Court File and Parties

COURT FILE NO.: 272/14 (Guelph) DATE: 20170526 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: SEELSTER FARMS INC. WINBAK FARM OF CANADA, INC, STONEBRIDGE FARM, 774440 ONTARIO INC., NORTHFIELDS FARM INC., JOHN MCKNIGHT, TARA HILLS STUD LTD., TWINBROOK LTD., EMERALD RIDGE FARM, CENTURY SPRING FARMS, HARRY RUTHERFORD, D10041NE INGHAM, BURGESS FARMS INC., ROBERT BURGESS, 453997 ONTARIO LTD., TERRY DEVOS, SONIA DEVOS, GLENN BECHTEL, GARTH BECHTEL, 496268 NEW YORK INC., HAMSTAN FARM INC., ESTATE OF JAMES CARR, deceased, by its executor Darlene Carr, GUY POLILLO, DAVID GOODROW, TIMPANO GAMING INC., CRAIG TURNER, GLENGATE HOLDINGS INC., KENDAL HILLS STUD FARM LTD., ANY KLEMENCIC, TIM KLEMENCIC, STAN KLEMENCIC, JEFF RUCH, BRETT ANDERSON, DR. BRETT C. ANDERSON PROFESSIONAL VETERINARY CORPORATION, KILLEAN ACRES INC., DECISION THEORY INC., 296268 ONTARIO LTD., DOUGLAS MURRAY MCCONNELL, QUINTET FARMS INC., KARIN BURGESS, BLAIR BURGESS, ST. LAD’S LTD., WINDSUN FARM INC., SKYHAVEN FARMS, HIGH STAKES INC., 1806112 ONTARIO INC., GLASSFORD EQUI-CARE, JOHN GLASSFORD, GLORIA ROBINSON and KEITH ROBINSON

v.

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO and ONTARIO LOTTERY AND GAMING CORPORATION

BEFORE: EMERY J.

COUNSEL: Jonathan C. Lisus and Ian C. Matthews, for the Plaintiffs Robert Ratcliffe, Sandra Nishikawa and Chantelle Blom, for the Defendant, Her Majesty The Queen H. Michael Rosenberg and Dharshini Sinnadurai, for the Defendant, Ontario Lottery and Gaming Corporation

HEARD: In Writing

Endorsement

[1] Her Majesty the Queen in Right of Ontario (“HMQ”) seeks an order to enforce the agreement between counsel to wait for the outcome of the motion the defendants HMQ and Ontario Lottery and Gaming Corporation (“OLG”) have brought to quash summonses before examining any of the individuals who have been served under Rule 39.03; or

[2] In the alternative, HMQ seeks an order to stay each summons served on the following witnesses until the outcome of the motion to quash:

(i) Karim Bardeesy (ii) Don Drummond (iii) Dwight Duncan (iv) Darcy McNeil (v) Rod Seiling (vi) Tim Shorthill (vii) John Snobelen (viii) Blair Stansky (ix) John Wilkinson

[3] HMQ now acts for witnesses Mr. McGuinty, Mr. McMeekin, Mr. Orsini and Premier Wynne. The parties have agreed to hold the examination of those persons in abeyance until the motion to quash has been heard and determined.

[4] The motion to quash has now been scheduled for hearing on June 19, 2017.

Decision

[5] The motion was granted on April 27, 2017 for reasons to follow. These are those reasons.

Reasons

[6] On March 7, 2017, Mr. Matthews, as counsel for the Plaintiffs, confirmed the following arrangement by email to Ms. Machado at HMQ:

“In light of HMQ’s confirmation that it will move to quash the Summonses for the thirteen witnesses listed in your email, below, the Plaintiffs confirm that the examinations of these witnesses will not go forward on the dates specified in the respect Summonses. Instead, the dates for these examinations will be fixed following determination of the motion to quash by Justice Emery, assuming the plaintiffs prevail.”

[7] In Dietrich-Collins Equipment Co. v. General Motors of Canada Ltd. (1981), 31 O.R. (2d) 687 the court held that an agreement between counsel with respect to the conduct of litigation ought to be enforced, provided that agreement is clear, unambiguous and reasonable. The email from Mr. Matthews to Ms. Machado meets this criterion.

[8] Rather than decide the motion of HMQ on the basis of any agreement reached between Mr. Matthews and Ms. Machado on March 7, 2017, the better basis on which to decide the question is whether the summons should be stayed upon applying the test in RJR MacDonald Inc. v. Canada (Attorney General) [1994] 1 S.C.R. 311. I consider the correspondence from Mr. Matthews to Ms. Machado on March 7, 2017 to be evidence of a larger picture.

[9] On the evidence filed by HMQ as the moving party and by the plaintiffs in response, I find there is a serious issue to be tried. That issue is whether the defendants will have grounds to quash the several summonses served on particular witnesses based on the relevance of their proposed evidence to the issues on the upcoming motion for summary judgment. The serious issue here is further augmented by the novel question of whether HMQ or OLG can seek an order to quash the summons of any witness neither of them represents. I have been told that this is a standing issue on which there is no law to guide the court in the context of a motion for summary judgment.

[10] I take the letter from Mr. Matthews dated March 7, 2017 as evidence that counsel for the plaintiffs viewed these questions as serious issues to be tried, at least at that time. In my view, it was a courteous and correct position to take.

[11] Counsel for the Plaintiffs did not propose to schedule examinations under Rule 39.03 for nine of the thirteen witnesses that are the subject of HMQ’s motion to quash until April 12, 2017. In a letter that day, Mr. Matthews makes reference to my endorsement released on April 11, 2017. That endorsement dealt with the ability of the parties to proceed with examinations under the Rules in the absence of any order to the contrary. In his letter dated April 12, 2017, Mr. Matthews states:

“As we have previously explained, our willingness to delay the rule 39.09 examinations of witnesses in the face of HMQ’s and OLG’s motions to quash was premised on the understanding that HMQ had first spoken to these witnesses, ascertained that they had no possible relevant evidence, and received direction from the witnesses to quash their summonses. It subsequently became apparent to us that HMQ and OLG had unilaterally resolved to seek to quash the summonses of witnesses who they do not represent without having done any of these things. This, in turn, caused the plaintiffs to re-evaluate their willingness to delay their rule 39.03 examinations. As noted above, and in light of these developments, we have now decided to proceed with our examinations as scheduled.”

[12] It therefore appears that counsel for the plaintiffs “re-evaluated” their willingness to delay Rule 39.03 examinations, citing a misunderstanding of the basis for the agreement confirmed on March 7, 2017. HMQ argues that to reverse course on the agreement before the motion to quash is heard will cause irreparable harm to its position on that motion.

[13] Both parties focused on Canada (Attorney General) v. Canada (Information Commissioner) [2009] F.C.J. No. 1648, affirmed at 2001 FCA 26 on irreparable harm as a factor to consider. HMQ submitted in its factum (at paragraph 35) that the Federal Court recognized that a party would suffer irreparable harm if compliance with a subpoena in advance of a motion to quash was compelled, making the pending motion “moot or futile”.

[14] The plaintiffs argue (in paragraph 194 of their factum) that the Federal Court of Appeal overturned this decision on the issue of irreparable harm.

[15] As I read the appeal decision in Canada (Attorney General) v. Canada (Information Commissioner), that part of the order under appeal that was set aside turned on the facts before the court. The Federal Court said this at paragraph 12 of the appeal decision:

[12] First, the fact that irreparable harm may arguably arise does not establish irreparable harm. What the respondents had to prove, on a balance of probabilities, is that irreparable harm would result from compliance with the subpoenas issued on behalf of the Commissioner (Manitoba (Attorney General) v. Metropolitan Stores (MTS) Ltd., [1987] 1 S.C.R. 110 at para. 35). The alleged harm may not be speculative or hypothetical (Imperial Chemical Industries PLC v. Apotex Inc., [1990] 1 F.C. 211 (C.A.)).

[16] The facts in evidence before this court are different. HMQ has filed sufficient evidence that, when read in conjunction with the factual matrix the plaintiffs have put into evidence, there is a real prospect on the balance of probabilities that compliance with the summons could result in irreparable harm to the interests of HMQ in this litigation. The harm alleged by HMQ is not merely speculative or hypothetical. If the plaintiffs obtained evidence from witnesses under summons before the motion to quash was decided on its merits, the motion to quash would become moot or futile. In Bisaillon c. R., 1999 CarswellNet 2578 Justice Letourneau J.A. wrote on behalf of the Federal Court of Appeal that:

[32] According to RJR-MacDonald, supra, the concept of irreparable harm refers more to the nature of the harm caused than to its extent and involves either harm which cannot be quantified in monetary terms or harm for which there is no remedy. Beetz J. made similar comments in Metropolitan Stores, supra, when he said that irreparable harm is harm for which damages cannot compensate, or can only compensate with difficulty.

[33] In the case at bar I feel that the applicants would be likely to suffer such harm if the stay were not granted. Their appeal from the order by the motions judge will become moot or futile if Revenue Canada obtains the material requested before the appeal is decided on its merits. The harm seems especially irreparable since refusal to grant the stay is likely to deprive the applicants of the benefit of their right of appeal, which is itself concerned with obtaining a stay in a proceeding where the applicants' right to privacy is at issue as well as the legality and constitutionality of the exercise of a ministerial power. The applicants' appeal would become moot or futile from execution of the very order from which they are appealing. In this connection Stone J. wrote for this Court in New Brunswick Electric Power Commission and Maritime Electric Company Limited v. The National Energy Board: 11

These observations bring into focus the absurdity that could result if, pending an appeal, operation of the order appealed from rendered it nugatory. Our appellate mandate would then become futile and be reduced to mere words lacking in practical substance. The right of a party to an "appeal" would exist only on paper for, in reality, there would be no "appeal" to be heard, or to be won or lost. The appeal process would be stifled. It would not, as it should, hold out the possibility of redress to a party invoking it.

[17] It seems to me that the circumstances in this case are closer to those in Bisaillon than they are to those in the Canada (Attorney General) case. The appellate decision in Bisaillon is therefore more persuasive to stay the summons pending the motion to quash. The motion to quash, like the appeal in Bisaillon, is the process in which the rights of the parties to obtain information shall be determined on a proper evidentiary record.

[18] In a passage found in paragraph 59 of RJR MacDonald Inc. v. Canada, Justice Lebel describes “irreparable” as the nature of the harm rather than its magnitude. It is harm which cannot be quantified in monetary terms, or that cannot otherwise be cured.

[19] The RJR MacDonald case is not only persuasive, it is binding on this court. I therefore adopt and apply the description of irreparable harm provided by the Supreme Court to the prospect and nature of the harm to which HMQ is exposed if these examinations are not stayed.

[20] It is the party seeking the examination who bears the evidentiary burden to satisfy the court that an individual has information relevant to an issue on the pending motion, and that the individual is in a position to provide such evidence: Ontario Psychological Assn. v. Mardonet, 2015 ONSC 3063. The time to address that burden will come when the motion to quash is heard on June 19, 2017.

[21] The technical nature of the irreparable harm that would be caused if the examinations under Rule 39.03 are not stayed raises the balance of convenience into stark relief. The motion of HMQ at its essence seeks temporary relief for 7 weeks to stay examinations on dates for which summonses have been served. Those dates were selected arbitrarily and there is no evidence the plaintiffs will be prejudiced by the delay.

[22] The Plaintiffs’ argument that one or more of the proposed individuals they wish to examine between May 1 and 15, 2017 were not contacted by HMQ to determine if they have relevant evidence to give on the pending motions for summary judgment, or to receive directions to seek an order quashing his or her summons has no merit at this time.

[23] The balance of convenience favours HMQ under these circumstances.

Conclusion/Order

[24] The motion materials of HMQ have satisfied the test to order a stay set out in RJR MacDonald Inc. v. Canada (Attorney General). In my view, the motion to quash raises issues of standing in a summary judgment context, as well as issues on the substantive grounds for the motion under Rule 39.03. To me, these are serious questions. I consider the prospect of usurping the purpose of the motion to quash if the examinations under Rule 39.03 were allowed to proceed to be irreparable harm to the legal interests of HMQ. Once the evidence is given, it is evidence to be considered one way or another. In the result, I consider the balance of convenience favours HMQ.

[25] For these reasons, the motion of HMQ was granted. The summonses at issue are stayed until further order or a decision has been given on the motion to quash, whichever comes first.

Costs

[26] Costs of this motion are reserved to the motion on June 19, 2017.

Emery J. Date: May 26, 2017