ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

626381 ONTARIO LIMITED

and NADIRE ATAS

Plaintiffs

v.

PATRICE A.J. COTE, BAKER SCHNEIDER RUGGIERO LLP,

DAVID J. SLOAN, KAGAN SHASTRI BARRISTERS & SOLICITORS, IRA T. KAGAN, RAHUL SHASTRI and DAVID WINER

Defendants

P R O C E E D I N G S I N C O U R T

BEFORE THE HONOURABLE JUSTICE D.L. CORBETT,

on June 30, 2015 at TORONTO, Ontario

APPEARANCES:

R. Napal Counsel for the Applicants

G. Caplan Counsel for the Defendants

ONTARIO

SUPERIOR COURT OF JUSTICE

T A B L E O F C O N T E N T S

Exam. Cr- Re-

WITNESSES in-ch. Exam Exam

None.

EXHIBITS

EXHIBIT NUMBER PAGE

None.

TRANSCRIPT ORDERED...........................July 7, 2015

TRANSCRIPT COMPLETED.........................July 16, 2015

APPROVED FOR RELEASE ........................July 27, 2015

ORDERING PARTY NOTIFIED......................July 27, 2015

TUESDAY, JUNE 30, 2015

U P O N R E S U M I N G

R U L I N G

CORBETT, J: (Orally)

There are two sets of issues before me today: one, whether I have jurisdiction to hear the section 140 application on the merits having case managed all proceedings involving Ms. Atas, including the section 140 application, since November of 2014; and, two, whether portions of the applicants’ evidence ought to be struck primarily because these portions of the evidence are said to be inadmissible hearsay and cross-examinations have not been possible in respect to those portions of the evidence.

I have concluded that the second aspect of this motion ought to be decided by the judge hearing the section 140 application. It concerns the proper characterization of the issues on the application and could have a substantial impact on how that application unfolds.

Although the Supreme Court of Canada’s decision in Hyrniak v. Mauldin, 2004 SCC 7 concerns a motion for summary judgment in an action, the principles that underlie that decision are equally applicable to a section 140 application. The procedures adopted on the application ought to be appropriate and proportional to the dispute and should be tailored to put the application judge in a position to adjudicate the merits in a proportional manner in order to come to a fair decision on the merits.

The parties have a fundamental disagreement about what this application is about and, consequently, what evidence ought to be before the court deciding the application. The applicants do not seek to put in issue the merits of the many proceedings involving Ms. Atas. Rather, they wish to provide a narrative of what proceedings have been brought and what the results have been, and how the current litigation relates to the past litigation, what Mr. Caplan describes as the “pattern of litigation”.

Ms. Atas takes the position, in essence, that her conduct as a litigant, past and present, cannot be assessed without considering the merits of her claims. She, of course, takes the position that they are meritorious.

The applicants respond to this that it cannot be permissible to require them to fully litigate a swath of vexatious litigation in order to decide whether Mr. Atas is a vexatious litigant. This is the fundamental divide over the approach to this litigation that the parties have had, not just today, but throughout much of this case management process.

In my view, it is not appropriate to decide where the proper balance lies between an investigation of the merits and a review of the formal proceedings outside the process of deciding the main application itself. If I do not hear the main application and if I decide that none of the applicants’ evidence could be struck, this decision could not possibly preclude the applications judge from deciding that a more probing inquiry into the merits of Ms. Atas’ litigation is required in order to decide the section 140 application fairly.

This conclusion - that the evidentiary issues on this motion should be decided by the applications judge - convinces me that not only does the case management judge have jurisdiction to decide the section 140 application, but also that it is the only practical way to proceed: that the section 140 application be decided by the judge dealing with issues concerning the scope of cross-examination and the admissibility of evidence.

That then leaves two options: to recuse myself from the section 140 application and adjourn the balance of this motion to the applications judge, whoever that may turn out to be or, alternatively, to dismiss the motion requesting that I recuse myself and deal with the admissibility issues myself.

The section 140 application is not a proceeding comme les autres. It is substantive to be sure but it concerns the process of all other related proceedings. In my view, the section 140 application is central to the task of case managing Ms. Atas’ litigation. It was with the prospect of this application in mind that I was appointed to case manage these proceedings, all of these proceedings.

Aside from staying all litigation pending final determination of the section 140 application, and some minor housekeeping matters, the section 140 application has been the sole procedural task for this court since November 2014 when I took over case management from Justice Stinson.

It would be a simple matter to send this application to another judge to hear the section 140 application. It could be argued that it would be safer to proceed that way to avoid a prospect of appellate reversal and the cost to the parties of running this proceeding twice, but that is really no answer. In general terms, acceding to all procedural requests might well reduce the risk of appellate reversal, but at the cost of ever more expensive, time-consuming, and for the administration of justice, burdensome litigation.

I consider the section 140 application to be a core part of my assignment to manage all of Ms. Atas’ litigation. I consider that I would be derelict in my duty to pass this responsibility on to another judge. Nothing that has taken place during my tenure as case management judge has led me to make credibility assessments, rulings on the merits of any of the proceedings, underlying or instant, or explorations of settlement, and there is no reasonable apprehension of bias. None has been alleged.

This conclusion is reinforced by some of the concerns raised by Mr. Napal on behalf of Ms. Atas in his able submissions today. He mentioned two decisions I have made that, he argued, raise concerns about my hearing the section 140 application. First, I refused to permit Ms. Atas to pursue requests under Rule 15 to require solicitors to confirm their authority to act for plaintiffs in litigation that has been decided already. This ruling concerns the effect of the general stay of proceedings in the scope of evidence relevant to the section 140 application.

The applications judge is not bound by my ruling in the sense that she or he could permit evidence respecting the issue of whether the lawyers have authority to be adduced on the application.

Second, I refused to permit Ms. Atas to conduct examinations or cross-examinations focused on the merits of the underlying litigation for use on the section 140 application. For the reasons I have already expressed, only the applications judge can decide on a final basis the scope of the application and thus the parameters of admissible evidence.

I would add to this list of two an exchange that took place at a case conference that did not result in an order. Ms. Atas advanced the position that any order under section 140 would only apply to legal proceedings involving the applicants on the strength of a decision of D.M. Brown, J., as he then was, in which Rogers Communications was not permitted to “bootstrap” on an application brought by another party. A discussion ensued about the scope of potential remedies under section 140. It is clear law that a general order under section 140 applies to all litigation brought by a litigant found to be vexatious, and a tailored order, such as the one granted by Justice Brown, while the rule for a common law order made on the basis of inherent jurisdiction, is the exception to the general rule for orders made under section 140. These are trite statements of law and, of course, none of them have a bearing on the precise remedy that would or should be ordered at the end of the section 140 application.

Mr. Napal framed his submissions on the basis that it would be advisable to have a “fresh judge” or a “fresh mind” look at these issues at the return of the section 140 application. I would replace the word “fresh” to “different” and my conclusion is that these are not matters of prejudgment but judgment on an interlocutory basis inherent in the process of bringing the section 140 application to court for a determination on the merits.

Thus far in the case management process, I have acceded to the applicants’ approach to the application, which is to deal with it on a procedural rather than substantive basis. Of course, it is for the applicants to prove their application on a balance of probabilities, which includes satisfying the applications judge that an approach to this application that does not explore the underlying merits of Ms. Atas’ case is a proper basis on which she may be declared vexatious. Part of Ms. Atas’ defence, no doubt, will be that that is not a sufficient basis given the nature of her claims for such an order to be made. I expect that when the matter is returned for argument on a final basis that I will hear full argument on those particular points and the implications that arise from those points.

For these reasons, the motion that I recuse myself is dismissed. I have concluded that the evidentiary issues that are raised on this motion should properly be brought before me at the return of the main application on September the 11th and related alternative relief to striking out the affidavits, of course, may also be pursued at that time such as requesting that I, if I’m not prepared to strike them out, rely on them only for certain prescribed limited purposes. That is my ruling.

FORM 2

Certificate of Transcript

Evidence Act, subsection 5(2)

I, Phyllis Torrance, certify that this document is a true and accurate transcript of the recording of 626381 Ontario Limited et. al. v. Patrice Cote, et al. in the Superior Court of Justice, held at Osgoode Hall, Toronto, Ontario, taken from Recording No. 4899_6_20150630_094856_10_CORBETD, which has been certified in Form 1.

DATE PHYLLIS TORRANCE, ACT ID 4026163594

Photostatic copies of this transcript are not certified and have not been paid for, unless they bear the original signature of PHYLLIS TORRANCE in blue ink, and accordingly are in direction violation of the Administration of Justice Act, Ontario Regulation 94/14.