Court File and Parties

COURT FILE NO.: CV-11-436825

DATE: 20200902

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

1539058 Ontario Inc. et al., Plaintiffs

– and –

2102503 Ontario Inc. et al., Defendants

BEFORE: F.L. Myers J.

COUNSEL: M. Solmon, for the Gerstel Parties D. Naymark, for the Berkovits Parties

HEARD: August 31, 2020

Endorsement

[1] This endorsement applies to all seven lawsuits among the Gerstel parties and the Berkovits parties.

[2] Mr. Ohayon has apparently been difficult to contact concerning the additional examination for discovery that I have ordered. There is no motion before me seeking any relief currently. I reiterate the importance of all parties complying with court orders.

[3] Mr. Gerstel asks to schedule a motion for an order that Mr. Hosseini be prohibited from testifying at the trial of these actions. Mr. Hosseini occupies a unique role in the narrative in these actions. Mr. Berkovits alleges that acting on behalf of Mr. Gerstel, Ms. Konstan hired Mr. Hosseini to kill Mr. Berkovits.

[4] Mr. Solmon wants to argue that Mr. Hosseini should not be allowed to testify at the trial because: (a) he has perjured himself in prior testimony; (b) he has ignored orders of the court compelling him to attend for examination; and (c) he allegedly makes himself available in these proceedings only when it benefits the Berkovits parties.

[5] Mr. Solmon acknowledges that I cannot make admissibility holdings that bind the trial judge. But he wants to argue that there should be a hurdle for Mr. Hosseini to surmount, through a leave requirement, before he can testify. He also argues that my years of background as the case management judge in these proceedings equip me to deal with the question better than the trial judge. Explaining all the background at trial, he submits, will be a significant and time-consuming detour.

[6] This issue was raised by Mr. Solmon at a case conference on August 2, 2020. At that time, I ruled,

Mr. Gerstel brings a cross-motion to bar Mr. Hosseini from testifying at trial. Mr. Solmon argues that Mr. Hosseini is a proven perjurer whose false evidence was knowingly proffered by Mr. Berkovits and [his prior counsel]. While removing him from the mix might indeed save time, we cannot erase history. The admissibility of his testimony is a question for the trial judge. There is no Rule of Civil Procedure or rule of law on which to bring a motion to allow a judge before trial to prevent relevant evidence from being adduced. It is for the trial judge to assess relevancy and admissibility. She or he will also assess the relevancy at trial, if any, of what [counsel] knew when Mr. Berkovits proffered Mr. Hosseini’s evidence.

[7] Mr. Solmon asks to revisit this decision because he has now located a decision of the Alberta Court of Appeal on which he relies. See: Tremco Incorporated v. Gienow Building Products Ltd., 2000 ABCA 105. In that case, the majority of the court upheld an order by a case management judge that only witnesses who comply with specified discovery obligations would be permitted to testify at trial.

[8] The Court of Appeal was dealing in that case with a specific Practice Note that had been introduced for a trial period under the Alberta Rules of Court. The Practice Note granted case management judges wide authority including to “order that the party be precluded from … relying on certain types of evidence at trial”. However, it also provided expressly that, “Any order may be modified at the trial to prevent injustice.”

[9] The Court of Appeal ultimately ruled:

[39] The case management judge’s order limiting who might testify at trial was authorized by para. 21 of Practice Note 7. But a case management judge cannot fetter a trial judge’s discretion to admit evidence. “What evidence is proper often depends on the course of the trial, and what evidence has preceded. No one can foresee all the twists and turns of a long trial”: Ellis-Don Management Services et. al. v. Rae-Dawn Const. Ltd. (1992), 1992 ABCA 261, 131 A.R. 190 at 192 (C.A.).

[40] This principle is recognized in para. 29 of Practice Note 7, which permits the trial judge to revisit and modify pre-trial orders to prevent injustice. The trial judge’s discretion, therefore, is not fettered.

[41] The case management judge’s order serves the important purpose of alerting the parties to the case they may have to make or meet at trial. Either party may ask the trial judge to reconsider. No doubt the order was intended as a form of sanction, but whether it will in fact have that effect will depend upon the trial judge’s view of its fairness as the trial unfolds. If the parties do not want to take a chance on the trial judge’s decision, they are free to agree to another procedure, then ask the case management judge to modify his earlier position by a new order.

[10] Mr. Solmon wishes to argue that Rule 77.04 of Ontario’s Rules of Civil Procedure, RRO 1990, Reg 194 gives the same authority to a case management judge in this case. The rule provides:

77.04 (1) A judge or case management master may,

(a) extend or abridge a time prescribed by an order or the rules;

(b) adjourn a case conference;

(c) set aside an order made by the registrar;

(d) establish or amend a timetable; and

(e) make orders, impose terms, give directions and award costs as necessary to carry out the purpose of this Rule. O. Reg. 438/08, s. 64.

(2) A judge or case management master may, on his or her own initiative, require the parties to appear before him or her or to participate in a conference call to deal with any matter arising in connection with the case management of the proceeding, including a failure to comply with an order or the rules. O. Reg. 438/08, s. 64.

(3) For greater certainty, the powers set out in subrules (1) and (2) are in addition to any other powers set out in this Rule. O. Reg. 438/08, s. 64.

[11] I am not deciding the issue today of course. Rather, I am determining as case management judge whether the motion ought to be brought at this time.

[12] At para. 33 of Gienow, the majority discussed the purpose of case management as follows:

Under Practice Note 7, a case management judge is assigned to a case in order that a single judge might develop a comprehensive understanding of the action and be in a better position to guide the litigation. Familiarity with the facts and circumstances and continuity with pre-trial processes place the judge in a unique position to make assessments on interlocutory motions and applications.

[13] This is the reason that Mr. Solmon submits that I am better placed than the trial judge to make a determination concerning the status of Mr. Hosseini. I heard Mr. Hosseini testify in court in 2015. I am aware of the issues with locating him and the changes in his story at different times.

[14] However, although I am mired in the details, my role also requires me to step back and not lose sight of the forest for the trees. These cases have been studded with both serious allegations of dishonesty and relentless efforts to bring interlocutory proceedings to take advantage of perceived opportunities.

[15] In early 2015, prior to being appointed the case management judge, I heard a motion for summary judgment that appeared to have the possibility of resolving the major issues between and among the parties. I adjourned the motion to allow for the continued cross-examination of Mr. Gerstel.

[16] The examination became bogged down. In November, 2015, a witness recanted his testimony and made allegations against Mr. Berkovits’s counsel in connection with the original delivery of his evidence on the summary judgment motion. Rather than disclosing this new evidence to Mr. Berkovits’s counsel, one of Mr. Gerstel’s prior lawyers was armed with the recanting affidavit and pulled it out of his briefcase while supposedly cross-examining the recanting witness as an adverse party. The cross-examination appeared to be a sham context to try to get new evidence before the court recanting the evidence already adduced on the summary judgment motion.

[17] At about the same time, Mr. Berkovits came into possession of documents that were part of a sealed court file in the Gerstel’s matrimonial proceedings.

[18] Allegations and counter-allegations flew.

[19] I ultimately determined that the motion for summary judgment could no longer proceed because serious credibility issues that required a trial had been raised by the parties’ shenanigans. Whether a minor witness recanted testimony on a tangential issue was a fairly small matter. Whether one of the protagonist parties induced the witness to give untruthful evidence initially or induced him to make an untruthful recantation coupled with allegations of serious wrongdoing against counsel were much more serious issues. Similarly, while there are innocent explanations as to how documents that are part of a sealed matrimonial court file came into Mr. Berkovits’s possession, there are also possible explanations that are not at all innocent. Of greatest concern however was that, unless contained, the forensic inquiries sought by both parties into the witness’s recantation and the surreptitious disclosure of sealed documents could have overwhelmed the litigation.

[20] I was appointed case management in November, 2015 in light of these developments. In ordering the matters to trial on November 12, 2015, as reported at 2015 ONSC 6955, I held:

[35] Finally, I have an institutional concern. There are at least six outstanding actions between Mr. Gerstel and Mr. Berkovits in the Superior Court in Toronto. During the hearing of the summary judgment motion last March, the parties invited me to consider case managing all of the cases for them. The court is working on improving access to justice following the Supreme Court of Canada’s clarion call in Hryniak. However, some litigants seem to be mistaking the enhanced availability of the court as an invitation to increase tactical gamesmanship rather than as an enhanced opportunity to find an early, affordable, and proportional resolution of their civil disputes. The Superior Court of Justice is not a free mock war theatre where parties can shoot verbal and tactical paintballs at each other for endless entertainment. The court resolves civil disputes. Litigants are expected to behave as rational economic actors in the process. They are not entitled to more than their fair share of the scarce public resource that the court represents.

[36] Given these parties’ proven zeal for the dramatic and clear willingness to go to great tactical lengths to gain a perceived advantage across the lines of different cases and with little heed for process, the institution needs to exercise some oversight and restraint to ensure fairness, efficiency, economy, and proportionality. This is especially the case where the parties have imbued such symbolic importance on their civil disputes that they seem unshackled by the normal economic rationality expected of litigants.

[21] Little has changed since then. The August 2, 2020 hearing is an example. Mr. Berkovits’s former lawyer was removed from the record some time ago. However, he had erroneously filed a backsheet on a pleading on behalf of all the defendants that ostensibly included Mr. Hosseini instead of just the Berkovits defendants. The Gerstel parties required the lawyer to move to get off the record for Mr. Hosseini as if he was actually Mr. Hosseini’s lawyer. Then, while the Gerstel parties did not oppose the lawyer being removed from the record, they used that motion as the context to ask to schedule the cross-motion to prevent Mr. Hosseini from testifying at the trial the first time. In addition, they used the motion to remove counsel from the record as a pretext to ask for the third time for examinations to be held to inquire into how Mr. Berkovits received documents that were filed in the Gerstels’ matrimonial case. I refused for the third time to launch an inquiry into how documents came into Mr. Berkovits’s possession. I also refused to consider barring Mr. Hosseini from testifying at the trial for the reasons that I have already quoted above.

[22] For several years now, I have been trying to keep the parties focused on finishing these cases. Each time a step forward is taken, it seems like two new side issues arise. At the end of my endorsement on August 2, 2020, I wrote:

All that matters now, from the Court’s perspective, is for the parties to finish discovery to ready these actions for trial once and for all.

[23] The question of whether a case management judge might, in a proper case, erect a barrier to a witness testifying except with leave of the trial judge, is not a frivolous question. But I do not agree that my hearing the issue now will save any trial time. The leave motion at trial will require the trial judge to learn the background and to balance the alleged misconduct of Mr. Hosseini against the justice of the case at the time of trial. Discovery and trial preparation will still have to be conducted as if Mr. Hosseini may well be a witness. I see no substantive gain in making the order were I to be satisfied to do so. It all still has to go to the trial judge who is not bound by my order.

[24] On the other hand, in my view, the simple acts of scheduling and hearing the motion would be harmful. They will open yet another front for these parties to launch further salvos in their unyielding efforts to find tactical gains in their private chess game. Will there be cross-examinations on the motion? Will someone want to serve a summons to witness on Mr. Hosseini or perhaps Mr. Berkovits’s former lawyer to inquire as to how they communicated with Mr. Hosseini? Then comes the obligatory refusals motion before a Master or me. An appeal from the Master to me. Will the discoveries have to be cancelled? Will setting the actions down be deferred? What tidbits of information will be learned that can then be used (with appropriate outrage and flourish) to start the next phase of recriminations and motions?

[25] These parties have no natural limits on their zeal to bring proceedings. Cost and delay does not seem to matter. If the court cannot keep them focused on moving forward to trial, they won’t do it voluntarily. In my view, the harm of allowing a motion to veer the parties from the straight and narrow path to trial far exceeds any possible benefit from an order that cannot bind the trial judge in any event.

[26] In my view, this is a proper case to exercise the discretion to decline to schedule a motion. See: Griva v Griva, 2016 ONSC 1820 at paras. 18 and 22 and Rubner v. Lower Fourth Limited, 2017 ONSC 7520, at para. 38. The Gienow case does not change my understanding of the applicable law or process. Nothing of significance has happened in the past month that might be a basis to re-visit my decision on August 2, 2020. I therefore decline to do so.

F.L. Myers J.

Date: September 2, 2020