COURT FILE NO.: CV-17-2802
DATE: 2020-12-01
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: The Regional Municipality of Halton, Respondent/Plaintiff
AND:
F. Greco & Sons Limited o/a Greco Construction, Michael Greco, John Frank Greco, John Paul Greco, Sirron Systems Incorporated, Sirron Systems Inc., Sirron Group International, Sirron Electrical Contracting Corporation, David Allen Norris, Meehan’s Industrial Maintenance Ltd., Patrick Vincent Meehan, Jason Matthew Mote, Giulio (Julio) Cerelli, Canian Precision Machine Shop Limited, Wahan Aghian, Eli Ishkanian and Lisa Snowball, Appellants/Defendants
The remaining Defendants took no part in the Appeal
BEFORE: Conlan J.
COUNSEL: Mr. R. Rothstein for the Respondent/Plaintiff
Mr. J. Brown for the Appellants/Defendants, Sirron and Norris
HEARD: November 27, 2020
APPEAL BOOK ENDORSEMENT
I. Introduction
[1] In this civil action, the Defendants, Sirron Systems Incorporated, Sirron Systems Inc., Sirron Group International, Sirron Electrical Contracting Corporation, and David Norris (“Norris”), collectively referred to hereinafter as the “Appellants”, appeal the decision of Master Mills made on November 28, 2019.
[2] The formal Order emanating from the Master’s handwritten Endorsement, consisting of two preamble paragraphs and two operative clauses, is found at pages 13-14 of the Appeal Record and is set out below.
THIS MOTION, made by the Plaintiff for an Order compelling production of documents from a non-party, was heard this 28th day of November, 2019, at the Courthouse, 491 Steeles Avenue East, Milton, Ontario.
ON READING the Motion Record and Factum of the Plaintiff and the Motion Record and Factum of the Defendants, David Norris, Sirron Systems Incorporated, Sirron Systems Inc., Sirron Group International, and Sirron Electrical Contracting Corporation (together, the “Opposing Defendants”), and on hearing the submissions of the lawyers for the Plaintiff and the Opposing Defendants,
- THIS COURT ORDERS that pursuant to Rule 30.10 of the Rules of Civil Procedure, Lancaster Business Services Inc., LBS Accounting and Financial Services Inc., and Glen Lancaster (the “Lancaster Entities”) produce to the Plaintiff copies of all documents set out in Schedule “A” to this Order in their possession or control within forty-five (45) days of this Order.
2.. THE COURT ORDERS that the Opposing Defendants pay the Plaintiff’s costs of this motion in the amount of $12,500 by December 31, 2019.
[3] For the background, this Court adopts the following taken from paragraphs 8-13 of the factum filed by the Respondent on appeal (the Plaintiff), the Regional Municipality of Halton (“Halton”).
Halton’s action arises from a fraud scheme perpetrated by the Defendants and others, and seeks the return of funds unlawfully taken from it currently estimated at 23,000,000.
The plaintiff Halton is a municipal corporation.
10 The defendant Norris is the officer, director, and/or directing mind of Sirron. At all material times, one or more of the Sirron entities was an approved vendor of Halton.
Between March 20, 2000 and October 24, 2013, Lisa Snowball (“Snowball”) was an employee of Halton. Snowball and Norris were previously in a romantic relationship and lived together from approximately the Fall of 2009 to April 2017.
The Defendants and others induced Halton through deceit to make payments to Sirron and others in return for non-existent or worthless services or for services that were not for the benefit of Halton. In other words, the fraud scheme involved inducting Halton to pay vendor invoices for work never performed for Halton, among other things (the Fraud Scheme”).
On April 11, 2017, Norris was criminally charged in connection with Fraud Scheme.
[4] To that background, add that Norris was, in June 2019 (months before Halton’s production motion was heard by the Master), found guilty of various criminal offences including fraud over $5000.00 (see page 579 of the Appeal Record). That is not disputed.
[5] In addition, it should be noted that the non-party from whom production was sought and ordered in the proceeding under review, the “Lancaster Entities”, although duly served, did not oppose Halton’s motion and did not appear before the Master at its hearing, and likewise the Lancaster Entities did not participate in the within appeal.
II. The Appeal
[6] The Appellants seek to have the Master’s Order, including the costs portion of it, set aside. They argue that the Master erred in several respects, but the appeal boils down to these three submissions made by Mr. Brown.
[7] First, it is submitted that the Master erred in holding that “[t]he simple fact that some or all of the documents requested may have previously been seized by the police does not impress them with a Crown privilege” (see page 19 of the Appeal Record). Mr. Brown asserts that the said statement is incorrect in law.
[8] Second, it is argued that the Master misapprehended the evidence on the motion when she stated that “[t]he documents in question have been returned to the accountant [Lancaster] by the Crown” (see page 19 of the Appeal Record).
[9] Third and finally, it is submitted that the Master erred in rejecting the argument made to her by Mr. Brown that the Crown had to be served with the motion. The failure of Halton to effect that service, and the failure of the Master to require it, amounted to an improper circumvention of the Wagg principles, argues Mr. Brown, referring to the decision of the Court of Appeal for Ontario in D.P. v. Wagg (2004), 2004 39048 (ON CA), 71 O.R. (3d) 229.
[10] For the reasons that follow, I would reject those arguments and dismiss the appeal.
III. The Standard of Review
[11] This Court adopts the following taken from paragraph 43 of the factum filed on behalf of Halton, including footnotes 56 and 57 referred to therein.
- The standard of review on an appeal of a Master’s decision is whether the Master made an error of law or exercised her discretion on the wrong principles or misapprehended the evidence such that there was a palpable and overriding error.
Moreover, an appeal from a Master’s decision is not a re-hearing. On questions of fact and mixed fact and law, deference applies and the role of the reviewing court is limited. The appellate court cannot substitute its interpretation of the facts or re-weigh the evidence simply because it takes a different view of the evidence from that of the Master; Wellwood v. Ontario Provincial Police, 2010 ONCA 386, 102 O.R. (3d) 555 (Ont. C.A.), at para. 28 Further, an appellate court is not free to interfere with a factual conclusion that it disagrees with where such disagreement stems from a difference of opinion over the weight to be assigned to the underlying facts: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 (S.C.C.), at para. 23.
Footnotes:
56 Book of Authorities of the Respondents (“Halton BOA”), Tab 1, p 12: Zeitoun v. Economical Insurance Group (2008), 2008 20996 (ON SCDC), 91 OR (3d) 131 at paras 40-41 (Sup Ct J. (Div Ct)), aff’d on appeal, 2009 ONCA 415.
57 Halton BOA, Tab 2, p 18: BMW Canada Inc v. Autoport Airport Limited, 2018 ONSC 4208 at para 16.
IV. Decision
[12] Regarding the first impugned remark contained in the Master’s handwritten Endorsement, “[t]he simple fact that some or all of the documents requested may have previously been seized by the police does not impress them with a Crown privilege”, the Appellants point to no authority in support of their position that the said statement is incorrect in law. Nor can the Appellants point to any authority that stands for the proposition that a document that goes from a non-party in a civil lawsuit, to the police, and then to the Crown, and then back to the non-party, remains subject to Crown privilege forever (even after a verdict is rendered in the criminal proceeding), which is the practical effect of the Appellants’ submission on appeal.
[13] I see nothing objectionable about the Master’s impugned remark. It amounts to nothing more than the unassailable observation that the question of whether privilege attaches to a specific document is a more nuanced enquiry than simply ascertaining whether it had ever been seized by the police.
[14] Regarding the second impugned remark contained in the Master’s handwritten Endorsement, “[t]he documents in question have been returned to the accountant by the Crown”, I agree with Mr. Brown that the evidence on the motion fell short of that finding. In oral submissions, Mr. Rothstein took this Court to page 337 of the Appeal Record, where Norris stated during out-of-court questioning that “[s]ome documentation was returned to my accountant [Lancaster]. I have no idea exactly what” (lines 22-23 of the transcript).
[15] With respect, it was not open to the Master to conclude as broadly as she appears to have done - that the documents being sought by Halton on the motion had been returned to Lancaster. Arguably, that statement meant that all of the documents subject to the production motion were then back in the hands of Lancaster. Mr. Rothstein was unable to bring this Court to anything in the evidentiary record before the Master that would have enabled that conclusion to be drawn.
[16] It makes no difference to the result of the appeal, however. The only relevance to the said slip by the Master is on the issue of whether she erred in deciding that the Crown did not need to be served with Halton’s motion. That takes us to the third and final point.
[17] I can see no error committed by the Master on the penultimate question of whether the Crown needed to be served with Halton’s motion. Simply put, despite Mr. Brown’s best efforts to make it so, this was not a Wagg motion. The criminal verdict had already been rendered. Halton was not seeking anything in the possession of the Crown. Halton was not seeking anything contained in a Crown brief or in Crown disclosure. Whatever it was that had been returned to Lancaster by the Crown, it was most certainly not the Crown brief, as that would have been highly improper on the part of the prosecution. Halton’s motion had nothing to do with compelling production of the contents of a Crown brief, as that term was used by Justice Rosenberg and the Court of Appeal for Ontario in Wagg, supra.
[18] I do not accept the submission that what happened here was an improper circumvention of the balancing exercise set out by the Divisional Court, and approved of by the Court of Appeal for Ontario at paragraph 17 of its decision, in Wagg, supra. Rather, this was a straight Rule 30.10 motion for production from a non-party, which non-party (Lancaster) was not the Crown or an agent thereof.
[19] Accepting the position of the Appellants would have serious consequences for the law as we know it today. The law evolves, and this Court is not too timid to be a part of such evolution. But not in this case, on this record. If Mr. Brown is correct, then in every case where a civil litigant seeks production from a non-party who at any time in the past was the subject of a search warrant executed by the police which led to a criminal charge, the party seeking production would be obliged to involve the Crown in the production motion. At this juncture, I do not accept that.
[20] No reversible error having been committed by the Master, the appeal must therefore be dismissed.
[21] This Court will entertain costs submissions in writing, if not resolved between the parties. Halton, the successful party, shall have thirty calendar days after December 1, 2020 to serve and file its submissions, limited to two pages excluding attachments. The Appellants shall serve and file their submissions (the same page-limit applies) within fifteen calendar days after Mr. Brown’s receipt of Halton’s submissions. Without leave of the Court, no reply submissions on costs are permitted.
(“Original signed by”)
Conlan J.
Date: December 1, 2020