COURT FILE NO.: CV- 20-1957
DATE: 08 02 2022, amended 08 09 2022
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: THE BANK OF NOVA SCOTIA v. SERGIO A. GRILLONE also known as SERGIO GRILLONE operating as GRILLONE LAW FIRM
BEFORE: Agarwal J
COUNSEL: Randy Schliemann, for the plaintiff
Sergio Grillone, self-represented
HEARD: July 29, 2022
AMENDED ENDORSEMENT
Amended Endorsement: The text of the original endorsement was amended on August 9, 2022. Amendments were made to paragraph 6 and the backsheet.
[1] The plaintiff The Bank of Nova Scotia sues the defendant Sergio Grillone (o/a Grillone Law) for around $480,000 in a liquidated debt action. Scotiabank seeks repayment of money owing on a credit line.
[2] Grillone defends the action. Grillone refuses to repay the credit line claiming that Scotiabank paid it out on his behalf and granted him a new term loan for the same amount owing without providing him with any loan documentation or ever advising him of the terms of this alleged new term loan. Scotiabank denies that any new loan was granted or that it paid out any of Grillone’s debt.
[3] Grillone also counterclaims for $500,000 on the basis that Scotiabank improperly collected around $200,000 from his guarantor, Lisa Gatto, that he must repay. Gatto and Grillone are spouses.
[4] Scotiabank moves for an order to quash a summons that served under rule 39.03. Grillone moves for an order to compel a Scotiabank witness to be cross-examined on her affidavit.
Background
[5] Gatto gave Scotiabank a guarantee for $150,000 (plus interest and costs) and a second collateral charge on Gatto’s property as security for granting the credit line to Grillone. When Grillone defaulted on the credit line, Scotiabank sued Gatto to enforce the guarantee.
[6] Gatto sold her property in July 2020. The total payout was $190,352.77. Gatto paid this sum, and the collateral charge was discharged. Gatto took no issue with Scotiabank’s legal costs ($26,470.81) (affidavit of Zamena Baksh, sworn February 10, 2022, Exhibit O). Grillone asked for copies of Scotiabank’s lawyer’s invoices. Scotiabank delivered redacted copies of the invoices in June 2021.
[7] Scotiabank moves for summary judgment on the claim in the statement of claim and dismissing the counterclaim. The motion hearing is scheduled for August 17, 2022, for two hours (peremptory on Grillone under the endorsement of Justice Bloom, dated February 2, 2022). Grillone argues that there is a genuine issue requiring a trial with respect to Scotiabank’s claim and his counterclaim.
[8] In Grillone’s defence to the summary judgment motion, he argues that Scotiabank’s legal costs were excessive. In August 2021, Justice Doi granted Grillone’s motion to cross-examine Zamena Baksh, a Scotiabank employee and affiant for Scotiabank on the summary judgment motion, “about the legal costs in dispute for up to one hour” (at para 5).
[9] After the motion, Grillone served a summons on Jason Spetter, a lawyer for Scotiabank, under rule 39.03 of the Rules of Civil Procedure. The summons requires Spetter to produce “any and all communications between yourself and/or employees of the Bank of Nova Scotia; any and all accounts rendered by Lipman Zener and Waxman to BNS for services rendered in the matter of BNS v Grillone and BNS v Gatto; any and all communications with Lisa Roberta Gatto, Sergio Grillone and others regarding the issues in the action and any documents relating to the matters in issue in the action” (Baksh Affidavit, Exhibit Q).
[10] At the August 2021 motion, Grillone didn’t advise that he intended to examine Spetter. Before the motion, he served a notice to cross-examine Laura Culleton, an employee of Scotiabank’s law firm. Grillone then abandoned that examination (and a further examination of Shashank Doulath, a Scotiabank employee). There was no suggestion, at the motion, that he intended to examine Spetter.
[11] The summary judgment was last returnable in December 2021 (it has been adjourned several times). Two days before the hearing, Grillone served another affidavit. Scotiabank served, in reply, another affidavit from Baksh (sworn January 19, 2022). Grillone seeks to cross-examine Baksh on the January 2022 affidavit.
[12] Grillone has already examined Doulath and cross-examined Baksh twice (including on the disputed legal costs).
[13] Scotiabank moves for an order quashing the summons of Spetter. Grillone moves for an order compelling Scotiabank to produce Baksh to be cross-examined on her January 2022 affidavit.
Scotiabank’s Motion to Quash
[14] Under rule 39.03 of the Rules of Civil Procedure, a person may be examined as a witness before the hearing of a pending motion to have a transcript of their evidence available for use at the hearing.
[15] An examination under rule 39.03 is appropriate when the evidence sought is relevant to any issue raised on the main application. The onus is on the party seeking to conduct the examination to show on a reasonable evidentiary basis that the examination would be conducted on issues relevant to the pending application and that the proposed witness is able to offer relevant evidence. See Ontario Fed’n of Anglers & Hunters v Ontario (Ministry of Nat Resources), 2002 41606 [30] (Ont CA).
[16] The court must consider not only relevance, “but also whether the right to examine would be an abuse of process, which includes considering whether the underlying application has merit” (Ontario Fed’n of Anglers & Hunters v Ontario (Ministry of Nat Resources) 57).
[17] The Supreme Court of Canada explained in Hryniak v Mauldin, 2014 SCC 7, that there will be no genuine issue requiring a trial under rule 20.04(2)(a) of the Rules of Civil Procedure “when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result” (49).
[18] While the onus is on the moving party to establish the existence or lack thereof of a genuine issue requiring a trial, each “side must ‘put its best foot forward’ with respect to the existence or non‑existence of material issues to be tried” (Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v Aga, 2021 SCC 22 [25]).
[19] Grillone argues that Baksh “was unable to explain or clarify how and why the fees for a simple discharge amounted to almost $28K” (defendant’s factum, 13).
[20] Scotiabank argues that an examination of Spetter would be “an abuse of process, not provide any relevant information for the Summary Judgment Motion in this action, and most likely be frivolous as the information is covered by solicitor-client privilege and/or litigation privilege” (plaintiff’s factum, 14). Scotiabank, in oral argument, submits that the issues raised by Grillone are legal not factual.
[21] The disputed legal costs are a relevant issue on the summary judgment motion (indeed, Justice Doi has already found as such). Spetter can offer relevant evidence. Grillone is seeking factual information about why Spetter “combined all the legal fees incurred and why the Plaintiff paid those legal fees and the why the Plaintiff then turned to Gatto for indemnity for all those legal fees” (defendant’s factum, 20) (emphasis in original).
[22] That said, I agree that an examination of Spetter at this time would be an abuse of process.
[23] Scotiabank paid the disputed legal fees. It is in the best position to answer questions about the reasonableness of those fees. Baksh is a Senior Litigation Officer. Grillone has cross-examined her on the disputed legal fees. It is unclear to me what more is to be gained by examining Spetter, especially where Scotiabank is likely to properly refuse most or all questions on the grounds of privilege.
[24] Grillone’s summons discloses the risk of abuse. “Where a request for documents to be produced at such an examination is overly broad, the court can infer that fishing is the purpose behind the summons” (Coburn v Barber, 2010 ONSC 3342 [101]).
[25] In Payne v Ontario Hum. Rights Comm’n, 2000 5731 [166] (Ont CA), the court found the list of documents in the notice of examination was “so sweeping and unfocused that it is apparent that the appellant is, in effect, insisting upon a general discovery of the Commissions through its registrar, hoping to uncover something that will help her case. The proposed scope of the examination is simply too broad.”
[26] So too here. Grillone is asking Spetter to produce his entire file regarding this dispute. He wants copies of every email and letter between Scotiabank and its lawyers about this matter. He wants all accounts rendered by Scotiabank for this matter and the matter involving Gatto (Scotiabank has already produced the latter, although redacted). He wants copies of every email and letter between Scotiabank’s lawyers and him and Gatto (presumably he has copies of these or could get them from Gatto). Grillone has examined Doulath. He has cross-examined Baksh twice, including on the disputed legal fees. This summons to Spetter is a sweeping and unfocused attempt to hopefully discover something, anything, that will help his case, which makes it a fishing expedition.
[27] I am not persuaded that Grillone’s obligation to put his “best foot forward” requires him to examine Spetter. He sought and obtained cross-examination of Baksh, a Scotiabank employee, on this issue. If Grillone believes that Baksh’s answers were incomplete, he can argue that on the summary judgment motion.
[28] Scotiabank relies on R v 1504413 Ontario Ltd., 2008 ONCA 253 [16-17], for the proposition that “issuing a summons to counsel for the opposite party to testify against his or her client is virtually unheard of and it should not be done absent the most exceptional circumstances.” The summonsing party has the burden of “high materiality and necessity (assuming that the proposed evidence is otherwise admissible).” Privileged information may not be admissible. Scotiabank argues that Grillone has not met the test of materiality and necessity. It’s unclear to me this case applies here, given the lawyer was being summonsed to testify in court at a criminal trial. It’s also not clear to me that Spetter is being summonsed to testify “against” Scotiabank.
Grillone’s Motion to Compel Baksh
[29] Under rule 39.02, a party “may cross-examine the deponent of any affidavit served by a party who is adverse in interest on the motion.” Though rule 39.02(3) requires this right to be exercised with reasonable diligence, that rule seeks to prevent cross-examinations being used to adjourn a motion.
[30] In Mapletoft v Christopher J. Service, 2008 6935 [11] (Sup Ct), the court held: “It is equally improper to engage in unnecessary cross examination of a deponent who is swearing to facts that are not in dispute.” Scotiabank relies on this case to argue that cross-examination here is improper because Baksh’s January 2022 affidavit puts into evidence only “two letters that were previously provided to Mr. Grillone, a copy of the Summons to Witness he served on Mr. Spetter, and a copy of the Certificate of Independent Legal Advice…executed by Ms. Gatto”, all of which it says is undisputed.
[31] I don’t believe Mapletoft assists here. In that case, the defendant relied on a lawyer’s affidavit. Associate Justice MacLeod (as he was then) discussed lawyers swearing affidavits. In my view, he was warning against cross-examining a lawyer or clerk who swears a non-contentious affidavit “identifying productions, answers to undertakings or answers given on discovery” to organize and identify key portions of the evidence (15).
[32] Here, Scotiabank has adduced an affidavit from the person who presumably has the most direct knowledge of the issues in dispute. It has done so, presumably, because it believes that evidence will be persuasive. In doing so and given that Baksh was cross-examined twice before on a motion that is intended to end the litigation, Scotiabank would have reasonably expected that cross-examination may be necessary.
[33] I am reluctant to deny Grillone the right to cross-examine a deponent, especially on a summary judgment motion. If this were a trial, and Baksh were called as a witness to prove the documents in her affidavit, even non-controversial or undisputed documents, Grillone would have a right to cross-examine her.
[34] At the hearing, the parties advised me that Baksh’s cross-examination could be completed in 30 minutes. I encouraged the parties to use rule 34.12(2) to avoid a refusals motion, especially given that the hearing of the summary judgment motion on August 17th is peremptory on Grillone and given rule 39.02(3).
[35] Scotiabank suggested using written interrogatories—I don’t know of any rule that allows examinations or cross-examinations on a motion in writing, but I also don’t see any reason the parties couldn’t agree to adopt Rule 35, with modification, to cross-examine Baksh. Though Grillone seeks to orally examine Baksh, he must be reasonable given that the hearing is less than 3 weeks away and peremptory on him.
[36] The cross-examination of Baksh shall be limited to matters put in issue by her January 2022 affidavit. Grillone has had many opportunities to cross-examine Baksh on the issues in dispute on the motion more broadly and this cross-examination should not be used to revisit those issues.
[37] The parties agreed that costs of the motion would be reserved to the summary judgment motion judge.
Disposition
[38] For these reasons, I endorse these orders:
a) THIS COURT ORDERS that the summons to witness for Jason Spetter, dated August 30, 2021, is quashed.
b) THIS COURT ORDERS that Zamena Baksh shall be cross-examined on her affidavit, sworn January 19, 2022, for no more than 30 minutes and the cross-examination shall be limited to matters put in issue by her affidavit, or as the parties may otherwise agree.
c) THIS COURT ORDERS that the costs of these motion are reserved to be fixed by the summary judgment motion judge.
[39] I’m not seized of this matter.
Agarwal J.
DATE: August 2, 2022 , amended August 9, 2022
COURT FILE NO.: CV- 20-1957
DATE: 08 02 2022, amended 08 09 2022
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
THE BANK OF NOVA SCOTIA
Applicant
- and -
SERGIO A. GRILLONE also known as SERGIO GRILLONE operating as GRILLONE LAW FIRM
Respondent
AMENDED ENDORSEMENT
AGARWAL J.
Released: August 2, 2022, amended August 9, 2022