Court File and Parties

COURT FILE NO.: CV-14-504979 MOTION HEARD: 20160602 REASONS RELEASED: 20160825 SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

MARIO ZEITOUN, ALBA ZEITOUN, SAMMY ZEITOUN, SAMMER ZEITOUN and HANNAH ZEITOUN Plaintiffs

and

G. JOSEPH FALCONERI and BARRY MUNRO Defendants

BEFORE: MASTER D. E. SHORT

COUNSEL: Mitchell Wine, for moving plaintiff F (416) 224-2400 Wm. Scott, for defendants F (416) 869-0123

RELEASED: Aug 25, 2016

Reasons for Decision

I. Nature of Motion

[1] This 2016 motion was made in an action brought by the Plaintiffs against some of their former lawyers, the Defendants, with respect to the handling of a serious motor vehicle accident claim relating to a collision that happened in 1992 [sic].

[2] The Plaintiffs’ motion inter alia sought the following relief:

a) An Order granting the Plaintiffs leave to file a Fresh as Amended Statement of Claim;

b) An Order granting the Plaintiffs leave to add as Defendants the law firms in which a Defendant was a partner from 1997 to 2014 or, alternatively, adding former partners of that Defendant from 1997 to 2014 as Defendants:

c) An Order granting the Plaintiffs leave to add to the allegations of negligence against the Defendants;

Those elements were either agreed upon, in part, or deferred to a later date.

[3] What was contested and argued before me was the request for an Order compelling the Defendants to produce all internal memos, notes and emails from their files relating to the Zeitoun matters, made on or before March 6, 2014.

[4] In its original Notice of Motion, the Plaintiffs also sought an Order compelling the Defendants to produce for inspection any policies of insurance available to the Defendants in this action. The Defendants have since produced details of those policies and that part of the motion is withdrawn (with costs to be spoken to at the appropriate subsequent time).

II. Background Facts

[5] A very serious motor vehicle accident happened in July of 1992. Now in 2016 as the twenty-fifth anniversary of the accident approaches, issues arising from that event are still unresolved and continue to be addressed in this 2014 action. The history that follows, if proven, does not reflect at all well on the operation on Ontario’s litigation system.

The Parties

[6] The Plaintiff, Mario Zeitoun ("Zeitoun'') was a passenger in the back seat of a motor vehicle that was involved in the accident that gave rise to this litigation. He sustained serious injuries that left him confined to a wheelchair. A comprehensive affidavit sworn by his brother-in-law was provided which outlined the history of this case and was not cross examined upon.

[7] I have relied on the unchallenged portions of that affidavit in compiling the portions of the background to this motion set out below.

[8] The other Plaintiffs in this action are Zeitoun’s wife, Abla Zeitoun ("Abla"), and his three children. They are Family Law Act claimants.

[9] The present defendant, G. Joseph Falconeri was retained five years after the accident in 1997 to act for Zeitoun with respect to his accident benefits claim and to recover damages in a civil action brought on his behalf. The other defendant named in this 2014 Claim was Barry Munro who became involved as counsel in the accident litigation in January 2010.

The Plaintiff’s Driver

[10] Zeitoun was riding in a vehicle driven by his brother-in-law Joseph Farrage (“Joseph”). The vehicle was owned by Fedco Contracting Inc. It appears that neither of them was added as a defendant in the initial action.

The Accident

[11] Mr. Zeitoun is a resident of Israel. In July of 1992 he was on holiday visiting family in Toronto. On July 19,1992, the family went sightseeing in Niagara Falls. They planned to return to Toronto that evening by automobile.

[12] Zeitoun's car was traveling southbound on Ontario Street in the Town of Lincoln, when struck by another automobile at approximately 11:00 pm. Zeitoun was seated directly behind the driver in the back seat of the vehicle. He was wearing his seat belt.

[13] The driver of the other vehicle was Janez Stevancec, a resident of Hamilton, Ontario. Stevancec was driving northbound in the southbound lane.

[14] Stevancec was charged with impaired driving under the Criminal Code together with a charge of careless driving under the Ontario Highway Traffic Act (“HTA”).

Injuries

[15] Zeitoun lost consciousness in the accident and was transported to hospital where he spent several days. Once discharged, he returned almost immediately to Israel.

[16] Zeitoun suffered serious permanent physical injuries. He is now confined to a wheelchair. He has suffered headaches, dizziness, depression and other physical and emotional injuries. He has been required to undergo hospitalization, therapy, rehabilitation and other forms of medical treatment.

[17] It is asserted by counsel in this action against various lawyers who acted on Zeitoun’s behalf from time to time, that in addition to the significant loss of enjoyment of life, he was unable until very recently to continue with any type of employment and suffered a great loss of income.

[18] His wife Abla suffers from multiple sclerosis and the couple's daughter, Hannan, Zeitoun, has suffered from cerebral palsy since a young age. Prior to the accident Zeitoun had been the primary caregiver for both. After the accident he was no longer able to continue with these duties. Hannan is now institutionalized.

III. History of Actions

[19] Zeitoun originally retained a lawyer, Mr. Harder. He was hired to seek statutory accident benefits on behalf of Zeitoun and to commence a tort action against Stevancec.

[20] That lawyer commenced an action against Stevancec in the then Ontario Court (General Division) court office in Kitchener, Ontario on July 18, 1994 (one day before the expiry of the HTA two year limitation period) as Action 1372/94 (the "Stevancec Action").

[21] Stevancec was served with the Statement of Claim in September 1994 but did not serve or file a Statement of Defence.

[22] Zeitoun hired Falconeri in early 1997 to replace Harder for the statutory accident benefits claim and the Stevancec Action.

[23] Although Stevancec had been served with the Statement of Claim in September 1994, he was not noted in default until November of 2000 (i.e. three years after Falconeri became involved with the file in 1997).

[24] Falconeri negotiated a settlement of Zeitoun’s statutory accident benefits claim for $250,000 in the fall of 1998.

[25] It appears that in the 20 years from 1994 to 2014, the Stevancec Action was not otherwise advanced.

[26] The Plaintiffs' current counsel was retained on March 6, 2011. They appear to have identified and addressed a number of problems following that retainer. Since the firm was retained, they have completed the following:

a) Commenced this action by Notice of Action on May 27, 2014 with the Statement of Claim filed with the Court on June 24, 2014:

b) Obtained an Order dated September 8, 2014 under Rule 11.01 to continue the Stevancec Action against Stevancec's estate. Stevancec died on May 14, 2005 with the consequence that the claim against him was stayed. (It appears that in the subsequent nine years, no lawyer acting for the plaintiffs took steps to have the Stevancec Action continued against his estate);

c) Obtained judgment in the Stevancec Action (twenty years after the accident) against the estate of Stevancec on October 8, 2014;

d) Obtained an assessment of damages of the Plaintiffs against Stevancec in the amount of $5,995,496.31 (inclusive of costs) on November 19 and 26, 2015.

[27] The damages were broken down as follows:

Lost Income to 2015 $1,288,423 Future Income to 67 years of Age 1,118,136 Special Damages 356,360 5% Gross-up 51,585 Future care costs 675,396 Non-pecuniary/ general damages 250,000 Family Law damages 300,000 Interest 1,877,675 Costs 77.921 Total $5,995,496

[28] It is clear the estate did not defend and this quantum was established at a subsequent, unopposed, damage assessment.

IV. Amongst the Problems

[29] Somewhat inexplicably the original action was only commenced against Stevancec and not against either the driver or the owner of the vehicle in which Zeitoun was riding. To the extent there was either no or inadequate insurance coverage in place for sole defendant Stevancec, it was possible that insurance in place for the Fedco vehicle through its insurer Economical Mutual might have responded.

[30] The present action identifies a range of asserted inadequacies in the approach of the individual lawyers now sued, or the firms if which they were part of over the years. For my purposes the evidence put before me on behalf of the plaintiffs with respect to elements of the alleged inadequacies in the manner of carriage is sufficient to provide an appreciation of the circumstances in which the plaintiffs have found themselves.

[31] The Statement of Claim makes these, (as yet not formally proven) assertions with respect to the delay following the retainer of the replacement counsel in February 1997 and the failure at that time to add Joseph and Fedco as parties to the litigation since theirs was the other vehicle in the 1992 collision:

“74. Joseph and Fedco were proper parties to the litigation with Stevancec. The original decision not to sue them was made by Zeitoun's previous counsel.

75. However, Falconeri did not try to add these parties to the litigation until a motion was brought on February 1st, 2005, almost eight years after Falconeri had been retained. -The limitation period at the time Falconeri was retained was six years. Accordingly, Falconeri had time once he was retained to add the parties prior to its expiry but by February 2005, the six years had long elapsed.

76. Master Abrams declined to add the parties. Her reasons rely upon the substantial prejudice to these Defendants’ ability to defend themselves properly if they were added at such-a late stage.”

[32] Apparently that decision was not appealed.

[33] The Statement of Claim also asserts that the first named defendant failed to commence an action against the counsel with original carriage of the Stevancec Action, for negligence within the then six year limitation period and, once an action was commenced, improperly allowed it to be dismissed for delay.

[34] I do not intend to catalogue all the possible instances of alleged mishandling that are set out in the existing and proposed amended pleadings of the plaintiffs. However, I do feel there is particular relevance to the present specific motion for production of the Lawyers’ file contents to consider the following areas of complaint.

V. Action against Economical Insurance Group and Security for Costs

[35] “Murphy’s Law in Action”, would best describe virtually every step in the saga of the claims made against the insurer of the Fedco vehicle, in which Zeitoun was riding in 1992.

[36] On June 6, 2003 Falconeri commenced an action in the Supreme Court on behalf of the Plaintiffs against the Economical Insurance-Group. The action relied upon the uninsured and unidentified provisions of' Fedco's insurance policy.

[37] The affidavit filed in support of the plaintiffs’ motion recites the following history (with my emphasis added). While what follows is a large block of type, its contents place in sharp focus the present motion’s key issue:

82. Economical served and filed a Statement of Defence and moved in 2006 for security for costs against the Plaintiffs on the grounds that they were not residents of Ontario.

83. Economical was successful in its motion before the Master and the Plaintiffs were ordered to pay security for costs in the amount of $45,000.00 to be paid in tranches with $10,000.00 to be paid by December 31, 2006, $15,000.00 by April 30, 2007 and $20,000.00, 90 days before the date first fixed for trial.

84. The Plaintiffs successfully appealed the Master's Order to a judge of the Superior Court. Economical then appealed the judge's Order to the Divisional Court and the Master's Order was restored. An appeal by the Plaintiffs to the Court of Appeal was unsuccessful. [see Zeitoun v. Economical Insurance Group, [2008] O.J. No. 1771 (Div. Ct.) and 2009 ONCA 415, 96 O.R. (3d) 639 (C. of A.).]

85. The Court of Appeal ordered the Plaintiffs to pay Economical $10,000.00 inclusive of interest as costs of the appeal.

86. The Plaintiffs failed to pay the $20,000.00 to be paid 90 days before the date fixed for trial and the $10,000.00 costs award of the Court of Appeal.

87. Economical moved on April 30, 2010 to dismiss the Plaintiffs' action for failure to make these payments. A further motion was brought on December 7, 2010. By Order dated December 10, 2010 Master Abrams ordered that the outstanding amounts be paid by December 20, 2010 with evidence of the payment to be provided to her at the same time or the action was to be dismissed with costs to be assessed.

88. The [lawyer]Defendants' made arrangements for payment of the Court of Appeal costs order but that payment was late as a result of the inattention of the Defendants. No evidence of the payment was provided to Master Abrams' office. As payment was not made by the required date of her order and no evidence of payment was ever received by her, Master Abrams dismissed the Plaintiffs' action on December 21, 2010.

89. The Plaintiffs sought to appeal Master Abrams' order but their Notice of Appeal was filed late. On May 17, 2011 the Plaintiffs brought a motion to the Divisional Court to extend the time for service and filing of the Plaintiffs Notice of Appeal.

90. The Plaintiffs' motion was heard by J. Wilson J. Her Honour ordered that the Plaintiffs be granted additional time to serve and file their Notice of Appeal as long as they paid an additional $20,000.00 into Court as security for costs within 60 days. This amount was never paid.

91. The Plaintiffs brought a motion before a three member panel of the Divisional Court to vary or set aside the Order of J. Wilson J. dated May 17, 2011 under section 21 (5) of the Courts of Justice Act, R.S.O. 1990, c. C.43.

92. The Plaintiffs had been required to serve their motion under section 21(5) of the Courts of Justice Act by May 21, 2011. Service actually occurred substantially later on October 7, 2011. The Plaintiffs, therefore, also required an extension of time for service of their motion.

93. Aston, J. writing for the Divisional Court on May 29, 2012 declined to extend the time for service of the motion. Accordingly, the Plaintiffs' motion was dismissed with costs without the Court considering the matter on its merits. The Plaintiffs were further ordered to pay costs fixed at $6,685.11.

[38] It appears to me that the contents of the defendant lawyers’ files will be crucial to establishing who was responsible for each of the above apparent missteps and delays.

VI. Summary Judgment Motion

[39] The Factum filed on behalf of the Plaintiffs asserts:

48. The Plaintiffs are moving for summary judgment against the Defendants so the Plaintiffs can obtain recovery for substantial damages that occurred 24 years ago. Counsel for the Plaintiffs consider this to be an appropriate case for summary judgment under the current case law.

49. The documents requested are, prima facie, highly relevant to the motion and it is in the interests of justice that the Court on the summary judgment motion be in a position to properly adjudicate the issues between the parties.

[40] The Defendants’ factum asserts with respect to this issue:

6. There is no discovery plan in this action.

7. The defendants moved to impose a discovery plan, but their motion was successfully opposed by the plaintiffs. Neither the plaintiffs, nor the defendants, have an obligation to deliver an Affidavit of Documents and neither has done so.

[41] My colleague Master Muir made an endorsement setting out his reasoning with respect to his refusal to simply establish a Discovery plan in light of the proposed pending Summary Judgment motion. The neutral citation for his endorsement did not seem to have been entered as at the release of these reasons (i.e. Zeitoun v. Falconeri, 2015 ONSC 8047). To simplify matters I have appended Master Muir’s decision to these reasons as a Schedule.

[42] It would appear from a current case history that no Summary Judgment motion has been launched to date, as I understand the Plaintiffs wish to rely on the full file record on any such motion.

[43] I adopt and agree with my fellow Master’s view as set out in paragraph 14 of his endorsement:

“…As I noted above, the evidence on this motion demonstrates that the plaintiffs have a good chance of success on at least a portion of their claims against the defendants. In my view, allowing the summary judgment motion to proceed in advance of full production and discovery will result in the most efficient determination of the issues between the parties.”

VII. Defendants’ Position

[44] Counsel in his usual succinct way has set out the pith and substance of his clients’ position that disclosure of portions of the files at this stage is premature and that “the plaintiff’s motion should be dismissed with costs.”

“THE LAW

8. If a lawyer receives a direction that he forward the client's file to another lawyer, he is obliged to deliver only those documents that are the property of the client. Internal memos, emails and notes are not the property of the client.

Aggio v. Rosenberg, [1981] O.J. No. 2229”

[45] Aggio v. Rosenberg was a decision of our recently retired colleague Master Sandler which can also be found in the first series of Carswell’s Practice Cases at 24 C.P.R. 7. Because it is the sole case relied upon in opposition to this issue, I am reproducing a substantial portion of Master Sandler’s decision in an action brought by way of a specially endorsed writ by the client to recover portions of the lawyer’s file as they were required for a pending trial.:

13 When the motion came before me on March 27th, 1981, I heard some of the argument, and it appeared that the only documents that the defendant had in its possession was a certain file marked Ex. 6 on the cross-examination of the solicitor who swore the affidavit of merits, and counsel for the plaintiff argued that the plaintiff was only seeking and was entitled to those particular documents in Ex. 6 which the law as set out in Cordery, Law Relating to Solicitors (6th ed.) at pp. 118-119, stated belong to a client, and it appeared, because I was going to apply this law, that what was required was to examine each document in Ex. 6, to ascertain whether it fell within a client category or a solicitor category, as set out on p. 119, supra, and thus both counsel agreed to an adjournment for the purpose of themselves examining Ex. 6 and making the appropriate selection into client and solicitor categories, with any dispute to be decided by this Court. ….

15 As to what the law in Ontario is, I adopt the law as set out in Cordery, supra, as follows:

"D. AUTHORITY OVER DOCUMENTS ON TERMINATION OF RETAINER

Documents in existence before the retainer commences and sent to the solicitor by the client or by a third party during the currency of the retainer present no difficulty since their ownership must be readily apparent. The solicitor holds them as agent for and on behalf of the client or third party, and on the termination of the retainer must dispose of them (subject to any lien he may have for unpaid costs - see pp. 416 et seq., post) as the client or third party may direct.

Documents which only come into existence during the currency of the retainer and for the purpose of business transacted by the solicitor pursuant to the retainer, fall into four broad categories:

(i) Documents prepared by the solicitor for the benefit of the client and which may be said to have been paid for the client, belong to the client.

(ii) Documents prepared by the solicitor for his own benefit or protection, the preparation of which is not regarded as an item chargeable against the client, belong to the solicitor.

(iii) Documents sent by the client to the solicitor during the course of the retainer, the property in which was intended at the date of despatch to pass from the client to the solicitor, e.g., letters, belong to the solicitor.

(iv) Documents prepared by a third party during the course of the retainer and sent to the solicitor (other than at the solicitor's expense), e.g., letters, belong to the client."

[46] Master Sandler went on to provide this guidance:

16 From these broad categories, specific propositions are then laid down at p. 119 as follows:

"Cases, instructions and briefs prepared by the solicitor and delivered to counsel belong to the client within category (i).

Drafts and copies made by the solicitor of deeds or other documents in non-contentious business belong to the client within category (i).

Copies made by the solicitor of letters received by him, if paid for by the client belong to the client under category (i).

Copies made by the solicitor of letters received by him, if not paid for by the client belong to the solicitor under category (ii).

Copies made by the solicitor of letters written by him to third parties, if contained in the client's case file and used for the purpose of the client's business belong to the client under category (i).

Copies made by the solicitor of letters written by him to third parties, if contained only in a filing system of all letters written in the solicitor's office belong to the solicitor, under category (ii).

Entries of attendance, tape recordings of conversations, etc., inter-office memoranda partner to partner, partner to staff, entries in diaries, office journals and books of account belong to the solicitor under category (ii).

Letters and authorities and 'instructions written or given' by the client to his solicitors belong to the solicitor under category (iii).

Letters received by the solicitor from third parties belong to the client under category (iv).

Vouchers for disbursements made by the solicitor on behalf of his client belong to the client under category (iv)."

[47] Master Sandler then notes Ontario guidance that was at that point in time relatively recent with respect to these issues:

17 In (1981) 15 L.S.U.C. Gaz. 103, there is to be found a helpful article prepared and published at the suggestion of the Committee of Professional Conduct of the Law Society of Upper Canada entitled "A Lawyer's Authority Over Documents on Termination of Retainer". The article opens with the following statement:

"The documents that should be handed over to a client who is in the process of changing lawyers is a matter of law (my emphasis) and not of professional conduct.

If a lawyer receives a direction that he forward all documents and correspondence relating to a client's affairs to another lawyer, he should, subject to the payment of fees do so as quickly as possible. The lawyer however, is obliged to deliver only those documents that are the property of the client."

18 The article then details what documents, letters, vouchers and notes are the property of the client and which are the property of the solicitor, following the law laid down in Cordery, supra.

19 In this case, the major documents in issue concern letters received by the defendant solicitors from third parties, and copies made by the said solicitors of letters written by them to third parties contained in the client's case file and used for the purpose of the client's business, and vouchers for disbursements made by the said solicitors on behalf of the client, all of which, until March 30th, 1981, the solicitors insisted belonged to them and not the client. This action was necessary in order for the client to have delivered up to her property. The documents that should be handed over "is a matter of law", and who better than a solicitor should know or be able to ascertain what the law is. In this case, the law was easily ascertainable by reading Cordery or other authorities.

20 I should say that the defendant firm was trying to act reasonably, although they were legally wrong in the position they took, and the duty of solicitors in his area is sufficiently unfamiliar so as to move the Law Society to publish the article they did, supra. Notwithstanding this, the plaintiff was legally correct and was obliged to institute this action to assert her rights and, in my view, is entitled to her costs of this action, including the cross-examination and this motion for judgment, forthwith after taxation. Judgment accordingly.

[48] As noted at the outset, what was contested and argued before me was the request for an Order compelling the Defendants to produce all internal memos, notes and emails from their files relating to the Zeitoun matters, made on or before March 6, 2014.

[49] I note that while Aggio also was an action by a client against their previous counsel, the action in no way related to the handling of the matter while that firm was retained. I believe different considerations arise in the present case.

VIII. Applicable Regulations

[50] Prior to considering the applicability of the Rules of Civil Procedure in this case, I turn first to The Solicitors Act, R.S.O. 1990, c. S-15 which states at subsection 6(6):

Client's papers

Upon payment by the client or other person of what, if anything, appears to be due to the solicitor, or if nothing is found to be due to the solicitor, the solicitor, if required, shall deliver to the client or other person, or as client or other person directs, all deeds, books, papers and writings in the solicitor's possession, custody or power belonging to the client.

[51] This leaves open what belongs to the clients.

[52] The Rules of Professional Conduct deal in section 3 with the applicable duties following withdrawal of a lawyer's services (with my emphasis added):

3.7 (8) When a lawyer withdraws, the lawyer shall try to minimize expense and avoid prejudice to the client and shall do all that can reasonably be done to facilitate the orderly transfer of the matter to the successor legal practitioner.

3.7(9) Upon discharge or withdrawal, a lawyer shall

(b) subject to the lawyer’s right to a lien, deliver to or to the order of the client all papers and property to which the client is entitled:

(c) subject to any applicable trust conditions, give the client all information that may be required in connection with the case or matter:

(f) co-operate with the successor legal practitioner so as to minimize expense and avoid prejudice to the client:

[53] The Commentary to these Rules states:

[2] If the question of a right of lien for unpaid fees and disbursements arises on the discharge or withdrawal of the lawyer, the lawyer should have due regard to the effect of its enforcement upon the client's position. Generally speaking, the lawyer should not enforce the lien if to do so would prejudice materially the client's position in any uncompleted matter.

[4] Co-operation with the successor legal practitioner will normally include providing any memoranda of fact and law that have been prepared by the lawyer in connection with the matter, but confidential information not clearly related to the matter should not be divulged without the written consent of the client.

[54] Here the client is prejudiced by a potentially incomplete picture without the file components sought and there is no question about the clients’ consent.

[55] I agree with the submissions of the Plaintiffs’ counsel that the clear spirit of the Solicitors Act and the Rules of Professional Conduct are that these documents should be produced.

54. The Defendants' position is that all the "internal memos, emails and notes" do not form part of the Plaintiffs file. They take an "all or nothing" approach to this material without any attempt to differentiate between what may properly be the property of the Plaintiffs and what is properly the Defendants' property.

55. The Defendants have produced hundreds of letters addressed to various parties yet refuse to produce emails. No explanation is provided for this inconsistent approach.

56. The Defendants have produced all of their factums over 17 years including all their legal arguments yet refuse to produce any memoranda during this period.

57. The Defendants cite the case of Aggio v. Rosenberg as their sole authority. In fact, the case stands for the general proposition that most of the file is the property of the client: It is well established that the vast majority of the documents contained in a solicitor's file, including any drafts, letters. pleadings and notes, are the property of the client. See the case of Aggio v. Rosenberg (1981). 24 C.P.C. 7 (Ont. Master) .6

[56] Counsel for the moving parties further argues that if the Defendants wish to claim some of this material is their property, it was incumbent upon them to identify all the documents under consideration and advise which ones they claim as their property. This would be a similar approach taken by counsel in claiming privilege for documents in an Affidavit of Documents. (e.g. Wadsworth v. Elkin Injury Law, 2008 CarswellOnt 2658 at para. 17, 21)

[57] To a degree this issue is all about timing. Should the Plaintiffs be put to an election as to whether to bring a Summary Judgment motion with a partial understanding of the content of the files relating to their case? In that case, additional salient information may only be gleaned after the motion and an Affidavit of Documents is produced on behalf of the Defendants.

IX. Obligations of a Defendant to Produce Documents

[58] I regard this case as very different from a simple transfer to new counsel situation. In Aggio and similar cases, the issue before the court concerned the transfer of a file from one counsel to another. This case concerns an action for negligence against the previous lawyer. Accordingly, ownership of the document ought to be largely irrelevant. All non-privileged documents in the possession of the previous lawyer that are relevant to the litigation are properly producible by the Defendants.

[59] Plaintiffs’ Counsel asserts:

61. The Defendants take the position that these documents are to be produced during the discovery process but this has not yet occurred. This is correct but the Court has discretion to order the production of these documents under Rule 30.04(5) of the Rules of Civil Procedure which states: “The court may at any time order production for inspection of documents that are not privileged and that are in the possession, control or power of a party.”

[60] I accept the submission that the Courts have granted production of documents prior to the discovery process when there is a valid reason for the request. This position is consistent with Rule 1.04 of the Rules of Civil Procedure that the Rules shall be construed liberally to secure the just, most expeditious and least expensive determination of every civil proceeding on the merits.

[61] Ultimately I adopt the approach of my colleague Master Brott as endorsed by Emery,J. in De Iuliis v. Zilli, 2014 ONSC 5515:

22 In Freedom International Brokerage Company v. Tullett Prebon Canada Limited, the plaintiff by counterclaim alleging libel and slander moved for the production of a letter in the possession of the defendant to the counterclaim. The defendant to the counterclaim had served a Demand for Particulars of the allegations of the libel and slander. The defendant to the counterclaim did not deny the existence of the letter but took issue with the lack of specifics and particularity in the pleading. Although the plaintiff by counterclaim responded to the Demand for Particulars and stated it would provide a more fulsome response once the letter was produced, the defendant to the counterclaim served its motion to strike pleadings.

23 Master Brott expressed the view that on a motion under Rule 30.04(5), when the court finds a valid reason to order one party to an action to produce a document to another party, then the one party should be ordered to produce those documents.

24 The Court in the Freedom International Brokerage case found that it was the pending motion of the defendant to the counterclaim to strike pleadings that rendered the production of the subject letter essential. The Master also indicated that she relied heavily on Rule 1.04 that requires that all Rules of Civil Procedure shall be construed liberally to secure the just, most expeditious and least expensive determination of every civil proceeding on the merits. She expressed the view that the motion to strike might be averted once the letter was produced.

[62] Here I come to a similar conclusion and now have the advantage of the more recent guidance from the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, and the Court of Appeal in Carioca's Import & Export Inc. v. Canadian Pacific Railway Ltd., [2015] O.J. No. 4569; 2015 ONCA 592. There R.J. Sharpe, P.D. Lauwers and K.M. van Rensburg JJ.A. dealt with a refusal of the judge at first instance to return a matter to the trial list on the basis of delay. While this case is at a different stage of the litigation process the overarching principles examined have a clear impact on cases such as the present one.

[63] In Carioca’s Justice van Rensburg writing for the Court made a number of useful observations. For example (with my emphasis added):

48 It is a waste of resources to have trials adjourned on or near the trial date, at a juncture when court time that has been set aside may not be able to be filled with other matters. The ability to remove and restore actions to a trial list is part of the function of the local court to manage the timing and progress of civil actions commenced within its jurisdiction in the context of its available resources. If the test to restore an action to the trial list is applied too rigidly, "speak to" and other attendances where matters may be struck will become lengthy and contentious, preventing efficient case management. Therefore a proper delay analysis does not consider the conduct of an action in a vacuum.

52 Applying too exacting a standard for restoring an action which has been struck from the trial list may well hinder the objective of an efficient justice system, as parties and counsel would argue over keeping matters on the trial list for fear that, once struck, they might never be restored. Fighting highly contested motions over cases being struck and restored to the trial list is not an effective use of scarce judicial and legal resources. Ontario courts are actively discouraging a "motions culture" among counsel, and the Supreme Court of Canada has called for a "shift in culture", citing the need for a process that is proportionate, timely and affordable: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 28.

53. While this court has stated frequently that the plaintiff bears the primary responsibility for moving a case forward, it has also acknowledged that the conduct of a defendant is a factor, especially where a plaintiff encounters some resistance when trying to move the action along: 1196158 Ontario Inc., at para. 29. The suggestion that it is normal and acceptable for a defendant, if not to actively delay, to simply wait for the plaintiff to make the next move, may be based on a conventional view of litigation strategy. The objectives of timely and efficient access to justice, and effective use of court resources require all parties to play their part in moving actions forward, and for counsel to act in a way that facilitates rather than frustrates access to justice: Hryniak, at para. 32. For these reasons, although the burden of proof on the motion is on the plaintiff, the conduct of all parties in relation to the litigation is relevant in determining whether to restore an action to the trial list.

55 …. The context of the action and any other relevant factors that are specific to the case must be considered. These will include the overall progress of the action before it was listed for trial, the circumstances of how the action came to be struck from the trial list, and the conduct of all parties. Procedural rules cannot be mechanically applied but have to be interpreted in a contextual manner that pays heed to all relevant circumstances and consequences.

[64] In my view proportionality in this case dictates that the Plaintiffs motion with respect to production at this time must succeed.

[65] The Discovery Plan apparently agreed to by the parties reads in part:

Documents to be provided by the Defendant to the Plaintiffs

Any and all documents relevant to the issues in this action pursuant to Rule 30.02 including any and all information and/or documentation, including correspondence, notes. and voice mail messages, with respect to all of the claims or actions handled by the Defendants on behalf of the Plaintiffs.

[66] The time for the production of that information is now.

VI. Disposition

[67] I am satisfied that my discretion is properly exercised in this situation and believe my approach accords with the guidance of the Supreme Court in Hryniak, supra as set out in these extracts with my emphasis added:

2. Increasingly, there is recognition that a culture shift is required in order to create an environment promoting timely and affordable access to the civil justice system. This shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just.

3. Summary judgment motions provide one such opportunity. …

4. This requires a shift in culture. The principle goal remains the same: a fair process that results in a just adjudication of disputes. A fair and just process must permit a judge to find the facts necessary to resolve the dispute and to apply the relevant legal principles to the facts as found. However, that process is illusory unless it is also accessible – proportionate, timely and affordable. The proportionality principle means that the best forum for resolving a dispute is not always that with the most painstaking procedure.

5. There is, of course, always some tension between accessibility and the truth-seeking function but, much as one would not expect a jury trial over a contested parking ticket, the procedures used to adjudicate civil disputes must fit the nature of the claim. If the process is disproportionate to the nature of the disputes and the interests involved, then it will not achieve a fair and just result.

[68] Order to go in accordance with these reasons.

[69] The Plaintiffs sought partial indemnity costs of $10,896.73 and indicated an offer to settle was made. I am satisfied that $10,000 (all in) payable by defendants in 60 days is appropriate and so order.

R. 144/DS

Master D.E. Short

Schedule A

SUPERIOR COURT OF JUSTICE-ONTARIO

ZEITOUN v. FALCONERI

CV-14-504979

2015 ONSC 8047

ENDORSEMENT Master R. A. Muir –

[1] The defendants bring a motion for an order establishing a discovery plan and for security for costs. The plaintiffs are opposed.

[2] The defendant wants to proceed with the discovery plan portion of this motion but seeks an adjournment of the security for costs motion. The plaintiffs take the position that both issues should proceed together either today or at a later date. If it is determined that both forms of relief should be heard at the same time, the defendants want to proceed today.

[3] In my view, it is not appropriate to impose a form of discovery plan on the plaintiffs before they know whether they will be required to post security for costs as a condition of being permitted to continue with this action. The discovery plan issue should be argued with or following the security for costs motion. I am therefore ordering that both parts of the relief sought proceed today as scheduled.

[4] The defendants bring their motion for an order requiring the plaintiffs to post security for costs pursuant to Rule 56.0l(l)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 as the plaintiffs are ordinarily resident outside of Canada.

[5] The principles applicable to a motion of this nature can be found in the decision of this court in Cigar500.com Inc. v. Ashton Distributors Inc., [2009] O.J. No. 3680 (SCJ). In general terms, the moving defendants have the initial onus of demonstrating that the plaintiffs fall into one of the categories set out In Rule 56.01(1). This onus is not a heavy one and the defendants have obviously met their burden.

[6] The onus then shifts to the plaintiffs to tender evidence that they have assets available in Ontario to respond to any costs order, to demonstrate impecuniosity or to ask the court to make such order as is just in the circumstances.

[7] I have applied these factors and principles in determining the issues on this motion. Overall, I am guided by the central principle that an order for security for costs is discretionary. The role of the court on a motion such as this is to make the order that is just in all of the circumstances. See Cigar 500. com Inc. at paragraph 33.

[8] In my view, the plaintiffs have met the onus placed upon them on this motion. It would be unjust to order that they post security for costs. First, there is no evidence on the merits from the defendants. I only have the evidence of the plaintiffs. The plaintiffs' evidence shows a long history of inattention and missteps by their lawyers in handling their underlying personal injury claims. The main plaintiff, Mario Zeitoun has recovered nothing despite being seriously injured as a passenger in a motor vehicle accident caused by an impaired driver. In my view, for the purposes of this motion, the plaintiffs have established a good chance of success. This is a factor to consider even if the plaintiffs have not established impecuniosity. See Zeitoun v. Economical Insurance Group, [2008] O.J. No. 1771 (Div. Ct.) at paragraph 50.

[9] In any event, I am also: satisfied that Mario and his spouse have demonstrated impecuniosity. Their financial disclosure is robust. They are more or less breaking even between their income and expenses. The assets they do have cannot be easily encumbered. They certainly do not have easy access to $162,000.00 as requested by the defendants in their bill of costs.

[10] The disclosure from the other family law plaintiffs is not complete. They have not demonstrated impecuniosity. However, their claims are clearly secondary to Mario's. The vast bulk of the work in defending this action will involve Mario's claims. Very little time or effort will be required to defend these FLA claims.

[11] I have therefore concluded that it would not be just in the circumstances of this action to require the plaintiffs to post security for costs. That part of the relief sought on the defendants' motion is dismissed.

[12] The defendants also seek an order establishing a discovery plan. They have been waiting for more than a year for the plaintiffs to agree to the terms of a discovery plan and move forward with production and discovery.

[13] The plaintiffs intend to bring a motion for summary judgment. They believe that some or all of the issues in this action can be determined on such a motion. They argue that it makes no sense for the parties to engage in full production and discovery while a summary judgment motion is pending. They explain their delay in bringing their summary judgment motion by pointing to the necessity of obtaining expert evidence and pursuing a claim to recover a portion of their losses from TD Home and Auto Insurance Company. They advised the court that they that are now ready to serve their summary judgment motion materials.

[14] I understand the defendants' frustration with the delay to date. However, the plaintiffs are now ready to move forward with their summary judgment motion. There is no evidence of any prejudice to the defendants arising from a few more months of delay. As I noted above, the evidence on this motion demonstrates that the plaintiffs have a good chance of success on at least a portion of their claims against the defendants. In my view, allowing the summary judgment motion to proceed in advance of full production and discovery will result in the most efficient determination of the issues between the parties.

[15] However, the time has now come for the plaintiffs to get on with the summary judgment motion. I am therefore ordering that the plaintiffs serve their summary judgment materials by no later than January 29, 2016. If the summary judgment motion is not served by that date, the draft discovery plan at Schedule A to the defendants' notice of motion shall apply to this action, as amended by me and attached to this endorsement.

[16] If the parties are unable to agree on the issue of costs, they shall provide the court with brief written submissions by January 15, 2016.

DATE: December 22, 2015

Master R.A. Muir