Harbouredge Commercial Finance Corporation v. Jet Express Transportation Group Ltd.
Court File No.: 3199/19 Date: 2020-06-17 Superior Court of Justice - Ontario
Re: HARBOUREDGE COMMERCIAL FINANCE CORPORATION, Applicant And: JET EXPRESS TRANSPORTATION GROUP LTD., SKYWAY EXPRESS INC. and JIM RASO also known as ANTONIO JIM RASO also known as GENNARO JIM RASO also known as GENNARO RASO 2526982 ONTARIO INC., Respondents
Before: Kurz J.
Counsel: Inga Andriessen
Heard: by teleconference
Endorsement
Introduction
1The Applicant (“Harbouredge”) brings an application under the Repair and Storage Liens Act, R.S.O. 1990, c. R. 25 (“RSLA”) for the determination of the right to possession of two trucks and for their delivery by the sheriff to their owner, Harbouredge. Those trucks are a Chassis 2012 Hino 268 Body 2012 CNTB 24/96/102 FRP Van 24, vehicle identification number 2AYNE8JTXC3S19536; and a Chassis 2010 Hino 185 Body 2010 MULT ALUM 18/102/96 Aluminium Van 18, vehicle identification number 2AYNC6JM6A3S14379 (the “Vehicles”).
The Respondents Failed to Participate on the Return of this Application
2The Respondents have failed to file any responding materials, despite being served with the application record on March 18, 2020. The individual respondent, Jim Raso, also known as Antonio Jim Raso, also known as Gennaro Jim Raso, also known as Gennaro Raso (“Jim Raso”), is a principal of the corporate respondents.
3On the June 3, 2020 return date for this application, I granted Mr. Raso, speaking on his own behalf and on behalf of each of the corporate respondents, a one week adjournment to seek legal counsel. Since service of Harbouredge’s materials on March 18, 2020, he represented to Harbouredge that he was in the process of retaining a lawyer. He repeated that representation in the hearing before me, stating that he was in the process of retaining a lawyer whose name he could not recall. He stated that he has spoken to the lawyer’s assistant, whose name I noted phonetically in my June 3, 2020 endorsement as “Mr. Barn’ [sic?]”. He claimed to have given “Mr. Barn” a $1,000 advance against the lawyer’s retainer. He stated that he would be meeting that lawyer in two days (i.e. June 5, 2020).
4Mr. Raso did not participate in this motion on its June 10, 2020 return date. However, Ms. Andriessen received an email at 9:21 that morning from a person named Daniel Barna, whom I take to be “Mr. Barn.” It reads as follows:
I am retired from practice however I still do a few hours a week for Jet Express and Jim Raso. I was not aware of this matter until the beginning of this week. I have referred other matters to lawyer Robert Maki, and I advised Raso to take this to him has well. Mr. Raso is seeking to have this morning’s tele-conference adjourned, and I will follow up to get Maki up to speed. I am suggesting 3 to 4 weeks, and I don’t see any prejudice to Harbouredge if this is done. DAB
5As Ms. Andriessen accurately pointed out, Daniel Barna is a disbarred lawyer who had his licence removed for what the Ontario Court of Appeal later described as “trust fund violations.” He was subsequently convicted of laundering the proceeds of crime (see R. v. Barna, 2018 ONCA 1034). From Mr. Barna’s June 10, 2020 email, it appears that he was unaware of this matter when Mr. Raso stated that he had offered “Mr. Barn” $1,000 as an advance against a retainer.
6The lawyer to whom Mr. Barna referred in his email, Robert Maki, has not contacted Ms. Andriessen nor has he placed himself on the record. At the beginning of the June 10, 2020 appearance, Ms. Andriessen advised me, as an officer of the court, that she had contacted Mr. Maki’s office and spoken to a clerk. She learned that Mr. Raso had not retained Mr. Maki and had not provided him with a $1,000 advance against a retainer.
7While the one week adjournment that I granted on June 3, 2020 was not peremptory, it was solely intended to allow Mr. Raso to retain counsel. Mr. Raso had been served with Harbouredge’s materials some two and a half months earlier, on March 18, 2020. In the absence of responding materials or even proof of the retainer of counsel (despite Mr. Raso stating for over two months that he was in the process of doing so) I see no reason to believe that Mr. Raso intends to actually defend this proceeding or do anything but unnecessarily delay it.
8I add that a key concern of Harbouredge was that the Vehicles were uninsured. Mr. Raso has failed to provide proof of any insurance on the Vehicles. That is despite his representation on June 3, 2020 that they are insured by a policy that covers the yard in which they are stored. The financial risk to Harbouredge from the non-insurance of the Vehicles is sufficient that I find that it is urgent that this matter proceed. Accordingly, I proceeded in Mr. Raso’s absence. In doing so, I have exercised my discretion under s. 2 of O. Reg. 73/20.
Evidentiary Issues with Ms. Monahan’s Affidavit
9Harbouredge relies in large measure on an affidavit by its “Accounts Solutions Specialist” (which I take to be Harbouredge’s designation of a collections manager), Laurie Monahan. It also relies on a supplementary affidavit from Ms. Andriessen’s law clerk, Christine Allan.
10As I indicated to Ms. Andriessen during the June 10, 2020 hearing, there are a number of evidentiary problems with Ms. Monahan’s affidavit, some of which also apply to her law clerk’s affidavit.
Indirect Evidence of Counsel
11First, both affiants impermissibly rely in large measure on the truth of the hearsay statements of Ms. Andriessen herself. The mischief in that reliance arises from the fact that Ms. Andriessen appears as counsel for Harbouredge in this application. That concern is more pronounced in Ms. Monahan’s affidavit but is not limited to it.
12Over 45 years ago, in Imperial Oil v. Grabarchuk, 1974), the Ontario Court of Appeal pointed out: “the impropriety of counsel who had been a witness in the proceedings appearing as counsel on the appeal. This is a well-settled rule which the Court has strictly enforced over the years.”
13This comment has long been understood to mean that one generally cannot be both counsel and witness in the same proceeding. A corollary to that rule is that counsel cannot avoid the rule through the back door manoeuvre of having a lawyer’s staff member swear a “knowledge and belief” affidavit, offering substantive evidence, based on the lawyer’s statements. These points are well summarized by Perell J. in Gutierrez v. The Watchtower Bible and Tract Society of Canada et al., 2019 ONSC 3069, at para. 37, as follows:
The case law reveals that it is improper for the deponent of an affidavit to act as counsel and rely on his or her affidavit. An advocate cannot avoid the rule that he or she cannot be a witness and advocate through the device of having someone else swear the affidavit based on information and belief from the lawyer. It is improper for a lawyer to appear as advocate on a matter where the lawyer is the source of the information concerning an important and contentious matter before the court, even where the lawyer is not the deponent of the affidavit. [References omitted]
14Perell J. explains the rule as follows:
39 The case law explains that an advocate cannot be a substantive witness in his or her client's litigation because as an advocate, he or she has a duty to the administration of justice to be objective and detached from the client's litigation, which duty could conflict with the advocate's duty to present the client's case in as favorable a light as possible.
15While both Ms. Monahan and Ms. Allan’s affidavits breach the rule, the former’s affidavit, as I set out below, does so more frequently. Many of Ms. Andriessen’s hearsay statements in Ms. Allan’s affidavit simply refer to email correspondence exchanged with Mr. Raso. That correspondence is reproduced as exhibits to Ms. Allan’s affidavit. Ms. Andriessen’s emails to Mr. Raso is only proof that the emails have been sent. However, Mr. Raso’s emails that are reproduced as exhibits to Ms. Allan’s affidavit, contain written statements and implicit admissions of fact, for example that he controls the Vehicles and knows where they are located.
Double Hearsay Violates r. 39.05(5)
16A second problem with Ms. Monahan’s affidavit is its use of single and double hearsay. Two of many examples in her first affidavit will suffice. Ms. Monahan swears the following:
I am advised by Earl Lewis [a bailiff] and believe that Jim Raso advised him that RDS is the company that did the repairs and has a Possessory Lien.
I am advised by Kevin Bowman [the principal of Harbouredge] and believe that on or about March 2, 2020, he had a phone conversation with Jim Raso during which he advised that he knew where the Vehicles were but would not provide the information.
17This evidence, like similar single and double hearsay in Ms. Monahan’s affidavit (including the hearsay of Ms. Andriessen), is offered for the truth of the facts alleged. Similarly, Ms. Allan offers the hearsay evidence of Ms. Monahan and attaches a letter from a third party, received by Ms. Monahan, as proof of its contents.
18This proceeding is an application. Under the Rules of Civil Procedure, the rules of evidence for an application are stricter than those for a motion. Under r. 39.01(4), single hearsay is admissible in a motion if the deponent cites the source of their information and the fact of their belief in it.
19The applicable evidentiary subrule for applications is r. 39.01 (5), which reads as follows:
(5) An affidavit for use on an application may contain statements of the deponent’s information and belief with respect to facts that are not in contention, if the source of the information and the fact of the belief are specified in the affidavit. [Emphasis added]
20As Fuerst J. stated in Newmarket (Town) v. Halton Recycling Ltd., 2006) (“Halton Recycling”):
14… The word "contentious" means "likely to cause an argument; disputed, controversial": Oakley Manufacturing Inc. v. Bowman, [2005] O.J. No. 1641 (S.C.J.).
21Fuerst J. added, at para. 15, that:
[i]nformation and belief evidence is often hearsay evidence: Metropolitan Toronto Condominium Corp. No. 781 v. Reyhanian, [2000] O.J. No. 2640 (S.C.J.); King Estate v. King, [1999] O.J. No. 2509 (Gen. Div.). Accordingly, even where the facts are contentious, a statement on information and belief is permissible if it is not hearsay because it is not tendered in proof of the truth of its contents, or if it falls within an exception to the hearsay rule, including the principled approach: King Estate, supra.
22Generally, the notion of “facts that are not in contention” refers to background or similarly non-contentious information. Ms. Monahan’s affidavit contains clear hearsay statements that go to the heart of the matter. She offers no justification for their admission under any exception to the hearsay rule, including the principled one. It was Harbouredge that put those facts into contention. They are “likely to cause an argument” in this proceeding unless they are conceded.
23Admittedly, the Respondents have not filed any responding materials in this matter. Nonetheless, the court can make a finding that facts are contentious without the responding party having filed an affidavit. As Mandel J. stated in Toronto (City) v. McIlroy, [1993] O.J. No 4621, 1993 CarswellOnt 3069 (Ont. Gen. Div.) at para. 1:
In my view it is not necessary for the Applicant to file an affidavit which would put those portions of the affidavit into issue as contentious, rather, those portions are part of the matters on which the City's application is based. They are germane and not collateral to the application and relief requested. To hold otherwise would mean that all of an application could be based on information and belief and that it would only be at the return of the application if the Respondent filed material that the affidavit would be struck and the Applicant would then have to file further material if so allowed. Where the parties are aware as in the case at bar that the issue is contentious then in my view the material of the Applicant should be based on direct information and not knowledge and belief [citations omitted].
24However, as Fuerst J. pointed out at para. 19 of Halton Recycling, there are other cases in which the court has declined to strike passages of an affidavit under r. 39.01(5) where there is no responding affidavit. As she concludes at para. 20, “[t]he determining factor appears to be the ability of the presiding judge to determine whether the impugned passages of an affidavit contain statements about contentious matters.” While not commending the approach of striking without a responding affidavit, Fuerst J. then did just that where the affidavit in question contained obviously contentious hearsay evidence.
25It is important to note that the requirements of r. 39.01(5) are not mere technicalities. As Akbarali J. wrote in Ontario (Attorney General) v. 855 Darby Road, Welland et al., 2017 ONSC 4953:
38 Compliance with r. 39.01(5) is not a mere technicality. As Leach J. recognized in Aker Biomarine AS v. KGK Synergize Inc., 2013 ONSC 4897, [2013] O.J. No. 5048, where it is clear in law that evidence is inadmissible, leaving it on the record is embarrassing and prejudicial to the fair hearing of the application. A court should not consider such evidence.
The Hearsay in Ms. Monahan’s Affidavit is not Saved by the Business Records Rule Exception under the Evidence Act
26Further, the Monahan affidavit purports to provide confirmation of hearsay evidence through the cutting and pasting of emails from third parties into the internal collection notes (called the “Comment Listing”), kept on a running basis by Harbouredge. During the argument of this motion, Ms. Andriessen justified the admissibility of the contents of this Comment Listing by stating that it is admissible under the business records provisions of the Canada Evidence Act, R.S.C., 1985, c. C-5. That federal statute does not apply in this case.
27This is a proceeding under Ontario legislation, the RSLA. Section 2 of the Ontario’s Evidence Act, R.S.O. 1990, c. E. 23 (the “Evidence Act”) states: “[t]his Act applies to all actions and other matters whatsoever respecting which the [Ontario] Legislature has jurisdiction.” The applicable provision under the Canada Evidence Act is s. 2, which reads: “[t]his Part applies to all criminal proceedings and to all civil proceedings and other matters whatever respecting which Parliament has jurisdiction.” Parliament lacks jurisdiction over the subject of the RSLA. Thus, the applicable provisions are found in the Evidence Act.
28In any event, Harbouredge’s claim that the Comment Listing qualifies as a business record raises two problems:
a. First, the use of business records under the Evidence Act does not make all hearsay contained in those records admissible; b. Second, the use of cut and pasted emails into the Comment Listing as proof of the truth of their contents violates the “best evidence” rule for electronic evidence under the Evidence Act.
Problem with Using Business Records Exception to Admit Evidence of Hearsay Conversations or Correspondence
29Subsection 35(2) of the Evidence Act reads as follows:
Where business records admissible (2) Any writing or record made of any act, transaction, occurrence or event is admissible as evidence of such act, transaction, occurrence or event if made in the usual and ordinary course of any business and if it was in the usual and ordinary course of such business to make such writing or record at the time of such act, transaction, occurrence or event or within a reasonable time thereafter. [Emphasis added]
30Thus, business records form an exception to the hearsay rule. The lack of personal knowledge by the maker of the writing or record does not, in itself, affect the admissibility of the writing or record, rather it goes to weight. That construction, which changes the previous common law, is set out in s. 35(4) of the Evidence Act, which reads as follows:
Surrounding circumstances (4) The circumstances of the making of such a writing or record, including lack of personal knowledge by the maker, may be shown to affect its weight, but such circumstances do not affect its admissibility.
31But s.35(4) does not change the fact that the writing or record in question is admissible only as evidence of an “act, transaction, occurrence or event.” It is not a backdoor route to hearsay or double hearsay recitations of conversations or correspondence offered for the truth of the facts alleged.
32This point was clearly made by Griffiths J., as he then was, in one of the earliest cases dealing with the business records provisions of the Evidence Act: Setak Computer Services Corporation Ltd. v. Burroughs Busters Machines Ltd. et al., 1977) 641 (Ont. H.C.) (“Setak”). There, Griffiths J. wrote of the manner in which the Evidence Act expanded the common law requirements for the admission of business records, which required that the author of the records have personal observation or knowledge of the facts recorded. However, that expansion was not meant to open a floodgate of unreliable hearsay into evidence. Griffiths J. stated:
The Act was intended to make admissible records which, because they were made pursuant to a regular business duty, are presumed to be reliable. The mere fact that recording of a third party statement is routine imports no guarantee of the truth of the statement, and to construe s. 36 [now s. 35] as admitting hearsay evidence of any third party would make the section an almost limitless drag-net for the introduction of random testimony from volunteers outside of the business whose information would be quite beyond the reach of the usual test of accuracy. [Emphasis added]
33Griffith J. excluded some of the evidence contained in minutes of pre-litigation meetings between representatives of the parties and internal meetings of one the parties. He excluded some of that evidence for two reasons, First, because some of that evidence was non-expert opinion evidence offered for the truth of the opinion, and second, because it was hearsay received from third parties who were not under a business duty to report the information. Griffiths J. interpreted the business records provisions of the Evidence Act to require both the person creating the record and the informant whose information is being recorded to have a duty the appropriate duty to the business. As he wrote:
In my opinion, s. 36 [now s. 35] of the Evidence Act should be interpreted as making hearsay statements admissible when both the maker of the writing or the entrant of the record, and the informant or informants, if more than one, are each acting in the usual and ordinary course of business in entering and communicating an account of an act, transaction, occurrence or event.
34In Catholic Children’s Aid Society of Toronto v. L. (J.), 2003), at para. 10, Jones J. summarized the four criteria for the admission of business records set out by Griffiths J. in Setak as follows:
(1) the record must be made in the usual and ordinary course of business and it must be in the usual and ordinary course of business to make such a writing or record; (2) the record must be made contemporaneously with the transaction recorded, or within a reasonable time thereafter; (3) only records of “facts” can be admitted — note words in subsection 35(2) “an act, transaction, occurrence or event” and not records of expert opinion; and (4) although there is no requirement that the maker of the record have personal knowledge of the facts recorded, he must be acting under a business duty and the informant must be acting under a business duty or the informant’s statement must be otherwise admissible under the hearsay rule of exceptions.
35Relying in part on the Setak decision, Sherr J. of the Ontario Court of Justice explains the point of the business record exception to the hearsay rule in Children’s Aid Society of Toronto v. L. (L.), 2010 ONCJ 48, by stating:
7 For evidence to be relevant, it must be reliable; otherwise it has no value. The “business record” exception creates a test that ensures a certain degree of reliability for first-hand hearsay. [Emphasis added]
36Ms. Monahan’s affidavit and her reference to Harbouredge’s Comment Listing fails to meet the requirements of Evidence Act s. 35(2) as set out in Setak. The only justification for the admission of the “Comment Listing” records as business records under s. 35 to which Ms. Monahan deposes is her statement that:
The Applicant maintains a computerized Comment Listing which records activity on the Lease Agreement in one place. I am one of the individuals at the Applicant who is under an obligation to impute information into the Comment Listing.
37In saying that, Ms. Monahan fails to mention or offer the following necessary elements of the s. 35(2) criteria:
a. That the Comment Listing is made in the usual and ordinary course of Harbouredge’s business (Ms. Monahan only says that she has an obligation to input information into the Comment Listing); b. That it is in the usual and ordinary course of Harbouredge’s business to make the writing or record at the time of such act, transaction, occurrence or event or within a reasonable time thereafter; c. That the records that she relies upon must relate to an “act, transaction, occurrence or event”; and d. That the informant of the hearsay she is relying on was acting under a business duty to Harbouredge in providing the information to Harbouredge or that the informant’s statement is otherwise admissible under the hearsay rule or its exceptions.
38Because of the failure to meet the criteria set out above, the contents of the Comment Listing, as presented in Ms. Monahan’s affidavit, cannot be accepted as a business record under s. 35 of the Evidence Act.
Best Evidence Rule
39My third concern with the evidence in Ms. Monahan’s affidavit arises from the application of the “best evidence” rule to electronic documents such as the Comment Listing. That rule, which has evolved over the years and now been codified for electronic records is described by Chappel J. in Al-Sajee v. Tawfic, 2019 ONSC 3857, as follows:
61 … the "best evidence rule" evolved at common law as a means of assisting in addressing the integrity requirement. This rule requires the production of an original writing, recording of photograph where the content of the item is material to the case, unless the original is unavailable for some reason other than the fault of the party seeking to adduce the evidence (Alan W. Bryant, Sidney N. Lederman and Michelle K. Fuerst, Sopinka, Lederman and Bryant: the Law of Evidence in Canada, 4th ed. (Toronto: Lexis-Nexis, 2009), at para. 18.31). The common law rule has evolved to the point that it is not considered to be an absolute criterion for the admissibility or exclusion of an item of evidence, but rather "a general guide for choosing the appropriate method of proof". [citations omitted]
40Electronic documents have unique characteristics, which can negate the concept of “original” documents or their copies in many circumstances. There can be many originals of, for example an email: the one created by the sender, the one received by the recipient and even the one received by a person who receives a “c.c.” copy of the document.
41As a result of the unique characteristics of electronic records, the provisions of s. 34.1 of the Evidence Act modify the common law best evidence rule (s. 34.1(2)), setting out specific provisions for the admissibility of electronic documents. They look to “electronic records” and require proof of their authenticity and integrity.
42The terms “data”, “electronic record” and “electronic records system” are defined as follows in s. 34.1(1):
“data” means representations, in any form, of information or concepts;
"electronic record" means data that is recorded or stored on any medium in or by a computer system or other similar device, that can be read or perceived by a person or computer system or other similar device, and includes a display, printout or other output of that data, other than a printout referred to in subsection (6).
“electronic records system” includes the computer system or other similar device by or in which data is recorded or stored, and any procedures related to the recording and storage of electronic records.
43Under s. 34.1(4), the person seeking to introduce an electronic record has the burden of proving its authenticity. But the bar for that proof is the relatively low one of "... evidence capable of supporting a finding that the electronic record is what the person claims it to be.” Subject to the description of what constitutes an electronic record under s. 34.1(6), the best evidence rule is met when the court is “…satisfied on proof of the integrity of the electronic record” (s. 34.1(5)).
44That integrity need not be proven by reference to the record itself. It may instead be proven “… by evidence of the integrity of the electronic records system by or in which the data was recorded or stored, or by evidence that reliable encryption techniques were used to support the integrity of the electronic record” (s. 34.1(5.1)).
45For the purpose of the s. 34.1 best evidence rule, the record sought to be tendered may be “[a]n electronic record in the form of a printout that has been manifestly or consistently acted on, relied upon, or used as the record of the information recorded or stored on the printout” (s. 34.1(6)).
46For the purposes of the best evidence rule, there is a rebuttable presumption of the integrity of an electronic record. Under s. 34.1(7), that presumption may be invoked by the following proof:
a. evidence of the proper operation of the recording system (or that any improper operation does not effect the integrity of the document); b. that it was recorded or stored by a party adverse to the one tendering it; or c. that it was recorded or stored in the unusual and ordinary course of business by a third party who did not act under the control of the party tendering the document.
47The precise provisions s. 34.1(7) are as follows:
Presumption of integrity (7) In the absence of evidence to the contrary, the integrity of the electronic records system by or in which an electronic record is recorded or stored is proved for the purposes of subsection (5),
a) by evidence that supports a finding that at all material times the computer system or other similar device was operating properly or, if it was not, the fact of its not operating properly did not affect the integrity of the electronic record, and there are no other reasonable grounds to doubt the integrity of the electronic records system; b) if it is established that the electronic record was recorded or stored by a party to the proceeding who is adverse in interest to the party seeking to introduce it; or c) if it is established that the electronic record was recorded or stored in the usual and ordinary course of business by a person who is not a party to the proceeding and who did not record or store it under the control of the party seeking to introduce the record. 1999, c. 12, Sched. B, s. 7 (2).
48Under s. 37.1(8), in determining whether any electronic record is admissible under any rule of law,
…evidence may be presented in respect of any standard, procedure, usage or practice on how electronic records are to be recorded or stored, having regard to the type of business or endeavor that used, recorded or stored the electronic record and the nature and purpose of the electronic record.
49In her very helpful analysis of these provisions in Al-Sajee v. Tawfic, 2019 ONSC 3857, Chappel J. summarized the application of the best evidence criteria of s. 34.1 of the Evidence Act, writing at para. 66 that:
… statutory provisions such as sections 34.1(5) to (7) dispense with the requirement of an original record and establish other means of satisfying the integrity requirement (Sylvestre v. Sylvestre, 2018 SKQB 105 (Q.B.), at para. 22). As in the case of authentication, the statutory criteria for determining the integrity of an electronic document at the admissibility stage are threshold criteria only. The admissibility criteria are set low, and as a general rule, concerns regarding the accuracy and reliability of the records, including whether they have been altered, should be resolved by the trier of fact after hearing all of the evidence. It is at that stage that a determination should be made as to whether the item in question should remain in the evidence or be excluded, and the weight that should be accorded to it if it is not excluded (see R. v. J.V., 2015 ONCJ 837 (O.C.J.); Sylvestre, at paras. 24-25).
50Here, the only evidence offered by Ms. Monahan to meet the threshold authenticity and integrity questions is, as set out above, that 1) Harbouredge maintains a computerized “Comment Listing”, which records activities under its lease agreement; and 2) she is one of the individuals who inputs information into that record. That statement does not come close to meeting even s. 34.1’s minimal criteria.
51That failure is particularly apposite when Ms. Monahan’s affidavit contains single or double hearsay. That is, when she refers to an email that she received from someone else as proof of the truth of its contents, it is single hearsay. When the contents of some of those emails are statements made by a third party to the email’s author, it is double hearsay. The fact that hearsay is contained in an electronic document does not make it admissible unless it meets one of the criteria as an exception to the hearsay rule (see R. v. Mondor, 2014 ONCJ 135, where Green J. states” “…where the electronically stored information is effectively data inputted by a human the hearsay rules still apply”).
52Then to compound the concern, Ms. Monahan does not refer to the actual email she is quoting or relying upon. Instead, she refers to a version of the email that was cut and pasted into the Applicant’s Comment Listing by an unknown person. That version is, in turn, stored within an unidentified computer programme. An example of this process is set out at para. 21 of Ms. Monahan’s affidavit and throughout its Exhibit “C” Comment Listing.
53If Ms. Monahan wishes to rely on an email that she has received, and place its contents into evidence, she need only make it an exhibit to her affidavit. Its contents will then stand or fall on its own evidentiary virtues.
54It may be expedient to Harbouredge that its internal record keeping deal with email correspondence by cutting and pasting such emails into its running Comment Listing. It may be equally expedient to counsel to simply rely on that Comment Listing for proof of its contents. But that expediency ignores even the liberal requirements of the Evidence Act.
55Further, Harbouredge’s expediency does not offer an adequate explanation for its failure to provide the relevant emails themselves, printed out in the form that they are received.
56One may ask whether the court is placing an unreasonably high bar on the admission of electronic evidence, simply for the sake of rigour and rigidity. There are two answers to that query. The first deals with the ills of too lax an application of the Evidence Act’s test for the admission of electronic evidence, such as the contents of Harbouredge’s Comment Listing. The second speaks to what is needed to properly place such evidence before the court.
The Ills of too Lax an Application of the Evidence Act’s Test for the Admission of Electronic Evidence
57The risk of too lax a standard for the admission of electronic evidence arises from its protean, highly malleable nature. Electronic evidence can easily be digitally manipulated in a manner that is difficult to detect without expert evidence.
58Many of the risks of too lax a test for its admission are borne out in this case. They include:
a. Ms. Monahan does not say how the emails came to be reproduced in her running Comment Listing. She does not say that she received them and then cut and pasted them into the electronic document upon which she relies. If it was not her who performed the cutting and pasting, she does not say who did it and how she can confirm its accuracy. These omissions are important because a reproduction of an electronic document is different than, say, a photocopy. A photocopy reproduces an image, albeit imperfectly. While it can alter the underlying image, that alteration is usually capable of discernment upon close review. But that is not necessarily the case with an electronic document, where the underlying document itself can be altered. Further, any alternation to the document, such as cutting and pasting, may introduce alterations to it, whether wittingly or not. b. But here, nothing in Ms. Monahan’s affidavit assures the court that the form of the emails pasted into her Comment Listing are complete and unaltered. c. Harbouredge’s process of cutting and pasting takes an electronic document from one form, the email programme, and places it into another programme, the one that supports the Comment Listing. Neither programme is identified. This represents a direct failure to meet the s. 34.1 test for proving the integrity of the electronic records system. Recall that the definition of an electronic records system in s. 34.1(1), above, includes “…any procedures related to the recording and storage of electronic records.” Here, that includes cutting and pasting. If there were any questions as to the authenticity and integrity of the records, there is nothing in the Monahan affidavit to confirm the integrity. d. The process of cutting and pasting appears to remove, or at least does not visibly include, the metadata associated with the email. This denies the court the type of information that may be visible, at least in part, in even a photocopy of a complete printout of an email. That absence increases the difficulty of anyone attempting to verify the authenticity of the emails. It would be the equivalent of a partial photocopy of a photocopy, without any ability to independently verify the provenance of the original. That problem could be corrected if the deponent were to swear that the pasted email contained exactly the same contents as the original email she received, without any change of data or metadata. This is not an onerous threshold to meet. I add that it could be easily avoided by simply producing a printout of the email. e. Ms. Monahan fails to attest to the integrity of the Comment Listing or the underlying system that she relies upon to support the Comment Listing. a. Ms. Monahan also fails to say that she has checked the printout of the Comment Listing attached to her affidavit against the original electronic documents that she has pasted into it, in order to confirm their accuracy and integrity of the reproduction.
What is Needed to Properly Place Electronic Evidence before the Court.
59Despite the need to meet the Evidence Act’s standards before electronic evidence can be admitted, one does not need to be an expert to meet that test. The Evidence Act sets out straightforward methods of proving the authenticity and integrity of an electronic document. Those methods take into account both practicality and the need to ensure the reliability of the record presented to the court. Evidence Act ss. 34.1(6) - (8) allow for proof of integrity without requiring anything approaching complex or expert evidence. In fact, under s. 34.1(9), that evidence can be proven by affidavit, based only on the deponent’s knowledge and belief.
60For the reasons set out above, Ms. Monahan’s affidavit and her printout of her Comment Listing in that affidavit fail to meet the best evidence rule set out for electronic records in s. 34.1 of the Evidence Act.
Harbouredge is Entitled to the Relief it Seeks
61During the course of argument, I raised a number of the evidentiary concerns set out above with Ms. Andriessen, albeit not in the same depth as set out in these reasons. Her main response was that – even accepting the validity of my concerns and excluding any inadmissible evidence – her client has presented sufficient evidence to make her case.
62In reviewing Harbouredge’s materials, I agree. Even excluding all of the inadmissible evidence that I have described above, there is sufficient admissible evidence to grant Harbouredge the relief it seeks. Such evidence includes the admissible portions of Harbouredge’s two affidavits, and the concessions made by Mr. Raso during the June 3, 2020 motion teleconference attendance.
63First, Harbouredge has proven that Jim Raso is a principal of both corporate respondents, a fact that he does not deny in speaking for them on June 3, 2020. Mr. Raso also does not deny that the lease for the Vehicles has not been paid to Harbouredge. He did orally claim, during the June 3, 2020 attendance, that he has paid to sublease the Vehicles from their original lessee. However he never offered Harbouredge any proof of even those payments.
64Mr. Raso also does not deny that the insurance on the Vehicles has been terminated for non-payment Rather, he told the court that the Vehicles are sitting in a yard controlled by an entity styled as “RDS Auto and Truck Repairs” (“RDS”), whose contents, he claims to be insured. RDS is a business style registered by one of the corporate respondents of which Mr. Raso is a principal, Skyway Express Inc.
65In saying this, Mr. Raso has implicitly admitted, as he has earlier done in writing, that he knows where the Vehicles are located. Furthermore, he implicitly admitted that he has control over the Vehicles. In his oral submissions before me (and in emails to Harbouredge, as early as March 18, 2020), Mr. Raso stated that he would be willing to return them to Harbouredge if it paid the amount of RDS’s alleged lien into court.
66Mr. Raso explained his rationale when he told the court on June 3, 2020, that one of the corporate respondents, Jet Express Transportation Group Ltd. (“Jet Express”), attempted to take over the lease on the Vehicles (a process that Harbouredge refused). He claimed that was misled by Harbouredge about the vehicle’s repair costs. When an independent third party garage presented him with what he felt to be an excessive estimate of the costs of repairing the Vehicles, he provided them to RDS for repair.
67Mr. Raso claimed that RDS has a lien against the Vehicles. He makes that claim even though RDS never registered such a lien under the RSLA. Any claim would have to be to a possessory lien under s. 3(1) of the RSLA. That provision reads as follows:
3 (1) In the absence of a written agreement to the contrary, a repairer has lien against an article that the repairer has repaired for an amount equal to one of the following, and the repairer may retain possession of the article until the amount is paid:
- The amount that the person who requested the repair agreed to pay.
- Where no such amount has been agreed upon, the fair value of the repair, determined in accordance with any applicable regulations.
- Where only part of a repair is completed, the fair value of the part completed, determined in accordance with any applicable regulations.
68Despite the terms of the statute granting a possessory lien, none of the respondents have ever produced an invoice for the alleged repairs of the Vehicles. They have not even set out what repairs they allege that RDS has effected. That is the case despite the fact that the repairs were purportedly performed before this application was issued. Further the respondents never had the consent of the Vehicle’s owner, Harbouredge, to repair them.
69I note that a corporate entity entitled “RDS Truck and Repairs Ltd.” (“RDS Ltd.”) registered a financing statement under the Personal Property Security Act, R.S.O. 1990, c. P.10 (“PPSA”) in regard to the Vehicles. However, a March 2, 2020 corporate search shows that RDS Ltd. had its corporate status cancelled. Furthermore, even if RDS Ltd. were to exist, it has no security interest to register under the PPSA. The registration may have been in error and intended to be a RSLA registration.
70All of this leads me to conclude that each of the respondents have some degree of control over the Vehicles and are not entitled to possession of them. For its part, Harbouredge owns and is entitled to possession of the vehicles. Mr. Raso knows where they are.
71Under s. 23(1)(a) of the RSLA, the court has jurisdiction to determine the rights to possession when a possessory lien is claimed. The relevant provision reads as follows:
Determination of rights by court 23 (1) Any person may apply to a court for a determination of the rights of the parties where a question arises with respect to,
(a) the seizure of an article under Part II (Non-possessory Liens), any right of seizure in respect of the article, whether the costs of seizure are recoverable or whether they exceed the amount permitted under subsection 14 (3.1); (d) the amount of a lien or the right of any person to a lien; and (e) any other matter arising out of the application of this Act,
and the court may make such order as it considers necessary to give effect to those rights.
72In Hamilton v. 1262108 Ontario Inc., 2001) (“Hamilton”), Feldman J.A., writing for the Ontario Court of Appeal, described the scheme of RSLA s. 23 as follows at para. 10:
…s. 23 allows any person access to the court for a determination of a list of issues set out in subsections (a) through (e) respecting “the rights of the parties”, and gives the court the authority to “make such order as it considers necessary to give effect to those rights.” Such an order would include an order for release of the liened goods upon payment of the amount of the lien as determined by the court.
73Feldman J.A. clarified that the process under s. 23 is different than the process under s. 24. The latter allows for paying the lien claim into court and then obtaining the release of the vehicle. In fact, the two processes are mutually exclusive (see Hamilton, at paras. 11 and 15).
74As Harbouredge is “any person”, it is entitled to make this application under RSLA s. 23. Upon that application, I am entitled to determine “any right of seizure in respect of the article, whether the costs of seizure are recoverable…” Here, I have already determined that Harbouredge is the owner of the Vehicles and that it is entitled to possession of them, while the respondents are neither entitled to possession nor to enforce a possessory lien over the Vehicles. The respondents have no right to seize the Vehicles and Harbouredge is entitled to their return.
75Under s. 141 of the Courts of Justice Act, unless that statute provides otherwise (which it does not in this case), orders arising out of a civil proceeding and enforceable in Ontario shall be directed to the sheriff for enforcement.
Order
76Accordingly, I order that:
- the Respondents shall deliver possession of the Vehicles to Harbouredge.
- the Sheriff of the Region or municipality where the Vehicles may be located in, is directed and authorized to deliver possession of the Vehicles to Harbouredge by taking any and all necessary steps to enter upon the lands occupied by the Respondents, or such any other lands where the Vehicles may be located;
- The Respondents shall pay costs of this application, fixed at $6,500. I find that that amount is fair, reasonable and proportionate in the circumstances.
“Marvin Kurz J.” Electronic signature of Justice Marvin Kurz, Original will be placed in court file
Dated: June 17, 2020