Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Joseph Rosati and Linda Rosati, Applicants
AND:
Laura Reggimenti, Respondent
BEFORE: Turnbull, J.
COUNSEL: Stanley Jaskot and Darryl Willer, Solicitors for the Applicants
Gary Joseph and Ryan Kniznik, Solicitors for the Respondents
HEARD: January 14, 2016
ENDORSEMENT
1There are two motions before the court. The applicants have brought a motion for leave to argue a motion for summary judgment. The respondent has brought a motion seeking direction from the court with respect to the continuation of a trial which commenced before the Honourable Justice Carpenter-Gunn but was terminated when she declared a mistrial.
Overview:
2The trial in question commenced on November 4th, 2013 before Carpenter-Gunn, J. It involved a request for relief setting aside the order of Steinberg, J dated January 24th, 2007 which incorporated Minutes of Settlement dated October 22, 2006. The allegation of the respondent was that the Minutes of Settlement were founded on fraud.
3During the trial sittings in November 2013, Carpenter-Gunn, J. held a two day voir dire relating to qualifying the respondent’s expert witness, Christine Minelli, to provide opinion evidence in forensic investigation, in determination of income for the calculation of support in family law litigation and in identifying relevant professional standards in her profession. Carpenter-Gunn, J. exercised her discretion and for reasons given, declined to qualify Ms. Minelli to provide evidence in any of the proposed areas of expert testimony. She also ruled Ms. Minelli could not be called as a lay witness in the proceeding.
4Justice Carpenter-Gunn presided over 11 days of evidence and on November 21st, 2013 the trial was adjourned to March 24th, 2014 for a further 15 days of testimony.
5The trial did not reconvene on March 24th, 2014 due to court scheduling conflicts.
6The respondent then brought a motion for an order that Justice Carpenter-Gunn recuse herself from the trial on the basis of bias, an order for a mistrial and an order that the adverse ruling with respect to Ms. Minelli as an expert witness and fact witness be reconsidered.
7The motion with respect to whether or not Justice Carpenter-Gunn should recuse herself was heard on July 21st, 2014 and July 22nd, 2014. The motion for recusal based on bias was dismissed but a motion for a mistrial was granted. Carpenter-Gunn, J. declared the mistrial given the “real danger of prejudice to the litigants and a danger of miscarriage of justice.” Her Honour stated that the trial was one of “complexity” and was not suitable to be “tried by installment.” Her schedule was, according to Carpenter-Gunn, J., so heavily booked that her unavailability would result in a significant delay in completing the trial.
8The applicants Joseph Rosati and Linda Rosati then obtained leave to appeal the decision of Carpenter-Gunn, J. to the Divisional Court. By order dated March 25th, 2015 the appeal against the decision of Carpenter-Gunn, J. to grant a mistrial was dismissed. However, the court directed that the case should be then placed back on the long trial sittings list in the Central South Region and directed as follows:
4“This court orders and directs that unless the Regional Senior Justice or the assigned trial judge orders otherwise:
a) All evidence taken at trial until the date of the order for mistrial shall be transcribed and shall constitute evidence in the new trial.
b) All exhibits entered at trial until the date of the mistrial order shall be trial exhibits in the new trial.
c) All evidentiary and other rulings made by Carpenter-Gunn, J. to the date of the mistrial order shall apply in the new trial.”
9The respondent thereafter sought leave to appeal to the Ontario Court of Appeal from the procedural and evidentiary order granted by the Ontario Divisional Court but that motion was denied by the Court of Appeal on August 28th, 2015.
10When this matter then returned to this court, I exercised my discretion to appoint myself as the trial judge for this trial. Mr. Jaskot indicated he wished to bring a motion for summary judgment. I indicated my reservations in that respect but as envisaged under Rule 14(21), I directed that he should bring a motion for leave to bring a summary judgment motion. I further directed that the respondent could, if she so desired, bring a motion for directions of the court with respect to the continuation of this trial bearing in mind the order of the Divisional Court.
Motion for Leave for Summary Judgment
11The issue on this motion is whether or not the applicant should be granted leave to bring a motion for Summary Judgement dismissing all of the respondent’s fraud claims contained in her redacted and updated Response to Request for Particulars of Fraud save and except for the allegations of “fraud in the face of the court.”
Position of the Applicant, Moving Party:
12Mr. Jaskot has argued that there is a prima facie meritorious claim for summary judgment which can be made by his clients. In that respect, he outlined various salient admissions made at trial by the respondent under cross examination on November 7th, 2013. He noted that Ms. Reggimenti admitted that within the five volumes of disclosure provided to her six days before she signed the Minutes of Settlement with her husband, there were income documents which she did not review or rely on before signing. In her cross examination at trial, she acknowledged she was not enticed or tricked into signing the Minutes of Settlement. She further acknowledged in her cross examination that she did not care what Mr. Rosati’s income was when she settled nor did she make inquiries. Ms. Reggimenti also acknowledged in cross examination that she did not believe Mr. Rosati’s representations regarding his income.
13Mr. Jaskot further noted Justice Steinberg made the following critical findings after a two day hearing on January 24th, 2007 following which he upheld the validity of the Minutes of Settlement which had been signed by the parties:
a) The respondent’s motive for signing the Minutes of Settlement was to end the costly and stressful litigation with respect to what appeared to be a never ending case.
b) The respondent had competent assistance from counsel and chose to settle the case without his assistance despite the advice from her partner.
c) The parties had met immediately prior to signing the Minutes of Settlement to discuss settlement of the litigation because each of them was eager to settle it.
d) The respondent was insistent on signing the agreement and acknowledged the following:
She had a motion pending in which she was requesting disclosure and production of undertakings at the time the parties signed the Minutes of Settlement on October 22nd, 2006, which was never argued or decided.
The respondent did not choose to not pursue her right to continue questioning of Joseph Rosati prior to signing the Minutes of Settlement on October 22nd, 2006.
The respondent did not pursue her right to the questioning of Linda Rosati prior to signing the Minutes of Settlement October 22nd, 2006.
The respondent had not produced the undertakings she gave at her questioning on May 5th, 2004.
The respondent’s pending motion dated May 17th, 2006 requested that Mr. Rosati pay child support based on the imputed income of $1,000,000.00. That motion was never pursued and argued.
The respondent never retained a business valuator or accountant to assist her with the quantification of the applicant’s income prior to signing the Minutes of Settlement on October 22nd, 2006.
14Mr. Jaskot has relied on the case of Bruno Appliance and Furniture v. Herniac 2014 SCC 8, in which Karakatsanis, J writing for the court summarized the four elements of the tort of civil fraud at paragraph 21 of that judgment. Those four elements are:
A false representation made by the defendant.
Some level of knowledge of the falsehood of the representation on the part of the defendant (whether through knowledge or recklessness).
The false representation caused the plaintiff to act.
The plaintiff’s actions resulted in a loss.
15Mr. Jaskot submitted that based on the evidence already before the court the third element of the test is applicable to the case at hand. Hence he submitted this is a meritorious claim and a summary judgment motion should be allowed to be argued.
Position of the Respondent, Responding Party:
16Mr. Joseph, who was not counsel at the trial of this matter before Carpenter-Gunn, J. noted that Rule 16(1) of the Family Law Rules was amended in 2015. However Rule 16(1) provides as follows:
“After the respondent has served an answer, or after the time for serving an answer has expired, a party may make a motion for summary judgment or for a final order without a trial on all or part of any claim made or any defence presented in the case.”(Underlining is that of this court)
17Mr. Joseph has argued that a clear intention of the rule is that a motion for summary judgment should be made prior to trial. He noted that Rule 20 under the Rules of Civil Procedure R.R.O. 1990, Reg 194 does not contain the words “without a trial.” Hence he submits that a motion for summary judgment should not be entertained in this case as it does not comply with Rule 16(1).
18He further noted Mr. Jaskot provided no authority to the court to support the timing of this motion.
19Mr. Joseph submitted that the respondent had not finished her case before Carpenter-Gunn, J. when the mistrial was declared. He urged the court to consider it unfair and dangerous to grant leave to bring a summary judgment motion in the middle of the respondent’s case because the court has no way of knowing what further evidence might come before it to be considered on the totality of the record.
20Mr. Joseph noted that Rule 16(6) provides that only if there is not a genuine issue requiring a trial of a claim or a defence, should the court make a final order accordingly. Mr. Joseph urged the court to consider that this is a family law trial and the issues relating to the alleged fraud must be considered in that special context. In that respect, he relied on the case of Danylkiw v. Danylkiw 2003 10615 (ON SC), [2003] O.J. 430 (Ont SCJ). In that case, Pepall, J (as she then was) considered the validity of a domestic contract and a settlement based on that contract. In that case, the respondent father had provided false financial disclosure which was material and was relied upon by the lawyer advising the applicant mother. The court found that the mother was induced into entering into an agreement as a result of the false representation on which the mother was entitled to have relied. The father was found not to have made any effort to correct the false representation. At paragraph 73 of that ruling, the learned judge wrote as follows:
“In the face of a misrepresentation of income, a party should not be obliged to pursue further disclosure through expensive motions and examinations for discovery. Ms. Danylkiw is not precluded from relief as a result of her failure to do so. She was entitled to rely on the representation made and did so. The suggestion that Ms. Danylkiw should be deprived of a remedy because she could have pursued further disclosure from Mr. Danylkiw for court action, is not an answer to a claim for misrepresentation.”
21In the case of Virc v. Blair 2014 ONCA 392, Pepall, J.A. again wrote the judgment for the court. In that particular case, the parties had entered into a separation agreement in May of 2008. The wife subsequently brought an unsuccessful application to set aside the agreement. The husband had brought a cross motion to successfully obtain summary judgment dismissing the wife’s application. The Court of Appeal held that given the unresolved issues involving allegations of undue influence, duress and unconscionability, all of those matters had to be left to be determined by a trial judge on a full factual record. Of interest to this case, is that at paragraph 68 the court stated as follows:
“It’s one thing to disclose assets and liabilities and their values believing the disclosure to be true. It’s quite another to deliberately misrepresent the values of assets and liabilities knowing them to be untrue. The law does not entitle a liar to succeed just because the recipient of the falsehoods has not ferreted them out.
Furthermore, clear findings of actual knowledge of the misrepresentation are required. While as noted in Cheshire and Fifoot actual knowledge may constitute a defence, a mere suspicion of lack of veracity does not absolve a fraudster’s responsibility. In this case, there was insufficient evidence to conclude that the appellant had knowledge of the respondent’s misrepresentations.”
22Relying on those authorities, Mr. Joseph has argued that this is not an appropriate case to decide on the basis of a summary judgment motion.
23Mr. Joseph further referred to various extracts of the testimony of the respondent during this trial. When asked why she had signed the Minutes of Settlement, the respondent stated that she “was convinced from his (the applicant’s) financial statement that all the debts that he said that he had, $952,000.00, I think it was, I had confirmed all the mortgages on the properties that were owned by Joe or Linda and all the property – there was little equity in all the properties. Linda worked part time. I didn’t think her income could have effectively reduced the $952,000.00… debt.” 1
24Furthermore the respondent testified that from her research and review of documents she “concluded that they [the applicants] were in a lot of debt… he [Joseph] also said Home Life itself was losing money, and he wasn’t injecting his own income to keep the doors opens.” 2
25There were further issues referred to relating to a $402,000.00 commission received by the applicant Joseph Rosati shortly after the Minutes of Settlement were signed. Ms. Rosati testified that if she had knowledge of this information, it would have affected her decision about signing the minutes of settlement. 3 She testified that Joseph “would of known at all times”, including at the time of the hearing before Steinberg, J that he was going to be receiving a $400,000.00 commission.4
26Based on evidence of that nature, Mr. Joseph argues that there is a genuine issue for trial and that the trial should proceed without the intervention of a summary judgment motion.
Analysis
27Mr. Jaskot on behalf of the applicants has relied on a decision of Pazaratz, J of this court in MacDonald v. MacDonald 2009 15444 (SCJ). In that particular case, at the conclusion of the applicant’s case, counsel for the respondent brought a motion for summary judgment arguing that the grandmother had failed to establish a prima face case and that her request for access should be dismissed.
28Pazaratz, J granted the motion for summary judgment. In doing so, he referred to the case of Attwood v. Sharma (2000) O.J. no. 1129, in which, at the end of the applicant’s case, the respondent moved for summary judgment based upon Rule 16 as it then was. Pazaratz, J wrote at paragraph 57 as follows:
“In granting the request for summary judgment, Justice Campbell stated:
Rule 16 is obviously intended to be invoked prior to a trial being commenced. However, in an effort to avoid the misuse of judicial and court resources, when its read in conjunction with rules 2(3)(b),(c) and (d) (together with the inherent jurisdiction of any tried of fact), it invites the court to intervene to shorten any proceeding that is vexatious, abusive, without merit or a waste of limited resources. This motion for summary judgment at the end of the applicant’s case, similar to a non-suit in criminal proceedings, is both appropriate and timely.”
29While I certainly respect those decisions, I do not feel they are binding on this court. I note both those decisions were rendered at the end of the applicant’s case. In truth, they essentially were motions for “non-suit.” In civil cases, unlike criminal cases, the defendant must make an election as to whether to call evidence. A motion for non-suit will generally not be entertained unless the defendant first elects to call no evidence: Ontario v. Ontario Public Service Employees Union (OPSEU), [1990] O.J. No. 635, 37 O.A.C. 218 at 226 (Div. Ct.).
30The appropriateness of a mid-trial motion under Rule 16 was also considered by Quinn, J in the case of Children’s Aid Society of Niagara v. D.(W.) (2003) 2003 2293 (ON SC), 43 R.F.L. (5th) 286. In that case, while not having to deal with the matter directly, the learned Judge clearly expressed his view, with which I agree, of a mid-trial motion being brought under Rule 16(1). At paragraph 27 of that decision he wrote:
“In my opinion a motion pursuant to sub rule 16(1) is not properly brought after the hearing or trial has commenced. Sub Rule 16(1) speaks of making a motion for summary judgment for a final order “without a trial.” There is also the awkwardness of having to “serve an affidavit or other evidence,” as required by sub Rule 16.4 in mid trial. In such cases as Attwood v. Sharma (supra), where at the end of the applicant’s case, the respondent successfully moved for summary judgment on the evidence before the court, I respectfully think that the matter should have been dealt with as an application for a non-suit.”
31I concur with that reasoning and would dismiss the motion for leave to bring a motion for summary judgment on that basis alone. The words “without a trial” in Rule 16 must have some meaning attributed to them. If the legislature intended that a motion for summary judgment could be brought at any time, the section easily could have been worded to provide that a motion for summary judgment can be brought at any stage of a proceeding.
32Furthermore, I note that Rule 16(6) provides that “if there is no genuine issue requiring a trial of a claim or defence, the court may make a final order accordingly.” The wording is consistent with that of Rule 16(1) that the motion for summary judgment should be brought before the trial commences.
33Justice Quinn touched on the obvious procedural difficulties of allowing summary judgment motions in mid trial. Affidavits may have to be filed. Cross examinations may have to be conducted. The parties may then have to await transcripts so that factums can be properly prepared. The delays and costs associated with such an unwieldy procedure are self-evident. It does not constitute the most efficient and effective manner to advance one’s case to an ultimate decision.
34As stated the respondent has not even finished presenting her case.
35At the present stage of the trial, I cannot say that based on all the evidence that there would not be a genuine issue for trial. I have considered carefully the direction of the Supreme Court of Canada in Hyrniak v. Mauldin (2014), 2014 SCC 7, 366 D.L.R. (4th) 641 and even if I am wrong with respect to my interpretation of the time for a summary judgment motion to be brought under Rule 16(1), I am not satisfied that a fair and just determination can be made with only a portion of the Respondent’s case having been presented.
36Having considered the submissions of counsel, leave to bring the summary judgment motion is refused.
Directions with respect to the trial
37Mr. Joseph has urged the court to order that the trial start “de novo”. He emphasized that Ms. Reggimenti will not have the opportunity to testify before me as the new trial judge. Hence I will not have the opportunity to observe her demeanor as she testifies, which can be an important factor for a trial judge in determining whether or not fraud has been committed. Secondly he has argued that the actual trial time which would be lost if the trial was to commence again is not that significant. In that respect, he has provided me with a helpful summary of the progress of the trial before Carpenter-Gunn, J. He submitted it showed that only about six days of actual trial evidence was heard by the presiding judge.
38Mr. Jaskot strenuously opposes an order that the trial proceedings should commence again as in his view it is directly contrary to the intention clearly expressed by the Divisional Court. I concur with that submission.
39The Divisional Court carefully considered this matter and crafted a very deliberate order seeking to have this matter heard as quickly as possible and as inexpensively as possible for the parties. The obvious effort is to try to salvage the court time already used and the legal expenses incurred by the parties up to the time of the mistrial. The members of the Divisional Court panel are all experienced trial judges who preside in this court. They did not feel there would be significant prejudice if the trial was to continue from the point that the mistrial was declared. As pointed out by Mr. Jaskot, I have the capability of not just reading the transcripts of the evidence but also listening to the digital recordings of the proceedings as they unfolded. I am satisfied that a fair trial can be conducted in the manner directed by the Divisional Court and that this court is duty bound to provide as fair a trial in as proportionally reasonable and cost effective manner as possible.
40The respondent argued that a new trial unencumbered by evidentiary directions is needed. Mr. Joseph argued that by recommencing the trial again, as if no evidence had been led, we can be assured that the integrity of the second trial will be preserved, R v. Poloni, 2008 Carswell B.C. 2444 at paragraph 21. Mr. Joseph further argued that the discretion of a trial judge should be unfettered and not lightly interfered with.
41Having considered the decision of the Divisional Court, and having reviewed the evidence, I am not at all satisfied that a fair trial cannot be effected. I note that the Divisional Court specifically ruled all evidentiary and other rulings made by Carpenter-Gunn, J., to the date of the mistrial should apply in the new trial unless the assigned trial judge orders otherwise. There is nothing within that order which would prevent either party from bringing a motion to have a ruling of Carpenter-Gunn, J., reviewed by me as the new trial judge. I note at page 75 of her reasons, when she ordered the mistrial, Carpenter-Gunn, J., did not give any reasons with respect to the dismissal of the respondent’s motion to hear further and fresh evidence to reconsider the court’s ruling with respect to qualifying Ms. Christine Minelli as an expert. Hence, Mr. Joseph may, if directed, reopen the motion to have Ms. Minelli qualified as an expert, provided the appropriate motion materials and the grounds for the relief sought are served on Mr. Jaskot.
42I also note that Mr. Joseph has raised in his factum before this court, that he may wish to bring a motion for leave to recall Ms. Reggimenti to provide additional testimony. If he wishes to formally argue that motion and give Mr. Jaskot an opportunity to reply to that, a motion can be made returnable before me on that issue.
43Mr. Jaskot on this motion indicated that he would be prepared to have his clients’ examinations in chief submitted by way of affidavit and they would simply be cross examined. That would strike me as an efficient cost savings step in this litigation and it is so ordered.
Conclusion
44It is ordered that the trial of this matter which ended in a mistrial pursuant to the order of Carpenter-Gunn, J., dated July 22nd, 2014, upheld by the Divisional Court by way of order dated March 25th, 2015, shall continue from the point where the evidence concluded and such evidence and the rulings of the trial judge shall be binding on me as the trial judge unless otherwise ordered by me pursuant to paragraph 4 of the Divisional Court’s order dated March 25th, 2015.
45The applicants Joseph and Linda Rosati shall provide their evidence in examination in chief by way of an affidavit.
46If counsel wish to bring a motion for further directions with respect to any of the evidentiary orders and rulings made by Carpenter-Gunn, J. they may do so by motion returnable before me on a date to be fixed with the trial coordinator. Such motions shall be argued on or before February 24th, 2016.
Costs
47In light of the divided success on each of these motions, there shall be no costs to either party for these motions.
Turnbull, J.
Date: January 25, 2016