O’Donovan v. O’Donovan, 2017 ONSC 4948

CITATION: O’Donovan v. O’Donovan, 2017 ONSC 4948

COURT FILE NO.: C-248-007 (Kitchener), C-772-07 (Kitchener), 08-004-09 (Toronto), 08-005-09 (Toronto), ES-1040-11 (Kitchener), ES-1041-11 (Kitchener) and ES-827-16 (Kitchener)

DATE: 2017-08-18

ONTARIO

SUPERIOR COURT OF JUSTICE

at KITCHENER

In the Michael Val O’Donovan Family Trust #1

In the Michael Val O’Donovan Family Trust #2

In the Sheila O’Donovan Family Trust

BETWEEN:

Steven O’Donovan aka as Stephan O’Donovan, Christopher Anthony O’Donovan, Brian O’Donovan

Patrick O’Donovan, Tyler O’Donovan, Fuyoku O’Donovan, Loretta O’Donovan and Michael O’Donovan

The Children’s Lawyer

Lionel Tupman and Arieh Bloom, Solicitors for Christopher O’Donovan and Steven O’Donovan in their professional capacity as Trustees of the Michael Val O’Donovan Family Trust # 1 and Michael Val O’Donovan Family Trust # 2, directors and trustees of MVO Investment Ltd., and 1403627 Ontario Ltd. and as beneficiaries in the SOFT Trust

Tanya Pagliaroli and Justin H. Nasseri, Solicitors for Brian O’Donovan

Sean Grayson, Solicitor for Patrick O’Donovan, Tyler O’Donovan, Fuyoku O’Donovan, Loretta O’Donovan and Michael O’Donovan

Mark Muir Rodenburg, Solicitor for the Children’s Lawyer on behalf of all the minor beneficiaries, the unborn and the un-ascertained beneficiaries

AND

Sheila O’Donovan (in her personal capacity and her capacity as the Trustee Of the Sheila O’Donovan Family Trust)

Edward Kalkstein (in his personal capacity and his capacity as the Trustee Of the Sheila O’Donovan Family Trust)

The Estate of Michael Val O’Donovan

R. Douglas Elliott & Elena Mamay (formerly Paul D. Amey and John Morrissey), Solicitors for Sheila O’Donovan (in her personal capacity and her capacity as Trustee of the Sheila O’Donovan Family Trust)

Sandra E. Dawe, Solicitor for Edward Kalkstein

Unrepresented

HEARD: August 8 & 9, 2017

The Honourable Justice James W. Sloan

[1] Sheila O’Donovan (Sheila) brings this motion seeking an order granting her:

(a) leave to withdraw her admissions made in paragraph 24, 25 and 27 of her affidavit sworn September 2, 2016 and any corresponding statements made during her cross examination of September 28, 2016.

(b) leave to file her affidavit sworn August 3, 2017, David Bushell’s affidavit sworn August 3, 2017 and the affidavit of Lidia Mariam Benoji sworn August 4, 2017.

[2] Briefly by way of background, this motion is being brought in the middle of other interlocutory motions. Those motions were heard on November 28, 29 and 30 and December 1 of 2016 and were scheduled to commence today for a further four days of hearings.

[3] During the first four days of the hearings Sheila was represented by Paul Amey, who unfortunately passed away unexpectedly on January 17, 2017.

[4] In her affidavit of September 2, 2016, drafted by Mr. Amey, Sheila made representations that the sum of $5,942,000 which she and her husband used to purchase a Bermuda property really belonged to SOFT/1338, not her personally, and therefore should be deducted from her shareholder’s loan owing to her by 1338.

[5] She further represented that $728,473 which she had expended, did not benefit the beneficiaries of SOFT and should be deducted from the shareholder’s loan owing to her by 1338.

[6] In early March 2017, Sheila retained Cambridge LLP and specifically Mr. Elliott and Ms. Mamay to replace the late Mr. Amey.

[7] The lawyers in opposition to Sheila, brought a motion to block the appointment of Cambridge LLP as Sheila’s solicitors, which motion was heard on June 12, 2017 and was dismissed.

[8] In preparation for continuation of the motions which had commenced in November 2016, Sheila’s new lawyers could not reconcile the material they were reviewing with the aforementioned representations put forth in Sheila’s September 2, 2016 affidavit.

Sheila’s Position

[9] She was, for the most part of her life, a mother and housewife and depended on professionals to advise her on legal and accounting matters.

[10] She submits:

(a) pursuant to an endorsement of Justice Flynn dated August 6, 2008, he already determined that the $5,942,000 came from 1338 and therefore could not have come from SOFT;

(b) she relied on her former lawyer, Mr. Amey, who drafted her subject affidavit and that even in the drafting of that affidavit there is confusion because at paragraph 25 it reads that the $5,942,000 “really belonged to SOFT/1338”,

(c) SOFT and 1338 are separate entities and therefore this statement is patently wrong;

(d) SOFT never had a bank account from which to dispense money;

(e) she did not speak with Bushell, her accountant at KPMG, before signing the affidavit prepared by Amey;

(f) she always understood that the assets of 1338 owe both her and SOFT money.

[11] She further relies on the affidavit of David Bushell dated August 3, 2017.

[12] Mr. Bushell is a chartered public accountant, certified in financial forensics, and is a vice president at KPMG Forensic in the Waterloo region.

[13] KPMG has been retained by Sheila since 2005. He has not filed an expert’s report in this matter.

[14] Mr. Bushell’s affidavit sets out his understanding as follows:

(a) SOFT and 1338 are two distinct entities and have never had separate bank accounts since they were set up in 1996;

(b) all his communications about accounting issues in this litigation were with Mr. Amey;

(c) if he had been consulted by Mr. Amey with respect to the $5,942,000 figure and $728,473 figure, he would have advised Mr. Amey that Sheila did not owe either of these amounts to either 1338 or SOFT, and that both these amounts were properly dealt with in the accounting records of 1338; and

(d) The current balance of all shareholder’s loans for 1338 shows that Sheila is owed $8,572,122.77.

[15] Mr. Elliot submits that part of the confusion about 1138 and SOFT may come from the fact that one of the assets contained in SOFT are 100 common shares of 1338.

Legal Submissions

[16] Sheila brings her motion under Rules 51.05 and 39.02.

[17] Rule 51.05 states that an admission made in response to a request to admit, a deemed admission or an admission in a pleading may be withdrawn with leave of the court.

[18] Sheila relies on several cases including Marchand (Litigation Guardian of) v. Public General Hospital Society of Chatham, 2000 CanLII 16946 (ON CA), [2000] O.J. No. 4428, Quest Management Services Inc. v. Quest Management Systems, 2014 ONSC 3473, Antipas v. Coroneos [1998] O.J. No. 137, Bank of Nova Scotia v. George Hill Cartage Ltd. [2001] O.J. No. 1776, R. v. Waite [1986] O.J. No. 2312 (C.A.), Gottwald v. Young, [2005] O.J. No. 5421, Nolan v. Canada (Attorney General) 1997 CanLII 12213 (ON SC), 1997 CarswellOnt 5421.

[19] The Marchand case held that a doctor’s original discovery answer was not a formal admission and he was entitled to explain his discovery answer in his testimony.

[20] The court went on to distinguish between formal and informal admissions stating that formal admissions could not be withdrawn except by leave of the court or by consent.

[21] The responding parties submit that the Marchand case does not deal with a witness’s testimony. I do not know whether I misunderstood this submission, however in Marchand, the doctor was both a party and a witness and in this case while Mr. Bushell is only a witness, Sheila is both a party and a witness.

[22] The Quest case at paragraph 68 states, “Marchand adopts a broad and purposive interpretation to rule 51.05. In effect, a party makes an admission by engaging in conduct that unequivocally communicates to the other party that a fact is not in dispute. Applying the Marchand criteria, a statement made under oath is an admission …”

[23] The Antipas case states that the trend over the years has been towards a more liberal view on the withdrawal of an admission and goes on at paragraph 14 to state:

A review of the cases indicate that a party requesting leave to withdraw an admission must pass three tests by establishing (1) that the proposed amendment raises a triable issue; (2) that the admission was inadvertent or resulted from wrong instructions; and (3) that the withdrawal will not result in any prejudice that cannot be compensated for in costs.

[24] Sheila submits that she has satisfied all three criteria. She submits that the opposing parties have always thought that the shareholder’s loans of 1338 were a triable issue and they still do. Her admission was inadvertent and that she personally misunderstood the accounting records and furthermore depended on her legal counsel to draft her affidavit. Sheila submits, that since the opposing parties never accepted the state of the shareholder’s loans in 1338 they cannot be prejudiced by the removal of her admission.

[25] In the Bank of Nova Scotia case, although it deals with an admission of fact contained in a pleading, the court stated that the applicant is not required to demonstrate that the admission is untrue, but must satisfy the court that the evidence that is proposed to replace the admitted fact, gives rise to a triable issue.

[26] In the Waite case, the court defined inadvertent as “not properly attentive; in observant; negligent; heedless … characterized by want of attention; hence, unintentional”.

[27] The Gottwald case states in paragraph 10 that, “It is established law that “a client cannot be placed irrevocably in jeopardy by reason of the neglect or inattention of his solicitor…”

[28] Rule 39.02(2) provides:

A party who has cross examined on an affidavit delivered by an adverse party shall not subsequently deliver an affidavit for use at the hearing or conduct an examination under rule 39.03 without leave or consent, and the court shall grant leave, on such terms as are just where it is satisfied that the party ought to be permitted to respond to any matter raised on the cross examination with evidence in the form of an affidavit or a transcript of an examination conducted under rule 39.03.

[29] When determining whether or not to grant leave the courts have considered (1) whether the evidence sought to be filed is relevant to the litigation, (2) whether the evidence is responsive to a matter raised on cross examination and (3) if leave to file the evidence is granted, would non-compensable prejudice result that could not be addressed by the imposition of terms, costs or an adjournment?

[30] With respect to rule 39.02, Sheila relies on the Nolan case where the court stated at paragraph 18:

The restrictive interpretation of the rule reflected in the foregoing line of cases can lead to unfairness (by punishing a litigant for the oversight of his or her counsel) and injustice (by excluding evidence which might be of assistance to the Court in arriving at a just determination of the matter in dispute). Obviously there are sound policy reasons why the barrage of affidavits, which unfortunately characterize many motions and applications should be controlled; however an unduly restrictive interpretation of rule 39.02(2) is an inappropriate solution.

Position of Opposing Parties

Mr. Grayson

[31] Mr. Grayson submits that rule 51.05 does not apply because the admission of Sheila does not fall under the admissions referred to in the rule.

[32] He further submits that rule 39.02 should not be used to allow the proffered evidence into the proceeding at this time, when the hearing has been ongoing for four days, and, but for the need for further time to complete submissions would have been completed before the proffered evidence came into being.

[33] He submits that the Marchand case does not deal with a witness’s testimony. I am not entirely sure what he meant by this submission, unless it is to suggest that in the Marchand case the witness was also a party and in this case Mr. Bushell is not.

[34] He referred the court to the 4th edition of the Law of Evidence in Canada, where at page 1313 paragraph 19.1 the text states:

A formal admission in civil proceedings is a concession made by a party to the proceedings that a certain fact or issue is not in dispute. Formal admissions made for the purpose of dispensing with proof at trial are conclusive as to the matters admitted. As to these matters, other evidence is precluded as being irrelevant but, if such evidence is adduced, the court is bound to act on the admission even if the evidence contradicts it. A formal admission should be distinguished from an informal admission. The latter is admitted into evidence as an exception to the hearsay rule and does not bind the party making it, if it is overcome by other evidence.

[35] He submits the Quest case was a pleadings motion and from his research has not been followed in any other cases. At paragraph 66 of the case the court stated; “… In circumstances where the effect of an amendment will result in the withdrawal of an admission, rule 51.05 takes precedence over rule 26.01.”

[36] Mr. Grayson submitted that he could not find any cases where testimonial evidence had been used to withdraw the testimony of a witness.

[37] He submits that Antipas deals with admission of liability in a statement of defence where an insurance company, without consultation with their client, instructed the lawyer to admit liability. He therefore submits that there were no instructions from the client whatsoever, which is very different from this case.

[38] Like the Antipas case, he submits that the Bank of Nova Scotia case also deals with pleadings and not with the withdrawal of evidence.

[39] He submits that the Gottwald case deals with a standard form release, not the withdrawal of evidence, and in addition, here we are in the middle of an interlocutory motion.

[40] Grayson submits there will be prejudice if Shelia’s admissions are allowed to be withdrawn in the context that they are expunged from the record, because part of the case of the responding parties relates to the conduct of the trustees. It is my understanding that Sheila is not asking for her admission to be expunged.

[41] He goes on to submit that if the testimony is not to be expunged, it is not a rule 51.05 motion, it is a rule 39.02(2) motion.

[42] He submits leave should not be granted to file the requested affidavits midway through a proceeding on interlocutory motions, however he did acknowledge that the responding parties have always requested an accounting.

[43] He referred the court to the case of Chitel v Rothbart, [1984] O.J. 2238 where at paragraph 34 the court stated:

“… I think it wrong, except in the most unusual circumstances, to allow a counsel to repair damage to his case by allowing further evidence to be introduced as a motion is being argued because holes are being punched into the structure by opposing counsel’s submissions. If the motion had not been adjourned on the 21st because of the lateness of the hour, the applicant would not have had the opportunity to prepare and tender this latest affidavit. The respondent should not be prejudiced by the vagaries of the clock. There is no satisfactory explanation as to why Erickson’s affidavit could not have been delivered prior to the commencement of the action. The procedure attempted to be adopted by Mr. Morrison is essentially unfair and I refused to accept this affidavit of Erickson.

[44] The case at bar is significantly different from the above passage. Holes were not being punched into the structure by opposing counsel’s submissions and there is a satisfactory explanation for wanting to deliver a new affidavit.

[45] In this case, there has always been an issue with respect to the shareholder’s loans in 1338 and, the new evidence will not alleviate that issue.

[46] Grayson submits that Bushell’s affidavit is inadmissible because he clearly gives opinion evidence and he is neither a participating witness or properly qualified as an expert. In addition he has not signed the appropriate form acknowledging his duty to the Court.

[47] The responding parties rely in part on the case of R. v. Abbey 97 R.O. (3rd) 330, which was a criminal case, and sets out four criteria for the court to consider before allowing expert evidence, one criteria being that the expert must be properly qualified.

[48] Similarly, he submits that Sheila’s affidavit should not be admitted because she simply parrots, what Bushell tells her as factual evidence.

[49] Grayson further submits that the purpose of rule 39.02 is used when new issues come up on cross examination that were not anticipated by the other party.

[50] With respect to Justice Flynn’s endorsement, Grayson submits that there is no issue estoppel with respect to the proceeds of sale from the Bermuda property. This would certainly appear to be the case from the wording of Justice’s Flynn’s order.

[51] Grayson further submits that the opposing parties relied on Sheila’s evidence and a large part of their application relies on this evidence.

[52] He therefore submits that leave should not be granted to allow Sheila to file the three affidavits.

Mr. Bloom

[53] In addition into agreeing with the submissions of Mr. Grayson, Mr. Bloom made the following submissions.

[54] He submitted that Sheila cannot claim that the admission in her affidavit of September 2, 2016 was inadvertent.

[55] He submits that the issue of the $5,942,000 has been a live issue since the start of this litigation in 2007 and even before.

[56] He drew the court’s attention to a resolution of MVOST in 1998, which references the purchase of the Bermuda property and potentially placing it in the trust. He further submits that paragraph 1 of the resolution is operative and the property or the money standing in its place belongs to the three sons.

[57] He also drew the court’s attention to a mortgage used to purchase the Bermuda property, but the mortgage seems to say that Val and Sheila own the property in fee simple as joint tenants.

[58] In addition, Justice Flynn, after being referred to the resolution and mortgage, plus whatever other material was before him, concluded on August 6, 2008, that the $5,942,000 came from 1338.

[59] Notwithstanding Christopher’s and Steven’s claim that MVOST had an equitable ownership in the property, Justice Flynn ruled Sheila could deal with the proceeds of sale of the Bermuda property as she wished.

[60] Bloom further submits that Sheila refers to the said money in her affidavit of May 6, 2010.

[61] Bloom admits that up until her September 2, 2016 affidavit, there is some evidence that goes in both directions, but since she has referred to the subject money so often in the proceedings, her statements in her September 2, 2016 affidavit simply cannot be characterized as inadvertent.

Mr. Rodenburg

[62] He adopts the submissions of Grayson and Bloom.

[63] In addition, he submits the affidavit in question is Sheila’s evidence and she does not say that Amey made her sign it.

[64] He essentially took the court through the same cases as other counsel.

[65] He submitted that Shelia’s sworn evidence in affidavit form does not fit within the parameters of rule 51.05.

[66] He submitted that on the face of rule 39.02, since the affidavits of Sheila and Bushell do not respond to issues raised on the cross examination of Christopher, rule 39.02 does not apply.

Mr. Nasseri

[67] For the most part he relies on the submissions of Grayson, Bloom and Rodenburg.

[68] He emphasized paragraph 12 of the Jacob’s case where, referring to the case of Choo v. Wong 2005 CanLll 502265, states that “leave by motions judge to a party to introduce further evidence to repair damage, constituted grounds to grant leave to appeal to the Divisional Court”. He did not say if the appeal decision was reported.

[69] He emphasized that here, Sheila’s request is being made after affidavits have been filed, cross examinations completed, factum’s filed and approximately one half of the motion(s) have been heard.

Ms. Dawe

[70] She does not oppose the motion and leaves it in the hands of the court.

Mr. Elliot in Reply

[71] He submits that all the cases the court has been referred to are clear, in that there is a discretion in the court and even though the threshold may be high, the court’s discretion should be exercised using a broad, purposive interpretation of the rules.

[72] He submits that this case, by its facts, creates very unusual circumstances.

[73] He reminded the court that he took over this case from Sheila’s former counsel, who unfortunately passed away.

[74] He submits that he did not go down one litigation path and then try to change directions based on submissions made by his opponents. Therefore, he states this is not a case of trying to repair holes, when based on the opponents’ submissions, a party realizes there is a gap in the evidence.

[75] He submits that the issue of the $5,942,000 has always been a live issue and he did not just suddenly realize that they had to address it. It is not an issue that took Sheila, Amey or himself by surprise.

[76] He submits that Sheila was confused, based on contradictory statements made by her in the past, and while she takes responsibility for her affidavit, she also now understands that the portion of the affidavit referencing the $5,942,000 drafted by Mr. Amey is clearly incorrect.

[77] He submits that, stating that you are not entitled to over $6,000,000 is not a tactical move and there is no credible evidence to suggest it ever could be a tactical move.

[78] He submits that whatever decision the court ultimately makes, it should make the decision on the real facts and not on mistaken facts.

[79] He submits that the court should follow what he referred to as two golden threads. The first being, that in the absence of real legal prejudice the court is generally inclined to admit evidence and focus on terms such as adjournments or costs thrown away because of the adjournment, and secondly, the court always wants to make a ruling on the real merits of the case and not on a slip made by one of the parties or her counsel.

[80] He expressed his surprise at the opposition to Ms. Benoji’s affidavit submitting that it only sets out history/timelines since the last hearing dates and no one has suggested that any part of it is inaccurate

[81] He submitted that there is a distinction between Sheila’s evidence and the legal effect of her evidence. She simply made a factual error and if she is allowed to file the subject affidavits, her error will remain on the record and the new affidavits will simply be a contradiction of her earlier evidence. The opposing parties can still argue that her earlier evidence is correct; they simply will not be able to argue that there is a binding admission.

[82] With respect to Justice Flynn’s decision, he submits since it was not appealed, it stands for now.

[83] He submits Bushell is a participating expert. He has worked for Sheila for 12 years, which puts him on the payroll before the court action started. Although he has not filed a full CV, his designations are set out on the letterhead of a prestigious international accounting firm.

[84] He was retained to assist Sheila after Val died, not for the purpose of this litigation, and therefore is not the type of expert sometimes referred to as a hired gun.

[85] As a participant expert, he does not have to comply with the rigours of rule 53.03.

[86] While submitting that both rule 39.02 and 51.05 apply, he submits that this Court is also a Court of Equity and can use its equitable powers in addition to the Rules of Civil Procedure.

[87] He further submits that when the court interprets and applies the Rules of Civil Procedure, it must use the broad, purposive and contextual approach.

[88] While admitting that the court has to do a balancing act, he submits the court should lean in favour of deciding cases on their merits, not on someone’s mistake, unless there is demonstrated legal prejudice and none has been shown here.

Findings

[89] The facts behind the numerous O’Donovan litigation files are extremely unfortunate.

[90] The issue before me can be put quite succinctly. After four days of hearings on multiple motions in the O’Donovan litigation, with an estimate of four days needed to complete the motions, should Sheila be allowed to file new affidavits?

[91] All other affidavits have been cross-examined on and the material for the current ongoing motions fills over three bankers’ boxes.

[92] The reason Sheila wants to file the affidavits, she submits, is to correct an error in her September 2, 2016 affidavit. In that affidavit, Sheila swore that certain funds in excess of $6,000,000 were owed by her to SOFT.

[93] This affidavit was drafted by her former lawyer, the late Mr. Amey, who passed away in January 2017.

[94] When her new lawyers reviewed the file, they sought the advice of Mr. Bushell, who advised them, that in his opinion Sheila did not owe in excess of $6,000,000 to 1338 or SOFT and in fact 1338 owed Sheila in excess of $8,000,000.

[95] It is the respondents’ position that whether or not Sheila and/or Mr. Amey made an error in the drafting of her September 2, 2016 affidavit, she is stuck with it and cannot withdraw it.

[96] This submission strikes the court as unusual in general and even more unusual when it involves funds in excess of $8,000,000.

[97] On the evidence before me, Sheila has offered a reasonable explanation for the mistake when she essentially says she did not appreciate the distinction between 1338 and SOFT.

[98] Unfortunately, neither she nor Amey discussed the material in her September 2, 2016 affidavit with Bushell.

[99] Bushell’s, as yet untested affidavit, is extremely clear on its face and essentially states that Sheila’s affidavit is not correct, she does not owe any money to 1338 and that in fact 1338 owes her $8,572,122.77.

[100] Leaving aside the legal niceties of the rules and case law referred to by counsel, surely the parties and the court are better served if a decision is made on the correct evidence.

[101] On this motion, the court is not being asked to decide whether or not Sheila owes money to 1338 or SOFT, or whether 1338 owes money to Sheila, it is simply being asked to allow Sheila to call evidence at a hearing with respect to her position that 1338 owes her money.

[102] For the purposes of my task, the law seems well settled and a broad, purposive and contextual approach must be used when interpreting the Rules of Civil Procedure.

[103] I further acknowledge that Sheila has a high bar to get over before this evidence will be admitted.

[104] In this case, I find that the distinction between formal and informal admissions unhelpful.

[105] I also find that:

[106] The proposed amendment raises a triable issue and in fact the shareholder loans in 1338 have always been an issue,

[107] It is much more likely than not, that the admissions in Sheila’s September 2, 2016 affidavit were inadvertent or caused by her solicitor’s error. Sheila was for the most part a housewife and mother. Upon the death of her husband in 2005, she essentially found herself in a very complicated legal and accounting world that had previously been run by her very successful husband. Throughout the material in the files, there are places where she and Mr. Amey appear to be confused about the legal entities 1338 and SOFT and their interaction.

[108] Mr. Bushell is a participant witness since he was hired by Sheila after the death of her husband and has not been retained by her lawyer to offer an expert opinion in this action. That does not mean that Mr. Bushell may not become an expert witness within the Rules of Civil Procedure in the future.

[109] Mr. Bushell’s evidence, while currently untested by cross examination, certainly bolsters Sheila’s position that her September 2, 2016 affidavit is incorrect, that it was made inadvertently and she should be allowed to put the correct evidence before the court.

[110] Whether the problem originated from Sheila’s or Mr. Amey’s inadvertence, oversight or confusion, on the facts of this case as set out above, I prefer of the rationale in the Nolan case.

[111] Unlike other cases cited to me, this is not a case of Sheila’s counsel trying to repair damage because holes were being punched into the structure of her case by opposing counsel submissions.

[112] It is very simply, on the unique facts of this case, that new counsel discovered what he thinks is a significant error and is trying to set the record straight before the court adjudicates on any of the outstanding motions.

[113] In the end, all parties seem to agree that the court had discretion to allow the filing of the affidavits or not.

[114] On the facts of this case, since no legal prejudice has been made out by any of the respondents, I exercise my discretion to allow Sheila to withdraw her admissions made in paragraphs 24, 25 and 27 of her affidavit sworn September 2, 2016 and any corresponding statements made during her cross examination of September 28, 2016. Leave is also granted to allow her to file the three affidavits, her own, Bushell’s and Benoji.

[115] In addition to the foregoing, and while the “O’Donovan Files” so far have not been expeditious or inexpensive, rule 1.04 obligates the court to construe the rules liberally so that every civil proceeding can be determined on its merits.

[116] As the case management Judge, I note that, had the parties been able to agree on the filing of the three affidavits, the four days set aside to complete the motions between August 8 and August 11 may have been able to have been used for that purpose.

[117] If the parties cannot agree on what has to be done to move this matter forward, I may be spoken to, perhaps by means of a conference call.

[118] At the end of this hearing there were discussions about the following:

(a) Mr. Elliott will be talking with Mr. Bushell in an effort to resolve as many outstanding requests of an accounting nature that Mr. Bloom or other counsel may have raised.

(b) Should the pleadings be amended to claim relief against SOFT2016?

(c) Mr. Grayson will consider whether or not to add Mr. Cappelli, and if he does, Mr. Elliott may seek instructions from Sheila to see if he may represent them both. This of course would depend on the allegations that Mr. Grayson or other counsel may make with respect to Mr. Cappelli.

(d) Mr. Grayson will consider whether or not to add Royal Trust.

(e) The opposing parties may wish to cross examine the affiants on any of the three subject affidavits or file responding material.

[119] It was the court’s understanding that at this stage of the motions:

(a) Mr. Grayson and Rodenburg have to finish their response to Sheila and Kalkstein’s motion to dismiss for delay and Mr. Elliott needs to reply.

(b) Mr. Grayson still has his application.

(c) Mr. Bloom still has his application.

[120] Counsel may advise, hopefully collectively, if they have any questions regarding this endorsement.

[121] If the parties are unable to agree on costs, Mr. Elliott shall forward his brief submissions on costs to me by August 25, 2017. Responding parties shall forward their brief response to me by September 1, 2017. Mr. Elliott shall then forward his reply, if any, to me by September 8, 2017. Cost submissions may be sent to my attention by email, care of Kitchener.Superior.Court@ontario.ca

J. W. Sloan J.

Released: August 18, 2017