Court File and Parties

COURT FILE NO.: CV-19-627474

DATE: 20210329

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MANDEEP SAGGI, NEELAM SAGGI, SUCHA SAGGI, Plaintiffs

AND:

SERGIO GRILLONE, GRILLONE LAW FIRM, GRILLONE BEKIARIS LLP, GEORGE BEKIARIS, 1894931 ONTARIO LIMITED, LISA ROBERTA GATTO, Defendants

BEFORE: Kimmel J.

COUNSEL: Michael Kestenberg, for the Plaintiffs

Sergio Grillone, appearing for himself and the Grillone Law Firm (the "Grillone Defendants") (self-represented)

HEARD: March 18, 2021

ENDORSEMENT (motion by the grillone defendants under Rule 59.06)

The Background to this Motion

[1] In reasons for decision released October 20, 2020, I granted the plaintiffs' motion for a Mareva Injunction (and various related relief) against the Grillone Defendants (the "Mareva Injunction Motion"), after having granted leave (in that same decision) to the plaintiffs to file certain fresh evidence following the initial hearing of that motion (the "Fresh Evidence Motion"): Saggi v. Grillone, 2020 ONSC 6351. The Mareva Injunction motion was heard on January 14, 2020, the Fresh Evidence Motion was served on January 28, 2020 but, due to various scheduling delays, the most significant of which related to the COVID-19 pandemic, the Fresh Evidence Motion was not heard until October 1, 2020. The fresh evidence for which leave was granted was received and considered in my decision to grant the Mareva Injunction.

[2] Previously, in a decision dated July 3, 2020, I discharged a certificate of pending litigation ("CPL") that the plaintiffs had registered against a property on Dickson Park Crescent previously owned by the defendant Lisa Gatto: Saggi v. Grillone, 2020 ONSC 4140. That CPL had been registered by a Master's order granted ex parte to the plaintiffs on September 30, 2019. The CPL was granted in that same order against another property, at 5155 Spectrum Way, Unit 8, Mississauga Ontario (the "Spectrum Way Property"), owned by the defendant 1894931 Ontario Limited ("189") a company in which Mr. Grillone was, until recently, an indirect 50% shareholder through another holding company, 2390215 Ontario Inc. ("239"). The Spectrum Way Property was the premises out of which Mr. Grillone carried on his law practice.

[3] Following the release of my reasons for decision in October 2020 on the Mareva Injunction and Fresh Evidence Motions, various directions were provided regarding the parties' cost submissions for those motions. The plaintiffs were initially claiming costs personally against the solicitor who had been representing the Grillone Defendants throughout the proceedings before me, which led to that counsel getting off the record. Mr. Grillone took over the representation of the Grillone Defendants at that time. The Grillone Defendants were represented by counsel at the time of the Mareva Injunction Motion and Fresh Evidence Motion.

[4] The matter of costs sought by the plaintiffs as against the former solicitor for the Grillone Defendants was subsequently settled, but Mr. Grillone has continued to self-represent the Grillone Defendants. The parties have now provided me with all of their respective cost submissions on the plaintiffs' Mareva Injunction and Fresh Evidence motions. My costs decision has been held in abeyance pending, and subject to, the outcome of this motion which could impact whether it is appropriate or necessary to decide the issue of costs on the earlier motions. That costs decision is being released contemporaneously with this decision (see Saggi v. Grillone, 2021 ONSC 2359).

The Grillone Defendants' Rule 59.06 Motion and Preliminary Considerations

[5] That brings me to this motion, by which the Grillone Defendants seek to set aside or stay my October 20, 2020 decision under Rule 59.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The prospect of this motion was raised by Mr. Grillone during a case conference at which directions were being sought and provided concerning the process for dealing with the costs of the plaintiffs' Mareva Injunction and Fresh Evidence Motions. I issued an endorsement on January 15, 2021 and a subsequent endorsement on February 23, 2021 setting out the procedure by which the Grillone Defendants' Rule 59.06 motion would be adjudicated. The February 23, 2021 endorsement provided, in part, as follows:

Having received and reviewed the Rule 59.06 motion and response and reply, I am now convening a hearing under Rule 50.13(6)(d) arising out of the previous Rule 50.13 case conferences held in this matter, at which I will hear from the parties briefly on the question of whether I require any further material to decide the Rule 59.06 motion, and will hear any final submissions that they may wish to make on the merits of that motion before it is decided. The parties are on notice that, after this hearing, I may decide the Rule 59.06 motion without any further attendances or submissions.

[6] The procedure for the hearing that was convened before me on March 18, 2021 was further clarified in a February 24, 2021 email that my assistant sent to Mr. Grillone in response to an inquiry from him, which read as follows:

At this time, it is anticipated by Justice Kimmel that she will decide Grillone defendants' Rule 59.06 motion after this hearing on March 18, 2021 without any further attendances or submissions. Factums are not required but if you wish to deliver one (or to deliver a supplementary written submission to that which you have already provided on February 17, 2021) you may do so by March 8, 2021 (not to exceed 10 pages double spaced). If the moving parties deliver any further material, the responding parties shall be permitted a brief written response to be delivered by March 15, 2021 (not to exceed 10 pages double spaced). These should be supplementary to, and not repetitive of, the materials already filed on this motion.

As indicated in Her Honour's endorsement of February 23, 2021, all participating parties should come to this hearing prepared to make final submissions on the merits of the Rule 59.06 motion. This should include submissions on the Rule 59.06 test, the applicable law and whether and how the circumstances of this case do, or do not, satisfy the test.

[7] The court has a broad discretion to determine its own process under Rule 1.04. Following the January 15, 2021 Rule 50.13 case conference, a hearing was convened to consider whether any further materials or submissions would be required for the court to decide the Grillone Defendants' Rule 59.06 motion, and to hear the parties' oral submissions on the merits of that motion. The parties were given notice of this by the court's February 23, 2021 endorsement and February 24, 2021 clarifying email.

[8] Although the parties were granted permission by the court to file additional materials in advance of the March 18, 2021 hearing, no further materials were filed after February 24, 2021. The materials before the court on this motion are comprised of the following:

a. The Grillone Defendants' Notice of Motion dated January 25, 2021;

b. The affidavit of Sergio Grillone sworn January 28, 2021 with attached exhibits "A" through "G";

c. The written submissions of the defendants in response to the Rule 59.06 motion of the Grillone Defendants; and

d. The response of the Grillone Defendants to the written submissions of the plaintiffs to dismiss the Rule 59 motion "on its face".

[9] The Grillone Defendants sent a letter to the court on March 2, 2021 suggesting that they might have a concern about my objectivity because of a connection that my former law firm, Goodmans LLP, had with Omega Process Servers, Mr. DeLuca's company, and a personal and professional relationship that Mr. Grillone believes Mr. DeLuca has with two of my former partners at Goodmans LLP. Mr. Grillone indicated in his letter that he had recently discovered that I was a partner at Goodmans LLP in the litigation group before I was appointed to the bench in September of 2018 and that he might raise this as a concern at the March 18, 2021 hearing.

[10] On March 4, 2021, Mr. Grillone was advised by the court that:

If you intend to ask Justice Kimmel to recuse herself from this matter, you should serve and file a motion well in advance of the March 18, 2021 hearing date (allowing time for any response on behalf of the plaintiffs) so that this issue can be addressed on a proper record at that appearance. Please ensure that copies of any such materials are also sent to me by email so that they may be provided to Justice Kimmel in advance of the hearing date.

[11] The Grillone Defendants did not file a recusal motion and the hearing proceeded on March 18, 2021 without any further reference to this concern. The court does not take the suggestion of bias lightly. Thus, I have reflected on the matter despite the fact that the Grillone Defendants did not raise it formally as they were invited to do. I do not consider that the provision by Omega Process Servers of process serving services to my former law firm Goodmans LLP and/or the existence of a professional relationship and friendship between Mr. DeLuca and two of my former partners, would cause an informed person, viewing the matter realistically and practically, and having thought the matter through, to conclude that I would be unable, whether consciously or unconsciously, to decide the matters before me involving Mr. DeLuca fairly. These do not constitute strong grounds or compelling and cogent evidence of a real likelihood or probability of bias.[^1] I assume that the Grillone Defendants reached the same conclusion and that is why the matter was not pursued further.

[12] The Grillone Defendants seek the following relief in their Notice of Motion (in addition to their costs):

a. An order setting aside the decision of Justice Kimmel dated October 20, 2020 on the grounds of fraud and of facts discovered after it was made;

b. In the alternative an order suspending the operation of the order of Justice Kimmel dated October 20, 2020 on the grounds of fraud and of facts discovered after it was made.

The Positions of the Parties

The Grillone Defendants' Position

[13] The relief is sought on this motion on the basis that, in my decision to grant the Mareva Injunction, I relied upon certain of the admitted fresh evidence contained in an affidavit of Marco DeLuca sworn February 22, 2020 (the "DeLuca Affidavit"). Evidence which had been obtained by the lawyer for the plaintiffs from the court file in a different proceeding in Brampton involving disputes between the shareholders of 189 that pertained to the Spectrum Way Property. The Grillone Defendants contend that the DeLuca Affidavit was incomplete because the exhibits to that affidavit were not appended to it when it was filed by the plaintiffs in support of their motion for a Mareva Injunction.

[14] The Grillone Defendants submit that if the complete DeLuca Affidavit, with exhibits, had been filed, the credibility of Mr. DeLuca would have been called into question. They contend that one of the exhibits, a January 22, 2020 letter between counsel for the plaintiffs in this action and counsel for 189 in the other action (Exhibit 25 to the DeLuca Affidavit), would have exposed that the statements in the DeLuca Affidavit about Mr. Grillone's status as a director of 189 were misleading or inaccurate. The Grillone Defendants assert that the plaintiffs had an obligation to disclose this letter to the court when they brought their Fresh Evidence motion, by including it among the exhibits to the DeLuca Affidavit and, independent of that, because it was written to plaintiffs' counsel and therefore known to him and within his possession and power to produce.

[15] Specifically, the DeLuca Affidavit indicated that a meeting of the shareholders of 189 had been called in November 2019 for the removal of Mr. Grillone as a director. The Grillone Defendants argue that the January 22, 2020 letter exposes that, contrary to the suggestion in the DeLuca Affidavit that Mr. Grillone had been removed as a director of 189 at a shareholders' meeting in November of 2019, it was acknowledged that Mr. Grillone was a director of 189 in January 2020 because that letter refers to Mr. DeLuca as "the other director of 1894931".

[16] The DeLuca Affidavit also indicated that Mr. Grillone had not been authorized by the other shareholder of 189 to enter into a transaction to sell the Spectrum Way Property in the fall of 2019. It is not suggested that the missing January 22, 2020 letter, or any other exhibit to the DeLuca Affidavit, calls into question the broader issue raised by the DeLuca Affidavit about whether or not Mr. Grillone had the authority to transact on behalf of 189 when he entered into the agreement to sell the Spectrum Way Property on October 10, 2019 (amended November 11, 2019) without the consent of the other shareholder of 189. However, the Grillone Defendants argue that the suggestion that Grillone might not have been a director at that time, said to be contradicted by the January 22, 2020 letter that identifies DeLuca as the "other" director, calls into question the credibility of everything contained in the DeLuca Affidavit.

[17] The Grillone Defendants also complain that they did not have the opportunity to challenge the DeLuca Affidavit because leave was granted for it to be considered in the same decision in which the Mareva Injunction was granted. They maintain that it is not just a fanciful suggestion that Mr. DeLuca could have been discredited because Mr. DeLuca had been found previously to be an unreliable witness. They have provided a decision in the Small Claims Court case of Maraj v. Omega Process Servers (SC-17-000019309) to back this up, which they suggest the plaintiffs ought to have brought to the court's attention at the time of their Fresh Evidence Motion.

[18] The Grillone Defendants postulate that the court relied on the DeLuca Affidavit as support for a narrative that Mr. Grillone had been acting improperly in respect of the Spectrum Way Property on behalf of 189 and that this impression was based on false or misleading evidence contained in the DeLuca Affidavit about Mr. Grillone's status as a director. On this basis, the Grillone Defendants argue that any reliance placed on the DeLuca Affidavit in support of the court's decision in granting the plaintiffs' Mareva Injunction was misplaced and the order should be set aside or stayed.

[19] The Grillone Defendants submit that because Mr. Grillone's January 28, 2021 affidavit was not responded to or challenged on cross-examination by the plaintiffs, his evidence on this motion must be accepted at face value. However, some of what is contained in that affidavit is argument, rather than evidence, and it will be addressed as such.

[20] Mr. Grillone states in his January 28, 2021 affidavit, among other things, that:

a. The Plaintiffs knowingly and willfully did not provide the court with the full record because the evidence contained in the Exhibits did not support the position being taking on the Mareva motion [para. 16];

b. In preparation for my response to Plaintiffs' motion for costs against my former lawyer (said motion, without explanation, was recently withdrawn by the Plaintiffs) I undertook a full review of the file, including unrelated matters dealing with 189 Ontario [para. 19];

c. I was provided material by counsel for Rhondaroo [the other shareholder of 189] which materials included, most importantly, letters from Rhondaroo's counsel, Emilio Bisceglia ("Bisceglia") to Allan Rouben ("Rouben"), counsel for the Plaintiffs [para. 20];

d. One of the letters, dated January 22, 2020 ("Jan. 22. Letter"), from Bisceglia to Rouben confirmed that I was a director of 189 Ontario [para. 21];

e. Rouben knew that Deluca was not a reliable witness and did not advise the court. Further, Rouben actively suppressed evidence by not providing the full affidavit, so the court would remain unaware of the unreliability of the affidavit [para. 24];

f. The Deluca Affidavit of February 22, 2020 was used by Deluca as evidence in the Brampton action to suggest that I was: a) not a director of 189 Ontario; b) did not have authority to act on behalf of 189 Ontario; c) and that I was removed as a director of 189 Ontario in November of 2019. All of which I have denied [para. 25];

g. The Plaintiffs herein used the Deluca Affidavit of Feb. 22 to create a narrative that that I was acting improperly [para. 26];

h. Rouben did not bring the Jan. 22 letter to the attention of Justice Kimmel and he did not include it in his motion for fresh evidence [para. 29];

i. The Jan. 22 letter clearly makes reference to me as a director and plainly states this fact to Rouben. In contrast to the letter itself, Deluca Affidavit of February 22 at paragraph 28 falsely claims that I was removed as a Director in November, 2019 and purports to prove this by attaching minutes to a shareholders meeting, not the resolution purporting to remove me [para. 32];

j. In a single affidavit Deluca manages to both confirm and deny my status as a director of 189 Ontario. Reuben was fully aware of this as early as January 22, 2020, and he did not advise anyone [para.33].

[21] Mr. Grillone acknowledges in that affidavit that he facilitated the sale of the Spectrum Way Property in his capacity as a director of 189, the company that owns that property.

The Plaintiffs' Position

[22] At a case conference earlier this year, a question was raised about the process for determining the Grillone Defendants' Rule 59.06 motion. The plaintiffs raised a concern early on that the Rule 59.06 motion, as it had been described by Mr. Grillone, was certain to fail because the Grillone Defendants would not be able to meet the Rule 59.06 test. Directions were provided that left open the possibility that the motion would be argued based strictly on the record filed by the Grillone Defendants, with a request for dismissal of the motion by the plaintiffs either under Rule 2.1 (which the court indicated would not be the preferred course of action), or by way of submissions and argument to be made in opposition to the motion once it had been filed.

[23] The motion proceeded on the basis of the latter option, and the plaintiffs elected to argue that the motion should be dismissed on the grounds that the Grillone Defendants had not satisfied their onus to obtain the relief they seek on this motion. No evidence was filed by the plaintiffs. They contend that it is apparent on the face of the material filed by the Grillone Defendants that they cannot meet the test set out in the authorities. Most fundamentally, they argue that the January 22, 2020 letter, and the suggestion in it that Mr. Grillone was one of the two directors of 189, was not relevant or material to, nor did it go to the foundation of, the court's decision on either of the Mareva Injunction or Fresh Evidence Motions.

[24] In deciding the Mareva Injunction Motion, the court relied on the DeLuca Affidavit for the evidence it provided about Mr. Grillone's involvement in any arrangements for the sale of the Spectrum Way Property in October and November 2019, and Mr. Grillone's credibility having regard to testimony he provided under oath in this proceeding that suggested that he had no knowledge of or involvement in any such arrangements. Notably, Mr. Grillone has not on the previous motions before me, or on this motion, challenged the veracity of what is in the DeLuca Affidavit about that transaction and Mr. Grillone's involvement in it.

[25] The plaintiffs ask the court to dismiss the Grillone Defendants' Rule 59.06 motion, with costs on a substantial indemnity basis, which they argue are justified because of the assertion by the Grillone Defendants that plaintiffs' counsel intentionally mislead the court by not filing the January 22, 2020 letter.

The Court's Reliance on the DeLuca Affidavit on the Mareva Injunction Motion

[26] Only certain parts of the DeLuca Affidavit were admitted as fresh evidence on the Mareva Injunction Motion. Other parts of it (in particular, paragraphs 18 to 21, 29 and 30, comprised part of the "Excluded Fresh Evidence" that I declined to admit on the Fresh Evidence Motion (at para. 24 of my reasons for decision).

[27] At paragraph 26 of my reasons for decision I explained that:

Most of the fresh evidence now sought to be introduced by the plaintiffs relates to the timing and arrangements for the sale of the Spectrum Way Property by 189 that pre-dated the Mareva injunction motion hearing but was only discovered by the plaintiffs afterwards, including subsequent court proceedings among the shareholders of 189 that eventually led to the termination of an agreement orchestrated by Mr. Grillone for the sale of the Spectrum Way Property, the sale of Mr Grillone's indirect shareholdings in 189 and the payment of those share sale proceeds into court pursuant to the order of Koehnen J. dated August 12, 2020.

[28] The fresh evidence from the DeLuca Affidavit was considered and found to enhance the evidentiary foundation and grounds for establishing certain of the requirements for the Mareva Injunction, namely that the Grillone Defendants had undisclosed assets and that there was a real risk of those assets being disposed of within the jurisdiction or otherwise dealt with so that the plaintiffs would be unable to satisfy a judgment if awarded in their favour.

[29] The evidence relied on from the DeLuca affidavit was with respect to the agreement of purchase and sale that Mr. Grillone had negotiated and signed for the Spectrum Way Property in October and November 2019, but not disclosed, as can be seen from the following extracts from my reasons for decision:

a. Mr. Grillone testified under oath, when he was cross-examined on November 11, 2019, that he was not a shareholder of 189, that he did not know what the intentions of the shareholders of 189 were with respect to the Spectrum Way Property and that the plaintiffs would have to talk to the shareholders to find that out. The fresh evidence discloses that this was untrue and that Mr. Grillone had been directly involved in listing the Spectrum Way Property for sale and in the negotiation and execution of an agreement of purchase and sale entered into by 189 that was signed on October 10, 2019 and amended on November 11, 2019, with an initial closing date of February 10, 2020 that was later extended. Mr. Grillone's untruthful answers on cross-examination were never updated or corrected by him in his January 8, 2020 affidavit or otherwise. [at para 30]

b. This fresh evidence pertains to dealings with Mr. Grillone's indirect holdings and assets at material times that he appears to have been attempting to hide from the plaintiffs and the court, both before and after the January 14, 2020 hearing. This withholding of information cannot be condoned. The integrity of the court's process is at risk and the Mareva injunction motion should be reconsidered with the benefit of the fresh evidence now available about the timing and non-disclosure of the sale of the Spectrum Way Property. [at para. 32]

c. The fresh evidence about court proceedings that were commenced in or about February 2020 among the shareholders of 189 discloses that Mr. Grillone orchestrated the sale of the Spectrum Way Property for $1.97 million without the knowledge or consent of the other shareholder of 189. [at para. 34]

d. The timing of the agreement of purchase and sale that Mr. Grillone negotiated for the sale of the Spectrum Way Property, shortly after the statement of claim in this action was served (October 11, 2019), when the Grillone defendants were facing mounting claims from other creditors, his non-disclosure of the agreement of purchase and sale when asked about the prospects of the sale of the Spectrum Way Property on his November 11, 2019 cross-examination, his refusal to disclose any information about the assets and other creditors of the Grillone defendants, and his later attempts to remove assets from the scrutiny and supervision of the court, all support an inference that Mr Grillone has been trying, and will continue to try, to take the assets of the Grillone defendants out of the reach of creditors such as the plaintiffs. This is one of the requirements for a Mareva injunction. [at para. 38]

e. With respect to this third requirement, the fresh evidence discloses that Mr. Grillone in particular has assets in the jurisdiction, namely at the time of the motion he held shares in 239, that, in turn, held 50% of the shares in 189 that, in turn, owns the Spectrum Way Property (sold to an arm's length party for over $1.3 million in the fall of 2019 under an agreement that has since been terminated). [at para. 51]

[30] The DeLuca Affidavit challenged Mr. Grillone's authority to instruct and transact on behalf of 189 without the consent of the other shareholder of 189. Mr. Grillone took the position in response to the Fresh Evidence Motion that he was authorized to act on behalf of 189. Mr. Grillone testified in his March 5, 2020 affidavit that was provisionally filed (and received and considered by the court) in response to the proposed fresh evidence that he had been the one instructing counsel on behalf of 189 with respect to the net proceeds of sale of the Spectrum Way Property. The court was aware that this was a point of disagreement between Mr. Grillone and Mr. DeLuca, but no reliance was placed on whether Mr. Grillone did, or did not, have the authority to instruct and transact on behalf of 189. What was relevant for the Mareva Injunction and Fresh Evidence Motions was that Mr. Grillone had purported to cause 189 to enter into an agreement of purchase and sale for the Spectrum Way Property and he had not disclosed that transaction in this proceeding.

[31] The court received Mr. Grillone's evidence from his March 5, 2020 affidavit that he was an officer and director of 189. In their factum in support of their motions, the plaintiffs acknowledged that Mr. Grillone was a director and officer of 189. This point was not controversial on the Mareva Injunction Motion.

The Test on a Rule 59.06 Motion

[32] Rule 59.06(2) allows the court to:

a. set aside or vary an order on the grounds of fraud or facts arising or discovered after the order was made; or

b. suspend the operation of an order.

[33] In the decision on the Fresh Evidence Motion, I reviewed the test under this Rule as it relates to facts arising or discovered after the making of an order, which requires the moving parties to establish that: (a) the newly discovered facts or evidence could not have been obtained by the exercise of due diligence; (2) if admitted, the newly discovered facts or evidence can be expected to have affected the result: see Saggi v Grillone, 2020 ONSC 6351, at para. 20.

[34] The wide discretion of a trial or motions judge to reopen a hearing was also addressed in paragraph 22 of the decision on the Fresh Evidence Motion, in which I highlighted an example of the application of this broader discretion from the reasoning of Roberts J. (as she then was) in the case of Strugarova v. Air France (2009), 2009 CanLII 40552 (ON SC), 82 C.P.C. (6th) 298 (Ont. S.C.), at paras. 6-7:

[t]he 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.

[35] In the context of a motion under Rule 59.06(2)(a), Osborne J. (as he then was) in International Corona Resources Ltd. v. LAC Minerals Ltd. (1988), 1988 CanLII 4534 (ON SC), 54 D.L.R. (4th) 647 (Ont. H.C.J.), applied these principles in circumstances of fraud (as opposed to circumstances of newly discovered facts or evidence). In that context, it must be shown that: (a) the fraud must be proven on a reasonable balance of probability; (b) the fraud must go to the foundation of the case; and (c) the fraud must not have been known at the time of trial.

[36] The plaintiffs rely on Divisional Court's caution in the case of Berge v. College of Audiologists and Speech Language Pathologists of Ontario, 2019 ONSC 3351, at para. 34:

Rule 59.06 is not an invitation to reargue cases endlessly or an invitation to raise new issues after a decision has been rendered. The rule provides a mechanism for re-opening a hearing under very strict conditions. As this court has previously remarked it is "not a do-over". (See Massiah v. Justices of the Peace Review Counsel, 2018 ONSC 2179 (Div. Ct.)).

Analysis

[37] The Grillone Defendants rely primarily on the ground of fraud under Rule 59.06, although they also contend that they could meet the test of newly discovered facts or evidence. They have not established on the record before this court that they can meet either test.

[38] The Grillone Defendants argue that the evidence in Mr. Grillone's January 28, 2021 affidavit must be accepted as true because it was not challenged by any responding affidavit or on cross-examination. They say the court should rely upon Mr. Grillone's speculation and infer that the January 22, 2020 letter was knowingly and intentionally withheld from the court because it was perceived to be contrary to the plaintiffs' interests to provide that letter which might highlight that not all of the evidence contained in the DeLuca Affidavit was reliable. If the court were to do as Mr. Grillone urges, that would only address parts (a) and (c) of the test from the International Corona case.

[39] However, the Grillone Defendants falter on part (b) of the test. The assertion by the Grillone Defendants that the court relied upon the DeLuca Affidavit to support a narrative that Mr. Grillone was generally acting improperly is simply not accurate. The court's reliance on the DeLuca Affidavit was clearly indicated to be for a specific fact, namely that: Mr. Grillone had direct knowledge and involvement in a transaction to sell the Spectrum Way Property in October and November of 2019 that he did not disclose in this proceeding when he was asked questions about the plans for that property while being cross-examined in November 2019, or thereafter. To this day, Mr. Grillone has never disputed the veracity of the evidence in the DeLuca Affidavit about his knowledge of or involvement in, the transaction to sell the Spectrum Way Property. To the contrary, Mr. Grillone admitted in his January 28, 2021 affidavit that he facilitated the sale of the Spectrum Way Property in his capacity as a director of 189.

[40] The Grillone Defendants suggest that the court relied on unreliable or "bad" evidence and if DeLuca was lying about some things, he may have been lying about others. But there has been no suggestion that he was lying about Mr. Grillone's knowledge of or involvement in the sale of the Spectrum Way Property. The DeLuca Affidavit was not admitted in its entirety (portions of it comprised the expressly Excluded Fresh Evidence). It is only the admitted portions that were ultimately relied upon that need to be addressed in the context of this motion.

[41] The court had before it the competing evidence of Mr. DeLuca and Mr. Grillone about Mr. Grillone's authority to act on behalf of 189 and was advised of the position of the plaintiffs in this action that they did not challenge or dispute Mr. Grillone's status as an officer and director of 189. However, neither Mr. Grillone's status as a director of 189 (said to have been confirmed in the January 22, 2020 letter and exhibit to the DeLuca Affidavit that was not disclosed to the court) nor his authority to transact or provide instructions on behalf of 189 were relevant or material to the court's reasons for decision on the Mareva Injunction and Fresh Evidence Motions.

[42] The alleged fraud arising from the non-disclosure of the January 22, 2020 letter that was an exhibit to the DeLuca Affidavit does not go to the foundation of anything that the court decided on the Mareva Injunction Motion or the Fresh Evidence Motion. The Grillone Defendants thus cannot meet the test under Rule 59.06, as set out in International Corona.

[43] The Grillone Defendants also fail on both branches of the test for newly discovered evidence under Strugarova. First, given that the missing exhibit from the DeLuca Affidavit is said to have been discovered by Mr. Grillone either in his own, or in his own lawyer's, files after the fact it clearly could have been obtained by the exercise of due diligence before the Fresh Evidence Motion was heard and put before the court as part of the Grillone Defendants' response to that motion. As a party to the Brampton proceeding in which the DeLuca Affidavit as originally filed, it is reasonable to infer that Mr. Grillone and/or at least his counsel would have had that affidavit with all of its exhibits dating back to February 2020. Second, having already concluded in the fraud analysis that the missing exhibit (the January 22, 2020 letter) does not go to the foundation of the case because it does not deal with a factual matter that was relevant or material, it also cannot be expected to have affected the result of either the Fresh Evidence or Mareva Injunction Motion.

[44] Nor does this case raise any of the sorts of exceptional circumstances that would justify the exercise of the court's wider discretion to re-open a matter. The integrity of the court's process is not at risk and there is no principle of justice at stake that requires the court's reconsideration of the matter.

[45] The Grillone Defendants argue that they were deprived of the opportunity to challenge the DeLuca Affidavit with responding evidence or by cross-examination because the Fresh Evidence Motion was heard and reserved and both the Fresh Evidence and Mareva Injunction Motions were decided in the same reasons released later that month. This overlooks the fact that the Grillone Defendants did provisionally file an affidavit in response to the Fresh Evidence Motion (Mr. Grillone's March 5, 2020 affidavit) and that affidavit and the DeLuca Affidavit were both in the record from March to October 2020 when the Fresh Evidence Motion was argued.

[46] This afforded the Grillone Defendants ample opportunity to file further affidavits, or to request a cross-examination or Rule 39.03 examination of Mr. DeLuca. They did provisionally file Mr. Grillone's March 5, 2020 affidavit, but made no request to examine Mr. DeLuca. They were represented by counsel at the time. The August 12, 2020 triage directions for the Fresh Evidence Motion clearly contemplated not only that the responding motion record of the Grillone Defendants could include provisionally filed material in response to the plaintiffs' proposed fresh evidence, those directions also expressly indicated (the box having been checked on the triage form) that:

Rule 34.12 applies to all examinations and cross-examinations taken for this motion. The witness shall answer all questions to which objection is taken unless the objection is based on lawyer/client privilege. No answer to a question to which objection has been taken may be used unless a ruling is obtained from the judge at the hearing of the motion. Abuse of this rule will be subject to costs.

[47] There was never any suggestion that any party wished to cross-examine on any affidavits that had been filed or to conduct any Rule 39.03 examinations, but they were clearly provided for. Mr. Grillone's argument now about what he would have done if he had been given the opportunity to respond to the DeLuca Affidavit is revisionist history.

[48] The Grillone Defendants further argue that the plaintiffs ought to have advised the court that Mr. DeLuca had been found by another court to be an unreliable witness. No authority for this proposition was provided. I would be surprised to learn that there is an obligation on a party tendering an affidavit to search all court records to determine whether the affiant had ever been a witness before and, if so, what a different court might have said about the accuracy and reliability of their testimony.

[49] As the plaintiffs have pointed out, there is authority to the contrary: that if the Grillone Defendants had attempted to tender as evidence another court's findings about Mr. DeLuca's credibility or reliability, it would not have been admissible. Judicial comment in a separate action has been found not to be admissible or relevant to the evidence of that witness in a different action: Bruff-Murphy v. Gunawardena, 2017 ONCA 502, 138 O.R. (3d) 584; R. v. Ghorvei (1999), 1999 CanLII 19941 (ON CA), 138 C.C.C. (3d) 340; R. v. Boyne, 2012 SKCA 124, 405 Sask. R. 163, at paras. 48-51, leave to appeal refused, [2013] S.C.C.A. No. 54.

[50] The strict conditions for re-opening a hearing have not been met. The Grillone Defendants do not get a "re-do" just because the exhibits to the DeLuca Affidavit were not included and they want to now argue that one of those exhibits suggests an internal inconsistency that might call Mr. DeLuca's credibility into question.

[51] There is no concern about the integrity of the court's process or that a principle of justice is at risk because the Grillone Defendants regret not having directly challenged the overall credibility of Mr. DeLuca by an examination or by attempting to discredit him through commentary about his testimony in other proceedings. This is particularly so given that the Grillone Defendants have never denied the veracity of the specific evidence from the DeLuca Affidavit that was relied upon in the decision to grant the Mareva Injunction, pertaining to the agreement of purchase and sale negotiated and signed by Mr. Grillone on behalf of 189 in October and November 2019.

Disposition, Costs and Implementation

[52] The Grillone Defendants' motion is dismissed. The Grillone Defendants have not raised any grounds that would justify an order setting aside or suspending the Mareva Injunction granted by my October 20, 2020 reasons for decision.

[53] The plaintiffs are entitled to their costs of this motion. Their costs outline indicates substantial indemnity costs of $14,085.00 and partial indemnity costs of $9,112.51. Mr. Grillone stated during the hearing that he was prepared to accept these cost figures as reasonable and would be asking for the same amounts to be awarded in his favour, if he was successful.

[54] The plaintiffs argue that because the foundation of the motion by the Grillone Defendants was that plaintiffs' counsel committed a fraud on the court in connection with the underlying Mareva Injunction Motion, which was not made out, they should be awarded at least their substantial indemnity costs: Mullin v. Sherlock, 2017 ONSC 6762, at paras. 65-68.

[55] The court's discretion under Rule 57.01 and s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43, when it comes to costs is broad, and does allow for a higher award of substantial indemnity costs where fraud is alleged. The difficulty here is that I have made no finding of fraud because I did not need to do so and the issue of fraud was not the focus of the argument on the Rule 59.06 motion.

[56] I am not being critical of the plaintiffs for opposing this motion on the grounds that they did, which was to focus on elements of the test that the Grillone Defendants could not meet that did not require the court to deal with the fraud allegations and thus streamlined and simplified the process in a manner consistent with Rule 1.04 of the Rules of Civil Procedure. I commend them for that but, at the same time, this is not a typical case when it comes to the cost implications of a fraud allegation where the court has gone through the exercise of determining that the allegations of fraud were unsupportable.

[57] In the exercise of my discretion, and having regard to the factors under Rule 57.01 and s. 131 of the Courts of Justice Act, I am awarding the plaintiffs their claimed partial indemnity costs of this motion in the amount of $9,112.51, inclusive of all fees, applicable taxes and disbursements.

[58] The plaintiffs have asked that any costs awards in their favour against the Grillone Defendants be ordered payable notwithstanding the Mareva injunction that restrains the use or dissipation of the Grillone Defendants' assets, because of the consideration expense and effort that they have been put to obtain that order which potentially benefits all creditors of the Grillone Defendants. My Reasons for Decision on the Mareva Injunction Motion allowed for the Grillone Defendants to apply to the court for leave to access their assets made subject to the freezing order to fund their expenses for legal advice and representation. Consistent with the concept of exceptions for legal expenses, I am prepared to grant leave for the costs awards against the Grillone Defendants to be paid out of their frozen assets, if they otherwise have access to those assets. To be clear, this is not intended to override any other orders or undertakings concerning those assets and is an exception only to my order on the Mareva Injunction Motion.

[59] Notwithstanding Rule 59.05, this decision and the orders and directions herein are effective from the date indicated below and are enforceable without any need for formal issuance, entry and filing.

Kimmel J.

Date: March 29, 2021

[^1]: These points were not argued but are well settled. See Yukon Francophone School Board, Education Area No. 23 v. Yukon Territory (Attorney General), 2015 SCC 25, [2015] 2 S.C.R. 282, at paras. 20-21; and Smith v. Duca Financial, 2016 ONSC 6289, at para. 18.