Court File and Parties

COURT FILE NO.: CV-22-30 DATE: 2023 04 11

SUPERIOR COURT OF JUSTICE – ONTARIO 207 Cayley Street, Walkerton ON N0G 2V0

RE: Bross v. Bross

BEFORE: Justice Ranjan K. Agarwal

COUNSEL: Robert Scriven, for the plaintiffs Troy Dore, for the defendants

HEARD: March 3, 2023, in person

ENDORSEMENT

INTRODUCTION

[1] The applicants Walter Daniel Bross and Linda M. Bross move for production of documents in the possession of MNP LLP, an accounting firm retained by the respondents Jeff Bross and Sharon Bross.

[2] The accountant was cross-examined on an affidavit he provided for Daniel and Linda’s summary judgment motion in this proceeding and Jeff and Sharon’s motion for return of property in their counter-application (see Bross v Bross, 2023 ONSC 2104). The accountant undertook to produce his file. The parties agreed that the file would be produced on a “counsel’s eyes only” basis unless Jeff and Sharon consented or the court made a disclosure order. After the motions were heard and on reserve, Daniel and Linda asked to see the documents (which had been produced to their lawyer). Jeff and Sharon objected to production of certain documents in the file on the grounds that they are privileged. Daniel and Linda now move for production under Rule 30 of the Rules of Civil Procedure. Since this motion was heard, Justice Chown has released his decision on the parties’ motions—the summary judgment motion was granted, ending this proceeding.

[3] I endorse an order dismissing this motion. Rule 30 doesn’t apply to applications or undertakings given on a cross-examination on an affidavit. If Daniel and Linda are seeking an order that the accountant honour his undertaking, the motion should have been heard and decided before their summary judgment motion. Now that the summary judgment motion has been determined (in their favour), the accountant’s file isn’t relevant to anything in dispute. There is no freestanding right to documentary disclosure—it must be anchored in a legal proceeding, and then in relevant issues in dispute.

[4] I also endorse an order fixing the costs of the motion in the amount of $3500 and order them to be paid by Daniel and Linda to Jeff and Sharon within 30 days.

BACKGROUND FACTS

[5] Daniel, Linda, Jeff, and Sharon are family—Daniel and Jeff are brothers, and they are married to Linda and Sharon respectively. They each have a 25% interest in Florbil Farms Ltd., a dairy farm. They are also all directors and officers of Florbil.

[6] There was a breakdown in the relationship between Daniel and Linda, on one hand, and Jeff and Sharon, on the other hand. The parties seemingly resolved their issues through a settlement agreement in August 2022. But then a dispute arose about the “discretionary tax condition” in the minutes of settlement. See Bross v Bross, 2023 ONSC 2104, for a detailed explanation of the background to this proceeding.

[7] Jeff and Sharon claimed that the minutes were terminated and unenforceable. Daniel and Linda applied to enforce the minutes. Jeff and Sharon counter-applied for interlocutory relief regarding the alleged removal of some of Florbil’s assets. At the hearing, the parties agreed to have Daniel and Linda’s motion proceed as a summary judgment motion under rule 20.04(2)(b) on the basis of the materials filed. Justice Chown’s decision on the motions was released on April 4, 2023.

[8] For those motions, Jeff and Sharon relied on an affidavit from Jordan Bowles, an accountant at MNP, about tax issues for Florbil. Bowles deposes to certain facts about his retainer:

• he is retained by Jeff and Sharon to provide “tax consulting services regarding Florbil…”
• Florbil “entered into an engagement letter with MNP on February 2, 2022”
• “Although my engagement letter was with [Florbil], at all material times, I only provided services to Jeff Bross and Sharon Bross directly. For clarity, I did not provide services to [Florbil] or any other shareholders, directors or officers of [Florbil].”

[9] On cross-examination, Bowles testified that:

• his “engagement letter was with” Florbil
• his only point of contact was Jeff and Sharon
• he has never spoken to Daniel and Linda in this matter or at all

[10] Jeff and Sharon say that they retained Bowles in February 2022 to provide tax advice to them about the potential restructuring of Florbil in connection with the dispute with Daniel and Linda. They say that the engagement letter with MNP was mistakenly made between it and Florbil, not it and them. Neither they nor MNP realized the mistake until they sought to obtain Bowles’s affidavit for the motions. They paid MNP’s fees personally and considered him their personal tax advisor. Bowles continued to provide personal tax advice to Jeff and Sharon after Daniel and Linda started this proceeding in May 2022.

[11] At the cross-examination, Bowles undertook to provide his entire file. The parties, through their lawyers, agreed that Bowles “would provide his complete file” to the parties’ lawyers on a “lawyer’s undertaking not to do anything with that” until the parties’ lawyers agreed on or, if necessary, litigated “relevancy or confidentiality”. Jeff and Sharon’s lawyer acknowledged that this meant that Daniel and Linda’s lawyer could review MNP’s file on a “counsel’s eyes only” basis.

[12] MNP produced the file the night before the motions hearing. At the hearing, Daniel and Linda’s lawyer confirmed that the undertakings from the cross-examinations had all been honoured.

[13] After the motions hearing, Daniel and Linda requested that the “counsel’s eyes only” condition be removed. Jeff and Sharon agreed if: (a) Florbil paid Bowles’s costs; and (b) certain communications are not produced to Daniel and Linda on the grounds that they are privileged. Daniel and Linda didn’t accept these terms.

ANALYSIS AND DISPOSITION

[14] Daniel and Linda rely on Rule 30 of the Rules of Civil Procedure:

• the court may at any time order production for inspection of documents that are not privileged and that are in the possession, control or power of a party (rule 30.04(5))
• where the court is satisfied by any evidence that a relevant document in a party’s possession, control or power may have been omitted from the party’s affidavit of documents, or that a claim of privilege may have been improperly made, the court may order the disclosure or production for inspection of the document, or a part of the document, if it is not privileged (rule 30.06(c))
• the court may, on motion by a party, order production for inspection of a document that is in the possession, control or power of a person not a party and is not privileged where the court is satisfied that (a) the document is relevant to a material issue in the action; and (b) it would be unfair to require the moving party to proceed to trial without having discovery of the document (rule 30.10(1))

[15] Rules 30.04 and 30.06 don’t apply here. These rules govern the disclosure and production of documents in an action through the service of an affidavit of documents. This proceeding is an application. No party has, or is required to, serve an affidavit of documents. The two cases cited by Daniel and Linda are both from actions (Olendzki v W.A. Baker Trucking Ltd., [2006] OJ no 256 (Sup Ct)), and Adesa Corp. v Bob Dickenson Auction Serv. Ltd., [2004] OJ no 4925 (Sup Ct)).

[16] Even if rule 30.10 may be used in an application, it could only apply if the motion had been served on MNP or Bowles, which it wasn’t here. See Taylor v. Reid, 2022 ONSC 671, at para 10, for a discussion of whether rule 30.10 applies to applications.

[17] Instead, the issue on this motion is the effect of Bowles’s undertaking. He promised to produce MNP’s file regarding Florbil to Daniel and Linda. Daniel and Linda now seek to enforce that undertaking.

[18] Jeff and Sharon argue that the file should not be produced to Daniel and Linda because it’s not relevant to any ongoing litigation and it’s privileged. In reply, Daniel and Linda rely on the principle of “fairness”. Quoting Taylor v Reid, 2022 ONSC 671, at para 27, they say: “Fairness is to be considered broadly in this context. In considering whether it would be ‘unfair to require the moving party to proceed to trial’ without the production, the court can logically consider this to include not only the decision to proceed to trial but also the decision to resolve the matter (for example, at mediation).”

[19] Though Daniel and Linda frame this motion as a privilege dispute in the context of documentary disclosure, I don’t agree that it is so. In Ontario v Rothmans Inc., 2011 ONSC 2504, leave to appeal denied 2011 ONSC 3685, Justice Perell summarized the law related to cross-examinations on an affidavit and undertakings:

• the questions must be relevant to: (a) the issues on the particular motion; (b) the matters raised in the affidavit by the deponent, even if those issues are irrelevant to the motion; or (c) the credibility and reliability of the deponent’s evidence (para 143)
• a cross-examination does not replace examinations for discovery or for the production of documents available under the Rules of Civil Procedure (para 143)
• the deponent for a motion may be asked relevant questions that involve an undertaking to obtain information, and the court will compel the question to be answered if the information is readily available or it is not unduly onerous to obtain the information (para 143)
• if an undertaking is voluntarily given, then it simply must be honoured (para 146)
• one of the more important principles to be applied for a refusals motion is the principle that the scope of the cross-examination will vary depending on the nature of the motion—questions about the merits of the motion may not be within the scope of a particular motion (para 148)

[20] There is no freestanding right to the production of documents from the other party or a non-party, even where an undertaking is voluntarily given. The right must be exercised within the scope of the cross-examination.

[21] Here, the undertaking was given on a cross-examination on an affidavit filed for the parties’ motions. If Daniel and Linda needed the documents in MNP’s file to litigate the motions, they should have sought production before the hearing (their lawyer had access to the file so there was no unfairness). But now that the motions have been litigated and decided, the documents are no longer relevant.

[22] Daniel and Linda argue that the entire file is relevant because it “directly discusses the tax issues which are in question in this litigation”. In pleading this argument, they disclose the weakness of their request—the tax issues can’t be in question because they have already argued the motions. If Daniel and Linda needed the information in MNP’s file to litigate the “tax issues in question”, presumably they would have moved to adjourn the motions hearing and sought production, either from Jeff and Sharon or from MNP and Bowles.

[23] As a result, Daniel and Linda’s motion for production of MNP’s file is dismissed. I need not consider the issues of non-party disclosure or privilege. Though Jeff and Sharon provided me the documents at issue for inspection to determine the validity of the claim, I haven’t done so as it is unnecessary given my disposition. The parties may contact my judicial assistant (sara.stafford@ontario.ca) to retrieve the documents.

[24] The parties have agreed that the successful party is entitled to costs of this motion in the amount of $3500 inclusive of legal fees, disbursements, and taxes.

[25] I am not seized.

_______________________________ Agarwal J. April 11, 2023