2284064 Ontario Inc. v. Michael Stewart Shunock

CITATION: 2284064 Ontario Inc. v. Michael Stewart Shunock, 2017 ONSC 5033

COURT FILE NO.: CV-16-00560179

MOTION HEARD: 20170828

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2284064 Ontario Inc., Applicant

AND:

Michael Stewart Shunock, Respondent

BEFORE: Master B. McAfee

COUNSEL: S. Shoemaker, Counsel for the Moving Party on the Motion, the Respondent on the Application

M. Adilman, Counsel for the Responding Party on the Motion, the Applicant on the Application

HEARD: July 28, 2017

REASONS FOR DECISION

[1] This is a motion brought by the respondent to the application Michael Stewart Shunock (Shunock) for answers to questions refused on the cross-examination of Joseph Iaccino (Iaccino), a representative of the applicant 2284064 Ontario Inc. (228) on his affidavits sworn October 20, 2016 and December 13, 2016. The cross-examination was held on January 17, 2017. The application is scheduled to proceed on October 30, 2017.

[2] In the underlying application, 228 seeks inter alia a declaration that Shunock’s first right of refusal (FROR) is void, invalid and no longer of any force or effect. It is 228’s position that the FROR is void because the neighbouring hotel is no longer to be developed in conjunction with the subject property.

[3] It is Shunock’s position that the FROR was not conditional on the hotel being part of the development.

[4] There are 20 refusals remaining at issue. In oral submissions, Shunock categorized the refusals into 4 categories.

[5] The principles concerning the scope of cross-examination are summarized by Justice Perell in Ontario v. Rothmans Inc., 2011 ONSC 2504 (Ont.S.C.J.) at paragraphs 142-148 and Bot Construction (Ontario) Ltd. v. Dumoulin, [2007] O.J. No. 4435 (Ont.S.C.J.) at para 5.

[6] What follows are my rulings.

Category No. 1 – Question Nos. 14, 15, 25, 287 and 305

[7] I am satisfied that the questions in this category are relevant based on paragraphs 6, 30, 42 and 50-52 of the Shunock affidavit and are relevant to the issue of whether 228 has a relationship with other entities involved in the sale of the property or Leyzac. I am also satisfied that the questions go to the issue of credibility (see pages 33-36 of the transcript of Iaccino’s cross-examination). The questions shall be answered.

Category No. 2 – Question Nos. 32, 51, 163, 164, 165, 211, 212 and 214

[8] I am satisfied that the questions in this category are relevant. Question no. 51 has been partially answered. Leyzac is integral to the dispute at hand. The questions are relevant based on paragraphs 5, 6, 9, 10, 22-25, 30, 42, 50-52 of the Shunock affidavit. I am also satisfied that the questions go to the issue of credibility (see pages 33-36 of the transcript of Iaccino’s cross-examination).

[9] On the motion, the parties advised that Leyzac had been examined on July 24, 2017. To the extent that 228 relies on the Leyzac examination in support of their refusal to answer the questions in this category, there was no evidence before me concerning the substance or scope of the Leyzac examination and the parties were not in agreement with respect to the questions asked of Leyzac.

[10] To the extent that 228 also argues, relying on paragraph 21 of Lanosh-Medad Family Trust (Trustee of) v. Versatech Industries Inc., (Ont.S.C.J.), that extrinsic evidence is generally inadmissible where parties have reduced an agreement to writing and there is an entire agreement clause, the admissibility of such evidence on the application is a determination made by the application Judge and not the Master hearing the interim refusals motion.

[11] The questions shall be answered.

Category No. 3 – Question Nos. 134, 135, 235 and 240

[12] With respect to questions 134 and 135, Shunock’s counsel confirms that he is only seeking documents that are not subject to solicitor and client privilege. I am satisfied that questions 134 and 135 are relevant based on paragraphs 3 and 4 of the Iaccino affidavit. Questions 134 and 135 shall be answered limited to documents that are not subject to solicitor and client privilege.

[13] I am satisfied that questions 235 and 240 are relevant based on paragraph 16 of the Iaccino affidavit and paragraph 42 of the Shunock affidavit. Question 235 and 240 shall be answered.

Category No. 4 – Question 204, 225 and 315

[14] I am satisfied that questions 225 and 315 are relevant to the issue of whether sufficient space is available and based on paragraphs 55-58 of the Shunock affidavit and paragraph 4 of the Iaccino reply affidavit. Questions 225 and 315 shall be answered.

[15] I am not satisfied that question 204 is relevant. On the motion 228 confirmed that there is a separate proceeding against the hotel arising out of the cancellation of the joint venture and that specific performance is not sought in that proceeding. Question 204 need not be answered.

Timing of Answers

[16] The questions ordered answered shall be answered within 10 days as requested in the notice of motion.

Costs

[17] The parties agree that if any party achieves success on 80 per cent or more of the refusals, that party shall be entitled to costs of the motion in the all-inclusive amount of $5,000 and if no party achieves success on 80 per cent or more of the refusals, there shall be no costs of the motion.

[18] Based on the agreement and Shunock’s success on over 80 per cent of the refusals, costs of the motion shall be fixed in the all-inclusive sum of $5,000.00 payable by 228 to Shunock within 30 days.

Master B. McAfee

Date: August 24, 2017