Court File and Parties
COURT FILE NO.: CV-15-541652
DATE: 20221117
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Block Developments Inc., Plaintiff
AND:
Brewers Retail Inc., Defendant
BEFORE: Carole J. Brown J.
COUNSEL: Matthew P. Sammon and Christopher Yung, Counsel for the Plaintiff
Michael I. Binetti and Meredith L. Hayward, Counsel for the Defendant
HEARD: November 8, 2022
Endorsement
Background
[1] The moving party/plaintiff, Block Developments Inc., brings this motion pursuant to Rule 53.05 of the Rules of Civil Procedure for leave of the court to withdraw an admission.
[2] Block seeks leave to withdraw the admission based on new documentary evidence produced by the defendant, Brewers Retail Inc., midway through trial, which Block alleges demonstrates the admission to be incorrect.
[3] It is the position of Block that Brewers produced the documents, including the document that Block alleges demonstrates the incorrectness of the admission late in the litigation process, but that Brewers still wishes to avoid any adverse effects on its case which may result from the late-produced document.
[4] The defendant, Brewers, opposes the motion on the grounds that there is no contradiction between the late-produced evidence and the document produced during documentary production on which the admission was based, and further that it would be prejudiced by any withdrawal of the admission.
[5] I note that the production of documents, including the subject document on which the admission is sought to be withdrawn, was made after solicitor-client privilege was waived by Brewers during the examination of their principal witness, Tom Lucas. They thereafter produced 128 documents from their lawyer’s files, including 123 documents previously not produced.
[6] Brewers thereafter brought a motion pursuant to Rule 53.08 for leave to admit the late-produced productions which had not previously been produced in compliance with the Rules and, as well, sought leave to recall Mr. Lucas to give evidence regarding the late-produced productions. At that juncture, the plaintiff had already closed its case except for one expert witness, whose evidence was completed out of order due to scheduling difficulties.
[7] This Court, with expressed reluctance in its written reasons, granted the defendant’s motion, but also granted a brief adjournment to permit examination for discovery of Mr. Lucas on the newly produced documentation.
[8] As regards this motion, the plaintiff, at the end of trial, indicated that they wished to seek withdrawal of an admission which this Court indicated would be heard, should a motion be necessary, upon reconvening. As the defendant did not concede to the withdrawal of the admission, this motion was scheduled for November 8, 2022.
The Facts
[9] The admission, sought to be withdrawn, was contained in the Agreed Statement of Facts at paragraph 35, first paragraph, which provides:
[35] Subsequently, Born communicated orally to Fried (in a call at approximately 11 AM) that his instructions were not to extend the Mutual Lease Condition date but that Brewers would waive the Mutual Lease Condition if Block waived.
[10] Paragraph 35 continues as follows:
Born later wrote to Fried at 12:41 PM that day, advising that his instructions were that there would be no further extensions of the Mutual Lease Condition. There was an Internet issue at the Weir Foulds office that affected the firm’s ability to send and receive mails.
[11] The admission, contained in the first sentence of paragraph 35, was made on the basis of a note produced by the defendant and prepared by Jonathan Born, Brewers’ real estate solicitor at Weir Foulds LLP, describing a call between Mr. Born and Mr. Fried, indicating that he told Mr. Fried that his instructions were not to extend the Mutual Lease Condition.
[12] That note read:
10/29/15
TC J Fried/JB re-Brewers/Block 11 AM
– Joe B
– I advised Joe that my instructions from client were no further extensions and that we would waive s. 3(b) Mutual Lease if they waive
– Joe said business issues not settled so perhaps solution is deal dies today, we agree informally to discuss lease and revive once settled
– JB advised that could not agree to above as my understanding is that lease is settled and my instructions are no further extensions
– JB will send Joe follow-up confirmation email.
[13] The contradictory evidence produced late in the trial includes an email from Mr. Born to David Thompson and Aaron Kempf at 9:43 AM on October 29, 2015 which provides:
“Any update on the mutual lease conditions for River/Dundas? They expire today. Jon”, to which David Thompson responded “on conf call now”.
[14] Pursuant to the Agreed Statement of Facts there was a teleconference at approximately 9:30 AM on October 29 among Tom Lucas, Barry Fenton, Ryan Fenton, David Thompson and Adam Perzow to discuss the leases. It would appear that this was the conference call referenced by David Thompson in his response above, at paragraph 13. The evidence indicates that Mr. Born was not present on that teleconference and was seeking information from his principals.
[15] A subsequent email from Mr. Born to David Thompson at 12:18 PM on October 29, 2015, after the conference call, provides:
I received a call from Joe Fried. He understands that the clients have settled the terms of the lease but time is needed to paper the agreement. He asked how long we need for an extension to paper the agreed upon terms, which I think is a bit presumptuous. What happened on the call and should I reach out to Tom to discuss an extension or go back to Joe and tell them to waive today on the agreed upon terms?
[16] It would appear, therefore, that at 12:18 PM on October 29, 2015, Mr. Born did not have instructions as regards waiver of the lease conditions and was seeking instructions, which contradicts the earlier handwritten note, on the basis of which the admission was made.
[17] As regards the evidence adduced near the end of the plaintiff’s case, Mr. Born testified as follows: as regards the email which he sent on October 29, 2015 at 9:30 AM, he confirmed on cross-examination that, at that time, he had no instructions on the issue of an extension from the client or from Mr. Thompson.
[18] As regards his email of October 29, 2015 at 12:18 PM to Mr. Thompson, sent shortly after the call with Mr. Fried, he testified that the email would have reflected the material elements of the discussion that occurred minutes before. He agrees that the email indicated that as of 11:00 AM, he did not have instructions on the issue of an extension and that the handwritten note suggested that he did have instructions and was inconsistent with his email to Mr. Thompson. Based on the email, he agreed that Mr. Fried had told him that the clients had settled the terms of the lease and more time was needed to paper the agreement. He further agreed that he had not included this information in his handwritten note and that the handwritten note conveyed the opposite. He conceded that what Mr. Fried had conveyed to him was the opposite of what he had indicated in his note. He further conceded that his note omitted key details of the first telephone conversation. He further conceded that he had no recollection of receiving instructions from Mr. Thompson that morning.
[19] Therefore, the documentation upon which the plaintiff’s admission, contained in the parties’ Agreed Statement of Fact was made is contradicted by other late-produced documentation.
The Law
[20] Rule 51.05 provides as follows:
An admission made in response to a request to admit, a deemed admission under rule 51.03 or an admission in a pleading may be withdrawn on consent or with leave of the court.
[21] In determining whether to grant leave to withdraw an admission, consideration must be had to whether the admission is one of fact, mixed fact and law or pure law, which can be more easily withdrawn than questions of fact. Thereafter, a three-part conjunctive test is applied as follows:
Does the proposed amendment raise a triable issue in respect to the truth of the admission?
Is there a reasonable explanation for the withdrawal, such as inadvertence or wrong instructions?
Has the party wishing to withdraw the admission established that the withdrawal will not result in any prejudice that cannot be compensated for in cost?
[22] Where an admission is made through inadvertence, as opposed to deliberately, the hurdle which a party must cross to withdraw that admission is a low one, absent any obvious prejudice to the other side.
Analysis
[23] In this case, both parties agree that the admission is one of fact.
[24] As regards the first test, I am satisfied that a triable issue is raised in respect of the truth or accuracy of the documentation upon which the admission was based. The truth or accuracy are not, of course, an issue to be determined at this juncture. It is nevertheless apparent that the earlier documentation of the defendants suggested one thing upon which the admission was based, which in light of the late-produced evidence appears to be in contradiction to that late-produced evidence, such that a triable issue is raised.
[25] As regards the second test, I am satisfied that there is a reasonable explanation which was given for the withdrawal, namely the contradiction between the defendant’s evidence on which the admission is based, and the late-produced defendant’s evidence which appears contrary to the earlier evidence. The admission is thrown into doubt based on the late-produced contradictory evidence on that point.
[26] While I understand the defendant’s position to be that there was no demonstrated inadvertence on the part of the plaintiff as regards their admission, as they could have obtained any information necessary from Mr. Fried and did not, I am not persuaded by that argument. The documentary evidence initially produced by the defendant, which was admitted to be authentic, unless otherwise shown in evidence at trial, was such that it would not have raised a red flag that required further investigation by the plaintiff. It was indicated to be prima facie authentic, until the new documentation was produced by the defendant and the plaintiff was able to cross-examine the defence witness on both documents.
[27] As regards the third test, I do not find that the withdrawal of the admission will result in prejudice to the defendant. There remains at paragraph 35 of the Agreed Statement of Facts the second sentence in which there is an admission that there would be no further extensions of the Mutual Lease Condition that was communicated by Mr. Born to Mr. Fried at 12:41 PM.
[28] While the defendant argues that that admission is not helpful because the communication was by email and, while there is no direct evidence that the timestamps are inaccurate, the evidence is that Weir Foulds LLP had trouble that day sending emails until later in the afternoon. I note that there is no evidence and no agreed-upon evidence to indicate that any of the timestamps were incorrect, but only evidence that the internet was not operational. Without evidence, this Court has nothing on which to determine the correctness or incorrectness of the timestamps, nor when the emails may have been sent and received. I do not find this argument to be persuasive.
[29] In conclusion, in all of the circumstances of this case, I find that all parts of the tripartite test for withdrawal of an admission are satisfied and grant leave to withdraw the admission contained in the Agreed Statement of Facts, paragraph 35, the first sentence.
[30] Costs of this motion are to be considered along with the trial costs.
C.J. Brown J.
Date: November 17, 2022