Court File and Parties

COURT FILE NO.: CV-16-00566416 MOTION HEARD: 20190403 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Liudmyla Krolenko and Sergiy Nekoz, Plaintiffs AND: Tetiana Solynko aka Tatiana Solynko aka Tetiana Krolenko aka Tatiana Krolenko, Yuriy Solynko and 2276883 Ontario Inc., Defendants

BEFORE: Master B. McAfee

COUNSEL: M. Zatovkanuk, Counsel for the Plaintiffs W. Kravchuk, Counsel for the Defendants

HEARD: April 3, 2019

Reasons for Decision

[1] The plaintiffs Liudmyla Krolenko (Liudmyla) and Sergiy Nekoz (Sergiy) (collectively the plaintiffs) move for answers to undertakings and questions taken under advisement/refused on the examination for discovery of the defendants Tetiana Solynko aka Tatiana Solynko aka Tetiana Krolenko aka Tatiana Krolenko (Tetiana) and Yuriy Solynko (Yuriy) and 2276883 Ontario Inc. (227) (collectively the defendants).

[2] It is agreed that undertaking no. 1, q. 72, p. 321-323 given on the examination for discovery of Tetiana held on January 25, 2018, has now been answered (see exhibit “C” to the Tetiana affidavit sworn February 24, 2019). Six questions taken under advisement, now considered refusals, remain at issue.

[3] In this action the plaintiffs seek payment on a joint and several basis from the defendants of $107,142.02 plus interest and costs. The plaintiffs plead that a $50,000.00 USD loan was given to the defendants to purchase a truck, an additional $5,000.00 USD was provided in cash and certain additional money was provided for safekeeping due to an unstable situation in the Ukraine. The defendants plead that they owe no money to the plaintiffs. The defendants plead that $50,000.00 USD was transferred to Tetiana but deny that the money was a loan and plead that the plaintiffs’ claim in respect of the $50,000.00 USD is statute barred. The defendants plead that certain additional money was provided for safekeeping and plead that the additional money has been repaid. The defendants also plead business losses and set off.

[4] In determining the propriety of the refusals at issue, I have applied the relevance test stated at rule 31.06 of the Rules of Civil Procedure, the principles of proportionality set out at rule 29.2.03 and rule 1.04(1.1) and considered the scope of discovery as summarized by Justice Perell in Ontario v. Rothmans Inc., 2011 ONSC 2505 (Ont. S.C.J.) at para. 129, as cited in part by Justice Price in Koolatron v. Synergex, 2017 ONSC 4245 (Ont. S.C.J.) at para. 41.

[5] In objecting to the questions at issue the defendants rely on the decision of Master Muir in PDP Importing v. Tiffany Gate Foods Inc., 2013 ONSC 6468 (Ont. S.C.J. – Master). PDP was a motion for answers to questions refused on cross-examination. In considering the propriety of the questions in light of Rule 1.04(1.1), Master Muir noted that he was advised that the claim had been reduced to $75,000.00 and stated that cross-examinations would not have been permitted, let alone a lengthy refusals motion, if the action had been a simplified procedure action. In the case before me, the plaintiffs did not confirm on the motion that their claim is reduced. Examinations for discovery, unlike cross-examinations, are permitted in simplified procedure actions.

[6] I am satisfied, having regard to the matters at issue, including the amounts involved in this proceeding, that the rulings below are proportionate.

[7] The question and page numbers are taken from the chart found at tab “B” of the supplementary motion record of the defendants. What follows are my rulings.

Examination for discovery of Tetiana held on January 25, 2018

Under Advisement No. 2, q. 284-291, p. 65-66

[8] On the motion, the parties confirmed that the correct wording of this question is as underlined in the chart. The plaintiffs seek financial information and earnings of Tetiana, including bank statements from January 2009 to June 2014. On the motion, plaintiffs’ counsel confirmed that he would be content with the period of time commencing three months prior to the first payment of money on September 19, 2011.

[9] The plaintiffs plead that they loaned money to the defendants for the purchase a truck for 227 (paras. 6-9, 11-13 of the statement of claim). The defendants deny any loan (para. 2 of the statement of defence). The plaintiffs also plead that Tetiana convinced Sergiy to send her additional money for safekeeping due to the unstable condition in the Ukraine and that Tetiana was not permitted to spend or dispose of this additional money (paras.14-16 of the statement of claim). The defendants plead that the additional money was repaid (para. 26 of the statement of defence). The defendants also plead that they made significant financial sacrifices for the benefit of the plaintiffs (para. 33 of the statement of defence). I am satisfied that this question is relevant based on these pleadings.

[10] Credibility is an issue. The financial circumstances of Tetiana in the three months before the first payment are relevant. Tetiana’s financial circumstances prior to the alleged loan have probative value and adequately contribute to the truth or falsity of whether there was a loan. In addition, the information requested is relevant to what happened to the money after the payments were made, including whether any money was repaid as pleaded by the defendants.

[11] The defendants also object to producing the banking records relying on R. v. Chusid (Ont. S.C.J.) at para. 46, and argue that the records are prima facie private and confidential. As I have determined that the banking records are relevant based on the matters that the parties have put in issue in this action, there can be no reasonable expectation that the banking records will remain private and confidential in these circumstances.

[12] The defendants argue that the question is akin to a judgment debtor examination. I disagree. Whether money was used as a loan to purchase a truck, held or repaid are issues pleaded in the action.

[13] The question shall be answered for the period of time commencing June 2011.

Under Advisement No. 3, q. 362, p. 83-84

[14] The plaintiffs seek business tax returns of 227 from incorporation to date. 227 was incorporated in 2011. The plaintiffs allege that Tetiana and Yuriy asked Liudmyla for a loan to purchase a new truck for 227 (para. 6 of the statement of claim) and plead that the funds were provided (paras. 7 and 8 of the statement of claim). The defendants acknowledge that some money was provided to them but deny that money was provided to them for a loan to purchase a truck (paras. 2 and 3 of the statement of defence). The defendants also plead business losses and set-off (paragraphs 30-33 and 43 of the statement of defence). I am satisfied that the question is relevant based on these pleadings. The question shall be answered.

Under Advisement No. 4, q. 368, p. 84

[15] The plaintiffs seek Tetiana’s personal tax returns from 2009 to present. I am satisfied that Tetiana’s personal tax returns for 2010, the year before the alleged loan, and 2011, the year of the alleged loan, are relevant to her financial circumstances and have probative value. The documents may tend to prove or disprove whether there was a need for a loan. Tetiana’s personal tax returns for 2012 to 2016 are also relevant to the issue of whether there was an inability to repay the alleged loan and whether extensions were requested as pleaded by the plaintiffs (paras. l1-20 of statement of claim). The question shall be answered for the period 2010 to 2016.

Examination for discovery of Yuriy personally and on behalf of 227 held on January 25, 2018

Under Advisement No. 1, q. 74-75, p. 17

[16] The plaintiffs ask if Yuriy has a joint account with Tetiana. I am satisfied that the question is relevant. The plaintiffs plead that monies were provided for a loan (paras. 6-9, 11-13 of the statement of claim) and additional monies were provided for safe keeping (paras.14-16 of the statement of claim). The defendants deny a loan (para. 2 of the statement of defence) and plead that additional monies were returned (para. 26 of the statement of defence). I am satisfied that the existence of a joint bank account between two of the defendants is relevant to these pleadings. The question shall be answered.

Under Advisement No. 2, q. 87-91, p. 19-20

[17] The plaintiffs seek the bank statements of Yuriy from October 2009 to present. For the reasons given above with respect to under advisement no. 2 on Tetiana’s examination for discovery, the question shall be answered limited to the same period of time.

Under Advisement No. 3, q. 12, p. 4

[18] I am not satisfied that Yuriy’s salary for 2009 is relevant. The first payment of money was made on September 19, 2011. Financial circumstances in 2009 are not relevant. The question need not be answered.

Costs

[19] With respect to costs of the motion, I am satisfied that the plaintiffs are entitled to some costs of the motion. The plaintiffs were substantially, but not entirely, successful on the motion. The plaintiffs advised on the motion that with respect to certain questions, they would be content with a period of time starting three months before the first payment of funds, which is a lesser period of time than originally requested. In my view the all-inclusive sum of $2,500.00 is a fair and reasonable amount that the defendants could expect to pay for costs. Had the defendants been successful, the defendants were seeking costs in the amount of $5,948.26. In all of the circumstances of this motion, I am satisfied that an order different than payment within 30 days would be more just. Costs in the all-inclusive amount of $2,500.00 are payable by the defendants to the plaintiffs in the cause.

Master B. McAfee Date: April 17, 2019