Superior Court of Justice - Ontario

COURT FILE NO.: CV-15-522676

DATE: 20220524

RE: Syed Abid Hussain and Rubina Abid, Plaintiffs – AND – Daya Singh Flora and Balbir Flora, Defendants

BEFORE: Justice E.M. Morgan

COUNSEL: Simon Bieber, for the Plaintiffs Doug Bourassa, for the Defendants

HEARD: May 24, 2022

OPENING OF TRIAL – MOTION TO STRIKE defence

[1] Mr. Bieber, on behalf of the Plaintiffs, has brought a motion at the opening of trial to strike the Statement of Defence for failure of the Defendants to comply with a series of pre-trial production Orders going back to 2017.

[2] The successive Orders include: Kristjansen J. (May 11, 2017, ordering production of financial records), Sanderson J. (Nov 23, 2018, following up on the initial production Order), Allen J. (April 12, 2019, giving the Defendants “one last chance” to make full documentary production), Chalmers J. (June 15, 2021, following up on outstanding undertakings and production requirements at a telephone case conference), Chalmers J. (Sept 15, 2021, ordering further production at yet another case conference).

[3] It is Mr Bieber’s submission that the Defendants’ non-compliance has made it impossible for the Plaintiffs to effectively pursue their damages claim. As Mr. Bieber explains it, the documents sought by the Plaintiffs are the financial records of the properties in question, which they need in order to establish the income of the property over the years as well as the appraised value of the property.

[4] The parties had at one point jointly retained an appraiser and the correspondence from the appraiser indicates that he also needed the same financial records to produce a proper appraisal. They were never produced to the appraiser and so the record at trial will contain no appraisal of the property. That will make it rather difficult for the Plaintiffs to put a figure on their claimed percentage ownership.

[5] Mr. Bieber argues that the Defence ought to be struck, and that the trial will have to proceed with the Plaintiffs’ best estimates of value based on the scanty records that the Defendants have produced. He also says that where necessary I will have to draw inferences from the gaps in financial records produced by the Defendants.

[6] Mr. Bourassa, for the Defendants, submits that the documentation ordered to be produced has, in fact, been produced. He points to the fact that 5 separate affidavits of documents have been delivered by the Defendants over the years, and that the productions listed in those affidavits fill several bankers’ boxes. These include rental income statements for 2010-2017, rent roll and expenses spreadsheets for those same years, income tax returns for 2010-2016, detailed operating expenses for the Broadview property for 2010-2018, and notices of assessment. Mr. Bourassa states that this material should be more than enough for the parties and the court to work with.

[7] I note that the last affidavit of documents produced by the Defendants was on April 18, 2019, in response to Justice Allen’s order. As indicated above, Her Honour’s endorsement at the time specifically said that the Defendants are getting “one last chance” to make the proper productions. Clearly, up until then the Defendants’ production had been deficient. The Defendants took Justice Allen up on this chance, and they followed up her Order promptly with some further financial production. It is apparent, however, that this was still not sufficient, as Justice Chalmers issued two more Orders to the same effect in 2021. Both times he ordered that the Defendants complete their production obligations.

[8] Mr. Bourassa explains that Justice Chalmers’ orders were for the most part aimed at updating the financial production to 2021. That, of course, is the Defendants’ obligation on an ongoing basis, and Mr. Bourassa states that the financial matters pertaining to the property have been updated at least until 2021.

[9] Mr. Bieber says that what we have are summaries of financial records prepared by the Defendants, and not the records themselves. For example, he says that were money has been spent on renovating the property, we have a global figure for the renovation supplied by the Defendants or their bookkeeper, with no actual bills or receipts by which to verify the figure.

[10] It is difficult for me to tell at the outset of the trial whether what we have (or will have) in the record suffices to prove damages. That said, it appears to me that the Defendants have complied with the orders at least to the extent that striking the Defence altogether will be disproportionate to the extent of any delinquency on their part. The Court of Appeal has been outspoken on the need to change litigation culture and ensure that parties do not give each other the run-around on matters like production obligations; at the same time, they have been careful to say that any remedy must be in proportion to the offence it addresses: Falco Lumber Limited v. 2480375 Ontario Inc., 2020 ONCA 310, at para 53.

[11] The Defendants’ tardiness in making the productions which they have been obliged all along to make has delayed this action in getting to trial. Their incomplete production, as argued by Mr. Bieber, may also have made it difficult for the Plaintiffs to be precise in establishing their damages claim. But to strike out the Defence altogether is not called for now that we have finally arrived at trial. I am content to proceed, and to allow the Defendants to present a defence even if spotty on financial records. Of course, if there are records that are missing that should have been produced, the Defendants may end up paying the price if I draw an adverse inference from their failure to do so.

[12] I sympathize with the Plaintiffs’ frustration in having to seek successive court orders in an effort to get what every litigating party deserves – full production of all relevant material in the opponent’s possession and control. However, their requested remedy goes too far.

[13] Instead of having the trial proceed undefended and having the Plaintiff estimate damages where the evidence falls short, I prefer to see the trial proceed on a defended basis. Where the financial evidence falls short the Plaintiffs will in any case be in a position to estimate their losses, but those estimates will be more fully informed if the Defendants and their counsel are here to make whatever explanations they can.

[14] I therefore will not strike out the Defence at this point. I will, however, make whatever inferences are necessary if it appears down the road that the Plaintiffs’ ability to prove their claim has been impeded by the Defendants’ failure to produce that which they were obliged to produce.

[15] Accordingly, the trial will proceed.

Date: May 24, 2022 Morgan J.