Court File and Parties
COURT FILE NO.: 309/13 DATE: 20160825 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: John Sawah, Plaintiff AND: Tyler David Warren and Sheetal Jhuti c.o.b. as SBJ Consulting Services, Defendants
BEFORE: Gray J.
COUNSEL: Ben Hahn and Ethan Rogers, Counsel for the Plaintiff Bradley Phillips, Counsel for the Defendant Tyler David Warren David Lipkus, Counsel for the Defendant, Sheetal Jhuti
HEARD: August 16, 2016
Endorsement
1On August 17, 2015, I heard a Motion for Summary Judgment brought by the Plaintiff. On August 26, 2015, I issued Reasons for Judgment in which I dismissed the Motion for Summary Judgment and ordered the matter to proceed to trial.
2On September 29, 2015, I ordered that costs of the Summary Judgment Motion be in the cause.
3The Plaintiff sought leave to appeal my decision. On March 29, 2016, Barnes J. refused leave to appeal and ordered that the costs of the motion before him be in the cause.
4Pursuant to Rule 59.06 (2) of the Rules of Civil Procedure, the Plaintiff now brings a Motion to set aside or vary my order on the ground of fraud or of facts arising or discovered after my order was made. There is also a motion to require Mr. Warren’s examination for discovery to be in Mississauga rather than in Winnipeg.
5The background to this matter is set out in detail in my original Reasons for Judgment, and it is unnecessary to repeat it in detail.
6For the purposes of this Motion, it is necessary only to note that the action brought by the Plaintiff arises out of the settlement of a tort action for personal injuries allegedly caused as a result of a motor vehicle accident, and a parallel claim for Statutory Accident Benefits. Both the Defendant Warren, who is a solicitor, and the Defendant Jhuti, who is a licenced paralegal, were involved, although their involvement was different. Jhuti, not being a solicitor, could not act for the Plaintiff in the tort action, although she could act for him on the Statutory Accident Benefits claim.
7In substance, it is alleged by the Plaintiff that the Statutory Accident Benefits claim was settled for $15,000, while he was told it was settled for $6,000. He alleges that the tort claim was settled for $22,500, while he was told it was settled for $18,000. The Plaintiff alleges that this was part of a scheme by one or both of the Defendants to pocket the difference in the amounts of the actual settlements and the amounts represented to him.
8With respect to the tort claim, the Defendant Warren takes the position that the matter was settled for $22,500, and he took his contingency fee of 25 per cent and disbursements, plus a “settlement fee” of $750 out of the settlement proceeds. He takes the position that he had no knowledge of any misconduct that may or may not have taken place by Ms. Jhuti, the other Defendant. It is acknowledged that Ms. Jhuti provided an address for his Ontario practice (he lives in Winnipeg), and it is clear that most of the correspondence involving the claim was actually handled by Ms. Jhuti.
9It should be noted that at no time was it disclosed, in the material filed on the Summary Judgment Motion, that any of the money kept by Mr. Warren was actually given by him to Ms. Jhuti, although he now says that some of the documents filed should have alerted the Plaintiff that that was the case.
10In his Affidavit of Documents, sworn on April 12, 2013, Mr. Warren did not disclose his trust account bank statements that showed the transactions involved in the settlement of the tort claim. In his affidavit filed on the Summary Judgment Motion, sworn on July 29, 2015, Mr. Warren attached copies of his accounts to the Plaintiff, together with what purported to be copies of the relevant trust account bank statements. However, unbeknownst to the Plaintiff, the actual trust account bank statements had attached to them copies of the cancelled cheques written on Mr. Warren’s trust account, that corresponded to the entries in the trust account bank statements. Those cancelled cheques were not disclosed in Mr. Warren’s affidavit sworn on July 29, 2015.
11It should be noted that when Mr. Pickard, counsel for Mr. Warren, was corresponding with Plaintiff’s counsel in 2013 regarding Mr. Warren’s Affidavit of Documents, Mr. Pickard specifically stated that he was awaiting Mr. Warren’s bank records. However, the first time Plaintiff’s counsel saw any portion of those bank records was when they were attached as exhibits to Mr. Warren’s affidavit sworn on July 29, 2015.
12The relevant bank records were actually sent to Mr. Pickard by Mr. Warren on March 18, 2013, April 3, 2013, and April 9, 2013. Included in the communication dated April 3, 2013, as reflected in the fax transmission information at the top of each page, were copies of the trust account bank statements and the relevant cheques written on Mr. Warren’s trust account. Notwithstanding that material, which seems quite clear, Mr. Pickard now swears that the cheques were actually attached to a blank document sent on April 9, 2013, and Mr. Pickard did not realize the cheques were there. He now asserts, therefore, that he did not see them then and he was not aware that he had them. I must say that Mr. Pickard’s explanation is puzzling.
13On April 4, 2016, Plaintiff’s counsel served on Mr. Pickard a number of requests to inspect documents, which included a request to inspect the relevant trust account statements. Plaintiff’s counsel attended Mr. Pickard’s office on April 12, 2016, and he was then shown the trust account statements that included the cheques written on Mr. Warren’s trust account. Over the next few weeks, Plaintiff’s counsel pressed Mr. Pickard in correspondence as to why the pages with copies of the trust account cheques had been omitted from any previous disclosure. No response was received.
14Mr. Pickard now deposes that copies of the trust account bank statements with the attached copies of cheques were provided to the expert retained to provide an opinion on the Summary Judgment Motion, but says that because he did not personally prepare the material that went to the expert, he remained unaware that the copies of the cancelled cheques were in his file.
15Mr. Pickard also deposes that after receiving the request to inspect the documents in April, 2016, he then became aware of the two pages of the electronic copies of the cheques from the trust account. He says they were loose in the file, and he then stapled them together with the trust account statements and allowed Plaintiff’s counsel to inspect them when he attended on April 12, 2016.
16I must say that I find Mr. Pickard’s explanation to be troubling. His explanation is fundamentally inconsistent with the fax communication Mr. Pickard received from Mr. Warren on April 3, 2013, which was a five page document, the first page for which Mr. Pickard claimed privilege. The other four pages are clearly numbered. Page one is a trust account statement from June 24, 2011 to July 25, 2011, and has attached to it page 3, being an electronic copy of a cheque issued during that period. Page four is a trust account statement for the period July 25, 2011 to August 25, 2011, to which is attached page 5, being four of the cheques referred to on the statement. It is highly unlikely, in my view, that pages 3 and 5 of that fax transmission would somehow end up being “loose” in counsel’s file and not seen by him until April, 2016. Furthermore, even if the cheques were attached to a blank document received on April 9, 2013, which counsel did not see, it does not explain how they were somehow not seen when they were received on April 3, 2013.
17The important point is that one of the cheques bearing the date July 4, 2011 is in the amount of $9,122.40, and is made out to Ican Inc., a company owned by Ms. Jhuti. On the cheque itself, it states that it is for “Sawah fees”.
18Mr. Warren, in his Affidavit sworn on July 27, 2016, now says that this money represents payment of a loan made by Ms. Jhuti for flights and other disbursements from February, 2007 to May, 2009. He says he did not disclose this fact earlier because it was his money that was paid to Ican and it was not relevant to this matter. Mr. Pickard, in his Affidavit, says he does not believe that the electronic copies of the cheques are relevant for the reasons given by Mr. Warren.
19To me, it is inconceivable that either Mr. Warren or Mr. Pickard could have believed that the payment to Ms. Jhuti was not relevant, having regard to the allegations made in the case. Fundamentally, it is alleged by Mr. Sawah that he was defrauded by Mr. Warren, Ms. Jhuti or both of them, as a result of a misrepresentation of the amount of the settlement. The fact that Ms. Jhuti was paid a substantial amount of money out of the settlement proceeds would be highly relevant. Mr. Warren says he was counsel for Mr. Sawah, and the contingency fee was his. The fact that a large sum was paid to Ms. Jhuti is certainly suspicious. Of course, it would be open to them to provide whatever explanation they chose for the payment. However, it cannot be realistically be asserted that the documents, and particularly the cheque to Ms. Jhuti, are not relevant.
20The explanation is particularly suspicious, in my view, in view of the way in which the documents were ultimately disclosed. At the very least, the candour of Mr. Warren and Mr. Pickard is subject to serious question.
21The issue, then, is whether an order pursuant to Rule 59.06 (2) should be made. Under that Rule, the Court has a discretion to set aside or vary an order on the ground or fraud or of facts arising or discovered after the order was made.
22In this case, there is no doubt that there are facts that were discovered by the Plaintiff after my order was made. The relevant documents that would have disclosed a payment of over $9,000 to Ms. Jhuti were not disclosed until April, 2016. Counsel for the Plaintiff acknowledged, during argument, that it would have to be shown that the non-disclosure was deliberate in order to justify an order under Rule 59.06 (2).
23I do not accept Mr. Warren’s argument that the Plaintiff should have been able to figure out that a payment was made from what was disclosed in the report of Mr. Warren’s expert. It was certainly not clear from the expert’s report that a payment of over $9,000 was made to Ms. Jhuti, and that it was labelled “Sawah Costs”.
24The circumstances of the non-disclosure, and the ultimate disclosure, are certainly suspicious. However, in the final analysis, there is simply not enough in the new evidence to tip the balance in favour of canvassing anew the entire Motion for Summary Judgment, and granting judgment to the Plaintiff. At the end of the day, I think it is best that the entire matter proceed to trial so that the trial judge will be able to make the necessary credibility findings on the basis of oral evidence that is subject to cross-examination.
25As noted earlier, the circumstances are disturbing. However, they can be taken into account on the matter of costs.
Discovery Location Motion
26The other issue is whether Mr. Warren should be examined for discovery in Winnipeg or in Mississauga.
27Mr. Warren argues that he is a sole practitioner in Winnipeg, and his children are there. He submits that it would be quite inconvenient for him to attend in Mississauga, particularly when the examination will be limited in length as this action is under the simplified rules. In the alternative, he submits that if he is required to attend in Ontario, the Plaintiff should defray his travel and accommodation costs.
28Because this action is under the simplified rules, I see no reason why the examinations of all three parties cannot take place on one day. That would be the most efficient way to conduct them. To require the examination of Mr. Warren in Winnipeg would mean that three lawyers would have to travel to Winnipeg and the examinations of all parties would take place over the course of at least two days.
29In my view, it would be most efficient for Mr. Warren to attend his examination for discovery in Mississauga. That way, he will also be present while Mr. Sawah is examined, and he can give any necessary instructions to his counsel.
30The travel costs from Winnipeg to Toronto are not particularly onerous. I see no reason why Mr. Warren should not defray his own costs at this point, subject, of course, to any re-allocation by the trial judge.
Conclusion
31For the forgoing reasons, the Motion under Rule 59.06 (2) is dismissed. It is ordered that Mr. Warren attend his Examination for Discovery in Mississauga, at a time and on a date to be agreed between counsel or as ordered by the court if counsel cannot agree.
32I will entertain brief written submissions with respect to costs, not to exceed three pages together with a costs outline. Counsel for Mr. Sawah shall have five days and counsel for the other parties shall have a further five days to respond. Counsel for Mr. Sawah shall have three days to reply.
Further Observations
33Before closing, I will make two further observations.
34First, it is clear that Mr. Pickard should not continue to act as counsel in this matter. His conduct is under serious question, and it is quite likely that he will have to be a witness at the trial.
35Second, I think it is time that motions come to a close, and the parties get on with the trial if the action cannot be settled. While the allegations are serious, the amounts claimed are on the modest side. There is no benefit, in my view, in increasing costs any more than is necessary. This matter can be most expeditiously and economically determined at a trial, and I urge the parties to get there as quickly as they can.
Gray J.
Date: August 25, 2016