Konstan v. Berkovits

COURT FILE NO.: CV-11-430602

DATE: 2021-10-11

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MARIA KONSTAN, JIM KONSTAN, ELAINE KONSTAN and ETTA KONSTAN

Plaintiffs

– and –

SAMUEL JACOB BERKOVITS, SAEED HOSSEINI, TED FRITZ, WILLIAM BLAIR, TORONTO POLICE SERVICES BOARD

Defendants

COUNSEL:

Mark Ross and Avi Bourassa, lawyers for the Plaintiffs

Melvyn L. Solmon and Cameron Whetmore, lawyers for the Gerstel parties

Daniel Naymark and Dillon Collett, lawyers for the Defendants

HEARD: October 7, 2021

ENDORSEMENT

DIAMOND J.:

[1] As per all my recent decisions rendered in these matters, this Endorsement applies to all seven legal proceedings currently outstanding between the parties (this action plus court files nos. CV-11-436825, CV-13-483531, CV-12-447394, CV-13-476452, CV-14-476939 and CV-14-474051). All seven proceedings are scheduled to be tried before me for five weeks commencing on October 21, 2021.

[2] After Justice Myers admirably case managed these proceedings for several years, the trial management function was handed off to me in the summer of 2021. Several case conferences and trial management conferences have ensued since then.

[3] Late last week (ie. two weeks before the trial begins), the Gerstel parties brought a motion before me seeking an order adjourning the trial and seeking their costs thrown away. While Ms. Konstan supports the Gerstel parties’ request for an adjournment of the trial, she did not serve her own Notice of Motion seeking that relief.

[4] For their part, the Berkovits parties oppose the adjournment requests, but advance a claim for their own costs thrown away in the event an adjournment of the trial is granted.

[5] The basis for the Gerstel parties’ request for adjourning the trial is relatively straightforward, although it deserves a brief historical summary. Saeed Hosseini (“Hosseini”) was an original defendant in two of the seven proceedings. In reviewing the pleadings in those two actions, Hosseini appears to be a key party, featuring prominently in the factual matrices advanced by both the Gerstel parties and the Berkovits parties, including allegations that Hosseini was hired as a “hitman” by the Gerstel parties, and also conspired with the Berkovits parties to harm Mr. Gerstel.

[6] The Gerstel parties attempted to examine Hosseini for discovery on several occasions. Hosseini never attended in accordance with any Notices of Examination or summonses to witness. As a result, Justice Myers (in his role as case management judge) issued two separate orders compelling Hosseini’s attendances at discovery.

[7] Hosseini failed to comply with both of those orders. He once again failed to show up for discovery. As a result, Hosseini’s Statements of Defence in both proceedings were ultimately struck out.

[8] After Hosseini’s pleadings were struck out, in early September 2020, counsel for the Gerstel parties wrote to counsel for the Berkovits parties advising, inter alia, that if Hosseini “showed up at trial”, the Gerstel parties would seek an adjournment of the trial and payment of their costs thrown away. Counsel for the Berkovits parties was requested to confirm whether Hosseini would be called as a witness for his clients.

[9] No substantive response to those inquiries was delivered by the Berkovits parties. In late August 2021, the Berkovits parties served their proposed witness list, and that list included Hosseini to be called as a witness at trial. As noted by the Gerstel parties, eleven months passed between the delivery of their September 2020 letter and a formal response from the Berkovits parties.

[10] The Gerstel parties also point out that on February 12, 2020, Justice Myers included the following “warning” in his Endorsement released that day:

“If Mr. Hosseini tries to give evidence at trial, I would expect the judge to be very interested in the allegations of tampering if he does not attend on March 3, 2020 as ordered.”

[11] The Gerstel parties submit that the record clearly discloses that Hosseini enters and exits these proceedings at the whim of Mr. Berkovits. As the judge assigned to hear the trial of these proceedings, I make no finding at this time in relation to that submission. That said, the Gerstel parties have advanced evidence on this motion supporting the existence of an issue as to whether Hosseini’s presence and/or absence in these proceedings is tied in some way to the Berkovits parties. No doubt that issue will likely be canvassed at trial with fulsome viva voce and documentary evidence.

[12] The Gerstel parties argue that Hosseini’s “miraculous last minute reappearance” on the eve of trial necessitates an adjournment as they will suffer significant prejudice as a result of being forced to proceed to trial without having conducted an examination for discovery of Hosseini (as a defaulting party under Rules of Civil Procedure).

[13] The Berkovits parties submit that the trial should not be adjourned, as Hosseini has now indicated he is willing to attend an examination for discovery, and the Gerstel parties have known of the Berkovits parties’ intentions to call Hosseini as a trial witness for a “long time”. In response, the Gerstel parties submit that examining Hosseini on the very eve of trial would seriously interfere with trial preparation and “throw their counsel into crisis management.”

[14] All parties agree that a judge’s decision to adjourn or not adjourn a trial is highly discretionary. In Ariston Realty Corp. v Elcarim Inc. 2007 13360 (ONSC), Justice Perell set out a helpful list of factors and principles for the Court to consider when exercising its discretion to grant or refuse an adjournment:

“Depending on the circumstances of each case, to judicially exercise the discretion to grant or refuse an adjournment, a judge or master may need to weigh many relevant factors including:

• the overall objective of a determination of the matter on its substantive merits;

• the principles of natural justice;

• that justice not only be done but appear to be done;

• the particular circumstances of the request for an adjournment and the reasons and justification for the request;

• the practical effect or consequences of an adjournment on both substantive and procedural justice;

• the competing interests of the parties in advancing or delaying the progress of the litigation;

• the prejudice not compensable in costs, if any, suffered by a party by the granting or the refusing of the adjournment;

• whether the ability of the party requesting the adjournment to fully and adequately prosecute or defend the proceeding would be significantly compromised if the adjournment were refused;

• the need of the administration of justice to orderly process civil proceedings; and

• the need of the administration of justice to effectively enforce court orders.

[15] Both parties also rely upon the following comments of the Court of Appeal for Ontario in Turbo Logistics Canada Inc. v. HSBC Bank Canada 2016 ONCA 222:

“The applicable principles are well understood. They were expressed by this court in Khimji v. Dhanani (2004), 2004 12037 (ON CA), 69 O.R. (3d) 790, per Laskin J.A. dissenting, but not on this point, at para. 14:

A trial judge enjoys wide latitude in deciding whether to grant or refuse the adjournment of a scheduled civil trial. The decision is discretionary and the scope for appellate intervention is correspondingly limited. In exercising this discretion, however, the trial judge should balance the interests of the plaintiff, the interests of the defendant and the interests of the administration of justice in the orderly processing of civil trials on their merits. In any particular case several considerations may bear on these interests. A trial judge who fails to take account of relevant considerations may exercise his or her discretion unreasonably and if, as a result, the decision is contrary to the interests of justice, an appellate court is justified in intervening. In my opinion, that is the case here.

Laskin J.A. observed that in refusing an adjournment, the trial judge should have taken into account the goal expressed in r. 2.01(1)(a), namely “to secure the just determination of the real matters in dispute” and the resolution of cases on their merits.

Khimji was considered by this court in Toronto-Dominion Bank v. Hylton, 2010 ONCA 752, which adopted the above statement. This court observed, at para. 36, that “[t]he presiding judge has a well-placed and a well-established discretion to decide whether an adjournment request ought to be allowed or denied.” After setting out the above statement, the court added, at para. 37:

Laskin J.A.'s passage makes it clear that, in reviewing highly discretionary decisions such as whether to allow a request for an adjournment, the inquiry must focus on whether the court below took account of relevant considerations in balancing the competing interests and made a decision that was in keeping with the interests of justice.

The court added that factors to be considered include the reason for the adjournment request, the history of the matter, the prejudice to the party resisting the adjournment and the consequences to the requesting party of refusing the request.”

[16] I agree with the Gerstel parties that Hosseini is a central witness in the trial of these proceedings. Several of the various causes of action being advanced and defended by all parties will likely be impacted by findings of fact arising from Hosseini’s testimony and involvement in the chronological narrative. There is no dispute that the Gerstel parties are entitled to examine Hosseini for discovery, even if Hosseini is now a defaulting party. It is not as if the Gerstel parties failed to take steps to secure Hosseini’s attendance at discovery, and then “woke up” on the eve of trial. The Gerstel parties clearly sought to exercise their right to examine Hosseini for discovery before these actions were set down for trial.

[17] None of the parties swore affidavits on this motion, although I do agree with the Gerstel parties that there would have been more of an expectation upon the Berkovits parties and/or Hosseini to provide direct evidence in response to the evidence file in support of this motion, which essential consists of a chronology of “how we got here”.

[18] If the trial of these proceedings is adjourned, the next available trial dates commence in February 2023, some 16 months from now. There is inherent delay and prejudice to all parties if another extensive delay occurs. Most of the events given rise to these proceedings are alleged to have taken place over ten years ago.

[19] As all parties consented to these actions being set down for trial, the Gerstel parties must demonstrate that their need for an adjournment arises from “exceptional circumstances”. I am tasked with balancing the interests of the parties and the overall administration of justice. While the Berkovits parties claim an entitlement to call Hosseini as a trial witness notwithstanding his default, as the trial judge I am entitled to control the trial process, and I agree with the Gerstel parties that they should not be forced to participate at trial without having had the opportunity to examine Hosseini for discovery.

[20] The real issue for this Court’s determination is whether the trial should be adjourned now with a schedule for Hosseini’s discovery to take place later, or whether Hosseini should be examined during the next two weeks so that the trial hopefully proceeds as scheduled. In my view, the latter option is preferrable.

[21] While the Gerstel parties cannot be faulted for the current situation, in my view the parties need to pull themselves up by their proverbial bootstraps and exert all reasonable and necessary efforts to ensure that this trial proceed as scheduled. Justice delayed is no doubt justice denied, and the situation before the Court is one of those times when counsel and parties simply need to adjust to circumstances that arguably changed “on the fly”. I do not accept that foregoing a few days of trial preparation over the next two weeks will necessarily lead to “crisis management” for the Gerstel parties. The trial preparation has been ongoing for months, and while the Gerstel parties consider Hosseini’s reappearance as a wrench thrown into their trial preparation system, sometimes parties are required to practice the art and skill of adaptation.

[22] Even if the trial was adjourned with or without a fixed timetable for Hosseini to attend examination for discovery, the trial would arrive (at least) sixteen months from now and Hosseini could re-appear again at the last minute. In such circumstances, an adjournment would not address the problem at hand.

[23] It is unknown whether Hosseini will attend any examination for discovery scheduled over the next two weeks. Obviously, his track record to date shows otherwise. However, in my view a balancing of the various interests of the parties with a view to fostering and promoting the administration of justice results in the following result:

(a) counsel for the Gerstel parties may examine Hosseini for discovery for two days on any dates between now and the commencement at trial. Notices of examination may be served upon Hosseini by e-mail or text message forthwith;

(b) if Hosseini does not attend on one or both of the dates set aside for his examination for discovery, as the trial judge I am ordering that he shall not be permitted to give any testimony at the trial of these proceedings. Simply put, this is his final opportunity to comply with a Court order failing which his absence from these proceedings will be permanent; and,

(c) as the outcome of Hosseini’s discovery (should it proceed) is also unknown, I am permitting the Gerstel parties the opportunity to report back to me as the trial judge in the event the Gerstel parties believe that any further relief arising from Hosseini’s discovery is warranted and necessary. Counsel may schedule a 9:15 am case conference through my assistant for that purpose if necessary. Alternatively, counsel may address such concerns at the opening of trial.

[24] Order accordingly.

Diamond J.

Released: October 11, 2021

COURT FILE NO.: CV-11-430602

DATE: 2021-10-11

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MARIA KONSTAN, JIM KONSTAN, ELAINE KONSTAN and ETTA KONSTAN

Plaintiffs

– and –

SAMUEL JACOB BERKOVITS, SAEED HOSSEINI, TED FRITZ, WILLIAM BLAIR, TORONTO POLICE SERVICES BOARD

Defendants

ENDORSEMENT

Mr. Justice Diamond

Released: October 11, 2021