COURT FILE NOS.: CV-18-608051-00CL CV-19-614180-00CL

DATE: 2021-08-26

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: CV-18-608051-00CL

ANDREW STRONACH, Plaintiff

AND:

BELINDA STRONACH IN HER PERSONAL CAPACITY and AS TRUSTEE OF THE ANDREW STRONACH 445 FAMILY TRUST, NICOLE WALKER, and FRANK WALKER IN THEIR CAPACITY AS TRUSTEES OF THE ANDREW STRONACH 445 FAMILY TRUST, ALON OSSIP IN HIS PERSONAL CAPACITY and AS TRUSTEE OF THE ANDREW STRONACH 445 FAMILY TRUST, and STRONACH CONSULTING CORP., Defendants

AND RE: CV-19-614180-00CL

SELENA STRONACH, Plaintiff

AND:

BELINDA STRONACH, NICOLE WALKER, FRANK WALKER, ELFRIED STRONACH and ALON OSSIP, in their capacities as Trustees of the Andrew Stronach 445 Family Trust, BELINDA STRONACH, ELFRIEDE STRONACH and ALON OSSIP, in their capacities as Trustees of the 445327 Trust; BELINDA STRONACH, FRANK WALKER, and NICOLE WALKER, in their capacities as Trustees of the Strosel 2011 Trust; BELINDA STRONACH, FRANK WALKER and NICOLE WALKER, in their capacities as Trustees of the Stroand 2011 Trust; BELINDA STRONACH in her capacity as Trustee of the BSFIN Investment Trust; 2305218 ONTARIO INC. in its capacity as Trustee for the Woodington Trust; BELINDA STRONACH in her capacity as Trustee of the Adena North Trust; FRANK WALKER and NICOLE WALKER, in their capacity as Trustees for the Andrew Stronach Family Trust; BELINDA STRONACH in her capacity as Trustee for the Andrew Stronach 2011 Trust; BELINDA STRONACH, NICOLE WALKER and FRANK WALKER, in their capacities as Trustees of the ST Trust, Defendants

BEFORE: Justice Cavanagh

COUNSEL: Marie Henein, Alex Smith, David Postel and Eleni Loutas for Andrew Stronach Matthew P. Gotlieb, Shaun Laubman, Philip Underwood, and Cole Pizzo for Selena Stronach Michael Barrack, Iris Fischer, Jessica Lam, Anna Christiansen, and Peter F.C. Howard for Belinda Stronach Melanie Ouanounou and Mark Leonard for Nicole Walker and Frank Walker Mark Gelowitz, Craig Lockwood, and Simon Cameron for Alon Ossip Linda Plumpton, Gillian Dingle, Davida Shiff, and Stacey Reisman for Stronach Consulting Corp. Nina Bombier for Elfriede Stronach

ENDORSEMENT

Introduction

[1] Andrew Stronach and his daughter, Selena Stronach, are Plaintiffs in two separate actions. They are the moving parties on separate and related motions before me.

[2] The Defendants and responding parties on the motions are Belinda Stronach, Nicole Walker and Frank Walker, Alon Ossip, Elfriede Stronach, and Stronach Consulting Corp. (“SCC”).

[3] The Plaintiffs bring the motions for orders striking out portions of the Fresh as Amended Statements of Defence of Belinda Stronach, Nicole Walker and Frank Walker, Alon Ossip, and SCC under rule 25.11 of the Rules of Civil Procedure on the ground that they plead documents and communications that are subject to settlement privilege.

[4] On May 26, 2021, I released a decision on motions by Andrew Stronach and by Selena Stronach for leave to amended their Amended Statements of Claim: Stronach v. Belinda Stronach in her Personal Capacity and as Trustee of the Andrew Stronach 445 Family Trust, 2021 ONSC 3801. The factual background to this litigation is described in my reasons on the prior motion, at paras. 4-16.

[5] The prior motions were principally, but not entirely, concerned whether a document described at para. 13 of my reasons on the prior motion (the “May 2020 Agreement”) was subject to settlement privilege. I held that it was not.

[6] The issues on the motions before me relate to a judicial mediation of the two actions in which the within motions have been brought, and a third action by Frank Stronach and Elfriede Stronach. The judicial mediation (the “Mediation”) began on May 25-26, 2020 and continued for more than seven months. The action by Frank Stronach and Elfriede Stronach was settled at the mediation.

[7] Before the Mediation, the case management judge, Hainey J., made an order dated July 19, 2019, on consent, appointing two persons as officers of the court to serve as “Independent Observers” (“IOs”) with respect to certain trusts and with the powers specified in the appointment order. The IOs were invited by the case management judge to participate in the Mediation and they did so. Hainey J. acted as the judicial mediator.

[8] Following release of my decision on the prior pleadings motion, each Plaintiff delivered a Fresh as Amended Statement of Claim. The Defendants delivered Fresh as Amended Statements of Defence.

[9] The portions of the Defendants’ pleadings that the Plaintiffs seek to strike out make allegations with respect to three subject matters: (i) the involvement of the IOs in the Mediation in relation to the settlement of the Frank Stronach and Elfriede Stronach action; (ii) a document described in the Defendants’ pleadings as a valuation that was prepared by an accounting firm during the Mediation for use at the Mediation (the “Valuation”); and (iii) email correspondence exchanged during the Mediation in July 2020 including, in particular, an email from Andrew Stronach’s counsel dated July 14, 2020 in response to an email from Belinda Stronach’s counsel attaching a draft term sheet that was being negotiated with Frank Stronach and Elfriede Stronach (the “July correspondence”).

[10] In addition to the motions seeking to strike out parts of the Defendants’ pleadings, Selena moves to require Nicole Walker and Frank Walker to reinstate portions of their prior pleading on the ground that they impermissibly withdrew an admission. Andrew Stronach moves to strike out a paragraph of the pleading of Alon Ossip on the ground that the allegations are irrelevant and scandalous.

[11] For the following reasons, the motions by Andrew Stronach and Selena Stronach to strike out portions of the Defendants’ pleadings on the ground that they plead matters that are subject to settlement privilege are granted. Andrew’s motion to strike out portions of Alon Ossip’s pleading on the ground that the allegations are scandalous is granted in part. Selena’s motion to require Nicole Walker and Frank Walker to reinstate portions of their prior pleading is dismissed.

[12] For convenience, I refer to the parties by their first names (I refer to Frank Walker as Frank W.).

[13] Counsel for all Defendants supported the submissions made on behalf of Belinda at the hearing of these motions.

Analysis

[14] The issues on this motion are:

a. Whether portions of the Defendants’ Fresh as Amended Statements of Defence should be struck out on the ground that they plead documents and communications that are covered by settlement privilege.

b. Whether Nicole should be ordered to reinstate pleadings that were removed from her prior pleading on the ground that she has withdrawn an admission.

c. Whether certain paragraphs of Alon’s pleading should be struck out on the ground that they make irrelevant and scandalous allegations.

Legal principles on a motion under rule 25.11 to strike out statements in a pleading

[15] Rule 25.11 of the Rules of Civil Procedure provides that the court may strike out all or part of a pleading on the basis that it (a) may prejudice or delay the fair trial of the action, (b) is scandalous, frivolous or vexatious, or (c) is an abuse of process.

[16] In B. (A.) v. Halton Children’s Aid Society, 2016 ONSC 6195, Master Pope, at para. 29, set out the principles that apply on a motion under rule 25.11 to strike out a pleading. These principles include that the court must read the pleading in context with a generous eye and only strike it out if it is plain and obvious that the pleading must fail at trial. The moving party has a heavy burden, and motions under rule 25.11 should only be granted in the clearest of cases.

[17] In Renzone v. Onyx Homes Inc., 2020 ONSC 7722, Master Josefo, at para. 15, held that it is settled law that referring to settlement offers or discussions which are subject to settlement privilege are subject to being struck as scandalous, frivolous or vexatious given that such communications are inadmissible.

[18] Several authorities were cited with respect to the approach to be taken on a motion brought pursuant to rule 25.11 to strike out portions of a pleading on the ground that the impugned pleading alleges documents or communications that are subject to settlement privilege.

[19] In Belsat Video Marketing Inc. v. Zellers Inc., 2003 CarswellOnt 3311, Master McLeod, as he then was, decided a motion to strike out portions of a statement of claim on the ground that they disclosed privileged settlement communications. Master McLeod confirmed, at paras. 21 and 23, that there should be no references in a pleading to offers to settle litigation and that the Court should jealously protect bona fide settlement discussions. Master McLeod accepted that the function of the court on a pleading amendment motion is not to determine admissibility of evidence and noted that on the motion before him, no evidence was tendered concerning the nature of the alleged settlement discussions. Master McLeod held that the pleading before him was not “self-evidently” an improper reference to the contents of a settlement discussion, and, as a result, it was not possible to apply the tests to determine whether the discussions in question were protected from disclosure by settlement privilege.

[20] In Algoma Steel Inc. v. Capitol Steel Corporation, 2021 ONSC 2531, Heeney J. addressed the test to be applied on a motion to strike out a pleading on the ground that it alleged facts or documents that are protected by settlement privilege. On the motion before him, there was a live dispute between the parties as to whether pleaded communications were made on a without prejudice basis and a real issue as to whether the purpose of the communications was to settle a litigious dispute. Heeney J. held that on the record before him (conflicting affidavits, untested by cross-examination, as to the nature of the telephone calls and emails) he was not well-positioned to be making the findings of fact necessary to decide whether the communications in question were protected by settlement privilege or whether the exclusionary rule (based on the justice of the case) applied. Heeney J. concluded that it was not necessary for him to make a ruling on the privilege issue, one way or the other, because the impugned pleading did not necessarily refer to a proposal for settlement of a litigious dispute and, as such, was unobjectionable. The trial judge would be able to determine whether the communications said to be protected from disclosure by settlement privilege are admissible in evidence.

[21] In Lakeside Steel Corp. v. White, 2007 CarswellOnt 3311, Brown J. (as he then was) decided a motion to strike out portions of the defendant’s pleading because they set out the contents of a meeting which the plaintiffs contended was a privileged settlement discussion. Brown J. held that to determine whether the meeting was privileged would require factual findings, including findings of credibility, and the Court was not equipped to do so based on contested evidence tendered by affidavits upon which no cross-examinations had been held. Brown J. concluded that it was not clear and obvious that the facts pleaded involve privileged communications. He saw no prejudice to the plaintiffs given that the discoveries would not be unduly lengthened and the plaintiffs could argue at trial that evidence of what took place at the meeting should not be admitted.

[22] In F.(M.) v. Dr. Sutherland (2000), 188 D.L.R. (4th) 296 (Ont. C.A.), the moving party sought to strike out a pleading that referenced documents that the majority of the Court concluded were clearly inadmissible at trial and, therefore, irrelevant. The majority held, at para. 43, that a pleading of documents that are inadmissible at trial will prejudice or delay the fair trial of the action. The impugned paragraphs of the defendant’s pleading were struck out. The majority, at para. 44, added a qualifying comment to clarify that if they held the view that the documents might be admissible, their admissibility would be left to be determined by the trial judge.

Legal principles with respect to settlement privilege

[23] In Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, the Supreme Court of Canada set out the rationale for settlement privilege and the principles that apply to the assertion of settlement privilege. Abella J., writing for the Court, held, at para. 2, that “the purpose of settlement privilege is to promote settlement”, and “the privilege wraps a protective veil around the efforts parties make to settle their disputes by ensuring that communications made in the course of these negotiations are inadmissible”. Settlement privilege extends beyond documents and communications expressly designated to be “without prejudice”. See Sable, at paras. 12-14.

[24] Settlement privilege will attach to a document or communication where (a) there is a litigious dispute, (b) the communication has been made with the express or implied intention it would not be disclosed in a legal proceeding in the event negotiations failed; and (c) the purpose of the communication is to attempt to effect a settlement: Re Hollinger, 2011 ONCA 579, at para. 16.

[25] Settlement privilege is a class privilege and, while there is a prima facie presumption of inadmissibility, exceptions will be found “when the justice of the case requires it”. See Sable, at paras. 12 and19.

[26] Where settlement privilege is asserted over documents and communications made in furtherance of settlement, the party asserting the privilege must first show that they are prima facie protected by settlement privilege. If this is done, the party seeking disclosure on the ground that an exception to the privilege applies must show that, on balance, a competing public interest outweighs the public interest in encouraging settlement. See Sable, at para. 19.

[27] In Union Carbide Inc. v. Bombardier Inc., 2014 SCC 35, the Supreme Court of Canada explained that settlement privilege is a common law rule that protects communications exchanged by the parties as they try to settle a dispute. The Supreme Court of Canada held, citing Sable, that settlement privilege promotes a priority of our justice system of encouraging settlements. Settlement privilege applies even in the absence of statutory provisions or contract clauses with respect to confidentiality, and the privilege applies even after a settlement is reached. In a mediation held to discuss settlement, the parties’ communications are protected by the common law settlement privilege. See Union Carbide, at paras. 31-34, and 39.

Approach to a motion under rule 25.11 to strike out portions of a pleading on the ground that they disclose documents or communications subject to settlement privilege

[28] On a motion under rule 25.11 to strike out pleadings on the ground that they disclose privileged documents and communications made in furtherance of settlement, the moving party must show that the impugned portions of the pleading should be struck out. To discharge this onus, the moving party must first show that the documents and communications are prima facie protected by settlement privilege. If the evidentiary record is such that the Master or motion judge is unable to determine whether the impugned portions of the pleading allege documents or communications that, prima facie, are subject to settlement privilege, the moving party will have failed to discharge its initial burden and the motion should be dismissed. The question of admissibility of the allegedly privileged documents or communications would be left to the trial judge.

[29] If the moving party discharges its initial burden, the responding party has the onus of showing that an exception to the privilege applies. If the responding party discharges this onus and the Master or motion judge finds that the impugned documents or communications are not subject to settlement privilege, the motion should be dismissed. The responding party may also show that the evidentiary record is such that findings of fact needed to determine whether an exception applies cannot be made, such that the Court cannot determine on a motion at the pleadings stage that the impugned pleadings disclose documents and communications that are protected by settlement privilege. If the Court is unable to make the necessary determinations, the moving party will not have met its onus of showing that impugned portions of the pleading should be struck out. The question of admissibility of the allegedly privileged documents or communications would be left to the trial judge.

Have the Plaintiffs shown that the impugned paragraphs of the Defendants’ pleadings plead documents and communications that are prima facie subject to settlement privilege?

[30] The Plaintiffs move to strike out portions of the statements of defence of the Defendants in each action that allege facts that, they contend, disclose documents and communications that are covered by settlement privilege that attached to the Mediation. The Plaintiffs submit that the Mediation was held on a confidential and without prejudice basis and that all documents prepared for use during the Mediation and all communications between and among participants in the Mediation, including parties, counsel, the IOs, and the judicial mediator, are protected from disclosure by settlement privilege.

[31] In her pleadings in the actions, Belinda pleads allegations that put in issue the involvement and participation of the IOs in the Mediation, including their role in facilitating communications between the parties concerning matters discussed during the Mediation and Belinda’s consultation with the IOs concerning preparations for the Frank/Elfriede settlement. Belinda pleads communications to and from counsel for Andrew and Selena concerning a draft term sheet that addressed matters in relation to this settlement and, Belinda alleges, was developed, with the knowledge of the IOs, during the Mediation. Belinda pleads that, through an email from Andrew’s counsel, Andrew and Selena expressed support for the proposed settlement with Frank and Elfriede. Belinda pleads that in agreeing to settle the Frank/Elfriede action, she relied on a draft document, the Valuation, that was prepared by an accounting firm, at the direction of the judicial mediator, on a confidential and without prejudice basis for use during the Mediation.

[32] In Nicole and Frank W.’s Fresh as Amended Statement of Defence in Andrew’s action they plead that the IOs were involved throughout the settlement process that led to the settlement of the Frank and Elfriede action and, to Nicole and Frank W.’s knowledge, the IOs did not raise any issues or concerns with the settlement ultimately reached.

[33] In Alon’s Fresh as Amended Statement of Defence, he pleads that the IOs were directly and materially involved throughout the settlement process that led to the settlement with Frank and Elfriede and at no point raised any concerns whatsoever.

[34] The Plaintiffs move to strike out the pleadings that make these allegations.

[35] Belinda, and the other Defendants, submit that the Plaintiffs cannot claim privilege over portions of the Mediation relating to the settlement of the action commenced by Frank and Elfriede, either because the Plaintiffs were not parties to that settlement agreement or because the terms of that settlement were made public and are not the subject of settlement privilege.

[36] The Mediation began on May 25-26, 2020 and continued for more than seven months. On May 26, 2020, Hainey J., the judicial mediator, made an order confirming that a without prejudice, confidential meeting was held among the parties to the Andrew and Selena actions and directing that information shared by SCC to attendees shall be held in strict confidence.

[37] The Mediation was a joint mediation to facilitate discussions directed to a global settlement of all three actions. The issues in the three actions are related such that a settlement of one action would affect the parties to the other actions. Belinda’s counsel communicated with the Plaintiffs’ respective counsel during the Mediation, sometimes through the IOs, concerning the subject of the Mediation, including the proposed terms for the settlement of the Frank/Elfriede action. Many documents were filed in the motion materials showing communications between and among counsel and with the judicial mediator and the IOs concerning settlement of the actions. The IOs were involved in the negotiations and discussions about potential settlement of the three actions throughout the Mediation.

[38] It is usual in multi-party mediations for there to be separate and private communications by the mediator with a party, or between some but not all parties. Not all issues in a multi-party mediation will affect every party in the same way. The fact that Andrew and Selena’s counsel did not participate in all communications during the mediation, including those that were directed to settlement of the Frank/Elfriede action, does not mean that they were strangers to the Mediation when these matters were discussed. No separate mediation was constituted for the purpose of negotiating a settlement of only the Frank/Elfriede action which did not include Andrew and Selena and their representatives as participants. I do not accept that the Plaintiffs are not able to assert on settlement privilege over communications during some parts of the Mediation that resulted in the settlement of the action by Frank and Elfriede.

[39] The fact that the settlement of the action by Frank and Elfriede, and the terms of settlement of that action reached on or around August 6, 2020, are public and not subject to settlement privilege does not lead to the conclusion that communications during the Mediation that related to this settlement are not privileged. In Sable, at paras. 15-18, and in Union Carbide, at para. 34, the Supreme Court of Canada held that settlement privilege applies even after a settlement is reached.

[40] Nicole and Frank W. submit that there is nothing inherently privileged about the role of the IOs and that the simple statement that the IOs were aware of the settlement with Frank and Elfriede and voiced no objection to it does not implicate any privileged communications. Alon makes a similar submission that his pleading in respect of the IOs is directly responsive to the allegations pleaded by the Plainitffs in respect of the settlement (of an action to which the Plaintiffs were not parties) and that his pleading does not make allegations that are subject to settlement privilege.

[41] I accept that there is nothing inherently privileged about the role of the IOs. The IOs were appointed with respect to certain trusts pursuant to an Order dated July 19, 2019 for the purpose of observing the ongoing activities of the trusts and to report to the Court in the event that they become aware of any problems regarding the activities of the trusts during litigation. The IOs were asked by the judicial mediator to participate in the Mediation and they did so throughout the Mediation and, in this role, communicated with the participants including the judicial mediator. In this role, the IOs became participants in a Mediation that was held on a confidential and without prejudice basis.

[42] The pleadings by Nicole and Frank W., and by Alon, allege that the IOs were involved throughout the settlement process that led to the settlement with Frank and Elfriede and that the IOs did not raise concerns with the settlement. This pleading would make the allegation that the IOs did not raise any concerns with the settlement an issue in the litigation, and, as a result, settlement privilege over the communications during the Mediation involving the IOs with the parties or their representatives, with each other, and with the judicial mediator, in relation to the settlement, would be lost. To the extent that the Mediation is subject to settlement privilege, the communications involving the IOs during the Mediation are subject to settlement privilege.

[43] I am satisfied that the Plaintiffs have discharged their onus of showing that the requirements for settlement privilege in relation to the Mediation are satisfied and that the Mediation in its entirety is, prima facie, subject to settlement privilege.

[44] Belinda submits that even if settlement privilege applies, prima facie, to the communications and documents to which reference is made in the impugned portions of her pleading, exceptions to settlement privilege apply. Belinda relies on two exceptions. She submits that Andrew and Selena, through their pleadings, waived privilege over the matters over which they assert privilege on this motion. Belinda also contends that the justice of this case requires that she be able to respond as she has to the allegations against her, and that this is a public interest that outweighs the public interest in encouraging settlement.

[45] I address each of these submissions, in turn.

Have the Defendants shown that Andrew and Selena waived settlement privilege over matters that are pleaded in the impugned paragraphs of the Defendants’ pleadings?

[46] The onus of establishing a waiver of privilege rests with the party asserting the waiver: Hallman v. Pure Spousal Trust (Trustee of), 2009 ONSC 49643, at para. 15.

[47] In Hallman, Brown J. (as he then was) noted, at para. 14, that the privilege attaching to a communication made in furtherance of settlement may be lost of the person resisting its disclosure waives the privilege. Brown J. held, at para. 16, that waiver of privilege may be established in several ways. First, the party seeking disclosure of the communication may show that the possessor of the privilege knew of the existence of the privilege and demonstrated a clear intention to forgo the privilege. In addition, where a party uses a privileged communication as the basis of its claim or defence, the party may be taken to have waived the privilege.

[48] In Hallman, Brown J. quoted the following passage from Bentley v. Stone (1998), 42 O.R. (3d) 149 (Ont. Gen. Div.) to explain the principles that apply when a court is asked to determine whether privilege has been waived:

8. ... Privilege may be waived expressly or by implication. It is useful to understand these words from Wigmore as set out in The Law of Evidence, Butterworth’s, Sopinka, Lederman and Bryant, at p. 166:

It has also been said that clear intention is not in all cases an important factor. In some circumstances, waiver may occur even in the absence of any intention to waive the privilege. There may also be waiver by implication only.

As to what constitutes waiver by implication, Wigmore said:

Judicial decision gives no clear answer to this question. In deciding it, regard must be had to the double elements that are predicated in every waiver, i.e., not only the element of implied intention, but also the element of fairness and consistency. A privileged person would seldom be found to waive, if his intention not to abandon could also control the situation. There is always also the objective consideration that when his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder. He may elect to withhold or to disclose, but after a certain point his election must remain final.

Whether intended or not, waiver may occur when fairness requires it, for example, if a party has taken positions which would make it inconsistent to maintain the privilege. (my [Brown J.’s] emphasis)

[49] Belinda submits, citing S&K Processors v. Campbell Avenue Herring Producers Ltd., [1983] BCJ No. 1499, at para. 6, that even in the absence of intention to waive a privilege, privilege may be waived where fairness and consistency require it. In S&K Processors, McLachlin J. (as she then was), at para. 10, observed that in cases where fairness has been held to require implied waiver, there is always some manifestation of a voluntary intention to waive the privilege, at least to some extent, and “the law then says that in fairness and consistency, it must be entirely waived”.

[50] Belinda relies on the Plaintiffs’ pleadings in support of her contention that they waived settlement privilege.

[51] Belinda submits that the pleadings of Andrew and Selena in respect of the May 2020 Agreement have directly led to the responding pleadings to which they object and, through their pleadings in relation to the May 2020 Agreement, Andrew and Selena have waived any privilege that would otherwise attach to the documents and communications to which reference is made in Belinda’s pleading.

[52] The May 2020 Agreement was the subject of a previous motion by the Plaintiffs in these proceedings to amend their pleadings in which the legal principles in respect of settlement privilege were addressed. In opposition to this motion, Belinda’s position was that the Mediation is confidential and privileged and that the May 2020 Agreement is privileged because it was prepared for the Mediation and became the focus of the Mediation. Belinda submitted that the May 2020 Agreement met the three requirements for settlement privilege to attach to a document or communication.

[53] Belinda submitted on the previous motion that if the Court found that the May 2020 Agreement is not subject to settlement privilege, the Plaintiffs’ proposed amendments discussing subsequent events and negotiations leading to the settlement with Frank and Elfriede reference privileged communications in the context of the Mediation and that such references should not be permitted. Belinda gave as an example Selena’s proposed pleading of alleged attempts by the Defendants to “justify” the May 2020 Agreement and negotiations that took place over June and July 2020. Belinda referred to Andrew’s proposed amendments making reference to settlement negotiations that did not lead to resolution. Belinda submitted that these alleged communications took place in the context of an ongoing judicial mediation aimed at resolving the disputes and that such communications are privileged and amendments that make allegations about such communications should be refused.

[54] In my decision on that motion, I held that Belinda had failed to discharge her onus of showing that the May 2020 Agreement was made with the intention that it be kept confidential and, therefore, she had failed to show that this document was, prima facie, subject to settlement privilege. I held that if I had not reached this conclusion, I would hold that Belinda has implicitly waived this privilege. I also held that if I had decided that the May 2020 Agreement was subject to settlement privilege and this privilege was not waived, I would hold that an exception to settlement privilege applies in the circumstances: Stronach v. Belinda Stronach in her Personal Capacity and as Trustee of the Andrew Stronach 445 Family Trust, 2021 ONSC 3801, at paras. 46-48; 61-62; and 73.

[55] Belinda submits that the Plaintiffs’ claims as pleaded directly put in issue Belinda’s conduct and communications throughout the Mediation. Belinda points to the following statements in the Plaintiffs’ pleadings:

a. Andrew alleges that in the ensuing weeks after the May 2020 Agreement, Belinda engaged in a pressure campaign against Andrew and Selena to force them to consent to the May 2020 Agreement and, when that did not work, Belinda switched tactics and began negotiating a settlement with them which bought time but did not lead to a resolution.

b. Selena alleges that immediately after learning that Belinda had agreed to a proposed transaction with Frank to transfer assets from the Trusts to Frank’s control in exchange for settling all claims against her, Selena voiced her objections to the proposed transaction.

c. Selena alleges that the Defendants, and Belinda in particular, attempted to justify the May 2020 Agreement, however, she could not justify or explain why Selena and Andrew were being lumped together with Frank and Elfriede in the proposed transaction. Selena alleges that in the ensuing weeks, Belinda, Nicole and Frank W, coordinated with Frank and Elfriede in trying to pressure Selena and Andrew to consent to the May 2020 Agreement. Selena alleges that when she and Andrew refused to yield to the pressure exerted by Belinda, Nicole, Frank W., Frank and Elfriede and consent to the May 2020 Agreement, Belinda switched tactics and began negotiating a settlement with them. Selena alleges that negotiations continued over the course of June and July 2020 towards a global resolution of all Stronach family litigation.

d. Andrew alleges that in August 2020, he was informed that Belinda and Frank had reached an agreement to resolve Frank’s action in exchange for transferring trust assets to Frank and Elfriede’s control or ownership. Andrew alleges that the Defendants entered into and implemented the settlement with Frank over the express and repeated objections of Andrew and Selena, and they did so for their own personal benefit and without regard for Andrew’s or Selena’s interest. Andrew alleges that he and Selena received nothing of value out of the settlement with Frank.

e. Selena alleges that on August 10, 2020, she was informed that the Defendants and Frank had reached an agreement to resolve Frank’s and Elfriede’s lawsuits in exchange for transferring trust assets to Frank’s control. Selena alleges that her counsel was provided with a summary term sheet and informed that discussions were still taking place to reach a separate agreement with Alon.

[56] The Plaintiffs respond that they do not allege in their pleadings that Belinda engaged in a pressure campaign to force the Plaintiffs to consent to the May 2020 Agreement as a part of or during the course of the Mediation. They submit that the allegations relate only to conduct prior to and outside of the Mediation and, given their acceptance that the entire Mediation is subject to settlement privilege, this is the only way to read their pleadings. The Plaintiffs submit that their pleading that Belinda “switched tactics” and engaged in settlement discussions, makes it clear that the allegations of pressure relate to the period before the Mediation.

[57] The Plaintiffs accept that the entire mediation is subject to Settlement Privilege and, given this, I agree that their pleading should be read as alleging a pressure campaign by Belinda prior to and outside of the Mediation. This is consistent with the Plaintiffs’ pleading that Belinda allegedly switched tactics and began to negotiate a settlement after the alleged pressure campaign failed.

[58] Belinda submits that the Plaintiffs plead that she behaved tactically, in her personal interests, and implicitly in bad faith during the mediation negotiations and by so pleading, they put in issue Belinda’s conduct and communications throughout the seven-month Mediation. Belinda submits that by pleading only certain facts regarding the Mediation, they are not entitled to withhold the remainder, thereby denying Belinda her ability to plead back in response.

[59] I do not agree that the Plaintiffs’ pleadings should be so read. The Plaintiffs do not make any allegations in their pleadings about what was said or written during the Mediation. I do not agree that the Plaintiffs’ pleadings that Belinda “switched tactics” when she began negotiating a settlement, which “bought time but did not lead to a resolution” put in issue Belinda’s conduct during the entire Mediation. These pleadings address Belinda’s decision to engage in settlement discussions through the Mediation and the fact that a global settlement was not achieved, neither of which is covered by settlement privilege. I do not agree that the reference to Belinda’s “tactics” when she began to negotiate a settlement fairly puts Belinda’s conduct throughout the Mediation at issue. These pleadings do not manifest a clear intention by the Plaintiffs to waive privilege over the Mediation. Fairness and consistency do not require that the Plaintiffs be treated as implicitly waiving privilege over the entire Mediation as a result of these pleadings, or even that privilege be waived to a limited extent over the documents and communications pleaded in the impugned paragraphs of the Defendants’ pleadings.

[60] The settlement of the Frank/Elfriede action was reached on or around August 6, 2020 on terms which involved Frank and Elfriede receiving certain assets and the redemption of certain preferred shares held by Frank. None of the parties takes the position that this settlement is subject to settlement privilege. The terms of that settlement are public.

[61] Belinda, supported by the other Defendants, submits that given that the settlement with Frank and Elfriede is not privileged, and the Plaintiffs have pleaded that they objected to it and its implementation (asserting that it was made contrary to their interest and in breach of Belinda’s fiduciary duties as trustee), documents prepared in the Mediation to assist with the negotiations which led to this settlement, and communications during the Mediation concerning the proposed settlement, including communications involving the IOs that relate to their role in the Mediation, are not subject to settlement privilege. Belinda contends that the Plaintiffs’ pleadings alleging that by making the settlement, Belinda and the other Defendants breached fiduciary duties owed to the Plaintiffs by allegedly acting in their self-interest and without regard for the Plaintiffs’ interests, puts Belinda’s state of mind throughout the Mediation in issue and that settlement privilege over the Mediation was waived.

[62] I do not agree with Belinda’s submissions in this regard.

[63] The Plaintiffs’ pleadings do not make allegations in relation to the settlement with Frank and Elfriede that disclose the substance of the Mediation in relation to this settlement, communications sent or received during and as part of the Mediation, or documents prepared during and for use at the Mediation. The Plaintiffs’ pleadings disclose that the settlement was made, a fact over which no party asserts privilege, and they allege that upon learning of the settlement, they objected to it and to its implementation. They plead that the Defendants entered into the settlement for their own benefit and without regard for the Plaintiffs’ interests and that they breached fiduciary duties owed to the Plaintiffs.

[64] On the prior motion by the Plaintiffs to amend their pleadings, Belinda, supported by the other Defendants, submitted that the Mediation was a confidential process that was entirely without prejudice and subject to settlement privilege. The Plaintiffs’ proposed pleadings that were at issue on that motion are the pleadings to which the Defendants have delivered the responding pleadings that are at issue on these motions. Belinda opposed amendments allowing the Plaintiffs to plead the May 2020 Agreement because, she argued, it is a document that was prepared for use at the Mediation which is subject to settlement privilege. Belinda submitted on that motion that, apart from the May 2020 Agreement, other proposed amendments that reference privileged communications that took place in the context of the Mediation aimed at resolving the disputes should not be permitted because they are privileged. On the prior motion, Belinda and the other Defendants did not contend that the Plaintiffs are unable to plead their claims for breach of fiduciary duty in respect of the settlement with Frank and Elfriede without waiving settlement privilege over the Mediation, a position they take on these motions.

[65] In the circumstances of this case, the fact that documents were prepared for the purpose of the Mediation and communications took place with other participants during the Mediation, including the IOs, which related to and concluded with the settlement with Frank and Elfriede, does not, simply because a settlement was reached and claims for breach of fiduciary duty have been made in respect of the settlement, justify an exception, based on waiver or the justice of the case, to settlement privilege that attaches to such documents and communications. The authorities are clear that settlement privilege applies even after a settlement is reached, and that the content of successful negotiations is protected by settlement privilege: Union Carbide, at para. 34, citing Sable, at paras. 15-18. In this case, the Plaintiffs’ pleading of a breach of fiduciary duty is not enough to justify setting aside the well-established rule that documents relating to settlement negotiations are privileged: Heritage Duty Free Shop Inc. v. Attorney General of Canada, 2003 BCSC 818, at para. 20, aff’d 2005 BCCA 188.

[66] The Plaintiffs, through their pleadings, have not evinced a clear intention to waive settlement privilege over the Mediation, or any portion of it. Nor have the Plaintiffs, through their pleadings, manifested a voluntary intention to waive privilege over the Mediation to the extent that fairness and consistency require that privilege be waived over the entire Mediation, or over the documents and communications pleaded in the impugned paragraphs of the Defendants’ pleadings.

Have the Defendants shown that the justice of the case requires an exception to settlement privilege?

[67] Belinda submits, citing Sable, at para. 12, that the pleadings subject to the Plaintiffs’ motion to strike are so relevant and necessary that the need for disclosure of the documents and communications pleaded outweighs the public interest in encouraging settlement.

[68] Belinda submits that her pleadings are responsive to the allegations pleaded against her, and if the involvement of the IOs in the Mediation, the Valuation, and the July 2020 email correspondence is protected from disclosure by settlement privilege, she will be unable to effectively defend against the Plaintiffs’ allegations and will be unable to meet the case against her. Belinda submits that the justice of the case requires an exception to settlement privilege in relation to the impugned pleadings.

[69] In support of her submissions in this respect, Belinda relies on Dos Santos (Committee of) v. Sun Life Assurance Co. of Canada, 2005 BCCA 4. In Dos Santos, the British Columbia Court of Appeal, at para. 19, accepted that there are exceptions to settlement privilege, but cautioned against setting the bar for discharging the burden to establish an exception too low. The Court held, at para. 20, that an exception should only be found where the documents sought are both relevant, and necessary in the circumstances of the case to achieve either the agreement of the parties to the settlement, or another compelling or overriding interest of justice.

[70] Belinda also relies on IPEX Inc. v. AT Plastic Inc., 2011 ONSC 4734. In that case, the plaintiff sued the defendant for contribution and indemnity for amounts that it paid, or would become obligated to pay, as a result of settlements or judgments in other litigation. The defendant sought production of settlement documents including offers to settle, mediation briefs, and settlement agreements in the other litigation. The plaintiff took the position that the documents were privileged and protected from production.

[71] IPEX was an appeal from a decision of a Master. Strathy J., as he then was, accepted that the documents were, prima facie, covered by settlement privilege, and he identified the issue as whether the injury caused to the relationship of confidentiality between the parties to the settlements will be greater than the benefit to be achieved by the correct disposal of the litigation in which the motion was brought. This required a balancing of the rights and expectations of the plaintiff and the parties with which it settled against the right of the defendant to meet the case against it. Strathy J. noted that the Master had held that any admissions against the plaintiff’s interest could be redacted, and he concluded that there was no reason to think that the other settling parties would be concerned about disclosure of the settlement documents.

[72] Strathy J. held that the plaintiff had put the settlements in issue through its action because the only way to understand the basis for the plaintiff’s liability in the other litigation (for which the plaintiff was seeking contribution and indemnity from the defendant) was through the settlement documents. He concluded that the settlement documents should be disclosed based on the principle that a party is entitled to know the case that it must meet and be given a fair opportunity to meet that case and, without disclosure of the settlement documents, the defendant would be unable to defend itself against the plaintiff’s claim. See IPEX, at paras. 48-58.

[73] The documents and communications at issue on this motion, communications involving the IOs during the Mediation, the Valuation, and the July 2020 correspondence, are unlike the settlement documents in question in IPEX which the plaintiff had put in issue through its action and where the only way for the defendant to understand the claim was through disclosure of the settlement documents. The recognized exception to settlement privilege identified by Strathy J. in IPEX, whether the claimant acted reasonably to mitigate his loss in his conduct and conclusions of negotiations for the compromise of proceedings, is not applicable to the motion before me. See IPEX, at paras. 56-58.

[74] With respect to the IOs, Belinda submits that an exception to settlement privilege is justified because their involvement in negotiations during the Mediation arising from and related to the May 2020 Agreement and the settlement with Frank and Elfriede is necessary to allow her to defend against the allegations of misconduct in respect of these settlement discussions. Belinda submits that the IOs were appointed to ensure that the Plaintiffs’ interests were not disregarded while their actions were pending and, therefore, the role of the IOs is highly probative in defence to allegations that Belinda engaged in a pressure campaign, acted in bad faith during the negotiations, and disregarded Andrew’s and Selena’s interests by entering into the settlement.

[75] All parties accepted that the IOs would participate in the settlement discussions at the Mediation which all parties knew was being held on a confidential and without prejudice basis and, prima facie, was entirely subject to settlement privilege. For this reason, the participants in the Mediation, including the IOs, would have known that they were able to speak freely, with confidence that the communications would be kept confidential. Belinda did not contend on the prior pleadings motion that the Plaintiffs, by making claims for breach of fiduciary duty in relation to the settlement with Frank, lost the privilege attaching to the Mediation. The fact that Belinda now wishes to plead the involvement of the IOs in the discussions at the Mediation to strengthen her defence is not a sufficient reason for an exception to settlement privilege to apply based on the justice of the case.

[76] Nicole and Frank W. submit that the knowledge and involvement of the IOs during the portions of the Mediation that were focused on settlement of the Frank/Elfriede Action are relevant entirely apart from any force the communications involving the IOs may have to show admissions against interest by the Plaintiffs or weaknesses in their case. In support of this submission, they rely on Mueller Canada Inc. v. State Contractors Inc., 1989 CarswellOnt 469 and IPEX. I do not regard IPEX as a helpful authority because, as I have explained, the facts were materially different and the exception that Strathy J. applied is not applicable on the motions before me.

[77] In Mueller, the plaintiff alleged breach of contract and breach of fiduciary duty against a defendant for entering into a settlement agreement with other parties that did not account for the plaintiff’s interests. The plaintiff sought production of the settlement agreement, which was resisted on the basis of settlement privilege. Doherty J., as he then was, held that “[w]here documents referable to the settlement negotiations or the settlement document itself have relevance apart from establishing one party’s liability for the conduct which is the subject of the negotiations, and apart from showing the weakness of one party’s claim in respect of those matters, the privilege does not bar production.”

[78] On the motions before me, unlike in Mueller, the communications that the Defendants plead were made during the Mediation in which all parties were participants. The fact that the Nicole and Frank W. do not rely on the involvement of the IOs to show admissions by Frank or Elfriede or the Defendants in connection with the Frank/Elfriede action does not change the fact that Nicole and Frank W. plead the involvement of the IOs during the Mediation to strengthen their defence to the claims made by the Plaintiffs and show the weakness of these claims. The exception to settlement privilege applied by Doherty J. in Mueller does not apply.

[79] Belinda submits that the Valuation, prepared for purposes of the Mediation by an independent accounting firm, is highly probative and necessary to her defence to allegations that put the merits of the settlement with Frank in issue. Belinda pleads that the settlement with Frank was based on the Valuation and that she needs to rely on the Valuation to defend against the Plaintiffs’ allegations that she did not consider their interests in connection with the settlement with Frank.

[80] The Valuation was prepared at the request of the judicial mediator and provided to the parties participating in the Mediation on June 30, 2020. The document is called a “Scope of Analysis” and is described as a “Draft for discussion purposes only”. The document was prepared and provided on a without prejudice basis. The document states that it is not a valuation report, and that the authors will not render an opinion as to the fairness on the values in the report. I do not agree that the Valuation, that was provided to the participants in the Mediation on a confidential and without prejudice basis, is necessary for Belinda to defend the Plaintiffs’ claims. To the extent that the values of given assets are contentious in this litigation, Belinda will be able to tender evidence that is not subject to settlement privilege to prove the values.

[81] Belinda submits that the July correspondence, whereby the Plaintiffs were sent a draft term sheet which would be effective upon execution (identifying assets to be transferred to Frank and Elfriede as part of a proposed settlement by which the Frank/Elfriede action and counterclaims and related litigation would be dismissed on consent), is highly probative and necessary to Belinda’s defence to the Plaintiffs’ claims in respect of the settlement because, she contends, it shows that they were informed in July 2020 of the proposed transaction and expressed support for it at that time. Andrew’s counsel responded to the email from Belinda’s counsel sending the term sheet on July 14, 2020.

[82] With respect to the July 2020 correspondence, Belinda proposes to use the words written in the July 14, 2020 email from Andrew’s counsel as a statement that weakens the Plaintiffs’ claims in relation to the settlement with Frank and Elfriede. Belinda is able to plead facts in defence of the Plaintiffs’ claims in relation to the settlement that are not privileged, and tender evidence to prove them at trial, and the fact that she is unable to plead communications from the Plaintiffs made during the Mediation, which are, prima facie, subject to settlement privilege, does not justify an exception to settlement privilege based on the justice of the case.

[83] Belinda has not shown that she will be unable to effectively defend the Plaintiffs’ claims if she is unable to plead facts relating to the role of the IOs in the Mediation in relation to the settlement with Frank and Elfriede, the Valuation, or the July 2020 email correspondence.

[84] The fact that Belinda and other Defendants regard the documents and communications pleaded as highly probative and helpful to their defences to the Plaintiffs’ claims is not, in itself, justification for an exception to privilege based on the justice of the case. Many parties who engage in unsuccessful settlement negotiations would like to use statements made in or documents prepared for the settlement negotiations to their advantage in the litigation. However, they are not able to do so for the reasons expressed in Sable, at para. 2, that settlement privilege “wraps a protective veil around the efforts parties make to settle their disputes by ensuring that communications made in the course of these negotiations are inadmissible”. The fact that a party wishes to use privileged information to assist the party in litigation is not a competing public interest that justifies an exception to settlement privilege. See Singh v. Progressive Conservative Party of Ontario, 2017 ONSC 4168, at paras. 108-113; affirmed, Singh v. PCPO, 2018 ONSC 203, at paras. 54-57.

[85] The Mediation was conducted over many months, under judicial supervision, and with the assistance the IOs. All participants knew that the Mediation was a joint mediation involving the parties to the three actions and their representatives and that the parties were attempting to settle all three actions. There can be no question that the confidential and without prejudice nature of the Mediation was essential to allow the participants to freely express themselves without fear that their words, or documents prepared for and used in the Mediation, would be used in the litigation if an overall settlement was not achieved.

[86] In Hollinger Inc. (Re), 2011 ONCA 579, the Court of Appeal for Ontario, at para. 20, held that “settlement privilege constitutes a social value of superordinate importance” when addressing whether settlement privilege was capable of justifying a sealing order that limits the open court principle.

[87] Although there are occasions when an exception to settlement privilege is justified, Belinda and the other Defendants have not shown, with respect to the paragraphs of their pleadings that are before me on this motion, that an exception is justified based on the justice of the case that outweighs the public interest in encouraging settlement.

[88] I conclude that (i) the Plaintiffs have shown that the impugned paragraphs of the Defendants’ pleadings plead documents and communications that, prima facie, are subject to settlement privilege, and (ii) the Defendants have not shown that an exception to settlement privilege applies.

[89] I am satisfied that the Plaintiffs have discharged their onus under rule 25.11.

Should portions of paragraph 21 of Alon’s Fresh as Amended Statement of Defence be struck out as scandalous?

[90] Andrew moves to strike out portions of paragraph 21 in Alon’s Fresh as Amended Statement of Defence. Paragraph 21 relates to paragraph 20 which reads:

Conversely, the suggestion at paragraph 2 of the Claim that the Stronach family fortune was “created by Andrew and Belinda’s father, Frank Stronach”, is patently absurd. Outside of the horse breeding and horse ownership business, which lost hundreds of millions overall (and in respect of which Alon had no responsibility or ownership), Andrew contributed nothing to the family’s wealth. In fact, Andrew was oftentimes a liability to the family, causing numerous potential scandals and embarrassments.

[91] In paragraph 21, Alon alleges that the “list of Andrew’s embarrassing activities is extensive and includes (inter alia)” nine pleaded examples of Andrew’s conduct, including allegations of serious and personal misconduct involving members of Andrew’s family, allegations of mismanagement of his personal finances, and alleged misconduct in relation to TSG employees and suppliers. Alon pleads that “[o]verall, Andrew did far more damage to the Stronach family – both financially and emotionally – than any “value” that he might otherwise claim to have brought to the family”.

[92] In his Notice of Motion, Andrew asserts that Alon misstated facts about Andrew’s pleading and that he does not plead, in paragraph 2, that Andrew and Frank created the family fortune, only that Frank did so. Alon, in his factum, accepts this confirmation of how paragraph 2 of Andrew’s pleading should be read, and he has proposed to amend his pleading to remove the disputed interpretation.

[93] Andrew seeks to strike out positions of the list of activities pleaded in paragraph 21 of Alon’s pleading that relate to his personal finances, allegations of misconduct towards family members, borrowing from employees, and that his conduct damaged the Stronach family “emotionally”.

[94] Alon submits that paragraphs 20-22 of his pleading allege material and relevant facts that are directly responsive to a number of the “sweeping allegations” that are advanced against him in Andrew’s pleading and that he is entitled to plead facts that address: (a) Andrew’s inability to manage his own finances; (b) Andrew’s direct interference with TSG assets and suppliers; (c) Andrew’s pattern of abusive conduct to TSG employees and trustees; (d) Andrew’s flagrant abuse of horses; and (e) Andrew’s general disruption of TSG operations by virtue of his pattern of serial misconduct. Alon submits that he is entitled to plead the history of his interactions with Andrew - in his capacity as both trustee and CEO - particularly where Andrew has alleged that Alon “made no effort to hide his disdain for Andrew”.

[95] A fair reading of paragraph 21 of Alon’s pleading is that the “list of Andrew’s embarrassing activities” relates to Alon’s pleading in paragraph 20 that addressed Andrew’s alleged failure to contribute anything to the family’s wealth. This followed from Alon’s denial that the family fortune was created, to any extent, by Andrew. The proper reading of paragraph 2 of Andrew’s pleading has been clarified and it does not allege that Andrew, with his father, created the family fortune.

[96] I have reviewed Andrew’s pleading insofar as it makes allegations against Alon. Although allegations about Andrew’s conduct in relation to the business of TSG and the effect his conduct may have had on the finances of TSG are not wholly irrelevant, allegations directed only to Andrew’s personal conduct insofar as they relate to members of his family and management of his personal finances are not relevant to the issues raised by Andrew’s pleading and they qualify as scandalous.

[97] The portions of paragraph 21 of Alon’s pleading that Andrew seeks to strike out (that were provided to me by Andrew’s counsel for this motion) are struck out as irrelevant and scandalous, with the exception of “(vi) borrowing from employees”.

Should Nicole and Frank W. be required to re-insert language that was removed from their pleading when they delivered their Fresh as Amended Statement of Defence?

[98] Selena moves for an order requiring Nicole and Frank W to reinsert deleted the language from their previously operative statement of defence into their Fresh as Amended Statement of Defence on the ground that they improperly withdrew an admission.

[99] In their Amended Statement of Defence dated February 13, 2020, Nicole and Frank W. plead:

Selena also overstates any entitlement to a one-third interest in 445327 Co. It was never intended that the Andrew Trust would have a one-third interest in 445327 Co. immediately upon the completion of the 2013 re-organization. Instead, in the event that at some point in the future (upon Elfriede’s death or otherwise), Elfriede’s 9.5% share of 445327 Co. was transferred to the Andrew Trust, then each of Selena, Nikki, and Frank W. would ultimately have a roughly one-third interest in 445327 Co. (Selena would have a 32.6% interest in 445227 Co., while Nikki and Frank W. would each have a 33.7% interest.)

[100] In her Fresh as Amended Statement of Defence, this paragraph is replaced with the following paragraph:

Selena also overstates any entitlement to a one-third interest in 445327 Co. It was never intended that the Andrew 445 Trust would have a one-third interest in 445327 Co. upon the completion of the 2013 re-organization. Instead, at best, there was a desire on the part of Frank Sr. that in the long run, the three grandchildren which share equally in the assets of the overall Stronach family enterprise.

[101] Selena submits that the underlined words in the prior pleading are an admission within the meaning of rule 51.05 because they concede Selena’s claim of an equal entitlement to the family’s key holding corporation. Selena relies on her pleading that she would ultimately inherit one-third of 445327 Co. and its underlying assets.

[102] An admission is an unambiguous, deliberate concession to the opposing party’s position where one party confirms that a set of facts as posed by the other party is correct. Where the plaintiff has not asserted in its pleading the position the defendant is said to have conceded, there can be no admission. If a statement of defence does not admit allegations in the statement of claim, and instead denies them, the allegations are not admissions within the meaning of rule 51: Petrasovic Estate v. 1496348 Ontario Ltd., 2012 ONSC 4897, at paras. 28 and 30.

[103] A party is not precluded from amending its pleading to plead new or different facts from those pleaded in an existing pleading, or from withdrawing statements of fact in an existing pleading, unless those statements qualify as admissions that were deliberately made as a concession to the opposing party: Stronach, at paras. 84 and 87.

[104] In their prior pleading, Nicole and Frank W. did not admit that Selena was entitled to a one-third interest in 445327; they pleaded that this allegation was overstated. They also generally denied the allegations contained in Selena’s Amended Statement of Claim (other than specific paragraphs). Their prior pleading was a statement of a hypothetical situation where, if Elfriede were to transfer her 9.5% interest in 445327 Co. to Andrew 445 Trust, then each of Selena, Nicole and Frank W. would have “a roughly one-third interest in 445327 Co. ...”.

[105] I do not regard the statement in Nicole and Frank W.’s prior pleading to be an unambiguous, deliberate concession to Selena’s position.

[106] In her reply pleading, Selena denied the allegations in Nicole and Frank W.’s previously operative statement of defence. Given this denial, and for this reason, also, the statement in question in Nicole and Frank W.’s pleading does not qualify as an admission.

[107] This portion of Selena’s motion is dismissed.

Disposition

[108] For these reasons, the Plaintiffs’ motions for orders striking out portions of the Defendants’ pleadings are granted, as follows:

a. Paragraphs 142, 143, and 144 of Belinda’s Fresh as Amended Statement of Defence in Selena’s action are struck out.

b. Paragraph 62 of Nicole and Frank W.’s Fresh as Amended Statement of Defence in Selena’s action is struck out.

c. Paragraph 102 of Alon’s Fresh as Amended Statement of Defence in Selena’s action is struck out.

d. The portions of paragraphs 42, 43, 44, 141, 142, and 143 of Belinda’s Fresh as Amended Statement of Defence in Andrew’s action as highlighted in the document sent to me on August 20, 2021 by Andrew’s counsel entitled “Synopsis of Andrew’s Objections to Amended Pleadings” are struck out.

e. The words “In light of Andrew and Selena’s objections to the May 2020 framework” and the last sentence in paragraph 55 of Nicole and Frank W.’s Fresh as Amended Statement of Defence in Andrew’s action are struck out.

f. Paragraph 117 of Alon’s Fresh as Amended Statement of Defence in Andrew’s action is struck out.

g. Paragraph 41 and the words “with the involvement of the independent observers” in paragraph 42 of the Amended Statement of Defence of Stronach Consulting Corp. in Andrew’s action are struck out.

h. The portions of paragraph 21 of Alon’s Fresh as Amended Statement of Defence as highlighted in the document sent to me on August 20, 2021 by Andrew’s counsel entitled “Synopsis of Andrew’s Objections to Amended Pleadings” are struck out, with the exception of the words “(vi) borrowing from employees,”.

[109] The motion by Selena seeking an order requiring Nicole and Frank W. to reinstate words removed from their prior pleading is dismissed.

[110] If the parties are unable to resolve costs, written submissions may be made in accordance with a schedule agreed upon by counsel and approved by me.

Cavanagh J.

Date: August 26, 2021