ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-11-430602

DATE: 20151112

BETWEEN:

MARIA KONSTAN, JIM KONSTAN, ELAINE KONSTAN and ETTA KONSTAN

Plaintiffs

– and –

SAMUEL JACOB BERKOVITS, SAEED HOSSEINI, TED FRITZ, WILLIAM BLAIR and TORONTO POLICE SERVICES BOARD

Defendants

• and –

SAMUEL JACOB BERKOVITS

Plaintiff by Counterclaim

Brian Shiller, for the Plaintiff by counterclaim and Defendant by counterclaim Samuel Jacob Berkovits

Jonathan Rosenstein, for the Defendant by counterclaim and Plaintiff by counterclaim Harold Gerstel

• and -

MARIA KONSTAN and HAROLD GERSTEL

Defendants by Counterclaim

A N D B E T W E E N :

HAROLD GERSTEL

Plaintiff by Counterclaim

• and -

SAMUEL BERKOVITS and SAEED HOSSEINI

Defendants by Counterclaim

HEARD: November 4, 2015

REASONS FOR DECISION

F.L. MYERS J.

Background

[1] In March, 2015, Harold Gerstel brought a motion for summary judgment. He asked the court to dismiss Jack Berkovits’s counterclaim against him. Mr. Berkovits seeks relief based on a claim that Mr. Gerstel hired a hitman to kill Mr. Berkovits. Mr. Gerstel denies the claim and says that there is no serious issue requiring a trial. I heard the motion last March. Ultimately, I adjourned the summary judgment motion pending the completion of the cross-examination of Mr. Gerstel. In my endorsement adjourning the motion, I invited the parties to set up a case conference under Rule 50.13 in the event that the scope of questioning at the renewed cross-examination could not be agreed upon. It comes as no surprise therefore that I am now asked to resolve a refusals motion.

[2] An issue arose at the further cross-examination that led Mr. Gerstel’s former lawyer to object to six or seven related questions. I heard this refusals motion instead of sending it to a Master. I feared that if the parties were left to move on the refusals in the ordinary course, the action might become bogged down in unhelpful ancillary proceedings fostered by the parties’ proclivity to litigate by short term tactics rather than by implementing a strategy toward achieving an early, efficient resolution of the dispute on the merits. Despite the court’s effort to keep the parties on an expressway to judgment, they have decided to take a detour away from resolution. What to do about it is a vexing question.

Refusals

[3] At the cross-examination, Mr. Berkovits’s counsel asked Mr. Gerstel a number of questions designed to determine if a court file that bears the initials of Mr. Gerstel and his wife is a sealed matrimonial proceeding between them and, if so, whether Mrs. Gerstel obtained either a Mareva injunction or an Anton Piller Order against Mr. Gerstel in that proceeding. Counsel for Mr. Gerstel objected to these questions on the basis that they are irrelevant.

[4] Counsel for Mr., Berkovits argues that a key ingredient in obtaining both a Mareva injunction and an Anton Piller order is some form of deception or dishonesty. Therefore, he argues, if the sealed court file is indeed a matrimonial proceeding between Mr. and Mrs. Gerstel, and if the file includes a Mareva injunction or an Anton Piller order, then the order would be evidence of dishonesty on the part of Mr. Gerstel that should be before me in assessing the credibility of his testimony in this action. Counsel claims that Mr. Berkovits has no desire to use the matrimonial proceedings to embarrass Mr. Gerstel. He is content, for example, for the Court to inspect the sealed court file itself so as to protect the integrity of the sealing order.

[5] Counsel for Mr. Gerstel argues that evidence of general dishonesty is inadmissible to support an inference concerning the credibility of a witness’s testimony. Moreover, even if evidence of general dishonesty was capable of supporting an inference concerning a witness’s credibility, the simple existence of either a Mareva injunction or an Anton Piller order is not evidence of dishonesty. Those orders are often made on unproven allegations presented without notice. They are often set aside after a full hearing. Moreover, they are granted based on considerations including irreparable harm and the balance of convenience. The simple existence of one of those orders therefore cannot in itself be taken as probative of a witness’s general dishonesty he argues.

[6] In my view, this is a naked fishing expedition for embarrassing intimate details that have no bearing on any issue relevant to the motion that is before me. As the two italicized “ifs” in para. [4] above make clear, the questions are a complete fishing expedition with no evidence before me as to why either “if” might be true.

[7] While the credibility of Mr. Gerstel’s evidence is very much in issue on the summary judgment motion before me, “[t]he scope of cross-examination in respect to credibility does not extend to a cross-examination to impeach the character of the deponent.” Ontario v. Rothmans Inc., 2011 ONSC 2504 at para. 143. Accordingly, I disagree with Mr. Berkovits’s first submission that evidence of general dishonesty is relevant to the drawing of an inference concerning the credibility of a witness’s testimony. While criminal records are admissible and go to credibility by statute, there is debate in the authorities as to their real probative value if any. An interim order in a civil proceeding is something much less definite and much more ambiguous than a criminal record. In my view, a finding by a judge that there is a strong prima facie case that Mr. Gerstel did something dishonest vis-a-vis his spouse or his assets, if it exists, is not probative in the least as to the credibility of his denial of hiring a hitman in the summary judgment motion before me.

[8] Finally, I would not allow a fishing expedition to try to get behind a sealing order in a matrimonial proceeding even if I knew that there was a Mareva injunction or an Anton Piller order made in those proceedings. The risk of mischief and prejudice to the parties in the matrimonial proceedings and the risk of abuse by the threat of inappropriate use of very private information, whether explicit or implicit, greatly outweighs any probative value that the evidence could be argued to have in this proceeding.

[9] Therefor the refusals at questions 134, 138, 140, 144 are upheld.

[10] The attack on the refusal at question 178 was withdrawn at the outset of the hearing.

[11] Now, what about question 212?

The evidence of Mr. Hayoun

[12] Counsel provided a very helpful refusals chart for the court’s use at the motion. It lists the following question being refused at Q.212 of the transcript:

To advise why the potential new information that came about following the March 3, 2015 hearing could only be dealt with in open court?

[13] Understanding the question requires some background facts. Two weeks after I had heard and reserved on the summary judgment motion (but before I adjourned it for further cross-examination of Mr. Gerstel) I received an unsolicited communication from Mr. Gerstel’s former lawyer that included the following information:

My office has just this week come into possession of information that affects the motion for summary judgment heard March 3, 2015 and currently under reserve. The information is of a nature that I do not believe it would be appropriate for me to get into the substance of it in any forum other than in open court.

[14] I responded that rather than contacting the court unilaterally, in apparent breach of Rule 1.09, if Mr. Gerstel seeks relief, he should bring a motion. Approximately two weeks later, I received another communication from the former lawyer to Mr. Gerstel, with the assent of Mr. Berkovits’s counsel, advising that no motion would be brought by Mr. Gerstel on the newly received information whatever it may have been.

[15] Forward to the refusals motion. On the renewed cross-examination of Mr. Gerstel, Mr. Berkovits’s lawyer inquired about the email to me and sought disclosure of the new information that Mr. Gerstel’s former lawyer said he would only speak of in open court.

[16] The refusals chart describes the grounds for the refusal as follows:

Refusal to answer on the basis of litigation privilege. On October 30, 2015 during a cross-examination in another action involving the parties, Mr. Gerstel’s counsel disclosed that the “potential new information” included a sworn statement by Clancie Hayoun claiming his previous affidavit filed on the within motion is a false affidavit that was fabricated by Gerald Chan and Clayton Ruby

The issue requires further adjudication before Justice Myers as, for the first time, Mr. Gerstel is alleging that the lawyers for Mr. Berkovits fabricated evidence that is before this Honourable Court.

[17] In his submissions at the refusals motion, with no evidence filed, Mr. Shiller told a tale of events concerning the evidence of Clancie Hayoun. On behalf of Mr. Berkovits, Mr. Shiller had filed a brief affidavit of Mr. Hayoun on the summary judgment motion that I heard last March. That affidavit recited Mr. Hayoun’s evidence that Mr. Gerstel had attempted to hire him to physically harm Mr. Berkovits in an incident that was not specifically related to the hitman allegation. The affidavit was sworn in 2011 some four years before the motion. Mr. Gerstel’s lawyer chose not to cross-examine Mr. Hayoun on the summary judgment motion. He argued instead that Mr. Hayoun’s affidavit was irrelevant as it was not even similar fact evidence. He argued that Mr. Hayoun was an admitted criminal who ought not to be believed. He argued that even Mr. Berkovits did not believe the affidavit. He asked me to infer this because when Mr. Berkovits mounted his campaign to have the police charge Mr. Gerstel arising from the hitman allegation, Mr. Berkovits did not give Mr. Hayoun’s affidavit to the police although Mr. Berkovits already had it in hand at the time.

[18] Mr. Shiller also told me that there is a summary judgment motion scheduled for later this month in an action in which Mr. Gerstel is suing Mr. Berkovits and the Toronto Sun newspaper for defamation. Mr. Gerstel’s new lawyer, Mr. Rosenstein, examined Mr. Hayoun for that motion pursuant to a summons to witness under rule 39.03. No one before me took the position that Mr. Hayoun’s evidence was at all relevant to the issues in the defamation action. Rather, Mr. Shiller alleges that Mr. Rosenstein engaged in a theatrical performance to get Mr. Hayoun’s new evidence on the court record, although not in this proceeding where it might be relevant.

[19] Mr. Shiller stated that prior to the examination of Mr. Hayoun, he asked Mr. Rosenstein to provide him with any relevant documents that Mr. Rosenstein planned to adduce in evidence through Mr. Hayoun. According to Mr. Shiller, Mr. Rosenstein said that he was not planning to put any documents into evidence through Mr. Hayoun, although documents may always be needed for the purposes of impeachment. You never know. Mr. Shiller continued the story, advising that Mr. Hayoun commenced giving his testimony in a fairly hostile manner under questioning by Mr. Rosenstein. At some point, with no real groundwork for impeachment or a proper prior inconsistent statement, Mr. Rosenstein reached into his briefcase and produced a document that was a new affidavit of Mr. Hayoun and began cross-examining Mr. Hayoun it. Mr. Rosenstein said he was only using the new affidavit to impeach the witness. He only marked the affidavit as a lettered exhibit for identification.

[20] Mr. Shiller asked me to read the affidavit. I declined to do so at the time as I was not comfortable with the process unfolding before me. Undaunted by my note of caution, Mr. Shiller proceeded to tell me that in the new affidavit, Mr. Hayoun swears that when he went to Mr. Shiller’s office to swear his first affidavit, he told Mr. Shiller’s partners Clayton Ruby and Gerald Chan that the evidence in the draft affidavit that they had prepared for him was not true. Mr. Hayoun says that Mr. Chan told him to sign the affidavit and Mr. Chan promised to change its content to reflect the correct story. Mr. Hayoun says Mr. Shiller’s firm tricked him and filed the original, untrue affidavit without making the promised changes. This is a very serious allegation of wrongdoing.

[21] It is significant, superficially at least, that the date of Mr. Hayoun’s new and incendiary affidavit is the same day that Mr. Gerstel’s former lawyer sent his email to me regarding his acquisition of new information that could only be dealt with in open court. That lawyer is no longer on the record. Is there an inference to be drawn from his failure to bring a motion to admit the new affidavit and now his absence from the case?

[22] Mr. Shiller submits that I must now re-open the summary judgment motion and hear the summary judgment motions in both the defamation action and this action together. However, Mr. Hayoun’s new affidavit is not currently before me. Mr. Gerstel has not brought a motion for leave to introduce new evidence after the cross-examination of Mr. Berkovits. But, of course, Mr. Gerstel consents to the two motions being heard together so that his new evidence will be before me through the circuitous route orchestrated by Mr. Rosenstein.

[23] Mr. Shiller submits that Mr. Hayoun should be cross-examined in open court with security present. He also wishes to present the evidence of Messrs. Ruby and Chan. I questioned why any of this was necessary given that Mr. Hayoun’s new affidavit is not yet before me. Why can Mr. Berkovits not proceed on the record as is rather than insisting upon introducing evidence that undercuts the evidence that he previously adduced given that Mr. Gerstel chose not to bring a motion to introduce the new evidence? Mr. Shiller advised, fairly, that he felt duty-bound to advise the court that evidence that he had proffered has been recanted. That’s fine. I can ignore it. But he goes further. He argues that now that I have been told the content of Mr. Hayoun’s new affidavit it is too late for the court to proceed with the two cases separately. In other words, as I suspected, something was amiss. Instead of simply being told by counsel, perhaps jointly, that I should ignore Mr. Hayoun’s evidence, I have now heard the nature of the allegations and I have been infused with questions as to how Mr. Hayoun came to make such allegations when he did and the implications that flow from either a determination that they are true or untrue.

[24] Mr. Shiller also argued that there has to be a further hearing in order to clear the names of his partners. I raised the question of whether this was a collateral fact that could properly be the subject of further inquiry. Neither side had a clear response on that issue.

[25] Mr. Shiller is balancing on the edge of a knife. On the one hand, he wishes to hold a hearing to clear his partners’ names. On the other, he strongly resists the notion that his firm should be removed from the record in this proceeding if such an inquiry is held. He argues that Mr. Gerstel’s theatrical efforts concerning Mr. Hayoun should not be allowed to succeed in causing substantial prejudice to Mr. Berkovits by removing his counsel at this very late date. I would be inclined to agree with that position were it not Mr. Shiller pushing for the further evidentiary inquiry to protect his firm. If there is to be an issue as to whether Clayton Ruby or Gerald Chan committed wrongdoing on behalf of Ruby Shiller and Mr. Berkovits and if their credibility as witnesses is to be an issue, then the representation of Mr. Berkovits by Mr. Shiller in that hearing at least is very much in issue.

[26] In light of the unexpected direction which the motion for summary judgment has taken, I wrote to both counsel to advise that prior to joining the Ruby, Shiller firm, Mr. Chan worked as a lawyer in the law firm in which I was then a partner. In fact, we worked in the same department and were colleagues. I told the parties that I am confident that our relationship does not cause a partiality issue for me. But, in light of the significance of the issues and the importance of the appearance of impartiality, I offered each party the opportunity to have me withdraw from considering any issues involving Mr. Chan. Each has expressly consented in writing to me continuing - including hearing the summary judgment motion in the defamation action in which the issues concerning Mr. Chan and Mr. Ruby currently are raised.

Disposition

[27] At para. 12 of my endorsement adjourning the summary judgment motion to allow the completion of the cross-examination of Mr. Gerstel, I wrote:

In all, I see no basis to send this matter for trial at this time. Rather, the evidence should be completed properly and arguments can then be finalized under Rule 20.04.

[28] Although there are obvious credibility issues in this case, my preliminary assessment of the nature and strength of the evidence and the proportionality of the process, as called for under Hryniak v. Mauldin, 2014 SCC 7, at para. 59, was that once I had Mr. Gerstel’s final cross-examination transcripts in hand, there was likely to be no need for a trial. I had heard the oral evidence of the alleged assassin. I would have transcripts of detailed and thorough cross-examinations of the parties. I also had the sworn evidence of bit players that was not likely to be very important or to change much at a trial.

[29] The circumstances have changed in my view. While a witness recanting a story is not necessarily of central importance, the circumstances by which the change has come about here are integral to the credibility issues at play. If Mr Hayoun’s new affidavit is truthful, Mr. Berkovits’s credibility may be seriously undermined. If Mr. Hayoun’s evidence is not truthful, then evidence of how and why he suddenly came forward with his allegations may likewise seriously impact Mr. Gerstel’s credibility.

[30] I do not mention the credibility of Messrs. Ruby and Chan as the scope of the inquiry into their involvement is not yet determined.

[31] The process by which this matter has been raised was also problematic. Subpoenaing a witness with no relevant evidence in an unrelated case to raise an incendiary issue in the guise of impeachment may well be an abuse of process. But if there is a game being played by Mr. Gerstel and Mr. Rosenstein, Mr. Berkovits and Mr. Shiller have decided to become full and willing participants. Counsel telling a tale of intrigue with no evidence or motion before the court and then asking me to take over managing another file that was not before me by poisoning my ability to do otherwise is equally susceptible to characterization as abusive.

[32] I was surprised and expressed to both Mr. Gerstel and Mr. Berkovits that I was disheartened to see them in court on a simple refusals motion. Both have significant business interests to which they could profitably attend. Both confirmed to me that the litigation between them is fundamentally important to their lives. Their apparent hatred has led them to prefer to regularly sit in courtrooms a few feet from each other rather than staying separate and apart to focus on earning their livelihoods.

[33] I am no longer satisfied that a summary judgment motion is necessarily a proportionate outcome for these litigants. I say this for three principal reasons. First, I have a real concern that even if I were able to determine some matters on summary judgment, the parties will likely find ways to continue their same disputes in this or other litigation. In Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, the Court of Appeal expressly cautioned motion judges to be wary of the need to assess a motion for summary judgment in the context of the litigation as a whole. That is, for a summary judgment motion to be proportional, there has to be enough resolved to leave substantially less remaining for trial. If the trial proceeds on the same facts and issues, then the motion has not accomplished much if anything.

[34] Second, while hearing the oral testimony of a single witness and then hearing argument seemed like an excellent process to save the cost and delay of a trial last March, I am now faced with hearing another witness orally and then developing a process to deal with the involvement of Messrs. Ruby and Chan. I doubt that their evidence will be the only additional evidence that will be adduced on a re-opened motion process. There was at least one affidavit similar to Mr. Hayoun’s affidavit. Will we be hearing from that witness next? Does it make sense to have a mini-trial in which the bit players testify months apart but the protagonists do not testify in court? When will I find hearing time for the next steps given that I am no longer sitting in civil motions? Can I deal with the ongoing motion process more efficiently than a trial judge? In other words, with the parties’ detour through another lawsuit that was beyond the court’s reach, the procedural complexity, delay, and cost of this summary judgment motion has mushroomed.

[35] Finally, I have an institutional concern. There are at least six outstanding actions between Mr. Gerstel and Mr. Berkovits in the Superior Court in Toronto. During the hearing of the summary judgment motion last March, the parties invited me to consider case managing all of the cases for them. The court is working on improving access to justice following the Supreme Court of Canada’s clarion call in Hryniak. However, some litigants seem to be mistaking the enhanced availability of the court as an invitation to increase tactical gamesmanship rather than as an enhanced opportunity to find an early, affordable, and proportional resolution of their civil disputes. The Superior Court of Justice is not a free mock war theatre where parties can shoot verbal and tactical paintballs at each other for endless entertainment. The court resolves civil disputes. Litigants are expected to behave as rational economic actors in the process. They are not entitled to more than their fair share of the scarce public resource that the court represents.

[36] Given these parties’ proven zeal for the dramatic and clear willingness to go to great tactical lengths to gain a perceived advantage across the lines of different cases and with little heed for process, the institution needs to exercise some oversight and restraint to ensure fairness, efficiency, economy, and proportionality. This is especially the case where the parties have imbued such symbolic importance on their civil disputes that they seem unshackled by the normal economic rationality expected of litigants.

[37] Therefore, under Rule 77.05(2)(a), the Hon. Mr. Justice Thomas McEwen, as delegate of the Regional Senior Justice has appointed me to case manage all of the disputes between and among the parties. Whether I may be the trial judge or the motion judge in summary judgment hearings down the road remains to be seen.

Case Specific Directions

[38] The Following case-specific directions are made by the court:

a. The motion for summary judgment in this action and the motion for summary judgment in the action involving the Toronto Sun that is scheduled for November 26, 2015, are stayed pending further order of the court. I have directed the Motions Coordinator to release the time scheduled for that motion;

b. Counsel are to communicate and agree upon a list encompassing all of the pieces of litigation that are ongoing in which both Messrs. Gerstel and Berkovits are parties. They are to jointly create an indexed, electronic book of pleadings for each action that includes: all pleadings of all parties in the action (including counterclaims and subsequent party claims, if any), a copy of all orders made in the action, and all supporting endorsements/reasons. Counsel will include in each book of pleadings a one or two page cover note that describes the key issues in the case, the procedural status of the case, and outlines in summary or point form their client’s respective positions on each issue.

c. Counsel are to provide a copy of these Reasons to counsel for all other parties in the listed litigation. Messrs. Shiller and Rosenstein are then to coordinate with all other counsel and with my office to arrange a case conference in person on a date that is convenient for all to be held within the next month. The electronic books are to be provided to me at least one week prior to the scheduled date of the case conference;

d. At the case conference, the agenda will be to agree upon an overall schedule for all actions so that the disputes between these parties are resolved as soon and as efficiently and affordably as circumstances allow. At that case conference, if any counsel wishes his or her client’s action to proceed separately, he or she can so advise. If there is no agreement, the court will set a schedule in whole or in part for one or more actions and direct further steps as may appear appropriate;

e. There is no determination today of whether this or any of the actions can or should ultimately be resolved by summary judgment motion or other summary procedures rather than by full blown trial(s); and

f. Costs of the refusals motion are reserved to the judge who finally resolves this action.

General Case Management Directions for Myers J.

[39] The purpose of this case management process is to resolve the lawsuits as efficiently, affordably, and proportionately as the interests of justice allow. Parties and counsel are required to cooperate on procedural and scheduling matters so as to achieve these ends for all.

[40] All motions in this proceeding will be heard upon a schedule to be set at a case conference by telephone or in person as the case may be. No motions may be brought in any of the lawsuits except upon leave granted at a case conference.

[41] I may be contacted to schedule a case conference by email to my Assistant. Counsel should have communicated in advance to agree on dates and procedural issues to accommodate the hearing being requested regardless of whether their clients oppose the relief sought. Requests should include a proposed timetable and a minimal description of the matter in issue or the relief sought without any argument. Email communication should follow rule 1.09 and should generally be treated as if the content were being filed with the court. The court is not to be copied on email arguments between counsel.

[42] Except where the Rules positively require the filing of hard copies, all documents to be delivered in this matter should be sent to the court as attachments to emails or on flash drives or equivalent portable media. The documents should be in searchable PDF format. No copies of cases may be filed in any format. Reference to case law should be by hyperlinks to online sources if necessary. If counsel need assistance with format, resort may be had to http://www.ontariocourts.ca/scj/practice/practice-directions/edelivery-scj/

[43] If electronic media are being delivered to the court, they should not be filed with the registrar, but should be delivered to my attention in care of Judges’ Administration, Room 170, 361 University Avenue.

F.L. Myers J.

DATE: November 12, 2015