Court File and Parties

COURT FILE NO.: CV-20-0049 DATE: 20201223 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: M & P TOOL PRODUCTS INC. – and – DAVID LAWSON, TERA BEAULIEU, ROYAL BANK OF CANADA and RBC DOMINION SECURITIES INC.

BEFORE: TRIMBLE J.

COUNSEL: Tyler Inkster, for M & P Tool Products Inc. David Milosevic, for the Defendant David Lawson No one appearing for Royal Bank of Canada and RBC Dominion Securities Inc., although served, and the action having been dismissed against Tera Beaulieu

HEARD: 24 July 2020 by Zoom Conference, with further submission requested on 28 July 2020, and received.

Endorsement re Plaintiff’s Motion for Summary Judgment

An Apology

[1] This motion was heard on 24 July 2020 by Zoom Conference. Materials were filed electronically. On 28 July 2020, I requested further submissions on the defence of condonation. The submissions were provided as requested. I did not receive them, however, until early December 2020, when the parties inquired as to when my reasons would be released.

[2] The parties can appreciate that the rapid changes in the court’s processes and technology since 17 March 2020 brought on by the Covid-19 pandemic have brought with them growing pains, problems, and pitfalls, some of which have beset this file.

[3] On behalf of the Court, the parties have my profound apologies for the delay in issuing these reasons.

This Motion

[4] In this motion, M & P seeks summary judgement against the defendant, David Lawson, for civil fraud and breach of fiduciary duty. In addition, M & P seeks dismissal of Mr. Lawson’s counterclaim for damages in tort.

[5] Mr. Lawson resists the motion on the basis that there are issues that require a trial, namely; his defence that M & P condoned the fraud, and his counterclaim for damages for harassment. He argues that summary judgment, even if granted only in the main action, still leave his defence of condonation and his counterclaim against M & P for harassment to be addressed. There is potential for inconsistent findings of fact between the summary judgment motion and the trial of the defence of condonation and the counterclaim.

The Action

[6] M & P alleges that between 2016 and when Lawson was dismissed in early 2020, Lawson embezzled from M & P $652,696.72 in two ways. First, he wrote cheques to himself on the M & P account totaling $560,642.43 and covered his activities by creating fictitious invoices from actual suppliers or by padding otherwise legitimate invoices from suppliers. Second, he paid himself $94,053.29 as an employee beyond that which was recorded on his T4 slip. M & P alleges that Lawson e-transferred $122,430.87 of the embezzled funds from his account directly to the bank account of Tera Beaulieu, his paramour. The action against Ms. Beaulieu has been dismissed.

[7] Lawson counterclaims for intentional infliction of mental injury of $500,000 plus $25,000 each for aggravated and punitive damages. He alleges that M & P maintained a toxic culture of abuse, and regularly and systematically abused Lawson by undermining his authority and his ability to do his job, and publicly shaming him and targeting him in front of others in order to establish control over him. In addition, he defends the main action by alleging that M & P ’s corporate culture tolerated and condoned fraud including the fraud that Lawson perpetrated on M & P.

[8] M & P denies all allegations in the counterclaim. Further, it takes the position that the evidence developed in preparation for this motion does not support the claim. The counterclaim, too, should be dismissed as part of the summary judgement motion.

Result

[9] For reasons that follow, M & P’s summary judgment motion is dismissed, in its entirety. This decision, however, is a close call.

The Facts

a) Lawson’s Job

[10] Lawson began working at M & P in October 30, 2006 as the office manager. He was promoted to assistant Comptroller eventually, and in 2011 became Comptroller.

[11] As Comptroller, Lawson was responsible for accounts receivable, information technology, accounts payable, order entry, reception, the general ledger, personnel, and payroll. He reported directly to Martin Prufer, M & P’s President, on all matters except HR and wages. On the latter two subjects, Lawson reported to Greg Wouters, General Manager and Vice President.

[12] Part of Lawson’s responsibilities were to maintain M & P’s accounting controls, and to update the computer accounting software by posting expenses and revenues in the computer records.

[13] As comptroller, Lawson had sole signing authority on M & P’s accounts to a limit of $100,000.

b) The fraud discovered

[14] Lawson’s fraud was discovered by Philip Bright, the company’s external accountant.

[15] Since 1986, Bright and is firm performed the annual review of M & P’s financial statements pursuant to a review engagement.

[16] A review engagement is an accounting profession-wide standard form of limited engagement whereby an accountant reviews only statements and information provided to him or her by the client. In a review engagement, unlike an audit, the accountant does not require direct access to source documents. In this case, Bright was never retained to perform an audit or provide an audit opinion.

[17] In performing the review engagement, Bright would rely upon Lawson to provide him with the records that Lawson maintained for M & P that Bright required in order to perform the review engagement.

[18] In late November 2019 a bookkeeper at M & P telephoned Bright and expressed concern about oddities that were occurring in M & P’s accounting system. At the time, Bright was beginning his review engagement of the 2019 fiscal year.

[19] The bookkeeper advised Bright that is part of normal monthly procedures, accounting staff would post to the company’s accounting computer program those manual cheques (handwritten cheques, as opposed to those printed with the accounting software) which Lawson had not already posted. The staff member reported the existence of a couple of manual cheques that Lawson made payable to himself, but which Lawson had posted to the computer system as having been paid to other M & P employees. The bookkeeper also found some M & P manual cheques that were posted as being “void” in the computer system, but which were, in fact, written by Lawson to Lawson.

c) The check scam

[20] On 12 December 2020, Bright conducted a review of the payroll process during the time period identified by the employee and discovered that Lawson had written manual cheques to himself between pay periods but had not always posted those manual cheques to the computer program’s general ledger at the end of the pay period. Rather, he posted them some time afterward.

[21] Bright asked Lawson why he was doing this. Lawson explained that he had an arrangement with Prufer whereby he would track his overtime and other above-normal working hours and then pay himself by way of manual cheque. He kept a handwritten list of such manual cheques which he posted to the computer system. Sometimes he forgot to post those cheques at the appropriate time, or to add those manual cheques to his handwritten list. He usually corrected his oversight at a later time.

[22] On December 12, Bright also noticed that there were 18 cheques in October 2019 which were reported as missing, which, to Bright, seemed to be an unusually high number. Bright told Lawson that he was looking at this issue.

[23] By between 12 December 2019 and 19 February 19, 2020, Bright focused his review on the period between September 2019 and December 2019. He analysed computer-generated cheques and manual cheques that had been issued to Lawson. He noted that the computer-generated cheques that Lawson had cashed included those cheque numbers that the M & P accounting system identified as “missing cheques”. This concerned Bright further. On 21 February 2020, Bright emailed Lawson concerning his findings about missing cheques and asked Lawson to explain. He wrote again on favourite 28 th demanding an explanation. Lawson did not respond.

[24] At 8:00 AM, on 3 March 2020, Bright came to M & P’s premises and went to Lawson’s office to examine M & P’s bank statements to determine which cheques Lawson had written to himself. He discovered a number of computer- generated cheques issued to Lawson that followed the same pattern as between September 2019 through December 2019.

d) Payroll Scam

[25] Bright reviewed payroll records, amounts listed as being paid as wages to Lawson, and Lawson’s T4 slips issued by the company.

[26] Lawson was required to submit payroll records at regular intervals, which were provided to a third party payroll administrator who issued payments by direct deposit to employees, including Lawson. Bright compared the payroll records to Lawson’s T4s and determined that Lawson had paid himself an additional $94,000.00.

[27] As part of his undertakings answered following cross examinations on affidavits for this motion, Lawson produced a list of hours he worked. M & P has no information to gainsay this record. The difference between the total time Lawson recorded that he worked and the amount he was paid was minor. M & P acknowledged that Lawson is entitled to be paid for the time he worked regardless of his fraud in any other areas. Since the only evidence of the time Lawson worked was Lawson’s own records, and since M & P did not have any contrary evidence, the parties agreed that this issue would not be pursued.

e) Lawson confronted

[28] At 9 am, 3 March 2020 Lawson arrived to find Bright in his office reviewing M & P’s bank statements and financial records. Bright and Lawson discussed Bright’s findings concerning the M & P cheques that Lawson had been writing to himself. Bright demanded an explanation.

[29] Lawson admitted that he had been misappropriating funds from the company which he would then deposit into his Royal Bank of Canada personal account. He admitted that he would regularly e-transfer sums from the misappropriated funds to Miss Beaulieu. Lawson admitted that he started misappropriating funds around January 2019, the earliest date for which Bright, at that time, had information. Later in the conversation, Lawson corrected the date to October 2018, around the time that the company had terminated Beaulieu.

[30] Lawson admitted that in order to cover his misappropriation of funds he would enter into M & P accounting computer system false invoices in the names of M & P’s actual suppliers and by inflating otherwise valid invoices from M & P’s actual suppliers.

[31] Immediately after meeting with Lawson, Bright met with Prufer and Wouters and advised them of the discussion with Lawson. Lawson was then suspended without pay. Bright was instructed to continue his investigation.

[32] With the information from Lawson, Bright began to review accounting records (both computer and paper) from 2016 through 2020. As a result of his investigation, Bright discovered that Lawson had misappropriated a total of $560,643.43 by writing cheques to himself which he reconciled by entering completely false expense entries or by inflating otherwise valid expense entries into the accounting system.

[33] On 11 March 2020, Lawson met with Prufer, Wouters, and Bright. The conversation was recorded, and a transcript was produced.

[34] During this meeting, Lawson admitted, again, to the fraud. Bright explained how he arrived at the total amounts and where he found the information. Lawson was asked to explain how he perpetrated the fraud. Lawson admitted, again, to creating false expenses and inflating otherwise valid expenses and entering them into the accounting system to cover the fraudulent cheques that he had written to himself. Lawson revised the date on which he began his fraud by saying that he started shortly after an accounting employee left the company whose responsibility it was to post the cheques and match them to the bank statements.

[35] After M & P obtained a Court Order freezing Lawson’s accounts and ordering production of his banking records, Bright was able to trace the deposits of the fraudulent cheques into Lawson’s bank account, and Lawson’s e-transfer of $122,430.87 to Beaulieu’s account, often using multiple transfers in the same day.

[36] None of the cheques that Lawson wrote to himself were related to his employment. His salary was directly deposited into his bank account through the third-party payroll administrator.

[37] Bright was able to locate and confirm the false and inflated invoices.

[38] Lawson does not dispute any of these facts.

The Law

a) Test on A Motion For Summary Judgment

[39] Pursuant to Rule 20.04(2), summary judgment is to be granted if the Court is satisfied that there is no genuine issue requiring a trial.

[40] Hryniak v. Mauldin, 2014 SCC 7, at para. 49, says that here will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on the record, or using the expanded powers under the rule. There will be no genuine issue for trial when the process: "(1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result."

[41] On a motion for summary judgment, the judge should determine, first, if there is a genuine issue requiring a trial based on the evidence before him or her without using the fact-finding powers in subrule 20.04(2.1). If there appears to be a genuine issue requiring a trial, Rule 20.04(2.1) permits the motion judge, at his or her discretion, to: (1) weigh the evidence, (2) evaluate the credibility of a deponent, or (3) draw any reasonable inference from the evidence unless it is in the "interest of justice" for these powers to be exercised only at trial (see: Hryniak, supra, at para. 66.) The motion judge may also use the expanded powers under Rule 20.04(2.2) to create a procedure such as a mini trial (rather than a full trial), to address issues that cannot be addressed on summary judgement.

[42] The responding party cannot stave off a summary judgement motion by saying he will produce more evidence at trial. He must put its best foot forward in response to the motion for summary judgment. The summary judgement motions judge is entitled to assume that the respondent has led all of the evidence he or she would lead at trial (see: Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 (Ont. S.C.J.), at para. 26, aff'd 2014 ONCA 878 (Ont. C.A.), leave to appeal to SCC refused, [2015] S.C.C.A. No. 97 (S.C.C.).

b) Partial Summary Judgment

[43] The Supreme Court of Canada's decision in Hryniak was meant to mark a culture shift, permitting the trial courts to use summary judgement motions as tool for addressing the merits of civil claims in an economic and efficient way. The Court of Appeal for Ontario, however, has said several times since Hryniak that motions for partial summary judgment can defeat the lofty objectives set out in Hryniak, and therefore partial summary judgment is inappropriate in many cases (see: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450; Hamilton (City) v. Their + Curran Architects Inc., 2015 ONCA 64; Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2016 ONCA 922; and Butera v. Chown, Cairns LLP, 2017 ONCA 783).

[44] In Butera, at paras. 30-34, the Court said that motions for partial summary judgment are not appropriate where they create a real risk of duplicative and inconsistent findings. Further, if they are unsuccessful they serve only to cause delay, and waste the clients’ and the Court’s resources. The Court said:

First, such motions cause the resolution of the main action to be delayed. Typically, an action does not progress in the face of a motion for partial summary judgment. A delay tactic, dressed as a request for partial summary judgment, may be used, albeit improperly, to cause an opposing party to expend time and legal fees on a motion that will not finally determine the action and, at best, will only resolve one element of the action. At worst, the result is only increased fees and delay. There is also always the possibility of an appeal.

Second, a motion for partial summary judgment may be very expensive. The provision for a presumptive cost award for an unsuccessful summary judgment motion that existed under the former summary judgment rule has been repealed, thereby removing a disincentive for bringing partial summary judgment motions.

Third, judges, who already face a significant responsibility addressing the increase in summary judgment motions that have flowed since Hryniak, are required to spend time hearing partial summary judgment motions and writing comprehensive reasons on an issue that does not dispose of the action.

Fourth, the record available at the hearing of a partial summary judgment motion will likely not be as expansive as the record at trial therefore increasing the danger of inconsistent findings.

When bringing a motion for partial summary judgment, the moving party should consider these factors in assessing whether the motion is advisable in the context of the litigation as a whole. A motion for partial summary judgment should be considered to be a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost effective manner. Such an approach is consistent with the objectives described by the Supreme Court in Hryniak and with the direction that the Rules be liberally construed to secure the just, most expeditious, and least expensive determination of every civil proceeding on its merits. (emphasis added)

[45] In this case, M & P seeks judgment against Lawson for fraud and breach of fiduciary duty – in other words, partial summary judgment.

[46] In light of the cautionary words of the Court of Appeal, as a first step in deciding whether M & P 's claim can be decided on summary judgment, I focus on whether this is one of those rare circumstance that partial summary judgment can be granted. Can the claim be bifurcated from the defence of condonation and the Counterclaim such there would be no risk of duplicative or inconsistent findings, and that granting partial summary judgment is an expeditious and cost- effective way to make this decision?

Analysis

a) Is there an issue Requiring A Trial?

[47] Yes. Consequently, this case is not appropriate for summary judgment. It requires a trial.

[48] In the causes of action of civil fraud and breach of fiduciary duty, the defence of condonation, and the counterclaim of harassment, M & P’s knowledge of Lawson’s fraudl activities is central. What M & P’s principal actors knew and when is a question of credibility which cannot be determined in a summary fashion. It requires a trial or hearing in which the judge presiding can properly form and make the necessary findings of credibility between the individual parties. I do not have confidence that the written record will allow me to reach a fair and just determination of the defence of condoning and with respect to the counterclaim.

[49] Lawson says that as early as 2018 M & P knew that he was engaged in fraudulent activities because:

1. All the cheques that he wrote to himself were maintained in the company’s records which were open to anyone to review. He did not destroy any of them.
2. All the cheques he wrote to himself were entered into the cheque register, which was open for anyone to review. Bright had access to the cheque register when performing his review engagement, and in some years, he reviewed the cheque register.
3. During the March 2020 interview, Wouters admitted to being aware, in 2018, of Lawson’s fraud.
4. While performing the 2018 year-end review engagement, Bright posed questions of Lawson which indicate that Bright knew of potential fraud. These questions by Bright included weather Lawson knew whether Prufer had looked at the HST, payroll, or bank documents. Lawson says that the fact that Bright posed these questions indicates that Bright was aware of something inappropriate with the cheques. In addition, during this discussion, Lawson admitted that money had been very tight.
5. M & P did not pursue the fraud, notwithstanding its knowledge, because it did not want to have to restate its financial statements and/or it considered the amounts “immaterial”.
6. Lawson’s fraud is no different than any of the other fraud which occurred at M & P, which M & P tolerated and forgave as part of its “culture of fraud.”

[50] M & P denies that it had any knowledge of Lawson’s fraud until Bright was told of the irregularity about the cheques at the end of 2019. Bright, himself, denies that he was aware of Lawson’s fraud until the end of 2019. He says that any discussions that he may have had with Lawson were about documents he needed for his review engagement and any change in documents that he reviewed for his previous review engagements as a result of legislative or regulatory changes to his obligations when conducting a review engagement. The purpose of those conversations were not to flush out information from Lawson with respect to a possible fraud scheme, as Lawson suggests.

[51] M & P and Lawson both rely heavily on the transcript of the March 2020 interview. This is problematic for both parties.

[52] The portion of the interview transcript that Lawson relies upon to say that Wouters knew of the fraud in 2018, does not support that proposition. In context of the whole recording, the transcript portion that Lawson relied upon is not an admission that Wouters knew about the fraud as early as 2018, or at any other time than at the end of 2019. In context, Wouters is recounting the history of the frauds, on a year-by-year basis. He is not indicating that he knew about those frauds at any earlier time than at the end of 2019.

[53] Setting aside Lawson’s inappropriate reading of a portion of the 11 May 2020 meeting’s transcript, the transcript itself is not admissible evidence on this motion. It is merely a transcript of an audio recording of a conversation. Mr. Lawson was not under oath at the time of the conversation. The transcriber does not swear about the accuracy of the transcription.

[54] Consequently, on the issue of the Company’s knowledge of Lawson’s actions, I am left with versions of events of the parties as contained in their Affidavits. Those version differ. Questions of credibility are not decided on the bases of the number of witness for or against a proposition. It is not a matter of majority rule. Rather, the issue can be decided only on the credibility of the witness, and the quality of their evidence. This issue requires a hearing in order to make findings of fact required.

[55] M & P invites me to grant judgment on the main action. It argues that the evidence is clear of civil fraud and breach of fiduciary duty. I disagree. The questsion of the company’s knowledge of Lawson’s activities are inseparably tied to each of the causes of action and the defence of condonation.

[56] I turn to each of the causes of action or defences.

Civil Fraud

[57] The four elements of the tort of civil fraud are:

1. the defendant must make a representation to M & P;
2. the defendant must have some level of knowledge that the representation was false, either through actual knowledge of falsity or recklessness;
3. the false representation caused M & P to act; and
4. M & P ’s actions resulted in the loss.
5. (See: Bruno Appliance and Furniture Inc. v. Hryniak, 2014 SCC 8 at para. 21).

[58] The third element puts M & P’s principals’ knowledge of Lawson’s activities at the heart of whether M & P can make out the cause of action of civil fraud. If the Companhy, through its principals, knew of Lawson’s activities, or they knew that his representations were false, M & P cannot make its case of civil fraud.

Breach of Fiduciary Duty

[59] A fiduciary duty exists where:

1. the fiduciary has the scope for the exercise of some discretion or power,
2. the fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interest, and
3. the beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power

(see: South Nahani Trading Company Ltd. and Thomas C. Pinckard, 2007 ONSC 30668, at para 10, and Frame v. Smith, [1987] 2 SCR 99, at para. 136).

[60] As with civil fraud, it is arguable that if M & P knew of Lawson’s activities, it cannot be said that Lawson unilaterally used the discretion or power reposed in him to affect M & P interests. If this is the case, then M & P cannot make its case of breach of fiduciary duty.

Condonation

[61] Pagliaroli v Rite-Pak Produce Co., 2010 ONSC 3729 and Dunsmuir v Royal Group, Inc., 2017 ONSC 4391 provide that the defence of condonation requires that the following elements occur;

1. The defendant establish on a balance of probabilities that the employer had “full knowledge of the nature and extent of the fault” ( see: Pagliaroli at para. 24 );
2. The court should conduct a hierarchical analysis of the inner- workings of the employer to discern the identities of the people with “the ability to terminate or trigger a review and influence the continuation of the employer-employee relationship.” The agents or directing minds of the company must have actual knowledge of the impugned activities. ( see: Pagliaroli at para. 36 );
3. The directing minds must “either have knowledge of the conduct in question or choose, for whatever reason, to ignore it or approve it.” ( see: Pagliaroli at para. 36 );
4. In some narrow range of cases, “there can be contexts in which it is unfair to hold an employee liable for dismissal for cause for some breaches of duty especially where the corporate culture is particularly lax.” ( see: Dunsmuir para. 155 ).

[62] Stacey Ball, in her loose-leaf text, Canadian Employment Law, Chapter 11, “Cause for Summary Dismissal”, title 11:80 – Condonation, sets out the principles regarding condonation as follows (omitting citations):

1. Where an employer fails to act in a timely way to dismiss or discipline an employee for misconduct of which the employer is aware, it may be held to have condoned the employee’s behaviour and therefore be unable to rely upon that behaviour with respect to dismissing employee. This inquiry is fact driven.
2. The onus of proof is on the employee and the burden of proof is the civil standard.
3. The application of the test for condonation is a mixed question of fact and law.
4. For an employer to condone an employee’s action, it must have full, actual knowledge of the impugned conduct as intention is an essential element of condonation. Knowledge may be imputed or inferred from the employer’s conduct.
5. The atmosphere at a workplace may need an employee to conclude that certain conduct will not place his or her job in jeopardy, and therefore, that the conduct is condoned. When an employer permits other employees to engage in a particular conduct, the court, depending on the facts, may be inclined to consider that the employer has condoned a similar conduct being carried on by the plaintiff.
6. Condonation is subject to an implied condition of future good conduct. Whenever new misconduct occurs the old misconduct, even though condoned, may be invoked and may be considered against the employee.

[63] Based on these authorities, M & P’s knowledge of Lawson’s activities is essential to the defence of condonation.

[64] M & P argues that condonation is not a defence to a claim of civil fraud and breach of fiduciary duty, nor is it a basis for Lawson’s counterclaim. M & P argues that neither Pagliaroli nor Dunsmuir are applicable because in neither case was condonation raised or considered by the Court as a defence to an action for civil fraud or breach of fiduciary duty.

[65] While Pagliaroli and Dunsmuir are not civil fraud or breach of fiduciary cases, they do not limit their application to their facts. Further, the parties did not direct me to authority that said that condonation is not available as a defence in civil fraud or breach of fiduciary cases. It is arguable that condonation is a defence to such cases, an argument that must be resolved by a judge on a full evidentiary record. I am not prepared to settle this question on the record before me.

Counterclaim

[66] The legal foundation of Lawson’s counterclaim is in harassment. He does not base his counterclaim in wrongful dismissal. He pleads that Wouters engaged in regular and systematic abuse of Lawson (SOD, para. 28), consistently undermined Lawson’s ability to perform his job by not allowing him to hire staff, instruct staff that reported to him (SOD, para. 28 and 29), and that they engaged in an ongoing campaign of publicly shaming him and targeting him for ridicule (SOD, para. 29).

[67] Lawson also pleads that M & P maintained a toxic atmosphere at the workplace which included a culture of condoning fraud. On this motion Lawson testified to several examples of such behaviour.

[68] M & P denies all of this. It says that the whole of the counterclaim sounds in harassment. The allegations of a culture of condoning fraud are irrelevant to the cause of action of harassment and the counterclaim and raise no triable issue.

[69] The counterclaim, however, still requires a trial. The success of the counterclaim depends on issues of credibility of the parties about the alleged instances of harassment that cannot be addressed on a written record.

[70] I said at the outset of this Endorsement that my dismissal of this motion was a close call. It is. Had I accepted the transcript of the interview with Lawson as admissible evidence, I would have granted summary judgment in the main action. Based on Lawson’s admissions in that transcript, civil fraud and breach of fiduciary duty would have been made out. Indeed, in that transcript, Lawson does not really deny the essential facts that support a finding of liability in the main action.

[71] Had I accepted the transcript as admissible, I also would have dismissed the defence of condonation. As I explained above, the evidence in that transcript on which Lawson relies in support of his defence of condonation, he misreads.

[72] Had I admitted the transcript I would have sent only the counterclaim on to trial.

a) Exercise of Special Powers

[73] I cannot see any procedure short of a trial that I could fashion under the special powers under R. 20.04(2.1) that would lead to a fair and just result in this case, and I was offered no assistance in this respect by the parties. I cannot see any refined procedure that would assist in determining the credibility issues between the parties, which I cannot resolve on the basis of the written record before me. Neither party suggested an alternate procedure.

Costs

[74] I will decide the matter of who pays whom costs, and in what amount, in writing. Submission are limited to three type-written, double-spaced pages (excluding Bills of costs). Mr. Lawson shall serve and file his submission by 4 pm, 15 January 2021, and M & P’s by 4 pm, 29 January 2021.

Trimble J. Released: December 23, 2020