COURT FILE NUMBERS: 2393/10 and 5979/11

DATE: 2015/07/06

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 969625 ONTARIO LIMITED and CARY CONN

(Plaintiffs)

And:

GOLDSTONE RESOURCES INC.

RE: GARY CONN

(Plaintiff)

And:

CATHERINE PATTERSON and FERGUSON PATTERSON

(Defendants)

BEFORE: Justice I. F. Leach

COUNSEL:
Sean Dewart, for the Patterson defendants
Paul Boshyk, for the defendant Goldstone Resources Inc.
Lorne Honickman, for the plaintiffs in both actions

HEARD: June 26, 2015

ENDORSEMENT

[1] Before me is a motion, brought by the defendants in an action designated by London Court File No. 5979/11, (“the lawyer negligence action”), for an order directing that trial of that action be heard simultaneously or consecutively with trial of an action designated by London Court File No. 2393/10, (“the wrongful dismissal” action), or otherwise as the resulting common trial judge may direct.

[2] The motion is opposed by the defendant to the wrongful dismissal action.

[3] Counsel representing both the plaintiffs in the wrongful dismissal action, and the plaintiff in the lawyer negligence action, (who is one of the two plaintiffs to the wrongful dismissal action), attended at the return of the motion but took no position, except to suggest how the matter might best proceed if there was an order that the two actions be tried together.

Background

[4] The events and litigious developments leading to this motion were described in considerable detail in the parties’ motion material, but may be summarized as follows:

• Mr Conn was a majority shareholder of a junior mining company, (“Ontex”). His relationship with Ontex was defined in large measure by a management consulting agreement between Ontex, Mr Conn and Mr Conn’s personal services corporation 969625 Ontario Limited (“969625”), whereby Mr Conn was engaged as an officer of Ontex, in exchange for specified remuneration. The agreement was reached in June of 2008, and was to run for an initial five year period, with the possibility of renewal for a further five years at the option of 969625. Amongst other things, the agreement provided that it could not be terminated without “cause”, the nature of which was specified and correspondingly limited by the agreement. Such cause included identified failures to perform, observe or comply with provisions of the agreement, “gross negligence” in carrying out duties pursuant to the agreement, and Mr Conn or 969625 engaging in “any criminal act of dishonesty resulting or intended to result directly or indirectly in [their] personal gain … at the … expense [of Ontex]”.

• In 2009, Ontex then merged with another junior mining company (“Roxmark”) to form a larger corporation called Goldstone Resources Inc., (“Goldstone”). The merger was not a seamless and happy one. To the contrary, it apparently was characterized by a good deal of corporate infighting, and a struggle for control of the merged corporation.

• In early October of 2010, the former shareholders of Roxmark took control of Goldstone, and terminated its relationship with Mr Conn and 969625. In doing so, Goldstone took the position that the relationship was being terminated for cause. Particulars were given, (including allegations of gross negligence, failure to adhere to reasonable business standards and/or to perform other specified duties, and approval of a press release said to contain false and misleading information), but Goldstone reserved its right to continue its investigation into Mr Conn’s conduct, and thereafter rely on any additional matters that might be “uncovered”.

• Within days of the aforesaid termination, Mr Conn and 969625 commenced the wrongful dismissal action against Goldstone, using the legal services of Ms Patterson and her law firm. Relief sought in the action included substantial damages, (in excess of $3 million), for breach of the management consulting agreement, wrongful dismissal, and/or loss of opportunity to exercise stock options. As plaintiffs in the wrongful dismissal action, Mr Conn and 969625 relied on the termination provisions of the management consulting agreement, and denied that Goldstone had sufficient cause to terminate the agreement or Mr Conn’s employment.

• In late October of 2010, Goldstone filed a statement of defence and counterclaim in the wrongful dismissal action. In its pleading, Goldstone took the position that the management consultancy agreement was “invalid and unenforceable” for a multitude of independent and cumulative reasons, which were described both generally and by specifics. Goldstone also took the position that the agreement was validly terminated for cause in any event, for additional independent and cumulative reasons. These too were set forth in both a general way, and by the provision of particulars that alleged numerous failings and separate instances of serious misconduct on the part of Mr Conn. For example, Mr Conn was said to have approved a false and misleading press release, as well as agreements with various third parties which were inappropriate and not in the best interests of Goldstone. He also was alleged to have engaged in further misconduct such as failure to follow corporate counsel recommendations, insider trading, entry into an undisclosed collateral agreement with Goldstone’s landlord, and failure to conduct shareholder and investor relations, (with a view to artificially depressing the price of Goldstone’s shares so as to participate in equity financing of the company in an opportunistic way).

• Of particular relevance to later developments was Goldstone’s pleaded allegation, in support of its “termination for cause” position, that Conn had invaded the privacy of Goldstone employees and committed “a criminal act of dishonesty”, (within the meaning of the termination provisions of the management consultancy agreement), by installing undisclosed cameras with microphones in a Goldstone property used as an office and residence, “presumably for the purpose of secretly monitoring their private activities for his own amusement”.

• While Mr Conn disputed most of the allegations pleaded in Goldstone’s defence and counterclaim, it seems he was particularly offended by Goldstone’s allegations concerning installation of the aforesaid cameras. In particular, the allegations were viewed as a highly defamatory suggestion that Mr Conn was a voyeur or “peeping Tom”. As Goldstone’s statement of defence had been published on the internet prior to its being filed with the court, (in a context where it accordingly did not enjoy the “absolute privilege” from defamation litigation normally extended to court filings), Mr Conn made that internet publication the subject of a separate defamation action, (commenced in January of 2011 and having London court file no. 3192-11), in which he once again was represented by Ms Patterson and her law firm.

• In April of 2011, the defendants to Mr Conn’s defamation action, (including Goldstone), moved for summary judgment dismissing the claim, based on their defence of justification; i.e., that Mr Conn could not properly claim damages for loss of reputation because the essence or “sting” of the relevant alleged defamation was substantially true. According to Mr Conn, he wished to respond to the summary judgment motion with evidence supporting his contention that surreptitious installation of the cameras was done for various reasons that in his view were defensible; e.g., to protect the interests of Goldstone by monitoring potential theft and vandalism. However, believing the motion would be decided in Mr Conn’s favour because of the moving defendants’ failure to tender evidence proving that the cameras were installed for Mr Conn’s “amusement”, Ms Patterson chose to file no responding evidence on the summary judgment motion, apart from minimal filings relating to the extent of publication.

• In the result, Justice Gorman granted summary judgment, (in May of 2011), dismissing Mr Conn’s defamation claim. In doing so, she noted that the purpose for which Mr Conn had installed the cameras was “immaterial to the central issue” of whether there was no genuine issue for trial in relation to the moving defendants’ reliance on justification. That was because installation of the cameras intercepted private communications of Goldstone employees, rendering the conduct an offence pursuant to s.184(1) of the Criminal Code of Canada. That was sufficient to make out the “sting” of the alleged defamation; i.e., that Mr Conn had engaged in disreputable conduct sufficient to make out the defence of justification.

• In November of 2011, Justice Gorman’s dismissal of Mr Conn’s defamation action was then upheld by the Court of Appeal, which noted Mr Conn’s failure to file any affidavit material challenging the evidence upon which Justice Gorman relied in reaching her conclusions.

• In the wake of that Court of Appeal ruling, Mr Conn and 969625 terminated their retention of Ms Patterson and her law firm. They retained new counsel to continue pursuit of the ongoing wrongful dismissal action, and Mr Conn had the same new counsel commence a third proceeding, (the lawyer negligence action), against Ms Patterson and her law firm.

• That lawyer negligence action was commenced in December of 2011, and seeks relief including damages in the amount of $3,250,000. In that regard, Mr Conn says the losses he has sustained and will sustain, because of the alleged failings of Ms Patterson and her law firm, go beyond those immediately associated with dismissal of the defamation action, (such as Mr Conn’s inability to vindicate his reputation, and his inability to recover the damages he says he otherwise would have obtained had the defamation action been pursued appropriately). In particular, he says the adverse rulings in the defamation action also may have jeopardized the ongoing wrongful dismissal claim, resulting in possible consequential damages for which Ms Patterson and her law firm also should be responsible.

• Mr Conn’s fears in that regard have been reinforced by efforts made by Goldstone, in the wrongful dismissal action, to make use of judicial rulings in the defamation action.

• The first such effort came in February of 2012, when Goldstone moved for summary judgment in the wrongful dismissal action. In doing so, Goldstone argued that Justice Gorman effectively had decided that the requirements of termination for cause under the management consultancy agreement had been established, (by her finding of criminal conduct on the part of Mr Conn), and that Justice Gorman’s ruling in that regard had application in the context of the wrongful dismissal action by virtue of issue estoppel. Justice Tausenfreund disagreed. In refusing to grant summary, he found that the principle of issue estoppel did not apply because Justice Gorman had addressed “but one of the issues” Goldstone would need to resolve in its favour, in order to rely successfully provisions of the agreement permitting termination for cause because Conn or 969625 had engaged “in any criminal act of dishonesty resulting or intended to result directly or indirectly in [their] personal gain … at [the] expense” of Goldstone. [Emphasis added.] Even if Justice Gorman had found that Conn engaged in a “criminal act of dishonesty”, this alone was not the same as the relevant and more expansive question to be answered in the context of the wrongful dismissal action, which would focus not only on whether there was a criminal act of dishonesty, but also on its effect and/or intended purpose.

• In May of 2013, Goldstone brought a further motion for summary judgment, again seeking dismissal of the wrongful dismissal action. In doing so, it relied on Justice Gorman’s finding in the defamation that Conn had committed the criminal offence of interception of private communications, and supplemented that with further evidence. It asked the court to find that Conn had engaged in a “criminal act of dishonesty”, and that the criminal act of dishonesty “either resulted or was intended to result directly or indirectly in personal gain to Conn at the expense of Goldstone”. Justice Lederman found that the case was not an appropriate one for summary judgment, as interpretation and application of the relevant termination for cause provisions of the agreement required a contextual examination. Moreover, although it apparently was common ground that no personal gain was actually obtained by Conn as a result of the conduct in question, Justice Lederman found “great difficulty” discerning Conn’s subjective intent in the context of a motion for summary judgment, in the absence of any relevant documentary evidence. The request for summary judgment accordingly was denied.

• As noted below, Goldstone recently has brought a further motion, (which it seeks to have heard and decided before trial), seeking a determination that evidence or argument at trial that Mr Conn did not intercept private communications, contrary to s.184(1) of the Criminal Code, is barred by issue estoppel and/or abuse of process concerns.

Current status of wrongful dismissal action

[5] The wrongful dismissal action has continued to move toward trial. Pleadings are closed, documentary and oral discovery is complete, and the matter has been set down for trial.

[6] A pre-trial of the matter was conducted relatively recently, (on May 15, 2015), at which time the presiding judge granted leave for a further pleading amendment, (to remove an allegation of fraud), and set deadlines for the parties’ filing of possible expert and responding expert reports over the course of this summer.

[7] At the pre-trial, the presiding judge also granted leave for Goldstone to bring the further motion, noted above, seeking a determination that issue estoppel and/or abuse of process concerns preclude any evidence or argument at trial that might seek to avoid or question Justice Gorman’s finding, in the defamation action, that Mr Conn intercepted private communications contrary to s.184(1) of the Criminal Code. That motion now has been brought, but the relevant notice of motion, provided in the material before me, indicates that it is first returnable on Tuesday, July 21, 2015. However, that is a “short motions” date, which suggests the matter would be spoken to then only for the purposes of scheduling a later special appointment.

[8] I am informed by the trial co-ordinator that, on June 23, 2015, another two-hour special appointment motion in the wrongful dismissal action was scheduled for hearing on July 17, 2015. However, there seems to be nothing in the material before me to indicate what that motion may be for, (if it is a motion different than the further motion already described), and it was not mentioned by counsel during the hearing before me.

[9] Although counsel for Goldstone indicated the wrongful dismissal action “is proceeding to trial on September 8, 2015”, the trial co-ordinator has indicated that the matter does not have a fixed trial date but is simply on a running list.

[10] Whether or not the matter is actually reached for trial on the date in question therefore will depend on a variety of factors, including its placement on the list, the settlement of other matters on the running list, the anticipated length of the trial, and the availability of judges who have not pre-tried the matter and who are not seized of other matters.

[11] In that regard, I note that the amount of time required to try the wrongful dismissal action is already problematic. In particular, the trial duration estimate provided during Assignment Court was only 8-10 days. However, at the recent pre-trial, counsel apparently informed the judge that trial of the matter would take at least 10-12 days.

[12] Moreover, if argument and determination of the pending motion (or motions) cannot be completed before September 8, 2015, that too obviously will have an impact on whether trial of the wrongful dismissal trial is ready to proceed, regardless of whether it is joined with the lawyer negligence action.

Current status of the lawyer negligence action

[13] The lawyer negligence action also has been making its separate way toward trial.

[14] Pleadings are closed, (with the defendants very much denying that anything done in the defamation action has prejudiced Mr Conn in relation to the wrongful dismissal action), and all documentary and oral discovery has been completed.

[15] Liability has been admitted by the defendants. However, damages remain in issue, with the defendants disputing not only the existence and quantification of Mr Conn’s damages, but his allegation that any such damages were caused by the defendants.

[16] The action has been set down for trial, but has not yet been pre-tried, or assigned a trial date.

[17] Apart from the motion before me, and a pre-trial, no further measures before trial are contemplated or thought to be necessary.

Analysis

[18] Motions of this nature are governed by the provisions of Rule 6 of the Rules of Civil Procedure, which reads as follows:

6.01 (1) Where two or more proceedings are pending in the court and it appears to the court that,

(a) they have a question of fact or law in common;

(b) the relief claimed in them arises out of the same transaction or occurrence or series of transactions or occurrences; or

(c) for any other reason, an order ought to be made under this rule,

The court may order that,

(d) the proceedings be consolidated, or heard at the same time or one immediately after the other; or

(e) any of the proceedings be,

(i) stayed until after the determination of any other of them, or

(ii) asserted by way of counterclaim in any other of them.

(2) In the order, the court may give such directions as are just to avoid unnecessary costs or delay and, for that purpose, the court may dispense with service of a notice of listing for trial and abridge the time for placing an action on the trial list.

6.02 Where the court has made an order that proceedings be heard either at the same time or one immediately after the other, the judge presiding at the hearing nevertheless has discretion to order otherwise.

[19] Rule 6 is interpreted and applied having regard to the more general legislative direction, in section 138 of the Courts of Justice Act, R.S.O. 1990, c.C.43, emphasizing that, “As far as possible, multiplicity of legal proceedings shall be avoided”.

[20] The court’s general approach to Rule 6 motions has been summarized in Perell and Morden, The Law of Civil Procedure in Ontario (1st ed.), at p.316:

Before making a consolidation order or an order for a trial together, the court will consider whether the criteria defined by the rule have been satisfied and then consider whether the balance of convenience favours such an order. It is not appropriate to consolidate actions arising from separate and distinct occurrences. In assessing whether there is a question of fact or law common to both proceedings, the focus is on whether the proposed common issue has sufficient importance in relation to the other facts or issues such that it would be desirable that the matters be consolidated, heard at the same time, or after each other.

The underlying policy of the consolidation rule is to avoid a multiplicity of proceedings, to promote expeditious and inexpensive determination of disputes, and to avoid inconsistent judicial findings. In exercising its discretion whether to order the consolidation of proceedings or that they be heard simultaneously or consecutively, the court will consider the general rule, mandated by the Courts of Justice Act, that, as far as possible, multiplicity of proceedings shall be avoided, and a variety of factors including: (1) the extent of the difference of commonality of the factual or [legal] issues in the proceedings; (2) the status of the progress of the several proceedings; and (3) the convenience or inconvenience, in terms of time, money, due process and administration, of bringing the proceedings together.

[21] A more comprehensive list of possible factors for consideration was set out by Master Dash in the oft-cited case of 1014864 Ontario Ltd. v. 1721789 Ontario Inc., [2010] O.J. No. 2624 (Master), at paragraph 23:

A non-exhaustive list of some of the considerations on ordering trial together may, depending on the circumstances, include:

(a) the extent to which the issues in each action are interwoven;

(b) whether the same damages are sought in both actions, in whole or in part;

(c) whether damages overlap and whether a global assessment of damages is required;

(d) whether there is expected to be a significant overlap of evidence or of witnesses among the various actions;

(e) whether the parties are the same;

(f) whether the lawyers are the same;

(g) whether there is a risk of inconsistent findings or judgment if the actions are not joined;

(h) whether the issues in one action are relatively straightforward compared to the complexity of the other actions;

(i) whether a decision in one action, if kept separate and tried first, would likely put an end to the other actions or significantly narrow the issues for the other actions or significantly increase the likelihood of settlement;

(j) the litigation status of each action;

(k) whether there is a jury notice in one or more but not all of the actions;

(l) whether, if the actions are combined, certain interlocutory steps not yet taken in some of the actions, such as examinations for discovery, may be avoided by relying on transcripts from the more advanced action;

(m) the timing of the motion and the possibility of delay;

(n) whether any of the parties will save costs or alternatively have their costs increased if the actions are tried together;

(o) any advantage or prejudice the parties are likely to experience if the actions are kept separate or if they are to be tried together;

(p) whether trial together of all of the actions would result in undue procedural complexities that cannot easily be dealt with by the trial judge;

(q) whether the motion is brought on consent or over the objection of one or more parties.

[22] In my view, almost all of the considerations relevant to the matters before me favour granting of the requested order for simultaneous or consecutive trial.

[23] Although Goldstone suggests otherwise, it is clear to me that there actually is a substantial and significant overlap in the factual and legal issues to be addressed and resolved in each action.

[24] That overlap stems in large measure from Mr Conn’s claim that the alleged failings of Ms Patterson and her law firm in conduct of the defamation action have jeopardized the recovery to which he otherwise may have been entitled in the wrongful dismissal action, such that all the damages he otherwise would have recovered in the wrongful dismissal action should be added to his recovery in the lawyer negligence claim.

[25] That fundamental position effectively creates a unity of interest between Goldstone and the Patterson defendants in establishing that the wrongful dismissal action is destined to fail for any of the myriad reasons relied upon by Goldstone that really have nothing whatsoever to do with Mr Conn’s installation of cameras in Goldstone’s facilities, and therefore nothing to do with the conduct or outcome of the defamation action.

[26] For example, if it can be established to a court’s satisfaction that the management consultancy agreement generally is invalid and unenforceable, that alone may provide a sufficient reason for dismissal of the wrongful dismissal action. Goldstone therefore has an obvious interest in establishing that proposition. However, so do the Patterson defendants, as such a judicial ruling would vindicate their position that Mr Conn was destined to lose the wrongful dismissal action in any event for reasons entirely unrelated to the agreement’s “termination for cause” provisions, which in turn would mean that damages claimed but not recovered by Mr Conn in the wrongful dismissal action should not be added to whatever he may be entitled to recover in the lawyer negligence action.

[27] Similar considerations apply to Goldstone’s arguments that the wrongful dismissal claim should fail, even if the management consultancy agreement is valid, because of various other alleged failings of Mr Conn unrelated to his installation of the cameras, (e.g., approval of a false and misleading press release, inappropriate agreements with third parties, insider trading, etc.), that nevertheless are said to offer sufficient independent reasons for Goldstone’s reliance on the agreement’s termination for cause provisions.

[28] If a court can be persuaded that any of those additional arguments are valid, Goldstone may succeed in having the wrongful dismissal action dismissed on one or more of those independent grounds, without having to demonstrate that Mr Conn’s installation of the cameras also justified reliance on the “criminal act of dishonesty” provisions of the agreement.

[29] However, such a judicial ruling once again would vindicate the damage causation arguments of the Patterson defendants in the context of the lawyer negligence action. In particular, if Mr Conn would not have recovered his claimed damages in the wrongful dismissal action in any event, for reasons unrelated to his installation of cameras, and therefore regardless of what may have happened in the defamation action that was focused on such conduct, the damages Mr Conn fails to recover in the wrongful termination claim once again should not be added to any amounts Mr Conn may be entitled to recover in the lawyer negligence action.

[30] While I have focused on unity of interest between Goldstone and the Patterson defendants in relation to certain issues, there is a different but equally important unity of interest between the Patterson defendants and the plaintiffs to the wrongful termination action; i.e., when it comes to defeating Goldstone’s reliance on the Mr Conn’s installation of the cameras, and the termination for cause provisions relating to “a criminal act of dishonesty” resulting or intending to result directly or indirectly in personal gain by Mr Conn and/or his personal services corporation, at the expense of Goldstone.

[31] In the context of the lawyer negligence action, Mr Conn’s argument is that the outcome of the defamation action may have prejudiced him in that regard; i.e., by moving Goldstone closer to its goal of successfully relying upon the “criminal act of dishonesty” provisions in the context of the wrongful dismissal action.

[32] However, in the context of the wrongful dismissal claim, Mr Conn apparently intends to argue and demonstrate that, even if it has been established in a binding manner than he committed a “criminal act of dishonesty”, the relevant termination for cause provisions still are not engaged because the remaining requirements for application of those provisions have not been satisfied; i.e., because installation of the cameras did not result in any personal gain at Goldstone’s expense, and was not intended to result in any such personal gains at Goldstone’s expense.

[33] If Mr Conn succeeds in that argument, he will have defeated one of Goldstone’s principal defences in the wrongful dismissal action.

[34] However, a similar judicial ruling in the context of the lawyer negligence action effectively would establish that Goldstone’s defence could not have succeeded, regardless of whether a binding finding of “criminal act of dishonesty” emanated from the defamation action. That in turn would mean that Mr Conn’s position in the wrongful dismissal action was not actually prejudiced by the outcome of the defamation action, and that his recovery in the lawyer negligence action once again should not include any damages not recovered by him in the wrongful dismissal action.

[35] The above focuses on commonality of issues that relate to liability in the context of the wrongful dismissal actions, and translate into damage causation issues in the context of the lawyer negligence action.

[36] However, there also are potentially overlapping issues in relation to quantification of damages as well.

[37] For example, in the context of the wrongful dismissal action, a court may rule that there is no liability for reasons that include, or may even be limited to, a finding Mr Conn’s installation of the cameras led to full engagement of the “criminal act of dishonesty” termination for cause provisions, but proceed with quantification of damages in the event the liability ruling is challenged on appeal.

[38] However, in the context of the lawyer negligence action, if the court finds that Mr Conn’s wrongful dismissal claim would have succeeded but for engagement of the “criminal act of dishonesty” provisions, and that Mr Conn’s position in that regard was prejudiced by the outcome of the defamation action, the court will then have to determine what additional damages should be added to Mr Conn’s recovery in the lawyer negligence action, because of his failure to recover such damages from Goldstone.

[39] In relation to all these overlapping factual and legal issues, the parties to both actions necessarily would seek to rely on the same evidence as to the underlying facts, and the same or similar legal arguments.

[40] If the actions are permitted to proceed independently, (e.g., with the Patterson defendants using the summons procedure to compel testimony from the same witnesses relied upon by Goldstone in the wrongful dismissal action), there accordingly will be a duplication of time and expense, and a lack of judicial economy as two triers of fact are presented with the same evidence, and compelled to address similar issues.

[41] Moreover, the spectre of such separate proceedings also gives rise to the possibility of inconsistent rulings, which inevitably brings the administration of justice into disrepute.

[42] In that regard, Goldstone repeatedly suggested in its written and oral submissions that allowing the wrongful termination action to proceed first effectively would “narrow or settle” issues in the lawyer negligence action.

[43] In particular, it was suggested that parties to the legal negligence action would have far fewer issues to address once the merits of Goldstone’s arguments have been decided in the context of the first action, and/or damages have been quantified in the course of that proceeding,

[44] But how will Ms Patterson and her law firm be bound in any way by relevant rulings made in the wrongful termination action, if it is allowed to proceed first, and Ms Patterson and her firm are not participants in that proceeding?

[45] More pointedly, in a separate and subsequent trial of the lawyer negligence action, on what basis would further litigation by the Patterson defendants of precisely the same issues be precluded by concerns relating to issue estoppel and/or abuse of process, (the requirements of which already have been brought “front and centre” by Goldstone itself, in the context of the wrongful dismissal action)?

[46] In my view, Goldstone offered no satisfactory answer to these important questions.

[47] In that regard, I think it also has to be recognized that the various overlapping issues are not only substantial but significant.

[48] In particular, the quantum of damages sought in the lawyer negligence action is $3.25 million, which is far in excess of what most Canadian plaintiffs could ever hope to recover in a defamation action.

[49] It seems clear that the magnitude of damages being sought in the lawyer negligence action is being driven in large measure by Mr Conn’s allegation that the conduct of Ms Patterson and her firm caused him to lose not only the damages he otherwise might have recovered in his unsuccessful defamation action, but also most of the almost $3.8 million in damages being sought in the wrongful dismissal action.

[50] Given their exposure, Ms Patterson and her firm therefore have every incentive to independently pursue every legitimate argument and defence they are not precluded from raising by reasons of issue estoppel or abuse of process.

[51] For the above reasons, I am more than satisfied that the wrongful dismissal action and the lawyer negligence action have questions of fact or law in common, and that relief claimed in each action self-evidently “arises out of the same transaction or occurrence or series of transactions or occurrences”.

[52] The suggestion of simultaneous trial makes sense to me, having regard to many of the applicable factors set forth in the non-comprehensive list of Master Dash, noted above. In particular:

• The issues in each action are substantially and significantly interwoven, for the reasons outlined above.

• Mr Conn effectively seeks many of the same damages in both actions. To the extent he is unable to recover them from Goldstone, he looks to Ms Patterson and her firm for their payment.

• As noted above, it seems to me that there is expected to be a significant overlap of evidence or witnesses between the two actions, (even if the witnesses are willing in one context and compelled to testify by summons in the other). In particular:

o Goldstone and the Patterson defendants inherently will rely on precisely the same evidence and witnesses in support of their arguments that the wrongful dismissal action must fail for reasons that are entirely independent of Mr Conn’s installation of the cameras and Goldstone’s corresponding reliance on the “criminal act of dishonesty” termination for cause provisions.

o Conversely, Mr Conn, his personal service corporation and the Patterson defendants inherently will rely on precisely the same evidence and witnesses in support of their arguments that the “criminal act of dishonesty” provisions are not engaged because all of their prerequisites have not been established, even if there is a binding finding that Mr Conn engaged in a “criminal act of dishonesty” by installing the cameras.

o Evidence relating to quantification of the damages Mr Conn is claiming in the wrongful dismissal action, and which he arguably should recover in the lawyer negligence action, (if the conduct of Ms Patterson and her firm prejudiced recovery of those damages in the wrongful dismissal action), is likely to be similar or the same.

o While there will be evidence relating to the lawyer negligence action that is not relevant to the wrongful dismissal action, (e.g., quantification of the damages for loss of reputation that Mr Conn may have recovered in the unsuccessful defamation action but for the conduct of Ms Patterson and her law firm), it seems to me that such evidence is not likely to be substantial. Again, liability in that action has been admitted, and most of the damages being claimed in the lawyer negligence action inherently and substantially overlap with the damages being claimed in the wrongful dismissal action.

• The parties to the two actions are not identical, although Mr Conn is obviously an important common denominator. However, as noted above, the variance in parties is a consideration supporting simultaneous trial, in order to preclude a separate and subsequent trial relating to precisely the same matters. Having all parties participate in one determination of the issues will then engage the doctrine of issue estoppel where it otherwise would not seem to apply.

• Mr Conn and his personal service corporation are being represented in the wrongful dismissal action by the same lawyers who are representing Mr Conn in the lawyer negligence action.

• For the reasons outlined above, there is a real risk of inconsistent judicial findings if the issues common to both actions are not tried at the same time.

• To the extent there is complexity in the two matters, it is concentrated in the factual and legal issues common to both actions. The additional and unrelated issues raised by the lawyer negligence action are relatively simple, having regard to the admission of liability in that matter.

• As I have explained, a decision in the wrongful dismissal action, (if allowed to proceed independently and first), would not necessarily put an end to the lawyer negligence action, significantly narrow its issues, or significantly increase the likelihood of its settlement. Ms Patterson and her law firm would not be bound by any findings in that action, and would have every incentive to pursue the common issues in their own way, so long as there is a prospect of Mr Conn ultimately being unsuccessful, (either at first instance or after appellate proceedings), in his efforts to recover the damages he seeks from Goldstone.

• Both matters generally seem ready for trial, apart from the remaining motion or motions brought by Goldstone in the wrongful dismissal action, and the need for a pre-trial in the lawyer negligence action.

• Neither action is to be tried by a jury. In my view, this is an important consideration favouring simultaneous trial of the two matters. In particular, if both matters are dealt with by the same judge, and the wrongful dismissal action is unsuccessful, that judge obviously will know precisely the reason or reasons why it failed, and therefore be in a position to readily indicate whether or not what was done in the defamation proceeding prejudiced Mr Conn’s wrongful termination action in any meaningful way.

• It is difficult to see how combining the two matters would necessitate much in the way of further interlocutory matters, apart from those already underway or contemplated, except perhaps in relation to matters of trial scheduling and trial management. In particular, counsel in both actions indicated their willingness to share and rely on the productions and discovery evidence generated to date in each action, if simultaneous or consecutive trial was ordered.

• This motion was brought back in March of this year, and therefore long before the September trial date currently assigned to the wrongful dismissal action. Unfortunately, its argument required a special appointment hearing, which was not available until much later in the year. This resulted in the motion being heard approximately two months before possible commencement of the wrongful dismissal action trial, and Goldstone has understandable concerns about that trial being delayed by the order being sought. However, for a number of reasons, it is not clear to me that the requested order would in itself cause such a delay:

o First, as noted above, the wrongful dismissal action was not given a fixed trial date, but is simply on a running list. There accordingly is no guarantee that the matter will be reached in September, even if simultaneous or consecutive trial is not ordered.

o Second, Goldstone itself has brought one or more outstanding motions for resolution of further issues which it apparently wants decided before trial. They are to be argued by special appointment. Even if such motions are argued before trial, they may not be decided before September, depending on their complexity and the intervening summer schedule of the presiding judge or judges. If the issues raised by the motion or motions do indeed merit resolution before trial, the motions themselves might require postponement of the wrongful dismissal action beyond September in any event.

o Third, as noted above, the revised trial duration estimate provided at the pre-trial of the wrongful dismissal action already has the trial requiring more time than that allocated to it in assignment court. That too might require a postponement of the wrongful dismissal trial, regardless of whether I grant the relief requested.

o Fourth, for the reasons I have outlined, it seems to me that the lawyer negligence trial will not require much in the way of additional evidence or raise many issues that do not overlap with those already in play in the wrongful dismissal action. In the circumstances, while a simultaneous or consecutive trial of the two actions might be somewhat longer, it may still be possible to accommodate a more extended trial of the two matters in September, depending on the availability of judicial resources.

• Initially at least, the parties may be obliged to incur additional expense if attendance at court is prolonged by a simultaneous or consecutive trial, and/or if further steps are required in terms of sharing productions or evidence, or additional trial preparation and management matters. In that regard, counsel for Goldstone suggested it might incur as much as $11,250 per day in additional legal fees. Leaving aside questions of whether such estimates or claims are reasonable, it seems to me that such arguments ignore the court’s broad discretion in relation to cost reimbursement, and the possibility of trial management and direction that would alleviate the need for parties and their counsel to participate in aspects of the trial in respect of which a particular party has no interest. (For example, I question whether Goldstone would require both of its counsel to attend at trial during evidence and submissions relating exclusively to issues concerning proper quantification of the damages which Mr Conn arguably may have recovered in his failed defamation action, but for the negligence of the Patterson defendants.) Moreover, focusing on the costs of Goldstone alone seems inappropriate. Mr Conn undoubtedly will save a great deal of legal expense if he is not obliged to litigate the same issues in two separate trials, and the Patterson defendants probably will enjoy cost savings if their counsel is permitted to supplement rather than duplicate the efforts being made by counsel for Goldstone and counsel for Mr Conn, (where there is a unity of interest between the Patterson defendants and those parties). Finally, when considering costs, the court also has a vested interested in promoting judicial economy, and in this case, I think that unquestionably would be furthered by directing one trial instead of two.

• Apart from the delay and expense factors considered above, the only further consideration of advantage or prejudice was raised by Goldstone, which suggested that a judge’s simultaneous consideration and determination of the lawyer negligence action might “inappropriately taint” proper determination of issues vis-à-vis the wrongful dismissal action; i.e., because “judges are human” and may be inappropriately influenced by sympathies or prejudices generated by the other action. In my view, there is nothing in the material before me to support such arguments, which in my view border on an improper submission.

• An order for simultaneous or consecutive trial inherently calls for additional procedural rulings; e.g., to determine the order of witnesses, examinations by counsel, and legal argument. However, in this case, I do not think simultaneous or consecutive trial would result in “undue procedural complexities that cannot easily be dealt with by the trial judge”, and/or at a further pre-trial focused on case management.

• As noted at the outset, the motion is very much opposed by Goldstone. However, it obviously is supported by Ms Patterson and her law firm, and it is not opposed by Mr Conn and his personal service corporation.

[53] On balance, I think the relief requested on the motion is appropriate.

Conclusion

[54] For the above reasons, an order shall go pursuant to Rule 6.01(1)(d), directing that trial of the wrongful dismissal action (London court file no. 2393/10) and trial of the lawyer negligence action (London court file no. 5979/11) shall be heard at the same time, or one immediately after the other, subject to the discretion of the presiding judge to order otherwise pursuant to Rule 6.02.

[55] Pursuant to Rule 6.01(2), I also make the following further directions:

a. Parties to the wrongful dismissal action who want copies of any or all documentary and oral discovery disclosure in the lawyer negligence action must request such copies, from counsel in the lawyer negligence action, within one week of this order, failing which there shall be no entitlement to such disclosure.

b. Parties to the lawyer negligence action who want copies of any or all documentary and oral discovery disclosure in the wrongful dismissal action must request such copies, from counsel in the wrongful dismissal action, within one week of this order, failing which there shall be no entitlement to such disclosure.

c. A party who receives a written request for copies of such disclosure, within the timelines set forth above, shall provide such disclosure within 30 days, at the requesting party’s expense.

d. Both actions shall be spoken to at the next London Assignment Court, on July 17, 2015, at which time:

i. Counsel shall provide the court with a revised trial duration estimate, indicating the time it will take for both matters to be tried together;

ii. Counsel shall request the scheduling of a further pre-trial on an expedited basis, (and before September 8, 2015, if possible), for the two-part purpose of canvassing prospects for resolution of the lawyer negligence action, and discussing management of the combined trial of all matters that are not expected to settle; and

iii. Counsel shall advise the court of the status of any and all outstanding motions, (including confirmation of their nature, whether they are proceeding, and when they are expected to be argued).

e. A copy of this endorsement shall be included with the pre-trial memoranda submitted by the parties in relation to the aforesaid pre-trial. Counsel also shall bring an additional copy of this endorsement to the pre-trial, so that it may be appended to the “Report to Trial Judge” prepared by the presiding judge, and signed by counsel.

[56] The judge presiding in the Assignment Court on July 17, 2015, may very well determine that a new trial date is required; e.g., because of the parties’ revised trial duration estimate, the inability to schedule a further pre-trial before September 8, 2015, and/or because pending motions may not be heard and decided in advance of the scheduled trial date. Nothing in this endorsement is intended to limit the discretion of the presiding judge in that regard.

Costs

[57] During the course of the hearing before me, counsel for the Patterson defendants and counsel for Goldstone both submitted that costs of the motion should follow the event and be payable within 45 days.

[58] Both counsel also submitted that costs of the motion should be fixed at $9,000.00, (inclusive of all fees, disbursements and applicable HST).

[59] Reflecting the “watching brief” nature of his attendance at the hearing, counsel for the plaintiffs did not request costs, and no costs were sought from the plaintiffs.

[60] Costs remain in the discretion of the court. Having regard to the motion’s outcome, and the similar cost expectations of the participating parties, I nevertheless am content to order that Goldstone pay the Patterson defendants their costs of the motion fixed in the all-inclusive amount of $9,000.00, to be paid within 45 days.

“Justice I. F. Leach”

Justice I. F. Leach

Date: July 6, 2015