SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-10-406342
MOTION HEARD: DECEMBER 18, 2015
RE: Mars Canada Inc. v. Bemco Cash & Carry Inc., GPAE Trading Corp. and Aizic Ebert
BEFORE: MASTER R.A. MUIR
COUNSEL:
Patrick Summers for the defendants/moving parties
Jim Holloway for the plaintiff/responding party
REASONS FOR DECISION
[1] The defendants bring this motion pursuant to Rule 39.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”). The defendants seek leave of the court to file the affidavit of Dr. Francesco Bova sworn July 7, 2015, along with his attached expert opinion, after having conducted cross-examinations in connection with a summary judgment motion brought by the plaintiff.
BACKGROUND
[2] The plaintiff’s motion for summary judgment has been pending for nearly four years. It has been delayed by cross-examinations, a three day production motion, an appeal from the order made on that production motion and certain concerns regarding confidentiality that required a negotiated form of court order. Further delay has resulted from this motion for leave. Although the overall delay with the summary judgment motion has been significant, I am unable to conclude from the evidence on this motion that one side bears a greater share of the responsibility than the other. It appears that both sides have been acting in good faith to advance their respective positions with vigour and commitment.
[3] The plaintiff is in the business of selling chocolate bars and other related confectionary items under the Mars label in Canada. It alleges that the defendants were improperly importing Mars products from the United States for re-sale in Canada. This practice is known as grey marketing. The plaintiff objects to such practices, in part, because the products purchased outside of Canada do not comply with Canadian labeling requirements.
[4] The plaintiff’s motion for summary judgment seeks judgment with respect to its claims that the defendants are in breach of certain settlement agreements related to their alleged grey marketing activities. The settlement agreements were entered into by the parties in 2006. For the purposes of this motion, it is important to note that the defendants are resisting the plaintiff’s claim, in part, by alleging that the settlement agreements constitute an unlawful restraint of trade and are therefore null and void for reasons of public policy.
THE DEFENDANTS’ MOTION FOR LEAVE – THE POSITIONS OF THE PARTIES
[5] The defendants take the position that the expert evidence of Dr. Bova could not have been provided before the cross-examinations took place. Certain relevant information and documents in the sole possession of the plaintiff were not produced until after the cross-examinations were partially completed and then only after two judicial officers ordered the plaintiff to make the requested production. The defendants point to Dr. Bova’s evidence that he could not have prepared his report without information relating to the plaintiff’s sales and profits, the evidence given by the plaintiff’s representative on cross-examination and certain information about the ownership connection between the plaintiff and its U.S. parent company, Mars, Incorporated. None of this information was provided until after the defendants had partially conducted their cross-examination of the plaintiff’s representative.
[6] The plaintiff objects to the defendants’ request for leave for three reasons. First, the plaintiff argues that Dr. Bova’s report is not an admissible expert opinion. Second, the plaintiff takes the position that Dr. Bova’s evidence does not meet the applicable test for leave under Rule 39.02. Third, the plaintiff objects to the evidence on the basis that it does not comply with the information requirements of Rule 39.01(7) applicable to the use of expert opinions on motions.
ANALYSIS
[7] Rule 39.02 provides as follows:
39.02 (1) A party to a motion or application who has served every affidavit on which the party intends to rely and has completed all examinations under rule 39.03 may cross-examine the deponent of any affidavit served by a party who is adverse in interest on the motion or application.
(2) A party who has cross-examined on an affidavit delivered by an adverse party shall not subsequently deliver an affidavit for use at the hearing or conduct an examination under rule 39.03 without leave or consent, and the court shall grant leave, on such terms as are just, where it is satisfied that the party ought to be permitted to respond to any matter raised on the cross-examination with evidence in the form of an affidavit or a transcript of an examination conducted under rule 39.03.
[8] The parties are mostly in agreement with respect to the test to be applied by the court in determining whether to grant leave under Rule 39.02. The requirements are set out in First Capital Realty Inc. v. Centrecorp Management Services Ltd., [2009] OJ No. 4492 (Div Ct) at paragraphs 13 and 14 where the court states as follows:
13 The case law under rule 39.02(2) confirms the criteria to consider in determining whether a party should be granted leave to respond to a matter raised on cross-examination:
Is the evidence relevant?
Does the evidence respond to a matter raised on the cross-examination, not necessarily raised for the first time?
Would granting leave to file the evidence result in non-compensable prejudice that could not be addressed by imposing costs, terms, or an adjournment?
Did the moving party provide a reasonable or adequate explanation for why the evidence was not included at the outset?
See: Brock Home Improvement Products Inc. v. Corcoran (2002), 2002 49425 (ON SC), 58 O.R. (3d) 722 (S.C.) at paras. 8-9 and Nolan v. Canada (Attorney General) (1997), 1997 12213 (ON SC), 38 O.R. (3d) 722 at 727-8 (Gen. Div.).
14 A flexible, contextual approach is to be taken in assessing the criteria relevant to rule 39.02(2), having regard to the overriding principle outlined in Rule 1.04 of the Rules of Civil Procedure that the rules are to be interpreted liberally to ensure a just, timely resolution of the dispute. An overly rigid interpretation can lead to unfairness by punishing a litigant for an oversight of counsel. See: Arfanis v. University of Ottawa (2004), 7 C.P.C. (6th) 371 (Ont. S.C.) at paras. 8 and 15; BFC Construction Group Inc. v. Ontario Realty Corp. (2001), 17 C.P.C. (5th) 288 (S.C.) at para. 24; Nolan v. Canada (Attorney General).
[9] The plaintiff takes some issue with this last point. It relies on a statement made by this court in Skrobacky v. Frymer, 2011 ONSC 3295 where Justice Corrick stated at paragraph 27 that leave under Rule 39.02 should be “granted sparingly” and the moving party has a “very high threshold to meet”.
[10] In my view, the approach articulated in First Capital Realty Inc. is to be preferred. First, the decision in First Capital Realty Inc. is a decision of a panel of the Divisional Court and as such takes precedence over a decision of a single judge of the Superior Court. Second, I would note that the decision relied upon by Justice Corrick in support of the more rigid approach is one that pre-dates First Capital Realty Inc. In my respectful view, the court should avoid a rigid interpretation of Rule 39.02. The flexible, contextual approach is to be preferred.
[11] These are the factors and principles I have applied in considering the issues on this motion. In my view, the defendants should be granted leave to deliver the affidavit of Dr. Bova.
[12] First, I am unable to accept the plaintiff’s submission that leave should be denied on the basis that the purported expert report of Dr. Bova is inadmissible expert evidence. The plaintiff argued that Dr. Bova’s report lacks objectivity, includes opinions outside of his area of expertise and ignores important material facts. All of these assertions may or may not be true. However, it is my view that this motion is not the time or place to advance an argument based on the general admissibility of expert evidence. I agree with the plaintiff that the court must exercise a gatekeeper function when it comes to expert evidence but it is my view that any admissibility decision should be made by the judge hearing the summary judgment motion. If an objection is made, the summary judgment judge will be able to assess the expert evidence after Dr. Bova has been cross-examined and within the full context of the summary judgment motion. In my view, this approach is consistent with the court’s practice when it comes to admitting expert evidence at trial. I would also note that the court was not provided with any authority under Rule 39.02 where leave was denied on such a basis.
[13] I am also satisfied that the defendants have met the applicable test under Rule 39.02. In terms of relevance, one of the issues on the summary judgment motion will be whether the settlement agreements amount to an unlawful restraint of trade. As Justice Belobaba noted in his appeal decision from the earlier production motion “restraint of trade is a formidable and far-reaching doctrine”. Such an allegation gives rise to a “wide range of arguably relevant issues”, including issues related to the plaintiff’s sales and ownership structure. See Mars Canada Inc. v. Bemco Cash & Carry Inc., 2014 ONSC 4172 at paragraphs 15-17. Dr. Bova’s report provides his purported expert opinion on whether the settlement agreement is in the public interest and whether the restrictions found in the agreement are unreasonable for the parties. A judicial determination that a particular agreement is in restraint of trade and void as against public policy requires extensive evidence about the economic and social benefits and detriments of the impugned contract. See Justice Belobaba’s comments in Mars Canada Inc., above, at paragraph 15. In my view, Dr. Bova’s evidence is relevant to the restraint of trade defence in issue on the summary judgment motion.
[14] It is also my view that the evidence from Dr. Bova responds to a matter raised on the cross-examination and that the defendants have provided an adequate explanation for not providing the evidence at the outset. It was necessary for the defendants to cross-examine a representative of the plaintiff in order to obtain the plaintiff’s evidence regarding the impact of grey market sales on the plaintiff. In addition, it was also necessary for the defendants to cross-examine the plaintiff in order to obtain information and documents necessary for Dr. Bova to prepare his report. This is made clear from Dr. Bova’s evidence. This is not a situation where a party has served a further affidavit from one of its original deponents with a view to rebutting evidence given on cross-examination or to shore up a faltering position with evidence that should have been adduced in the first place. The defendants were only able to serve their full expert report after all of the ordered production had been made. It is clear to me that the affidavit and opinion from Dr. Bova respond to matters raised on the cross-examinations and could not have been fully prepared any earlier than they were.
[15] I also see no prejudice to the plaintiff. The hearing of the summary judgment motion has yet to be scheduled. The plaintiff will have a full opportunity to respond to Dr. Bova’s report if it so chooses. It will also be able to cross-examine Dr. Bova. It can object to the admissibility of the report at the return of the summary judgment motion. The additional delay occasioned by the delivery of Dr. Bova’s affidavit is not significant in the context of this summary judgment motion. Any costs wasted or thrown away by the plaintiff can be requested from the summary judgment motion judge.
[16] Finally, I am not prepared to give any weight to the plaintiff’s argument concerning non-compliance with Rule 39.01(7). The required information can easily be provided prior to the summary judgment motion. Any issue of non-compliance can be the subject of argument before the judge hearing the summary judgment motion.
ORDER
[17] I therefore order as follows:
(a) the defendants are hereby granted leave to deliver the affidavit of Dr. Bova sworn July 7, 2015, and the attached opinion dated June 30, 2015, as part of their responding evidence to the plaintiff’s summary judgment motion;
(b) the affidavit of Dr. Bova sworn July 7, 2015 and his opinion dated June 30, 2015, along with the documents set out at Tabs 2P, 2Q and 2S of the defendants’ motion record shall be treated as confidential, sealed and not form part of the public record in accordance with the order of Master Hawkins of December 15, 2014;
(c) the relief in relation to a timetable for the plaintiff’s summary judgment motion is adjourned to be heard by a judge presiding in motions scheduling court; and,
(d) if the parties are unable to agree on the issue of the costs of this motion, they shall provide the court with brief written submissions by February 5, 2016.
Master R.A. Muir
DATE: December 29, 2015