is avoided. This is particularly important in Toronto at this juncture, when motion time is a much sought-after and limited resource.

[16] Counsel are generally told to advise me when they have completed all steps set out in the timetable order which they help to create, and, at that time, we agree on a date for the motion to proceed that works for everyone.

[17] This approach is an effective way to manage court time. In addition to reducing the number of late-in-the-day adjournments, it avoids the need to convene a multitude of case conferences to adjust the timetable any time there is agreement among counsel to extend the deadline for a step if the extension puts the scheduled motion date in jeopardy. By scheduling the motion date after all the preparatory work has been done, counsel can do what needs to be done and let me know when they are truly ready, so the court schedule is not affected by any delay on their part.

[18] I saw no reason to approach this matter any differently. All 4 motions were assigned to me in late January 2014, and the first telephone case conference took place on March 4, 2014. At that time it was agreed that the plaintiff would serve a responding motion record in each of the 4 motions by May 2, 2014, such that, with the remaining steps, counsel should be ready for their motion date by the end of October 2014.

[19] Our discussions found their way into a Timetable Order. Though the order deals with, essentially, timetabling, it is a court order nonetheless. The deadline of May 2, 2014 for service of Comatec’s record was an essential ingredient of that order, as completion of cross-examinations and service of factums and briefs of authorities hinged on it.

[20] In view of what I had been told were upcoming changes to how the masters would be scheduling their long motions, I decided to deviate from my normal practice in this case. Instead of waiting for counsel to contact me, I contacted them with a view to scheduling the motion date, though I knew they could not have yet have completed all steps in the timetable. I did so as I was concerned about them losing their place in the queue for assigned dates once the new practice comes into effect.

[21] What I needed to know from counsel was how far along in the process they had gotten as that would help me assess when the motions would be ready to proceed.

[22] A telephone case conference was conducted on May 13, 2014, at which time I was told that all of the responding motion records had been served on schedule. On that basis, I was able to estimate when the parties would be ready and the November 7, 2014 date was allocated for a full day to hear all four motions.

[23] That telephone conference was followed by a second Timetable Order from me of that date. In it, I note that the plaintiff has completed service of its four motion records by May 2, 2014, and I then set out the remaining steps and the respective deadline for each. My order of that date contained my standard provision, at item 8, to the effect that counsel they must advise me at the earliest available opportunity if anything arises that appears to jeopardize this motion date.

[24] I heard nothing from anyone to suggest that the date scheduled was in jeopardy or to the effect that that an insufficient amount of time had been booked to complete the motions.

[25] It therefore came as somewhat of a surprise when the plaintiff first tried to file the affidavit of Ella Cohen, dated October 31, 2014, which had only been served that day – more than 6 months beyond the schedule, without even a cover letter to explain. This material has a direct bearing on the issue of impecuniosity of all of the plaintiffs.

[26] Notwithstanding the terms of two timetable orders, the assurance from Comatec’s counsel that their evidence had, indeed, been filed by the May 2 deadline, and the fact that Conen had already been cross-examined, here was a new affidavit from Conen, with documents attached as exhibits.

[27] The Conen affidavit was followed by a new motion record, in which Comatec sought “leave, if necessary” to file it.

[28] As I note above, giving out a court date before knowing the parties are “really” ready is something I am generally loathe to do. I did so in this case only because we are in the midst of a change in procedure and I did not want this matter to fall through the cracks. I did so on the assurance that the evidence had been served and that all counsel were being up front, honest and accurate when they told me what had been completed to-date and what was left to be done. I did so to protect the position of these motions.

[29] On that basis, I gave out a full day of master court time because I was fairly certain that, barring exceptional circumstances (eg/ death or serious illness of one of the counsel or someone near and dear to them) we would proceed as scheduled.

[30] From the time of the second May 2014 conference call until these materials were filed at some point between October 31 and November 7, 2014, I was given no heads up about the change in circumstances or any indication that the motion date was in jeopardy, despite item (8) in my 2^nd Timetable Order

[31] Conen has already been cross-examined. The examination took place on July 9, 2014. Although initially of the mind to seek an adjournment of this hearing date, to allow further cross-examination on the new evidence, the defendants changed tact and, instead, asked that the new evidence, delivered contrary to two court orders, be struck.

Is leave necessary?

[32] Comatec has breached two court orders – one in which they delivered materials beyond a court ordered deadline, the second, by also failing to advise the court when they became aware of an issue (their desire to file further evidence) that could have derailed this motion in the face of a court order that made that a requirement. As a result, leave is most certainly necessary here.

[33] Simply because an order deals with timing does not render it any less a court order and an enforceable one. How is a court-ordered deadline for serving motion materials, agreed to by counsel, any less a court order than one setting a deadline for serving an affidavit of documents, complying with undertakings, or attending to be examined for discovery? The fact that the deadlines being set in this case amount to a timetable preparatory to a motion does not detract from the fact that the various steps are contained in an order and enforceable as such. It is rather shocking, in my view, that there was any doubt in counsel’s mind about this issue.

[34] The Timetable Order was of particular importance in this case, as I provided counsel with a motion date before they completed the necessary steps on their assurance that the evidence had been served by all parties. Though I confirmed this with counsel, it appears plaintiffs’ counsel neglected to do what was required of him in order to be able to respond accurately.

Should leave be granted in this case?

[35] Comatec’s counsel, Benjamin Salsberg, filed the supporting affidavit for leave. He states that the defendants served their factums for the motions in or around September 30, 2014. Apparently, he simply filed them away without even glancing at them, as he claims it was not until October 25, 2014 that he began to review them with a view to preparing his factum in response.

[36] Salsberg claims that he had been engaged with other matters during the first three weeks of October so he had set aside the week of October 27, 14 for this task, for which he believed he had sufficient time.

[37] Paragraph 6 and 7 of the affidavit contain the substance of Salsberg’s position:

Upon reading the Factum delivered on behalf of the Defendant the Boiler Inspection and Insurance Company of Canada (“B.I. & I”), I first noticed the said Defendant’s submission to the effect that the Plaintiffs had failed to meet an apparent evidentiary burden prescribed by the jurisprudence, being that when responding to Motions for Security for Costs on the basis of impecuniosity, a Plaintiff ought to produce all relevant financial documentation. It was at this point in time that I first realized that it would be appropriate for the Plaintiffs to tender documentary evidence in support of their assertions as to impecuniosity made in the affidavit and on Ms. Conen’s cross-examination. This was an unfortunate and avoidable oversight on my part, because at all times Ms. Conen had available to her the aforementioned documentary evidence.

At the time I prepared Ms. Conen’s Affidavit of May 2, 2014, I had failed to adequately turn my mind to the need for documentary corroboration as to the facts she was attesting to concerning her financial circumstances and some elements of Comatec’s circumstances in her affidavit. I was unaware of the jurisprudence, which apparently requires such documentary production in support of the Plaintiff’s assertion of impecuniosity. It is only with the benefit of hindsight that I now see I was not as well versed in the applicable case laws as I had thought. It was solely for this reason that the documents referred to below were not included in Ms. Conen’s affidavit.

[38] Salsberg concludes this portion of his evidence by stating that the necessary documents were not included with Conen’s affidavit:

…solely as a result of my failure to update myself on the applicable jurisprudence as it relates to Plaintiffs seeking to resist motions for security for costs on the grounds of impecuniosity.

[39] Salsberg added a second prong to his evidence, by stating, in paragraph 9, that, in any event, Conen was examined on her and Comatec’s financial situations, such that the document evidence now being produced:

…simply confirms and substantiates much of the evidence Ms. Conen gave during her cross-examination. For that reason there is no prejudice to the defendants if Ella’s (Conen) Supplementary affidavit is admitted into evidence, as its contents should come as a surprise to the defendants (sic).

[40] I expect Salsberg intended to say that its contents should not come as a surprise or should come as no surprise, but that is not what he has sworn to on November 4, 2014, 3 days before the return of the motion.

[41] In a nutshell, Salsberg says he was not current as to the applicable law, so was not aware that he ought to have included documents with Conen’s first affidavit. He claims his lack of awareness is the sole reason documents were not included from the outset, and that he only realized the problem when he reviewed Boiler’s factums on October 25, 2014. Salsberg explained that he could not review the factum any earlier as he was occupied with other matters during the first three weeks of October.

[42] This evidence is very difficult to accept, in view of the fact that documents were produced in July 2014, to Boiler, but apparently, not to other counsel. There is no reference at all to this in the plaintiffs’ evidence and it appears, from the transcript, that Boiler’s counsel actually had the documents in hand before Salsberg did. I therefor infer that Boiler’s counsel were given authority to write to Comatec’s accountant for copies of these materials.

[43] The fact that this was permitted by Salsberg suggests he was already well aware, by July 2014, that providing documentary back-up was an important part of the exercise

[44] The documents produced in July 2014 were Comatec’s financial statements from 1999-2012, inclusive, marked collectively as exhibit 1.

[45] There are a number of factors that must be considered in determining whether or not to grant leave:

• the nature of the allegations in the statement of claim;

• the purpose behind security for costs;

• the plaintiffs’ first affidavit, its preparation and Salsberg’s evidence about it;

• the law regarding the evidence needed to meet the test for impecuniosity; and

• the new affidavit.

THE STATEMENT OF CLAIM

[46] The plaintiffs have failed to include a copy of their statement of claim in their materials. In fact, I don’t see reference to it in any of the indices to the motions records, though in view of the fact that this file now lives in three boxes, it is possible that it is buried somewhere I have not been taken to or thought to look. What I know of the claim is based on what I have been told by counsel and excerpts of it I read that appear in the various defence factums.

[47] From what I am told, the plaintiffs have taken somewhat of a shot gun approach in their claim. Here are two examples:

1. they claim against the defendant Boiler, only because Dominion pleads that Boiler is on risk. They make no independent assertions as to why Boiler should pay this claim, though not even notified of it at the time of the loss. It is noteworthy that Dominion has not counterclaimed against the other insurer; and

2. the plaintiffs assert that the mould caused by the water damage left unattended at the premises led to Mr. Broner becoming ill and to his eventual death. I am told no medical evidence has been produced to substantiate any aspect of this claim.

[48] In the face of that approach to this litigation it is not surprising that the defendants are concerned about having security for their costs, all the more so once it became clear that Comatec is no longer operating and Conen has moved to Israel. Boiler is of the view they have a solid defence to the action, and all parties are confident there will be no finding against them, at least in so far as Broner’s death.

THE PURPOSE OF SECURITY FOR COSTS

[49] It is trite law that the Rules have made security for costs available as an extension of the fact that Ontario is a cost jurisdiction – he who throws the proverbial dice and fails to prevail at trial must generally pay a significant portion of the costs incurred by parties adverse in interest. In some cases, where a plaintiff is in a physical or financial position that renders collection of such costs, if awarded, difficult or impossible, they have the right to ask the court to ensure that their potential future cost order is secured for them. Similarly, if the claim appears to be frivolous and vexatious, the court will also expect a plaintiff to put his money where his claim is.

[50] This regime is compatible with the fact that Ontario is a cost jurisdiction and it reinforces the principle that there are no free rides on the Ontario litigation train. The purpose behind such a regime is to discourage litigation that should not be pursued. If a party locates counsel prepared to work on a contingency basis and is not required to pay costs if he loses, there is no down side to litigating. We have seen the results of this approach in other jurisdictions so we resist erosion of the cost principle here. This is the backdrop to the Rule and explains why it has developed as it has.

[51] If it were as simple as saying that one is impecunious in order to avoid the application of Rule 56.01, we would likely find ourselves in a world full of impecunious plaintiffs. However, as is the case with most other areas of evidence, the court has long expected a “don’t just tell me - show me” approach, when that is possible. This is not something new or different – it is always the case that where a party has a document that substantiates their allegations, it is preferable and often necessary to tender it as an exhibit. It adds credibility and weight to the stated evidence and allows other parties to test the evidence in a direct and tangible way.

[52] As a result, it is not correct to say that the defendants would suffer no prejudice if this material is allowed in at such a late date, as it simply corroborates and confirms what counsel learned at cross-examinations. Unless and until there is such corroboration, they were entitled to assume that none existed. The defendants should not be expected to deal with new materials, on the eve of the motion. In any event, several relevant questions that were asked were refused during the cross-examination, so it is not accurate to say that defence counsel already knew all they needed to know about this issue as a result of this event.

THE AFFIDAVIT ON WHICH CONEN WAS CROSS-EXAMINED, ITS PREPARATION and WHAT SALSBERG HAS TO SAY ABOUT IT

[53] I speak and write regularly about advocacy skills. Papers I have written about this subject were regularly available in my courtroom for many years, when we had dedicated one on one staff, who also sat with us in court. They are still part of the handout materials when I participate in continuing legal education programs several times each year and I understand they are widely circulated.

[54] It is therefore well known that I expect counsel to do their research before they ever bring or resist a motion, as it is the results of that research that will guide them in their drafting and also educate them as to whether or not their position has a good chance of success. I expect my colleagues share this expectation. This is not a new concept that I invented – it is simply a matter of common sense. How can counsel draft a useful and helpful document if they are in the dark as to what it is they are trying to establish?

[55] In this case, I actually included reference to this approach in Long Motion Timetable Order of March 3, 2914, which was sent to all counsel. I stated the following:

As discussed today, it is critical that counsel conduct their research before they begin drafting their affidavits so they know the test they have to meet and how to go about meeting/refuting it factually. The evidence is critical in motions of this kind.

[56] As this excerpt notes, this passage did not simply appear in the order. The order incorporated a discussion which Salsberg was a part of, so even if he failed to read the order, he heard what I had to say when we spoke in March. Yet, there is no reference to either the discussion or this aspect of the order in Salsberg’s affidavit, and his counsel had nothing to say about this during oral submissions.

[57] Mr. Salsberg is senior counsel and has appeared before me several times over the years. As a result, I have difficulty with paragraphs 7 and 8 of his affidavit, and his having conducted himself here as if unaware of the concept of reading the law in the area before putting the affidavit evidence together. I find this of particular concern in view of what we discussed and I incorporated into my order and in the context of what is at stake for his clients in this motion.

[58] I turn to the original affidavit which Salsberg prepared for his client. From the outset, Conen makes it clear that her husband’s illness, which led to his demise, is still part of this action. It is also clear that the plaintiffs remain intent on proceeding against Boiler because of what Conen refers to as the contradictory claims of Boiler and Dominion as to the issuance of the boiler and machinery policy. Conen insists that she had no choice but to proceed against both, despite Dominion not having cross-claimed and though she has made no independent allegations against Boiler in her statement of claim.

[59] The evidence about the alleged impecuniosity of Conen and Comatec is all found in paragraphs 5-12 of Conen’s first affidavit. The sole document appended to it that relates to the financial situation of either of these two plaintiffs is Comatec’s unaudited financial statement, dated December 31 2010, though the company was still operating as late as May 2014.

[60] Those financial statements contain the usual caution about there not having been an audit or a review engagement, so that no assurance is expressed about their content. What is odd is that they do not contain the numbers for the prior year, which one would ordinarily find beside those for the current year. This is not explained. This is the only document tendered regarding Comatec’s financial status and none are provided regarding Conen, herself.

[61] Without going into too much detail about this evidence at this stage, I conclude that it raises more questions than it answers. A company either is or is not insolvent – what does Conen mean when she says it is, for all intents and purposes? Why does she believe that the small Amada machine is wholly inoperable and why does she believe it is worthless? Why did she have a loan from Benbeth Investments Inc., a company controlled by Salsberg, which apparently got repaid from the proceeds of disposition of her condo?

[62] The evidence of Conen’s situation and that of Comatec is intermingled and unclear. Efforts to clarify at cross-examination put some order to it but do not appear to have been satisfactory, nor complete as a result of improper refusals.

[63] It also appears that it was only during or just before the cross- examinations in July 2014, that many more documents were suddenly made available – Comatec’s financial documents from 1999 -2012 were in Boiler’s hands at that time, but other counsel do not appears to have received a copy to allow them to prepare properly for this examination

[64] The point is that Salsberg appears to have been aware, well before October 2014, that it was necessary or, at least, helpful, to put documentary evidence forward to support his client’s assertions. Why else were these financial statements provided/made available, late in the day, but in time to allow at least one counsel to review them before embarking on cross-examination?

[65] The fact that these documents appeared in July 2014 is not explained in Salsberg’s affidavit. This detracts from his evidence regarding his claim to have been unaware that this was an appropriate thing to do, to use his words, until after he read the responding factums in late October. Clearly, at some point before late October 2014, Salsberg figured out that documents should be produced – and they were – but only in a time frame that made it difficult for all but one counsel to review them and cross-examine on them in any depth.

[66] There is no explanation for why these materials were only produced in July and not appended as exhibits to the affidavit served in May. There is no evidence as to why they were produced at all before Conen’s October affidavit, in view of Salsberg’s evidence to the effect that he was not aware that tendering documents was “appropriate” on these motions. There is no evidence as to whether Salsberg asked Conen for hers and Comatec’s relevant documents at any time; if so, when; and if not why not. Salsberg simply says he didn’t appreciate he needed them and that Conen had them all along.

THE LAW REGARDING THE EVIDENCE NEEDED TO ESTABLISH IMPECUNIOSITY

[67] As I point out earlier, the need to put documents forward to substantiate bald statements is not something new in this area of the law or elsewhere, for that matter. Where a party makes an assertion in their affidavit, the best way to corroborate it and to provide opposing counsel with means to test it is by providing the documents that the deponent claims support what she is saying. It is also often the case that a party’s failure to tender any documents, in itself, raises questions about the credibility of their assertions, particularly in situations where one would except to find documents dealing with the subject area.

[68] The plaintiffs filed a case brief to support their position on this preliminary motion on November 5, 2014, only two days before the motion. My review of it suggests that its contents serve to impede rather than enhance their position regarding the admissibility of the new evidence, as it contains case law from the 1980s and 90’s. It is clear that, even at that time, the court looked for documentary evidence to back up sworn statements. This is not a new concept that required Salsberg to up-date himself. This is how it had been for most if not all of the time that he has practiced.

[69] Starting with Smith Bus Lines Ltd. v. Bank of Montreal, 1987 ONSC 4190, 1987 CarswellOnt 566, Sutherland J. stated:

To go the impecuniosity route the plaintiff must establish by evidence that it cannot raise security for costs….To raise impecuniosity there must be evidence that if security is required the suit will be stopped – because the amount of the security is not only not possessed by the plaintiff but is not available to it.

[70] In Holt v. Caven, WestlawNextCanada, Master Donkin noted, in 1989, that there is an onus on the plaintiff to establish impecuniosity through evidence. Admittedly, a statement to the effect that one is impecunious amounts to evidence, but it is far from the best evidence when there are documents available that can make the point more effectively. A statement, alone, does not establish impecuniosity – it simply asserts it.

[71] In 1986, Master Roger noted in 408466 Ont. Ltd. v. Fidelity Trust Co. (1986), 10 CPC (2d) 278:

…I expressed the opinion that there is an onus on a corporate plaintiff to demonstrate impecuniosity beyond the mere evidence that is has no assets.

[72] This passage highlights the necessity of documentary disclosure, something that Salsberg apparently appreciated before October 25, 2014, in view the Comatec’s additional financial statements appearing in July 2014, on the eve of his client’s cross-examination.

[73] Although the law has developed to a greater degree, in terms of clarifying the precise nature of documentation that must be produced to meet the plaintiff’s onus, the basic concept of showing, not simply telling, has been part of the law in the area of security for costs, for at least 30 years.

[74] Based on all of the above, I have great difficulty with Salsberg’s claim he was not aware of this necessity because he had failed to update his knowledge in this area. His assertion that he embarked on responding to these critical motions, when his legal knowledge was out of date, also makes no sense in view of the fact that several documents suddenly appeared in July 2014, well beyond the deadline for his evidence to have been filed but before he reviewed the Boiler’s factum, which he claims triggered his realization that he needed documentary evidence.

THE NEW AFFIDAVIT

[75] Salsberg maintains that all he is doing in the second affidavit is providing documentary corroboration for what has already been said. While Conen accepts that, she states that the purpose of her new evidence is three-fold, such that it is intended to:

…address issues raised by the Defendants in their factum; to provide a full record to this Honourable Court; and also to advise as to a development which occurred subsequent to my cross-examination on July 9, 2014.

[76] Though it may have been helpful for Conen to up-date her evidence to relate new developments, her stated objectives of addressing issues raised in the defendants’ factums and providing the court with a full record are both objectives that should have been upper most in her mind and anticipated before her May evidence was delivered, not after she was cross-examined and had an opportunity to assess where her evidence was lacking and should be shored up. What was raised in Boiler’s factum were the legal principles, which her counsel is deemed to have been aware of or capable of locating. Allowing this evidence in now would effectively be giving the plaintiffs a second proverbial “kick at the can.”

[77] While Conen claims that the documents corroborate what she said so should not come as a surprise to any of the defendants, what she fails to appreciate is the fact that the documents exist and to the extent that they may corroborate that evidence does come as a surprise this late in the day. All parties to the action were entitled to expect the plaintiffs to put their best foot forward on this motion in their responding record– they had counsel so there was no basis for anyone to expect that there may have been further and better evidence available that would emerge later in the day. What purpose does a responding record serve if counsel suddenly appears with more documents afterwards? There has to be some finality to this process.

[78] When Conen claims that she always had the documents but was not asked for them, this is also not entirely accurate. In at least two places in her very recent affidavit, she speaks of documents she does not yet have but is trying to get. Of what value will they be after this motion has been heard? It also fails to explain why documents appeared for cross-examination. Nowhere does either she or Salsberg advise if she just gave them to him of her own accord or if he suddenly asked her for them later in the day. It is not at all clear how these new documents emerged or why they were not made available earlier, if not in May, in July as part of exhibit 1.

[79] The fact that the responding record was so sparse was something the defendants had considered and was likely the basis for how they expected these motions to be decided by the court, hence, their advice to their clients. One generally does not and ought not to have to anticipate that a possible “whoops” from a party represented by senior counsel could arise a week before the return date of a motion timetabled 8 months earlier.

[80] Looking at the substance of the new evidence, Conen is again cagey with her language. Although she now claims that the defendants’ success on the motions will have an impact on the plaintiffs’ ability to continue with the action, she does not state unequivocally that such an order would, indeed, mean the end of the road for this litigation. Instead, she says it will essentially end this litigation. “Essentially” is not the same as “actually.”

[81] What follows is reference to 9 exhibits newly produced, 6 of which Conen suggests have a bearing on her own financial status for the purpose of the motion, while the other three deal with Comatec.

[82] The new affidavit contains Conen’s tax returns for 2012 and 2013, unsigned, without Notices of Assessment; and assorted pages showing the history of various bank accounts in hers and Comatec’s names. Nowhere does Conen state that these are the only bank accounts she or Comatec have world-wide. It is therefore questionable as to how much these documents would actually add to the plaintiffs’ evidentiary record.

[83] There is also discussion in this new affidavit about a second mortgage on Conen’s condo in favour of Benbeth, hence her need to pay down that loan on the sale of the property. All of this ought to have been made clear at the outset as this was her major asset. In any event, this has nothing to do with adding a document to corroborate the plaintiffs’ position on this motion, which Salsberg states was the sole purpose of the new affidavit. That is clearly not the case.

ANALYSIS and CONCLUSION

[84] In Mernick Construction Co. Limited et al. v. Gerstsein, 2008 CarwellOnt 6429, I was also faced with whether leave should be given to allow a party to file a late-in-the-day affidavit prepared, in that case, in response to an upcoming summary judgment motion.

[85] The first affidavit filed in that case alleged that a fraudulent scheme had been committed, that the deponents had been aware of it for some time, yet no exhibits to support the bald allegation were appended. It appeared to me there that the affidavit consisting of only bald allegations has been tendered for the purpose of making it appear as if there was a triable issue in response to summary judgment motion. The failure to include documentary evidence as part of the affidavit was therefore relied on by the moving parties to the summary judgment motion that there was no triable issue that the court had to be concerned about.

[86] When serving the new material, counsel in that case noted that its purpose was to demonstrate that what had already been sworn in the affidavit was supportable by documentation that in no way enhanced or detracted from what had already been provided.

[87] I found that was not accurate, as the new affidavit contained commentary about each document and a summing up – much like what Conen has done in her recent evidence.

[88] In that case, too, there was a timetable for the service of materials, one created by the parties and submitted, on consent, to the court, so of lesser weight than the order I made here, with the input of all counsel.

[89] These were my comments at that time, which apply equally here, with variation for the slight factual differences:

As I read Campbell J.’s endorsement, the full day of court time made available for this motion was contingent on the parties doing what had to be done beforehand, according to a proposed timetable that they, themselves, had worked out and agreed to. In my view, by submitting an agreed timetable to the court, the parties to it bind themselves to use their best efforts to do as they propose in exchange for the court agreeing to hold a full fay of judge-time available for them. In effect, the court and the parties have entered into a form of “contract”, each agreeing to use their best efforts to do as required to secure the motion date scheduled.

In this day and age of limited available judicial time and court resources, all Toronto counsel are deemed to know that a full day of court time is a valuable commodity, one they must take pains to preserve and honour, barring exceptional circumstances. It is for this very reason that timetables to assist the parties in readying themselves for long motions were introduced some time ago, the intent being to ensure that motions would be fully ready to proceed as scheduled and that court time, once allocated, would be used. This is a responsible approach to coping with limited resources.

Timetables are therefore not viewed by this court as a mere technical requirement that can be ignored if they prove to be inconvenient. Case law relates how parties must go about getting court approval when they require an indulgence and must deviate from the terms agreed to and ordered in a timetable. Thus, in Addeco Employment Services Ltd. v. McGowan Elliott & Kim LLP [2007] OJ No. 4865 Horkins J. refers to the parties attending before the court to amend the timetable. Seeking leave to amend a timetable is a recognized method for effecting a change to it.

[90] In Mernick, I was critical of counsel for simply serving and filing the new materials without first seeking leave, though not all parties consented to the variation of the timetable being sought. The same approach was used here. I noted in Mernick:

The leave process is important. The cases suggest that unless and until a party puts forward cogent and credible reasons for missing a deadline, they are bound to do as required within the timelines orders.

[91] Though the parties did not propose this timetable, they were all involved in a telephone case conference which gave rise to its creation and the dates were proposed, discussed and ultimately agreed to before they were incorporated into two court orders. Thus, as in Mernick, the parties had an opportunity to and have considered their ability to comply with it. What Salsberg ought to have done was notify all counsel that a telephone case conference was needed so that he could discuss how to go about seeking leave before the materials were served, prior to the cross-examination of his client. By failing to seek and obtain leave first, he bypassed the process.

[92] The nature of the evidence required in order to obtain leave was discussed by E.M. Macdonald J. in Mintz v. Wallwin (2008), 2008 ONSC 31409, 91 OR (3d) 388, where she states:

The defaulting party must provide evidence to the court that it has acted reasonably, in good faith and that it has made best efforts to comply with the timetable. The defaulting party must provide a reasonable and acceptable explanation, even before there is an inquiry as to the other party’s suffering prejudice from the non-compliance.

[93] In view of the foregoing, it is not possible to say that Salsberg’s evidence about why he served the second Conen affidavit so late meets the mark. He did not acte reasonably when he failed to undertake any research about impecuniosity before embarking on drafting the supporting affidavit. He adopted this approach when he had to know that his understanding of this area of the law was seriously outdated, as he was unaware of the framework of the evidentiary burden, though it has been around for at least 30 years. He ignored a court order that directed him to do his research before his drafting. His evidence also conflicts with the fact that a bundle of documents was made available in July 2014. That cannot possibly qualify as reasonable, in good faith or in any way acceptable.

[94] Based on all of the foregoing, I am not prepared to grant leave to introduce the 2^nd Conen affidavit or the exhibits appended to it. The affidavit does not simply introduce documents to corroborate evidence already given, as Salsberg suggests. Conen, herself, states the purpose of the new affidavit is three-fold. I point out, however, that in the context of hearing submissions and writing these reasons, I did review that evidence and find that had it been allowed in, it would not have altered my ultimate decision with respect to the issue of impecuniosity.

[95] I note that having to deal with this issue took up about two hours of court time, so delayed the start of this motion considerably. It also added considerably to my writing time, so has delayed my decision on impecuniosity, on which the remaining schedule hinges. These are issues to be factored into costs, if I am asked to assist.

[96] I believe the costs associated with this issue can be dealt with now, separate and apart from the outcome of the main motions. If the parties are unable to agree within the next thirty days, I can be spoken to.

Master Joan M. Haberman

Released: December 19, 2014