Court File and Parties
COURT FILE NO.: CV-18-00000180-0000 (Picton)
DATE: 2021-11-01
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Drew Harrison Farms Inc., Plaintiff
AND:
John Murphy, Sandra Murphy and John DiGioacchino in their capacity as Trustees of The John H. Murphy Family Trust, and Sean Curran, and Kimberly Curran, and Overbridge Corporation, Defendants
AND:
Drew Harrison Farms Inc. and Terry Anderson, Defendants to Counterclaim
BEFORE: Graeme Mew J.
COUNSEL: Donald E. Crabbe, for The John H. Murphy Trust (Moving Party)
Benoit M. Duchesne, for Drew Harrison Farms Inc. (Responding Party)
Ryan Flewelling, for Sean Curran and Kimberly Curran
James R.G. Cook, for Terry Anderson
HEARD: In writing
ENDORSEMENT
[1] On 7 February 2020, following a request consented to by all parties, this matter was accepted into the Provincial Civil Case Management Pilot – One Judge Model. I was assigned as the case management judge.
[2] Inclusion in the pilot is at the discretion of the Regional Senior Judge for the region in which the action is proceeding. A Practice Advisory issued by then Chief Justice Heather Smith dated 3 January 2019[^1] sets out the criteria which will be taken into account when determining whether a particular matter is suitable for inclusion in the pilot.
[3] The Practice Advisory summarises features of the project as including:
A judge that has been assigned to case-manage an action will preside over all pre-trial hearings, case management conferences, and the trial. This will allow the judge to become entirely familiar with the issues in the dispute. The only exception is for case conferences that are dedicated solely to settlement discussions; a different judge will preside over these case conferences in order to allow the parties to freely discuss the strengths and weaknesses of each party’s case and discuss the parties’ willingness to compromise their positions in an effort to find common ground.
No formal interlocutory motions will be scheduled in cases assigned to the pilot without the approval of the case management judge. Instead, informal procedures will be used wherever possible to resolve interlocutory disputes, such as meetings with counsel and self-represented parties in the judge’s chambers or by teleconference. (Exception: motions for recusal would not require the approval of the case management judge.)
At a relatively early stage of the proceeding, the case management judge will fix a trial date, or order a trial to be heard in a particular sitting of the court, and impose a schedule for completing necessary steps prior to trial. The trial date would be adjourned only in exceptional circumstances and would require the approval of the case management judge. For efficiency in the scheduling or conduct of the trial, the case management judge may make pre-trial orders concerning the admissibility of trial evidence.
[4] In this action, the plaintiff, as owner of a farm property at 2983 County Road 8, Picton, alleges that the defendants, the Murphy Trust (the former owner of both 2983 County Road 8 – “the 2983 property” - and 2984 County Road 8 – “the 2984 property”), and the Currans (who bought the 2984 property from the Murphy Trust), have not met certain obligations to register an easement and rights of way over the 2984 property in favour of the plaintiff. The relief sought by the plaintiff includes specific performance of the agreement of purchase and sale of the 2983 property and rectification of the title to the properties now owned by the plaintiff and the Currans respectively to give effect to the easement and rights of way claimed by the plaintiff.
[5] The smooth passage of this action has not been without its challenges. There have been two changes of lawyer by the plaintiff. No less than 13 case conferences have been held. There was a contested hearing over the production of documents, which resulted in a formal endorsement (reported at 2020 ONSC 8080), as well as a number of lesser rulings that have been made at case conferences. Deadlines have been set and then missed and/or extended. Nevertheless, considerable progress has been made. Initial plans for a series of summary judgment motions and examinations for discovery (not necessarily in that order) were replaced by an agreement to adopt a process similar to the summary trial procedure in Rule 76.10. Affidavits or witness statements of all trial witnesses except those whose attendance can only be secured by a summons to witness have been exchanged and will form the evidence-in-chief of those witnesses at trial. Examinations for discovery were dispensed with and, subject to what follows, documentary discovery is complete.
[6] At a case conference on 8 June 2021, all parties agreed that the trial would proceed over 9 days, commencing 6 December 2021. Unless public health directives in effect at that time provide otherwise, the trial is to take place in person in Picton.
[7] At the last case conference on 26 August 2021, I ordered that the plaintiff was to advise by 3 September whether it will be adducing further evidence regarding valuation of the subject property and, if so, to deliver any report by no later than 1 October 2021. Any responding valuation report was to be delivered by 29 October 2021. I also directed that any outstanding production issues could be dealt with by way of an in-writing motion.
[8] The next case conference is scheduled for later today, 1 November 2021, primarily for the purpose of finalising trial logistics.
[9] On 27 October 2021 a package of motion material was delivered to me via the trial coordinator. The trial coordinator was informed by counsel that the disposition of the motion would affect the case conference scheduled for today.
[10] The motion, brought by the Murphy Trust, seeks orders:
prohibiting the plaintiff from serving or tendering real estate appraisal evidence or reports relating to the 2021 value of the lands at issue in the proceeding at trial;
in the alternative rescheduling of the trial;
striking paragraph 61 of the affidavit of Kenneth Menlove sworn 20 August 2021, on the basis that the paragraph contains inadmissible hearsay evidence concerning a pivotal document produced by the plaintiff; and
requiring the accounting books and records of the plaintiff to provide evidence of all records pertaining to the acquisition, retention, depreciation and disposition of chattels purchased from the John H. Murphy Family Trust.
[11] The relief sought also implicitly seeks an order concerning the evidence of Anne Young, a legal assistant to Mr. Menlove, who was the solicitor who acted for the plaintiff on its acquisition of 2983 County Road 8, whom the moving party wishes to cross-examine at trial regardless of whether the plaintiff calls her as a witness.
[12] I will address each of these issues in turn.
Current Value Appraisal
[13] On 30 September 2021, the plaintiff delivered a “letter update” from Daniel Harvey, the author of an appraisal report dated 20 October 2020, which had previously been delivered by the plaintiff. The following are extracts from Mr. Harvey’s 30 September letter:
I am in the process of updating the appraisal report prepared on #2983 County Road 8, Prince Edward County, Ontario, K0K 2T0; the property was previously inspected on October 20, 2020, which also coincided with the effective date of the valuation.
Preliminary information and research completed to date appears to indicate a significant market value increase in the contributory value of the approximate 12-foot right of way to #2983 County Road 8, Prince Edward County from the last valuation in October of 2020; the market value increase from the amount estimated in October of 2020 appears to range from 40% to 70%; this equates to an approximate preliminary value range from $320,000 to $390,000.
I will continue to working [sic] towards completion of the full appraisal report, and will advise once the file is complete.
[14] The moving party submits that Mr. Harvey’s 30 September 2021 letter is not an appraisal report as such, but rather a discussion of an approach, and is only a “preliminary” estimated range of values representing an increase of between 40% and 70%. The letter clearly contemplates that a “full appraisal report” will be forthcoming. Yet no such report has been delivered and there is no indication as to when that will occur. As a consequence, the Murphy Trust submits that it has not been either feasible or reasonable for it to have obtained any responding evidence on the current value appraisal issue.
[15] Unless the current value appraisal evidence contained in Mr. Harvey’s 30 September 2021 letter is ruled inadmissible, the Murphy Trust argues that it would be unfair to proceed to trial as scheduled.
[16] The written argument filed by the plaintiff does not address Mr. Harvey’s statement that he is continuing to work towards completion of a full appraisal report. Nor has any request been made for an extension of the 1 October deadline for the plaintiff to deliver further evidence regarding valuation of the property as of the date of trial.
[17] Rather, the plaintiff points out that all parties have been in possession of the original appraisal report for nearly a year, and that the 30 September 2021 letter “merely updates the previously delivered expert report and does not constitute a stand alone new expert report”.
[18] Despite a provision in the Practice Advisory that “the case management judge may make pre-trial orders concerning the admissibility of trial evidence”, the plaintiff also cautions against a determination concerning the admissibility or exclusion of appraisal evidence being made at this stage, arguing that such a determination should be dealt with at trial, with the benefit of a full record and knowledge of all pre-trial steps taken by the parties up to the commencement of trial.
[19] Mr. Harvey’s 30 September 2021 letter was delivered prior to the deadline for the plaintiff to tender further real estate appraisal evidence. Accordingly, in the absence of any indication by the plaintiff that it wishes to deliver further appraisal evidence, no admissibility ruling is necessary.
[20] Given Mr. Harvey’s statement that he was “working towards completion of the full appraisal report”, it is understandable why the other parties have been waiting for that “report” to be delivered. It would have been helpful if the plaintiff had advised sooner than in its factum filed in response to this motion that no further report would, in fact, be forthcoming. The inevitable result is that the deadline for the other parties to file further appraisal evidence by way of response has now passed without them having done so.
[21] The plaintiff points out that no report was delivered by any party in response to Mr. Harvey’s 2020 report. Be that as may, when the timetable for delivery of further appraisal evidence was set at the 26 August case conference, the plaintiff could reasonably have anticipated that the other parties would wait until any further report from Mr. Harvey was going to be forthcoming before deciding whether and when to deliver a responding report. That was the rationale for requiring the plaintiff to advise by 3 September whether further evidence would be forthcoming.
[22] In the circumstances, the deadline for delivery of any responding valuation evidence is extended to 15 November 2021.
[23] The alternative relief sought by the moving party for an adjournment the trial is, in the circumstances, moot. Furthermore, according to the Practice Advisory, it would require “exceptional circumstances” for a fixed trial date to be adjourned.
[24] I should add that I do not accept the plaintiff’s submission that it would be inappropriate for me to make such a determination before trial. The One Judge model is part of a culture shift towards more efficient management and disposition of civil disputes. If the model continues, either by extension of the current project or through wider application, it can be anticipated that circumstances will arise where a case management judge who will also be the trial judge exercises his or her discretion to deal with issues of admissibility of evidence, including expert evidence before the formal commencement of trial.
Menlove Affidavit
[25] Objection is taken to Mr. Menlove’s statement, in paragraph 61 of his affidavit (which will be his evidence-in-chief at trial) that the legal assistant in his office who had transcribed a letter dated 5 January 2017, dictated by Mr. Menlove, erroneously included the word “irrigation”.
[26] To put this objection in context, it is helpful to first set out the entire paragraph of the letter containing this alleged error:
As part of our closing arrangements, the Murphy Trust provided two undertakings to DHF for easements over the Subject Property; one in regards to the existing shore well located approximately in the middle of the Subject Property; and two, in regards to access from the road to the waterfront for farming and irrigation purposes, on what I recall as an existing mutual right of way at the eastern property boundary of the Subject Property.
[27] Again, to provide context, both paragraphs 60 and 61 of Mr. Menlove’s affidavit should be read:
On or about January 5th, 2017, a similar letter was sent by my assistant on my behalf to Mr. Andrew Wilson, the solicitor who represented Mr. Sean Curran and Ms. Kimberly Curran, the purchasers of the Waterfront Property. The letter inquired if Mr. and Ms. Curran were aware of the Well Easement and Laneway Easement obligations still to be fulfilled.
Following the sending of this letter, I noted that the assistant, who was not familiar with the purchase transaction, had made a dictation error regarding the uses of the Laneway Easement by including the word irrigation. This typographical error was discovered much later, after litigation considerations were raised.
[28] The statement in the 5 January 2017 letter, as written, that the purpose of the easterly easement was “for farming and irrigation purposes” (emphasis added) is consistent with the position taken in this action by all of the defendants, and is inconsistent with the position taken by the plaintiff.
[29] Not surprisingly, therefore, the moving party regards the question of whether the inclusion of the word “irrigation” was, in fact, a transcription error, as “pivotal”.
[30] The basis for the moving party’s objection to the admission of paragraph 61 is that if this evidence was given viva voce, it would garner an objection on the basis that it is hearsay because the informant must be the assistant. On such an objection being made, the Murphy Trust argues that it is likely that Mr. Menlove would be asked how he concluded that there had been a “dictation error”, and if the answer was that it was discussed with the assistant, then it would be ruled inadmissible as hearsay.
[31] Another possibility, of course, is that Mr. Menlove might say that the source of his conclusion that a transcription error had been made was that he did not dictate (or would not have dictated) the word “irrigation”. Accordingly, whether Mr. Menlove’s assistant is a source for his conclusion that a transcription error was made, remains to be seen. Only if the assistant is the source of his information and belief would a hearsay concern arise.
[32] The use of affidavits or witness statements in place of evidence-in-chief given viva voce at trial has been less common Ontario civil proceedings then it is in commercial arbitration or in civil proceedings in other jurisdictions. Jurisprudence cited by the respondent concerning the circumstances under which an affidavit filed on a motion or application may be struck out[^2] is therefore of limited assistance.
[33] When a comparable issue concerning the admissibility of certain contents of a witness statement arose in an English case, Anglo Continental Educational Group (GB) Limited v. Capital Homes (Southern) Limited, [2009] EWCA Civ 218, Lady Justice Arden provided this guidance (at para. 24):
If a party is served with a witness statement which it considers may contain material which is inadmissible on a question of interpretation, it should seek to establish from the other party the basis on which the evidence is said to be admissible. If he is dissatisfied with the answer, he may in appropriate circumstances make an application to exclude the evidence before replying to it. Another course would be to issue an application to be heard at trial, but this may lead to increased costs and a diversion of the time available for trial to this subsidiary issue. Yet another course would be for the court at the case management conference to direct the parties to identify in writing the precise point which they say the evidence establishes and why they say that that evidence is admissible. This may shorten the time spent at trial on any application to exclude it.
[34] It would be premature to strike out paragraph 61 at this juncture. Its admissibility will depend on whether Mr. Menlove’s assistant was a source of his information and belief and, if so, whether she will be a witness at trial and, thus, available for cross-examination. Furthermore, Arden L.J.’s suggestion that a such an issue could be raised at a case conference is apposite, particularly where, as in the present matter, the next case conference will be conducted by the trial judge. This is exactly the sort of problem which, under the One Judge model, can be dealt with efficiently and effectively, often without the need to bring a formal motion (although in fairness to the moving party, my case conference endorsement of 26 August provided that any outstanding production issues could be dealt with as in-writing motions to be submitted to me).
[35] I therefore decline to strike out paragraph 61, or to make any order concerning the attendance of Anne Young to give evidence at trial. However, the moving party is at liberty to raise this issue again at the case conference or at trial, as well as to seek leave to cross-examine Ms. Young if her attendance at trial has to be secured through a witness summons served by the Murphy Trust.
Production of Records
[36] There has been a rumbling dispute over the value of chattels which were included in the purchase price of the farm property. Evidence of the value of those chattels is said to be relevant to determine what was paid for the land.
[37] The plaintiff says that it delivered accounting records to the moving party on 26 October 2021 and that this portion of the relief sought on the motion is now moot.
[38] Murphy Trust disagrees. In reply submissions delivered on 27 October, the moving party submits:
What was delivered on October 26, 2021 was the balance sheet from the financial statement of the Plaintiff as at August 2021 which was accompanied by a letter and the previously produced auctioneers list.
Farm equipment in August 2021 was listed as having current book value of $164,135.
The accompanying letter from counsel pointed out that this figure for 2021: “includes farm equipment purchased or acquired by our client in addition to the chattels purchased from your client”
[39] Given that the chattel purchase in issue occurred in the autumn of 2016, the moving party argues that the general ledgers for all applicable years and the balance sheets for 2015 to 2020 would assist the court in determining what the $164,135 represents and at what amounts the values were booked after the purchase of the chattels.
[40] I agree that the balance sheets for 2015-2020 should be produced. However, a determination of whether it is appropriate to require, in addition, production of all of the plaintiff’s accounting records regarding acquisition, depreciation and disposition of the chattels acquired from the Murphy Trust, is better made after the balance sheets have been produced and reviewed. In that regard, I would caution that the principle of proportionality is particularly apposite to disclosure of financial information.
[41] Accordingly, the plaintiff is to produce forthwith its balance sheets for 2015-2020. The moving party remains at liberty to request further production if it deems it appropriate to do so.
Costs
[42] Any issues relating to the costs associated with this motion can be addressed following the conclusion of the trial, if not otherwise agreed.
Mew J.
Date: 1 November 2021
[^1]: Online: https://www.ontariocourts.ca/scj/practice/civil-case-management-pilot/ [^2]: York Condominium Corporation No. 21 v. All Unit Owners and Mortgagees of Record of York Condominium Corporation No. 21, 2021 ONSC 4600, at para. 44.