Court File and Parties

COURT FILE NO.: CV-21-00670267-0000 DATE: 20230824 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: One York Street Inc., Plaintiff AND: 2360083 Ontario Limited and LCIL Ltd., Defendants

BEFORE: D.A. Wilson J.

COUNSEL: Matthew Lerner and Jim Lepore, for the Plaintiff Matthew Karabus and Luke Sabourin, for the Defendants

HEARD via Videoconference: August 9, 2023

Endorsement

[1] The Defendants bring this motion for an order transferring this proceeding from Sudbury (Northeast Region) to the Toronto Region.

[2] The Plaintiff opposes the transfer motion. He also brings a cross-motion requesting that should a transfer be necessary, it should be to Gore Bay in the Northeast Judicial Region.

[3] The motion is brought pursuant to Rule 13.1.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) and the procedures set forth in the Consolidated Civil Provincial Practice Direction amended February 1, 2024 (the “Practice Direction”). In accordance with the Practice Direction, I am to determine the Defendants’ request to transfer this proceeding from another judicial region to the Toronto Region.

[4] In determining whether a transfer is desirable in the interests of justice, the court is to consider the factors enumerated in subrule 13.01.02(b).

[5] The factors set forth in Rule 13.1.02(2)(b) are to be applied holistically. No one of the enumerated factors is more important than the other. These factors are to be examined together and balanced in order to determine whether a requested transfer is desirable in the interests of justice: Chatterson et al. v. M&M Meat Shops, 2014 ONSC 1897, 68 C.P.C. (7th) 135 (Div. Ct.), at paras. 22, 34, and 35.

[6] Balancing the factors in Rule 13.1.02(2)(b) is not a purely numerical or mathematical counting exercise: Bruce Power L.P. v. BNT Canada, L.P., 2018 ONSC 5968, at para. 16.

[7] If the Plaintiff’s choice of venue is reasonable and the Defendant challenges that venue, then a comparison of the two venues is required. The Defendant must establish that its proposed choice of venue is “significantly better” than the one chosen by the Plaintiff: Chatterson, at paras. 28-29.

[8] The subject collision took place in the City of Toronto. At that time the Plaintiff was a student at Tyndale University in Toronto and was employed at Starbucks. He attends university between September and April of each year. The Plaintiff is ordinarily resident in the Northeast Judicial Region.

[9] Following the collision, he was transported to the North York General Hospital and then St. Michael’s Hospital in Toronto where he remained for a number of days. Upon discharge he sought treatment at the Manitoulin Health Centre.

[10] The Defendants reside in Aurora which is located in the Central York Region and is part of the greater Toronto area. Neither the Defendants nor the Plaintiff reside in the City of Toronto.

[11] A number of the medical and other witnesses to be called at trial reside in or near the greater Toronto area. However, the record discloses that the majority of the witnesses to be called by the Plaintiff at trial are resident in the Northeast Region. This is where the post-acute care and treatment was received and is where the Plaintiff’s family doctor, treating orthopedic surgeon and psychological expert reside. It is also where the Plaintiff has worked in his chosen profession.

[12] On a holistic consideration of the factors enumerated in subrule 13.1.02(2) and the circumstances of the case, I find that the Plaintiff’s choice of venue was a reasonable one. I am not satisfied that the record establishes that the venue proposed by the Defendants is “significantly better” than the one chosen by the Plaintiff. It cannot be said that the Plaintiff’s choice is unreasonable. I therefore dismiss the Defendants' motion for a transfer.

[13] Given this result, the cross-motion is also dismissed. For clarification, a request to transfer or move a proceeding within a particular judicial region from one location to another is not a determination to be made by an RSJ in a different region.

[14] I encourage the parties to agree on the issue of costs. If they cannot agree, the Plaintiff is to provide his costs submissions of no more than 2 pages by June 11, 2025. The Defendants are to provide their costs submission of the same length by June 18, 2025. Any reply is to be delivered by June 23, 2025. These submissions are to be uploaded to Case Center and provided to my judicial assistant.

Endorsement

[1] This is an action for damages relating to a breach of a lease arising from the alleged failure of the tenant 2360083 Ontario Ltd. (“236”) to pay rent. The other Defendant LCIL Ltd. (“LCIL”) is the indemnifier. The Plaintiff alleges the Defendant abandoned the lease after approximately 3 3/4 years into a 20-year term.

Background

[2] The Plaintiff One York owns and leases commercial space of approximately 25,879 square feet in a shopping centre at 110 Harbour Street in Toronto. The Defendants operate a chain of supermarkets under the names Coppa’s Fresh Market and Market 63 by Coppa’s. On January 18, 2017, Louis Coppa executed an offer to lease. On May 25, 2017, he executed a lease on behalf of the tenant and the indemnifier. There was a term that the tenant “shall exercise its options to extend the term of the lease to 20 years, contemporaneously with the execution of the lease.” On May 26, 2017, Louis Coppa executed the lease extension agreement, which extended the term of the lease to 20 years.

[3] The Plaintiff started this action in October 2021. The Defendants served a statement of defence and counterclaim and pleaded that the Plaintiff made misrepresentations concerning the amount of foot traffic that could be expected at the leased premises, which the Defendants alleged induced them to sign the lease. The Defendants pleaded that they did not understand the terms of the lease and that they did not receive legal advice prior to signing the lease. As a result, they alleged the lease was unenforceable.

[4] In the productions exchanged prior to the discoveries, there was documentation in the Defendants’ materials that made it clear that Fogler Rubinoff LLP (“Fogler’s”) were counsel to the Defendants at the time of the execution of the lease on May 25, 2017. The discoveries took place in March and April 2023. John Coppa was produced as the representative of the tenant. The Plaintiff wished to also examine Louis Coppa on behalf of LCIL, but this was refused. At the discovery of Mr. Coppa, counsel for the Plaintiff requested documentation from the Fogler’s file; defence counsel (from Fogler’s) refused all questions on the grounds of solicitor-client privilege.

[5] I assumed the role of case management judge and convened a case conference on May 16, 2023. The Plaintiff served a motion on June 9, 2023 seeking production of Fogler’s file, an order requiring Louis Coppa to attend a discovery on behalf of the Defendant LCIL Inc., and an order that John Coppa complete his discovery on behalf of 236. I gave directions concerning the motion for production of Fogler’s file. The motion was scheduled before me on June 28; Gowlings then became counsel for the Defendants and the motion was adjourned to August 9 at the request of the Defendants.

[6] Prior to the return of the motion, counsel agreed on certain relief sought by the Plaintiff. The Defendants brought a motion to amend the statement of defence and counterclaim to withdraw the pleading that the Defendants did not receive legal advice in connection with the lease and that the Defendant 236 signed the lease extension agreement without legal advice. That motion to withdraw the pleading concerning the lack of legal advice was unopposed by the Plaintiff and the statement of defence was amended. As a result, the only matter on the Plaintiff’s motion is production of the file from the former counsel for the Defendants.

Positions of the Parties

[7] The Plaintiff takes the position that the Defendants admit to receiving legal advice regarding the lease and have waived solicitor-client privilege concerning that advice by asserting affirmative defences of misrepresentations made and relied upon. Furthermore, the Defendants have placed their state of mind in issue in the proceeding and the Fogler file is relevant to that issue and must be produced.

[8] The Defendants submit that there is no waiver of privilege from the fact that a party received legal advice during the event giving rise to the claim. A party does not create a waiver of privilege by simply pleading misrepresentation. Since the pleading alleging lack of legal advice has been removed, the solicitor-client communications are not relevant and need not be disclosed. Mr. Karabus submits that as soon as the Defendants were aware of the potential for waiver of privilege, they acted with dispatch.

Analysis

[9] John Coppa swore an affidavit dated June 19, 2023 in support of the motion in which he deposes that Fogler’s was the lawyer for 236 and LCIL in connection with the lease and lease extension agreement back in 2017. Mr. Coppa confirms that he reviewed the pleadings prior to their service; he deposes that he did not recall that he had received legal advice from Fogler’s when he approved the statement of defence and counterclaim.

[10] In the statement of defence it is pleaded that “but for the Plaintiff’s representations as to the suitability of the leased premises for the tenant’s business, the Defendants would not have agreed to sign the lease.” It is also pleaded that “the Plaintiff assured the Defendants that this new development would guarantee a high volume of foot traffic for the leased premises from the many residential and commercial tenancies and attractions adjacent to the leased premises.” It is pleaded that the Defendants relied on the representations of the Plaintiff “as to the leased premises, to their detriment and peril.”

[11] The Plaintiff in its reply and defence to the counterclaim pleads that the Defendants have placed their state of mind and the nature and extent of the legal advice received regarding the lease in issue and Coppa has waived any privilege that could otherwise attach to that advice.

[12] On December 1, 2021, after reviewing the statement of defence and counterclaim, Mr. Lerner wrote to Ms. Perfetto advising that because the Defendants had placed their state of mind in issue in this litigation, they had waived privilege over the Fogler’s file and communications concerning the execution of the lease and its extension. Ms. Perfetto’s response on December 15, 2021 was simply to deny that there was a waiver of solicitor-client privilege. Mr. Lerner asked for production of the file concerning the lease negotiation and extension, which was refused.

[13] I agree that solicitor-client privilege is a substantive right that is important to the manner in which the justice system operates. However, it is not an absolute privilege, and the jurisprudence is clear that a solicitor’s file may be produced in certain circumstances. When determining whether privilege should be deemed to have been waived, the court must consider and balance the advantages of full disclosure to ensure trial fairness against the importance of solicitor-client privilege. The onus is on the party seeking production, in this case the Plaintiff.

[14] A waiver of privilege may be express or implied. There can be waiver when a document(s) is produced which was privileged, and as a result the privilege is said to be lost. There may be waiver by reliance; this arises often in pleadings.

[15] In Creative Career Systems Inc. v. Ontario [1], Perell J. considered the issue of when there is a deemed waiver of solicitor-client privilege, and his analysis is helpful in the case before me. He commented:

[I]f a party places its state of mind in issue with respect to its claim or defence and has received legal advice to help form the state of mind, privilege will be deemed to be waived with respect to such legal advice…there is no waiver of the privilege associated with lawyer and client communications from the mere fact that during the events giving rise to the claim or defence, the party received legal advice, even if the party relied on the legal advice during the events giving rise to the claim or defence. For a party to have to disclose the legal advice more is required…The waiver of the privilege occurs when the party uses the receipt of legal advice as a material fact in his or her claim or defence. [2]

[16] Justice Perell articulates a two-step test:

Thus, a deemed waiver and an obligation to disclose a privileged communication requires two elements, namely: (1) the presence or absence of legal advice is relevant to the existence or non-existence of a claim or defence; which is to say that the presence or absence of legal advice is material to the lawsuit; and (2) the party who received the legal advice must make the receipt of it an issue in the claim or defence. [3]

[17] Roynat Capital Inc. v. Repeatseat Ltd. [4] is a similar case to the one before me, as it involved a misrepresentation and pleading of reliance. The court agreed that the analysis of Perell J. in Creative Career Systems was appropriate and applied the two-step test. The court found that the presence of legal advice was relevant to the pleading of reliance and the party who received the legal advice had made the receipt of it an issue because the court had to determine whether the reliance was reasonable under the circumstances. It is a similar situation in the instant case.

[18] I agree with the comments of the court in Roynat that the principles of fairness and consistency must be balanced when determining if waiver of privilege has occurred:

The principles of fairness and consistency temper and guide when waiver of privilege is deemed to occur. Whether fairness and consistency require implied waiver of privilege is case specific and factually dependent. The court provides an important gatekeeper function to avoid inappropriate requests for disclosure, balancing fairness with the importance of solicitor-client privilege. Deemed waiver and disclosure will be limited to circumstances where the relevance of the evidence in question is high, and the principles of fairness and consistency require disclosure to allow a party to adequate defend. [5]

[19] The issue of deemed waiver of solicitor-client privilege is not a new one; it was raised by Mr. Lerner in a letter dated December 1, 2021 to counsel at Fogler’s. At his cross-examination, Mr. Coppa initially stated that he did not know about this letter. He later acknowledged that the letter had been sent to him and its contents were discussed with counsel at Fogler’s. The Defendants submit that the issue of waiver of privilege was not a continuing issue and that the request for production of the Fogler’s file at the discovery of Mr. Coppa in March 2023 took counsel by surprise. I do not accept this submission on the evidence on this motion, nor do I find that the waiver was unintentional. Rather, I find the issue of waiver was raised directly by Mr. Lerner in his correspondence of December 1, 2021, which was acknowledged by Ms. Perfetto, although no meaningful response was provided to the concerns raised. Furthermore, the Plaintiff’s Reply to the counterclaim specifically states that the Defendants “waived any and all privilege that could otherwise attach to that state of mind and advice”.

[20] I do not accept the submission of the defence that what transpired was simply an “imperfectly drafted pleading”. The evidence does not support that contention.

[21] The Defendants assert that they relied on representations allegedly made by the Plaintiff that do not form part of the lease, specifically the statements concerning the suitability of the leased premises to their business and the volume of customers that could be expected at the store. The Defendants allege that had these representations not been made and relied upon, they would not have signed the lease. As a result, they plead that the lease is unenforceable. The Defendants plead they relied on statements not contained in the contract; they had the benefit of counsel at the time. Given the pleading and the defence asserted, the legal advice they received from Fogler’s at the time is absolutely relevant to this pleading.

[22] In my view, the two-part test articulated by Perell J. on the deemed waiver of solicitor-client privilege is met in this case. First, they acknowledge they had legal counsel at the relevant time and their defence includes reliance on extra-contractual misrepresentations which makes the advice relevant and the Defendants have made the receipt of it an issue through their pleadings. The waters have been muddied by the Defendants’ incorrect initial pleading that they did not have the benefit of legal advice when they executed the lease. Now, that portion of the defence has been abandoned and Mr. Coppa admits that he had legal advice at the time he was reviewing and considering the lease and the lease extension. Furthermore, the Defendants allege that they were induced into signing the lease by misrepresentations made by the Plaintiff.

[23] I agree with the view expressed by Perell J. in Creative Career, supra, that there is no waiver of privilege associated with solicitor and client communications just from the fact that a party received legal advice and relied on it during the events giving rise to the claim. However, in this case, the second part of the test is met because the Defendants’ pleading make the advice highly relevant. Counsel was retained to deal with the protection of the lessee’s interests and to ensure that the lease transaction accurately set out the parties’ agreement. The representations about the terms and conditions that were important to the Defendants would have been discussed with their counsel at the time. By pleading the misrepresentations, the lessee puts in issue what it knew and thought at the time of execution of the agreement. In my view, it would be manifestly unfair for the lessor to be unable to test the lessee’s evidence without knowing about discussions that were held at the time with counsel, which is essential to determining the understanding of the Defendants concerning the terms of the lease.

[24] The Defendants may say one of two things: that they did not bring the issue of the representations made by the Plaintiff to the attention of their counsel at the time of negotiations; or that they did discuss the representations and received advice which informed their understanding of the lease. If the Defendants never discussed the alleged representations with their counsel at the time, then there would be nothing in the Fogler’s file on this point. On the other hand, if there were discussions and advice and recommendations received, it is absolutely relevant to their defence of reliance on the extra-contractual representations they say induced them into signing the lease.

[25] I am of the view that the facts of this case lead to a waiver of solicitor-client privilege as a result of the position taken by the Defendants, which requires the disclosure of solicitor-client communication in order to achieve fairness between the parties: Spicer v. Spicer [6]. The Defendants’ withdrawal of the pleading alleging they did not have the benefit of legal advice when they signed the lease does not assist them with preserving solicitor-client privilege. They have placed their state of mind at issue in their defence and the legal advice they received from their lawyer at that time is relevant and it would be unfair to require the Plaintiff to proceed to trial without having disclosure of the file from Fogler’s.

[26] It is now admitted that the Defendants had the assistance of Fogler’s to help negotiate a lease that was significant; it was a large premises and extended for 20 years. Counsel was retained clearly to ensure that the Defendants understood the implications of the terms being negotiated and to ensure that the transaction encompassed the agreed-upon terms.

[27] The Defendants have pleaded they relied on the representations made by the Plaintiff. As a result, the Plaintiff would want to know what representations the Defendants allege were made, by whom, about what, whether they were material to the lessees, whether they were relied upon by the lessees and if so, was it reasonable for them to do so? The fact that the Defendants had counsel at the time of these negotiations is critical to comprehending what the Defendants understood at the time of execution of the agreement. If the representations were fundamentally important to the Defendants so as to induce agreement to the lease, it is critical to know if the Defendants discussed with their counsel at the time and if so, what advice was given to the lessees, if any, about those representations? This is clearly relevant given the four corners clause that is contained in the lease.

[28] Given the position of the Defendants, the discussions and advice received from their lawyers at Fogler’s at the time of the execution of the lease is relevant. It would be unfair to require to Plaintiff to proceed to trial without having disclosure of what the Defendants were advised by their counsel concerning the lease and its ramifications and the impact of the alleged representations made by the Plaintiff. Without understanding the context and the information the Defendants had at the time of the execution of the lease, the Plaintiff cannot test whether the pleading of reliance is reasonable or not. The Defendants assert that the contract is unenforceable as a result of the misrepresentations made at the time of the execution of the lease. The Defendants now acknowledge that they discussed these issues with their counsel at the time. It would be unfair to require the Plaintiff to proceed to trial in the absence of critical information that relates to the nature of the defence being asserted.

[29] The Defendants plead that the contract is unenforceable because they relied on misrepresentations by the Plaintiff on critical issues. They also plead that they did not understand the ramifications of signing the lease extension. In their counterclaim, they allege they signed the lease and the extension because they were threatened and intimidated by the Plaintiff. The Defendants had the advice of counsel at the time. What they understood from their lawyers is relevant to the determination of whether or not it was reasonable for the Defendants to have relied on the representations made by the Plaintiff concerning the nature of the leased premises. In order to understand the context in which the lease was signed, it is necessary to know the advice received from their counsel at the time. The Defendants have waived privilege in the file and cannot now attempt to “unwaive” it by stating that they were not aware of the issue of waiver and by withdrawing a pleading that was clearly not accurate.

[30] I do not accept the submission of defence counsel that ordering production of the Fogler’s file would mean that in every case where a misrepresentation is pleaded, the file from counsel who was involved at the time of the transaction is producible. The jurisprudence makes it clear that in a case where misrepresentation is alleged, there may be a deemed waiver of solicitor-client privilege when a party alleges reliance and was in receipt of legal advice at the time, which might challenge such reliance. The privilege in the lawyer’s file is not automatically waived, as Mr. Karabus submits, simply because of a pleading of misrepresentation and reliance on it, but it is subject to the court being satisfied that fairness dictates that the file be produced.

[31] On the facts of the case before me, the Defendants have made their state of mind at the time of the execution of the lease material to their defence. To preclude disclosure of the advice received from their counsel at the time would, in my view, result in an unfair litigation advantage to the Defendants. The Fogler’s file relating to the execution of the lease to May 25, 2017 is to be produced.

[32] If counsel cannot agree on the issue of costs of this motion, they are to contact my assistant and request a case conference.

D.A. Wilson J. Date: August 24, 2023

Footnotes

[1] 2012 ONSC 649, O.J. No. 262. [2] Creative Career Systems, at paras. 26, 27 and 29. [3] Creative Career Systems, at para. 30. [4] 2015 ONSC 1108, 125 O.R. (3d) 596 (Div. Ct.). [5] At para. 84. [6] 2015 ONSC 4175, [2016] O.J. No. 654.