Court File and Parties

COURT FILE NO.: 1318/18

DATE: 2020/07/31

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ELIZABETH BILBIJA, ROBERT BILBIJA and EBB PROPERTY INVESTIMENTS INC., Plaintiffs

AND:

TARIK SHOUSHER and NUAGE HOMES INC., Defendants

BEFORE: Justice I.F. Leach

COUNSEL: Stuart R. Mackay, for the Plaintiffs

Philip Morrissey, for the Defendants

HEARD: In writing

ENDORSEMENT

[1] Before me is a motion brought in writing, and apparently without notice, by the plaintiffs.

[2] The notice of motion indicates that the plaintiffs seek “an order in accordance with Consent attached [thereto]”.

[3] The relevant Consent is signed by plaintiff counsel, for the plaintiffs and as agent for counsel representing the defendants, indicating that the plaintiffs and defendants consent to a draft Order attached to the Consent.

[4] That draft Order includes provisions that:

a. would require the defendant Mr Shousher to satisfy outstanding undertakings, (identified in an attached schedule), within 45 days of the requested order being made, and to attend for a further examination to answer those undertakings if necessary;

b. would require all parties to provide sworn affidavits of documents;

c. would require the Royal Bank of Canada to provide, within 30 days, certain documents generated over a specified period of time in relation to a specified bank account maintained by the defendant Nuage Homes Inc.;

d. would require the Bank of Montreal to provide, within 30 days, certain documents generated over a specified period of time in relation to another specified bank account maintained by the defendant Nuage Homes Inc.;

e. would oblige the plaintiffs to reimburse the Royal Bank of Canada and the Bank of Montreal for their “reasonable production costs” incurred in making the required productions;

f. would oblige the plaintiffs to provide the defendants with copies of all documents received from the Royal Bank of Canada and the Bank of Montreal pursuant to the order, at “a reasonable cost”;

g. would require the parties to treat all documents produced pursuant to the order and all information contained therein in the “strictest confidence”, and not disclose them in any manner to others without party agreement or court order;

h. would deem all documents produced in this proceeding to also be produced in a “related proceeding”, having court file no. 1390/19; and

i. would require the defendant Mr Shousher to forthwith pay costs of the motion, fixed in the amount of $1,000.00, but require no payment of costs from the Royal Bank of Canada or the Bank of Montreal.

[5] I have not signed the requested order, for reasons that include the following:

a. The order being requested clearly would affect not only the plaintiffs and defendants but others; i.e., the Royal Bank of Canada and the Bank of Montreal. It would require each bank to produce certain documents, and to do so within a 30-day period. Failure to make the required productions, within the stipulated period, would expose the banks to possible contempt proceedings and cost orders.

b. Rule 37.07(1) requires a notice of motion to be served on any party or other person who will be affected by the order sought, unless the rules “provide otherwise”.

c. The rules do not “provide otherwise” when it comes to obtaining an order requiring production of documents from non-parties to litigation. To the contrary, Rule 30.10 makes it clear that:

i. such orders are not made on the basis of mere consent by existing parties to a proceeding;

ii. such orders instead require leave of the court, which is to grant such orders only when satisfied, (i.e., on the basis of appropriate evidence), that:

1. the document is in the possession, control or power of a person not a party;

2. the document is not privileged;

3. the document is relevant to a material issue in the action; and

4. it would be unfair to require the moving party to proceed to trial without having discovery of the document; and

iii. any motion to obtain an order requiring production of documents from non-parties must be made on notice to every other party, and “to the person not a party, served personally or by an alternative to personal service under rule 16.03”.

d. In this case, there is no evidence whatsoever to indicate that the plaintiffs’ notice of motion was served on either the Royal Bank of Canada or the Bank of Montreal. Nor is there any evidence whatsoever filed in support of the motion, let alone evidence to address and satisfy the requirements of Rule 30.10. The plaintiffs rely entirely on a Consent executed solely on behalf of the plaintiffs and the defendants.

e. The notice of motion indicates reliance on Rule 37.12.1(1), which permits a motion to be heard in writing without the attendance of the parties, unless the court orders otherwise, where “the motion is on consent”. However:

i. In my view the provisions of that rule do not permit disregard for compliance with the requirements of Rule 37.07(1), or the requirements of Rules 30.10(1) and 30.10(2).

ii. At the very least, reading Rule 37.07(1) together with Rule 37.12.1(1), I think it clear that the “consent” referred to in the latter refers to the consent of all parties or other persons who will be affected by the order being requested.

iii. Even if the court is supplied with indications of consent to a requested order by all parties to the proceeding, (in this case all plaintiffs and all defendants), and by all other persons who will be affected by the order being requested, (which in this case includes the Royal Bank of Canada and the Bank of Montreal), Rule 30.10(1) still requires the provision of evidence allowing the court to make a determination that the requirements of that particular sub-rule have been satisfied.

[6] In short, Rule 30.10 production orders are not available for the asking by consent of parties to a proceeding, without any notice to the non-parties who will be affected by the requested order, and without evidence satisfying the other requirements of Rule 30.10.

[7] Without limiting the generality of the foregoing, in my view the simple fact that parties agree to seek no costs from non-parties ordered to produce documents, and/or to provide such non-parties with reimbursement for the reasonable production costs associated with complying with the order, provides no sufficient basis for disregarding the service of notice required by Rules 37.07(1) and Rule 30.10(2).

[8] Not only do the rules not allow for such disregard, but there are very sensible and practical reasons for providing non-parties with such notice, and a corresponding opportunity to be heard in relation to whether making of the order is appropriate and/or presents any other concerns not known to or identified by parties to the litigation. For example, a non-party receiving such a notice may very well indicate:

a. that it does not have the documents being sought;

b. that the parties have made an error, (in relation to a specified bank account number), that would make granting of the order inappropriate;

c. that additional parties might be affected by making of the requested order;

d. that the order should not be made unconditionally, having regard to the non-party’s confidentiality obligations or other legal obligations; and/or

e. that compliance with the proposed production order by a suggested deadline, suggested unilaterally by parties to the litigation, might be unduly onerous or impossible.

[9] Pursuant to Rule 37.07(5), where it appears to the court that a notice of motion ought to have been served on a person who has not been served, the court may:

a. dismiss the motion or dismiss it only against the person who was not served;

b. adjourn the motion and direct that the notice of motion be served on the person; or

c. direct that any order made on the motion be served on the persons.

[10] In this case, I think the most sensible course of action in these particular circumstances is to dismiss the motion now before me, without prejudice to the ability of the plaintiffs to bring a further and fresh motion, compliant with the Rules of Civil Procedure I have identified, requesting similar relief. In that regard:

a. I note that Rule 37.05(5)(a) indicates the possibility of the motion being dismissed only vis-à-vis parties and other persons who were not served as required, in turn implicitly indicating the possibility of the court granting relief requested by the motion that would not affect such parties or other person. For example, the motion before me includes requests for relief, (e.g., Mr Shousher’s satisfaction of undertakings, the parties’ delivery of sworn affidavits of documents, and Mr Shousher’s payment of $1,000.00 in costs), which would seem to affect only the consenting plaintiffs and defendants, and which therefore might be granted in isolation without affecting the Royal Bank of Canada and the Bank of Montreal. While I considered granting that more limited belief, I nevertheless decided not to do so, having regard to the reality is that the Consent executed by the parties contemplated granting of all the requested relief as an integrated whole or “package”, in one order. Moreover, the imposition of some of the contemplated obligations to be imposed on the parties alone, (e.g., the obligation to share copies of productions received from the two banks, and treat all such productions on a confidential basis), cannot properly be understood unless they are placed in context with the contemplated order provisions requiring the specified productions from such non-parties.

b. Adjourning the motion and directing service of the notice of motion on the Royal Bank of Canada and the Bank of Montreal would not address the other problems, noted above, concerning the lack of evidence required by Rule 30.10(1).

c. Nor am I inclined to simply make the requested order, and direct its subsequent service on the Royal Bank of Canada and the Bank of Montreal. As noted above, there are sensible and practical reasons why the banks should have an opportunity to express any possible concerns they may have before such orders are made.

[11] Furthermore, and in any event, in my view additional information and evidence needs to be supplied in relation to the request for an order deeming that productions made in the context of this proceeding are to be considered made in another proceeding as well. In that regard:

a. As it stands, the existing motion record identifies the other “related” proceeding only by court file number, without indicating that other proceeding’s style of cause, and confirming the identities of the parties to that other proceeding.

b. Without such information, the court has no basis for determining what parties or other persons might be affected by the requested order, which in turn might give rise to additional Rule 37.07(1) service of notice concerns.

c. Before such relief is granted, the court should be supplied with additional information and evidence, if only in brief compass, addressing such matters and making it clear why the requested relief is appropriate.

[12] Having regard to all such considerations, I think the most sensible course is to dismiss this current motion, without prejudice to the plaintiffs’ ability to “start again” with a fresh motion that addresses the above concerns and complies with the Rules of Civil Procedure. (In that regard, it should be noted that I am not seized of the matter, and such a further motion may be directed to any judge of the court.)

[13] For all the above reasons, an order shall go:

a. dismissing this motion, without prejudice to the ability of the plaintiffs to bring a further motion, complying with the Rules of Civil Procedure, requesting similar relief; and

b. directing that, in relation to any such further motion, the plaintiffs shall include a copy of this Endorsement with any notice of motion or other material served in

relation to that further motion, and/or filed with the court.

Justice I.F. Leach

Date: July 31, 2020