Court File and Parties

CITATION: Elia et al v. Alizadeh et al, 2017 ONSC 6279

COURT FILE NO.: 01-CV-205661

DATE: 20171019

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: PAUL ELIA, FURL INVESTMENTS LIMITED, FURL AUTOMOTIVE INC. and HIGHCASTLE INVESTMENTS LIMITED, Plaintiffs

AND:

SHAHIN ALIZADEH, DOWNTOWN AUTOMOTIVE INC., KING PARLIAMENT AUTOMOTIVE INC., 997350 ONTARIO INC. (FORMERLY KNOWN AS KING TOYOTA INC.), KEY HOLDINGS INC., 1007006 ONTARIO LIMITED, CINA HULL, CHARISMA MARKETING INC., 1390835 ONTARIO LIMITED and MPI INVESTMENT CORP., Defendants

BEFORE: SANFILIPPO J.

COUNSEL: Andrea J. Sanche, for the Plaintiffs/ Moving Parties

Michael Simaan, for the Defendants/ Responding Parties

HEARD: October 18, 2017

REASONS

A. Background

[1] Consistent with a Direction issued at Civil Practice Court on April 25, 2017, the moving party plaintiffs advanced a summary judgment motion that was scheduled to be heard at a full-day hearing on October 18, 2017.

[2] The origin of this summary judgment motion can be traced to July 26, 2016, being the first of three Civil Practice Courts in which the scheduling of this summary judgment motion was addressed, all in the context of an action that has entered its sixteenth year.

[3] The hearing of the summary judgment motion today was imperiled by the late filing by the responding party defendants of their responding motion record, consisting of the affidavit of the defendant Shahin Alizadeh, sworn September 29, 2017 (the “Alizadeh Affidavit”).

[4] At the return of the summary judgment motion, the plaintiffs delivered a motion to strike the Alizadeh Affidavit on the basis that it was delivered late and thereby frustrated the right of the plaintiffs to conduct cross-examination. The delivery of the Alizadeh Affidavit on September 29, 2017 was in default of two orders rendered in Civil Practice Court and constituted a total delay of seven months from the dates ordered by the court for delivery of this material.

[5] The defendants admit that they have breached the term of the Civil Practice Court orders pertaining to the delivery of their responding motion material, but submit that this is consistent with a pattern of delay in advancing this action in which both plaintiffs and defendants are complicit. The history of addressing this matter at Civil Practice Court is as follows:

• At Civil Practice Court of July 26, 2016, a summary judgment return date was set for November 21, 2016, with the plaintiffs’ record to be delivered by August 26, 2016, with other steps necessary to develop the motion to follow.

• Due to procedural complications, including that the statement of defence was not filed until September 27, 2016, the plaintiffs’ record was not delivered on time such that the parties re-attended at Civil Practice Court on October 5, 2016. The return date of the motion was vacated and a timetable was implemented by order of Firestone J., by which the plaintiffs were required to deliver their motion record by October 31, 2016 and the defendants were required to deliver their responding motion record by January 15, 2017, with cross-examinations following.

• The plaintiffs delivered their motion record on November 4, 2016: four days late. The defendants did not deliver their responding motion record at any time up to April 25, 2017, constituting a default then in excess of three months.

• On April 25, 2017, the parties re-attended for a third time at Civil Practice Court. McEwen J. ordered that the summary judgment motion be heard on October 18, 2017 and that the defendants’ motion record be delivered by May 19, 2017. Timetable entries were established for cross-examination and delivery of factums.

[6] The defendants did not deliver their responding motion record by the date ordered: namely, May 19, 2017, but rather delivered their responding motion record on September 29, 2017, representing a default of almost four months.

[7] The evidence filed by the plaintiffs establishes that the plaintiffs consistently followed up with the defendants for delivery of their responding motion material, both after the breached January 15, 2017 deadline and after the breached May 19, 2017 deadline, without any response.

[8] The plaintiffs expedited the delivery of a reply motion record on October 6, 2017 and served a Notice of Cross-Examination on Mr. Alizadeh to be conducted on October 11, 2017. Counsel for the defendants stated in advance of this date that Mr. Alizadeh was not available to attend.

[9] On the basis of breach of the court-ordered timetables of October 5, 2016 and April 25, 2017, and by reason of Mr. Alizadeh’s failure to attend at cross-examination, the plaintiffs submit that the Alizadeh Affidavit should be struck. Should the Alizadeh Affidavit be struck, the defendants would have no evidence in resistance to the summary judgment sought by the plaintiffs and the court would hear the motion on only a portion of the material evidence.

[10] At the conclusion of argument on the motion to strike the Alizadeh Affidavit, I rendered an endorsement denying the striking of this affidavit but granting the alternative relief that the summary judgment motion be adjourned to allow for cross-examination and then argument of the motion, on a timetable set out herein. This decision was based on reasons to follow.

B. Analysis

[11] Failure to comply with a court order can give rise to the imposition of a sanction in accordance with r. 60.12, which provides as follows:

60.12 Where a party fails to comply with an interlocutory order, the court may, in addition to any other sanction provided by these rules,

(a) stay the party’s proceeding;

(b) dismiss the party’s proceeding or strike out the party’s defence; or

(c) make such other order as is just.

[12] The defendants breached the October 5, 2016 order of Firestone J. and the April 25, 2017 order of McEwen J. by failing to deliver their responding motion records in time, with periods of default totaling over seven months.

[13] As Mr. Alizadeh failed to attend at cross-examination on October 11, 2017, r. 34.15 is applicable. It provides, in operative part, as follows:

34.15. Where a person fails to attend at the time and place fixed for an examination in the notice of examination or summons to witness or at the time and place agreed on by the parties, or refuses to take an oath or make an affirmation, to answer any proper question, to produce a document or thing that he or she is required to produce or to comply with an order under rule 34.14, the court may,

(c) strike out all or part of the person’s evidence, including any affidavit made by the person; …

[14] The defendants’ breach of the orders rendered in Civil Practice Court has occurred without explanation and without purging. The failure to attend at cross-examination occurred in disregard of Mr. Alizadeh’s obligations under the Rules.

[15] These circumstances support the imposition of a sanction but also require a balance between the following two competing interests: a court’s control of its process, including the necessity to give effect to its orders, and the objective of ensuring that cases are determined on a full evidentiary record, on the merits. In Bank of Montreal v. Lewis, 2010 ONSC 3256, at paras. 18—19, Gray J. effectively summarized the issue as follows:

The Court is often confronted with conflicting interests, between the need to maintain control over litigation and the orderly processing of cases, and the need to ensure that litigants have a fair opportunity to be heard. In many, if not most, cases, the Court will lean towards the latter objective, on the understanding that in most cases it is preferable to have cases heard on their merits rather than to insist on procedural perfection.

However, there comes a point when the need to insist on procedural rules and orders must prevail. Otherwise, the system will break down.

[16] Gray J. declined to accept materials submitted by the party in default of a court order, whose breach had not been explained or purged, and thereby determined the summary judgment motion without reference to the proposed responding material.

[17] Master Sandler reached a similar result in Royal Trust Corp. of Canada v. Adamson (1992), 14 C.P.C. (3d) 352 (Ont. Gen. Div.), where the Master refused an adjournment to allow for the delivery of responding materials where no explanation was provided concerning the failure to comply with a deadline that had been established.

[18] Where no explanation is provided for non-compliance with a deadline, a conclusion is available that the offending parties simply decided not to adhere to, or comply with, the deadline. This is particularly the case where, like the present, there are multiple breaches of that term of court orders requiring the delivery of responding motion materials within a prescribed time.

[19] Failure to comply with procedural orders cannot be tolerated. Such conduct not only affects the parties involved but also has an impact on the orderly administration of justice and the allocation of court resources.

[20] At the same time, I am mindful of the desirability of allowing for the development of an evidentiary record that will foster the most “just, efficient and expeditious” determination of the summary judgment motion, consistent with the principle set out in r. 1.04. It is pursuit of this objective that often prevails in providing yet another opportunity to a defaulting party to purge a breach. The aim of ensuring fairness to the parties and to the argument that they seek to advance tilts this balance in favour of a final opportunity to hear this motion on a full record.

C. Conclusion

[21] The striking of the Alizadeh Affidavit is denied but the alternative relief is granted in that the summary judgment motion will be adjourned to allow for cross-examination and then determination, strictly on the following timetable:

(a) Cross-examinations will be conducted on October 25, 2017 and, if necessary, will continue on October 27, 2017. It is ordered that r. 34.12 apply to all examinations in that questions to which objection is taken are to be answered subject to a later ruling at the summary judgment motion, save and except for questions objected to by reason of lawyer and client privilege and questions for which objection is stated based on abuse of process;

(b) The plaintiffs’ factum and authorities brief will be delivered on November 3, 2017;

(c) The defendants’ factum and authorities brief will be delivered on November 7, 2017;

(d) The plaintiffs’ summary judgment motion will be heard by me on a full-day hearing on November 17, 2017;

(e) As I remain seized of this summary judgment motion, any further motions are to be brought to me.

D. Costs

[22] The plaintiffs were required to bring this motion in light of the late delivery by the defendants of their responding motion materials. The plaintiffs were successful in obtaining relief that was alternative to the main relief of striking the Alizadeh Affidavit. The plaintiffs will receive costs of today’s motion in the amount of $2,000 plus HST, fixed and payable forthwith.

Sanfilippo J.

Date: October 19, 2017