2021 ONSC 4600
COURT FILE NO.: CV-21-659800
DATE: 20210628
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
YORK CONDOMINIUM CORPORATION NO. 21
Applicant/ Respondent on Motion
– and –
ALL UNIT OWNERS AND MORTGAGEES OF RECORD OF YORK CONDOMINIUM CORPORATION NO. 21
Respondents
Megan Mackey, for the Applicant, Responding Party on the Motion
Jonathan H. Fine, for the Moving Party Respondent, Irving Investments Limited, owners of Unit 1, Level 13, York Condominium Corporation No. 21
No one appearing, for all other Respondents
HEARD: June 11, 2021
A.A SANFILIPPO J.
ENDORSEMENT
Overview
[1] The Applicant, York Condominium Corporation No. 21 (“YCC No. 21” or the “Condominium”) has brought an Application to amend its Declaration, under s. 109 of the Condominium Act, 1998, S.O. 1998, c. 19 (the “Condominium Act”). According to s. 109(3), the Applicant must satisfy the Court in its Application that “the amendment is necessary or desirable to correct an error or inconsistency that appears in the declaration or description or that arises out of the carrying out of the intent and purpose of the declaration or description.”
[2] YCC No. 21’s Declaration pertains to a 13-storey building wherein each unit occupies an entire floor except the penthouse unit, which occupies two floors (the “Penthouse Unit”). YCC No. 21 will argue in its Application that there was an “error or inconsistency” in its Declaration, enacted some 50 years ago, whereby the Penthouse Unit was assigned the same percentage of contribution to common expenses as each of the 11 single-floor unit owners even though the Penthouse Unit has two times the percentage of ownership interest.
[3] YCC No. 21’s Application is opposed by the Penthouse Unit owner, Irving Investments Limited, which is the moving party on this motion (“Irving Ltd.” or the “Moving Party”). Irving Ltd. brought this motion to strike the Notice of Application and to strike or expunge 28 of the 36 paragraphs of the affidavit filed by YCC No. 21’s President, Gerald Fialkov, sworn April 20, 2021 (the “Fialkov Affidavit”). YCC No. 21 responded by defending its Notice of Application as proper, and by defending the admissibility of the entirety of the Fialkov Affidavit even though conceding in argument, in my view correctly, that parts of it were inadmissible.
[4] This motion raised the question of “when is it permissible to bring a pre-emptive motion to determine the admissibility of affidavit evidence filed on a pending civil motion or application”. In my view, such pre-emptive motions, essentially a ‘pre-motion’ to a motion or application, should be brought only in rare and extraordinary circumstances. In all other cases, any challenge to the admissibility of affidavit evidence must be left to the judge hearing the motion or application.
[5] Both parties agreed that there were admissibility issues with parts of the affidavit evidence but disagreed on the extent. Rather than leave to the Application Judge the evidentiary issues that had the potential to delay or prejudice the fair hearing of the Application, as a matter of fairness and efficiency, I exercised my discretion to accept this as a rare and extraordinary case and heard the pre-emptive motion to strike or expunge parts of the Fialkov Affidavit.
[6] On the basis of the reasons that follow, in the exercise of my discretion, I dismiss Irving Ltd.’s motion to strike all or part of the Notice of Application. I exercise my discretion to strike, with leave to amend, parts of paragraphs 10 and 11 and paragraphs 14, 15, 16, 17, 20, 21 and 34 of the Fialkov Affidavit on the basis that they are inadmissible and will delay or prejudice the fair hearing of the Application. I dismiss the remainder of the relief that Irving Ltd. sought in regard to the Fialkov Affidavit, without prejudice to any challenge to the admissibility of all or part of the Fialkov Affidavit that Irving Ltd. may choose to make on the hearing of the Application.
I. THIS MOTION
A. Rule 25.11
[7] The Moving Party brought this motion on the basis of Rule 25.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which states as follows:
25.11 The court may strike out or expunge all or part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document,
(a) may prejudice or delay the fair trial of the action;
(b) is scandalous, frivolous or vexatious; or
(c) is an abuse of the process of the court.
[8] Rule 38.12 provides that Rule 25.11 “applies, with necessary modifications, with respect to any document filed on an application”. The reference to “other document” in Rule 25.11 includes an affidavit: Allianz Global v Attorney General of Canada, 2016 ONSC 29, at para. 10, referring to Mensour v. The Corporation of the Municipality of Leamington, 2012 ONSC 3525 (Div. Ct.); Holder v. Wray, 2018 ONSC 6133, at para. 32. Rule 14.09 provides that “[a]n originating process that is not a pleading may be struck out or amended in the same manner as a pleading.”
[9] The Moving Party heavily relies on Rule 25.06(1), which requires that: “Every pleading shall contain a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved.” The Moving Party did not refer to, or make submissions on Rule 38.04, which sets out the required elements of a Notice of Application, and mandates the statement of the “grounds” on which the Application is based.
[10] Rule 25.11 invokes the exercise of the Court’s discretion, obvious from the wording of the rule: “The court may strike out or expunge…” The decision of whether to grant an order to strike out or expunge all or part of the Notice of Application or the Fialkov Affidavit is within the discretion of the Court: Neighbourhoods of Windfields Limited Partnership v. Death, 2007 CanLII 31756, at paras. 23-28; Al-Dandachi v. SNC-Lavalin Inc., 2012 ONSC 6534, at para. 15; Holder, at para. 40: “it is a discretionary order to make in the right circumstances.”
B. Relief Sought
[11] YCC No. 21 was registered pursuant to the Condominium Act on October 13, 1970, with respect to a 13-story condominium building located in Toronto. Irving Ltd. is the current owner of Unit 1, Level 13, which is the two-floor Penthouse Unit. Irving Ltd. did not own the Penthouse Unit at the time that the Declaration was implemented, some 51 years ago. YCC No. 21 claimed that Irving Ltd. is the only Condominium unit owner opposing the amendment to the Declaration sought by YCC No. 21.
[12] Irving Ltd. brought this motion for the following relief:
(a) An Order striking the Notice of Application other than sub-paragraphs 2(n) and 2(o).
(b) An Order striking the Fialkov Affidavit.
[13] Irving Ltd. sought to strike 14 of the 16 sub-paragraphs in the Notice of Application, on the basis that they will prejudice the fair hearing of the application and are scandalous, frivolous or vexatious on the following grounds; (i) they are not limited to a concise statement of the material facts and contain evidence; (ii) they contain argument; (iii) they contain scandalous, frivolous and vexatious allegations; (iv) they contain speculation; and (v) they contain irrelevant assertions. Irving Ltd. sought to strike 28 of the 36 paragraphs in the Fialkov Affidavit on similar grounds.
[14] YCC No. 21 responded that the Notice of Application raises a justiciable issue: whether there is an error or inconsistency in its Declaration, within the meaning of s. 109 of the Condominium Act, 1998, which, if proven, entitles the Condominium to an order amending its Declaration. YCC No. 21 contended that it has an obligation under the Rules to set out the grounds for its Application and has done so consistent with Rule 38.04 and without offending Rule 25.11. YCC No. 21 admitted, in argument, that paragraphs 14 and 15 of the Fialkov Affidavit are inadmissible, but opposed any Order striking the Fialkov Affidavit.
[15] The Moving Party did not contest that YCC No. 21 should be provided with leave to amend, should I find that all or part of the Notice of Application or Fialkov Affidavit should be struck.
II. ANALYSIS
A. Motion to Strike Out or Expunge Parts of the Notice of Application
[16] On a motion to strike a Notice of Application, the moving party must show that the Notice of Application does not disclose a cause of action: Grain Farmers of Ontario v. Ontario (Environment and Climate Change), 2016 ONCA 283. The Court of Appeal has stated that the “threshold for success on this type of motion is high”, and it must be “plain, obvious and beyond doubt that the applications cannot succeed”: National Steel Car Limited v. Independent Electricity Systems Operator, 2019 ONCA 929, at para. 24.
[17] I am satisfied that the Condominium has pleaded a reasonable issue for determination based on its statutory entitlement to do so: whether there is an “error or inconsistency” in the Declaration that necessitates a correcting amendment. Section 109 of the Condominium Act provides the Applicant with a statutory basis on which to bring this Application.
[18] The main issue argued by Irving Ltd. was that parts of the Notice of Application, specifically 14 of the 16 sub-paragraphs, should be struck in accordance with Rule 25.11.
[19] As explained earlier, the relief sought by Irving Ltd. under Rule 25.11 is discretionary. I agree with the statement by Justice Stinson, in Al-Dandachi, at para. 15, of the considerations that frame the Court’s exercise of its discretion under this Rule:
Striking a pleading on this ground [Rule 25.11] is an exercise in discretion. The court must balance the added complexity of the pleading against the potential probative value of the facts alleged. A pleading that is superfluous or can have no effect on the outcome of the action is scandalous, frivolous and vexatious.
[20] Irving Ltd. conceded in argument that certain of the 14 challenged sub-paragraphs were undeniably pleaded properly. For example, sub-paragraph 2(a), which provides as follows:
“The applicant is a residential condominium corporation with 12 dwelling units. It was created on October 13, 1970 by registration of its Declaration and Description Sheets as Instrument Number B271826 in Land Registry Office No. 66 (the “Condominium”).”
[21] The cornerstone for YCC No. 21’s Application is its submission that the sharing, or allocation of expenses set out in the Declaration is inequitable. The basis for this position was presented arithmetically. The Condominium building is said to have 13 floors, but 12 units. Each of the condominium units occupies one floor except the Penthouse Unit which occupies two floors. Each of the 11 single-floor unit owners has an ownership interest of 7.6923% and pays 8.3333% of the building expenses. The Penthouse Unit occupies two floors, which is said to constitute an ownership interest of 15.3847%, which is double all other units in the Condominium, but the Penthouse Unit pays the same building expense allocation: 8.3333%.
[22] YCC No. 21 alleges that this is an inequitable allocation of expenses which constitutes an “error or inconsistency” and thereby necessitates the correction of the Declaration through amendment. This is pleaded in detail in sub-paragraphs 2(b), (c), (g), (h), (i), (k), (l) and (m) of the Notice of Application.
[23] Irving Ltd. submitted that these sub-paragraphs contain the expressions of an opinion, argument or speculation, or are scandalous and vexatious, and will thereby prejudice the fair hearing of the Application. YCC No. 21 responded that these paragraphs set out the “grounds to be argued” in the Application, without which YCC No. 21 would have no way to frame the issue for determination by the Application Judge. I agree.
[24] Rule 38.04 sets out the required content of a Notice of Application. The Applicant must (“shall”) state the grounds for the Application:
Every notice of application shall state,
(a) the precise relief sought;
(b) the grounds to be argued, including a reference to any statutory provision or rule to be relied on; and
(c) the documentary evidence to be used at the hearing of the application.
[25] In pleading that the “error or inconsistency” that supports an amendment to its Declaration is, according to YCC No. 21, an inequitable allocation of building expenses relative to ownership interest, YCC No. 21 is not arguing, speculating or proffering an inadmissible lay opinion, as is contended by the Moving Party. It is setting out the grounds to be argued. The grounds set out the basis which relief is claimed. The evidence adduced in the Application that is admitted and accepted by the Application Judge informs whether the ground is established. And I do not accept that the Condominium’s pleading of an alleged arithmetic inconsistency in the calculation of the building expenses relative to the ownership interest is scandalous, frivolous or vexatious.
[26] In applying the considerations stated in Al-Dandachi, I do not accept that these pleadings are superfluous, or could have no effect on the outcome of the hearing or will delay or prejudice a fair hearing. On these reasons, I dismiss the Irving Ltd.’s challenge to the Condominium’s pleading of an inequitable allocation in these impugned sub-paragraphs.
[27] I turn to sub-paragraphs 2(d), (e), (f), (i), (k) and (m), which contain a pleading that the original owner of the Penthouse Unit, Irving Ungerman Limited, and its principal, the late Irving Ungerman, caused or at least had a role in the current allegedly inequitable expense allocation. These sub-paragraphs go further, and plead that the late Mr. Ungerman contributed to the allegedly inequitable expense allocation out of self-interest because, according to the Condominium, an allocation of building expenses based on ownership interest would have resulted in the Penthouse Unit owner paying double the amount currently allocated for building expenses.
[28] This is seen in sub-paragraph 2(i), where the Condominium pleads that the allegedly inequitable allocation was “done purposely to benefit the developer of the condominium”. Also, sub-paragraphs 2(k) and 2(l) where the Condominium pleads that the allegedly inequitable allocation was “put in place” by the late Mr. Ungerman.
[29] The Moving Party submitted that these sub-paragraphs of the Notice of Application are scandalous and vexatious, argumentative, speculative, statements of inadmissible lay opinion and irrelevant and must be struck as they are abusive and will prejudice the fair hearing of this Application. Irving Ltd. submitted, further, that these grounds are simply wrong as the late Mr. Ungerman did not have a role in the establishment in 1970 of the Declaration. A Rule 25.11 motion is not the place to determine whether the original Penthouse Unit Owner and its principal were, in fact, involved in the development and registration of the Condominium, and so I decline the Moving Party’s request to do so, although I observe in passing that the late Mr. Ungerman signed the Declaration in his capacity as President of Irving Ungerman Limited, one of the five Declarants. The proper place for the adjudication of this issue is the hearing of the Application.
[30] YCC No. 21 submitted that it necessarily pleaded these grounds because the historical context of the Condominium is important to its Application. YCC No. 21 stated that it will have to show the factual circumstances in which the expense allocation was first established when the Declaration was registered in 1970 and it will have to explain why this expense allocation, which it views as inequitable, governed for more than 50 years without earlier assertion that the allocation was the product of an “error or inconsistency”. YCC No. 21 contends that it would be deprived of a fair opportunity to frame its Application for adjudication if these sub-paragraphs were expunged.
[31] In the exercise of my discretion, I decline to expunge any paragraphs from the Notice of Application, for reasons that I will now explain.
[32] YCC No. 21 is entitled to plead grounds that it considers to be relevant to its Application provided that the grounds do not “prejudice or delay the fair trial” of the Application, and so long as the grounds are not “scandalous, frivolous or vexatious”: Rule 25.11. The Moving Party does not rely on the third basis set out in Rule 25.11: abuse of process.
[33] Rule 25.11 does not provide for striking or expunging a part of a pleading on the basis of relevance. I adopt the statement by Justice Dambrot in 876502 Ontario Inc. v. I.F. Propco Holdings (Ontario) 10 Ltd., 1997 CanLII 12196 (ON SC), 1997 CarswellOnt 4721, 37 O.R (3d) 70(Gen. Div.), at para. 17: "Relevance only enters the picture if the impugned material is otherwise scandalous. If material is relevant, it cannot be scandalous … but irrelevant material is not, for that reason alone, scandalous.”
[34] It may be relevant for YCC No. 21’s Application to establish that the late principal of the original Penthouse Unit owner had a role in the establishment of the Declaration and crafted the current building expense allocation out of self-interest. If relevant, these grounds cannot be scandalous. If not relevant, they are not scandalous solely on the basis of irrelevance. There must be something more.
[35] I turn then to whether these sub-paragraphs are scandalous or vexatious. The Moving Party submits that the impugned sub-paragraphs plead unfounded allegations of bad faith, and improper motive on the part of the late Mr. Ungerman that improperly place Irving Ltd. in the position of having to respond to serious allegations of misconduct or allow them to go unanswered in the record. The Moving Party relies on Brooks v. Fredericton (City) Police Force, 2017 NBQB 83, at para. 26: “Scandalous pleadings are those which make immaterial or unfounded allegations of misconduct, bad faith or impute improper motives to the defendants.”
[36] Courts have held that a pleading is scandalous or vexatious where it “seriously impugns the behavior of a party and thereby places it in the invidious position where it will have to decide between responding in its own defence with further irrelevant material or leaving serious allegations of misconduct unanswered on the record” (Albert v. York Condominium Corp. No. 46, [2002] O.J. No. 1798 (S.C.), at para. 28); where the pleading “can have no effect on the outcome of the action” (A-Dandachi, at para. 15); “[s]candal refers to indecent or offensive matters or allegations made for the purpose of abusing or prejudicing the opposite party… which are unbecoming of the court to hear, or unnecessary allegations bearing cruelly on the moral character of an individual” (Propco, at para. 17); “offensive allegations and offensive rhetoric directed at a party” (Mensour, at para. 41, citing Chopik v. Mitsubishi Paper Mills Ltd., [2002] O.J. No. 2789 (S.C.), at para. 26).
[37] Here, the Notice of Application and the Fialkov Affidavit do not impugn the conduct or motives of a respondent to the Application. The Application places in issue the conduct and motives of the late Mr. Ungerman, said to be the principal of one of the corporate Declarants: itself not a respondent. Nonetheless, I will consider Irving Ltd.’s submission generously, accepting that Irving Ltd. has an interest in responding to allegations made against the original corporate Penthouse Unit owner and its principal.
[38] I find that these sub-paragraphs are not scandalous or vexatious because, if they are established in evidence, they may be relevant to the background and historical factual context of the Condominium and the amendment that it seeks. It would be unfair to the Applicant to deny it an opportunity to frame its Application by drawing on the full historic context that it considers necessary. And I have no doubt that the application judge is in a position to accept or disregard these grounds without delay or unfairness to Irving Ltd. I adopt and apply the reasoning by Cullity J. in Albert, at para. 30:
It is central to Mr. Albert's application that the board of directors of the corporation ignored provisions of the Act that are designed to enable owners of units to participate in decisions to take legal action that would, or might, affect their rights. In these circumstances, I am not prepared find that Mr. Albert's allegations that the board was controlled by a small group that consistently ignored the rights of other owners -- in litigation and otherwise -- are irrelevant, frivolous, scandalous or vexatious, or merely atmospheric. In my judgment, if they are correct they may provide a relevant part of the factual context in which the issues in the application arose.
[39] Even had I expunged certain paragraphs of the Notice of Application, I would have granted the Applicant leave to amend: Lido Industrial Products Ltd. v. Exbar Properties Inc., [1988] O.J. No. 349 (Div. Ct.): “Leave to amend should only be refused in the clearest of cases.” In light of the relationship of the parties, the nature of the issue to be tried and the Applicant’s statutory right to seek a determination of this issue, this is not a case in which I would have refused leave to amend.
B. Motion to Strike Out or Expunge Parts of the Fialkov Affidavit
[40] The Moving Party sought an order striking 28 of the 36 paragraphs of the Fialkov Affidavit, on the basis that they are improper, will unnecessarily increase the costs of the Application and would prejudice the fair hearing of the Application. The Applicant categorized its objections into six categories: (i) inadmissible hearsay; (ii) argument; (iii) scandalous, frivolous and vexatious allegations; (iv) speculation; (v) irrelevant evidence; (vi) inadmissible lay opinion.
[41] I begin by considering whether this pre-emptive motion to strike or expunge affidavit evidence filed on this Application ought to be heard, or whether the evidentiary objections raised by the Moving Party ought to be left to the application judge.
(a) Pre-Emptive Motions to Strike or Expunge Affidavit Evidence
[42] The Court has stated clearly that pre-emptive motions to strike or expunge affidavit evidence filed on a motion or application ought to be left to the motion or application judge and should not be brought as a “pre-motion/application motion” except in rare circumstances. An early statement of this principle is seen in Propco, wherein Dambrot J. explained that evidentiary rulings on admissibility or relevance of evidence are best left to the judge hearing the motion or application, for judicial efficiency and to avoid fragmenting proceedings. The principles stated in Propco were applied by Master McLeod, as he then was, in Jacob v. Playa El Agua Development Limited Partnership (2005), 2005 CanLII 35784 (ON SC), 77 O.R. (3d) 616 (S.C.), where he stated, at paras. 8-9 that “separate preliminary motions under Rule 25.11 should be discouraged and should only be granted in the clearest of cases”: see also, Mason v. Chem-Trend Limited Partnership, 2009 CanLII 70992 (Ont. S.C.). In Neighbourhoods of Windfields, at para. 33, D.S. Ferguson J. held that “evidence should not be struck on an interlocutory motion unless there is some special reason to do so.”
[43] In 1196303 Ontario Inc. v. Glen Grove Suites Inc., 2012 ONSC 758, at para. 19, D.M. Brown J., as he then was, held that while there may be cases where such pre-emptive motions are appropriate, they will be “the rarest and most extraordinary of cases”, finding the “clearest of cases” standard to be too inviting. Justice Brown explained, at paras. 12-19, that a motion to strike or expunge part of an affidavit is best addressed at the return of the motion or application for two reasons: first, the issues of admissibility or weight of the evidence should be reserved to the judge hearing the motion or application, who has a duty as “gatekeeper” to consider issues of competency and admissibility and who is the best position to do so, with the benefit of the full record; second, pre-emptive motions double the judicial resources required to adjudicate the motion or application – and similarly doubles the expense and delay to the parties – and is thereby antithetical to the objective of securing the most expeditious and least expensive determination of every civil proceeding on its merits.
[44] These principles were thoroughly considered by Perell J. in Gutierrez v. The Watchtower Bible and Tract Society of Canada et al., 2019 ONSC 3069; Charney J. in Hunt v. Stassen, 2019 ONSC 4466; Cavanagh J. in Bramer v. The Toronto Lawn Tennis Club, 2017 ONSC 1737; and Master McLeod, as he then was, in Allianz, among others. All held that there are limited circumstances in which a pre-emptive motion to strike or expunge evidence on a pending motion or application is permissible: described as “where either efficiency or fairness require[s]” (Gutierrez); where there is a “special reason” (Hunt; Bramer; Allianz; Neighbourhoods of Windfields); the “clearest of cases” (Jacob; Allianz); or the “rarest and most extraordinary of cases” (1196303 Ontario Inc.).
[45] Those who submit that the Court has broadened the use of pre-emptive motions to address admissibility of evidence on a civil motion or application rely on Gutierrez, Lockridge v. Director, Ministry of the Environment, 2012 ONSC 2316, 350 D.L.R. (4th) 720 (Div. Ct.); and Sierra Club Canada v. Ontario (Ministry of Natural Resources and Ministry of Transportation), 2011 ONSC 4086 (Div. Ct.). I agree with the observation made by Master McLeod, as he then was, in Allianz, at para. 13, that the importance of defining the evidentiary record prior to a hearing may have a heightened importance in applications for judicial review in Divisional Court and in class action proceedings: see also, Elementary Teachers’ Federation of Ontario v. Ontario (Labour), 2008 CanLII 6939 (Ont. Div. Ct.), at para. 22. In my view, the cases pertaining to pre-emptive motions determined in judicial review and class action litigation are distinguishable from those decided in relation to a civil motion or application particularly where, like here, there are no issues of expert opinion evidence.
[46] Regarding pre-emptive motions to address the admissibility of evidence on a civil motion or application, I adopt the principles stated by D.M. Brown J. in 1196303 Ontario Inc., that a pre-emptive motion may be brought in only the “rarest and most extraordinary of cases”. I will add that these principles, and this standard are consistent with the Supreme Court’s call in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 2, 23-28, for a “culture shift” in civil litigation that requires simplifying pre-trial processes, and ensuring the most efficient, proportionate and timely process for the determination of each case. This will only rarely be achieved by layering motion upon motion.
(b) Analysis
[47] Mr. Gerald Fialkov deposed that “for approximately the past ten years”, he has been the President of the Board of Directors of YCC No. 21. He stated that his parents bought a condominium unit in the Condominium building “in the early 2000’s”, and that the late Mr. Ungerman approached him and “strongly encouraged” him to join the Board. Mr. Fialkov’s 36 paragraph affidavit, the only evidence filed by YCC No. 21 in its Application, purports to provide a 50-year historical context of the Condominium through the lens of a non-unit owner whose direct knowledge spans approximately 10 years of the 50-year history.
[48] The Fialkov Affidavit is riddled with evidence of questionable admissibility. Most glaringly, as I will explain, Mr. Fialkov sought to provide evidence of how other condominium unit owners – who were neither identified nor put into historic context of the timing of their unit ownership – felt, or understood, or processed information, or took steps or declined to do so.
[49] The Condominium conceded in argument, in my view correctly, that two such paragraphs, paragraphs 14 and 15, were inadmissible and should be struck. I will grant an Order striking paragraphs 14 and 15 of the Fialkov Affidavit. Mr. Fialkov’s evidence based on “legend has it” or of what he learned from “interactions with owners in the building” is clearly inadmissible and would delay or prejudice a fair hearing.
[50] That makes this a special case, in that both parties agree that there are admissibility issues with the affidavit evidence but disagreed on the extent. Rather than leave to the Application Judge the evidentiary issues that had the potential to delay or prejudice the fair hearing of the Application, as a matter of fairness and efficiency, I exercised my discretion to hear the pre-emptive motion to strike parts of the Fialkov Affidavit.
[51] But there are limits to even a pre-emptive motion brought in rare and extraordinary circumstances. The Moving Party argued multiple objections on multiple grounds to 28 of the 36 paragraphs resulting in different sentences in the same paragraph attracting numerous challenges of admissibility on numerous grounds.
[52] A pre-emptive motion to challenge affidavit evidence on a civil motion or application under Rule 25.11, if heard, is not about “close calls” in the admissibility of the evidence. It calls for focused attention on the part(s) of the affidavit evidence that are said to prejudice or delay a fair hearing, are scandalous, vexatious or frivolous or an abuse of process. Any affidavit evidence of questionable admissibility that does not rise to these levels has no place in a pre-emptive motion under Rule 25.11. As I will explain, this accounted for a large part of Irving Ltd.’s motion.
(i) Relevance
[53] I begin by dismissing Irving Ltd.’s challenge to 11 of the 36 paragraphs of the Fialkov Affidavit on the sole basis of relevance, being paras: 3, 4, 8, 11, 13, 25, 26, 27, 30, 32 and 34. I have no doubt that parts of these paragraphs – and others – contain evidence that is irrelevant to the Application. However, as Irving Ltd. conceded in argument, in my view correctly, relevance alone is not a basis to expunge a part of an affidavit on a motion under Rule 25.11: Holder, at para. 48: “Evidence that is irrelevant is not enough”; Propco, at para. 17. I will address later those paragraphs of the Fialkov Affidavit that the Moving Party contended were both irrelevant and scandalous.
(ii) Inadmissible Lay Opinion, Argument, Speculation
[54] I will next explain why, in the exercise of my discretion, I will leave to the Application Judge the determination of the admissibility of the affidavit evidence challenged by Irving Ltd. on the basis that it constitutes lay opinion evidence, argument or speculation.
[55] Irving Ltd. submitted that 19 paragraphs of the Fialkov Affidavit should be struck as containing inadmissible lay opinion, argument or speculation, or on the basis of a combination of these grounds. Amongst these 19 paragraphs are paragraphs 10, 11, 16, 17, 20, 21 and 34 which, as I will explain shortly, I will strike, in whole or in part, on other grounds. This leaves for consideration Irving Ltd.’s challenge to paragraphs 5, 6, 7, 8, 9, 12, 18, 24, 29, 33, 35 and 36.
[56] Dealing first with inadmissible lay opinion. In R. v. Graat, 1982 CanLII 33 (SCC), [1982] 2 S.C.R. 819, a decision relied on by the Moving Party, the Supreme Court acknowledged the difficulty in distinguishing between fact and lay opinion evidence and accepted that lay opinion may be admissible where the facts cannot be separated from the opinion or impression formed by the witness from those facts, and where such opinion can be formed “on the basis of common ordinary knowledge and experience” without the need for expert evidence: at pp. 837-838. See also, R. v. Abbey, 1982 CanLII 25 (SCC), [1982] 2 S.C.R. 24, at p. 42.
[57] YCC NO. 21 submitted that any lay opinion expressed in the Fialkov Affidavit is the expression of a position, incapable of being disconnected from the facts known to Mr. Fialkov, and thereby should not be struck on a pre-emptive motion but left for consideration by the Application Judge. Paragraph 5 of the Fialkov Affidavit is illustrative:
The Condominium brings this application to fix the inequitable and inconsistent manner in which building expenses are paid. Briefly, the Condominium has 13 floors. Each unit occupies an entire floor – except for the late Irving Ungerman’s (“Ungerman”) penthouse unit which occupies two floors. Ownership of the building is based on the floor plate. Each unit has a 1/13 ownership share, except for the Ungerman’s penthouse unit which has a 2/13 ownership share. The ownership share makes complete sense.
[58] This paragraph of the Fialkov Affidavit is also challenged by the Moving Party as argumentative, as are paragraphs 6 and 9. As stated in Gutierrez, at para. 27, and in Enns v. Goertzen, 2019 ONSC 4233, at para. 68, argument is reserved to a factum and is not properly contained in an affidavit. And, paragraph 6, along with paragraphs 10, 11, 12, 34 and 35 are challenged on the basis that they contain speculation. I agree with the statement by Justice Gomery in Di Franco v. Bueckert, 2020 ONSC 1954, at para. 38, that affidavit evidence that may seem speculative may be found to consist of the affiant “asking the court to accept inferences based on information he presents.”
[59] The challenges to the Fialkov Affidavit based on inadmissible lay opinion evidence, argument and speculation have much in common. They are all based on the submission that the affiant strayed from the strict statement of a fact in a manner that is scandalous and thereby prejudicial to the fair hearing of the application. The Condominium responded that where the affiant went beyond the statement of a fact, he did so to provide historical context, to express a position or state mind, in a manner that is innocuous and does not rise to the level that would support being struck on a pre-emptive motion under Rule 25.11.
[60] While I do not doubt that certain of Mr. Fialkov’s evidence in these impugned paragraphs may constitute inadmissible lay opinion evidence, argument or speculation, that does not mean that the impugned paragraphs rise to the level of scandalous, frivolous, vexatious or abusive as necessary to prejudice or delay the fair hearing of the Application: Law Society of Upper Canada v. Ernst & Young (2002), 2002 CanLII 49625 (ON SC), 213 D.L.R. (4th) 167 (Ont. S.C.), at para. 5, rev’d (but not on this point) (2003), 2003 CanLII 14187 (ON CA), 65 O.R. (3d) 577 (C.A.). I am not satisfied that any of the evidence challenged in these paragraphs rises to the level of scandalous, frivolous, vexatious or abusive as necessary to exercise my discretion to strike these paragraphs in accordance with Rule 25.11. The affiant deposed that the late Mr. Ungerman’s role in the development and establishment of the Condominium, and its management over the years, accounts for the allegedly inequitable allocation of building expenses and the perpetuation, for decades, of this allocation. I am not persuaded by the Moving Party that these paragraphs must be struck to achieve a fair hearing of this Application without delay.
[61] Rather, the Application Judge is in a better position, on a full record, to accept or disregard this challenged evidence without in any manner affecting the fairness of the hearing. I will thereby, in the exercise of my discretion, decline to strike or expunge the evidence in these paragraphs.
[62] This finding follows the reasoning of other courts. In R. v. Council of Canadians, 2015 ONSC 4219, Wright J. noted that much of the evidence in the affidavit in that case appeared to constitute inadmissible opinion but declined to strike it on a pre-emptive motion because she “harbor[ed] some residual concern that [she], sitting as a motion judge on this narrow issue without the benefit of a fulsome court record, [was] not in the best position to assess this evidence, and it is best left for the determination by the injunction motions judge.” In Lockridge, at para. 127, in refusing to strike paragraphs that were challenged as argumentative, Harvison Young J. reasoned that the statements were not prejudicial to the moving party because, like here, there was “little or no danger … that a court will be influenced by such impermissible argument.”
(iii) Hearsay
[63] Irving Ltd. submitted that 8 paragraphs of the Fialkov Affidavit should be expunged on the primary basis of hearsay (8, 14, 15, 17, 19, 24, 26 and 31) and relied on hearsay as a basis for objection, combined with other grounds, in its challenge of other paragraphs.
[64] Two of these paragraphs will be struck on consent: paras. 14 and 15. I will address Irving Ltd.’s request that I strike other paragraphs of the Fialkov Affidavit on the basis of inadmissible hearsay that will prejudice or delay the fair hearing of this Application or is scandalous, frivolous or vexatious.
[65] Rule 4.06(2) provides that “[a]n affidavit shall be confined to the statement of facts within the personal knowledge of the deponent or to other evidence that the deponent could give if testifying as a witness in court, except where these rules provide otherwise.” An affidavit should not contain improper hearsay: Chopik; White v. Merck Frosst Canada, [2004] O.J. No. 623 (S.C.J.); Punit v. Wawanesa Mutual Insurance Co. 2006 CanLII 93712 (ON SC), [2006] O.J. No. 3685 (S.C.J.); Metzler Investment GMBH v. Gildan Activewear Inc., [2009] O.J. No. 3394 (S.C.J.)
[66] In considering the scope of “evidence that the deponent could give if testifying as a witness in court”, the Supreme Court of Canada stated in Abbey, at p. 42, that witnesses “testify as to facts”, but where it is not possible for the witness to separate fact from inference, the witness is permitted to state their opinion on matters not calling for special knowledge where it would be “virtually impossible for them to separate their inferences from the facts on which those inferences are based”.
[67] Rule 39.01(5) builds on Rule 4.06(2) by “providing otherwise” that “[a]n affidavit for use on an application may contain statements of the deponent’s information and belief with respect to facts that are not contentious, if the source of the information and the fact of the belief are specified in the affidavit.”
[68] The court has defined the word “contentious” as meaning “something in dispute or to which there are differences between the contending parties”: Ontario Securities Commission v. 1367682 Ontario Ltd. (De Freitas & Associates), 2008 CanLII 23949 (Ont. S.C.), at para. 6, citing Ontario (Attorney-General) v. Paul Magder Furs Ltd. (1989), 1989 CanLII 4253 (ON SC), 71 O.R. (2d) 513 (H.C.J); Aker Biomarine AS v. KGK Synergize Inc., 2013 ONSC 4897, at para. 10. “Contentious” has also been defined as “likely to cause an argument; disputed, controversial”: Newmarket (Town) v. Halton Recycling Ltd., 2006 CanLII 18731 (Ont. S.C.), at para. 14, citing Oakley Manufacturing Inc. v. Bowman, [2005] O.J. No. 1641 (S.C.J.).
[69] Rule 39.01(5) creates an exception to the hearsay rule for the purpose of making the hearing of an application more efficient. It does not, however, serve to exclude otherwise admissible evidence. For example, if evidence is hearsay but is admissible under a principled exception to the hearsay rule, it should not be struck solely by virtue of contravening Rule 39.05(1): Newmarket, at para. 15; Aker Biomarine, at para. 12. I agree with and adopt the statement by Leach J. in Aker Biomarine, at para. 13: “Put another way, the literal wording of Rule 39.01(5) should not be interpreted or applied so as to create some form of “stand alone” method of challenging and excluding evidence that is not clearly hearsay.”
[70] These are reasons why the admissibility of affidavit evidence should be left to the motion or application judge and not brought forward on a pre-emptive motion, even where there is a perceived breach of a Rule. The issue of admissibility is best addressed on a full record and in the context of the hearing of all the issues raised by the Application.
[71] However, where it is clear that the evidence is inadmissible and leaving it on the record will prejudice or delay a fair hearing or be scandalous, vexatious, frivolous or abusive, a motion judge may, in the exercise of discretion, strike the offending evidence. As explained earlier, the parties agree that paragraphs 14 and 15 meet these requirements. I have determined that the following paragraphs of the Fialkov Affidavit shall similarly be struck as inadmissible hearsay that will prejudice or delay a fair hearing of the Application:
(a) In paragraph 16, Mr. Fialkov stated that “owners in the Condominium kept to themselves” and that he “knows that [Mr. Ungerman] butted heads with other owners when he did not get his way”.
(b) Paragraph 17, and with it Exhibit “B”: Mr. Fialkov’s testimony is predicated on: “I was made aware of a situation where…”, and the accompanying exhibit was neither sent nor received by Mr. Fialkov.
(c) In paragraphs 20 and 21, Mr. Fialkov purported to testify as to the understanding (“no one complained about, nor were they aware”) or feelings (“no other owner felt”) or intentions (“other owners were not willing”) of “other unit owners”, who are not identified.
(d) In paragraph 34, Mr. Fialkov purported to provide evidence on behalf of all unit owners: “I believe that all owners (except the Ungermans) find it unfair”, and the accompanying exhibit (Exhibit “F”) was neither sent nor received by Mr. Fialkov.
[72] In each of these paragraphs, the evidence is not admissible. Mr. Fialkov has no first-hand knowledge of the matters addressed, he does not identify whether these events occurred in the four decades of the Condominium’s existence before he joined in 2010 or after, of unit owners present during the time that he was President or before. He does not identify the source of the information or the basis for the belief. The source(s) of the evidence set out in these paragraphs may tender an affidavit that can then be subject to cross-examination, or Mr. Fialkov may state the source of his information and belief, if the facts are not contentious.
[73] Paragraphs 14, 15, 16, 17 20, 21 and 34 (including related Exhibits “B” and “F”) shall be struck from the Fialkov Affidavit. I grant YCC No. 21 leave to amend, on the reasons explained earlier in paragraph 39 of this Endorsement. The Moving Party’s motion to strike other paragraphs of the Fialkov Affidavit as hearsay, whether hearsay is the primary, secondary or tertiary basis for objection, is dismissed, without prejudice to the Moving Party challenging the admissibility of any such evidence at the hearing of this Application.
(iv) Scandalous and Vexatious
[74] Last, I turn to the impugned paragraphs of the Fialkov Affidavit that are challenged by the Moving Party on the primary ground that they are scandalous or vexatious: specifically, paragraphs 10, 11, 12, 18, 19, 23 and 28.
[75] In paragraphs 35 and 36 of this Endorsement, I summarized the principles applicable to my assessment of whether the grounds set out in the Notice of Application were scandalous. I apply these principles, without repetition, in my assessment of the paragraphs of the Fialkov Affidavit that are challenged as scandalous and vexatious. This allows for symmetry in analysis in that the evidence challenged as scandalous is said to support the grounds that were challenged on the same basis.
[76] In these challenged paragraphs of his affidavit, Mr. Fialkov deposed that when he joined the Board of Directors some ten years ago, that the late Mr. Ungerman “dictated everything that happened in the building” (paras. 10 12); that he was a “dominant personality” (para. 10); that he would sign contracts without consulting with the Board (para. 19); that “the Board did not stand up to” Mr. Ungerman (para. 28); and that after his passing, “it is now possible for owners to stand together as a group to correct the inequitable payment scheme set up by the developer so many years ago” (para. 23).
[77] YCC No. 21 submitted that it needs to adduce this evidence, presuming that it is admitted and accepted by the Application Judge, for the same purposes as the grounds of the Application to which they relate: to show the context in which the allocation of expenses was first established when the Declaration was registered in 1970 and why the building expense allocation, which it views as inequitable, governed for more than 50 years without earlier assertion that the allocation was the product of an “error or inconsistency” that requires amendment.
[78] I am satisfied, however, that there are parts of paragraphs 10 and 11 of the Fialkov Affidavit that contain evidence that is scandalous because it is superfluous and can have no effect on outcome of the Application, and also because its probative value would be outweighed by the time and expense that would be involved in response. The last two sentences of paragraph 10, describing Mr. Fialkov’s perception of the late Mr. Ungerman, and the last two sentences of paragraph 11, relating to hockey tickets said to have been received by Mr. Fialkov, shall be struck as scandalous.
[79] On the analysis set out in paragraphs 37 and 38 of this Endorsement, which I apply without repetition, I decline, in the exercise of my discretion, to strike the other paragraphs of the Fialkov Affidavit challenged as scandalous, because if admitted and accepted by the Application Judge, this evidence may be relevant to the background and historical factual context of the Condominium. I do so without prejudice to Irving Ltd. challenging the admissibility or use of this evidence at the hearing of the Application.
III. CONCLUSIONS
[80] In seeking an Order striking the Notice of Application, the Moving Party did not meet its burden of establishing that the Notice of Application did not disclose a cause of action, or that it is “plain and obvious and beyond doubt that the Application cannot succeed”. Regarding the Moving Party’s challenge of sub-paragraphs of the Notice of Application, I am not satisfied that they may prejudice or delay the fair hearing of this Application or are scandalous or vexatious. Accordingly, in the exercise of my discretion, I decline to strike out or expunge them.
[81] In hearing this pre-emptive motion, I ought not to be taken to be expanding upon the principle, which I accept, that a pre-emptive motion in a civil motion or application may be brought in only the “rarest and most extraordinary of cases”.
[82] I concluded that this was a special case where fairness and efficiency required an analysis of paragraphs of the Fialkov Affidavit that would prejudice or delay the fair hearing of this Application and will thereby strike the last two sentences of each of paragraphs 10 and 11 and paragraphs 14, 15, 16, 17 20, 21 and 34 of the Fialkov Affidavit (including related Exhibits), with leave to amend. I will leave to the Application Judge the determination of all other impugned paragraphs of the Fialkov Affidavit. I thereby dismiss the Moving Party’s challenge to all other impugned paragraphs of the Fialkov Affidavit, without prejudice to Irving Ltd. challenging the admissibility of all or parts of the Fialkov Affidavit at the hearing of the Application.
IV. COSTS
[83] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides the court with discretion in the determination of costs. The exercise of this discretion may be guided by the principles set out in Rule 57.01 of the Rules of Civil Procedure, and applicable jurisprudence, having regard for the overriding principles of reasonableness, fairness and proportionality: Barbour v. Bailey, 2016 ONCA 334, at para. 9; Beaver v. Hill, 2018 ONCA 840, 143 O.R. (3d) 519, at para. 12; Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 38; Zesta Engineering Ltd. v. Cloutier, 2002 CanLII 25577 (ON CA), [2002] O.J. No. 4495 (C.A.), at para. 4.
[84] Absent special circumstances, “costs follow the event”: Bell Canada v. Olympia & York Developments Ltd. (1994), 1994 CanLII 239 (ON CA), 111 D.L.R. (4th) 589 (Ont. C.A.); Yelda v. Vu, 2013 ONSC 5903, at para. 11, leave to appeal denied, 2014 ONCA 353; St. Jean v. Cheung, 2009 ONCA 9, at para. 4.
[85] Here, success was divided. The Moving Party obtained partial success in that seven paragraphs of the Fialkov Affidavit shall be struck in whole and two other paragraphs are struck in part, but also failed in other relief sought, in that I declined to strike the Notice of Application, and declined to strike all or part of the other 19 paragraphs of the Fialkov Affidavit that the Moving Party challenged.
[86] Divided success on a motion is a factor to be considered in determination of costs. Rule 57.01(1) requires that the court consider “the result in the proceeding” in exercising its discretion in the determination of costs. Rule 57.01(4) sets out the court’s authority to “award or refuse costs in respect of a particular issue or part of a proceeding”. Having found divided success, I will exercise my discretion to award Irving Ltd. costs of this motion, in the amount of fifty percent (50%) of the costs that I will now fix.
[87] Irving Ltd. claimed costs on a full indemnity basis in the amount of $15,411.11, consisting of fees in the amount of $13,018.50, HST of $1,692.41 and disbursements of $700.20. The Moving Party did not present a claim for substantial indemnity costs but quantified its partial indemnity costs in the amount of $10,507.96, consisting of fees in the amount of $8,679.43, HST of $1,128.33 and disbursements of $700.20. Irving Ltd. cited no authority or principle that would entitle it to costs on a full indemnity basis or on a substantial indemnity basis.
[88] YCC No. 21 submitted that Irving Ltd. had not established any basis for an award of costs on a full indemnity or substantial indemnity basis. I agree. An award of costs on a substantial indemnity basis is available only in rare and exceptional circumstances: by operation of an offer to settle under Rule 49 (here there was none), or to sanction egregious conduct meriting disapproval: Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766, 140 O.R. (3d) 77, at para. 8, citing Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, at para. 28. The Moving Party has not established any such conduct.
[89] YCC No. 21 submitted that the amount of costs that the Condominium “could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed” (Rule 57.01(1)(0.b)), were partial indemnity costs at $5,869.45, consisting of $5,194.20 for fees and HST of $675.25, as set out in the Condominium’s cost outline.
[90] There is another factor. Rule 57.01(1)(e) makes applicable to my determination of costs “the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding”. The conduct of both parties activates this consideration. YCC No. 21 ought to have withdrawn paragraphs 14 and 15 prior to the delivery and hearing of the Motion, based on its determination that these paragraphs were inadmissible. And Irving Ltd. claimed broad relief that was beyond the scope of a motion under Rule 25.11.
[91] On these considerations, I will fix the amount of partial indemnity costs as $5,869 for fees and HST, to which I will add $700.20 in disbursements for a total of $6,569.20, all inclusive. I will reduce this by 50% to reflect the Moving Party’s divided success.
[92] In the exercise of my discretion, I conclude that it is fair, reasonable and proportionate to award costs to Irving Ltd., payable forthwith by YCC No. 21 on a partial indemnity basis, fixed in the amount of $3,284.60, all inclusive of legal fees, disbursements and applicable taxes.
V. DISPOSITION
[93] On the basis of these reasons, I order as follows:
(a) The motion brought by Irving Investments Limited for an Order to strike the Notice of Application in these proceedings other than sub-paragraphs 2(n) and 2(o), is dismissed.
(b) The last two sentences of paragraph 10, the last two sentences of paragraph 11, and paragraphs 14, 15, 16, 17 (including Exhibit “B”), 20, 21 and 34 (including Exhibit “F”) of the affidavit of Gerald Fialkov, sworn April 30, 2021 (the “Fialkov Affidavit”) are struck, with leave to York Condominium Corporation No. 21 to amend. The remainder of the motion brought by Irving Investments Limited for an Order to strike the Fialkov Affidavit is dismissed, without prejudice to any challenge to the admissibility of all or part of the Fialkov Affidavit that Irving Investments Limited may choose to make on the hearing of the Application.
(c) Costs of this motion are awarded to the moving party, Irving Investments Limited, payable forthwith by York Condominium Corporation No. 21 on a partial indemnity basis, fixed in the amount of $3,284.60, all inclusive of legal fees, disbursements and applicable taxes.
A.A. Sanfilippo J.
Date: June 28, 2021
2021 ONSC 4600
COURT FILE NO.: CV-21-659800
DATE: 20210628
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
YORK CONDOMINIUM CORPORATION NO. 21
Applicant
– and –
ALL UNIT OWNERS AND MORTGAGEES OF RECORD OF YORK CONDOMINIUM CORPORATION NO. 21
Respondents
ENDORSEMENT
A.A. Sanfilippo J.
Date: June 28, 2021