Court File and Parties
COURT FILE NO.: CV-17-570187 DATE: 20190424 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: KENNETH JAMES AND: ANNA CHEDLI and ANNA CHEDLI AS ESTATE TRUSTEE WITH A WILL OF THE ESTATE OF AMDOUNI CHEDLI aka DENNIS CHEDLI
BEFORE: MADAM JUSTICE O’BRIEN
COUNSEL: P. Bakos, for the Plaintiff A. Hershtal for the Defendants
HEARD: April 3, 2019
Endorsement
[1] This is an appeal pursuant to Rule 62 of the Rules of Civil Procedure, R.R.O 1990, Reg. 194 from a Master’s Order dated January 10, 2019, in which the Plaintiff was granted leave pursuant to Rule 39.02(2) to file additional evidence and to conduct examinations pursuant to Rule 39.03, pending the Defendants’ motion for Summary Judgment.
[2] The Plaintiff’s underlying action is for over $2,000,000 relating to two promissory notes, one of which was secured by a mortgage on a property owned by the Defendant, Anna Chedli. One promissory note was allegedly signed by Ms. Chedli, as well as by her spouse, Dennis Chedli. The second note was allegedly signed by Dennis Chedli only. Dennis Chedli is now deceased. The issue that forms the basis for the motion under appeal relates to s. 13 of the Evidence Act, R.S.O. 1990, C. E.23 (the “Evidence Act”). That provision requires corroborating evidence in an action against the estate of a deceased person, such that the Plaintiff’s evidence alone against the deceased is not sufficient. After it became clear from the Plaintiff’s cross-examination of Ms. Chedli that she could not corroborate the Plaintiff’s evidence, the Plaintiff sought and received leave to file the additional evidence and conduct the further examinations from the Master’s Order under appeal.
[3] The Defendants make the following arguments. They claim that the Master erred in failing to properly consider the additional case law principles that augment and inform the test articulated by the Divisional Court in First Capital Realty Inc. v. Centrecorp Management Services Ltd (2009), 83 C.P.C. (6th) 310 (Ont. Div. Ct.) (“First Capital”). In addition, they say the Master exercised his discretion on wrong principles by failing to consider that (a) the evidence sought to be adduced by the Plaintiff arises from a legal argument pled at the outset of the action in the Defendants’ Statement of Defence and does not arise from cross-examinations; (b) the Plaintiff failed to provide an adequate explanation for why the evidence could not have been adduced at the outset of the action; and (c) allowing the Plaintiff to adduce corroborative evidence after cross-examinations is case-splitting.
[4] The appropriate standard of review for a decision of a Master is one of deference. This is particularly so for interlocutory matters. An attitude of deference on appeals like the one before me recognizes the expertise of Masters in the discovery process: First Capital at para. 29; Noranda Metal Industries Ltd. v. Employers Liability Assurance Corp. (2000), 49 C.P.C. (4th) 336 (Ont. S.C.J.) at para. 7.
[5] In this case, I decline to interfere with the Master’s decision. In a carefully reasoned decision, the Master applied a contextual approach having regard to Rule 1.04, and found that the relevant criteria in the context of this action favoured granting leave to the Plaintiff. In the interest of proportionality, the Master limited the Plaintiff’s additional evidence to three witnesses. The Master also granted leave to the Defendants to respond to any additional evidence filed by the Plaintiff.
[6] In my view, the Master did not misapprehend the test under Rule 39.02(2). He applied the test under First Capital, which both parties agreed upon. I do not disagree with the Defendants that some cases under Rule 39.02 have emphasized that leave should be granted sparingly and that the threshold for granting leave is high. However, many of those cases involve fact situations which raise serious fairness concerns, and where elements of the First Capital test are clearly not met. See, for example, Redstone Investment Corporation, 2016 ONSC 513, in which the new evidence was proffered after the start of a hearing and after submissions had already been commenced. See also 2386240 Ontario Inc. v. The City of Mississauga, 2018 ONSC 3992, in which leave to provide the new evidence was sought at the opening of the hearing, without explanation, and where the evidence was not considered relevant. In addition, I note that those cases apply the First Capital test as the appropriate test under Rule 39.02. In my view, it was not necessary for the Master to emphasize those principles in this case, where the circumstances were not egregious and the elements of the First Capital test were met.
[7] With respect to the remainder of the Appellants’ arguments, the Master carefully considered the question of whether and how the issue of corroboration arose from and following cross-examinations. He also considered why the Plaintiff did not provide corroborating evidence at the outset, and why he did not consider the Plaintiff to be engaged in case splitting.
[8] It was specifically argued before me that the Master erred in his finding that the issue of corroboration under s. 13 of the Evidence Act arose from cross-examinations. Counsel for the Defendants argued that s. 13 sets out a substantive legal requirement and is not a requirement that needs to be pled. In his submission, the Plaintiff had a substantive legal obligation to ensure his evidence was corroborated, even without the defence specifically raising this argument. In addition, the Evidence Act, though not s. 13 in particular, was referenced in the Defendants’ Statement of Defence. Therefore, he argues, the Plaintiff was required to ensure he had corroborating evidence prior to the completion of cross-examinations.
[9] I do not think that the Master committed an error in principle in finding that the s. 13 argument arose from cross-examinations. First, the Master’s assessment of the evidence was that the requirement for other corroborating witnesses only became an issue when Anna Chedli’s knowledge of the underlying facts was fully understood and examined upon. I note that, in her affidavit, Ms. Chedli, on the one hand, suggested that she knew and recalled little of the documents or any transactions, while on the other hand, she acknowledged that she executed one of the promissory notes. She also executed an Acknowledgment and Direction authorizing the registration of the mortgage. I would not interfere with the Master’s assessment that, on this evidence, the requirement for corroborating witnesses other than Ms. Chedli became clear only once Ms. Chedli’s knowledge of the underlying facts was fully examined upon.
[10] Further, in my view, the fact that s. 13 sets out a substantive evidentiary requirement is not determinative of this motion. While on a motion for Summary Judgment, a Responding Party has the obligation to put its “best foot forward”. I do not think this means it is wrong under Rule 39.02(2) to grant leave to file additional evidence, prior to the hearing of the motion, where the Responding Party has not anticipated arguments that have not been specifically pled or articulated until after cross-examinations. Here, the Plaintiff received a very bare bones Notice of Motion for Summary Judgment and understood that the Defendants’ primary argument related to a breach of the limitation period. It was only at a chambers appointment after the completion of cross-examinations that the s. 13 argument was articulated.
[11] Finally, with respect to the argument that the Defendants have engaged in case-splitting, I note that the Master carefully considered any prejudice to the Plaintiff. He found that any prejudice could be compensated by costs, an adjournment of the Summary Judgment motion, an order limiting the number of additional witnesses, and by providing the Defendants with an opportunity to respond to the Plaintiff’s additional evidence. The Master further considered that “this action involves a significant amount of money. The principle of proportionality will allow for some limited additional evidence with a view to securing a just result”: para 17 of his Reasons for Decision.
[12] In short, the Master applied a flexible, contextual approach to considering the circumstances of this case and arriving at his determination under Rule 39.02(2). I defer to his balancing of all of the relevant factors and do not see any basis to interfere with his decision.
[13] In accordance with the agreement between the parties, the Defendants shall pay costs of this appeal to the Plaintiff in the amount of $5,000, all inclusive.
[14] Appeal dismissed.