Court File and Parties

COURT FILE NO.: CV-17-587517 DATE: 20210304 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ROBERT LEONARD MARSHALL and TRACEY DOROTHY HOYT, Plaintiffs/Defendants by Counterclaim AND: JOHN PETER MEIRIK and AMBER MADELYNN MEIRIK, Defendants/Plaintiffs by Counterclaim

BEFORE: Kimmel J.

COUNSEL: Fred Tayar, for the Plaintiffs/Defendants by Counterclaim Michael Bookman, for the Defendants/Plaintiffs by Counterclaim

HEARD: February 25, 2021

Case Conference Endorsement (Defendants’ proposed motion for leave to file further evidence)

Procedural Background

[1] This action arises out of a failed purchase of a property in Port Carling, Ontario in August of 2017. The defendants admit that they anticipatorily breached (repudiated) the agreement of purchase and sale. The plaintiffs re-listed and re-sold the subject property for a lower price and at a higher commission cost and sued for their damages.

[2] The plaintiffs brought a motion for summary judgment that I heard on July 17, 2019. In an endorsement dated October 28, 2019 (Marshall v. Meirik, 2019 ONSC 6215), I directed the parties to tender further evidence and argument on the issues of damages and mitigation before I decided the summary judgment motion (the “initial endorsement”). The parties were afforded the opportunity to provide further proper expert (and other supporting) evidence in accordance with directions provided at the end of my initial endorsement. I determined that this was the most timely, cost effective and proportionate manner of proceeding.

[3] The issues to be decided were clearly delineated in my initial endorsement, as follows:

a. What is the proper date of assessment of the plaintiffs’ damages? b. Can the plaintiffs rely solely on the re-sale price under the New APS to prove their damages, or is some other evidence of the market value of the Property on the assessment date required? c. Do any of the plaintiffs’ claimed damages include losses that could reasonably have been avoided and should their damages be reduced on account of any such avoidable losses (e.g. due to their failure to take reasonable steps to mitigate their losses)?

[4] There were various delays. The defendants engaged new counsel. A timetable was set that accommodated their change in counsel, and it was extended as a result of the COVID-19 pandemic. The parties eventually exchanged expert reports, conducted cross-examinations and appeared before me to tender this further expert evidence and make further submissions on the issues of damages and mitigation at the continuation of the summary judgment motion on January 14, 2021.

[5] At the request of the defendants’ counsel at the conclusion of the hearing on January 14, 2021, I agreed to allow counsel until February 19, 2021 to exchange their bills of costs/cost outlines and not to release my decision before then. On February 18, 2021 the court was advised that the defendants had retained new counsel and that they were requesting a chambers appointment at which they intended to ask the court to schedule a motion for leave to file further expert evidence on the mitigation issue before the court’s decision on the summary judgment motion is rendered.

[6] The defendants served their motion record with their notice of motion for leave to adduce further expert evidence and a supporting affidavit of the defendant Amber Meirik on February 18, 2021. That motion is predicated on the following evidence:

a. That the defendants understood after receiving my initial endorsement in or about November of 2019 that they had been invited to put in expert evidence regarding the market value of the Property and about what mitigation steps the plaintiffs should have taken (Meirik affidavit, para. 3); b. That counsel for the defendants did not put certain expert evidence regarding the mitigation issue before the court in advance of or during the continuation of the motion on January 14, 2021 (Meirik affidavit, para. 4); and c. That the defendants had retained a new expert, Barry Lebow, on February 18, 2021 to provide an expert opinion on the mitigation issue (Meirik affidavit, para. 6).

[7] The February 18, 2021 Notice of Motion states that:

a. the defendants wish to adduce expert evidence regarding mitigation that could alter the outcome of the motion for summary judgment currently under reserve (notice of motion, para. (k)); and b. if the court denies their request, the defendants will be irreparably prejudiced and there is a risk of miscarriage of justice (notice of motion para. (l)).

[8] By endorsement dated February 22, 2021, a case conference was scheduled before me on February 25, 2021 on the following basis:

This will proceed as a case conference under Rule 50.13 and the court may exercise the various powers available under that Rule, which go beyond the procedural orders for a timetable and directions that have been identified in the request form. In particular, counsel should attend this case conference prepared to address the test for fresh evidence and how it is expected to be satisfied in the circumstances of his case. The court will then decide whether to schedule the motion, and if it is to be scheduled, a timetable will be set.

[9] Counsel attended the case conference and made submissions on February 25, 2021 about the test for adducing fresh evidence and the factors for the court to consider in the exercise of its discretion to re-open a motion to receive fresh evidence, having regard to the evidence and submissions received to date and the defendants’ motion record and authorities that had been provided. Some additional cases were provided by counsel for the defendants the following day.

[10] Counsel for the defendants advised at the case conference that:

a. the proposed new expert has not prepared a report; b. the proposed new expert has indicated that he will require 1-2 weeks to complete his report if he is instructed to proceed; and c. the defendants intend to instruct the proposed new expert to proceed if the court grants their motion.

[11] It is not known what Mr. Lebow will say about the mitigation issue.

Summary of Disposition

[12] I have read the supporting material and authorities presented and considered the submissions of counsel. There is no need to schedule a motion for fresh evidence. I have all that is required to decide the issue. I am not prepared to exercise my discretion to re-open the evidentiary record on the summary judgment motion that I have under reserve.

The Test for Fresh Evidence

[13] To be granted leave to file fresh evidence, the defendants must address two general requirements, namely that:

a. the proposed fresh evidence could not have been adduced by them at either the July 17, 2019 or January 14, 2021 appearances on the summary judgment motion with due diligence; and b. the proposed fresh evidence, when taken with the other evidence, can be expected to have an influence on the outcome.

See Strugarova v. Air France, 2009 ONSC 40552, at paras. 4-7, aff’d 2009 CarswellOnt 6462 (Div. Ct.)

[14] In the context of considering these requirements, the court retains a wide discretion to re-open a hearing before entry of judgment to admit fresh evidence:

…a diligence requirement is a salutary one and in most cases I would expect trial judges would scrutinize the circumstances of the discovery of the evidence with care being, as Macdonald J.A. suggests, guided but not bound by the rules applicable to appellate courts. But in the final analysis, it appears to me that the Clayton rule is appropriate [p. 441 D.L.R.]:

The prudent course is to permit the trial Judge to exercise untrammeled discretion relying upon trained experience to prevent abuse, the fundamental consideration being that a miscarriage of justice does not occur.

See Castlerigg Investments Inc. v. Lam, 1991 ONSC 7355, at paras. 20-21, citing Clayton v. British American Securities Ltd., 1934 BCCA 229

[15] Roberts J. (as she then was) exercised this broader discretion in Strugarova, stating, at paras. 6-7, that: “the court still has discretion to re-open a motion to prevent a miscarriage of justice, which includes, but is not limited to, a fraud on or the deliberate misleading of the court, or to prevent an abuse of the court’s process…. The court has a wider discretion to re-open a matter where the integrity of the process is at risk or a principle of justice is at stake that requires the reconsideration of the matter…. While a court should re-open a motion or other matter sparingly and with the greatest of care, it may reopen it when it is just to do so in exceptional circumstances.”

[16] The court in Brasseur v. York, 2019 ONSC 4043, extensively canvassed the authorities in this area and made the following observations as they relate to the court’s exercise of discretion to permit fresh evidence while a decision is under reserve:

[41] The Supreme Court of Canada in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, dealt with a decision made by a trial judge who had used the test set out in Scott v. Cook. … Major J. noted that appellate courts should defer to the trial judge who is in the best position to decide whether, at the expense of finality, fairness required the trial be reopened. Major J. further commented that this discretion should be exercised sparingly and with the greatest care so that fraud and abuses of the court’s process do not happen.

[43] More recently, in the case of Mehedi v. 2057161 Ontario Inc. (c.o.b. Job Success), 2015 ONCA 670, Lauwers J.A. has further expanded upon the test found in Sagaz. He explained at para. 20:

In my view, properly understood, the test in Sagaz goes beyond the two questions of whether the new evidence, if presented at trial, would probably have changed the result, and whether the evidence could have been obtained before trial by the exercise of reasonable diligence. It includes considerations of finality, the apparent cogency of the evidence, delay, fairness and prejudice, factors that were articulated by this court in its decision in Baetz.

[45] However, when a case is yet undecided, the balance may tilt more towards fairness and truth-seeking rather than finality. This has been recognized in the authorities that have dealt with motions to introduce fresh evidence before a judge has rendered a decision. These authorities have generally held that the threshold required in the first question of Sagaz is loosened: Carleton Condominium Corporation No. 116 v. Sennek, 2017 ONSC 5016; Varco Canada Ltd. v. Pason Systems Corp., 2011 FC 467; Levant v. Day, 2017 ONSC 5988.

[46] This different approach to the first prong of the test was emphasized by Lauwers J. (as he was then) in Jackson v. Vaughan (City), 2009 ONSC 152 at paras. 22-23

It seems to me intuitive that where a court has not yet reached a conclusion on the matter to be addressed by the fresh evidence the standard ought to be somewhat relaxed, although I am mindful of the need to avoid never ending evidence ...

Analysis

[17] The defendants retained a third expert more than a month after the hearing of the summary judgment motion concluded and during the period in which the court had been asked to afford an indulgence to their counsel to prepare a cost outline/bill of costs. They have chosen not to incur the cost of having Mr. Lebow do any work until after the court decides this motion.

[18] Counsel for the defendants quite properly conceded that they cannot meet the prong of the test that requires them to demonstrate that they could not have obtained the proposed fresh evidence that they now seek to obtain from Mr. Lebow with reasonable diligence between November 2019 and January 14, 2021.

[19] As for the other prong of the test, it is not known whether any additional evidence could be obtained from Mr. Lebow that would probably, or even might, influence the result of this motion. What is known is that the defendants were aware in November of 2019 that they had been invited to tender this evidence, had ample opportunity to do so and availed themselves of that opportunity by tendering, according to Mrs. Meirik in her affidavit in support of this motion: “certain expert evidence regarding the mitigation issue before the court in advance of or during the continuation of the motion on January 14, 2021.” The defendants did tender and rely upon the evidence of two experts at the continuation of the summary judgment motion in January of 2021. Now it is suggested that there might be something more that Mr. Lebow can say on the mitigation issue that neither of the other two experts said. This is not sufficient to meet the second prong of the test, in my view.

[20] Since the defendants have not demonstrated that they can satisfy either prong of the fresh evidence test, that should put an end to the matter. However, in the interests of completeness, I have considered whether this is a case in which the court’s broader discretion should be exercised and a more loosened standard applied to the test to avoid a miscarriage of justice. Turning to the factors to consider in this exercise of that discretion, none lead to the conclusion that refusing to consider the defendants proposed fresh evidence will result in a miscarriage of justice in this case.

[21] The cogency of the proposed evidence is elusive at best. There is no apparent cogency to the yet unascertained further evidence (having regard to the fact that two other experts for the defendants in this same area did not provide and are not being asked to provide this evidence). Furthermore, the proposed fresh evidence is not in furtherance of a “truth-seeking” exercise. This is not a matter of presenting facts but is rather a desire to seek out another expert opinion that does not yet exist. This is consistent with the defendants’ concerted strategy on the summary judgment motion, which has been to hold out the prospect of further evidence as a basis for the court finding that the mitigation issue is a genuine issue that requires a trial.

[22] The process adopted in this case has already afforded the defendants two opportunities to present their expert evidence on the mitigation issue. That is more than fair. In doing so, the plaintiffs have been delayed significantly in the determination of their claims, which date back to the fall of 2017. Considerations such as finality, avoidance of further delay and the integrity of the summary judgment process all go against the court’s exercise of discretion in favour of the defendants’ request for a third opportunity to put in more evidence on the mitigation issue on this summary judgment motion.

[23] In weighing the competing tensions of the need for finality to the hearing process and to prevent unduly protracted legal proceedings with the need to ensure that important evidence is not ignored, the balance favours the need for finality in this case, where the defendants have already had two chances to put their best foot forward. The defendants should not be permitted to introduce new evidence to patch holes in their case created by the plaintiffs’ evidence or submissions: see Jacobs v. Hill, 2016 ONSC 4637, at paras. 9-11.

[24] “[A] miscarriage of justice requires more than just a finding that a different result might have occurred”: 1307347 Ontario Inc. v. 1243058 Ontario Inc., , at para. 9; see also DeGroote v. Canadian Imperial Bank of Commerce, 1999 ONCA 4115, 121 O.A.C. 327, at para. 4. The types of circumstances said to rise to the level of a miscarriage of justice include a fraud or deliberate misleading of the court, or a risk to the integrity of the process or a principle of justice as there was in the Strugarova case. These types of circumstances do not exist in this case.

[25] In my view, the interests of justice are not served by the court granting the defendants a third chance to improve upon their evidence on the mitigation issue. Put another way, there is no miscarriage of justice that justifies the exercise of the court’s discretion to permit the filing of fresh evidence in the circumstances of this case. The integrity of the court’s process is not at risk and there is not a principle of justice at stake. A miscarriage of justice does not arise just because the defendants fear in hindsight and with the benefit of having heard the submissions and arguments on the summary judgment motion that they might not have met their onus on the mitigation issue through their first two attempts.

[26] The defendants assert that they will be irreparable prejudiced but this is conflated with the argument about a miscarriage of justice and must be considered in that context. They also argue that the court should consider that there would be no irreparable prejudice to the plaintiffs. The potential for irreparable prejudice to the party opposing the introduction of the fresh evidence would only come into play as a relevant consideration if the court was considering permitting the introduction of the fresh evidence.

Next Steps

[27] Counsel advised the court at the case conference that they would be in a position to exchange their updated bills of costs/cost outlines within twenty-four hours if I decided not to allow the filing of any further evidence. They are thus on notice as of the release of this endorsement that they should complete that exchange, which was to have occurred on February 19, 2021. If there are additional costs to be included in relation to the February 25, 2021 case conference, those may be included in the updated bills of costs/cost outlines that are now exchanged. I will allow the parties until the close of business on March 5, 2021 to complete this exchange.

Kimmel J. Date: March 4, 2021