Citation: Popovich v. Financial Investment Centre Inc., 2016 ONSC 1888
COURT FILE NO.: CV-11-15997
DATE: 20160317
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
George Popovich and 2038339 Ontario Inc.
Plaintiffs
– and –
Financial Investment Centre Inc., Richard W. Woodall, 2107835 Ontario Inc., Mauro DiMario, 2107815 Ontario Inc., and Desjardins Financial Security Investments Inc.
Defendants
COUNSEL:
Andrew Eckart, for the Plaintiffs
Matthew R. Todd, for the Defendants, Richard W. Woodall, 2107835 Ontario Inc., Mauro DiMario and 2107815 Ontario Inc.
HEARD: March 15, 2016
DECISION ON MOTION
Thomas J.:
The Motion
[1] The plaintiff, George Popovich (“Popovich”), and his numbered company 2038339 Ontario Inc. have brought a motion pursuant to rule 48.04(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, requesting leave to bring a summary judgment motion notwithstanding the fact that the action is set down for trial and is on the trial list for April 2017 (set for four weeks).
[2] The defendants, Richard W. Woodall (“Woodall”) and Mauro DiMario (“DiMario”) and their respective numbered companies 2107835 Ontario Inc. and 2107815 Ontario Inc., resist the relief sought. The defendant, Financial Investment Centre Inc. (“F.I.C.”), is in default and not a viable company.
[3] The defendant, Desjardins Financial Security Investments Inc. (“Desjardins”), takes no position since no relief is sought against Desjardins in the proposed summary judgment motion.
Background
[4] Popovich, Woodall and DiMario were all registered representatives authorized to sell mutual funds and other investment instruments through Desjardins. Popovich, Woodall and DiMario operated their businesses through the defendant, F.I.C., a corporation in which they were shareholders.
[5] Woodall and DiMario entered into a Share Purchase Agreement in 2003 under the provisions of which they agreed to purchase Popovich’s shares in F.I.C. over a five year period. The agreement contained representations, warranties and covenants from Popovich. There were, in fact, two agreements, a unanimous shareholder agreement and separate share purchase agreements for each of Woodall and DiMario.
[6] The share purchase agreements also contained representations and warranties by Popovich.
[7] Woodall and DiMario also agreed that F.I.C. would engage the plaintiff, 2038339 Ontario Inc., as a vehicle through which Popovich would provide consulting services.
[8] It seems in 2006 and 2007 Popovich ran into difficulties. In 2007 Popovich and F.I.C. were sued by a client. In July 2007, Popovich was placed on restrictions by Desjardins.
[9] In February 2009, Popovich was terminated by Desjardins it is alleged for cause. The securities regulator revoked his licence in 2015 due to misconduct.
[10] In February 2011, Popovich issued the statement of claim in this action seeking damages from the defendants, jointly and severally, in the amount of $2,000,000 for breach of contract, intentional interference with economic relations, breach of fiduciary duties, loss of reputation, loss of future earnings, conspiracy and aggravated, exemplary and punitive damages in the amount of $1,000,000.
[11] In addition, other orders and various declaratory relief was proposed.
[12] Popovich set the action down for trial in January 2014. As previously mentioned, it is set for trial in April 2017.
The Arguments
[13] Counsel for Popovich requests leave to bring a summary judgment motion. Popovich proposes to restrict to relief against Woodall and DiMario for breaches of the share purchase agreements and consulting agreement.
[14] The balance of the claims in the statement of claim include:
(a) damages from Woodall, DiMario and Desjardins for breaches of fiduciary obligations and the wrongful conduct;
(b) damages from Woodall and DiMario for breaches of their fiduciary duties for not remitting commissions received from the sale of mutual funds to F.I.C.;
(c) damages against Desjardins for wrongful termination and for directing commissions owed to Popovich to Woodall and DiMario.
[15] Counsel for Popovich argues that the potential summary judgment motion engages a discrete portion of the overall claim which will not require the participation of Desjardins and will shorten the trial.
[16] Counsel for Woodall and DiMario sees the claim and its defence as complex and inter-connected. He maintains that the failure of the share purchase agreement was triggered by the same conduct of Popovich that lead to his termination and his allegations of breaches of fiduciary duties. Counsel argues no witnesses will be eliminated and no trial time will be saved even if the summary judgment motion, if brought, is successful. Additionally, he reminds me that his clients have counterclaimed for damages they incurred as a result of the malfeasance of Popovich.
The Law
[17] Rule 48.04(1) states the following:
Subject to subrule (3), any party who has set an action down for trial and any party who has consented to the action being placed on a trial list shall not initiate or continue any motion or form of discovery without leave of the court.
[18] The act of setting a matter down for trial has significance and is “not a mere technicality of procedure” (Hill v. Ortho Pharmaceutical (Canada) Ltd. (1992), 11 C.P.C. (3d) 236 (Ont. Gen. Div.), at para. 10; Fruitland Juices Inc. v. Custom Farm Service Inc., 2012 ONSC 4902, at para. 16 (Fruitland)).
[19] In Fruitland, at para. 15, Quinn J. suggests the rationale behind the rule requiring leave to be the following:
(1) to discourage actions being set down for trial when they are not ready; and
(2) to avoid delays by requiring further steps, such as discoveries, in an action, that while set down, is not ready.
[20] Although seen as two reasons, they amount to the same concern. Only actions that can be called for trial should be set down and placed on a trial list. Dockets are full of adjournment requests for actions that have been set down prematurely.
[21] It seems clear that the broad language of Rule 48.04(1) captures summary judgment motions that therefore require leave once the action is set down (Theodore Holdings Ltd. v. Anjay Ltd. (1993), 18 C.P.C. (3d) 160 (Ont. Gen. Div.); Fruitland, at para. 13).
[22] In Fruitland, Quinn J. suggests that summary judgment motions bring with them different considerations in the context of rule 48.04(1) leave. He sees a summary judgment motion brought at any time as a potential blessing for the administration of justice (para. 29). Further, in para. 28 and a related footnote found at page 8, Quinn J. proposes the following:
So long as the motion, if successful, will be less costly and time-consuming than the trial, and will not unduly delay the start of the trial, I do not see why the moving party must explain his or her choice of timing.
And, when arguing leave, I do not see the need for the moving parties to satisfy any threshold regarding the merits of the proposed motion for summary judgment. It would be for the responding party to show that the proposed motion is utterly devoid of merit.
[23] I cannot embrace Justice Quinn’s enthusiasm for all summary judgment motions or the low threshold he proposes for leave, particularly as I view the matter before me.
[24] The threshold proposed pushes off to the summary judgment motions judge all but the most hopeless of motions. While that test may function well in the vast majority of cases, it does not, in my view, capture the circumstances before me.
Analysis
[25] In the matter of the Popovich claims before me, I view the granting of leave to have a more robust function. I am convinced that the summary judgment motion proposed here would achieve none of the laudable goals promoted by the modern view of rule 20.01 motions.
[26] After the argument of the summary judgment proposed by counsel for Popovich, the following would be the state of the litigation:
No parties would be eliminated;
The factual matrix of this action plays across all claims and defences and, therefore, the necessary evidence of the events and the conduct of all parties would not be diminished. It is hard to believe that the trial would be shorter.
The need for numerous findings of fact in both the motion and the trial based on the same turn of events leads to the very real possibility of inconsistent verdict.
The counterclaim would still need to be tried which could very well lead to a set-off against any success available to the plaintiff Popovich. To grant judgment to Popovich and delay the set-off available to the defendants prejudices Woodall and DiMario.
Conclusion
[27] In the circumstances of this case, the summary judgment motion might very well cause some unintended mischief to the litigation while clearly providing none of the benefits the plaintiff suggests. I find that this should be addressed at this stage to save the court time and the parties the expense of the motion.
[28] For the reasons set out above, I decline to grant leave.
[29] I will receive written submissions on costs. Defendants’ counsel’s submissions are due 30 days from the release of these reasons (no more than seven (7) pages). The plaintiffs’ counsel’s submissions 20 days thereafter (no more than seven (7) pages). Reply submissions, if any, within five (5) further days. If no submissions on this schedule, there will be no order as to costs.
Original signed by Justice Bruce Thomas
Bruce Thomas
Justice
Released: March 17, 2016
CITATION: Popovich v. Financial Investment Centre Inc., 2016 ONSC 1888
COURT FILE NO.: CV-11-15997
DATE: 20160317
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
George Popovich and 2038339 Ontario Inc.
Plaintiffs
– and –
Financial Investment Centre Inc., Richard W. Woodall, 2107835 Ontario Inc., Mauro DiMario, 2107815 Ontario Inc., and Desjardins Financial Security Investments Inc.
Defendants
decision on motion
Thomas J.
Released: March 17, 2016