Abram v. Tsakiris, 2019 ONSC 4666

COURT FILE NO.: CV-14-119465

DATE: 20190808

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ROBIN ABRAM

Plaintiff

– and –

GEORGE TSAKIRIS

Defendant

Jordan D. Sobel, for the Plaintiff

Jonathan L. Frustaglio, for the Defendant

HEARD: July 16, 2019

REASONS FOR DECISION

charney j.:

Introduction

1The plaintiff, Robin Abram, brings this motion for an order to require the defendant, George Tsakiris, to forthwith file his statement of defence.

2The defendant has brought a cross-motion for an order requiring the plaintiff to produce all original documents requested by the plaintiff and to answer a Demand for Particulars, taking the position that the original documents must be produced and the particulars provided before any statement of defence can be filed.

3At the hearing of the motion, counsel for the defendant acknowledged that he has copies of all of the documents requested and, by letter dated November 7, 2018, was invited to make arrangements to attend at the office of counsel for the plaintiff to inspect the original documents that are in the possession of the plaintiff.

4As such, the only issue to be decided on this motion is whether the plaintiff must answer the Demand for Particulars before the defendant files his statement of defence.

Facts

(i) The Statement of Claim

5This case arises out of the plaintiff’s action in relation to an alleged failed investment scheme. The action was commenced by Notice of Action dated July 24, 2014, and the Statement of Claim was issued on or about August 24, 2014.

6In the Statement of Claim the plaintiff seeks damages of $700,000 for breach of contract, breach of trust, unjust enrichment, conversion, breach of fiduciary duty, and negligent misrepresentation. The Statement of Claim also seeks various declarations and corollary relief related to the alleged causes of action.

7The Statement of Claim is comprised of 49 paragraphs set out over eleven pages. It alleges that in 2007 the defendant “made various representations and assurances” to the plaintiff of the defendant’s capabilities to manage the plaintiff’s monies and the suitability of various investments and proposals, even though the defendant knew, or ought to have known, that he had no such investment management capabilities and did not hold “the requisite licences or sufficient training” to manage the plaintiff’s money.

8The Statement of Claim alleges that the defendant reasonably relied upon these representations and assurances and, by the end of 2008, had delivered $700,000 to the defendant to invest on her behalf.

9The Statement of Claim makes the following additional allegations:

a. The defendant represented to the plaintiff that he was a sound financial manager with capabilities of investment.

b. In January 2009 the defendant delivered an original executed document to the plaintiff in which the defendant acknowledged a “joint investment” with the plaintiff, and indebtedness to the plaintiff of the sum of $700,000 to be repaid upon his death.

c. The plaintiff did not agree to wait for her investment to be repaid upon the defendant’s death, and demanded and received small payments from the defendant over time. The final such payment was made in March 2013.

d. The plaintiff made various demands for payment from the defendant up to and including April 2013.

e. The funds provided to the defendant were held in trust for the benefit of the plaintiff but were put to an unauthorized purpose by the defendant, and that the defendant, as trustee, is liable to account to the plaintiff for the misapplication of those funds.

10Paragraph 20 of the Statement of Claim sets out the plaintiff’s allegations with respect to the defendant’s fiduciary duties owed to the plaintiff. A detailed list of such duties is set out.

11Paragraphs 23 to 31 set out the plaintiff’s allegations of breach of trust.

(ii) Procedural History

12The defendant did not defend the action and was noted in default on May 5, 2015.

13Default judgment was granted by Gilmore J. on November 17, 2016, following an assessment of damages.

14The defendant brought a motion to set aside the noting in default and the default judgment. He claimed that he had never been served with the Notice of Action or the Statement of Claim, and that he only learned of the default judgment in October 2017, after default judgment was granted.

15In support of his motion to set aside the default judgment, the defendant filed an affidavit and a draft Statement of Defence. The defendant’s affidavit filed for the motion “essentially copied the contents” of the draft Statement of Defence. In the affidavit/draft statement, the defendant denied that the plaintiff made any investments with him, and took the position that monies advanced to him were loans and not investments. In total, he received $500,000 from the plaintiff or from a company owned by her. He denied any fiduciary relationship or breach of trust. He also took the position that he had repaid significantly more than the $41,525 found to have been repaid by Gilmore J. in her assessment of damages. Given the opportunity, he would show that he had repaid the plaintiff $495,746.89, and that only $29,253.11 remained owing on one of the loans: Abram v. Tsakiris, 2018 ONSC 1488, at paras. 27-29, 33 and 40.

16On April 3, 2018, Healey J. set aside the default judgment. Based on the evidence filed on the motion before her, Healey J. found that the defendant had an arguable defence on the merits. She dismissed the defendant’s claim for an order to set aside any garnishment or executions issued against the defendant with respect to the default judgment. The execution and judgment were permitted to remain on title so that the plaintiff’s priority was not compromised, but enforcement of the execution and judgment were stayed pending further order.

17Healey J. also granted an order allowing the defendant to serve a Request to Inspect, pursuant to Rule 30 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and/or a Demand for Particulars pursuant to Rule 25, prior to serving and filing a statement of defence.

18On April 18, 2018, the defendant sought leave to appeal that part of Healey J.’s decision dismissing his claim to set aside the executions issued against him, and to allow the executions and judgment to remain on title.

19The defendant’s motion for leave to appeal was dismissed by the Registrar of the Divisional Court for failure to perfect the leave application. Costs were fixed at $750. These costs have not yet been paid by the defendant.

(iii) Demand for Particulars

20On October 12, 2018 - more than six months after the setting aside of the default judgment - counsel for the defendant served the plaintiff’s counsel with a Demand for Particulars, advising that they would not file their statement of defence until they received the particulars requested.

21The Demand for Particulars – like the Statement of Claim – is eleven pages long. It is comprised of 91 questions relating to 28 different paragraphs of the Statement of Claim.

22On October 16, 2018, counsel for the plaintiff responded to counsel for the defendant, refusing the Demand for Particulars and demanding that the defendant file its statement of defence.

23The defendant relies on Rule 25.06(8), which requires full particulars when breach of trust is alleged. Rule 25.06(8) provides:

25.06(8) Where fraud, misrepresentation, breach of trust, malice or intent is alleged, the pleading shall contain full particulars, but knowledge may be alleged as a fact without pleading the circumstances from which it is to be inferred.

24Particulars may be demanded pursuant to Rule 25.10, which provides:

25.10 Where a party demands particulars of an allegation in the pleading of an opposite party, and the opposite party fails to supply them within seven days, the court may order particulars to be delivered within a specified time.

25Rule 18 requires that a statement of defence must be filed within 20 days after the service of the statement of claim. While plaintiffs frequently agree to extend this period of time, counsel for the plaintiff points out that the defendant already has a statement of defence ready to go: the draft statement of defence that was filed with Healey J. on the motion to set aside the noting in default. While Healey J. granted leave to the defendant to serve a Demand for Particulars, she did not grant (and was not asked to grant) an order extending the time for the filing of the statement of defence. The defendant in this case waited six months to serve the Demand for Particulars. The plaintiff argues that this is an abuse of process.

26Service of a demand for particulars does not automatically suspend the time for filing a statement of defence. If particulars are refused, the requesting party can bring a motion to require the plaintiff to provide the particulars. Then the question is whether the particulars demanded are required for the defendant to plead. Pre-defence particulars will only be ordered when they i) are not within the knowledge of the party demanding particulars and ii) are necessary for the purposes of pleading: Pennyfeather v. Timminco Ltd., 2011 ONSC 4257, at para. 61; Ottawa (City) v. Cole & Associates Architects Inc., 2012 ONSC 3360, at para. 27.

27If a statute is pleaded, the particular sections relied on should be identified: Magill v. Expedia Canada Corporation, 2010 ONSC 5247 at para. 131, and Pennyfeather at para. 57. If a statutory duty is pleaded, the particular statute relied upon must also be identified.

28In Cole, Master MacLeod stated, at para. 31:

A request for particulars should be upheld if it appears it will result in more focused and intelligent pleading and it should be refused if it simply adds another unnecessary step or delays the progress of the action.

Analysis

29In the present case, the defendant has set out 91 questions in its Demand for Particulars. The Demand reads more like an examination for discovery than a proper demand for particulars. On this motion the defendant made no attempt to categorize his questions, although it is clear that many of the questions are duplicative.

30Many of the questions can be answered simply by reading other paragraphs of the Statement of Claim. For example, para. 2(a) of the Demand for Particulars asks: On what basis are the alleged funds trust funds? The plaintiff’s basis for asserting that the funds are trust funds is set out in paras. 23 and 24 of the Statement of Claim. Similarly, at para. 3(a), the defendant asks: What professional duty did Mr. Tsakiris owe to Ms. Abram? Again, the answer can be found in paras. 19-20 of the Statement of Claim.

31At para. 4(a), the Demand for Particulars asks: What monies were invested by Ms. Abram with Mr. Tsakiris? The answer to this question is found in para. 6 of the Statement of Claim. Para. 5(a) of the Demand for Particulars asks: What alleged fiduciary duties did Mr. Tsakiris breach? Paragraph 20 of the Statement of Claim lists eleven fiduciary duties alleged to have been breached.

32Paragraph 10 of the Demand for Particulars requests particulars with respect to the occasion on which the defendant advised the plaintiff that he was a sound financial manager. This information is provided in para. 5 of the Statement of Claim.

33Other of the demands for particulars relate to matters that would be within the knowledge of the defendant. For example, the defendant asks what amount of money he repaid to the plaintiff and when and how he made these payments. When and how the defendant made payments to the plaintiff would be within the knowledge of the defendant. The affidavit relied on by the defendant in the motion before Healey J. confirms as much.

34Moreover, the defendant also has the benefit of the findings from the November 17, 2016 decision of Gilmore J., which provides additional particulars in relation to the plaintiff’s claim. In her reasons for decision, Gilmore J. found that:

a. On January 21, 2008 the plaintiff wrote the defendant a cheque for $186,563, and that the defendant also took $13,000 from her line of credit to give to the defendant, for an even $200,000.

b. On October 20, 2008 the plaintiff wrote the defendant a cheque for $100,000.

c. On January 15, 2008 the plaintiff deposited $205,247.26 into her Bra-Mar Enterprises account which could be withdrawn by the defendant. On January 15, 2008 this money was withdrawn by the defendant and deposited into his bank account.

d. On July 4, 2008 the plaintiff transferred $200,000 to the defendant from her line of credit.

35Finally, Gilmore J. accepted the plaintiff’s claim that the defendant had repaid only $41,525.

36The exhibits relied upon by the plaintiff to support these allegation have been available to the defendant since November 2018.

37The claims made by the plaintiff before Gilmore J. represent the position of the plaintiff in this litigation and the defendant may take them into account when it drafts its Statement of Defence. It is apparent from the draft Statement of Defence that it has already done so.

38Given that the defendant filed a draft Statement of Defence in support of his motion before Healey J., it is apparent that the particulars demanded are not necessary for the defendant to file a statement of defence.

39Read as a whole, the Statement of Claim meets the requirements of Rule 25.06(8) to the extent that it makes allegations of breach of trust. Additional details may be obtained on examination for discovery.

40Moreover, the six month delay before the defendant served its Demand for Particulars militates against making any order for particulars at this stage in the proceedings. If particulars are necessary to plead, the defendant should generally serve the demand for particulars before the statement of defence is due.

41That said, there does appear to be one valid Demand for Particulars. Given how long this matter has taken to get to this point (default judgment was set aside sixteen months ago), requiring an answer to this demand will not entail any delay and may expedite the remaining steps.

42Paragraph 5 of the Statement of Claim alleges that the defendant did not have the requisite licences to hold himself out as capable to manage the plaintiff’s money. This allegation necessarily implies that the defendant was in breach of some statutory provision or requirement. The plaintiff must identify all statutes, including the particular section(s), relied upon. Accordingly, the plaintiff must answer para. 8(d) of the Demand for Particulars.

Conclusion

43For the above reasons, the Court orders the plaintiff to respond to the Demand for Particulars at para. 8(d) of the Demand for Particulars, within five days of the release of this decision. The defendant must file its Statement of Defence within 20 days of the service of the plaintiff’s response to that Demand.

44This Court further orders the following timetable:

a. Affidavits of documents to be exchanged by October 15, 2019.

b. Examinations for discovery to be held by November 30, 2019.

c. Motions arising from examinations to be held by January 30, 2020.

d. The above dates can be amended by agreement of the parties without an order from the Court.

45The deadline for setting the action down for trial was already extended to December 31, 2020, by Order of McKelvey J. dated July 10, 2016.

Costs

46The plaintiff seeks costs on a partial indemnity basis in the amount of $9,000 inclusive of disbursements and taxes. The defendant seeks costs on a partial indemnity basis in the amount of $5,400.

47The plaintiff’s costs include the July 10, 2019 court appearance, when the motion was adjourned due to insufficient time to hear the motion. I agree with counsel for the defendant that neither party should be responsible for this lost day.

48While the defendant was successful on one Demand for Particulars, the plaintiff was successful with respect to the other 90 demands. Accordingly, the plaintiff was substantially successful. Had the defendant served a more focused Demand for Particulars, or a more targeted cross-motion, the Demand for Particulars might have been easily settled or argued in under an hour. The demand served as part of this motion was excessive, resulted in the need for a long motion, and made settlement unlikely.

49I also note that the defendant abandoned its motion to inspect documents only at the hearing of the motion. Given that the defendant already had copies of all documents referred to in the Statement of Claim, and was invited to inspect the original documents when they came into the possession of the plaintiff in November 2018, it is unclear why the defendant waited until the day of the motion to abandon this aspect of its cross-motion.

50In these circumstances, and taking into account the factors listed in Rule 57.01, the defendant is ordered to pay costs to the plaintiff on a partial indemnity basis in the amount of $7,000, all inclusive. Costs are payable within 30 days.