Court File and Parties

COURT FILE NO.: CV-13-483716 REASONS RELEASED: 20160408 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: N.M. DAVIS CORPORATION LIMITED, Plaintiff

• and- MARSHALL STUART ROSS and EVA JACQUELINE WOWER, Defendants

BEFORE: MASTER D. E. SHORT

COUNSEL: Junior Sirivar Andrew Kalamut Fax: (416) 868-0673

• for plaintiff

M. Caterina Fax: 1 (866) 235-6191 -for the defendant Ross

Joseph Maggisano Fax: (416) 864-0192 -for defendant Wower (did not participate in motion)

HEARD: March 30, 2016

Reasons for Decision

I. Motion for Further and Better Affidavit of Documents

[1] The plaintiff N.M. Davis Corporation Limited (“Davis Corp.”) moves under Rule 30.06 of the Rules of Civil Procedure for a further and better affidavit of documents, and in particular with respect to a request for a detailed schedule B regarding materials over which privilege is claimed by the defendant, Marshall Stuart Ross (“Ross”). Specifically details of the crown disclosure brief in a related criminal matter are sought.

[2] Counsel for Mr. Ross resists on the basis that the crown disclosure brief is not relevant to the matters in this action, having regard to the fact that her client admitted his guilt at the opening of the criminal trial, and did not in his pleading in any way challenge, and in fact admitted, the allegations in the plaintiff’s statement of claim with respect to that crime.

II. Nature of Action

[3] In this 2013 action against the defendants, Davis Corp. claims that in 2011 the defendant, Ross fraudulently conveyed his interests in 2011 in a matrimonial home and two cottage properties to his wife, Eva Jacqueline Wower ("Wower"), “under the guise of a divorce proceeding, in order to defeat Davis Corp. from realizing on its judgment of more than $3,000,000 as against Ross.”

[4] Examinations for discovery of all the parties were completed in February 2015.

[5] The only refusal that Davis Corp. now moves upon with respect to Ross is what their Counsel assert is his refusal to comply with the principle established by the Court of Appeal in D. P. v. Wagg, [2004] O.J. No. 2053 (C.A.), namely to list the contents of the Crown brief in his Schedule "B".

III. Background

[6] Davis Corp. is an investment and holding company. Glen Davis was the principal of Davis Corp. until he was murdered in May 2007. Ross admits responsibility for that murder.

[7] Ross was the second cousin of Glen Davis. In 2004, Ross took out a loan with Davis Corp. through his company, Rosshire Enterprise ("Rosshire"). The loan was not to exceed $2.5 million. The purpose of the loan was to finance the purchase, renovation and/or sale of properties in the GTA. Ross, however, used the funds to make investments outside of Ontario and to finance his lifestyle.

[8] At the time that Ross entered into the loan with Davis Corp., he was married to Wower.

[9] Ross was arrested for the murder of Glen Davis in February 2009. Shortly after, Davis Corp. commenced an action against Ross seeking to recover the unpaid amounts of the loan, plus interest.

[10] In his Statement of Defence in this present action, Ross admitted to taking a series of tactical motions to delay the civil judgment against him prior to the start of the criminal trial.

[11] The plaintiff asserts that during Ross' incarceration, Wower visited Ross regularly and discussed the status of both the civil and criminal trials with Ross' lawyers.

IV. 2011 Divorce

[12] In January 2011, Davis Corp. noted Ross in default in the civil proceeding. In February 2011, after learning that Ross had been noted in default, Wower requested referrals for a divorce lawyer from Ross' criminal and civil counsel.

[13] The plaintiff asserts that Wower continued to communicate with Ross’ counsel relating to the divorce, asking them if they thought that her divorce lawyer “could handle representing [her] against Davis Corp. if [Davis Corp.] challenges [the] divorce settlement”.

[14] Plaintiff’s counsel asserts that the available evidence (including emails) indicates that:

“15. Wower discussed with potential divorce lawyers a "protection plan" to ensure that there is a "paper trail of some sort so that no one even attempts to believe that this is not a legitimate divorce." Wower even asked Ross' lawyers whether finalizing the divorce in two month would be "quick enough", though she does not say why the divorce needs to be finalized so quickly. It is reasonable to infer that Wower wanted to ensure that the divorce would be finalized before Davis Corp. obtained default judgment.”

16. Ross and Wower entered into a Separation Agreement that saw Ross' equalization payment and future spousal and child support obligations calculated in such a manner that Ross' interest in the matrimonial home and two cottage properties satisfied the precise amount of all of Ross' purported obligations.”

[15] On July 28, 2011, the divorce was ordered by Justice Goodman to be effective on August 23, 2011. The plaintiff observes that it is noteworthy that the transfer of the Properties was effected on July 7, 2011 weeks prior to the effective date of the divorce.

[16] The plaintiff seeks to establish when it was reasonable to conclude that the wife ought to have anticipated a finding of guilt being made against her spouse.

V. Guilty Plea

[17] On October 12, 2011, two months after the divorce became final, Ross pleaded guilty to the first degree murder of Glen Davis and was sentenced to life in prison.

[18] In November 2011, Davis Corp. moved for summary judgment as against Ross. The motion was heard in March 2012 by Justice Lederer who granted judgment against Ross in the amount of $3,269,204.94, plus pre-judgment interest.

VI. “Wagg Motions”

[19] Much of the argument on the motion was related to the proper interpretation of the Court of Appeal’s 2004 decision in D.P. v. Wagg, 71 O.R. (3d) 229, concerning the rights of access in a civil case to the Crown brief created with respect to a related criminal matter (“Wagg”). In 1998, DP began a civil action alleging that she was sexually assaulted in the course of a medical examination. In the civil action, DP moved for production from the defendant of the Crown brief that he had obtained as a result of the disclosure process in the criminal proceedings. The master dismissed the motion and, on appeal, Juriansz J. ordered disclosure and production of the Crown brief, including the defendant’s statements to the police. Leave to appeal having been granted, an appeal was heard by the Divisional Court and their decision was then appealed to the Court of Appeal. The judgment of the court was delivered by Rosenberg, J.A.

[20] His reasons noted at the outset:

[8] When the defendant refused to produce the contents of the Crown brief, the plaintiff moved to compel production. The Master refused to order production. He held that the contents of the Crown brief were not relevant. The defendant no longer takes the position that the contents of the brief are irrelevant.

[21] On the present motion counsel for Ms Wower takes the position that the contents of the brief are not relevant.

[22] The Court of Appeal in Wagg held that the Divisional Court was correct in concluding that production should not be compelled until the appropriate state agencies have been given an opportunity to assess the public interest consequences involved and either a court order or the consent of all parties was obtained. The court's inherent power to control its process and to protect that process from being abused or obstructed provided the jurisdiction to create a screening process. The Superior Court has the power to control the discovery and production process provided by the Rules of Civil Procedure, to ensure that important state and other third party interests are protected, even if particular documents do not, strictly speaking, fall within a recognized category of privilege.

[23] The Court of Appeal held that it was open to the Divisional Court to place limits on the production of the materials in the Crown brief through the screening mechanism without resort to the implied undertaking rule, which did not apply in this case because that rule was concerned with documents produced through the compulsory civil discovery process and the materials in this case were obtained through the criminal disclosure process as mandated by the Supreme Court of Canada in R. v. Stinchcombe, [1991] 3 S.C.R. 326, [1991] S.C.J. No. 83, 83 Alta. L.R. (2d) 193, 130 N.R. 277, [1992] 1 W.W.R. 97, 18 C.R.R. (2d) 210, 68 C.C.C. (3d) 1, 8 C.R. (4th) 277; Specifically the court found that it was not, strictly speaking, necessary in this case to decide whether there is an implied undertaking rule applicable to Crown disclosure. It was sufficient to say that the reasons for possibly recognizing an implied undertaking justified the adoption of the screening process where a Crown brief, for whatever reason, finds its way into the hands of a party in a civil case.

[24] Here the Crown brief found its way into the hands of the accused, who is now sued, and continues to have access to the brief provided to his defence counsel prior to the criminal trial.

VII. Screening Mechanism

[25] In Wagg, by the time the appeal was argued, counsel for the defendant was prepared to provide an index to the Crown brief. Justice Rosenberg continues:

(i) Disclosure

[13] The Divisional Court agreed with Juriansz J. that the existence of the Crown brief should be disclosed in accordance with rule 30.02 of the Rules of Civil Procedure. The defendant has not cross-appealed this part of the ruling and has served an amended affidavit of documents (albeit unsigned at the time of the hearing) that includes the index to the Crown brief.

(ii) Production

[14] The Divisional Court disagreed with Juriansz J. that the Crown brief must be produced to the plaintiff merely because the contents are relevant. Rather, production should not be compelled until the appropriate state agencies have "been given an opportunity to assess the public interest consequences involved and either a court order or the consent of the state and all parties is obtained" (para. 19). The court pointed out that there could be a myriad of documents and other material in the Crown brief that might be subject to privacy and other interests that the parties to the civil action will not necessarily have an interest in protecting. The court noted the concerns expressed in the Report of the Attorney General's Advisory Committee on Charges, Screening, Disclosure, and Resolution Discussions (the "Martin Report") ….about "the dangers of unwarranted dissemination of Crown disclosure documents" (para. 25). Thus, there needed to be some screening mechanism by the appropriate state agency or the court before the contents of the Crown brief were produced.

[26] With respect to that process the Court of Appeal approved the lower court’s formulation:

[17] The Divisional Court then explained how the screening mechanism would operate. Since I agree entirely with this part of the court's reasons, I intend to summarize this part of the reasons at some length:

• the party in possession or control of the Crown brief must disclose its existence in the party's affidavit of documents and describe in general terms the nature of its contents;
• the party should object to produce the documents in the Crown brief until the appropriate state authorities have been notified, namely, the Attorney General and the relevant police service, and either those agencies and the parties have consented to production, or on notice to the Attorney General and the police service and the parties, the Superior Court of Justice has determined whether any or all of the contents should be produced;
• the judge hearing the motion for production will consider whether some of the documents are subject to privilege or public interest immunity and generally whether "there is a prevailing social value and public interest in non-disclosure in the particular case that overrides the public interest in promoting the administration of justice through full access of litigants to relevant information" (para. 51)

[27] The Masters of this court routinely make orders reflecting these guidelines where access is sought under Rule 30.10 of the Rules of Civil Procedure. The issue before me makes further addressing the screening process at this stage premature.

[28] Beyond acknowledging the existence of the Crown brief what further obligations does Mr. Ross have in this case?

VIII. Issues on Motion

[29] Counsel for the plaintiff asserts that Ross has refused to abide by the requirements pursuant to Wagg and provide a list of the documents contained in the Crown disclosure in his possession.

[30] Is cataloguing and indexing the brief the Defendant’s obligation?

[31] The plaintiff’s factum asserts:

65. Ross has refused to provide this list on the basis that a cursory review of the relevant criminal file reveals no index for the Crown brief, and that the criminal file contains 13 boxes of documents. Ross takes the position that it is disproportionate for him to prepare a list of the Crown brief as required by Wagg.

[32] The plaintiff points to the screening process quoted in the Court of Appeal’s reasons and submit that a party is required to list the contents of the Crown disclosure in its possession and with counsel’s emphasis added asserts:

“the party in possession or control of the Crown brief must disclose its existence in the party's affidavit of documents and describe in general terms the nature of its contents.

[33] What degree of specificity is required by “in general terms”?

[34] Counsel for the plaintiff argues:

“67. The contents of the Crown Brief are relevant to the issues in this action and Ross is required to disclose its contents in his affidavit of documents. Without listing the documents, Davis Corp. is precluded from making the request for the disclosure of the documents from the Crown through a Wagg Application. ….”

IX. Timing is Everything

[35] The rationale put forward relates to the issue of when the likelihood of a conviction was known by the accused’s spouse:

68. A key issue in this matter is the timing of the divorce, and why Wower decided to seek a divorce when she did, which was both before Ross' pleading guilty and the civil judgment against him. Wower testified during her examination for discovery that her decision to divorce Ross was based on her review and understanding of the Crown disclosure, which was released at various times to her.

69. Q. You thought he was innocent. And did you come to believe at that time that he may have been engaged in some sort of financial impropriety or fraud? A. No. I think I -- I came to believe it much later than that, whenever disclosure started to come in to his lawyers, which I know was at a much later date than expected.

70. Q. Fair enough. So is it fair to say that at no time until his guilty plea did you believe that he was involved in Glen Davis's murder? A. No, I started to mistrust him when I started to read the disclosure. [my emphasis]

[36] The plaintiff’s argument continues:

69. Based on this testimony, it is necessary to test Wower's evidence against the contents of the Crown brief, which is only in the possession of Ross. The request is consistent with the principles of proportionality espoused by the Rules of Civil Procedure. Should Davis Corp. pursue a Wagg Application, it requires a sense of the documents and information contained within the Crown brief. Only Ross can provide this information. This is why the Court of Appeal found that a party in possession of the Crown disclosure relevant to the issues in the action must disclose its existence and describe the nature of its contents.

[37] Counsel for Ross submits that the Crown brief is not, in and of itself, of relevance to any now contested issue in the civil case. Moreover the cost and effort involved in cataloguing the entire brief does not seem justified applying the proportionality principle.

[38] I find these arguments reasonable, to a degree, but that does not end the matter.

X. Further and Other Relief

[39] In this case the plaintiff now seeks to commence indirectly, what otherwise would flow from a Rule 30.10 of the Rules of Civil Procedure application, to have the Crown review and then produce its copy of the crown brief, potentially with appropriate redactions.

[40] Instead, what is sought is a fresh as amended affidavit of documents disclosing more than the existence of the Crown brief and requiring its inclusion in Schedule B to the affidavit of Mr. Ross.

[41] He is incarcerated and resists having to incur the costs of indexing and disclosing the dates and parties of various wiretapped conversations, emails, etc.

[42] In effect, the justification for such access put forward by the plaintiff is that production will enable a determination of what information was available to Ms. Wower at the time the matrimonial separation took place. They seek to ascertain the point at which persuasive information was available enable her to understand and recognize that her spouse was likely to be found guilty as charged.

[43] Such a conclusion would then allow the plaintiff argue that matrimonial settlement, approved by the court, was at the time, was a joint effort to shield assets from the plaintiff.

[44] The Plaintiff’s Notice of Motion also sought such further and other relief as the court might deem appropriate.

[45] Rule 29.2 of the Rules of Civil Procedure relates to the need for proportionality in discovery. In particular Rule 29.2(3) provides:

29.2.03 (1) In making a determination as to whether a party or other person must answer a question or produce a document, the court shall consider whether,

(a) the time required for the party or other person to answer the question or produce the document would be unreasonable;

(b) the expense associated with answering the question or producing the document would be unjustified;

(c) requiring the party or other person to answer the question or produce the document would cause him or her undue prejudice;

(d) requiring the party or other person to answer the question or produce the document would unduly interfere with the orderly progress of the action; and

(e) the information or the document is readily available to the party requesting it from another source.

[46] I believe that documents relating to the timing of the making available of portions of the Crown brief to Mr Ross or his counsel (and potentially Ms. Wower) are relevant to issues in the action.

[47] However, I do not think that it is necessary make all 13 boxes available to the plaintiff when liability for the murder has been acknowledged and the only purpose of seeking access ultimately to the Crown file or portions of it is with a view to establishing the date upon which the date that the then accused individual was thought to be likely to be convicted by his spouse.

[48] In particular, it seems to me that the crown disclosure in all likelihood came to defence counsel in various tranches. It will be adequate production at this stage for them to produce copies of the covering correspondence from the crown with respect to each component of the Crown brief received. I expect that those letters will refer to the type of disclosure being made, have a date on them, which will be approximately when the documents were received by Mr. Ross’s defence counsel.

[49] If there is no date on the letter then I expect disclosure in the Schedule B to the Affidavit of Documents of any indication in the file as to when a group of documents was received.

[50] In my view the production of such “transmission related” documents need not be subject to any Wagg mandated screening process.

[51] I do not feel proportionality justifies requiring the convicted spouse at this stage to incur the costs of cataloguing the boxes. If particular document deliveries are identified that can be shown to be of particular potential relevance, the plaintiffs can seek to have those documents reviewed through the usual Wagg screening process with a view to trying to determine what Ms. Wower knew and when.

[52] Those prescribed detailed procedures are intended to protect the right to privacy of members of the public involved in investigations of criminal matters. It can be seen that this procedure adds time and expense to litigation. I recognize that in appropriate cases that it expense can be justified.

[53] In cases decided by my colleagues there have been occasions where access to the Crown brief was denied or restricted. (e.g. Boucher (Litigation guardian of) v. Charles, 2013 ONSC 3120). I feel this is another such case.

XI. Conclusion

[54] In the result I am ordering the Defendant Ross to amend his Affidavit of documents to identify those documents in his possession, control or power establishing what documentation was produced to his counsel as part of the Crown brief or any transmission documentation bearing indications of the date received.

[55] If there is a claim of privilege asserted with respect to any such document which is not waived I will inspect such documents and make determinations pursuant to rule 30.04(6) of the Rules of Civil Procedure.

[56] Ultimately it is my view that granting an order which obliges the level of detail sought by the plaintiff at this stage is not justified based on proportionality and relevance. I am also mindful of the impact on the resources of the Crown Law Office if a full review were directed.

[57] Section 131 of the Courts of Justice Act provides:

131.--(1) Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[58] To the extent Crown resources are required and costs incurred in the future with respect to the Crown brief; I am directing that such costs be paid by the plaintiff at this stage in the litigation. That party's costs incurred in compliance with this order form part of their costs of the case and are subject to the trial judge's ultimate award of costs at the conclusion of trial.

[59] Counsel for Ms Wower did not participate in the argument of this motion. In the circumstances it would seem that there is been a degree of divided success, and I am therefore awarding the costs of this motion in the cause of the action as between the plaintiff and Mr. Ross.

[60] I am obliged to counsel for their advocacy and assistance in this case.

Released: April 8, 2016

Master D. E. Short DS/ R. 136