Court File and Parties

COURT FILE NO.: CV-18-596927 DATE: 2020-12-04 ONTARIO SUPERIOR COURT OF JUSTICE

RE: Isaac Perlmutter et al., Applicant -and- David Smith, Respondent

BEFORE: F.L. Myers J.

COUNSEL: Winston K. Fogarty and Pavle Masic, for the Perlmutters Jerome Morse and David Trafford, for Harold Peerenboom Jordan Goldblatt and Jordan Katz for David Smith

HEARD: December 4, 2020

Endorsement

[1] Counsel wrote to the Regional Senior Justice seeking the appointment of a case management judge to oversee implementation of the order of Lederer J. dated May 11, 2020, with reasons reported at 2020 ONSC 2679.

[2] Justice Lederer ordered Mr. Smith to attend for examination pursuant to Letters of Request issued by the Fifteenth Judicial Circuit Court in and for Palm Beach County, Florida in relation to litigation taking place there. Justice Lederer’s order was made in this application and also in an application brought by Mr. Peerenboom under Court File No. CV-20-636500

[3] As delegate of the RSJ, I convened a case conference in both applications to consider the request to appoint a case management judge.

[4] At the case conference, counsel raised several issues and were content that they be resolved summarily pursuant to rule 50.13 (6).

[5] First, it seems that there are two distinct ways in which Mr. Smith may be examined. If he is examined in Florida, in the ordinary course of the Florida lawsuit, this court is not involved. I make no comment on how that examination would proceed.

[6] If, by contrast, Mr. Smith is examined in Ontario pursuant to the Letters of Request as enforced by Justice Lederer’s order, then it is self evident that the terms of the order will apply.

[7] There was apparently some conversation among counsel as to whether the terms of Justice Lederer’s order ought to apply to a deposition held in Florida in the ordinary course of the Florida litigation. That is not a question for this court. Nothing in Justice Lederer’s order purports to apply to a deposition taken in Florida. Whether the Florida court might wish to adopt some or all of the terms ordered by Justice Lederer to manage the Ontario examination is for the Florida court.

[8] The Court of Appeal for Ontario noted in its decision that if Mr. Smith is examined in the Florida litigation in Florida, that would likely obviate the need for the enforcement of the Letters of Request here. I leave to others the question of whether Mr. Smith will attend in Florida and what, if any, effect his failure to attend there may have in the Florida litigation.

[9] It is apparent that if Mr. Smith does not attend in Florida, then the examination under the Letters of Request will proceed here in accordance with Justice Lederer’s order. Moreover, given the timelines involved, the parties are proceeding with preparations for the examination here until such time as that may prove to be unnecessary.

[10] Another issue has arisen concerning the process of document review prior to the examination of Mr. Smith. The order made by Justice Lederer includes detailed provisions for the appointment of an independent examiner to review several devices that were seized by the police which contain Mr. Smith's information.

[11] The information on the devices is not limited to documents concerning the litigation between the parties.

[12] PricewaterhouseCoopers has run or is running searches of the data on the devices on search terms agreed among the parties (at least provisionally). The question raised is whether Mr. Smith’s counsel should be entitled to review for relevancy the document set produced by PwC based on its searches prior to production of the documents to the other parties.

[13] The applicable provisions of the order of Justice Lederer are:

(c) The independent third-party expert shall run a search on the Devices of the words on the keywords list and provide a ‘hit list’ describing the outcome of the ‘key word’ search based on the volume of ‘hits’ per word searched;

(d) Counsel for David Smith will review any documents or information that were identified as a result of the keyword search on the Devices for privilege;

(e) Counsel for David Smith shall deliver relevant and non-privileged documents to counsel for Harold Peerenboom and counsel for Isaac Perlmutter and Laura Perlmutter at least seven days prior to the examination;

(f) Any document withheld by David Smith for privilege shall be described in a detailed privilege log with sufficient particulars to provide for a meaningful opportunity to challenge the claim for privilege, including dates and identifying the sender and recipient (if applicable) of the documents;

[14] Counsel for Mr. Smith submits that the search terms have only been agreed upon provisionally pending a determination of whether they are entitled to review the documents that are responsive to the searches for relevancy. Many of the search terms are very broad, such as the first name of Mr. Smith's spouse. Accordingly, they expect the searches to yield a substantial number of irrelevant documents that Mr. Smith should not be required to produce.

[15] Paragraph 24 (e) of Justice Lederer’s order provides that “[c]ounsel for David Smith shall deliver relevant and non privileged documents...”. On that basis, they assert that the order anticipates that they will conduct a relevancy review.

[16] Counsel for the Perlmutters read the order differently. They note that a process for review for privilege is specifically contemplated in subparagraphs 24 (d) and (f). There is no similar process to allow for an extra review for relevancy. Rather, they submit, all documents that respond to the searches run by PwC on the agreed upon search terms are, by definition, relevant and producible subject only to privilege.

[17] In my view, I am interpreting the order made rather than adding to or supplementing it. I do not agree with the interpretation ascribed to the order by counsel for the Perlmutters.

[18] The order identifies documents that respond to the search terms as “hits”. There is no determination that hits are necessarily relevant or producible.

[19] Our process of document disclosure relies upon the integrity and professionalism of counsel as officers of the court to make relevancy determinations. In this case, they are greatly aided by the reasons given by Justice Lederer that address relevancy in a number of very specific cases.

[20] Counsel for Mr. Smith have confirmed to me that the results of PwC's searches will be provided first to them and not to Mr. Smith personally. Accordingly, Ontario counsel will be able to ensure that the full document set is reviewed for relevancy in the ordinary course. I reiterate the point that although the underlying litigation is in Florida, the issues dealt with by Justice Lederer’s order involve the enforcement of Letters of Request in Ontario pursuant to Ontario law. The court relies upon its officers to ensure that their duty to disclose relevant documents under Justice Lederer’s order, his reasons, and Ontario law, is fulfilled. I have no doubt that Florida counsel will want to make relevancy determinations for use in the Florida litigation. That is not what Ontario counsel are being tasked to do. While others may be involved, the question of whether a document is required to be produced under Justice Lederer’s order is one for Ontario counsel. It is not a decision for the client or others who may be retained by him elsewhere.

[21] Counsel for Mr. Peerenboom was content for counsel for Mr. Smith to make an initial relevancy cut provided that they provide a log listing all hits located by PwC annotated with counsels’ determination of whether each is determined to be relevant or irrelevant. Counsel for Mr. Smith agreed to produce such a log.

[22] Counsel for Mr. Smith confirmed that in the event that I agreed with their position, as I have, their agreement to the search terms proposed would no longer being contingent or provisional. Accordingly, search terms are agreed to by Mr. Smith.

[23] An issue was raised as to whether the cost provisions of paragraph 15 of Justice Lederer’s order ought to apply if a deposition proceeds in Florida in accordance with the terms of the order. As discussed above, it is for the Florida court to determine how a deposition in Florida proceeds. The terms of Justice Lederer’s order are clear and apply to an examination in Ontario under the Letters of Request. Nothing in the order purports to apply to a deposition in Florida. If the Florida court decides to use some of the terms from Justice Lederer’s order in Florida, then practice before that court will determine how the costs of the deposition will be handled.

[24] Finally, the parties anticipate encountering relevancy and privilege objections. All counsel agreed that they would be content for the court to resolve all such issues summarily on short notice. I do not commit to doing so as I do not wish to incentivize obstructionist tactics by providing a quick and cheap process to resolve unreasonable objections. However, I can be contacted by email on short notice to convene a case conference to discuss the manner of proceeding with counsel should a need arise. I would expect any process to resolve overbroad demands or overbroad objections to include significant cost consequences for any unreasonable positions.

F.L. Myers J.

Date: December 4, 2020