COURT FILE NO.: CV-19-CV-623279
MOTION HEARD: 20191018
REASONS RELEASED: 20200225
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
2169460 Ontario Limited and 1218934 Ontario Limited
Applicants
- and -
Jaswant Dass and Preet Dass
Respondents
BEFORE: MASTER D. E. SHORT
COUNSEL: Peter-Paul Du Vernet Fax: 416-368-34678
-for the Respondents (Moving Parties) peter-pauleduvernet@glaholt.com
Brian N. Radnoff Fax: 1-844-670-6009
-for the Applicants (Responding) bradnoff@dickinsonwright.com
REASONS RELEASED: February 25, 2020
Reasons for Decision
I. Background
[1] Family feuds are never pleasant nor simple to resolve. In this case three brothers originally worked together and seem to have amassed a significant number of valuable assets.
[2] However, at some point, they determined to go their separate ways and to divide their existing pool of assets.
[3] It appears a scheme of division was agreed upon in 2014. However, it is unclear to me whether any of the three brothers had independent advice with respect to potential accounting or legal issues arising from the nature of the assets to be acquired by each individual pursuant to the proposed division.
[4] Now, some five years later, rather than commencing a normal action, the moving numbered companies 2169460 Ontario Limited (“216”) and 1218934 Ontario Limited (“121”), bring an Application in the Superior Court seeking a range of relief. In addition to seeking the removal of PPSA and Land Titles Act [“LTA”] registrations. As well they seek, inter alia, the following items of relief in their Notice of Application:
“(d) An order requiring Jaswant Dass ("Jaswant'') to produce the Promissory Notes, defined below, for inspection by the Applicants;
(e) An order for a forensic examination of the Promissory Notes;
(f) A declaration that the Promissory Notes are forgeries;
(g) ln the alternative to (f), a declaration that the Promissory notes are invalid and of no force or effect;….”
[5] Following a listing of the various items of relief sought, the Notice of Application continues:
“2. The grounds for the application are:
A. The Parties
(a) 216 and 121 are Ontario companies controlled by Salinder Paul Dass ("Paul");
(b) Paul is the sole director and officer of 216 and 121;
(c) Jaswant is Paul's brother;
(d) Preet is Jaswant's daughter and assisted Jaswant with his fraudulent conduct giving rise to this application;
B. 121 and the Wolfdale Property
(e) 121 owns the Wolfdale Property;
(f) On April 5, 2019, Jaswant registered a notice under s. 71 of the LTA against the Wolfdale Property (the "Wolfdale Notice") claiming a beneficial interest in the property;
(g) The Wolfdale Notice is registered on the basis of two fraudulent promissory notes dated July 30, 2014 (the "Promissory Notes");
(h) The Promissory Notes are purported to be signed by Paul, on behalf of himself, in favour of Jaswant;
(i) The Promissory Notes are forgeries, and Paul is not indebted to Jaswant;
(j)) Preet witnessed the execution of the Promissory Notes;
(k) On April 8, 2019, Jaswant registered an interest under the PPSA against 121 on the basis of the Promissory Notes…”
[6] While Masters are without jurisdiction to make final decisions with respect to the resolution of proceedings brought under Rule 14.02 (3), it is within our jurisdiction to deal with interlocutory issues, within the Application process.
[7] It is well-established that an Application should be used when there is no matter in dispute and when the issues to be determined do not go beyond interpretation of a document. Normally, when issues of credibility are involved or when viva voce evidence is required, a matter proceeds as an action.
[8] However, the Court has the power to hear an Application, even if there are material facts in dispute. However, in an appropriate case, the court may still find that of a number of disputed peripheral facts are irrelevant, where the facts necessary to dispose of the subject of the Application, that will enable the disposition of the matter, are not in dispute. [see Lanark (County) v. Morrow, 2012 ONCA 64]
II. The Present Dispute
[9] The present motion deals with the entitlement of respondents on an Application to obtain access to original documents referred to in the supporting material filed by the plaintiffs.
[10] Put simply, the question before me was directed to determining the degree of access which should be granted to counsel for the respondent, with a view to establishing whether an actual, original document is in the possession of the Applicant Corporations (or their counsel) .
[11] Thus, the Respondents to this proceeding, commenced by way of Notice of Application, move to compel production by the Applicant corporations of the documents referred to, black and white photocopies only of which are exhibited to, the affidavits delivered by the Applicants, pursuant to Rule 30.04(2).
[12] In response to this motion, the Applicants deny there were ever any genuine promissory notes and assert that say they are not required to produce for inspection, the black and white photocopies of the alleged promissory notes .
[13] The uniqueness of the present situation seems to flow from the fact that the bulk of the rules dealing with production of documents address what is the proper approach, in a normal action, commenced by way of a Statement of Claim, where Affidavits of Documents would be involved.
[14] In an Application there is no requirement for any listing of any, or all, potentially relevant documents. Rather the moving party simply files an affidavit in support together with the Notice of Application.
III. Moving Parties’ Position
[15] The somewhat surprising element of this motion is that it is Jaswant who asserts that he is owed a substantial sum on the promissory notes allegedly issued in his favour by the Applicant Companies (or Paul).
[16] Yet it is the Applicants who have brought an application seeking to obtain a finding by this court that there never were any genuine promissory notes, allegedly issued in favor of Jaswant.
[17] Their materials filed in support of the Application assert that the notes were never given to Jaswant and that nothing is owing to him.
[18] It is somewhat confusing to find that the present procedural motion is brought by Jaswant to require the applicants to produce the alleged, actual promissory notes, which they deny exist.
[19] The Applicants chose to proceed by way of Notice of Application. There will be no Affidavits of Documents or examinations for discovery. The Respondents must serve all affidavit material upon which they intend to rely before cross-examining the Applicants on their affidavits.
[20] In a more normal situation, the Respondents would be entitled to production of the originals, or an explanation as to where the copies exhibited to the Affidavits of the Applicants came from, and why originals are not being produced for inspection, before completing their responding Affidavits. However, this matter seems to be far from a “normal” situation.
IV. Asserted Facts
[21] This Application was commenced by way of Notice of Application issued July 8, 2019, seeking, inter alia, a declaration that the purported Promissory Notes, allegedly made in favour of the Respondent Jaswant Dass, are forged and fraudulent.
[22] Jaswant relies on the fact that the Applicants delivered the Affidavit of Paul Dass, sworn August 1, 2019 in support, with black and white photocopies only of “what are put forward as authentic and original documents”.
[23] The Respondents to the Application delivered in response, the affidavits of Jaswant Dass, Preet Dass, and an accountant by the name of Aneal Thansingh. That individual is said to have done work for both the Applicants and the Respondent Jaswant Dass.
[24] The Affidavits of Jaswant Dass and Preet Dass state that the Promissory Notes are authentic, genuine, and valid, and that the principal of the Applicant companies, Paul Dass, prepared all of the documents including the Promissory Notes, and took all of the originals with him including the Promissory Notes.
[25] On August 21, 2019, the Respondents delivered a Request to Inspect the documents referred to in the Affidavit of Paul Dass sworn July 18, 2019. By letter dated August 22, 2019, counsel for the Applicants took the position that they were not required to produce the actual documents, and that the Respondents were required to provide a detailed explanation for the request to see the actual documents.
[26] The factum filed on behalf of Jaswant asserts:
“10. By letter dated August 23, 2019, in response, counsel for the Respondents confirmed that no explanation was required, however provided the explanation and again requested production of originals.
Counsel for the Applicants responded again requesting authority for inspection of originals.
By letter dated August 26, 2019, counsel for the Respondents provided the authority, and including by way of reference to Rule 30.04(2) and Rule 4.06(3), and confirmed that the right to inspect documents means:
"the document, actual document, original document .... where copies are attached to an affidavit,”
[27] The factum of Jaswant continues:
- There has been no timetable for the delivery of material in this Application. Apparently by way of reply, the Applicants delivered the further Affidavit of Paul Dass sworn September 8, 2019, the Affidavit of Rachhpal Dass sworn September 8, 2019, with, again, black and white copies of documents exhibited, and as well an affidavit of Aneal Thansingh sworn August 22, 2019 purporting to recant his affidavit provided to the Respondents.
[28] The Respondents delivered a Request to Inspect the Documents referred to in the Affidavits of Rachhpal Dass and Salinder Paul Dass sworn September 8, 2019, under cover of letter dated September 11, 2019, and under cover of letter dated September 16, 2019, served a Request to Inspect the documents referred to in the Affidavit of Aneal Thansingh sworn August 22, 2019, delivered by the Applicants and included in the Applicants' form of Reply Record.
[29] The factum asserts:
- No originals, nor whatever the exhibits are said to have been reproduced from, have been produced for inspection, nor has any explanation been provided as to why they would not be available to the Applicants who rely upon them, and have put copies of them forward as evidence, nor why they have not been produced for inspection.
[30] The consistent position of the Applicants throughout is that there were never any genuine promissory notes issued in favor of Jaswant.
V. Putting This Dispute in Context
[31] In his affidavit of September 2019 Salinder Paul Dass (“Paul”), on behalf of the Applicant deposes, in part, as follows:
Background to the Purchase of the Properties
“4. Jaswant's description of the background to acquiring the assets that were eventually divided between the Brothers is incorrect. Jaswant asserts that he purchased these assets with his own money when the assets were acquired with financial assistance from our father and then the collective efforts of all the Brothers over the years in building the businesses.
In early 1987, Jaswant and I started to work at a weekend flea market for a vendor, Jasbir Singh ("Jasbir"), to learn how to sell electronics. We worked there for about six months and learned how to sell electronics.
Our father gave the Brothers approximately $25,000 in 1987. Jaswant and I used the funds to purchase inventory from Jasbir and rented a booth at the Pickering flea market. I worked at the flea market. Rachhpal would assist with our booth at the flea market. on weekends and during some weekday evenings after he finished his factory shifts
Jaswant claims that he started and grew the business himself. This is not correct. The Brothers started the stall in the flea market, with the money from our father, and expanded the business with our collective efforts. Eventually, the business flourished. We started to purchase electronics inventory from Ohio for sale at the flea market.
In 1989, my father told us to get a retail location for our electronics business on Yonge St. near Yonge and Dundas. We could not find any location at Yonge and Dundas but ended up renting a building at 509 Yonge Street in Toronto and operated an electronics business under the name KP Electronics. The Brothers worked in the business. The business flourished. Our father continued to encourage us to find a location closer to Yonge and Dundas.”
[32] The affidavit then outlines activities from 1989 to 2014 and beyond. For my purposes, I have set out the above extracts, at some length, to provide a greater understanding of the context in which these three brothers built their businesses. As is often the case in partnerships at some point there is a breakdown and a need to go their separate ways. I omit that history which for my purposes it is generally irrelevant. What is clear to me is that there was a falling out which led to ongoing discussions and ultimately an agreement by all, to a basis for the discontinuance of the prior arrangements.
[33] The affidavit of Paul, filed on the motion before me, sets out the following description of his understanding of the arriving at a basis for dissolution and his denial of the validity of the alleged “Promissory Notes” :
G. Signing of the Settlement Agreement
Preet gives evidence at paragraphs 6 to 8 of her Affidavit about meetings between the Brothers. As well, her name appears on the Promissory Notes as a witness. She states that the Promissory Notes were signed at the same time as the Settlement Agreement and the Agreement of Purchase and Sale for the sale of the condominium units 11 and 12 at 1770 Albion Road (the "APS"). This is incorrect. The Settlement Agreement was discussed during several meetings, most or all of which Mr. Thansignh attended. When an agreement was reached, Mr. Thansingh prepared the agreement and gave it to Rachhpal. Preet was not at any of the meetings to discuss the Settlement Agreement, or when the Settlement Agreement was signed. The Promissory Notes, and the APS, were not part of the Settlement Agreement and were not prepared when the Settlement Agreement was signed.
Jaswant and Preet state at paragraphs 30-31 and 7-8 of their respective Affidavits that the Settlement Agreement was signed at Jaswant's office at 1770 Albion Road, Unit 51. This is incorrect. All the meetings took place at Woodbine Hotel & Suites in the breakfast area of the hotel. On July 30, 2014, Rachhpal brought the Settlement Agreement, that was prepared by Mr. Thansingh, to the hotel for the Brothers to sign. ….
Jaswant and Preet state at paragraphs 32 and 8 of their respective Affidavits that I came to the "meeting" with an already prepared version of the Settlement Agreement and the Promissory Notes and the APS. This is incorrect. Mr. Thansingh was the neutral facilitator that prepared the Settlement Agreement. I had no role in the preparation of the Settlement Agreement other than providing my notes to Mr. Thansingh that recorded the discussions between the Brothers. Mr. Thansingh has deposed that the Settlement Agreement was drafted by him using my notes. This accords with my recollection.
[34] There are clearly quite different views between the parties as to Mr. Thansingh’s role, which cannot be resolved on this motion. With that caveat, I set out the following portions from the affidavit of Salinder Paul Dass which continues:
I did not prepare the APS. The Agreement of Purchase and Sale is a developer form of Agreement of Purchase and Sale that Jaswant had prepared by his real estate lawyers that he was using for the sale of condominium units at 1780 Albion Road, which were under development at the time.
In a previous Affidavit that Jaswant swore on September 26, 2018 (Exhibit EE to My First Affidavit), Jaswant states that the APS for the condo units was not signed at the same time as the Settlement Agreement. Specifically, he states:
“6. Shortly after dividing our family business, in or around early August 2014, I offered Salinder a unit 10 in a Commercial Condo development that building located at 1780 Albion Road ...
7 ..... The APS was signed by both myself and Salinder on or about August 6, 2014.”
[35] The applicant’s affidavit evidence continues with this specific assertion:
I did not prepare nor sign any Promissory Notes. The Settlement Agreement did not provide for execution of the Promissory Notes, my notes do not refer to any discussion about promissory notes, Mr. Thansingh's recollection is that there was no discussion about promissory notes and Rachhpal has also deposed there was no discussion about promissory notes and that no promissory notes were signed at any meeting relating to the Settlement Agreement.
I deny Preet and Jaswant's allegation at paragraph 53 and 29 of their respective Affidavits that I manipulated the Settlement Agreement. The only change that I made was to add a line for a witness, which was not on the agreement drafted by Mr. Thansingh. Mr. lmtiaz was present when I signed the Settlement Agreement. Otherwise, the copy of the Settlement Agreement with his signature as a witness is the same as any other copy of the Settlement Agreement.
[36] He then specifically addresses whether there was any discussion at that time with respect to granting promissory notes in favour of Jaswant:
Jaswant and Preet state at paragraphs 38-43 and 14-19 of their respective Affidavits that there were discussions regarding the promissory notes.
There were no discussions about promissory notes. None of the other people involved in the Settlement Agreement recall any discussion of promissory notes.
Jaswant and Preet attempt to justify the $2.5 million promissory note, at paragraphs 35, 37 and 39 and 11, 13 and 15 of their respective Affidavits, by alleging that Jaswant owned 50% of 131 and that he gave me and Rachhpal each 25% of the shares.
[37] Clearly this case will turn ultimately on findings of credibility. If there is no original signed promissory note, that can be proven on the balance of probabilities to be genuine, it would seem that Jaswant will be facing an uphill battle. However, that is not the issue before me. I therefore turn to the applicable provisions dealing with productions of “original” documents at this stage of an Application.
VI. History of Search for “Originals”
[38] The factum filed by counsel for the applicant companies notes that:
After this application was commenced, the parties attended at Civil Practice Court on July 19, 2019, in order to schedule an application date. At that time, counsel for the respondents raised the issue of whether this application should be dealt with by way of action. An application date was set, with the respondents having the ability after they served their responding evidence to argue the application should be converted to an action.
On the same date, the applicants' counsel asked the respondents' counsel to make the original promissory notes available for inspection. Counsel for the respondents agreed.
Shortly after, new counsel was appointed by the respondents. On August 12, 2019, counsel for the applicants wrote to the respondents' new counsel requesting again that the original promissory notes be made available for inspection.
In response, for the first time, the respondents' counsel advised that the respondents did not have the original promissory notes and that, in fact, the applicants had the original promissory notes .. It is unclear why it took the respondents four months to deny possession of the original promissory notes on which they rely, and no explanation for this delay has been provided.
In response, the applicants' counsel advised that the applicants did not have the original promissory notes. This response was consistent with the fact that the applicants had been requesting access to the original promissory notes since April.
VII. Applicable Rules
[39] Rule 30.04(2) provides:
"A request to inspect documents may also be used to obtain the inspection of any document in another party's possession, control or power that is referred to in the originating process, pleadings, or an affidavit served by the other party."
[40] Rule 4.06(3) provides, as to exhibits to an affidavit:
(3) An exhibit that is referred to in an affidavit shall be marked as such by the person taking the affidavit, and where the exhibit, …
(c) is a document, a copy shall be served with the affidavit.
[41] Rule 30.01(1) defines document as:
"(a) document includes a sound recording, videotape, film, photograph, chart, graph, map, plan, survey, book of account, and data and information in electronic form".
[42] The moving party asserts that this definition “clearly means the document, the actual document, the original document, not simply copies of the document where copies are attached to an affidavit.”
[43] In my view the intent of these Rules is to require the production of any genuine original document for an appropriate degree of verification. If the applicant has a document that purportedly was signed and bears an original signature, that document ought to be produced. If on the other hand it is the applicants’ position that there never was such a promissory note executed by them, then their obligation is to produce whatever is the best evidence available in the form of a photograph or hard copy of what they obtained in any manner and which relate to the assertions of Jaswant.
[44] Rule 30.04(3) provides:
"(3) A party on whom a request to inspect documents is served shall forthwith inform the party making the request of a date within five days after service of the request to inspect documents and of a time between 9:30 a.m. and 4:30 p.m. when the documents may be inspected at the office of the lawyer of the party served, or at some other convenient place, and shall at the time and place named make the documents available for inspection."
[45] Court may Order Production
(5) The court may at any time order production for inspection of documents that are not privileged and that are in the possession, control or power of a party.
[46] It is asserted that the Applicants do not dispute that:
(a) copies of the documents referred to in the Requests to Inspect are referred to in the affidavits served by the Applicants;
(b) that the Requests to Inspect refer to those documents, and have been served;
(c) that apart from the Minutes Books, which have not been specifically correlated by the Applicants to the copies attached to the Applicants' affidavits, no originals, and no originals of what are reproduced as copies for the exhibits, have been produced for inspection.
[47] However, they do argue that bringing this motion was an “Improper Use of Rule 30.04(2). In part it is submitted that:
“30. Rule 30.04(2) permits parties to inspect or obtain copies of documents that are referred to in a pleading or affidavit but that are not actually produced. The purpose is to ensure fairness and that parties can respond appropriately. The Rule does not provide for inspection of original copies of documents that have already been produced.
Rule 30.04(2) does not permit parties to obtain early discovery or to go on a fishing expedition.19 Questions as to the provenance of documents, or whether they are genuine, are not questions Rule 30.04(2) is designed to answer. Instead, these are issues for the discovery process.
Under Rule 30.04(2), the court has discretion to delay inspection of requested documents until a later stage of the litigation. The court also has broad discretion to limit the scope of a request to inspect based on relevance, proportionality, privilege, prejudice and timeliness.
There is no authority to support the respondents' position that Rule 30.04(2) can be used in the manner that they are using it. The cases relied on by the respondents are all distinguishable as they deal with production of documents in the discovery process. None of them deal with the scope of Rule 30.04(2).
[48] As well it is argued that this motion is an abuse of process:
- This motion is tactical and an abuse of process:
(a) The respondents are attempting to use Rule 30.04(2) for a purpose for which it was not designed.
(b) The applicants have responded to the requests to inspect and made whatever originals they can make available. Despite this, the respondents have refused to withdraw this motion.
[49] In my view there is no abuse of process in seeking to verify the existence of what are clearly pivotal documents.
[50] Apparently, all of the copies of documents that have produces as exhibits to the affidavits are black and white images only. In this regard, counsel for the moving party Jaswant asserts:
The Applicants have provided no explanation for the claim made on their behalf only by way of lawyer's letter that they do not have originals in their possession. They have refused to provide what they have said have been requests of others to provide originals.
In any case, documents must be produced if within the possession, custody, or power of the party, including, in this case, Paul Dass and Rachhpal Dass personally as deponents, and Aneal Thansingh as a deponent that the Applicants have put forward.
VIII. Case Law
[51] Two somewhat helpful decisions, both by now Justice, Calum MacLeod were referred to me by counsel. These were Andersen v St Jude Medical Inc, [2008] OJ No 430, 75 CPC (6th) 349, 2008 CarswellOnt 6654; and Friends of Lansdowne v Ottawa (City), [2011] OJ No 669, 2011 ONSC 1015, 2011 CarswellOnt 861, 198 ACWS (3d) 40.
[52] In the Friends decision he considers “Production of Documents and the Nature of an Application”:
12 It is important to understand the nature of an "application". The Ontario Rules of Civil Procedure provide for two main routes to obtain a court decision; "actions" and "applications". An action is a full blown law suit engaging the entire panoply of civil procedure and ending in a trial. An application by contrast is supposed to be a relatively quick adjudication of a narrow issue amenable to determination on a written record.
13 For the purpose of this motion, one of the most significant differences between these procedures is the provision for documentary production in an action as compared to an application. In simplest terms, in an action, the rules require a party to index and disclose all of its relevant documents in an affidavit of documents whether or not the documents will be introduced as evidence. This is supposed to take place before oral examinations for discovery. Thus in an action a party is entitled to early and broad disclosure of documents relevant to the allegations set out in the pleadings. In an action, a party may plead a theory without actual evidence and may hope to obtain the evidence through the process of production and discovery.
17 When it comes to production of documents, applications are almost the reverse of actions. In an application, the parties are required to serve all of the evidence they wish to put before the judge in affidavit form. Documents forming part of the evidence are normally marked as exhibits to the affidavits and filed as part of the record. But there is a three part process by which each party can compel the other to produce additional documents prior to the hearing.
[53] Here all three steps would appear to be available and production can be sought at any of those stages.
[54] Justice MacLeod continues:
19 Rule 30 deals with "discovery of documents" in an action and most of it does not apply to applications. Rule 30.04(2) however makes it possible to serve Form 30C to "inspect documents" "referred to in the originating process ... or an affidavit served by the other party". Thus documents specifically referred to in the notice of application, answer or responding affidavit are amenable to this rule. In this case the intervener has also filed an affidavit and is subject to the same requirement.
[55] Similarly, in the present case, both sides have a number of options available. The decision in Friends of Lansdowne continues:
The documents in the affidavits
23 The applicant therefore has three separate tools at its disposal to compel production of relevant documents. Firstly, a form 30C notice to inspect may be served with respect to documents specifically referred to in the material. Secondly, a notice of examination may specify documents which if relevant must be brought to the examination. Thirdly, cross examination may result in the requirement to produce additional documents.
24 In summary, an application is not an action and the procedure for obtaining access to relevant documents is significantly different. It is possible however to end up in the same place by these different routes. It would be ironic however if a party to an application could make more sweeping demands for production than would be permitted in an action at least without imposing the same discipline that is now required for discoveries.
25 Mr. Shrybman for the applicants is at pains to state that the applicants are not asking for random or generalized production. It is his submission that the applicants are attempting to focus their demands and not to impose unreasonable costs on the city. ….
26 In a sense this motion is premature because the applicant has only served the Form 30C demand and has not yet served a notice of examination or conducted cross examination. Because the process is not yet exhausted there appears to be some futility in arguing about whether or not the response to the Form 30C was technically adequate or straining the words of an affidavit to discern if there are more documents. This is because any ambiguity can be cleared up on cross examination and the party conducting the examination can demand additional documents whether or not they are referred to in the affidavit.
[56] My former colleague’s observations continue:
28 When dealing with documents referred to in affidavits, it is not necessary to consider relevance to the questions in issue. A party which tenders evidence is open to being examined on that evidence. [see Caputo v. Imperial Tobacco Inc. (2002), 25 C.P.C. (5th) 78 (Master) at para. 14]
[57] In his earlier decision in St. Jude, then Master MacLeod had these observations with respect to the nature of the concerns regarding production of original documentation relating to heart valve replacement devices where the items sought were contained in computer records located on a database referred to as “AVERT”. In part he observed:
15 Any discussion of AVERT must begin from the premise that data stored electronically is a "document" within the meaning of the Rules of Civil Procedure. Rule 30.01(1)(a) defines "document" as including "data and information in electronic form". Unlike some databases that contain a mixture of relevant and irrelevant information, the entire AVERT data base has only one purpose and is relevant in its entirety. The database is also a "document" or series of documents within the "possession, power or control" of the defendant within the meaning of Rule 30.02. Our rules also provide that a party is entitled to inspect the original document pursuant to Rule 30.04 and to take copies. Accordingly the question is not whether the plaintiff should have access to the data, it is how that is to be achieved.
16 Of course discovery remains a court supervised process in which the rules provide the default position or starting point. The court has discretion to either expand or restrict discovery and production in appropriate cases. At the risk of over generalizing, it is fair to say that discovery will be expanded if necessary to gain access to critical and probative evidence and it will be restricted if technical application of the rules will result in onerous and expensive production out of all proportion to the particular issue. ….
17 Once the need for production is established by the rules, by agreement or by court order then the party with the production obligation must use all reasonable efforts to comply with that obligation in letter and spirit. ….
[58] In the same decision he made this observation which I believe supports my approach in the present case:
25 One purpose of inspecting the original of a paper document is to be satisfied as to the authenticity and accuracy of copies. By looking at the original, it may be possible to detect different colours of ink or characteristics of the paper. The other reason for inspecting documents is for reasons of efficiency. It may be that a party simply needs to see the documents to be satisfied that copies are not required. Inspection of cancelled cheques or deposit books for example may satisfy a party that the bank statements or financial statements can be relied upon. Simply going to the computer on which a database is actually stored and accessing the information on a screen may not meet either of these needs.
IX. Analysis
[59] The amounts that are involved in this Application, alleged to be almost $4,000,000.00, are clearly substantial. The claims made by way of the Application, to declare documents as forged and fraudulent are clearly serious.
[60] The provisions of the Rules regarding inspection of documents are mandatory. The Respondents are entitled to inspect the originals, and to an explanation, by way of evidence, on oath, if the Applicants advance the position that originals are not available to them. The Respondents do not need to justify the Requests.
[61] The parties seeking the forms of documents held by the applicants assert:
- However, the Requests and this motion are amply justified in the circumstances. The Applicants have chosen to commence this proceeding by way of Notice of Application, as a consequence of which to the knowledge of the Applicants, the Respondents will not have the right to require an Affidavit of Documents, or an examination for discovery.
[62] The Respondents would seem to have no other means by which to obtain access to the originals if they now or ever existed. They seek to test the Applicants' explanations, “if there are any”, as to the unavailability of originals, nor as to the location of the originals “so as to compel production of them by cross-examination, and properly respond, because the Respondents are required to deliver all affidavits upon which they intend to rely before cross-examination.”
[63] Ultimately, I accept the moving party’s position:
- Further, in the circumstances of this case, where the Applicants seek an order for forensic testing of documents, the position of the Applicants that they need not produce originals or provide an explanation is untenable.
[64] The affidavit from the accountant has this paragraph which highlights the possible confusion in this dispute:
“…, the statement that there were discussions of promissory obligations is misleading. There word promissory obligations were not typed by me. It is vague. I understood the word "promissory obligations" to mean the obligations by the brothers in the Agreement to pay the amounts that are stipulated in it and to transfer the shares to each other in accordance with the Agreement. If Jaswant is attempting to assert that the word "promissory obligation" means promissory notes, I unequivocally state that there was no mention or discussion of promissory notes being requested or required in the course of any of the meetings leading to the execution of the Agreement. lf promissory notes had been discussed or agreed upon, I would have incorporated that into the Agreement. There was simply no mention or discussion of promissory notes. I am not aware of any promissory notes related to the Agreement. “[my emphasis]
[65] As well the Applicants submit:
On September 27, 2019, the applicants' counsel provided a full response to the respondents' counsel regarding the three requests to inspect. The applicants' counsel advised what original documents were available and made them available for inspection. The applicants' counsel also advised regarding attempts to obtain original documents from third parties.
[66] This position does not address whether there were ever promissory notes discussed or drafted.
[67] This is clearly a case where the existence of alleged key documents is pivotal. Both sides need to know the actual contents of the case they are to meet.
X. Disposition
[68] The Respondents sought an Order that the Applicants:
(a) produce for inspection the documents the actual documents, copies of which are exhibited;
(b) produce for inspection the documents from which the exhibit photocopies were taken; and,
(c) to the extent that the Applicants claim that they cannot produce the actual documents, that they provide evidence as to their explanation as to the source and location of the documents, and authority or direction as required for the Respondents to inspect and take copies of them.
[69] The applicants’ counsel asserts:
Rule 30.04(2) cannot be used in the manner the respondents are attempting to use it and cannot be used to obtain early discovery; and that his motion is an abuse of process.
[70] I disagree.
[71] I am therefore prepared to issue an order having those provisions but, taking into account proportionality, I am also making as a condition of this Order a parallel Order requiring the moving parties on this motion to make the same productions to the Applicants with respect to any alleged promissory notes or other related documents supporting their claims. Both sides are directed to provide sworn evidence of their knowledge of the whereabouts of any relevant promissory notes.
[72] The purpose of an Application is to focus on an issue that is capable of prompt resolution. I am satisfied that this approach will assist in moving towards that goal.
[73] In the circumstances of this dispute cost of this motion are reserved to the Judge hearing the Application or, if it is discontinued, to the Judge conducting any related trial between these parties.
Master D. Short
Released: February 25, 2020
DS/ R296