Court File and Parties

Date: 2019-04-01 Superior Court of Justice - Ontario

Re: Walter Zuppinger and Min Yan, Plaintiffs And: Ted Slightham and Tatiana Doubovsky, Defendants

Before: Sanfilippo J.

Counsel: Paul Morrison, Anu Koshal & Avi Bourassa, for the Plaintiffs, Walter Zuppinger and Min Yan Aaron Postelnik, for the Defendant Ted Slightham Daniel S. Murdoch, for the Defendant Tatiana Doubovsky

Heard: March 7, 2019

Endorsement

A. Background to the Ninth Case Management Conference

[1] The Plaintiffs, Walter Zuppinger and Min Yan, entered into a partial settlement agreement with all of the defendants except Ted Slightham (limited to any liability apart from his role as a director of Toronto Standard Condominium Corporation (“TSCC”) No. 2139) and Tatiana Doubovsky, and with all third, fourth and fifth party defendants.

[2] As part of the implementation of this partial settlement agreement, the Plaintiffs brought a motion before me on December 4, 2018 for an Order to amend their Statement of Claim into a Fresh as Amended Statement of Claim so as to continue this action only against Mr. Slightham (solely in his capacity as real estate agent) and Ms. Doubovsky, and only as to their several liability and joint share of liability as between them, and to dismiss this action against all other party defendants and subsequent party defendants, including any crossclaims as between them. No party opposed this Order, which I granted on December 4, 2018.

[3] On February 6, 2019, I heard by teleconference the ninth case management conference in this action, being the first such case management conference conducted since the implementation of the partial settlement agreement. The principal issue addressed was the request by Mr. Slightham and Ms. Doubovsky to bring motions under Rule 21.01 of the Rules of Civil Procedure to seek the dismissal of this action as against them on the basis that the Fresh as Amended Statement of Claim does not plead a reasonable cause of action (Rule 21.01(1)(b)) and because the Plaintiffs do not have legal capacity to bring the claim (Rule 21.01(3)(b)). The Plaintiffs submitted that these motions ought not to be scheduled, but rather the remaining elements of this now more limited action ought to be scheduled to allow for a trial as early as possible in 2019. As the submissions that counsel sought to make could not be completed in the time scheduled, and as counsel for Ms. Doubovsky submitted that the scope of the issue, and its impact on the parties, necessitated an in person case management conference, this ninth case management conference was adjourned, to be completed as an in person case management conference, in accordance with timing available to counsel and to the Court.

[4] This ninth case management conference was continued and completed in person on March 7, 2019 (the “9th CM Conference”).

B. The Parties’ Positions on the Request for Motion Scheduling

[5] The Defendant Ms. Doubovsky seeks to advance a motion to strike out the action brought by the Plaintiffs against her on the basis of Rules 21.01(1)(b) and 21.01(3)(b). Mr. Slightham seeks to argue a motion to dismiss the action as against him on the basis of the same Rules. Both Defendants provided draft Notices of Motion for consideration at the 9th CM Conference.

[6] The Defendants also provided copies of the affidavit evidence that they seek to rely on in argument of their proposed motions. Both rely on the affidavit of Ms. Doubovsky sworn January 11, 2019 and the affidavit of Brian Toll affirmed January 10, 2019. Ms. Doubovsky was the vendor of the condominium unit involved in this litigation and Mr. Toll was, along with Mr. Slightham, one of the real estate agents who acted for Ms. Doubovksy.

[7] The Defendants submitted that the motions they seek to argue are timely, in that they could not practically have been brought earlier, and expedient, and if successful will be dispositive of the claims against them. They contend that if the motions are not scheduled at this time, but left to the opening of trial, their clients may be put to considerable expense that, if successful in the relief that they each seek, would not be necessary.

[8] The Plaintiffs’ main resistance to the motions is that they are not timely, they are not meritorious, and they will delay the orderly adjudication of the issues remaining for determination as set out in the Fresh as Amended Statement of Claim. The Plaintiffs submit that the Defendants’ motions are counter-productive to the orderly and efficient adjudication of the remaining issues.

C. Analysis

[9] As I explained in Hemming v. Peng, 2019 ONSC 1937, at para. 14, Rule 50.13 of the Rules of Civil Procedure provides a case conference judge with authority to make procedural orders and to give directions. In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 60 and 72, the Supreme Court explained the court’s power to provide directions under Rules 1.05 and 50.13 and emphasized that this includes consideration of the impact of any proposed motion: “the interest of justice inquiry goes further and also considers the consequences of the motion in the context of the litigation as a whole”.

[10] The court’s ‘gatekeeping function’ requires that the court must assess and provide orders and directions in relation to proposed motions to ensure that the principles of proportionality, timeliness and efficiency are satisfied: Griva v. Griva, 2016 ONSC 1820, at para. 18; Espresso Tax Credit Fund III Limited Partnership (c.o.b. Espresso Capital) v. Arc Stainless Inc., 2018 ONSC 415, at para. 40; Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 O.R. (3d) 438, at para. 33: the motions judge must “assess the advisability of the summary judgment process in the context of the litigation as a whole.” In Abrams v. Abrams, 2010 ONSC 2703, leave to appeal refused, 2010 ONSC 4714 (Div. Ct.), Brown J., as he then was, held that a case management judge may decline to schedule a motion where “alternate means are available to ensure the case proceeds to a fair trial in a timely manner”: paras. 3-5, 78-84.

[11] Counsel for the Defendants submitted that the conference judge’s gatekeeping function applies to summary judgment motions under Rule 20 but not to motions to dismiss actions under Rule 21. I disagree. The assessment of proposed motions, and providing any required orders or directions to ensure that the objectives of proportionality, timeliness and efficiency are achieved applies to all motions. The principles set out in the case authorities referenced immediately above are not limited to a single type of motion. Further, this gatekeeping function is particularly pronounced in a case managed action where, like here (2017 ONSC 5305, at para. 22), an Order was rendered prohibiting the initiation of any motions without first being considered at a case conference.

[12] My task then is to determine whether the proposed motions enhance the efficient progression of the remaining elements of this action, as the Defendants contend, or will result only in delay and added expense, as is submitted by the Plaintiffs. As part of this analysis, I will assess whether there is an alternate means by which to fairly advance this case to adjudication in a timely manner.

(a) Timeliness

[13] The Plaintiffs submit that the Defendants’ motions are being brought too late in this action, which has been pending since 2016. They contend that any challenge to the nature of the causes of action alleged ought to have been brought after the close of pleadings, or at least much-earlier in the procedural development of this action.

[14] The Defendants respond that the Fresh as Amended Statement of Claim is a significantly different pleading than the Statement of Claim, such that the assessment of delay in advancing their motion ought to be considered from the time of the issuance of the Fresh as Amended Statement of Claim: December 2018. The Defendants submit further that they could not have efficiently sought to schedule a motion under Rule 21.01 prior to the implementation of the Partial Settlement for the following reasons:

(i) Ms. Doubovsky was subject to crossclaims and fourth party claims for contribution and indemnity on various grounds, including negligence, in addition to the claims pleaded against her by the Plaintiffs. As such, she contends the entirety of the claims pleaded against her could not have been determined on a Rule 21 motion to strike the claims pleaded in the main action prior to the Plaintiffs’ implementation of the partial settlement agreement; and

(ii) Mr. Slightham was sued in his capacity as a director of Toronto Standard Condominium Corporation No. 2139 in addition to his capacity as one of the real estate agents for the vendor, Ms. Doubovsky, such that the dismissal of the claims pleaded against him in his capacity as a real estate agent would not previously have allowed for the dismissal of all claims pleaded in this action as against him.

[15] Additionally, the initial steps implemented in the management of this case were designed to advance the entirety of this action, then including 23 parties, to mediation at the earliest point, supported by a phased, focused examination process, to give the greatest opportunity for productive settlement discussions before mounting costs imperilled the potential for resolution. With this objective, any motion by single defendant or few defendants to seek summary dismissal would have been subordinated to a case management approach that had the potential to benefit a larger number of parties.

[16] The Plaintiffs’ principal resistance in response is that the proposed motions will inevitably result in delay in the final adjudication of this action, as the motions will in their submission undoubtedly be dismissed. The Plaintiffs contend that the motions will not be dispositive because they will not be successful. This submission presumes that my function in gatekeeping entails a substantive assessment of the merits of the proposed motion, in essence a pre-determination, which it does not. Indeed, the record has not yet been assembled to allow for such an analysis. My assessment considers whether the nature and scope of the motions will assist in achieving the case management objectives of proportionality, timeliness and efficiency in the overall adjudication of this action.

(b) Expedience

[17] The Defendants submit that their motions, if successful, would be dispositive of this action, with lower costs that would be realized if the same issue was argued at trial. They maintain that both their motions can be argued in two hours or less: one hour collectively to both Defendants and an hour in response by the Plaintiffs.

[18] The Plaintiffs submitted that significant evidence will have to be assembled and presented in order to respond to the Defendants’ proposed motion. They submit that evidence will be required from both Plaintiffs as well as their real estate agent, Ms. Jill Parlee, and that they will require an examination of Mr. Slightham under Rule 39.03 of the Rules of Civil Procedure. The breadth and scope of the responding evidence to be adduced is within the Plaintiffs’ control. I note that the Defendants’ proposed record in support of their motion has already been produced and is narrow, modest in volume and places only discrete evidence in issue. Rule 21.01(2)(a) states that no evidence is admissible in a motion under Rule 21.01(1)(b), being one of the two rules on which the Defendants’ motions are based.

(c) Proportionality

[19] The alternative process to allowing for the scheduling of the Defendants’ requested motions would be to establish a timetable for the procedural development of this action to trial. The Plaintiffs have confirmed that notwithstanding the partial settlement, their claim against the Defendants is in excess of $1 million, which the Defendants view as a sizable exposure. The Defendants submitted that they are required to take extensive, and costly, steps to defend these claims, including the retainer of experts on the issue of damages. The Defendants emphasized that they would be able to save these expenses if they are successful on the dismissal motions that they seek to have scheduled. The significant exposure faced by the Defendants and the extensive costs that they will incur in advancing the steps necessary for preparation of this case for trial must be balanced against the potential for delay when assessing whether it is proportionate to allow the Defendants an opportunity to argue their motions.

(d) Conclusions

[20] Having considered all submissions, I have concluded that it is proportionate and efficient to grant the Defendants their request to advance motions under Rule 21.01, at this time. I find that in the context of the significant change in this action resulting from the implementation of the partial settlement agreement, it is also timely to schedule this step now.

[21] In scheduling the Rule 21.01 motions that the Defendants seek to argue, I have assessed the scope and nature of the proposed motions from a standpoint of meeting the principles of case management. I reserve the substantive assessment and adjudication of the Rule 21.01 motions entirely to the motions judge. This includes the Plaintiffs’ submission that a motion under Rule 21.01 must be made promptly and that the failure to do so can alone be, in the appropriate circumstances, the basis for the motions judge exercising her or his discretion to deny the relief sought: Khavari v. Mizrahi, 2017 ONSC 3245, at paras. 2, 16-18; Fleet Street Financial Corp. v. Levinson, at para. 17. My assessment of the timeliness of the request to advance these motions is limited to assessing the principles of case management and is not in any manner intended to comment on the issue of delay as a factor in the motion judge’s exercise of discretion, which I leave entirely to the motions judge.

[22] In granting the Defendants’ request for the scheduling of these motions, I am mindful of the Plaintiffs’ submission that, should the motions prove unsuccessful, the Plaintiffs will have been prejudiced by the delay caused by the time required for the development and the argument of the motions. The Plaintiffs state that this is unfair, submitting that these motions will lead to the very continued accumulation of legal expense that this case management process was designed to remedy. In granting the Defendants their request to advance these motions, I am accepting their submission that the cost and time involved in doing so will prove more efficient than causing them to proceed to trial without the opportunity to argue their motions. In the event that the Rule 21.01 motions should result in the dismissal of the Plaintiffs’ claims against the Defendants, the Defendants’ submissions will be validated in that this action will be concluded, as will its case management. Should this not occur such that this action requires continued case management, I will give renewed consideration to the Plaintiffs’ submission that the trial in this action should, at that point, be expedited: Abrams, at paras. 81-83.

Case Management Directions

[23] I provide the following case management directions:

(a) Each Defendant may advance a motion under Rule 21.01 as proposed by the draft Notices of Motion provided at the 9th CM Conference;

(b) The Defendants are together allocated 50 minutes for submissions, the Plaintiffs shall have 60 minutes in response, and the Defendants shall together have 10 minutes in reply submissions, subject to any further order by the motions judge;

(c) The parties shall confer and collaborate on three motion return dates not sooner than May 9, 2019, being the first date available for the scheduling of a two hour motion;

(d) The parties shall confer and collaborate on the timing for delivery of further motion materials, any examinations and cross-examinations required and the filing of factums, in accordance with the Rules of Civil Procedure, for the purpose of constructing a timetable for the orderly development of the motions for argument, specially setting deadlines for the following:

(i) Delivery of the Plaintiffs’ responding record;

(ii) Delivery of any reply materials by the Defendants;

(iii) Conduct of any examinations under Rule 39.03;

(iv) Cross-examinations of affiants on supporting affidavits, if requested; and

(v) Deadline for delivery of factums;

(e) If the parties are successful in collaborating on those steps set out in paragraphs 23(c) and (d), the parties shall provide to me, through my judicial assistant, the three agreed-upon dates and proposed timetable along with their written consent. I will then take steps to schedule the motion return date with the Motions Office and implement the proposed timetable through a further case management endorsement;

(f) If the parties are unsuccessful in collaborating on those steps set out in paragraphs 23(c) and (d), the parties shall provide my judicial assistant with three dates on which they are all available for a case management conference by telephone, at either 9:00 am or 5:00 pm each day. I will then direct the scheduling of a case management conference by telephone to hear submissions on the steps necessary to schedule the Defendants’ motions for argument; and

(g) Once the date for the motion is scheduled and the timetable is implemented, all materials to be used on the motion must be filed through the Motions Court office, in the ordinary manner.

[24] Broad application of Rule 50.13 will be used to address and resolve matters raised at case conference, in circumstances where this is possible. Counsel ought to expect that procedural orders and directions will be made at case conferences, in accordance with Rule 50.13(6), on informal notice of the issue to be addressed.

[25] The requirement of preparation, issuance and entry of a formal order is hereby dispensed with, in accordance with Rule 77.07(6) of the Rules of Civil Procedure.

Sanfilippo J.

Date of Release: April 1, 2019