CITATION: CALDERONE v. CALDERONE, 2017 ONSC 5039
COURT FILE NO.: 07-CV-336695 (TORONTO)
MOTION HEARD: JANUARY 13, 2017, MAY 5, 2017 AND AUGUST 22, 2017
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Gus Calderone
v.
Bruno Vatri, Virgil Vatri, The Squires Apartments Limited, The Squires Apartments (West) Limited, Travit Development Company Limited, Lenran Realty Limited, Joseph Calderone, The Estate of Frank Calderone by its Estate Trustees John Calderone and Gus Paul Calderone, The Estate of Norman H. Solmon by its Estate Trustee Melvin Solmon, Albert Melchoir and the Estate of James Cirillo by its Estate Trustee Violet Cirillo
BEFORE: MASTER R.A. MUIR
COUNSEL: Michael Tamblyn for the Estate of Frank Calderone
Steven J. Weisz for Joseph Calderone
SUPPLEMENTARY REASONS FOR DECISION
[1] A further motion hearing took place on August 22, 2017. The purpose of this further hearing was to address an outstanding issue on this motion in relation to the so-called McMillan LLP files.
[2] The background to this dispute is set out in my reasons for decision dated July 14, 2017.
[3] As part of its motion first heard by me on January 13, 2017, the Estate of Frank Calderone (the "Estate") requested the production of certain files in the possession of a non-party, the law firm McMillan LLP. At the time this motion was first agued, I concluded that the court had insufficient evidence to make a determination on this issue. I therefore adjourned the relief in connection with the McMillan LLP files to allow for further investigation and a review of the documents. The matter was then re-scheduled for a hearing before me on August 22, 2017.
[4] The McMillan LLP files were originally created by the non-party David Young but had eventually come into the possession and control of McMillan LLP. McMillan LLP has taken no position on this motion but did require a court order or the consent of the parties before it would release the files.
[5] Joseph Calderone ("Joe") did not object to the production of the McMillan files insofar as they related to the Calderone Brothers Syndicate ("CBS"). However, he did have concerns that some of the McMillan LLP files may contain documents in respect of work done for him on the basis of a personal retainer or on behalf of one of his corporations unrelated to any CBS investments.
[6] Eventually Joe and his lawyers conducted a review of all of the McMillan LLP files. The vast majority of those files related to CBS investments and those files have been made available to the Estate. A few of the files related to legal work done on behalf of Joe's corporation Calcorp Inc. ("Calcorp"). Joe has been the sole shareholder of Calcorp since 1994. He takes the position that the Calcorp documents are unrelated to CBS, can have no relevance to the remaining issues in this proceeding and are otherwise subject to lawyer client privilege.
[7] Despite taking this position, Joe did agree to allow the Estate access to some Calcorp documents found in the McMillan LLP files. Those documents relate to Calcorp's purchase of Annovator Investments Inc. ("Annovator") and involved CBS to some extent. Joe permitted this access without prejudice to his position that the documents were not relevant and privileged.
[8] There now remain a small group of McMillan LLP files Joe objects to producing on the basis of relevance and privilege. These documents are described by Joe in his lawyer's letter of August 15, 2017 as "relating to Calcorp's structure and operations following the division of assets".
[9] I have significant difficulty with Joe's position on this part of the Estate's motion. In his lawyer's letter of June 22, 2017, it was stated that in the event the Calcorp files contained any relevant, non-privileged documents which had not already been produced, such documents would be produced to the Estate. In my view, the McMillan LLP Calcorp documents that were produced did in fact contain at least some relevant non-privileged documents not previously produced.
[10] Two examples of those documents are found at Tabs 1C and 1D of the Estate's Further Supplementary Motion Record, dated August 21, 2017. Those documents are a purchase agreement between CBS and Calcorp in relation to Annovator and a law firm trust cheque payable to CBS for the purchase of its Annovator shares. Those documents are obviously relevant to issues raised in the related 2013 action where Gus John Calderone is the plaintiff. As I noted in my reasons for decision dated July 14, 2017, this action and the 2013 action are proceeding in tandem with joint discoveries and are subject to an order for trial together. The 2013 action includes a broad claim for an accounting of all of the financial transactions involving CBS. There is evidence to show that Annovator was a CBS investment. I also ordered Joe to answer questions about a former Annovator property at paragraph 50 of my reasons for decision dated July 14, 2017. Annovator is a relevant issue.
[11] The documents are obviously not privileged as CBS is a party to the agreement and the payee of the law firm trust cheque.
[12] It is therefore clear to me that relevant and non-privileged documents formed part of the McMillan LLP Calcorp files. Despite this, Joe maintained his position that none of the Calcorp files, including the Annovator transaction files, contained relevant documents. In my view, the review of the Calcorp files has not been sufficiently thorough. I am satisfied on the evidence that the remaining Calcorp files may contain relevant and non-privileged documents.
[13] I see nothing to be gained by yet another review of the files by Joe and his lawyers. They appear to have been through them several times. All of the documents in the remaining McMillan LLP Calcorp files shall be disclosed by Joe in a supplementary affidavit of documents. Any non-privileged documents shall be listed in Schedule A and a copy provided to the Estate and the plaintiff in the 2013 action. Documents over which privilege is being claimed shall be disclosed in Schedule B with a description sufficient to allow the Estate to assess the claim for privilege. See Shibish v. Honda of Canada Inc., 2010 ONSC 3770 at paragraph 10. The supplementary affidavit of documents shall be served by September 29, 2017. Any dispute over any claim for privilege shall be determined by me on further motion.
[14] The costs of the Estate's motion in relation to the McMillan LLP files shall be determined in accordance with my order at paragraph 54(s) of my reasons for decision dated July 14, 2017.
Master R.A. Muir
DATE: August 25, 2017