COURT FILE NO.: 31-2117602

DATE: 2022 09 12

SUPERIOR COURT OF JUSTICE – ONTARIO IN BANKRUPTCY

IN THE MATTER OF THE BANKRUPTCY OF ALAN SASKIN

OF THE CITY OF TORONTO, IN THE PROVINCE OF ONTARIO

BEFORE: Associate Justice Ilchenko, Registrar in Bankruptcy

COUNSEL: Fred Tayar (“Tayar”) for the Bankrupt Alan Saskin (the “Bankrupt”); Kenneth Kraft (“Kraft”) for Adv. Guy Gissin, (“Gissin”) in His Capacity as the Israeli

Functionary of Urbancorp Inc. (the “Dentons Creditors”) and for Neil Rabinovitch (“Rabinovitch”) in his capacity as counsel for the Dentons Creditors, and originally the subject of this Motion to compel answers to refusals made at the cross-examination of Rabinovitch held on August 10, 2021 (the “Rabinovitch Examination”);

Bobby Sachdeva (“Sachdeva”) for Toro Aluminum (A Partnership), Speedy Electrical Contractors Ltd., & Dolvin Mechanical Contractors Ltd. (the “Miller Thomson Creditors”) and affiant Kevin Sherkin (“Sherkin”) in his capacity as counsel for the Miller Thomson Creditors, and subject of this Motion to compel answers to refusals made at the cross-examination of Sherkin held on August 10, 2021 (the “Sherkin Examination”);

Mario Forte (“Forte”) for Fuller Landau Inc. the Bankruptcy Trustee of the Bankruptcy Estate of Alan Saskin (the “Trustee”) and filing Report of the Trustee dated September 22, 2021 (the “Trustee’s Report”) at the Court’s request

HEARD: Heard August 25, 2021 (the “August 25 Hearing”) and adjourned, heard for a half day on October 21, 2021 (the “October 21 Hearing”), further 9:30 Case conference on November 15, 2021, further materials in writing on issues raised at October 21, 2021 hearing and October 22, 2021 endorsement to be filed by November 19, 2021, all materials attempted to be refiled by all parties in Caselines in January, 2022, and then through the creation of a Sync.com link by counsel on request of the Court due to elimination of my access to the materials for this Motion on Caselines, for reasons unknown, to the date of these reasons.

E N D O R S E M E N T

I. Overview

[1] On August 6^th, 2021, Associate Justice Jean issued an endorsement scheduling the motion brought by the Bankrupt for the relief set out in his Motion Record dated March 13, 2020 (the “s.163(2) Motion”), requesting an order granting leave under s.163(2) of the Bankruptcy and Insolvency Act (the “BIA”) to examine Rabinovitch, counsel to the Dentons Creditors and Sherkin, counsel to the Miller Thomson Creditors, for the purpose of investigating the administration of the Bankruptcy Estate of the Bankrupt, to be heard by me today, for a half day.

[2] The S.163(2) Motion requesting the relief sought to examine Rabinovitch and Sherkin arises from the circumstances described in the Notice of Motion and in the affidavit sworn by the Bankrupt on February 24, 2020 (the “Bankrupt’s Affidavit”), namely the allegation that Sherkin and Rabinovitch had obtained confidential information about the Bankrupt that the Bankrupt alleges they could only have obtained through unauthorized access to the Bankrupt’s personal email account or through communication with someone who had such access, and that Sherkin and Rabinovitch obtaining that information in this manner, or relying upon information obtained in this manner to influence the administration of the Bankruptcy Estate, would bring the administration of the Bankruptcy Estate and administration of Justice into disrepute.

[3] It goes without saying, that these are serious accusations being made against senior members of the Insolvency and Commercial Litigation Bar, including the implication of possible criminal conduct.

[4] As stated in the Factum of the Bankrupt on this Refusals Motion (the “Bankrupt’s Factum”):

“1. On three occasions in close succession, two lawyers representing creditors in this bankruptcy swiftly obtained knowledge of information possessed by the Bankrupt and very few others.

2. There should have been no way for the lawyers to know what they manifestly knew. One of the lawyers has testified that he gained his information from a client, who gained it from a friend. The circumstances strongly suggest that the information ultimately came from someone with improper access to the bankrupt’s personal email account.

3. Subsection 205(3) of the BIA provides that the Bankruptcy Court may authorize the trustee to initiate proceedings to prosecute a person where there are grounds to believe that an offence may have been committed under any statute, including the Criminal Code.

4. Subsection 205(1) obliges a trustee to report to the Bankruptcy Court if there are grounds to believe that an offence has been committed under any statute. Section 205 illustrates the importance of investigating whether and by whom the Bankrupt’s emails were monitored.”

[5] In the Bankrupt’s Factum the footnote to the statement in paragraph 44 above states:

“31 See, for example, s. 342.1(1) of the Criminal Code which creates an indictable offence where a person intercepts any function of a computer system.”

[6] The full text of s.205(1) and (3) of the BIA is attached at schedule “B” to the Bankrupt’s Factum, and reads:

“Report on offences to be made by trustee

205 (1) Whenever an official receiver or trustee has grounds to believe that an offence under this Act or under any other statute, whether of Canada or a province, has been committed with respect to any bankrupt estate in connection with which he has been acting under this Act, or that for any special reason an investigation should be had in connection with that estate, it is the duty of the official receiver or trustee to report the matter to the court, including in the report a statement of all the facts or circumstances of the case within his knowledge, the names of the witnesses who should in his opinion be examined and a statement respecting the offence or offences believed to have been committed, and to forward a copy of the report forthwith to the Superintendent.

Court may authorize criminal proceedings

(3) Whenever the court is satisfied, on the representation of the Superintendent or any one on his behalf, of the official receiver or trustee or of any creditor, inspector or other interested person, that there is ground to believe that any person is guilty of an offence under this Act or under any other statute, whether of Canada or a province, in connection with the bankrupt, his property or transactions, the court may authorize the trustee to initiate proceedings for the prosecution of that person for that offence.”

[7] The full text of s.342.1 of the Criminal Code is attached at schedule “B” to the Bankrupt’s Factum, and reads:

“Unauthorized use of computer

342.1 (1) Everyone is guilty of an indictable offence and liable to imprisonment for a term of not more than 10 years, or is guilty of an offence punishable on summary conviction who, fraudulently and without colour of right,

(a) obtains, directly or indirectly, any computer service;

(b) by means of an electro-magnetic, acoustic, mechanical or other device, intercepts or causes to be intercepted, directly or indirectly, any function of a computer system;

(c) uses or causes to be used, directly or indirectly, a computer system with intent to commit an offence under paragraph (a) or (b) or under section 430 in relation to computer data or a computer system; or

(d) uses, possesses, traffics in or permits another person to have access to a computer password that would enable a person to commit an offence under paragraph (a), (b) or (c).”

[8] Not in the Bankrupt’s Factum is the definition of “computer data”, “computer service” and “computer system” in s.342(2) of the Criminal Code:

computer data means representations, including signs, signals or symbols, that are in a form suitable for processing in a computer system;

computer service includes data processing and the storage or retrieval of computer data;

computer system means a device that, or a group of interconnected or related devices one or more of which,

(a) contains computer programs or other computer data, and

(b) by means of computer programs,

(i) performs logic and control, and

(ii) may perform any other function;

[9] No police report regarding these alleged offences appears in evidence before me. Tayar confirmed to me at the hearing that the Bankrupt has not filed a police report in relation to these serious allegations.

The Bankruptcy

[10] The Bankrupt filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act (the "BIA") on April 29, 2016 appointing The Fuller Landau Group Inc. as the Proposal Trustee.

[11] On October 27, 2016, a Holding Proposal was filed by the Bankrupt with the Official Receiver. A meeting of creditors to consider the Holding Proposal was adjourned without a fixed date by the creditors, but no vote was ever held. On July 23, 2019 the Bankrupt assigned himself into bankruptcy and the Trustee became the Bankruptcy Trustee of the Bankrupt.

[12] The Bankrupt was the manager of numerous corporations and partnerships which developed condominiums in or about the City of Toronto.

[13] Many of these entities filed notices of intention, and later, obtained a stay of proceedings under the Companies' Creditors Arrangement Act ("CCAA"). KSV Kofman Inc. ("KSV") is the monitor appointed by the Court for many of these corporations or other entities, along with this Trustee. Alvarez & Marsal Inc. was appointed as Court Appointed Receiver of other entities (the “Receiver”).

[14] Counsel for certain of the Miller Thomson Creditors is an inspector of this Bankruptcy Estate, as is Gissin. The Miller Thomson Creditors and the Dentons Creditors have had extensive involvement in the Urbancorp CCAA and Receivership proceedings.

[15] It is also of relevance that prior to the hearing of this Motion, Registrar Jean granted an Order in this Bankruptcy Estate dated December 14th, 2020 under Section 38 of the BIA in favour of Alpa Stairs and Railings Inc. (“Alpa”) (the “S.38 Order”), dealing with reversing certain alleged transactions entered into by the Bankrupt, including relating to the Condominium and the Wine Collection (each as defined below) where the Dentons Creditors and certain of the Miller Thomson Creditors are creditors that have agreed to participate in that S.38 Proceeding.

[16] Previously I have granted an order granting standing to counsel for certain of the Miller Thomson Creditors, as well as for the Dentons Creditors, to make submissions on a motion brought by the Bankrupt to Expunge the claim of Alpa, a motion that will be heard subsequently to the release of these reasons (the “Expungement Motion”). I also denied a motion for Security for Costs brought by Alpa against the Bankrupt in response to this Expungement Motion.

II. Procedural Context Of Refusals Motion

Motion re Refusals served by Bankrupt August 18, 2021

[17] On August 18, 2021 counsel for the Bankrupt served on counsel for the Dentons Creditors, the Miller Thomson Creditors and the Trustee a Motion Record dated August 18, 2021, supported by the same Bankrupt’s Affidavit as supported the S.163(2) Motion, but with a different Notice of Motion (the “Refusals Motion”) requesting different relief than in the original Notice of Motion for the s.163(2) Motion that was originally scheduled for hearing by me on August 25, 2021 by the endorsement of Registrar Jean.

[18] In the Refusals Motion the Bankrupt is requesting, inter alia, an order requiring Sherkin to re-attend before the official examiner to continue his cross-examination on his affidavit sworn August 4, 2021 (the “Sherkin Affidavit”), to compel Sherkin to answer questions 17-19, 59-65, 93-94 and 107-113 of the transcript of the Sherkin Examination (the “Sherkin Transcript”) held on August 10, 2021 that were refused by Sherkin (the “Refused Questions”), or, in the alternative, an order striking out the Sherkin Affidavit.

[19] On August 19^th, 2021 Counsel for the Bankrupt served a Factum in support of the Sherkin Refusals Motion and the S.163(2) Motion (the “Bankrupt’s Factum”). The legal basis for the Sherkin Refusals Motion is a request for a determination by the Court whether the refusals by Sherkin at the Sherkin Examination to provide the names of the client who informed Sherkin about certain transactions allegedly entered into by the Bankrupt, and the name of the friend who gave that information to the client, was protected by solicitor-client privilege, as claimed by Sherkin as the basis for the Refusals, or in the alternative, whether Sherkin had waived privilege.

[20] As part of the Motion Record supporting the Refusals Motion the Bankrupt has attached the Affidavit of Steven Ranger sworn October 28, 2019 (the “Ranger Affidavit”), the Sherkin Affidavit, the Sherkin Transcript, the Affidavit of Neil Rabinovitch sworn March 8, 2021 (the “Rabinovitch Affidavit”), and the transcript of the Rabinovitch Examination (the “Rabinovitch Transcript”).

[21] Counsel for the Miller Thomson Creditors filed a Notice of Contested Adjournment Request to adjourn the Sherkin Refusals Motion dated August 24, 2021 and requested at the August 25 Hearing that the Refusals Motion served on August 18^th, 2021, and the S.163(2) Motion that was scheduled for hearing at the August 25 Hearing, be adjourned and heard concurrently with each other.

[22] Counsel for the Miller Thomson Creditors filed the Sherkin Affidavit, the Sherkin Transcript as well as the Transcript (the “Bankrupt’s Transcript”) of the Cross-Examination of the Bankrupt on the Bankrupt’s Affidavit August 10, 2021 (the “Bankrupt’s Examination”), which had not been filed previously by Counsel for the Bankrupt.

[23] Having been served with the Sherkin Refusals Motion on Thursday August 18th, 2021, and the Bankrupt’s Factum on Friday August 19th, 2021, Counsel for the Miller Thomson Creditors requested more time to prepare responding materials to deal with the issues raised in both the S.163(2) Motion and the Refusals Motion.

[24] Counsel for the Miller Thomson Creditors argued that the relief sought on the Refusals Motion and the Bankrupt’s Factum, being a determination by the Court that the information sought in the questions refused by Sherkin was not protected by solicitor and client privilege or that privilege had been waived by Sherkin, required proper responding materials to be filed by the Miller Thomson Creditors

[25] Counsel for the Miller Thomson Creditors also requested an adjournment of both the S.163(2) Motion and the Refusals Motion to allow the Miller Thomson Creditors to bring a Motion for an Order that the Bankrupt provide Security for Costs (the “Security for Costs Motion”) prior to the hearing of these motions.

[26] Counsel for the Bankrupt opposed these adjournment requests.

[27] I granted the adjournments requested by the Miller Thomson Creditors in my August 27, 2022 endorsement (the “August 27, 2022 Endorsement”), initially ordering that the S.163(2) Motion and the Refusals Motion were to be heard concurrently by me at the same hearing.

[28] Ultimately, the Miller Thomson Creditors chose not to bring the Security for Costs Motion, prior to the hearing of this Motion.

Dismissal of Motion as against Rabinovitch

[29] Counsel for the Dentons Creditors filed on August 20^th a Responding Motion Record dated August 20^th, 2021 containing the Rabinovitch Affidavit and Exhibits thereto, a Factum dated

August 20^th responding to the S.163(2) Motion (the “Dentons Creditors’ Factum”), as well as the Transcript of the Rabinovitch Cross Examination (the “Rabinovitch Transcript”), the Sherkin Transcript and the Transcript (the “Ranger Cross-Examination Transcript”) of the Cross- Examination of Steven Ranger (the “Ranger Cross-Examination”) on the Ranger Affidavit (the “Ranger Affidavit”)(which was also not filed by the Bankrupt in its motion record for the Sherkin Refusals Motion), as well as the transcript (the “Ranger s.163 Transcript”) of the s.163(1) Examination of Ranger under s.163(1) of the BIA (the “Ranger s.163 Examination”) attached as Exhibit “J” to the Rabinovitch Affidavit (collectively, the “Dentons Creditors’ Motion Materials”).

[30] At the August 25 Hearing Counsel for the Dentons Creditors and Counsel for the Bankrupt advised that the relief sought against Rabinovitch was being dismissed on consent, on a without costs basis, and I granted an order in that regard on consent of the Bankrupt, Rabinovitch and the Dentons Creditors.

[31] All Counsel agreed that the Dentons’ Creditors’ Motion Materials would remain in evidence on the motions brought by the Bankrupt, and in particular this Refusals Motion.

Position of the Trustee

[32] Counsel advised that the Trustee was not taking a position on the S.163(2) Motion or the Refusals Motion. I requested that the Trustee provide the Trustee’s Report on the status of:

1. the realization by the Trustee on the assets of the Bankrupt, and in particular the status of the determination of the ownership of the proceeds of sale of the Wine Collection (as defined below) and the apparent s.38 BIA proceeding relating to it; and

2. the Bankrupt’s Application for Discharge and the s.170 and or Supplementary s.170 Report relating to the Discharge of the Bankrupt.

[33] Counsel for the Trustee did appear on the Motion at the October 21 Hearing but chose not to file further materials, and was not required to do so by me.

October 21 Hearing:

[34] For the October 21, 2021 hearing the Miller Thomson Creditors filed the Factum of the Respondent (the “MT Creditors’ Factum”), the Sherkin Affidavit sworn August 3, 2021 and a Brief of Transcripts and & Undertakings from Cross-Examination on Affidavits dated October 4, 2021 (the “Transcript Brief”).

[35] In response the Bankrupt filed a Reply Factum (the “Bankrupt’s Reply Factum”).

[36] The Trustee filed its Report to the Court for this Motion dated September 22, 2021 (the “Trustee’s Report”).

[37] No further cross-examinations or examinations on undertakings took place between the August 25 Hearing and the October 21 Hearing.

[38] The Materials before me at the October 21 Hearing were the Original Saskin Materials, the Bankrupt’s Reply Factum, the Sherkin Factum, the Transcript Brief (which included answers to undertakings produced on the Bankrupt’s Examination, including the CFI Report (as defined below)), the Dentons Creditors’ Motion Materials and the Trustee’s Report.

[39] From the submissions made by Counsel during the hearing, questions that I posed to Counsel, and a request by counsel for the Miller Thomson Creditors to be permitted to provide further materials to respond to certain issues raised in the Bankrupt’s Reply factum, I determined that it would assist the Court to provide the parties with the opportunity to provide further submissions in writing on these issues, particularly given the circumstances of this case where the determination of the issues raised in the Bankrupt’s motions may have serious implications on the parties involved, as well as systemic implications for the administration of Bankruptcy Estates under the BIA.

[40] Accordingly, the hearing was adjourned, and Counsel for the Miller Thomson Creditors and Counsel for the Bankrupt were permitted to provide further submissions in writing on the following issues to assist the Court with its determination of the issues raised in the Bankrupt’s Motions:

1. The duty of good faith under s. 4.2 of the BIA, and related jurisprudence as it relates to the Bankrupt and the Miller Thomson Creditors and as relevant to the issues raised in the Bankrupt’s Motions;

2. The application of the principles of relevance, proportionality and fairness summarized in the decision of Perrell, J. in Ontario v. Rothmans Inc. 2011 CarswellOnt 2916, 2011 ONSC 2504, [2011] O.J. No. 1896, 201 A.C.W.S. (3d) 341, 5 C.P.C. (7th) 112 (and in

particular paragraphs 138 to 164) (“Rothmans”) regarding cross-examinations on affidavits to the relief being sought in the Bankrupt’s Motion;

3. The application of the principles summarized in the decision of Blair, JA. in Re Kaiser (2012) 113 O.R. (3d) 308, 2012 ONCA 838 (“Kaiser”) regarding the circumstances under which information for which the protection of solicitor and client privilege is claimed to prevent disclosure may be compelled to be disclosed to the relief being sought in the Bankrupt’s Motion;

4. The application of the provisions of Rule 3 of the Bankruptcy and Insolvency General Rules to the relief requested by the Bankrupt and the applicability of jurisprudence under the Ontario Rules of Civil Procedure to motions under s.163(2) of the BIA, and in particular, cross-examinations conducted on affidavits filed on motions to obtain leave under s.163(2) of the BIA;

5. The application of the provisions of s.167 of the BIA to the relief requested by the Bankrupt in the Bankrupt’s Motions and the applicability of s.167 of the BIA to motions to obtain leave under s.163(2) of the BIA, where leave has not yet been granted to examine under s.163(2) of the BIA.

[41] Counsel for the Miller Thomson Creditors agreed to serve his written submissions on these issues by November 12^th, 2021 (the “MT Creditors’ Written Submissions”) and counsel for the Bankrupt agreed to serve his written submissions in response by November 19^th , 2021 (the “Bankrupt’s Written Submissions”).

November 15, 2021 Case Conference

[42] At this Case Conference counsel for the Bankrupt wished to clarify whether I was determining just the Motion regarding the answering of the Sherkin refusals, which was his impression, or also whether I was determining the actual s.163(2) leave motion, as well.

[43] Tayar submitted that to hear the Refusals Motion concurrently with the s.163(2) Motion, as ordered in paragraph 16 of my August 21, 2021 Endorsement, would effectively vitiate an opportunity for the Bankrupt to appeal the outcome of the Refusals Motion and prevent the Bankrupt from being able to marshal evidence from any further answers compelled by a possible Order in the Refusals Motion, for use on the s.163(2) Motion.

[44] After hearing the objections to the having the Refusals Motion heard separately from Sachdeva on behalf of the Miller Thomson Creditors, and after hearing the submissions of Forte on behalf of the Trustee, in order to avoid the possibility of prejudicing the Bankrupt’s appellate rights with respect to the Refusals Motion or his ability to marshal evidence for the s.163(2) Motion, I used my discretion to order that I would first determine the Refusals Motions, solely, before the underlying s.163(2) Motion, which I would hear separately.

[45] To determine this Refusals Motion I will utilize the arguments made by the Parties at the ½ day October 21 Hearing, and the further written submissions that I requested that the Parties make on the 5 issues enumerated at paragraph 23 of the October 21 Endorsement, to be determined in the context of the underlying s.163(2) Motion for which the Refusals Motion is brought, or as stated in Mr. Tayar’s letter “…the scope of the questions to be addressed in the Refusals Motion is defined, inter alia, by the underlying s.163(2) Motion / jurisprudence”.

[46] Sherkin appeared as counsel on the initial return of the Refusals Motion at the August 25 Hearing, and at all of the case conferences. Sachdeva appeared with Sherkin at the August 25 Hearing and on behalf of Sherkin at the October 21 Hearing. At the outset of these hearings I advised all counsel that I had worked with Sachdeva at Pallett Valo for a number of years until 2018, and gave all counsel the opportunity to determine whether I should continue to hear this Refusals Motion. Counsel for the Bankrupt and Counsel for the Trustee did not object to me hearing this Motion.

[47] At the August 25 Hearing, I also advised that Rabinovitch and I were both members of Fraser Milner Casgrain LLP for several months in 2007, but had never worked together.

III. Nature Of Specific Relief Sought By Bankrupt

[48] As a result, on this Refusals Motion the Bankrupt is requesting the following specific relief as set out in the Notice of Motion in the Refusals Motion with respect to answering the Refused Questions as recorded in the Sherkin Transcript:

“2. An order requiring Kevin Sherkin (“Sherkin”) to re-attend before the official examiner via video conference, or otherwise, to continue his cross-examination on his affidavit sworn August 4, 2021, and to identify his client and his client’s “friend” who are the source of the Information (hereinbelow defined), which questions he refused to answer at questions 17-19, 59-65, 93-94 and 107-113 of the transcript of his cross-examination.

3. In the alternative, an order striking out the Sherkin affidavit sworn August 4, 2021.”

[49] Sherkin refused to answer the Refused Questions on the basis that the communications with his client or clients was protected by Solicitor and Client Privilege, including the identity of the Client.

[50] I have reproduced, verbatim, the exact question and answer exchanges related to the Refused Questions at the Sherkin Examination at Schedule A to these Reasons, including some subsequent questions and answers for each, so that the exchanges between Tayar and Sherkin are contextually complete. Sherkin represented himself at the Sherkin Examination.

[51] Questions 17-19 and 59-65 relate to the identity of Sherkin’s client that provided information to Sherkin, and the identity of the client’s friend that provided information to the client, relating to an allegation made by Sherkin that a condominium at Suite 1202, 155 Cumberland Avenue, Toronto, Ontario in which the Bankrupt had an alleged interest had been listed for sale (the “Condominium”), as well as relating to an allegation by Sherkin that the Bankrupt was selling a wine collection (the “Wine Collection”) which allegations were made by Sherkin to Kraft and Rabinovitch, and which Kraft and Rabinovitch passed along to Forte, and to counsel for the CCAA Monitor in the restructuring proceedings, and for which Sherkin, Kraft and Rabinovitch all requested information from Tayar on behalf of the Bankrupt.

[52] Questions 93-94 relate to the source of the knowledge of Sherkin relating to the alleged listing for sale of the Condominium.

[53] Questions 107-113 relate to the source of the knowledge of Sherkin relating to an August 12, 2019 Sherkin Email to the Trustee, copied to, inter alia, Forte, Rabinovitch, and Tayar relating to the Wine Collection that is at Exhibit A to the Sherkin Affidavit (the “Exhibit A Email”)

[54] The Trustee has reported in the Trustee’s Report the following with respect to the Condominium, and the Wine Collection:

“18. While the Trustee was attempting to negotiate funding from the creditors to carry out these preliminary requests, the creditors became aware that a wine collection was being auctioned by Waddington's Auctioneers & Appraisers and so advised the Trustee. Mr. Saskin advised the Trustee that the wine was owned by Urbancorp Management Inc. and not him personally. In order to preserve the wine sale proceeds, Mr. Saskin agreed that the Trustee would hold the proceeds of sale. The proceeds of wine totalled

$40,104.35 (the "Wine Proceeds") which are being held in the Estate bank account pending a determination of ownership.

19. Due to the lack of funding in the Estate, Alpa Stairs and Railings Inc. ("Alpa") took steps to obtain the Section 38 Proceedings Order, authorizing Alpa to take proceedings as against the Bankrupt with respect to the Wine Proceeds and other matters including the ownership of the former matrimonial home and various purported transfers at under value, all of which are more particularly identified in the Section 38 Proceedings Order. A copy of the Section 38 Proceedings Order dated December 14, 2020, is attached as Appendix "B"

20. The Trustee understands from Mr. Fred Tayar, counsel to Mr. Saskin that other creditors have chosen to join in the Section 38 proceedings. Counsel in the Section 38 proceedings has not answered the Trustee's request to confirm who has joined in such proceeding.

21. It should be noted that the Section 38 Proceedings Order contains a charging order against the Wine Proceeds in favour of the Trustee and would partially compensate the Trustee for fees, and expenses previously incurred to a maximum of $20,000.

22. The wine transaction as well as the purported sale of a watch collection has given rise to the allegations by Mr. Saskin that improper interference with his computer has provided certain creditors with information (and misinformation in the case of the watch collection) that they could not otherwise have been privy to.

23. The Trustee has no particular knowledge of these allegations, and the evidence of Mr. Rabinovitch accurately sets out the chain of events from the Trustee's perspective which have given rise to the focus on the wine collection and the enquiries into the watch collection.

24. The Trustee has not been able to ascertain a benefit to the estate in the section 163(2) proceedings commenced by Mr. Saskin in the circumstances it is aware of, but others may have a different view.”

[55] To expand on the Trustee’s Report regarding the s.38 Order, the s.38 Order approved the creditors of the Bankrupt, and specifically Alpa, and including certain of the Dentons Creditors and Miller Thomson Creditors who are participating, to commence an Action (the “s.38 Action”) the Statement of Claim for which requests relief that includes:

“(d) a declaration that the bankrupt, Alan Saskin, was the owner of the wine collection prior to same being sold by auction conducted by Waddington's Auctioneers & Appraisers (the "Wine Collection''), and an order that the proceeds from the sale of the Wine Collection be paid to the Plaintiff, subject to the Section 38 Order of Master Jean, dated December 14,

(e) a declaration that Alan Saskin owns an interest in the matrimonial home located at the municipally known address of Suite 4A, 36 Hazelton Avenue, Toronto,

Ontario, and proceeds from the sale of the previous matrimonial home located at Suite 1202, 155 Cumberland Avenue, Toronto, Ontario;”

[56] The “Wine Collection” described above in the s.38 Action is the same Wine Collection at issue on this Refusals Motion. The alleged “previous matrimonial home located at Suite 1202,

155 Cumberland Avenue, Toronto, Ontario” described above in the s.38 Action is the Condominium at issue on this Refusals Motion, that was allegedly sold by the Bankrupt’s wife Doreen Saskin on or about October 11, 2019.

[57] It should be noted that subsequent to the events occurring regarding the communications at issue in this Refusals Motion, a Bankruptcy Order was issued by Chief Justice Morawetz on June 7, 2021 against Urbancorp Management Inc. (“UMI”) mentioned in the Trustee’s Report above, and in the Bankrupt’s Affidavit below, as the alleged seller of the Wine Collection, on the application of KSV Restructuring Inc., in its capacity as Court appointed Monitor of Urbancorp Toronto Management Inc., and KSV Restructuring Inc. was appointed as Trustee in Bankruptcy of UMI (the “UMI Trustee”).

[58] An Application by Doreen Saskin for the appointment of RSM Canada Inc. as Court Appointed Receiver of UMI was stayed by Chief Justice Morawetz pending final completion of a review of Doreen Saskin’s secured claim against UMI by the UMI Trustee.

[59] As a result, the proceeds of sale of the Wine Collection, the information regarding which is an issue on this Refusals Motion, is also subject to a priorities dispute between Doreen Saskin, the UMI Trustee and the Trustee of this Bankruptcy Estate, who was granted a court ordered charge on those proceeds.

IV) Evidentiary Context in which the Motion is Brought

[60] In comparison to most motions for undertakings and refusals, there is a complex factual and evidentiary background to the Refusals Motion that must be set out, to understand the context in which the Refusals Motion was brought by the Bankrupt to compel Sherkin to answer the Refused Questions.

Evidence of the Bankrupt

[61] The Bankrupt filed an Affidavit, sworn February 24, 2020 in support of the Refusals Motion (the “Bankrupt’s Affidavit”) which reads:

" 2. As is detailed below, two lawyers, representing creditors in these and in related CCAA proceedings, have recently obtained confidential, closely-held information about me. For the following reasons, I believe that the only way in which they could have obtained that information was through illegal or unauthorized access to my personal Gmail account, or through communication with someone who had such access.

The Incidents

3. Firstly, in June of 2019 my wife entered into a confidential agreement to sell a condominium she owned at 155 Cumberland Avenue, Toronto. The condominium was not listed for sale on the MLS registry. My wife and the purchaser agreed to non- disclosure agreements respecting the sale. Emails concerning the sale were sent to my gmail account by my wife. Within a few days of the agreements being signed, Kenneth Kraft, ("Kraft") of Dentons Canada, lawyer to certain creditors in this bankruptcy, wrote to Mario Forte, ("Forte"), lawyer to the trustee in what was then my proposal, copying my lawyer Fred Tayar ("Tayar"). In his letter, Kraft said that "the personal residence of Mr. Saskin was recently listed for sale and now is subject to an agreement of purchase and sale for approximately $10 million". Attached hereto and marked as Exhibit "A" is a true copy of Kraft's letter.

4. A few days later, in response to an inquiry from Forte, Kraft wrote Forte, copying Tayar, to say that "[t]he information came from one of Kevin Sherkin's clients". Kevin Sherkin ("Sherkin") is lawyer to certain other creditors in this bankruptcy. True copies of Forte and Kraft's emails are attached hereto as Exhibits "8" and "C".

5. Secondly, in August of 2019, UMI Inc. ("UMI"), a company owned by members of my family, decided to auction a wine collection it owned. On behalf of UMI, I wrote an email to Waddington's, a Toronto auction house, attaching a list of the wines to be auctioned. I intended this to be a confidential communication and did not discuss it with anyone other than my wife, Doreen Saskin, and Stephen Ranger ("Ranger") of Waddington's. Attached and marked as Exhibit "D" is a true copy of the email I sent to Ranger.

6. On August 12, 2019, Devin Hatfield of Waddington's sent me an email enclosing a consignment form and a valuation of the wines. No one else was copied on his email and I did not disclose it to anyone other than my wife. Yet the next day, August 13, 2019, Neil Rabinovitch ("Rabinovitch") of the Denton's law firm, lawyers to certain creditors in this bankruptcy, sent a letter to Ranger of Waddington's asserting that the wine collection had vested in my trustee in bankruptcy. Attached hereto and marked as Exhibit "E" is a true copy of the August 13, 2019 letter from Rabinovitch to Ranger, which was forwarded to me by Ranger.

7. I could not understand how Rabinovitch had become aware of the possible sale when I had told no one other than my wife and Waddington's about it. I was, and remain, confident that neither my wife nor anyone from Waddington's had improperly disclosed this confidential information.

8. At this point I became concerned that my personal email was being accessed. I discussed my concerns with my brother Ted Saskin ("Ted"). We decided that I should send another email to Waddington's, confirming the confidentiality of my discussions with Waddington's and stating that UMI also had a valuable watch collection that it wished to sell. UMI owned no watches: the statement was a fiction designed to see if someone was illegally accessing my email. Attached as Exhibit "F" is a true copy of the email I sent to Waddington's at 2:56 pm on August 13, 2019. This was sent from my personal gmail account to a single person at Waddington's. No one was copied on the email.

9. I have been advised by Tayar that two days later, on August 15, 2019, he received a phone call from Forte, lawyer to my trustee in bankruptcy. Forte told Tayar that he (Forte) had been told by Rabinovitch that I was hiding assets, specifically a wine and watch collection. This is the third instance of counsel to creditors quickly obtaining private information about assets held (or supposedly held) by parties related to me.

Eliminating Other Explanations

10. The three aforementioned incidents convinced me that Sherkin, Rabinovitch or someone connected to one or both of them may be obtaining confidential information from Waddington's or from my gmail account. I have tried to eliminate other explanations for their possession of such private information.

11. Obviously, I have not given Sherkin, Rabinovitch, Forte or any of their clients the right to access my gmail account, or to review any of my personal emails. I have also not given any of them the passwords necessary to access my computer or my gmail account.

12. After being advised by Tayar of Forte's telephone call, I spoke with Ranger of Waddington's, who confirmed that any communications I had with Waddington's were kept strictly confidential. He said that Waddington's would not disclose its communications with clients to third parties unless it was legally required to do so.

13. On October 28, 2019, Ranger swore an affidavit before Waddington's lawyer, David Goodman. Ranger deposed that he and Waddington's did not reveal the existence of the fictitious watch collection until after it had received a summons pursuant to section 163 of the BIA from Rabinovitch on August 22, 2019. A true copy of this affidavit is attached hereto as Exhibit "G".

14. Ted has advised me as follows. He met with Rabinovitch on November 26, 2019. Ted asked Rabinovitch how he had obtained information about the condominium sale, the wine auction and the watch auction. Rabinovitch told Ted that he had received the information about the condominium and the wine from Sherkin, and that he would review his files to determine where he obtained the information concerning the watches.

15. Ted copied me on a number of follow up emails he exchanged with Rabinovitch on this topic. In the second of his emails, Rabinovitch states that he "spoke with Steve Ranger on the 14th at which time he verbally advised me of both the wine and the watches." This statement is contrary to Ranger's affidavit, and is contrary to Rabinovitch' earlier statement to Ted that he (Rabinovitch) learned about the wine from Sherkin. True copies of these emails are attached hereto as Exhibit "H".

16. I believe it is now incumbent upon Sherkin and Rabinovitz [sic] to provide, under oath, an explanation on how they obtained confidential information concerning the sale of my wife's condominium, and the content of my communications with Waddington's."

[62] The Bankrupt was examined by Sherkin on this Affidavit on August 10, 2021 and the Bankrupt’s Transcript of that Examination was also filed on this motion by the Denton’s Creditors.

[63] At the Bankrupt’s Examination, the Bankrupt provided the following evidence relevant to the Refusals Motion:

“9. Q. Did you retain an expert to look through your computer to see if anyone had gained unauthorized access to your e-mails?

A. Yes.

10. Q. And can I have a copy of the report? MR. TAYAR: He didn't say there was a report. BY MR. SHERKIN:

11. Q. Okay. Did you get a report?

A. I don't recall, but I am happy to undertake to check.

12. Q. And who was the expert?

A. Again, I don't recall offhand, but I am happy to undertake to check.

13. Q. And you will agree with me that the report concluded that there was no one who had hacked your e-mail; correct?

A. No, it did not conclude that.

14. Q. Okay, and what did it conclude?

A. I am not a computer expert in any way, but they raised a number of areas where it might have been. They weren't sure. It was inconclusive.”

[64] In answering undertakings given at the Saskin Examination Tayar wrote to Sherkin, Rabinovitch and counsel for the Trustee on August 19, 2021:

“Q. 11 Did Mr. Saskin obtain a report with respect to the examination conducted of his computer? Who was the expert? When did you obtain the report?

A: Mr. Saskin has verified that he did not receive a written report from the firm he retained, Computer Forensics Inc. The examination was conducted on or about October 25, 2019. The expert was unable to conclude there was tampering, nor was he able to conclude that there was no tampering with the computer. There was, however, a program (“Program”) found on Mr. Saskin’s computer that was not known to Mr. Saskin and had not been installed by him, that permitted another computer, anywhere, to see what was shown on Mr. Saskin’s screen at any time. The individual at Computer Forensics Inc. was Mr. Marty Muskers. He was not able to

determine if the Program was live at the time of the examination. Mr. Muskers deleted the Program.”

[65] However, subsequently, the evidence of the Bankrupt changed on the existence of a written report from CFI Computer Forensics Inc., and Tayar again wrote to Sachdeva, Sherkin, Kraft, Rabinovitch, and counsel for the Trustee on September 2, 2021, AFTER the adjournment requested by the Miller Thomson Creditors at the August 25 Hearing was granted by me, stating:

“I am writing to you to follow up on my letter of August 19, 2021 and the answers to undertakings provided by Mr. Saskin arising from his cross-examination on August 10, 2021.

In my letter of August 19, Mr. Saskin had concluded after a search that he had not received a written report from the computer forensics firm whom he retained, Computer Forensics Inc. A further search, however, has revealed that he had in fact received a report, addressed to the undersigned, dated October 30, 2019, together with an invoice dated October 31, 2019 from CFI Computer Forensics Inc. Attached is the report together with the invoice in the total amount of $2,093.33.”

[66] This report put into evidence by the Bankrupt on September 2, 2021 in answer to undertakings given at the Bankrupt’s Examination. The report from CFI Computer Forensics Inc. (“CFI”) dated October 30, 2019 addressed to Tayar (the “CFI Report”) states:

[67] The CFI Report and its findings are very concerning. The Bankrupt’s Affidavit was sworn on February 24, 2020. From its date, the CFI Report was apparently provided or addressed to Tayar by CFI on or about October 30, 2019, being BEFORE the Bankrupt’s brother Ted attended a meeting at Dentons on November 26, 2019 and advised Kraft and Rabinovitch of the Bankrupt’s suspicion that his email was being Monitored, despite the findings of CFI in the CFI Report.

[68] This CFI “Expert Report” was not included as an exhibit to the Bankrupt’s Affidavit, despite being clearly relevant to the accusations being made, and apparently from the date on the CFI Report being in the possession of Tayar and/or the Bankrupt prior to the Bankrupt’s Affidavit being sworn on February 24, 2020.

[69] There is no Affidavit of Matthew or Marty Musters from CFI supporting this “Expert Report”, and they have not been examined by counsel for Sherkin or Rabinovitch on this “Expert Evidence”.

[70] Rabinovitch and Sherkin were not afforded access to the Bankrupt’s iMac, MacBook Air and iPhone to have their own expert opine as to the security issues and hacking alleged by the Bankrupt in the period from October 30, 2019 until the CFI Report was actually produced almost two years later on September 2, 2021, despite the CFI Report being addressed to counsel for the Bankrupt and dated October 30, 2019.

[71] Despite the findings of CFI in the CFI Report on October 30, 2019 the Bankrupt proceeded to swear in the Bankrupt’s Affidavit on February 24, 2020, stating:

“10. The three aforementioned incidents convinced me that Sherkin, Rabinovitch or someone connected to one or both of them may be obtaining confidential information from Waddington's or from my gmail account. I have tried to eliminate other explanations for their possession of such private information.

[72] Despite the findings of CFI in the CFI Report, 6 months after Tayar and/or the Bankrupt apparently received the CFI Report, on April 28, 2020 the Bankrupt served the Motion Record for the s.163(2) Motion, stating in the Notice of Motion:

“3. It appears that the only way that Sherkin and Rabinovitch could have obtained that information was through unauthorized access to the bankrupt's personal email account, or through communication with someone who had such access.”

[73] On the evidence before me, the Bankrupt was not re-examined on the findings of CFI in the CFI Report, after the CFI Report was produced by Tayar on September 2, 2021, in answer to the undertakings given at the Bankrupt’s Examination, almost 2 years after CFI apparently provided the CFI Report to Tayar and/or the Bankrupt.

Evidence of Sherkin

[74] Sherkin filed the responding Sherkin Affidavit, upon which he was cross-examined in the Sherkin Examination, as detailed in the Sherkin Transcript, which stated:

"1. I am counsel to a number of large creditors of Urbancorp Inc. (“UCI”) and of Alan Saskin personally and as such have knowledge of the matters to which I depose, save where stated to be upon information and belief, in which case, I verily believe them to be true.

OVERVIEW

2. I have reviewed the information contained in the Affidavit of Mr. Rabinovitch. We are both Counsel who’s clients have suffered substantial losses from the insolvency of Urbancorp and Alan Saskin.

3. This affidavit is filed in response to a motion by Alan Saskin, a bankrupt, seeking leave to examine myself and Neil Rabinovitch, counsel to another material creditor of Mr. Saskin in respect of his suspicions that his email might have been monitored. .

4. I too am incensed at his allegation and suggest that they are absurd, spurious and completely unfounded. Given the seriousness of the allegations, I too have been compelled to file this responding affidavit. This affidavit is not intended to waive any privilege that exists between myself and my clients and such privilege is expressly maintained and is not waived.

5. I have previously advised Mr Tayar, counsel to Mr. Saskin that the allegations that either me or my clients have intercepted Mr. Saskin’s emails are baseless and misinformed. I have also previously advised Mr. Tayar that I learned of Mr. Saskin’s attempts to sell his wine collection and his condominium from a client. Nonetheless, Mr. Saskin has persisted in bringing this meritless motion.

6. I did learn of the information about the Wine and later the Condominium being sold from a client of mine and informed Mr. Rabinovitch of what I believed was Alan Saskin’s improper conduct on the 12th of August, 2019 by copying him with my email. I did not inform Mr. Rabinovitch which client had provided me the information. Communications between me and my client are privileged. I annex hereto as Exhibit “A” is my email exchange with Mr. Tayar, counsel to Mr. Saskin at the time. His comments were dismissive, flippant and rude about serious conduct of his client at that time. Mr. Rabinovitch initially learned of it when I copied him with my email to Tayar. I had previously learned that the Condo was for Sale and conveyed that information to Mr. Rabinovitch. The information in Mr. Rabinovitch’s Affidavit as to what I told him shortly thereafter is accurate.

7. Mr. Rabinovitch took on the follow up with the Auction House relating to the Wine and later the Watches. I found out later in the month about the Condo which had been for sale was sold and together raised the issue with Mr. Saskin’s trustee in bankruptcy.

8. I am unaware of anyone monitoring any electronic communications of Mr. Saskin. The suggestion that we have obtained information as a result of anyone monitoring his emails is false. Mr. Rabinovitch and I provided this information to Mr. Tayar, before he brought his motion on a number of previous phone calls . I have also previously confirmed to him that I did not and do not have access to Mr. Saskin’s email, nor are am [sic] I aware of anyone else who may. I was not in any way monitoring Mr. Saskin’s communications."

[75] The August 12, 2019 Exhibit A Email from Sherkin to Tayar, Gary Abrahamson for the Trustee, Forte and Robert Drake another counsel for the Trustee, and Rabinovitch reads in its entirety:

“Further to our attendance at the first meeting of Creditors. It has come to my attention that A substantial asset has not been disclosed and must immediately be turned over to

the trustee. Mr. Saskin has a wine collection that Waddington’s has had appraised at

$200,000. I understand that plan was made to perhaps suggest it was Philips ( his son in law) or have it put up by a friend . I want immediate disclosure of the details of same and the appraisal from Waddington’s. I expect same by no later than tomorrow.”

[76] Apart from the specific exchanges at the Sherkin Examination resulting in the Refused Questions, that are the subject matter of this Refusals Motion, which I have excerpted at Schedule “A”, Sherkin provided the following evidence at the Sherkin Examination that that puts the Refused Questions in context:

“13. Q. And Mr. Rabinovitch, during his testimony, said that he learned about this wine collection and about the sale of a condominium unit that is referenced in the material from you. Can you confirm that is correct?

A. I believe so.

14. Q. Do you recall having discussions with Mr....

A. Unless he heard it from somebody else, but I don't assume that's the case, but he...I know that I told him about it, yes.

15. Q. You told him about it, and he didn't tell you that he had already heard about it elsewhere, did he?

A. No.

16. Q. And his testimony, sir, as you heard, was that you had learned this from a client of yours; correct?

A. My affidavit says that, yes.

22. Q. All right. And when you say...in your affidavit, you have interchanged the word "client" with "clients" on occasion, and I want to understand from you if that is a mistake. Like, for example, in paragraph 4 you say that you don't want to waive any privilege between yourself and your clients. In paragraph 5 you say you learned about the wine collection and the client from a client. Are we talking about one particular individual or more than one, sir?

A. In terms of...oh, no, just one.

23. Q. One individual?

A. Yes.

24. Q. Who told you about both the wine collection and the condominium?

A. Yes.

28. Q. All right. So, we have established that there is one client who gave you this information. And is it the case, sir, that this client received the information from another person, a friend of his, as Mr. Rabinovitch had told us this morning?

A. In terms of what?

29. Q. In relation...

A. My information was that the client learned the information from a third party.

30. Q. Sorry, let's just...all right, let's just break it down. We are talking about the fact that Mr. Saskin, or his family, was selling the condominium unit he was living in, you learned that from a client of yours; yes?

A. Yes.

31. Q. When did you learn it?

A. I sent Neil...I think the same day I learned it, I sent Neil an e-mail, and it was in June, I believe, sometime.

32. Q. June 2019; right?

A. Yes. I can double-check the date. Let's see here. I think I told Neil on June 21.

33. Q. And when you told him about the sale of the condo, did you tell him that you learned about it from a client of yours?

A. Well, I think we subsequently spoke, and he asked me how I found out the information. I told him I learned it from a client.

34. Q. And did you tell him, further, that your client learned it from a friend of Mr. Saskin?

A. It may not have been the first time we spoke, but at some point I had told him that.

48. Q. All right. Now, I just want to establish that no one has accused you, Mr. Sherkin, of monitoring Mr. Saskin's accounts; correct?

A. I don't recall. There was just a general suggestion that someone is monitoring the accounts, and that's why there was a motion brought against both Neil and I.

49. Q. Right, and, I take it...

A. Well, otherwise, if no one is suggesting that I am, then what am I involved in?

50. Q. Well, you are involved because we are trying to understand who is the source of this information, because my client believes that the source of the information is the party who may have been involved in monitoring the e-mails.

A. Okay.

51. Q. All right. So, you agree with me, no one has come to you and suggested that you have been hacking into the e-mail account of Mr. Saskin; correct?

A. Me, personally?

52. Q. Correct.

A. No, not me, personally.

53. Q. All right. And no one has suggesting that your client, your unidentified client, was doing the monitoring himself; correct?

A. I don't know.

54. Q. All right. So, in your affidavit, in paragraph 5, you say, and I am quoting you, that: "...The allegations that either me or my clients have intercepted Mr. Saskin's e-mails are baseless and misinformed..." And, you will agree with me, sir, you just testified that no one has ever made that suggestion; correct?

A. I don't know.

59. Q. All right. Now, you say that the allegation of, let's call it, the monitoring of Mr. Saskin's accounts are baseless and misinformed. Now, do you know who the person is who is a friend of Mr. Saskin, who was the source of the information that you conveyed to Mr. Rabinovitch?

A. No.

60. Q. Do you know what that person does for a living?

A. No.

61. Q. Do you know his or her name?

A. I don't. It was told to me, but I don't recall it, at this point.

62. Q. Well, did you take a note of the conversation?

A. No

72. Q. Now, in paragraph 4 of your affidavit you say that you are incensed. Also, you are incensed at Mr. Saskin's allegation. Which particular allegation are you incensed about, sir?

A. Oh, that someone would monitor his e-mails.

73. Q. Why would that make you incensed?

A. Because...why am I being examined? Why is a motion being brought against me to cross-examine me...

74. Q. Is that why you are incensed?

A. ...on some suggestion that I have...I would know of someone digitally monitoring this guy's communications? Nonsense.

148. Q. Do you know if he was, for example, monitoring Mr. Saskin's accounts?

A. When this was raised, I made inquiry, and the answer I received was that, no, absolutely not.

149. Q. And when did you make that inquiry, and of whom?

A. When...I don't recall when this issue was first raised, in terms of the suggestion, but I can't recollect the exact time, at this point.

150. Q. Of whom did you make that request?

A. Of my clients, where there was a suggestion that someone...somebody is monitoring someone's e-mails.

151. Q. Do you mean you called your client and you asked him if he was involved in...

A. I called all my clients.

152. Q. All of your clients? Well, you mean all the clients involved in the Saskin matter?

A. Well, yes, those were the ones I called, yes.

153. Q. Okay, and they all told you they weren't involved in monitoring; correct?

A. Correct.

154. Q. And, can I ask you, why...I am trying to understand the logic behind what drove you to do that. You got one client who told you some information that led to some questions about whether anyone was intercepting Mr. Saskin's e-mails. Why would you go to any client, other than the one who gave you that info?

A. Because there was a suggestion that someone is monitoring this person's...and I am being diligent, and just following up.

155. Q. But you restricted it to the clients on this file?

A. At that point, yes, because who else...why else would someone want to do that?

156. Q. All right. And they each told you that they were not monitoring; correct?

A. Correct, and never have been, either.

157. Q. And the client who conveyed the information to you, initially, about the wine collection, does he know how the information was received from Mr. Saskin's friend?

A. I don't know, and I don't care.

158. Q. Okay, you don't care. So, you wouldn't care, for example, if that person was monitoring Mr. Saskin's e-mails?

A. I don't have control, Mr...I don't have control over what third parties, who aren't my clients, or even if I do, but from my understanding from my client, none of the information was based on that.

159. Q. How does your client know what the source of the information was?

A. Because my client learned the information, and because they...he learned the information by a third party, who is friends with Mr. Saskin.

160. Q. Right, but how does he know that that friend of Mr. Saskin didn't intercept his e- mails?

A. Because my understanding, I think, at some point, was that the person was advised that Alan had told them.

161. Q. Alan had told him. And the name of this friend is who?

A. I don't know.

162. Q. You were told at one time, but you don't recall. That's what your evidence was, earlier.

A. Yes, a long time ago.

163. Q. Long time ago. And I am asking you...

A. It was, at the time, two years ago, or something.

164. Q. And I am asking you to undertake to ask your client to find out, or remind you...

A. No, no, and any communications or discussions I had with my client are an issue of privilege. So, I am not providing that information.

167. Q. You say in paragraph 4 that the allegation of the monitoring of e-mails is absurd and I want to know, how do you know that the allegation is absurd, if you are declining to tell me how the source of the information learned of the interception of the information?

A. Because, I told you, at some point I was told that Alan told this individual orally.

168. Q. And when did you learn that?

A. I don't remember, at this point.

173. Q. And I presume, sir, and I think you have already told me this, the condo and the wine source was the same individual client of yours; correct?

A. Yes.

184. Q. The information in your e-mail is sourced from your client; correct? Sorry, I didn't get that.

A. No, it says it has come to my attention that a substantial asset was not disclosed by your client.

185. Q. And that has come to your attention from that unnamed client; correct?

A. Correct.

186. Q. How did you learn about the watches, sir?

A. I know that...I don't recall if...we learned it at around the same time...I don't know if Waddington's told Neil about it. I think Neil told me that, what's his name, Ranger, had told him about the watches, too, when he made inquiry about the wine.

187. Q. When was that?

A. It was around the same time all this was happening.

188. Q. Can you be specific? The date may be important, Mr. Sherkin.

A. Well, it would...I wrote the e-mail on the 12th, and then we divided up the responsibility, and I don't...I didn't write it down at the time. I didn't think it was all that...you know, that...

189. Q. What responsibility did you take on, sir?

A. Well, I think we were going to try to deal with the house, and Neil was going to deal with Ranger.

234. Q. In paragraph 8 of your affidavit you say that you are not aware of anyone who may have had access to Mr. Saskin's e-mail?

A. Yes.

235. Q. And, do you agree with me, sir, that it's possible that someone did have, at the material time, access to his e-mail, and that's how that information that was revealed, or some of the information that was revealed in your August 12 e- mail, was derived?

A. Are you finished? Is that a question?

236. Q. Yes. Is it possible that that's how...what the source of the information was?

A. I have already told you the basis of my information. So, as far as I am concerned, the information that I...my statement is correct. Whether someone else was monitoring his e- mail, that I can't answer.

Q. It's possible?

A. I don't know what people were doing or not, Mr. Tayar. I can tell you, from the information that I have that my statement is correct.

240. Q. Wonderful. And, in the first sentence, you talk about learning the information about the wine and, later, the condominium being sold from a client of yours, and we have established from your evidence that it's this...you are talking about one client throughout this affidavit, correct,

one person?

A. Yes.

241. Q. And then, at the bottom of that paragraph, you say that you had previously learned that the condo was for sale. Was that information received from the same client, sir?

A. Yes.

242. Q. And when did you learn that the condo was for sale?

A. I don't know if it was learned it was for sale or sold in June, I can't recall which.

243. Q. Well, you must have learned it was sold in June, because there is the e-mails from Mario Forte concerning that.

A. Yes. So, it would have been in June. Whether...I think I learned, at the time, it was...I don't recall, at this point, to be honest.

244. Q. Because you did say you previously learned. So, you affirm in your evidence in the affidavit that you learned that it was for sale before it was sold; correct?

A. Yes, I guess.

245. Q. That's how your affidavit is read...is to be read.

A. Yes.

246. Q. And do I take it, sir, that then there were three conversations between your client 1 and the friend of Mr. Saskin? First, Mr. Saskin divulges that his condo is for sale; is that fair?

A. I don't know where the...I don't know...I didn't...I don't know about...if there was a third conversation or not, to be honest.

247. Q. Well, were there at least two conversations?

A. I don't know how many conversations there were.

248. Q. Okay, so, at the bottom of 6 you say you had previously learned that the condo was for

sale. Was that sometime much earlier than June of 2019?

A. I guess that's correct.

249. Q. Okay, and did your client learn that information from the same friend of Mr. Saskin that he learned that it was eventually sold in June?

A. I don't know.

250. Q. Your client didn't tell you that?

A. No, we didn't get into that.

251. Q. Because I am just trying to understand, here, how many conversations Mr. Saskin had with this individual, and...

A. I don't know.

252. Q.... and first he tells him it's for sale. Do you understand that the fact that it was for

sale was not publicly known? Were you aware of that?

A. I don't know.

253. Q. It wasn't listed; were you aware of that?

A. I don't believe it was listed, I think. I don't recall, though, to be honest. This would have been, like, two years, more than two years, two-and-a-half years ago, so I don't know.

254. Q. And were you aware that there was a non-disclosure agreement when the condo was, in fact, sold?

A. I have no idea.

256. Q. Okay, tell me roughly how much time elapsed between when you learned it was for sale...

A. I don't know.

257. Q.... and when you learned it was sold.

A. I don't know.

258. Q. But you do say that you learned about the wine and, later, about the condo being sold. So, we know that................. we established that you knew about the condo being sold in June

2019; correct?

A. Yes.

259. Q. But, before that, you learned about the wine; and when was that?

A. I learned about the wine on the day that I sent the e-mail, or thereabouts.

260. Q. No, that e-mail was August 12.

A. Yes.

261. Q. So, your affidavit says you learned the information about the wine and, later, the condo

being sold.

A. That may have been a misstatement, in terms of.. because I say, then, later on, that I

learned that it was for sale. So, I don't.. I am pretty sure I learned that it was sold in June,

or maybe it was listed in June. I don't know. I can't recall, at this point. I didn't take notes of it at the time.

262. Q. So, you can't support what you got in paragraph 6 as being correct, then, I take it?

A. Well, no, I can. I know that I sent an e-mail. I know that I had learned it was listed for

sale, and then I said that I had learned that the condo was for sale previously, true, and that was before the 12th.

263. Q. Of August? No, we are talking.. the condo, you learned about it being for sale

before June?

A. Correct. I am talking about that it was listed for sale, that's what it said.

264. Q. That was sometime before June of that year?

A. Yes, I would guess, yes, but I don't have notes of it.

265. Q. All right. And, consistent with paragraph 6, in paragraph 7 you say that you found out later in the month about the condo. This is after the wine issue has arisen. So, you are saying, in 7, that you learned about the condo sometime in August, or later than that; do you see that?

A. Yes.

267. Q. So, do you stand by your statement in paragraph 7 that you found out later in the month about the condo?

A. I would have to see what I can find online, in my e-mails, to, kind of, better deal with the timeline.

268. Q. So, at the moment, you are unable to say, one way or another?

A. I would have to double-check.”

[77] To be completely clear, when Tayar is questioning Sherkin above, about the nature of the specific allegations being made against Sherkin and Rabinovitch by Saskin in the Notice of Motion, in the initial Notice of Motion for the s.163(2) Motion originally returnable April 28, 2020 that Tayar and Sherkin are discussing, the specific allegations made by the Bankrupt against Sherkin and Rabinovitch state:

“1. Sherkin and Rabinovitch are lawyers to different alleged creditors in the within bankruptcy.

2. Sherkin and Rabinovitch have each recently obtained confidential, closely-held information about the Bankrupt.

3. It appears that the only way that Sherkin and Rabinovitch could have obtained that information was through unauthorized access to the bankrupt's personal email account, or through communication with someone who had such access.

4. Sherkin and Rabinovitch have used the information obtained to assert that the bankrupt has hidden assets from his trustee in bankruptcy.

5. The bankrupt has not done so.

6. Sherkin and Rabinovitch should be examined under oath in order to determine how they obtained the confidential information.

7. The Bankrupt uses his private email address to address the administration of the estate, and to communicate with the trustee in bankruptcy and with his lawyer.

8. If Sherkin and Rabinovitch obtain information with its source in the Bankrupt's private email, and rely upon that information to influence the administration of the bankruptcy estate, then that estate, and the administration of justice generally, has been brought into disrepute.”

Evidence of Rabinovitch

[78] As noted above, Rabinovitch played a key role in the factual dispute that brought about the Refusals Motion, and despite the Bankrupt discontinuing the s.163(2) Motion against Rabinovitch, his evidence remains relevant to the issues to be determined on this Refusals Motion and to provide the factual context for the issues.

[79] The Rabinovitch Affidavit, referred to in the Sherkin Affidavit, and filed into evidence by Saskin at Tab 4 of the Motion Record for the Refusals Motion, states as follows:

"1. I am counsel to Guy Gissin, Israeli court appointed Functionary Officer and Foreign Representative (the “Functionary”) of Urbancorp Inc. (“UCI”). As such have knowledge of the matters to which I depose, save where stated to be upon information and belief, in which case I verily believe them to be true.

2. At the outset, I confirm that this affidavit is not intended to waive any legal privilege to which the Functionary is entitled and such privilege is expressly maintained and is not waived.

OVERVIEW

3. UCI is a material creditor in the bankruptcy of Alan Saskin.

4. This affidavit is filed to respond to a motion Mr. Saskin, seeking leave to examine me and Kevin Sherkin, counsel to other material creditors of Mr. Saskin. The premise underlying his motion, are Mr. Saskin’s suspicions that his email might have been monitored. Specifically, ha [sic] has alleged that the only way counsel could have discovered the sale of his matrimonial home and wine collection, as well as a phantom watch collection, is by having somehow monitored his email.

5. This allegation is not true. However, given the seriousness of the allegations, I have been compelled to file this responding affidavit. As set out below, I learned about the sale of Mr. Saskin’s matrimonial home and wine collection from Mr. Sherkin. He advised me that found out about it from a client.

6. Further, I learned of the purported sale of the phantom watch collection from Stephen Ranger. He was the Vice-President of Waddington’s Auctioneers and Appraisers (“Waddingtons”), the company that auctioned off Mr. Saskin’s wine collection.

7. I provided this information to Fred Tayar, counsel for Mr. Saskin, before he brought his motion. I have also previously confirmed to him that I did not and do not have access to Mr. Saskin’s email, nor are am I aware of anyone else who may. I was not in any way monitoring Mr. Saskin’s communications. Nonetheless, Mr. Saskin has persisted in bringing this motion

THE CONDOMINIUM

8. In late June 2019, Mr. Sherkin told me that Doreen Saskin had listed their matrimonial home for sale. Until then, I had been unaware of this. Mr. Sherkin advised me this information had come from one of his clients - he did not tell me who specifically.

9. I discussed this information with my partner Ken Kraft who then wrote to counsel for Mr. Saskin’s trustee, noting that Mr. Saskin had previously provided statements of net worth claiming he owned 50% of the matrimonial home, and requesting that the trustee seek to recover Mr. Saskin’s share of any proceeds of sale. Mr. Kraft’s letter dated June 27, 2019, a copy of is attached as Exhibit “A”, was copied to counsel for Mr. Saskin.

10. By email dated June 28, 2019, a copy of which is attached as Exhibit “B”, Mr. Kraft advised counsel for the trustee, with a copy to counsel for Mr. Saskin, that the information relating to the listing of the condominium had come from one of Mr. Sherkin’s clients.

THE WINE COLLECTION AND THE PHANTOM WATCH COLLECTION

11. On or about August 12, 2019, I received a call from Kevin Sherkin advising that he had been told by one of his clients that Alan Saskin owned a wine collection that Waddingtons appraised at approximately $200,000. Mr. Sherkin further advised me that Mr. Saskin intended to claim that his son-in-law, Phillip Gales, owned the wine collection. Mr. Sherkin did not identify the name of his client.

12. Mr. Sherkin sent an email dated August 12, 2019 to Mr. Tayar, advising that the wine collection was required to be turned over to the trustee. In addition, Mr. Sherkin requested a copy of Waddingtons’ appraisal. The email was copied to the trustee, and its counsel. A copy of Mr. Sherkin’s August 12, 2019 email is attached as Exhibit “C”.

13. Prior to Mr. Sherkin advising me of the existence of the wine collection, I had no knowledge that Mr. Saskin owned a wine collection.

14. By email dated August 12, 2019, Mr. Tayar responded to Mr. Sherkin that he would “drop everything I am doing and get on it just for you”. A copy of Mr. Tayar’s August 12, 2019 email is attached as Exhibit “D”.

15. By email dated August 12, 2019, Mr. Sherkin advised Mr. Tayar (copied to the trustee, its counsel and me) that it was potentially a criminal offence if the information was correct and that it should be turned over to the RCMP. A copy of Mr. Sherkin’s August 12, 2019 email is attached as Exhibit “E”.

16. In response to the information received by Mr. Sherkin, the trustee authorized me to send a letter on behalf of the trustee to Mr. Ranger to advise Waddingtons that all property of Mr. Saskin vested in the trustee, requesting a copy of any wine appraisals, and asking whether Waddingtons had appraised any other property of Mr. Saskin. A copy of my August 13, 2019 letter to Waddington’s is attached as Exhibit “F”.

17. On August 14, 2019, I had a telephone call with Mr. Ranger. During the call Mr. Ranger advised me that Waddingtons had been asked to appraise a wine collection of Mr. Saskin and that it had been appraised at approximately $70,000. Mr. Ranger further advised me that Mr. Saskin had consigned the wine collection to Waddingtons’ November wine auction. Mr. Ranger further advised me that Mr. Saskin had advised by email that he had a watch collection worth approximately $250,000 that he was considering consigning for sale. This was the first time I had heard of any watch collection.

18. By email dated August 14, 2019, I asked Mr. Ranger to provide copies of any correspondence between Waddingtons and Mr. Saskin. A copy of the August 14, 2019 email is attached as Exhibit “G”.

19. On August 15, 2019, I had another telephone call with Mr. Ranger. On that call Mr. Ranger reviewed with me the exchanges of emails he had with Mr. Saskin. In response to my question as to whether he was aware of any other assets of Mr. Saskin, Mr. Ranger again stated that Mr. Saskin had advised him by email that he had a watch collection worth approximately $250,000 which Mr. Saskin would consider consigning for sale with Waddingtons if the wine auction was successful. I asked Mr. Ranger if he had any details of the watches. He stated that Mr. Saskin had not provided any details.

20. I advised Mario Forte, counsel for the trustee, of my discussions with Mr. Ranger and that Mr. Ranger had advised me that Mr. Saskin had advised that he had a valuable watch collection. Mr. Forte advised me that he would immediately contact Mr. Tayar, telling him that the watches needed to be delivered to the trustee. Mr. Forte informed me that he called Mr. Tayar and so advised him.

21. At this point, I had not received any of the documents or emails that I had requested from Waddingtons.

22. On August 20, 2019, I sent Mr. Ranger a Notice of Examination by email returnable August 23, 2019, and requested that he provide the documents and emails in advance of the examination as it would expedite his examination. A copy of the August 20, 2019 email and notice of examination are collectively attached as Exhibit “H”.

23. On August 22, 2019, Mr. Ranger emailed me copies of the documents and emails with Mr. Saskin relating to both the wine collection and the watch collection. A copy of Mr. Ranger’s August 22, 2019 email, with attached documents and emails, is marked as Exhibit “I”. This was the first time that I had seen any documents between Mr. Saskin and Waddingtons relating to either the wine or watches.

24. On August 23, 2019, I examined Mr. Ranger in respect of his dealings with Mr. Saskin and in particular relating to the wine collection and the watch collection. A copy of the transcript of examination is attached as Exhibit “J”.

25. On August 28, 2019, Robin Schwill, counsel for KSV Kofman, the court appointed Monitor in CCAA proceedings relating to various Alan Saskin-controlled companies, wrote to Waddingtons advising that the Monitor may have an interest in the wine and watches to the extent that corporate funds were used to purchase them. A copy of Mr. Schwill’s August 28, 2019 letter is attached as Exhibit “K”.

26. Counsel for Waddingtons responded to Mr. Schwill by letter dated August 30, 2019, advising that Waddingtons did not have any wine consigned to it by Mr. Saskin or any related party and that it had no watch collection consigned to it. A copy of Mr. Goodman’s letter to Mr. Schwill is attached as Exhibit “L”.

27. By letter dated September 10, 2019, counsel for Waddingtons advised that it had received the wine collection for auction and proposed to auction it off and retain the proceeds pending a determination of ownership. A copy of the September 10, 2019 letter is attached as Exhibit “M”.

28. By email dated September 25, 2019, I wrote to Messrs. Tayar and Andrew Winton (counsel to Mr. Saskin’s wife and a family company) on behalf of the trustee requiring production of any details of the watch collection, delivery of the watch collection to the trustee and confirmation that no watches would be sold pending a determination of ownership. A copy of my September 25, 2019 email is attached as Exhibit “N”.

29. In late November 2019, Ted Saskin (Alan Saskin’s brother) and Mr. Tayar attended at Dentons asking to meet with my partner Ken Kraft and me. At that meeting they expressed concern that Mr. Saskin’s email was possibly being monitored or intercepted. Specifically, they advised that Mr. Saskin had no watch collection and that they wanted to know how we became aware that Mr. and Mrs. Sasin [sic] were in the process of selling their condominium and how we became aware of the wine and the watches.

30. I advised that we had learned about the Saskins selling their condominium from Mr. Sherkin. Similarly, I confirmed that we had learned about the wine collection from Mr. Sherkin as well (as reflected in his email to Mr. Tayar of August 12, 2019). I further advised that the information about the watches initially came from Mr. Ranger on a telephone call prior to Mr. Ranger actually providing the documents referencing the watch collection. Mr. Kraft confirmed at the meeting that he had no independent knowledge.

31. We made it very clear that we did not receive any documents between Mr. Saskin and Waddingtons until they were produced by Mr. Ranger on August 22, 2019. Further, we made it clear that neither we, nor our clients, were monitoring Mr. Saskin’s communications.

32. By email dated December 19, 2019, I confirmed to Ted Saskin that our knowledge regarding the watches came from Waddingtons and reaffirmed that we did not have access to Mr. Saskin’s phone or emails, nor were we aware of anyone who may have. A copy of the December 19, 2019 email is attached as Exhibit “O”.

33. On December 20, 2019, I again wrote to Ted Saskin confirming that Mr. Ranger had advised me of the wine and watches on August 14, 2019, and again reaffirming that we did not have any access to Mr. Saskin’s phone or emails. A copy of the December 20, 2019 email is attached as Exhibit “P”.

34. In summary, I am unaware of anyone monitoring any electronic communications of Mr. Saskin. The suggestion that we have obtained information as a result of anyone monitoring his emails is false."

[80] Rabinovitch was examined by Tayar at the Rabinovitch Examination and answered undertakings given at that examination on August 19, 2021, confirming that he did not have notes of the conversations with Sherkin related to the Condominium and the Watch Collection, and did not have notes of his conversation with Ranger.

[81] Ranger had been examined by Rabinovitch, on behalf of the Trustee under s.163(1) of the BIA on August 23, 2019 at the Ranger s.163 Examination. The Ranger s.163 Transcript was entered into evidence by Rabinovitch as Exhibit “J” to the Rabinovitch Affidavit.

[82] After providing testimony at the Ranger s.163 Examination, Ranger also swore the Ranger Affidavit on October 28, 2019 which is at Tab 3 to the Motion Record of the Bankrupt on this Refusals Motion, in which Ranger states:

"1. I am a Vice-President of Waddington's Auctioneers and Appraisers ("Waddington"), a Toronto based auction house, and as such I have personal knowledge of the matters to which I depose. Where the source of my information is other than my own personal knowledge, I have identified the source of that information and verily believe it to be true.

2. On August 2, 2019, I received an email from Alan Saskin, on behalf of UMI inc ., enclosing a list of wines for consignment. Attached hereto and marked as Exhibit "A" is a true copy of the email I received from Alan Saskin dated August 2, 2019.

3. I asked Devin Hatfield, a Client Services Manager at Waddington, to prepare a valuation and send it to Mr. Saskin. Attached hereto and marked as Exhibit "B" is a true copy of the email dated August 12, 2019 from Devin Hatfield, on which I was copied, enclosing a draft valuation.

4. On August 13, 2019, Mr. Saskin, on behalf of UMI Inc ., wrote a further email to Waddington underlining the importance of confidentiality and indicating UMI also had a valuable watch collection, worth perhaps $250,000, which it might be interested in consigning for auction. Attached hereto and marked as Exhibit "C" is a true copy of the August 13, 2019 email from Mr. Saskin.

5. On August 13, 2019 I was copied on an email reply from Devin Hatfield to Mr. Saskin which replied to the Exhibit C email from earlier that day and assured Mr. Saskin that every Waddington client receives the utmost care with regards to anonymity. Attached hereto and marked as Exhibit "D" is a true copy of the August 13 ,2019 email from Waddington to Mr. Saskin. Our strict policy at Waddington's is not to disclose any information about who is consigning goods for auction without their express approval to do so. I have made internal inquiries of all people (Devon Hatfield and Joann Maplesden) at Waddington who had seen Exhibits A, B and C and can confirm that as of August 14, 2019 no one at Waddington had mentioned the possible wine or watch consignment by Mr. Saskin, on behalf of UMI Inc ., to anyone outside of Waddington.

6. When I received by email a letter dated August 13, 2019 from Neil Rabinovitch suggesting he was aware that Waddington had been engaged by Mr. Saskin to appraise a collection of wine, I believed that Mr. Saskin had revealed that information to Mr. Rabinovich [sic]. Attached hereto and marked as Exhibit "E" is a true copy of the letter received from Mr. Rabinovitch.

7. On August 14, 2019 I emailed a copy of Mr. Rabinovitch's letter to Mr. Saskin, a copy of which is attached hereto as Exhibit "F". In the phone conversation I had with Mr. Saskin on the afternoon of August 14th, I again assured Mr. Saskin of the fact that no one at Waddington had mentioned his possible consignment of wine or watches to anyone outside of Waddington.

8. On August 20, 2019 I received a Notice of Examination to attend and be examined by the Denton's law firm. I sent a copy of this Notice of Examination with an email dated August 22, 2019 to Mr. Saskin indicating that I would attend the examination and that I must comply with their request for information. Attached hereto and marked as Exhibit "G" is a true copy of the email I sent with the enclosed Notice of Examination.

9. In compliance with the Notice of Examination, with my approval, on August 21, 2019 I sent Mr. Rabinovitch copies of all our emails with Mr. Saskin between August 2 and August 14, 2019, discussing the possible consignment of wines and watches. Prior to then we had never provided any information about the possible consignment of any wine or watches by Mr. Saskin to Mr. Rabinovitch or anyone other than Waddington employees."

[83] Because of the seriousness of the accusations made by the Bankrupt against Sherkin (and initially against Rabinovitch before being withdrawn) the specific sequence and content of the correspondence regarding the Condominium, the Wine Collection and the non-existent “Watch Collection”, which the Bankrupt states he provided information about to Ranger in an email to

test if his email was being monitored, but never actually existed (the “Watch Collection”), is important.

[84] The letter from Kraft to Forte, copied to Tayar, Sherkin and Rabinovitch et. al. dated June 27, 2019, regarding the Condominium only (Exhibit “A” to the Bankrupt’s Affidavit, Exhibit “A” to the Rabinovitch Affidavit) states:

“We write in your capacity as counsel to The Fuller Landau Group Inc., as proposal trustee ("Trustee") in Alan Saskin's proposal proceeding. Apparently, the personal residence of Mr. Saskin was recently listed for sale and now is subject to an agreement of purchase and sale for approximately $10 million. As the Trustee is aware, at the recently conducted cross-examination of Mr. Saskin, documentation was provided wherein Mr. Saskin had represented to various parties that he had a 50% interest in the residence. Additionally, documentation was also provided evidencing that Urbancorp paid for certain renovations to the condominium. We believe that it is incumbent on the Trustee to take immediate steps to ensure that at least 50% of the net sale proceeds are set aside pending determination as to who actually owns the condominium, notwithstanding that title is nominally registered solely in the name of Doreen Saskin.

We do not know when this transaction will close. However, along with Mr. Sherkin's clients, we believe that the Trustee should take action to protect the interests of Mr. Saskin's creditors. Please confirm what the Trustee intends to do in this regard forthwith.”

[85] In response to Forte requesting further information and the identity of the source of this information contained in the June 27, 2019 letter, above, Kraft responds:

“Mario

The information came from one of Kevin Sherkin's clients. We also understand that there may have been no listing of the property.

We also note that the timing (assuming the information is accurate) follows shortly after an adverse Israeli appellate court decision against Doreen's challenge to jurisdiction with respect to the lawsuit Guy commenced against her and Alan (and numerous other parties) in relation to the prospectus.”

[86] The email from the Bankrupt to Ranger dated August 2, 2019, regarding the Wine Collection (at Exhibit “D” to the Bankrupt’s Affidavit and Exhibit “A” to the Ranger Affidavit) reads:

“From: Alan Saskin alansaskin@gmail.com Date: Fri, Aug 2, 2019 at 12:14 PM

Subject: wine consignment To: skr@waddingtons.ca

Hi Stephen, My company would like to consign the attached wines to Waddingtons. There are just over 200 bottles. The provenance is about 90% were bought from Waddingtons at auction over the years and some from the company that ran the auction prior to Waddingtons. Perhaps 10% were bought in the USA. They've all been stored in a temperature and humidity controlled wine cellar since purchase.

Let me know how to proceed next. Thanks Alan Saskin UMI Inc.”

[87] The August 12, 2019 Sherkin Email to the Trustee, copied to, inter alia, Forte, Rabinovitch, and Tayar, regarding the wine collection only, which is the subject matter of Questions 107-113 of the Refused Questions, reads:

“Further to our attendance at the first meeting of Creditors. It has come to my attention that A substantial asset has not been disclosed and must immediately be turned over to the trustee. Mr. Saskin has a wine collection that Waddington’s has had appraised at $200,000. I understand that plan was made to perhaps suggest it was Philips( his son in law) or have it put up by a friend . I want immediate disclosure of the details of same and the appraisal from Waddington’s. I expect same by no later than tomorrow.”

[88] The email from Saskin to Devin Hatfield (“Hatfield”) at Waddingtons dated August 13, 2019 (exhibit C to the Ranger Affidavit and Exhibit F to the Bankrupt’s Affidavit)(the “Watch Collection Email”), reads:

“Alan Saskin alansaskin@gmall.com to dh

Tue, Aug 13, 2:56 PM

Please note that a company , UMI inc. , owns the wine and I am the signing officer for that company. Please address future correspondence to UMI.

The enclosed pictures should answer the questions. The other " without value' wines will be removed

On a more delicate note, I expected all of UMl's dealings with waddington to be confidential. Please confirm this. UMl's name and mine expect confidentiality.

Umi also has a valuable watch collection, perhaps $250,000.

If the wine sale goes smoothly and confidentially, we can start discussions on that.

Thanks Alan Saskin UMI inc.”

[89] The letter from Rabinovitch to Ranger, regarding the Wine Collection only, dated August 13, 2019 (Exhibit “E” to the Ranger Affidavit, Exhibit “E” to the Bankrupt’s Affidavit, and Exhibit “F” to the Rabinovitch Affidavit) reads, in its entirety:

“We are counsel to The Fuller Landau Group Ltd. in its capacity as trustee in bankruptcy of Alan Saskin (the "Trustee"). The Trustee understands that Waddington's was recently engaged by Mr. Saskin to appraise a collection of fine wine. Pursuant to section 71 of the Bankruptcy and Insolvency Act (Canada) ("BIA"), all property of Mr. Saskin, Including any wine, has vested in the Trustee. The Trustee requests that you provide a copy of the appraisal. If Waddington's has appraised any other assets for Mr. Saskin we would appreciate receiving copies of such appraisals as well.

We further note that you have an upcoming auction of fine wine. Please advise us whether Mr. Saskin has consigned any wines for that auction. Mr. Saskin can no longer provide instruction to you with respect to the sale of such wine or any other assets. Such authority rests exclusively with the Trustee and any action to the contrary or failure to provide the requested information could constitute an offence under the BIA. We appreciate your prompt response.”

[90] Following the conversation between Rabinovitch and Ranger, Rabinovitch wrote to Ranger on August 14 stating:

“Further to my letter of this morning, on behalf of the Trustee, we would also request that you provide copies of any correspondence between Waddington’s and Mr. Saskin. We appreciate your prompt attention to this matter.”

[91] On August 22, 2019 Ranger provided Rabinovitch with emails he had with Saskin, a day prior to being examined by Rabinovitch at the Ranger s.163 Examination on August 23, 2019. The actual emails provided by Ranger to Rabinovitch on August 22, 2019 include the above August 13, 2019 Watch Collection Email from the Bankrupt, regarding the Wine Collection and the “Watch Collection”.

[92] At the Ranger s.163(1) Examination on August 23^rd 2019 Ranger testified with respect to the “Watch Collection”:

“75. Q. Okay. Then Mr. Saskin goes on to say on a more delicate note:

"...I expect all of UMI dealings with Waddington's to be confidential. Please confirm this. UMI’s name and mine expect confidentiality..."

And he further goes on to say:

"...UMI also has a valuable watch collection, perhaps $250,000..."

Did Mr. Saskin give you any further particulars on this watch collection?

A. No.

76. Q. At any point in your discussions with Mr. Saskin, did he give you any details of the watches that he was potentially interested in consigning?

A. No.”

[93] On August 25, 2019 Rabinovitch wrote to Tayar and Andrew Winton, counsel for certain of the Urbancorp debtor companies and Doreen Saskin in the Restructuring proceedings (“Winton”) with respect to the “Phantom Watch Collection” stating:

“Dear Messrs Tayar and Winton,

We are counsel to Fuller Landau, in its capacity as trustee in bankruptcy of Alan Saskin. Further to my call with Mr. Winton of yesterday, I confirm that in the course of investigating Mr. Saskin’s proposed consignment of wine to Waddington’s, we were provided with an email from Mr. Saskin (a copy of which was provided to Mr. Winton yesterday) which claims that he may be looking to consign for sale approximately $250,000 in watches, which he alleges are owned by Urbancorp Management Inc (“UMI”). The trustee hereby requests a complete inventory of the watches and to the extent that they are the property of Mr. Saskin, requires them to be delivered up forthwith. In the event Mr. Saskin, or any other party intends to asset they are the property of UMI, we require production of purchase documentation (including any warranty cards), evidencing such, as well as the contemporaneous accounting books and records of UMI evidencing the transactions. Further, while this matter is pending, we require confirmation that the watches will not be transferred or sold and that to the extent that Mr. Saskin or UMI intends to sell the watches, the proceeds of sale will be held in trust pending a determination of ownership.”

[94] In the Rabinovitch Transcript, Rabinovitch is adamant and consistent in his testimony that he found out about the Condominium from Sherkin, and that Sherkin advised Rabinovitch that he was provided that information by a client, whose identity Rabinovitch did not know.

[95] Similarly, with respect to the Wine Collection Rabinovitch is adamant and consistent in his testimony that he found out about the Wine Collection from Sherkin, and that Sherkin advised Rabinovitch that he was provided that information by a client, whose identity Rabinovitch did not know.

[96] With respect to the Watch Collection Rabinovitch is adamant and consistent in his testimony that he found out about (as he terms it) the “Phantom Watch Collection” from Ranger in a telephone call on August 14, 2022, then followed up on that information after he received on August 22, 2019 from Ranger the emails from the Bankrupt that he requested on August 13, 2019, prior to examining Ranger on August 23, 2019 at the Ranger s.163(1) Examination.

[97] Rabinovitch is adamant and consistent in his testimony that he had not seen the August 13, 2019 Watch Collection Email from the Bankrupt to Ranger prior to Ranger sending him on August 22, 2019 that email, along with other emails received by Ranger from the Bankrupt.

[98] Ranger in the Ranger Affidavit sworn on October 28, 2019 states:

“9. In compliance with the Notice of Examination, with my approval, on August 21, 2019 I sent Mr. Rabinovitch copies of all our emails with Mr. Saskin between August 2 and August 14, 2019, discussing the possible consignment of wines and watches. Prior to then we had never provided any information about the possible consignment of any wine or watches by Mr. Saskin to Mr. Rabinovitch or anyone other than Waddington employees.”

[99] Regarding the Watch Collection, in the Rabinovitch Affidavit sworn March 8, 2021, in response to the Bankrupt’s Affidavit and the Ranger Affidavit, Rabinovitch states:

“6. Further, I learned of the purported sale of the phantom watch collection from Stephen Ranger. He was the Vice-President of Waddington’s Auctioneers and Appraisers (“Waddingtons”), the company that auctioned off Mr. Saskin’s wine collection.

7. I provided this information to Fred Tayar, counsel for Mr. Saskin, before he brought his motion. I have also previously confirmed to him that I did not and do not have access to Mr. Saskin’s email, nor are am I aware of anyone else who may. I was not in any way monitoring Mr. Saskin’s communications. Nonetheless, Mr. Saskin has persisted in bringing this motion.

8. On August 14, 2019, I had a telephone call with Mr. Ranger. During the call Mr. Ranger advised me that Waddingtons had been asked to appraise a wine collection of Mr. Saskin and that it had been appraised at approximately $70,000. Mr. Ranger further advised me that Mr. Saskin had consigned the wine collection to Waddingtons’ November wine auction. Mr. Ranger further advised me that Mr. Saskin had advised by email that he had a watch collection worth approximately $250,000 that he was considering consigning for sale. This was the first time I had heard of any watch collection.

9. On August 15, 2019, I had another telephone call with Mr. Ranger. On that call Mr. Ranger reviewed with me the exchanges of emails he had with Mr. Saskin. In response to my question as to whether he was aware of any other assets of Mr. Saskin, Mr. Ranger again stated that Mr. Saskin had advised him by email that he had a watch collection worth approximately $250,000 which Mr. Saskin would consider consigning for sale with Waddingtons if the wine auction was successful. I asked Mr. Ranger if he had any details of the watches. He stated that Mr. Saskin had not provided any details.

10. By email dated December 19, 2019, I confirmed to Ted Saskin that our knowledge regarding the watches came from Waddingtons and reaffirmed that we did not have access to Mr. Saskin’s phone or emails, nor were we aware of anyone who may have. A copy of the December 19, 2019 email is attached as Exhibit “O”.”

[100] Rabinovitch was examined by Tayar at the Rabinovitch Examination and provided the following answers in relation to the Watch Collection, and states the following in his evidence regarding his contradictory evidence with Ranger on the issue of from whom, and when, Rabinovitch learned of the Watch Collection:

“155. Q. Sorry, I am talking about the watch collection.

A. What he did tell me, in terms of the watch collection, when I examined him, is that he was advised of it by Mr. Saskin, in an e-mail that Mr. Saskin sent to him. If memory serves me right, I'd actually have to look at it, but I think it was somewhere on August 12th or 13th.

156. Q. Let me just go back to the watch collection and your conversation, sir.

A. Sure.

157. Q. Okay. Ranger says that what you said about the watch collection is not true, that he did not discuss that with you in a telephone call. Is it possible that your memory is just simply mistaken about what he conveyed to you in your telephone conference before you examined him?

A. No, I think Mr. Ranger is 100 percent categorically wrong. And let me, perhaps, help with the chronology a little bit, Mr. Tayar. In paragraph 16, I refer to my August 13th letter, asking for the wine appraisals. That letter, just so you know...and we didn't produce, I don't think, the facsimile, or the e-mail transmittal...was sent at 9:41 on August 14, so, the following morning.

In paragraph 17, I talk about the first call I had with Mr. Ranger on August 14. That call came about because Mr. Ranger called me at 11:33 on August 15...sorry, on...sorry, just bear with me.

At 9:21 I sent him the letter, on August 14. At 9:54, Mr. Ranger left me a voice mail to call him. At...he and I played phone tag. At 1:49, he left me another voice mail to call him. At 3:46, he left me a third voice mail to call him. I then did speak to him sometime between 3:46 and 5:08 in the afternoon on the 14th. At that point in time, Mr. Ranger told me both about the wine collection, as well as the fact that Mr. Saskin had advised him that he has a $250,000 watch collection that he would be interested in consigning, if Waddington's was successful with the wine auction. So, I asked him to please provide me with copies in a conversation. I asked Mr. Ranger to provide me with copies of any of his correspondence with Mr. Saskin. At that point in time, Mr. Ranger said to me, "Please

make the request in writing", which then led to me sending an e-mail at 5:08, to Mr. Ranger, requesting copies of the relevant documentation between him and Mr. Saskin. So, I think, Mr. Tayar, I think Mr. Ranger is simply incorrect when he says he didn't disclose the existence of the wine or the watches until the later date.

158. Q. You are pretty meticulous about keeping track of these times. Did you keep notes of your conversation with Mr. Ranger, as well?

A. So, the times I am meticulous about, only because I was able to find voice mail messages that Mr. Ranger left for me, and that's how I know the precise times. The 5:08 time I know because that's when the e-mail was sent to Mr. Ranger, asking for copies of the documents between him and Mr. Saskin.”

[101] In the Rabinovitch Examination Rabinovitch confirmed that his clients learned of the Wine Collection, Condominium and Watch Collection from Rabinovitch, after he had learned of the Wine Collection and Condominium from Sherkin, and had learned of the Watch Collection from Ranger, and that Rabinovitch had obtained no information on these assets from his clients.

[102] Ranger provided no supplementary affidavit after the testimony of Rabinovitch in the Rabinovitch Affidavit and the Rabinovitch Examination.

[103] Ranger was however cross-examined by Kraft on the Ranger Affidavit at the Ranger Cross-Examination, where Ranger provided the following evidence:

“36 Q. No? So, just handwritten notes. All right, so, you said you can search to see notes of any conversations with Mr. Alan Saskin, from this period. Do you recall, on August 14, phoning Mr. Neil Rabinovitch?

A. No.

37 Q. Do you recall having a telephone conversation with Mr. Neil Rabinovitch on that date?

A. No, but it's possible that I did.

38. And, if I suggested to you that you actually left three voice mails for Mr. Rabinovitch on August 14, does that sound familiar at all to you?

A. It's possible.

39. Q. But you don't recall actually speaking to Mr. Rabinovitch on August 14?

A. No. I don't seem to have notes for it, either.

40. Q. Do you recall receiving another e- mail from Mr. Rabinovitch around 5:08 p.m. on August 14?

A. No.

BY MR. KRAFT:

42 Q. Okay, Mr. Ranger, if you can see on the screen ... and, well, just the top part, so that was the e-mail that was forwarded to me, but you will see there is an e-mail addressed to you. Was that your e-mail address at the time, skr@waddingtons.ca?

A. Correct.

43 Q. And it is from Mr. Rabinovitch? A Correct.

44. Q. And it is dated August 15, 2019?

A. Correct.

45. Q. And you are asking if Mr. Rabinovitch has time to talk "later today or 15 tomorrow"?

A. Correct.

46. Q. Do you recall sending this e-mail?

A. No, I do not, but clearly I sent it.

47. Q. All right. And, beneath that, this was in response to an e-mail that Mr. Rabinovitch sent to you on August 14, at 5:07 p.m. ?

A. M' hmm.

48 Q. Seeing this now, do you recall having received it?

A. Clearly, I did receive it.

BY MR. KRAFT:

51. Q. Do you recall having a conversation with Mr. Rabinovitch in or around that time [August 14]?

A. Vaguely.

52 Q. Vaguely, okay. Is anything coming back to you about the contents of that discussion?

A. No.

53 Q. Okay, thank you. So, your affidavit doesn't mention the discussion ... any telephone calls with Mr. Rabinovitch, does it?

A. It does not.

64. That's okay. I am not going to ask you any questions about that transcript. I am just letting you know we do have them. Okay, and is there any reason you wouldn't have mentioned these telephone calls with Mr. Rabinovitch in your affidavit?

A. I am not sure. David Goodman prepared the affidavit on my behalf. 65 Q. But you would have reviewed it before it was sworn?

A. Yes.

66. Q. And, I assume, he would prepare it based on the information you gave him?

A. I would assume so. ”

[104] In the Miller Thomson Creditor’s Factum, the Miller Thomson Creditors argue that the evidence of Ranger should not be relied upon, stating:

“19. The evidence contained in the Ranger Affidavit is inconsistent with other evidence submitted in this proceeding, including Mr. Ranger’s own oral evidence at the Ranger 163 Examination. For the reasons set out below, the Ranger Affidavit ought not to be relied upon.

20. In the Ranger Affidavit (which appears to have been delivered in support of the Bankrupt’s Leave Motion), Mr. Ranger deposes that he did not speak with anyone regarding the Bankrupt’s dealings with Waddingtons other than the Bankrupt himself and internal members at Waddingtons.

Reference: Ranger Affidavit at para. 7, Exhibit “G” to the Saskin Affidavit, Leave Motion Record; Refusals Motion Record, at Tab 3.

21. In particular, Mr. Ranger deposed in the Ranger Affidavit that he had a telephone conversation with the Bankrupt on the afternoon of August 14, 2019, following receipt of a letter from Mr. Rabinovitch dated August 13, 2019 regarding the wine collection. Therein, Mr. Ranger deposed that “In the telephone conversation I had with Mr. Saskin on the afternoon of August 14th, I again assured Mr. Saskin of the fact that no one at

Waddington had mentioned his possible consigned of wine or watches to anyone outside of Waddington”.

Reference: Ranger Affidavit at paras. 6 & 7, Refusals Motion Record, at Tab 3.

22. However, at the Ranger 163 Examination, Mr. Ranger deposes that he spoke with Mr. Rabinovitch on August 14, 2019.

Reference: Transcript from the Ranger 163 Examination, at questions 86 to 88, page 18, at Tab J to the Rabinovitch Affidavit.

23. It is noteworthy that this evidence regarding the communications that took place between Mr. Ranger and Mr. Rabinovitch on August 14, 2019 is not contained in the Ranger Affidavit.

24. However, this conversation that occurred between Mr. Ranger and Mr. Rabinovitch on August 14, 2019 is consistent with the evidence deposed by Mr. Rabinovitch in the Rabinovitch Affidavit. In fact, Mr. Rabinovitch deposes that he had a conversation with Mr. Ranger on the telephone on both August 14, 2019 and on August 15, 2019 regarding the wine collection.

25. In summary, there are two pieces of conflicting evidence here. On the one hand, the Bankrupt and Mr. Ranger depose that the Bankrupt’s dealings with Waddingtons were kept confidential internally at Waddingtons, and on the other hand, Mr. Ranger’s own oral evidence and Mr. Rabinovitch’s sworn evidence confirms that communications outside of Waddington did in fact exist.”

[105] In the Bankrupt’s Reply Factum the Bankrupt makes the following submissions about the inconsistencies in Ranger’s evidence alleged by the Miller Thomson-Creditors above between the Ranger Affidavit and the Ranger s.163(1) Examination:

“7. Contrary to the assertion in the Respondent’s Factum,6 there is no inconsistency in the evidence of Stephen Ranger, (“Ranger”), the auction-house officer with whom the Bankrupt communicated.

(a) Ranger deposed that prior to August 21, 2019, no one at the auction house had “provided any information about the possible consignment of any wine or watches by [UMI or the Bankrupt] to Mr. Rabinovitch or anyone other than Waddington employees.”7

(b) According to the Respondent’s Factum, the inconsistency in Ranger’s evidence consists of this:

i) during examination pursuant to s. 163(1), Ranger testified that “he spoke with Rabinovitch on August 14, 2019”,8 and

ii) that “Ranger’s own oral evidence…confirms that communications outside of Waddington did exist”.9

There is nothing to this argument. Ranger did not testify with any clarity that he spoke to Rabinovitch on August 14, 2019, and he certainly did not testify that he spoke to Rabinovitch about the wine or the watches prior to August 21, 2021. During the exchange cited by the Respondent’s Factum for this “inconsistency” argument, Ranger said simply that “when [he] received the initial letter” from Rabinovitch (dated August 13, 2019) he (Ranger), “called [Rabinovitch], I believe, or I think I sent [him] an email and said “…We should probably talk”.” 10 Nothing more is said about any pre-August 21st discussions between Rabinovitch and Ranger. In short, Ranger testified in a manner that was entirely in keeping with his affidavit.”

[106] The reference made in the above to the Ranger Cross-Examination is with respect to footnote 10 above referring to “10 Transcript of the Examination of Stephen Ranger taken August 23, 2019, at Q. 86- 88, Tab J to the Affidavit of Neil Stuart Rabinowitch [sic] sworn March 8, 2021” which is the Ranger s.163(1) Examination, and not Ranger’s testimony at the Ranger Cross-Examination on the Ranger Affidavit, and this testimony predates the swearing of the Ranger Affidavit.

[107] The specific statement at issue in the Ranger s.163 Examination, Questions 86-88 reads:

“ 83. Yes. And if you can then give me your best recollection of the telephone call you had with Mr. Saskin on or about August 14th?

A. When I received the initial letter from you, Neil ...

84. Q. Yes .

A. ... I called you, I believe, or I think I sent you an e-mail and said: " ... We should probably talk ... " And in that conversation, I indicated to you that I would call Mr. Saskin and which I did. And in that conversation, he indicated to me that a company, an unnamed company, was suing him, and that is not the company that is selling the wine, and instructed me to, as his client ... or asked me to forward the letter that you had sent to me, to him, and said that he would be in touch in a week after his return from the U.K ., and to ignore the letter.

85. Okay. And the letter you're referring to was the letter from me ...

A. Correct.

86. Q..... asking you to provide any particulars of any wine consignments by Mr. Saskin to

Waddington's?

A. Correct.

87. Q. Okay. And that is the only time you have spoken with Mr. Saskin?

A. Yes.

88. Q. And do you know whether Devin had any conversations with Mr. Saskin?

A. I will ask Devin. U/T

89. Q. Okay. And if you can provide for me the particulars of any telephone conversations he had, I would greatly appreciate it.

A. Yes. U/T

90. Q. Is there anyone else at Waddington's Mr. Saskin would have spoken with, in the context of attempting to consign wine?

A. It could have. .. he might have spoken to my colleague, Joann Maplesden, who is our ... one of our fine wine specialists. And I will undertake to ask Joann if she has had any conversations.”

[108] Given the specificity of Rabinovitch’s recollection, the vagueness of Ranger’s evidence at the Ranger Cross-Examination, (or as is admitted in the Bankrupt’s Reply Factum “Ranger did not testify with any clarity that he spoke to Rabinovitch on August 14, 2019”) and specifically the inability of Ranger to clearly recollect on cross-examination the specific conversations with Rabinovitch that Rabinovitch has provided specific detailed evidence regarding, where there is a contradiction in the evidence, I prefer the testimony of Rabinovitch.

[109] I find as testified to by Rabinovitch in the Rabinovitch Affidavit and the Rabinovitch Cross-Examination, that Rabinovitch found out about the Watch Collection from Ranger on the phone call on August 14^th, 2019, which was confirmed by Ranger sending to Rabinovitch on August 22, 2019 the August 13 Watch Collection Email from the Bankrupt to Ranger referring to the Watch Collection, prior to the Ranger s.163 Examination by Rabinovitch.

[110] I find that there is no evidence before me that Rabinovitch obtained the information relating to the Watch Collection in the August 13 email from the Bankrupt to Ranger from any other source, and in particular from emails obtained from the Bankrupt’s gmail account or as Rabinovitch states at paragraph 7 of the Rabinovitch Affidavit:

“I have also previously confirmed to him [Tayar] that I did not and do not have access to Mr. Saskin’s email, nor are am [sic] I aware of anyone else who may. I was not in any way monitoring Mr. Saskin’s communications.”

And as testified to at Q. 29 of the Rabinovitch Transcript:

“A. Well, as I set out further in my

affidavit, Mr. Tayar, we are not monitoring any of

his communications, nor are we aware of anyone who is monitoring his communications. So, as I sit here today, I am not aware of anyone monitoring any electronic communications, or other communications of Mr. Saskin.”

[111] Rabinovitch’s testimony relating to the Watch Collection Email, and specifically that he had been provided the information relating to the Watch Collection by Ranger, is extremely important given that the entire premise of this Refusals Motion is that the Bankrupt’s communications were being improperly monitored, and that Sherkin has to be compelled to answer the Refused Questions in order for the Bankrupt to obtain that evidence to argue the s.163(2) Motion.

[112] Rabinovitch’s clear evidence that he had received the August 13, 2019 Watch Collection Email from Ranger on August 22^nd,, 2019 AFTER his first call with Ranger on August 14, 2019, and not BEFORE his call with Ranger on August 14, is also very important evidence for this Refusals Motion, given that the Watch Collection Email was designed to be the “bait” to test if the Bankrupt’s emails were being monitored.

[113] The Watch Collection Email is also specifically mentioned in the CFI Report obtained by the Bankrupt that states regarding this same August 13 “bait” email:

“Based on our analysis of Mr. Saskin's configuration settings and devices, we have not observed any obvious threats to his personal information. We see no evidence on any of his current devices that would explain the compromise of his email dated August 13, 2019.”

III) Law and Analysis

[114] The Court has considered all materials and arguments raised by all parties on this Motion. Any failure by the court to refer to specific arguments and materials raised does not reflect that the Court has not considered those arguments. Where quotations are underlined in these reasons, that emphasis has been added by me.

A. Legislation and Jurisdiction:

[115] Under the Bankruptcy and Insolvency General Rules (the “BIA Rules”), Rule 14 states:

Witnesses and Depositions

14 (1) A party to any court proceedings may, with leave of the court, examine the other party or any other person and require them to produce documents.

(2) A party to any court proceedings may, with leave of the court, require the attendance of any person for examination on an affidavit that the person filed with the court.

(3) An application for leave of the court under subsection (1) or (2) may be made ex parte.

[116] Despite the specific wording of R.14, Houlden & Morawetz Bankruptcy and Insolvency Law of Canada, 4th Edition (“Houlden & Morawetz”) states at § 16:31. Examination of Witnesses in Court Proceedings—Cross-Examination on Affidavits:

“Strictly speaking by Rule 14(2), leave should be obtained for an examination on an affidavit filed in bankruptcy proceedings. However, the practice in civil matters is followed and, notwithstanding Rule 14(2), an order is not required for such an examination: Re Fair & Co. (1922), 3 C.B.R. 311 (Ont. S.C.); Re A. & B. (1927), 8 C.B.R. 239 (Ont. S.C.); Re Legault (1977), 24 C.B.R. (N.S.) 83 (Ont. Reg.).”

[117] In Re Legault, 1977 CarswellOnt 85, 24 C.B.R. (N.S.) 83 Registrar Ferron states:

“8 Both cases to which I have referred were decided with reference to R. 43 as it appeared in the Bankruptcy Act, 1919 (Can.), c. 36. That rule provided for cross- examination of any person upon an affidavit made by him in the proceedings and went on to provide that “proceedings under this rule shall be regulated as nearly as may be by the rules of the court for the time being in force in relation to like matters in civil actions or matters in such court”. That part of the rule which I have quoted has not been carried over to the present Act. Rule 43 was broken up into three subrules, in R. 29 of the current Act. The portion of that rule which I have quoted was not, however, re-enacted. Rule 4 is similar in some respects to the portion of R. 43 quoted above but is not as broad as the provisions of the former rule. Rule 4 provides that “the practice of the court in civil actions or matters, including the practice in chambers, shall in cases not provided for by the Act or these rules, and insofar as the same are applicable and not inconsistent with the Act or these rules, apply to all proceedings under the Act or these rules”. When one reads the rule dealing with examinations it is clear that the procedure for cross-examination has been clearly set out in R. 29(2), and the civil practice insofar as it has application to cross-examinations on affidavits filed in a proceeding is clearly inconsistent with R. 29. Clearly then Re Fair & Co. and Re A. and B., supra, have no application, and in all cases where cross-examination of affidavits is sought in bankruptcy proceedings, leave of the court should properly be obtained. But R. 29 was established at a time when the number of matters in bankruptcy was considerably less than today. I suppose the reasoning behind the rule was the desire to eliminate delay in proceedings by casual cross-examination unless the applicant could demonstrate that such examination was necessary for the proper determination of the proceedings.

9 The business in bankruptcy now coming before the court is such that on purely practical grounds a requirement at this point that R. 29 be strictly followed would in itself cause greater delay than that which the rule sought to prevent. As an additional consideration it seems to me that a practice, that is, of cross-examination without an order,

which has persisted for so many years without obvious prejudice to litigants in the bankruptcy court should not now be disturbed or discouraged.”

[118] However in Re Worlidge, 1983 CarswellOnt 177, [1983] O.J. No. 946, 46 C.B.R. (N.S.) 60 Registrar Ferron cited his own decision in Re Legault in dealing with a situation where a motion was brought to by an RCMP Officer conducting an investigation on behalf of the OSB to force the witness for the Bankrupt to reattend to answer refused questions on a cross- examination conducted by counsel for the RCMP Officer on an Affidavit, but where no leave had been obtained under the predecessor Rule to Bankruptcy and Insolvency Rule 14:

“12 Nor is the applicant entitled to examine the deponent as a right, as he would be if the proceedings were in the ordinary provincial civil court. In bankruptcy, the rules require that leave of the court be obtained for such an examination.

13 It is, of course, true that very often counsel simply agree to examinations on affidavits filed in a proceeding in bankruptcy and in that case no difficulty arises. However, in the absence of such an agreement, the leave of the court must be obtained and a proper case made out to warrant the examination sought: see Re Legault (1977), 24 C.B.R. (N.S.) 83 (Ont. S.C.).

14 No order for the examination of Brockbank was obtained so that there is no right to require his attendance in the first instance and, of course, no question of his reattendance to answer questions he refused to answer on his attendance pursuant to the appointment which was served upon him.”

[119] It appears then, even though there appears to be a practice in Ontario that leave is not typically requested on the basis of Legault, it appears also that Registrar Ferron was more equivocal in applying his own precedent of Legault in Worlidge.

[120] There are also cases in Ontario where leave has been refused, when parties opposed the cross-examination on the basis that leave has not been obtained. In Re Manor, 2009 CanLII 40567 (ON SC), C. Campbell, J., in the context of a request to cross-examine on an Affidavit of Verification of a Bankruptcy Application stated:

“[7] On the material before me, it would appear likely that Manor has committed more than one act of bankruptcy. No substantive defence has been submitted.

[8] The requested opportunity to cross-examine is nothing more than a fishing expedition into matters unrelated to the bankruptcy with presumably the hope that a continuing inquiry might delay or prevent KPMG from proceeding with the petition set for next month.

[9] Rule 14(1) of the Bankruptcy & Insolvency General Rules, Can. Reg. 368, requires that leave be granted before cross-examination on an affidavit of verification takes place.

[10] This Court would have to be satisfied that it is in the best interests of justice to permit the examination to take place. Placement Starr Inc. v. Diplome Construction Inc. (1967), 10 C.B.R. (N.S.) 250.

[11] There is nothing advanced in the material before me to suggest that the interest of justice with respect to Manor's defence to the bankruptcy petition would be advanced by cross examination.

[12] The suggestion of counsel to Manor during argument that leave is given almost as a matter of course is rejected. Until the petition is heard, Manor is free to pursue his claim in Israel. If he were to be adjudged bankrupt, he could then, if appropriate, persuade the Inspectors or Trustee to pursue such claim if they saw fit or permit him to do so.”

[121] It appears that other provinces do not follow the Ontario practice. In the context of a Bankruptcy Application, Veith, J. of the Alberta Court of Queen’s Bench in Re Prue, 2014 ABQB 363 states:

“[21] From that perspective, the BIA rule requiring leave to question an affiant [R.14] was prescient: if the parties opposite realize that there is some purpose to the cross- examination, they will consent to it without the need of leave. In the absence of consent, the court must decide if the proposed questioning will serve some fairness-related purpose related to the outcome of the proceeding, or whether the time and expense of questioning are disproportionate to the anticipated benefits: Wearmouth, Battery Plus Inc. It is only regrettable that a rule similar to the BIA can perhaps not practically be implemented for all civil litigation.”

[122] In Re: Tallon Energy Corp. (Bankrupt), 2006 ABQB 861 Veith J. (who refers to this case as Wearmouth in Re Prue) goes through the jurisprudence on this Rule:

“[15] In Alberta, leave is required to cross-examine on an affidavit filed in bankruptcy proceedings. In the circumstances here, that leave should be granted.

a) Is leave required in Alberta to cross-examine on an affidavit filed in bankruptcy proceedings?

[16] Although the decision deals specifically with discovery - or what is dealt with in R. 14(1) under the current version of the Bankruptcy rules, Mr. Wearmouth relies on the following extract from Placements Sarr Inc., which sets out general principles relating to the application of what is now Rule 14(2):

If a court, as a statutory prerequisite, must first grant leave before a given proceeding can be taken, then, clearly the court should only grant such leave after satisfying itself by the exercise of judicial discretion that the facts of the case are such that it is in the best interests of justice to allow such proceedings to be taken. If no useful object would be served by the

discovery, if the utility of the examination is not justified then, under the terms of the rule, the court should not grant leave for the holding of such examination.

[17] Tallon Energy relies on the following comment in Houlden & Morawetz:

Strictly speaking by Rule 14(2), leave should be obtained for an examination on an affidavit filed in bankruptcy proceedings. However the practice in civil matters is followed and, notwithstanding Rule 14(2), and order is not required for such an examination.

[18] In support of the latter proposition, Houlden & Morawetz cites the Ontario decision of Re Legault.; that decision is interesting because it sets out the history of this aspect of the bankruptcy rules and notes that, originally, the bankruptcy rules were comparable to the Ontario, and indeed, the Alberta Rules of Practice and allowed cross-examination on affidavit as of right. The learned Registrar stated that the Ontario practice of following the original version of the bankruptcy rules, which coincided with Ontario practice, had persisted and, in his view, the old practice had proved to be “without prejudice to litigants”. He mused that the reason for the change in the bankruptcy rules was presumably to eliminate delay in proceedings arising out of casual cross-examination. Indeed, he feared that enforcement of the requirement for leave would itself add inappropriately to delays in dealing with bankruptcy applications. Nevertheless, even in Ontario, the practice had sprung up of not allowing any cross-examination on verification unless the putative debtor had filed a notice disputing the petition.

[19] With respect, for the following three reasons, it appears to me that the principle adopted in Placements Sarr should govern Alberta practice. First, the amendment of the bankruptcy rules so as to specifically remove the opportunity of cross-examination without leave speaks to a definite policy decision having been adopted in relation to such proceedings; courts have no jurisdiction to decline to follow legislation merely because they prefer a different policy.

[20] Second, in any event, the policy underpinnings of the bankruptcy rules appear to be all the more wise in light of contemporary experience: the cost of litigation has increased so dramatically that courts must be vigilant to ensure that litigants with deep pockets do not hold the system hostage. The ability to control cross-examination is an important tool in the court’s ability to manage litigation.

[21] Third, the concern of the Ontario court relating to the congestion caused by applications for leave to cross-examine must be tempered by the predictable application of costs as litigation discipline: a party who unreasonably refuses cross-examination and causes a formal application for leave to be brought before the court will suffer cost consequences.”

[123] In Farm Credit Canada v. Gidda, 2015 BCCA 236, (“Farm Credit v. Gidda”) the British Columbia Court of Appeal states, in the context of an appeal from the appointment of a Receiver under s.243 of the BIA where the Motions Judge denied leave for the Debtor to Cross-Examine on the Affidavit of the Moving Party Creditor:

“[20] The decision to permit an affiant to be cross-examined on their affidavit in a bankruptcy proceeding is a discretionary one. Rule 3 of the Bankruptcy and Insolvency General Rules provides, in essence, that, in a matter arising under the BIA, the provincial rules of civil procedure are inoperative to the extent that they are inconsistent with

the BIA or the rules promulgated thereunder. In this case, it is well-established that R. 14 of the Bankruptcy and Insolvency General Rules will govern whether examination on an affidavit is allowed: see Re Mannix Resources Inc., 2004 BCSC 1315 at para. 16. For reference, I set out Rules 3 and 14 below:

GENERAL

3. In cases not provided for in the Act or these Rules, the courts shall apply, within their respective jurisdictions, their ordinary procedure to the extent that that procedure is not inconsistent with the Act or these Rules.

WITNESSES AND DEPOSITIONS

14. (1) A party to any court proceedings may, with leave of the court, examine the other party or any other person and require them to produce documents.

(2) A party to any court proceedings may, with leave of the court, require the attendance of any person for examination on an affidavit that the person filed with the court.

(3) An application for leave of the court under subsection (1) or (2) may be made ex parte.

[21] Leave of the court to examine on an affidavit is typically granted only where it is in the interest of justice to allow the examination to proceed: see Re

Manor (2009), 2009 CanLII 40567 (ON SC), 57 C.B.R. (5th) 126 (Ont. S.C.J.); see

also Prue v. Shen, 2014 ABQB 363, Wearmouth v. Tallon Energy Corp., 2006 ABQB 861 and Placements Sarr Inc. v. Diplome Construction Inc. (1967), 10 C.B.R. (N.S.) 250 (C.S. Que.).

[22] In my view, it was within the chambers judge’s discretion, arising pursuant to R. 14(2), to decline to order that Ms. Monoghan attend to be cross-examined on her affidavit. This is because the valuation of the underlying properties was not critical to the question of whether a receiver ought to be appointed.”

[124] On this issue, the Bankrupt argues in the Bankrupt’s Written Submissions, citing

Legault:

“45. The Bankrupt does not require leave to complete its cross-examination of Sherkin, as it did not require leave to commence it. For almost half a century, the practice of the Bankruptcy Court in Ontario has been that leave to cross-examine an affiant (a right granted by the Rules) is not required, as:

“…on purely practical grounds a requirement at this point that R. 29 [now 14] be strictly followed would in itself cause greater delay than that which the rule sought to prevent…a practice, of cross-examination without an order, which has persisted for so many years without obvious prejudice to litigants in the bankruptcy court should not now be disturbed or discouraged.”

[125] However the Bankrupt does not mention Registrar Ferron’s further commentary on Legault in Worlidge, nor the decision of Campbell, J. in Re Manor, or the contrary authority in Alberta and British Columbia.

[126] No party to this Refusals Motion obtained prior leave to conduct cross- examinations of Sherkin, Rabinovitch, the Bankrupt, or Ranger. On the evidence before me, no party to this Refusals Motion refused to appear at any of these cross-examinations on the basis that leave was not obtained under R.14(2). The issue of leave under R.14(2) was not argued before me by any party.

[127] Sherkin and Rabinovitch benefited from being able to examine the Bankrupt and Ranger and to obtain the admissions that they obtained from them, particularly obtaining the CFI Report and the admissions made by Ranger at the Ranger Cross-Examination about his poor recollection and vagueness relating to whether he told Rabinovitch about the Watch Collection and when.

[128] Accordingly, in the words of Registrar Ferron in Re Worlidge in this case it appears that the R.14 issue did not arise amongst counsel and “…counsel simply agree to examinations on affidavits filed in a proceeding in bankruptcy and in that case no difficulty arises.”

[129] However, the considerations regarding the grounds for granting leave in Re Legault, Re Manor, Re Wordlidge, Re Prue, Re Tallon Energy and Farm Credit Canada v. Gidda, are relevant to the conduct of those examinations and results of those examinations, as well as the determination of the Refused Questions on this Refusals Motion.

Adjudication of Refusals on Cross-Examination under the BIA and Application of Bankruptcy and Insolvency Rule 3:

[130] The BIA Rules state:

“R.3 In cases not provided for in the Act or these Rules, the courts shall apply, within their respective jurisdictions, their ordinary procedure to the extent that that procedure is not inconsistent with the Act or these Rules.”

[131] As stated in Farm Credit v. Gidda, above:

“Rule 3 of the Bankruptcy and Insolvency General Rules provides, in essence, that, in a matter arising under the BIA, the provincial rules of civil procedure are inoperative to the extent that they are inconsistent with the BIA or the rules promulgated thereunder.”

[132] The Bankrupt cites in the Bankrupt’s Written Submissions, Cunningham, J. in Re Compufacts (1999) 85 A.C.W.S. (3d) 16 (Ont. Gen. Div. In Bankruptcy), a case relating to the determination whether the venue of motions by a Bankrupt should be transferred to Toronto from Ottawa, and whether the Rules of Civil Procedure R. 37.03 or s.187(7) of the BIA governs that decision. Cunningham, J. states:

12 In the absence of any inconsistency between the Federal Statute and the Provincial Rules of Civil Procedure, Rule 3 under the B.I.A. makes it quite clear that jurisdiction lies Provincially. Only in those situations where an inconsistency exists should the Federal power of the B.I.A. have paramountcy. Where there is no inconsistency then the Provincial Rules of Civil Procedure govern. See Fair & Co., Re (1922), 3 C.B.R. 311 (Ont. S.C.) and Legault, Re (1977), 24 C.B.R. (N.S.) 83 (Ont. Bktcy.). There is no inconsistency in the present case.

13 An excellent example of this is contained in Section [Rule] 115 of the B.I.A. which states:

Unless the Act otherwise provides, examinations, other than those pursuant to Section 159 or 161 of the Act, must be held before a Registrar, before a person who is qualified to hold examinations for discovery or examinations of judgment debtors or before such other person as the court may on ex parte application order, and must be conducted in accordance with the rules of court in civil cases.

[133] BIA Rule 115 currently reads:

“115 Examinations, other than those under section 159 or 161 of the Act, shall be held before a registrar, before a person who is qualified to hold examinations for discovery, examinations of judgment debtors or examinations of debtors after judgment or before any other person that the court may, on ex parte application, order, and shall be conducted in accordance with the rules of court in civil cases.”

[134] Rule 1.02 of the Rules of Civil Procedure states: “Application of Rules

Court of Appeal and Superior Court of Justice

1.02 (1) These rules apply to all civil proceedings in the Court of Appeal and in the Superior Court of Justice, subject to the following exceptions:

3. They do not apply if a statute provides for a different procedure.”

[135] The BIA and BIA Rules do not have specific explicit provisions relating to the compelling of answers to refusals on a cross-examination relating to a Motion under the BIA, as opposed to an examination conducted under the provisions of the BIA, and the BIA and the BIA Rules do not contain specific provisions relating to the adjudication of whether a refusal is valid on the basis of a claim to solicitor and client privilege, as is claimed by Sherkin with respect to the Refused Questions.

[136] The Miller Thomson Creditors make the following argument in the MT Written Submissions regarding the applicability of the Rules of Civil Procedure and BIA Rule 3:

“38. The threshold factor in determining whether the Court ought to import the Ontario Rules of Civil Procedure (the “Rules”) into this BIA motion, is whether the relief sought is covered first by the BIA. If the relief sought is covered by the BIA, the inquiry ends, and there is no need to resort to the Rules. If the relief sought is not covered by the BIA, Rule 3 provides that a Court can employ the Rules.

39. Section 163(2) completely governs the relief sought by the Bankrupt, and is therefore completely dispositive of the relief sought by the Bankrupt. The Rules need not be employed.”

40. Section 163(2) offers a complete framework for deciding if Sherkin should be subject to further cross-examination. There is no gap, void or vacuum in the BIA that needs to be filled by the Rules. Thus, the Bankrupt’s use of a Refusals Motion under the Rules is inappropriate and contrary to the requirements of s. 163(2) the BIA.

41. As the Court held in Savage, the Bankrupt’s motivations cannot be overlooked by this Court. In this case, the Bankrupt’s inappropriate use of the Rules reflects his overly aggressive pursuit of information that is not only privileged, but is also not necessary for the administration of the Bankrupt’s estate. The Bankrupt’s motivation for obtaining the name of the person who provided Sherkin with this information is clearly personal in nature and highlights the inappropriate objective behind these motions.

42. The Court cannot assess the propriety of the Refusals Motion in isolation from the section163(2) motion, nor should it permit the Bankrupt to rely upon technical arguments to do so. The Bankrupt’s actions in this regard shows its ‘no holds barred’ approach to obtaining the information at any cost. In his pursuit, the Bankrupt ignores Rule 3 of the BIA and attempts to skirt the leave requirement under section 163(2).”

[137] In support the Miller Thomson Creditors cite the decision of Registrar Ferron in Re Savage Shoes Ltd. 1990 CarswellOnt 161 (ONSC), a case dealing with the determination of Bankruptcy Applications, where the Debtor sought an Order, after 5 days of cross-examination of the representative of the Petitioning Creditor Bank of Montreal on the Affidavit of

Verification, and production of numerous documents that would effectively require the Petitioning Creditor produce an Affidavit of Documents, and in particular a listing of documents over which the Bank claimed privilege. Registrar Ferron states:

“16 Nor is such an affidavit necessary or appropriate in the matter which is before me. Here there has been, as I have mentioned, a full cross-examination with the production of numerous documents over several months. If an affidavit were necessary, one would have thought that the application or the request would have been made long before this date. Lack of an affidavit has hardly in any way impeded the progress of the examination and I rather think that the disappointment in the answers given has motivated this request.

19 That situation does not arise here. There have been full and complete examinations, including the production of documents and a sufficient description of those documents for which a privilege is claimed and of the circumstances giving rise to those documents to allow the court to determine the merits of the claim.”

[138] Registrar Ferron then proceeds to rule on the refusals in that case and the privilege issues.

[139] I do not find that Re Savage Shoes has direct application on this topic. I note that the BIA and BIA Rules have very specific procedures for what evidence is required on a Bankruptcy Application and Affidavit of Truth, which do not include, at the time of Re Savage Shoes, or now, a form of evidence as requested by the Debtor in Re Savage Shoes, namely an Affidavit of Documents with schedules identifying privileged documents.

[140] In response the Bankrupt states in the Bankrupt’s Written Submissions:

“46. The suggestion that refusals motions are somehow unknown or inappropriate in bankruptcy matters is also contrary to the jurisprudence. For example, Justice Brown (as he then was), heard refusals motions while sitting in bankruptcy.”

[141] The Bankrupt cites for this proposition Re Gudmundsdottir, 2013 ONSC 2138, where Brown, J. (as he then was) granted Orders to answer undertakings and refusals on affidavits sworn by a Bankrupt, that Brown, J. deemed “essentially stands as her section 163(1) examination” and refusals and under advisements given at a s.163(2) examination. In each case

s.167 of the BIA would appear to be governing an examination under the BIA, not the ordinary Civil Rules, but that is not evident from the reasons.

[142] The Bankrupt also cites Spiros Pantziris (Re), 2013 ONSC 5868, where Brown, J. (as he then was) was ruling on refusals to questions on an Affidavit of Verification for a Bankruptcy Application. It is not explicit from the reasons that Brown, J. was applying the ordinary Rules of Civil Procedure jurisprudence.

[143] The provisions of s.163(2) do not explicitly provide a “complete code” to determining refusals to questions at a cross-examination on an affidavit filed for a motion to obtain leave under s.163(2). No party to this motion was able to provide any jurisprudence the specifically deals with this issue.

[144] As there is no explicit methodology to deal with a motion for refusals under the BIA or the BIA Rules, and BIA Rule 115 is supportive of examinations being conducted ”…in accordance with the rules of court in civil cases”, I find that the “the ordinary procedure” of the Ontario Superior Court, under the Rules of Civil Procedure should be employed to determine the Refused Questions “to the extent that that procedure is not inconsistent with the Act or these Rules”.

[145] I cannot see how the Miller Thomson Creditors may be prejudiced in any way with my providing the Miller Thomson Creditors with the ability to employ a known, extensive jurisprudence dealing with refusals of questions in cross-examinations under the Rules of Civil Procedure, to determine whether the Refused Questions must be answered, where the BIA has no such explicit procedures, and where I have adjourned the hearing of this Motion specifically to permit the Miller Thomson Creditors to make written submissions on the tests under the Rules of Civil Procedure, that I will deal with below.

[146] However in order to ensure that the procedure is “not inconsistent with the Act or these Rules”, I agree with the Miller Thomson Defendants that “The Court cannot assess the propriety of the Refusals Motion in isolation from the section163(2) motion” and I will consider those factors, as part of the contextual analysis required under the tests under the Rules of Civil Procedure, and under the BIA.

Application of s.167 of the BIA:

[147] Section 167 of the BIA states:

“Any person being examined is bound to answer all questions relating to the business or property of the bankrupt, to the causes of his bankruptcy and the disposition of his property.”

[148] The Miller Thomson Creditors take the following position on this issue in the MT Written Submissions:

“49. Section 167 appears in Part VI of the BIA, and under the section entitled “Examination of Bankrupts and Others” which includes sections 161 to section 167.

50. Section 167 can only be invoked in respect of examinations proceeding under the relevant provisions of this part of the BIA, as follows:

(a) section 161, which requires the official receiver to conduct an examination of a bankrupt before discharge;

(b) section 162, which provides the official receiver with the ability to make an inquiry of the conduct of the bankrupt as a matter of right, or on the direction of the Superintendent;

(c) section 163(1), which provides the trustee with the ability to examine the bankrupt as a matter of right, on ordinary resolution passed by the creditors or on the written request/resolution of a majority of the inspectors; and

(d) section 163(2), which provides any interested party, among others, with the ability to examine the trustee, bankrupt, inspector or creditor, or any other person named in the order, and not as a matter of right, but with leave of the court upon obtaining a court order for same [emphasis added].

51. Section 167 of the BIA refers to “any person being examined” under the above- noted sections. Accordingly, absent the granting and existence of an Order for leave to examine under section 163(2) of the BIA (as is the case here), the requirements under section 167 of the BIA have not been met. This appears to be implicit in the language of the BIA itself.

52. The Respondents herein have not located any case law where section 167 of the BIA was invoked in a case such as this (i.e., where leave to examine has not been granted to an interested party, or prior to leave being granted at all). It is respectfully submitted that to invoke section 167 of the BIA to compel information production/answers to questions at this juncture would be premature, undermine the statutory purpose of section 163(2), and subvert the gatekeeper function of the Court.”

[149] The Bankrupt takes the following position on the application of s.167 of the BIA in the Bankrupt’s Written Submissions:

“48. Strictly speaking, section 167 is not relevant to a refusals motion respecting cross-examination on an affidavit served in respect of an interlocutory motion. Such a motion is governed by the civil law, as set out above. Section167 is applicable to this motion only as a guide for policy, insofar as it expresses Parliament’s intent that those examined in bankruptcy proceedings answer the questions asked. Section 167 will not formally apply unless and until the Bankrupt is given leave to examine Sherkin under section 163(2).”

[150] I agree with both the Miller Thomson Creditors and the Bankrupt that s.167 is inapplicable to cross-examinations conducted in the context of a motion for leave under s.163(2) until leave under s.163(2) is actually granted, and an examination under the BIA is actually conducted.

General tests for compelling answers to refusals under Rules of Civil Procedure and

Rothmans

[151] Rule 34.10 of the Ontario Rules of Civil Procedure states: Production of Documents on Examination

Interpretation

34.10 (1) Subrule 30.01 (1) (meaning of “document”, “power”) applies to subrules (2), (3)

and (4). R.R.O. 1990, Reg. 194, r. 34.10 (1).

Person to be Examined Must Produce Required Documents and Things

(2) The person to be examined shall produce for inspection at the examination,

(a) on an examination for discovery, all documents in his or her possession, control or power that are not privileged and that subrule 30.04 (4) requires the person to produce; and

(b) on any examination, including an examination for discovery, all documents and things in his or her possession, control or power that are not privileged and that the notice of examination or summons to witness requires the person to produce.

O. Reg. 248/21, s. 6 (1).

Notice or Summons May Require Documents and Things

(3) Unless the court orders otherwise, the notice of examination or summons to witness may require the person to be examined to produce for inspection at the examination,

(a) all documents and things relevant to any matter in issue in the proceeding that are in his or her possession, control or power and are not privileged; or

(b) such documents or things described in clause (a) as are specified in the notice or summons. R.R.O. 1990, Reg. 194, r. 34.10 (3); O. Reg. 438/08, s. 31; O. Reg.

248/21, s. 6 (2).

Duty to Produce Other Documents

(4) Where a person admits, on an examination, that he or she has possession or control of or power over any other document that is relevant to a matter in issue in the proceeding and is not privileged, the person shall produce it for inspection by the examining party forthwith, if the person has the document at the examination, and if not, within two days thereafter, unless the court orders otherwise. R.R.O. 1990, Reg. 194, r. 34.10 (4); O. Reg. 453/09, s. 2.

[152] Rule 34.15 states:

34.15 (1) Where a person fails to attend at the time and place fixed for an examination in the notice of examination or summons to witness or at the time and place agreed on by the parties, or refuses to take an oath or make an affirmation, to answer any proper question, to produce a document or thing that he or she is required to produce or to comply with an order under rule 34.14, the court may,

(a) where an objection to a question is held to be improper, order or permit the person being examined to reattend at his or her own expense and answer the question, in which case the person shall also answer any proper questions arising from the answer;

(b) where the person is a party or, on an examination for discovery, a person examined on behalf or in place of a party, dismiss the party’s proceeding or strike out the party’s defence;

(c) strike out all or part of the person’s evidence, including any affidavit made by the person; and

(d) make such other order as is just.

(2) Where a person does not comply with an order under rule 34.14 or subrule (1), a judge may make a contempt order against the person.

[153] Rule 39.02 states:

EVIDENCE BY CROSS-EXAMINATION ON AFFIDAVIT

On a Motion or Application

39.02 (1) A party to a motion or application who has served every affidavit on which the party intends to rely and has completed all examinations

under rule 39.03 may cross-examine the deponent of any affidavit served by a party who is adverse in interest on the motion or application. R.R.O. 1990, Reg. 194, r. 39.02 (1).

(1.1) Subrule (1) does not apply to an application made under subsection 140

(3) of the Courts of Justice Act. O. Reg. 43/14, s. 11.

(2) A party who has cross-examined on an affidavit delivered by an adverse party shall not subsequently deliver an affidavit for use at the hearing or conduct an examination under rule 39.03 without leave or consent, and the court shall grant leave, on such terms as are just, where it is satisfied that the party ought to be permitted to respond to any matter raised on the cross-examination with evidence in the form of an affidavit or a transcript of an examination conducted

under rule 39.03. R.R.O. 1990, Reg. 194, r. 39.02 (2).

To be Exercised with Reasonable Diligence

(3) The right to cross-examine shall be exercised with reasonable diligence, and the court may refuse an adjournment of a motion or application for the purpose of cross-examination where the party seeking the adjournment has failed to act with reasonable diligence. R.R.O. 1990, Reg. 194, r. 39.02 (3).

Additional Provisions Applicable to Motions

(4) On a motion other than a motion for summary judgment or a contempt order, a party who cross-examines on an affidavit,

(a) shall, where the party orders a transcript of the examination, purchase and serve a copy on every adverse party on the motion, free of charge; and

(b) is liable for the partial indemnity costs of every adverse party on the motion in respect of the cross-examination, regardless of the outcome of the proceeding, unless the court orders otherwise. R.R.O. 1990, Reg. 194, [r. 39.02 (4)](https://www.canlii.org/en/on/laws/regu/r