CITATION: Royal Bank of Canada v. Galant and Slutsky, 2015 ONSC 2412
COURT FILE NO.: 14-49340
DATE: 2015-04-14
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Royal Bank of Canada, plaintiff
AND:
Gloria Galant and Samuel Slutsky, defendants
BEFORE: The Hon. Mr. Justice Robert B. Reid
COUNSEL: Melvyn Solomon, Counsel, for the defendants
Brian McCluskey, Counsel, for the plaintiff
CONSIDERED IN CHAMBERS: April 13, 2015
ENDORSEMENT
[1] The defendants brought a motion to transfer this action from Hamilton to Toronto.
[2] In response to the motion, the plaintiff filed an affidavit which referred to correspondence between the parties in advance of the litigation.
[3] The defendants then moved to strike certain portions of the affidavit based on settlement privilege.
[4] After a hearing in writing, both motions were dismissed by Regional Senior Justice J. Turnbull in an endorsement dated December 9, 2014.
[5] The defendants seek leave to appeal to the Divisional Court from the interlocutory orders of the motions judge.
[6] Leave to appeal is required by rule 62.02 of the Rules of Civil Procedure.
[7] The rule is presumptive against granting leave to appeal in that it states:
(4) Leave to appeal shall not be granted unless,
(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or
(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
[8] The defendants submit that both clauses (a) and (b) apply.
[9] For the reasons that follow, leave to appeal both orders is denied.
Change of Venue:
(a) Background Facts
[10] The plaintiff sued the defendants for repayment of a loan and realize on its security interest against the defendants’ property in Toronto. The defendants reside in Toronto and their legal counsel has offices there.
[11] The plaintiff commenced the action in Hamilton where its legal counsel has an office. It was entitled to do so under the provisions of rule 13.1.01(2). The claim predates the recent rule change requiring any mortgage action to be commenced in the county designated by the regional senior judge of the region in which the property is located.
(b) Reasoning of the Motions Judge
[12] The motions judge identified that the only relationship of the case to Hamilton is that the plaintiff’s legal counsel’s office is located there. He noted that there was no information with respect to the location of any witnesses who might be called to testify. At paragraph 8 of his endorsement, the motions judge noted: “The moving party has not provided the court significant evidence that the convenience of the parties of [sic] the witnesses will be adversely affected by having the matter heard in Hamilton as opposed to Toronto. The distance between the two cities is not significant in the scope of matters.”
[13] As Regional Senior Justice, the motions judge took judicial notice of the fact that “there clearly is an advantage to having the matter heard in Hamilton because the trial lists in Hamilton are significantly shorter than those in Toronto.” He also considered the fact that “judges and court facilities are available in Hamilton and there will be little or no problem in having an early trial of this action”.
[14] I note the directive at paragraph 49 of the Consolidated Provincial Practice Direction (effective July 1, 2014) that in motions to transfer civil proceedings: “counsel are not required to provide affidavit evidence about the availability of judges and court facilities in the other County to satisfy factor (viii) under rule 13.1.02(2). This factor shall be addressed by the Regional Senior Judge in the Region where the motion is brought, after consulting with the local administrative judge or Regional Senior Judge for the other County.”
[15] After reviewing the decision in Siemens Canada Ltd. v. Ottawa (City), 2008CarswellOnt5650, the motions judge concluded at paragraph 11 that the defendant had not met its onus to prove that the transfer is desirable in the interest of justice based on the totality of the record and in a situation where “the courts must simply decide between two locations where transportation and communication do not create a significant burden when considered with the other factors enumerated under rule 13.1.02(2)(b).”
(c) Is there a conflicting decision in Ontario or elsewhere?
[16] The defendants do not submit that there are lines of authorities on the issue of transfer of venue that conflict with one another, giving rise to the need for appellate review and clarification. Normally, for leave to be granted under clause (4)(a) of rule 62.02, a divergence or inconsistency in the case law is a necessary prerequisite.
[17] Rather, the defendants submit that the motions judge failed to properly apply the facts to existing case law principles and thereby made an error. That submission speaks to clause 4(b) of rule 62.02. The mere fact that the motions judge came to a different conclusion from other courts in different fact situations is not enough.
[18] Since I am not satisfied that the defendants have shown a conflicting decision in the sense that there is a divergence in the case law, I am of the opinion that it is not desirable that leave to appeal be granted under clause (4)(a) of Rule 62.02.
(d) Is there good reason to doubt the correctness of the order in question and does the proposed appeal involves matters of importance?
[19] For the reasons set out below, I find that there is no good reason to doubt the correctness of the order in question, in the sense that the soundness of the order is not open to very serious debate. In addition, and in the circumstances of this case, I do not consider that the proposed appeal involves matters of such importance that leave to appeal should be granted.
[20] Since there was no statute or rule requiring the trial of this claim in any particular county, the plaintiff was entitled to commence the proceeding at any court office in the Province of Ontario. The motions judge did not need to require the plaintiff to establish a rational connection between the claim and its choice of venue.
[21] The Divisional Court in Chatterson, et. al v. M & M Meat Shops Ltd. (2014 ONSC 1897) recently reviewed the matter of change of venue motions and confirmed that the court must engage in a “holistic exercise” when considering the factors listed in rule 13.1.02(2)(b).
[22] The motions judge did consider the relevant facts in determining whether a transfer is desirable in the interest of justice. He referenced the location of the property in question and the address of the defendants, the convenience of the parties, witnesses and the court, the extent to which judges and court facilities are available in the other county and, inferentially, any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceedings on its merits. The motions judge examined the situation holistically and identified that he had considered the factors enumerated under the rule 13.1.02(2)(b). He concluded that it was not in the interest of justice to grant the requested transfer.
[23] I find that there is no reason to doubt the correctness of the motion judge’s order.
[24] In any event of my conclusion on correctness, there is a second part to the test which is conjunctive. I must be satisfied that the matters involved are of such importance that leave to appeal should be granted. The matter must be of general importance to the public or to the development of law or to the administration of justice. Its importance must transcend the interest of the parties.
[25] Since rule 13.1.01(3) was added, effective March 31, 2015, requiring mortgage actions to be commenced in the county designated by the regional senior judge of the region in which the property is located, there is no issue of general importance arising from this proposed change of venue appeal. Motions to change venue on mortgage claims will virtually disappear. Therefore I am not satisfied that the matters involved are of such importance that leave to appeal should be granted.
[26] Parenthetically, as a practical matter, I consider that the additional cost and delay occasioned by an appeal likely would outweigh any potential inconvenience or increased cost to the defendants arising from defending the claim in Hamilton.
[27] Based on the foregoing, the defendants’ motion for leave to appeal as to the issue of change of venue is dismissed.
Motion to Strike:
(a) Background Facts:
[28] In response to the change of venue motion, the plaintiff filed an affidavit alleging that the defendants’ motive in seeking a change of venue was to create delay.
[29] The affidavit contained reference to a response by the defendant Slutsky to the plaintiff’s demand for payment. Mr. Slutsky provided written notice of his intention to bring the indebtedness into good standing. The plaintiff then granted time for him to do so.
[30] The defendants sought to have those references in the affidavit and attached exhibits expunged based on settlement privilege.
(b) Reasoning of the Motion Judge:
[31] The motions judge considered whether it was the intention of the defendant Slutsky to make a bona fide offer of settlement, the existence of the dispute and the contents of the letter to determine whether the communication was protected by settlement privilege. He used the criteria referred to in the decision of Justice Perell of this court in Moore v. Bertuzzi, 2012 ONSC 3248, [2012] O.J. No. 2485 (S.C.J.) at paragraph 117.
[32] The motions judge characterized the letter from Mr. Slutsky as an effort to encourage the bank to refrain from commencing legal proceedings rather than an offer of settlement. He noted that an action had not yet been instituted.
[33] I consider it of significance that the motions judge added at paragraph 14 of his endorsement that, even if the impugned material had been struck from the affidavit, he would still not have granted the transfer application.
(c) Is there a conflicting decision in Ontario or elsewhere?
[34] As with the change of venue motion, the defendants do not submit that there are lines of authorities on the issue of settlement privilege that conflict with one another, giving rise to the need for appellate review and clarification.
[35] Here, the defendants are submitting that the motions judge made a decision in conflict with existing case law and thereby made an error. That submission speaks to clause 4(b) of rule 62.02. There is really no dispute about the applicable legal principles but rather about the way they were applied to the facts by the motions judge.
[36] Since I am not satisfied that the defendants have shown a conflicting decision in the sense that there is a divergence in the case law on the issue of settlement privilege, I am of the opinion that it is not desirable that leave to appeal be granted under clause (4)(a) of rule 62.02.
(d) Is there good reason to doubt the correctness of the order in question and does the proposed appeal involves matters of importance?
[37] The defendants dispute the implied conclusion of the motions judge that a court action needs to be commenced before settlement privilege applies. They also dispute the finding that the correspondence in question was not a bona fide settlement offer meant to be extended on a without prejudice basis.
[38] The plaintiff responds that the motions judge, in applying correct legal principles, was entitled to make findings of fact based on the evidence provided and that his decision is entitled to deference.
[39] If the matter was to proceed to an appeal, the issue could be the subject of further debate. Is a letter promising full payment of a debt an offer of settlement? Is such a letter impliedly sent on a without prejudice basis? Is there an exception to settlement privilege based on the purpose of the party relying on it -- in this case to establish delay as a motive of the defendants rather than to prejudice the defendants’ position in the litigation?
[40] These considerations, while good fodder for appellate review, must be considered in light of whether the proposed appeal involves matters of such importance that in this court’s opinion leave to appeal should be granted. The matter must be of general importance to the public or to the development of law or to the administration of justice.
[41] Since the impugned portions of the affidavit and exhibits were found by the motions judge not to be relevant to his decision on the transfer of venue motion, the result of an appeal would be of no significance as between the parties in the litigation.
[42] I reject the assertion of the defendants that the decision of the motions judge not to strike the material from the affidavit opens the door to the use of allegedly privileged settlement communications in some other part of the proceedings up to and including the trial. To the contrary, the affidavit material was applicable only to the motion. The motions judge restricted his decision on settlement privilege to the “circumstances of the motion”. If the plaintiff attempts to rely on the same information at some other time and for some other purpose, the defendants are free to renew their challenge.
[43] As I have indicated, the context of the decision regarding the use of the allegedly privileged information in this case is narrow. It relates to material that was filed in support of an allegation of delay as motive for the change of venue request. Thus confined, it is of limited precedential value and as a result, I am not satisfied that the matters involved are of such general importance that leave to appeal should be granted.
[44] Therefore based on the foregoing, the defendants’ motion for leave to appeal as to the motion to strike is dismissed.
Costs:
[45] If the parties are unable to resolve the issue of costs consensually, I am prepared to receive written submissions according to the following timetable. The plaintiff is to provide to the defendants its bill of costs together with brief written submissions within two weeks of this date. The defendants are to deliver their response to the plaintiff within a further two weeks. The submissions by both parties and any reply submissions by the plaintiff are then to be filed with the court by no later than May 25, 2015. If submissions are not received by that date or by any authorized extension, the parties will be deemed to have settled the issue of costs as between themselves.
Reid J.
Date: April 14, 2015