SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: 14-61338 DATE: 2015/09/11
RE: MATTHEW DUMAIS et, al, Applicants AND: RICHARD HOBBS, et. al., Respondents
BEFORE: MASTER MACLEOD
COUNSEL: Paul D’Angelo for the Respondents, Bellehumeur & 7341334, moving parties Gary G. Boyd, for the Respondent Novotech, moving party Alyssa Tomkins, for the Applicant, responding party Allan O’Brien for the Respondent, Hobbs Bryan Carroll, for the defendants in action 15-63452
HEARD: June 23rd, 2015
ENDORSEMENT
1Certain of the respondents are bringing a motion to consolidate this application (14-61338) with a court action (15-63452). That motion was before RSJ McNamara in May and at his direction it was adjourned to a case conference before me on June 9th, 2015 and then to my list on June 23rd. It has been further adjourned pending my ruling on the refusals motions which were argued on that date. These reasons deal with refusals to answer questions posed at two cross examinations of the applicant.
2Although it is frequently possible to rule on refusals motions from the bench, I reserved to give written reasons because there were important issues that occupied inordinate time in argument. The first has to do with the extent to which it is permissible to examine a party on contractual intention and his understanding of documents. This involves a discussion of the proper scope of cross examination and the extent to which the parol evidence rule should be applied at this stage in a proceeding.
3The additional reason for reserving was the need to consider a series of documents forming part of a “mediation file” prepared by a solicitor leading up to a mediation of the issues in dispute. The contents of that file are subject to three separate forms of privilege each of which engage different considerations.
Summary of Conclusions
4As discussed in these reasons, the extent to which the scope of cross examination on a motion is narrower than on an application or on examinations for discovery depends very much on the context. In a consolidation motion seeking to combine an application with an action, the merits of each are engaged to the extent that the questions of fact, the elements of proof and the complexity of the evidence will be important considerations. In the case at bar, this leads to the conclusion that at the first set of cross examinations, it was improper to refuse to answer questions about the merits and the evidence.
5I have also concluded that it is improper to refuse to answer questions based on a possibility that the evidence may be inadmissible under the parol evidence rule. Admissibility is a decision for the applications judge. Any evidence that may be admissible and is potentially probative of a question in issue is relevant and may properly be elicited in cross examination. Particularly in a case such as this when the parties were implementing a letter of intent and subsequently purporting to exercise rights under a series of contractual and non-contractual corporate documents, these kinds of questions are relevant and potentially admissible.
6Even though the rules do not specifically require it, parties engaged in a series of multi-party overlapping cross examinations, motions and applications should be conferring with each other in a collaborative planning exercise. This was sorely lacking in the case at bar and the result was duplicative cross examinations with pages of rancorous debate between counsel. This is to be avoided in future.
Background
7To briefly summarize the facts and the issues in dispute, Novotech Technologies Corporation was established by Matthew Dumais and Richard Hobbs to acquire the business of Dynasty Components Limited, a company which was at the time undergoing CCAA rearrangement. Subsequently, in 2010 Novotech decided to acquire Mobileforce Solutions Limited, a corporation owned by Larry Bellehumeur.
8A letter of intent was prepared reflecting an agreement between the parties that Bellehumeur would sell Mobileforce for a 1/3 interest in Novotech. Ultimately Novotech proceeded with the acquisition of Mobileforce and in due course Mr. Bellehumeur was issued 1/3 of the common or Class A shares.
9At the time of the closing the parties executed several complex documents including a Share Purchase Agreement, a Management Services Agreement and a Unanimous Shareholder Agreement. Corporate articles were amended and various resolutions enacted and recorded in the minute books to close the transaction and implement the agreements. All of these documents were prepared by lawyers at Blakes who are now defendants in the related court action.
10At the time in question Blakes was the law firm for Novotech and at least at some point the lawyers for Mr. Dumais. Blakes was retained to prepare all of the closing documents in connection with the acquisition of Mobileforce. One of the live issues in the action is whether or not Blakes also acted for Mr. Bellehumeur and Mobileforce, a fact that is asserted by Mr. Bellehumeur and Mr. Hobbs but denied by Blakes.
11To continue the narrative, the relationship between the three owners of Novotech deteriorated with Mr. Hobbs and Mr. Bellehumeur allegedly allying against Mr. Dumais. There is a series of allegations and counter allegations in the affidavit material including an allegation that Mr. Dumais sexually harassed a staff member and inappropriately accessed her private e-mails. Ultimately Mr. Dumais appears to have been frozen out of the management of Novotech. The circumstances surrounding this and whether or not it was justified are very much in dispute. In any event Mr. Dumais purported to trigger an obligation that the other parties purchase his shares but there is significant disagreement about the valuation of his interest and whether or not Novotech or the other shareholders must take on debt to satisfy the demand.
12Novotech had a class of fully convertible Class B shares held by Mr. Dumais and Mr. Hobbs. Mr. Bellehumeur alleges he was unaware of this and Mr. Hobbs alleges that Blakes ought to have eliminated or rationalized these shares during the purchase of Mobileforce. Both Dumais and Hobbs converted their shares and then the corporation issued further Class A shares to Bellehumeur to restore the 1/3 ownership. Of course this also gave Hobbs and Bellehumeur the 2/3 votes required for certain matters under the unanimous shareholder agreement.
13In the application Mr. Dumais seeks to compel the purchase of his shares. According to his factum he is prepared to accept 1/3 of the fair market value of the corporation. As an alternative he seeks to set aside the transfer of additional shares to Bellehumeur, a decision of the board he argues was improper. While these are now advanced as alternatives, the respondents state that this is not apparent from the notice of application.
14In any event the interpretation of the corporate documents and the intertwined contractual documents relating to the purchase of Mobileforce are central to the application. The interpretation of those documents and whether or not they accurately implement the intention of the parties as conveyed to Blakes is also the major issue in the action.
15As noted above, Blakes denies that it ever acted for Mr. Bellehumeur. There is no doubt however that Blakes dealt primarily with Mr. Dumais on behalf of Novotech and subsequently that it represented and advised Mr. Dumais during an attempt to mediate the issues in dispute in this litigation. In the process certain documents were compiled by Blakes and this “mediation file” is one of the issues on the motion currently before the court.
The motion and the need for written reasons
16Mr. Dumais was cross examined on two occasions, May 20th, 2015 and June 8th & 9th, 2015. Most of the refusals are simple to resolve and would not have justified written reasons. There are however at least three significant issues which occupied time in argument. The first of these was the question of the proper scope of cross examination particularly as it relates to the merits of the application. The second is the obligation of counsel to confer and engage in a collaborative planning exercise even if Rule 29.1 does not apply. The substantive issue has to do with questioning about interpretation of contracts and subjective intent and with the intersection of the parol evidence rule and rights of cross examination. Finally there is the question of production of the Blakes mediation file.
17Although the argument proceeded seriatim with each question or group of questions argued separately, I have adopted a different approach with the reasons. I begin by outlining my general analysis and rulings on the major issues and then I apply them to the specific questions in issue. To the credit of counsel, a number of questions were resolved on consent.
18The first issue is the scope of cross examination.
The cross examinations and the question of scope
19On May 20th, 2015 Mr. Dumais was cross examined on his affidavits sworn in opposition to the consolidation motion. On June 8th and 9th, 2015 he was cross examined on his affidavits sworn in support of the application itself. There was considerable debate on the record concerning the scope of examination in May and whether or not Mr. Dumais could be asked questions relating to the merits of the application during that first cross examination. In June however he answered those questions.
20While the scope of cross examination on a motion may be different from cross examination on an application and both may be different from examination for discoveries, the extent to which there is a significant difference depends on the context. Mr. Justice Perell deals with the differences between discovery and cross examination on an affidavit in detail in Ontario v. Rothmans.1 As he points out in that decision there are differences in how discovery transcripts and cross examination transcripts can be used at a hearing and there are differences in the obligation of a witness to give undertakings. This sometimes means that questions that are proper discovery questions will not be proper on cross examination though such nuanced distinctions will not always be significant. It depends on what is in issue on the motion.
21When it comes to questions on the merits, there may be motions that are so narrow they do not engage the merits. Perell J. gives the example of a pleading amendment motion in which the issue is the viability of the proposed new cause of action and not of the existing cause of action. In other cases, such as summary judgment motions where the merits or lack of merit are the issues, the merits are of course completely relevant.
22In the case of the proposed consolidation motion, questions relating to the merits of the application, the nature of the evidence required and how that overlaps with the allegations in the action would also be relevant. There could be a reasonable debate about how deeply into the merits it is appropriate to probe particularly if the consolidation motion stood in isolation. I agree it would have been improper to ask questions of Mr. Dumais designed only to obtain evidence for use in the action if they were not also relevant to the application and to the motion. It is however erroneous to object to cross examination on the merits of the application as irrelevant to consolidation. The issues in dispute in both the application and the action and the extent to which they depend on credibility or other factors that might require a trial are relevant because they may assist the court to decide whether to exercise its discretion under Rule 6.01.
23Rule 6.01 provides that consolidation may be ordered inter alia where it appears to the court that two or more proceedings have a question or law or fact in common or seek relief arising from the same transaction or occurrence. The contrary rule, 5.05 provides for relief against joinder where it appears that joinder of multiple claims or parties may unduly complicate or delay the proceeding or cause undue prejudice. At the heart of the inquiry therefore are questions of overlap, efficiency, delay, prejudice and judicial economy. It will be extremely significant to understand what issues are truly in dispute, what admissions can be obtained and the extent to which the requisite elements of proof in the two proceedings are intertwined. The motions judge will require a detailed understanding of these matters.
24In any event, the consolidation motion did not stand in isolation from other steps in the application. At the time of the earlier cross examination there had not yet been cross examination on the affidavits in support of the application but they were to take place shortly. It is the position of the applicant that the consolidation motion should be adjourned to the applications judge in any event. The objections based on different scope now appear academic because both sets of cross examinations are available to the motions judge and the applications judge. Several of the questions refused in May were answered in June. It therefore appears, at least in hindsight, that the argument about scope in May was completely unnecessary because ultimately the questions about the merits would have to be answered. It would have been much more efficient to have a single set of cross examinations.
25I would have ordered questions such as Q. 26 & 27, May 20th to be answered. I would not have upheld the objection that Mr. Dumais’ knowledge of the convertibility of the Class B shares was irrelevant to consolidation. That is one of the overlapping issues between the application and the action. Whether or not that issue is truly in dispute or if it can be the subject of an admission is relevant to the consolidation motion as well as to the disposition of the application itself.
Lack of consultation and planning
26I observed at the hearing that there appeared to have been an unfortunate lack of consultation, collaboration and planning concerning the two sets of cross examinations. Since it was known in May that there would be cross examinations on the main affidavit evidence in June and as it was quickly apparent there might be a difference of view as to the appropriate scope of questioning, much of the unfortunate squabbling on the record might have been avoided had there been a more collaborative advance dialogue between counsel. It was suggested to me that there was no obligation to do so because Rule 29.1 does not apply to cross examinations on affidavits. I cannot let that submission pass without comment.
27It is true that rules 29.1 and 29.2 were added to the rules to impose specific pre-discovery obligations with respect to Rules 30, 31, 32, 33 and 35. It is accurate to say that those specific discovery planning rules do not apply to cross examinations on affidavits under Rule 39.02 but that does not mean there is no obligation on counsel to consult each other, to attempt to minimize conflict, or to adopt best practices. Discovery planning is not an aberration injected into the rules at the whim of the Rules Committee. Rather it is a specific expression of the duty of every lawyer to seek means to dispose of litigation in the least expensive and most expeditious manner and to engage in procedural collaboration whenever it can be done without sacrificing the interests of the client. Rule 1.04 (1.1) specifically requires that all of the rules be infused with the principle of proportionality or as I like to think of it, with common sense.
28It is a fundamental expectation of this court that in a complex application or series of motions, all parties and their counsel will collaborate with each other with this in mind exhibiting communication, courtesy and common sense.2 Even if the rules do not require it in every case, a “meet and confer” obligation may be inferred and it certainly may be ordered in the exercise of the court’s case management function.3 In future in this proceeding I will expect counsel to do their utmost to avoid needless procedural conflict and in particular to avoid the unseemly bickering found at pages 9 – 17 of the May 20th transcript as well as elsewhere.
Cross Examination on understanding and intent & the parol evidence rule
29A number of objections were raised to questions asking Mr. Dumais about the intention in entering into the contract or his understanding about the meaning of the contract. These are not precisely the same thing but both objections flow from an exaggeration of the impact of the parol evidence rule at the cross examination stage.
30The parol evidence rule is a rule of contractual interpretation that supports the primacy of written contracts. In simplest terms the rule holds that in the face of a complete and unambiguous written agreement, it is impermissible to admit oral evidence designed to show that the contract means something other than what it says. In the recent decision of Sattva Capital Corporation v. Creston Moly Corp.,4 the Supreme Court of Canada had the following to say:
59 It is necessary to say a word about consideration of the surrounding circumstances and the parol evidence rule. The parol evidence rule precludes admission of evidence outside the words of the written contract that would add to, subtract from, vary, or contradict a contract that has been wholly reduced to writing (King, at para. 35; and Hall, at p. 53). To this end, the rule precludes, among other things, evidence of the subjective intentions of the parties (Hall, at pp. 64-65; and Eli Lilly & Co. v. Novopharm Ltd., [1998] 2 S.C.R. 129, at paras. 54-59, per Iacobucci J.). The purpose of the parol evidence rule is primarily to achieve finality and certainty in contractual obligations, and secondarily to hamper a party's ability to use fabricated or unreliable evidence to attack a written contract (United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316, at pp. 341-42, per Sopinka J.).
60 The parol evidence rule does not apply to preclude evidence of the surrounding circumstances. Such evidence is consistent with the objectives of finality and certainty because it is used as an interpretive aid for determining the meaning of the written words chosen by the parties, not to change or overrule the meaning of those words. The surrounding circumstances are facts known or facts [page663] that reasonably ought to have been known to both parties at or before the date of contracting; therefore, the concern of unreliability does not arise.
61 Some authorities and commentators suggest that the parol evidence rule is an anachronism, or, at the very least, of limited application in view of the myriad of exceptions to it (see for example Gutierrez v. Tropic International Ltd. (2002), 63 O.R. (3d) 63 (C.A.), at paras. 19-20; and Hall, at pp. 53-64). For the purposes of this appeal, it is sufficient to say that the parol evidence rule does not apply to preclude evidence of surrounding circumstances when interpreting the words of a written contract.
31As these passages make clear, there are myriad exceptions to the parol evidence rule. Firstly, as set out in Gutierrez, cited in paragraph 61, supra, parol evidence may be admitted if it is not inconsistent with the main contract. Secondly, parol evidence will be admissible if the entire contract is not in writing. It may also be necessary to admit such evidence in cases based on misrepresentation or where one of the remedies is rectification. Then of course there is the clear statement in Sattva Capital itself that almost any evidence is admissible if it is for the purpose of proving the surrounding circumstances as an interpretive aid. In other words there is broad discretion for a trial judge or an applications judge to make use of parol evidence should it be necessary to do so to understand the contract. As the Supreme Court makes clear in Sattva, contractual interpretation in Canada is now generally to be regarded as a contextual exercise involving a mixed question of fact and law.
32There are many kinds of evidence that may not be ultimately admissible at a hearing but may properly be the subject of cross examination. Hearsay evidence or similar fact evidence are examples. Having regard to Justice Perell’s analysis in Ontario v. Rothman’s, supra, I am conscious of the fact that cross examination may be narrower than discovery. Nevertheless it is perfectly permissible to seek admissions on cross examination and it is perfectly reasonable to unearth evidence that may or may not ultimately be admissible. It will only be evidence that cannot be admissible under any circumstances that will be irrelevant.5
33It is of course acceptable to put on the record an objection to the admissibility of evidence and in an appropriate case to rely on Rule 34.12 (2). But relevant questions which may give rise to admissible answers must be answered. The use to which those answers may be put and whether or not they are admissible for that purpose is generally speaking a decision for the application or trial judge and it should not be usurped by a motions judge or master excluding that evidence prematurely. The filter applied by a motions judge must of necessity be broader than that applied by the hearings judge. If the motions judge excludes evidence that may be admissible then the hearings judge will never be presented with that evidence. Thus any evidence which may be admissible at the hearing will be relevant and proper on cross examination.
34In any event it cannot be known until the answer is provided whether the rule will be potentially offended or not. There is a distinction between evidence that can be admitted in support of a proposition and evidence that may be admitted in opposition to it. To take an example, a witness may be asked to confirm that the intention of the parties was exactly what the examining party argues is the plain meaning of the written documents. If a positive admission is obtained, it will be admissible as consistent with the written contract. On the other hand if the witness gives a negative response and testifies that his understanding was something different, that answer might be inadmissible. It is the answer and not the question that potentially offends the rule. Similarly an admission by one party that the common intention of the parties was precisely the common intention alleged by the other party is in all probability admissible and does not offend the rule.
35Even if I am in error in this general principle, in the case at bar there is a further aspect to it which makes it much more likely that evidence about the negotiations, communication and instructions between the parties and between the corporation and Blakes will be necessary. It is clear that what began as a letter of intent became a series of at least three written contracts supported by corporate resolutions and articles of amendment. There may also have been articles of amalgamation since that is mentioned in the transcript. In the process the 1/3 interest became a 1/3 interest that was to be contingent on certain performance targets over four years and then by agreement between the parties was accelerated. It is highly probable – though this is of course one of the issues to be argued – that none of the written agreements stand on their own as the complete agreement. Moreover some of the documents the applicant seeks to enforce or interpret are not contracts at all. They are the documents created to implement the contract such as the articles of amendment or amalgamation and resolutions of the board. If in fact there was a series of negotiations and renegotiations that are partly in writing and partly oral it is far more likely that questions about meaning and intention and interpretation of documents, e-mails and discussions will be necessary and admissible.
36A quite different type of question is to ask a witness what he understands a document to mean. Far too frequently this kind of question is met with a blanket objection to the effect that the witness is being asked for a legal opinion. That is simply misguided. If a party could never give evidence about the meaning of a contract because it would require a legal opinion then firstly few contracts would be enforceable and secondly the legal opinion would always be in issue with a corresponding waiver of privilege. It is proper to ask a witness to confirm that he read and understood the documents and it is reasonable to ask what he understood the effect of the document to be when he signed it. It is also proper to ask him what his current position is concerning the meaning of the documents in issue. Of course the witness may well answer that he is incapable of understanding the document he signed and he relies upon his lawyer but that cannot be known until the question is answered. Asking for his understanding about the meaning is not the same as asking about subjective intent and it is not asking for an expert opinion.
37In conclusion, it is an error to give a blanket refusal to answer any questions about the intention of the parties in entering into a contract. It is an error to give a blanket refusal to answer any questions about interpretation of documents. That is not to say that all questions must be answered. There may be questions that are improper because they are unfair questions or because they touch on privilege or are irrelevant for other reasons. But the parol evidence rule is not sufficiently clear or sufficiently rigid to form the basis of a proper refusal at the cross examination stage.
The mediation file
38There can be no doubt that information compiled or created for the purpose of mediation is subject to privilege. At least three types of privilege may attach. This will include solicitor client privilege that attaches to legal opinions, litigation privilege which attaches to documents prepared for the dominant purpose of litigation including settlement of the litigation, and settlement privilege which attaches to all material created for the purpose of attempting to negotiate settlement.
39The Supreme Court has clearly articulated that these are different forms of privilege each having its own purpose and peculiarities. In Blank v. Canada6 the court dealt with litigation privilege and in Sable Offshore Energy Inc. v. Ameron International Corp.7 it dealt with settlement privilege. Following Sable Offshore it is clear that settlement privilege is a blanket privilege that presumptively cloaks all aspects of settlement negotiations whether successful or not in order to “robustly promote settlement”. Of course any of these privileges may be waived and in the case of litigation privilege or settlement privilege the privilege may yield if a competing public interest outweighs the public interest in preserving the privilege.
40Although it is referred to as the Blakes mediation file, it is obvious that the contents of the file go beyond preparation for mediation. Mr. Dumais consulted Blakes in October of 2011 concerning his termination as an employee of Novotech and the “triggering event” giving rise to his demand to purchase his shares. He was then advised and represented by Blakes leading up to mediation with Novotech.
41Mr. Dumais has now waived privilege over most of the documents which were only said to be subject to litigation privilege or settlement privilege but has sought to preserve privilege over documents said to be subject to solicitor client privilege. The question then is whether the remaining documents are indeed subject to solicitor client privilege and if so whether he has waived that privilege by putting legal advice received from Blakes at the time of the “termination” in 2011 and leading up to mediation in 2012 in issue.
42Frankly I see no basis for ruling that there has been a blanket waiver of solicitor client privilege. I do not rule out that there may be such a waiver depending on the answers to some of the questions that were refused. For example if Mr. Dumais answers that his only understanding of the contractual documents is based on legal advice then the content of that advice could be put in issue. Generally however legal advice privilege is the most jealously guarded of privileges because it is central to the functioning of our system of justice. In any event the legal advice received by a litigant is not usually relevant unless it is specifically relied upon as justification for an act or omission that is itself in issue and in circumstances involving motive or good faith.
43There has in my view been no blanket waiver of privilege in connection with the Blakes mediation file.
44With these general observations, I turn to the specific rulings.
Specific Rulings
Cross Examination of May 20th, 2015
45I am advised that Questions 26, 43, 50, 55, 69, 77 and 86-88 have now been answered. Generally these questions related to instructions given to Blakes when drafting the original documents or discussions regarding the Class B shares.8
46Q. 27 & 31 have been partially answered. Q. 40, 41, 44, 45, 59-61, 63 & 82 were refused at the time as irrelevant. With the exception of Q. 63 all of these questions are directed at Mr. Dumais’ knowledge of the convertibility of the Class B shares, when he knew they were convertible and whether or when he disclosed this to Mr. Bellehumeur. These questions were relevant to the merits of the application and were also relevant to the question of consolidation. They should have been answered. Q. 63 is slightly different because it asks about instructions to Blakes about the convertibility of the shares and asks Mr. Dumais why it was important to him to give those instructions. It is possible that the answer would be evidence of subjective intent but it is also possible it would simply form part of the factual matrix against which the documents must be understood. This is a relevant question and should have been answered.
47A series of questions were put to Mr. Dumais at the June cross examination. On that occasion very similar questions were put to him and the issue of the Class B shares was explored at greater length at Q. 239-247, 604, 608-614, 669 and 620-699. I agree that there is no reason to re-answer the original question in light of the answers given in June and of course I have already ruled that the June cross examination as well as the May cross examination may be used in the consolidation motion.
48Similarly, Q. 85, 89, 90, 91, 92, 93, 93, 94, 95 and 285 which relate to the agreement on share ownership and the value of the shares at the time of the “triggering event” were ultimately answered in June. Again these are questions that go to the merits of the application and the answers would have been relevant to the consolidation motion. The June answers may be used as if they had been provided in May.
49Q. 143, 165-166 and 170 ask questions concerning legal advice and litigation strategy. Specifically they ask about the choice of an application over an action. These are questions which would be relevant to the consolidation motion but the answers are protected by both litigation privilege and solicitor client privilege. These questions were properly the subject of objection and they need not be answered.
50Q. 288 – 290, 294 – 295, 307 – 309, and 310 – 314 ask Mr. Dumais to acknowledge that there is a LawPro process, that it takes time to instruct and retain counsel, and asks him to identify costs thrown away or wasted leading up to this motion. These questions respond to allegations made by the witness in opposition to the consolidation motion. One of the objections to consolidation is that the action was launched late in the day and would delay the application and also that the applicant has incurred costs during that time on the assumption that the application will proceed.
51These are fair questions because they directly deal with assertions made by Mr. Dumais in his affidavit. In fact, however, a close reading of the transcript shows that they were all answered. There are objections and arguments made by Ms. Tompkins on the record interspersing the answers but Q. 288 and following are eventually answered at Q. 300 and at 306 council answers that Mr. Dumais has no evidence about why there was delay. Similarly the question about preparing for cross examinations is ultimately answered at Q. 314. Those answers will be binding and I will not order further answers be given.
52In summary all of the outstanding questions from the May cross examination have been answered either on the record or in June with the exceptions of the refusals I have upheld. There is no reason to order reattendance or further answers to deal with the May cross examination.
June 8th & 9th cross examination.
53This was cross examination on three affidavits sworn between July of 2014 and April of 2015. These are the affidavits in support of the application itself. The cross examination took place over two days in June. There were a number of objections but many of those have now been resolved.
54Q. 81- 82 were answered under objection pursuant to Rule 34.12 (2). As such it will be up to the applications judge to determine whether the answer can be used and for what purpose. I was not asked to rule on it.
55Q. 100-101 asked Mr. Dumais to clarify when he declared bankruptcy. I am advised this is no longer relevant as it was only directed to his capacity to be a director of the trust.
56Q. 190, 217-218, 228 and 233 were all objected to because they asked about the witness’s understanding of the meaning of the documents or in some cases whether the obligation set out in the document was carried out or complied with. In some cases the objection was “the document speaks for itself”. As discussed above, these sorts of blanket objections are improper. In fact however Q 190 was answered. There was then an objection which I take to just be notice that counsel may object to the admission of that evidence at the hearing. Mr. Dumais then answered several questions about the meaning of the shareholder’s agreement. Q. 217 and 218 may well have been answered at Q. 212 but the interjections and debate between counsel at Q. 218 make it unclear what the question or the answer would have been. The question was whether he in fact issued 1/48 of the outstanding new shares to Mr. Bellehumeur at the end of each month of service. That question is to be answered. Q. 228 is to be answered.
57Q. 233 raises an important point about undertakings. Mr. Dumais was asked if there was anything else in the document that he says would or should have alerted Mr. Bellehumeur to the fact that the class B shares were convertible to class A voting shares. Ms. Tomkins felt that it was not a good use of time to have the witness pour over the document and answer the question and she offered an undertaking. Mr. Boyd insisted on the witnesses’ answer.
58As discussed by Perell J. in Ontario v. Rothmans, supra undertakings play a more limited role in cross examination than they may play in a discovery. That is undertakings may be more readily compelled in the discovery context by the examining party than is the case in cross examination.9 Neither on discovery nor on cross examination however is the examining party forced to accept an undertaking. Of course the examiner runs the risk that the witness cannot answer the question but he is entitled to the answer. I agree however that it is an unfair question to present a witness with a lengthy document and to expect a comprehensive binding answer. In short the examiner is entitled to the witnesses answer or to an undertaking but not both. The witness is to answer whether or not he is aware of anything else in the document that would or should have alerted Mr. Bellehumeur to the existence of the convertible class B shares.
59Questions 300 & 303-304 were answered under protest. They are directed to allegations made by Katherine Hobbs that appear in her affidavit filed on the application. Mr Dumais gave a detailed response at Q. 302 – 315. It will be for the application judge to determine if the evidence should be given any weight. The allegations are allegations of sexual harassment and theft of information.
60Q. 456-457 resulted in pages of discussion about settlement privilege and whether or not it had been waived. The question concerned identification of an e-mail. Ultimately Mr. Dumais answered that he did not recall it but that he had obviously authored it. No further questions were asked about it.
61At questions 708-709 Mr. Dumais is asked a question about an e-mail which formed part of one of the responding affidavits but was an e-mail apparently authored by him. He was asked to undertake to see if he could locate the missing pages. Rule 34.10 (4) permits an examining party to compel production of a relevant document in the possession, power or control of a witness under examination. I agree that Mr. Dumais should not be compelled to pour through documents produced by the other party but he can be asked to locate and produce a document if he has it in his power or control. Since the original e-mail appears to be in the Blakes file, it is not unreasonable to make an effort to find the missing pages if they are in the file.
62Q. 794 was included in the refusals chart. It is simply an acknowledgement that Mr. Dumais was now prepared to answer any questions he refused to answer in May going to the merits of the application. At the same time he was not prepared to re-answer the question if he had already been asked it a second time at the June cross examination. This is a fair response. In any event Mr. D’Angelo then concluded his examination with approximately 40 questions that were answered without objection. This does not require an answer.
63There were undertakings. All had been answered by the time of the motion except for Q. 175 which is an ongoing undertaking.
Blakes Mediation file
64The only remaining issue is the Blakes mediation file. In a letter of June 17th, 2015 Mr. Carroll set out the contents of the Blakes “mediation file” and divided the documents into schedule A and schedule B. Schedule B contains documents over which Mr. Dumais asserted privilege
65Subsequent to the motion, Ms. Tompkins reviewed the Schedule B and produced a further schedule in which Mr. Dumais waived any privilege over the documents she coded in yellow. That left only documents which were said to be subject to solicitor client (legal advice) privilege – that is documents prepared for the purpose of receiving or giving legal advice.
66As stated earlier I do not read in the pleadings or in the answers to which I was referred any blanket waiver of legal advice privilege in relation to advice given to Mr. Dumais at the time of his “termination” or leading up to the mediation. I am satisfied from the description in the revised Schedule B that each of the documents in question is properly a privileged document. Subject to any subsequent waiver of that privilege, these remaining documents need not be produced.
Order and Direction
67In summary, there are no outstanding questions from the May cross examination that were not answered in June. Accordingly the June answers may be used on the consolidation motion along with the answers provided in May. No further answers are required.
68With respect to the June cross examinations, Q. 217-218, 228 and 233 are to be answered. Q. 708-709 is to be answered subject to the limitations set out above.
69The documents from the Blakes mediation file over which privilege has been waived are to be produced. The remaining documents subject to solicitor client privilege need not be produced at this time.
70Counsel are directed to confer and to seek agreement on the need for any further cross examinations and on the utility of arguing the consolidation motion in advance of the application itself. They are to seek agreement on a timetable leading up to the rescheduled hearing of the application. A case conference may be scheduled if necessary but I expect all parties to have made reasonable and good faith efforts to streamline the proceeding before that occurs.
71On the assumption that counsel cannot agree on costs, which of course I invite them to do, the question of costs may be spoken to on a date to be obtained from the court.
Master MacLeod
September 11, 2015
Footnotes
- See Ontario v. Rothmans Inc. 2011 ONSC 2504; (2011) 5 C.P.C. (7th) 512 (S.C.J.)
- The three Cs of the Commercial List Practice Direction, “communication, courtesy and common sense” which should guide counsel in all civil proceedings – see Kobre v. Sun Life Assurance Co. of Canada, [2005] O.J. No. 4235 (Master S.C.J.)
- See Friends of Lansdowne v. Ottawa 2011 ONSC 1015 (Master)
- 2014 SCC 53; [2014] 2 S.C.R. 633
- See for example M.F. v. Sutherland (2000), 188 D.L.R. (4th) 296 (On.C.A.). Though this case is about striking pleadings, paras 44 – 46 support this view. See also Andrushko v. Ontario 2011 ONSC 1107 (Div.Ct.) @ paras 32 & 33
- 2006 SCC 39; [2006] 2 S.C.R. 319
- 2013 SCC 37; [2013] 2 S.C.R. 623
- So that there is no confusion, I have used the question numbers from the transcript as set out in the refusals chart rather than the chart numbers themselves. For example, Q. 26 is no. 1 in the chart.
- Though see Rule 34.10 (4) which may be used to compel production of a relevant document after the examination.