Court File and Parties
COURT FILE NO.: CV-20-83739 DATE: 2023-09-21 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jennifer Horrocks, Plaintiff AND May Hachem, 1270349 Ontario Inc., McConville’s Garage Ltd., 11567551 Canada Inc., and Bruce McConville, Defendants AND Michael McLauglin, Third Party
BEFORE: The Honourable Mr. Justice Marc Smith
COUNSEL: Gary Boyd, Counsel for the Plaintiff Roger Leavoy, Counsel for the Defendant Bruce McConville
HEARD: August 28, 2023
Reasons for Decision
M. Smith J
1The Defendant, Bruce McConville is seeking to amend his Statement of Defence by withdrawing an admission in paragraph 1 of his Statement of Defence that paragraph 25 of the Statement of Claim is admitted. There are other minor amendments made to the Statement of Claim, which are not contentious.
2The Plaintiff, Jennifer Horrocks opposes the motion regarding the withdrawal of the admission.
3For reasons that follow, Mr. McConville’s motion is granted. There shall be no costs awarded for this motion.
Brief facts
4Ms. Horrocks and Mr. McConville were involved in a family law proceeding. Mr. McConville was the Respondent in those proceedings. On January 30, 2019, the parties consented to an order, which included the following, in paragraph 7: “Within 60 days the Respondent shall provide appraisals of the values of the real property owned by him or his corporations as of the date of marriage and date of separation with the understanding that such appraisals need not include formal environmental assessments of the property occupied by McConville Garage at 306 Montfort Street, Ottawa.”
5On June 11, 2019, MacEachern J. heard several motions in the matrimonial matter. In paragraph 40 of her endorsement, she notes the following: “The Respondent’s financial statement also reports that he owns two other real estate properties – a rental property and a cottage property, which appears to now be held through his corporation. Although the Respondent states that he needs to sell the matrimonial home due to financial issues, he is not seeking to sell his other real estate holdings.”
6On September 24, 2019, the parties appeared before Ryan Bell J. regarding several motions in the matrimonial matter. Ms. Horrocks was seeking an order for preservation pursuant to s. 12 of the Family Law Act, R.S.O. 1990, c. F.3, namely that Mr. McConville be restrained from dispensing or encumbering his ownership interests in McConville’s Garage Ltd. and 1270349 Ontario Inc. This motion was brought by Ms. Horrocks in response to a letter written by Mr. McConville’s then lawyer, Mr. Michael Rappaport, to Ms. Horrocks’s lawyer, which read, in part: “I do not believe that an income determination report is required as my client is in the final stages of negotiating the sale of McConville Garage Ltd. and Holdco, which will include a one year contract for him to continue in a management role as an independent contractor.”
7Ryan Bell J. makes several observations and orders in her endorsement dated September 24, 2019, including the following:
a. “The matter comes before me – and, I might add, to the applicant – with no evidence or disclosure regarding the sales whatsoever. Indeed, the first 2 hours of submissions by counsel for the respondent proceeded on the basis that the sales of the corporations were scheduled to close tomorrow. It turns out, that is not correct. Apparently, Holdco was sold June 6, 2019 for $850,000 while McConville Garage was sold April 1, 2019.”
b. “Despite the sales in Apr. & early June, this fact was apparently not disclosed to MacEachern J. who heard a motion on June 11, 2019.”
c. “The respondent is ordered not to proceed with the sale of the Saint Anne Avenue property pending further order of this court or consent of the parties.”
8The parties returned before Ryan Bell J. on November 14, 2019, for the continuation of the motions. It is noted in Ryan Bell J.’s endorsement that Mr. McConville had not complied with the disclosure orders regarding the sale of the businesses. Ryan Bell J. made further orders regarding disclosing the details surrounding the sale of the businesses.
9The parties returned once again before Ryan Bell J. on December 10, 2019. On that day, Mr. McConville was self-represented. A contempt motion had been brought by Ms. Horrocks, but it was adjourned. Ryan Bell J. noted that Mr. McConville had breached her orders of September 24, 2019 and November 14, 2019, including the sale of the Saint Anne Avenue property on October 29, 2019. Regarding the sale, Ryan Bell J. wrote, amongst other things: “The fact that this was not disclosed at the attendance on November 14, 2019 & that the respondent, through counsel, permitted the court to make further orders wrt the “proposed” sale of Ste Anne Avenue property, including the provision of an aff’t, is of the most serious nature.” As a result, Ryan Bell. J. made further orders regarding payment into court of $280,000 from the proceeds of the sale of the Saint Anne Avenue property, and disclosure of all documentation pertaining to the sale of the businesses.
10On July 7, 2020, the Plaintiff’s Statement of Claim was issued. Paragraph 25 of the Statement of Claim reads as follows: “The plaintiff brought an emergency motion in the Family Law Matter on September 14, 2019 regarding the sale of the businesses as Bruce McConville had not disclosed the sale of McConville’s Garage Ltd. and the Holding Company prior to September 18, 2019.”
11On September 25, 2020, the Defendant McConville filed his Statement of Defence, whereby he admitted the allegations contained in paragraph 25 of the Statement of Claim.
Issue
12The only issue to determine is whether Mr. McConville should be permitted to withdraw his admission regarding paragraph 25 of the Statement of Claim.
Position of the parties
Mr. McConville
13Mr. McConville argues that in admitting paragraph 25 of the Statement of Claim, it was his intention (and his counsel at the time) to only admit the first part of paragraph 25, namely that Ms. Horrocks had brought an emergency motion regarding the sale of the business, and for the reasons claimed. Mr. McConville states that he was not admitting or conceding that he had not disclosed the sale of his assets.
14In support of Mr. McConville’s position, he refers to paragraph 69 of his affidavit dated March 5, 2019, filed in the family law proceeding regarding his claims. This paragraph reads: “The total is around $3,600 per month, which I can no longer afford. I have been forced to sell all of my assets and my income from my business has declined markedly over the past three years.” He submits that he never intended to contradict this affidavit.
15On September 26, 2019, Mr. McConville’s counsel wrote to Ms. Horrock’s counsel and advised as follows: “I believe that Justice MacEachern misapprehended the facts at paragraph 40 of Her Honour’s decision when she wrote “he is not seeking to sell his other real estate holdings.” Nothing could be further from the truth.” Counsel for Mr. McConville further wrote: “In the Affidavit, Bruce McConville advised the Court that he already sold all his assets, albeit conditionally, and neither you or your client pretended to be “shocked,” “startled” or “surprised.” In fact, it has always been the position of Bruce McConville that he wanted to sell his business and all of his rental properties located in Vanier ever since the City of Ottawa approved construction of the “mega-homeless shelter” near his business and properties.”
Ms. Horrocks
16Ms. Horrocks submits that throughout the family law proceedings, Mr. McConville has clearly demonstrated a pattern of total non-disclosure.
17It is argued that Mr. McConville has misled the court regarding the sale of his assets. The court has, on several occasions, prohibited Mr. McConville from selling his assets, yet Mr. McConville proceeded in any event with the sale.
18Ms. Horrocks says that in the previous appearances, there have been findings of the court regarding the sale of the assets, and none of these findings have been appealed. It is submitted that there is no triable issue.
Legal principles
19Rule 51.05 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that an admission may be withdrawn on consent or with leave of the court.
20An admission is an unambiguous deliberate concession, and it must be an intentional concession and not simply the result of the words chosen in the claim: Yang (Guardian of) v Simcoe (County), 2011 ONSC 6405, at para. 46.
21To obtain leave to withdraw an admission, a party must meet a three-part test: (a) show a triable issue; (b) furnish a reasonable explanation for the change in position; and (c) show that there is no resulting prejudice that could not be compensated by costs: Antipas v. Coroneos, [1988] O.J. No. 137 at para. 14; 147619 Canada Inc. v. Chartrand, [2006] O.J. No. 1877, at para. 1.
Analysis
22It is not contentious that Mr. McConville's amendment to his Statement of Defence withdraws an admission. The question is whether leave should be granted to withdraw the admission.
23I am troubled by Mr. McConville’s conduct during his previous appearances before MacEachern J. and Ryan Bell J. Taken as a whole, the endorsements clearly show that Mr. McConville misled the court regarding the sale of his assets, and as noted by Ms. Horrocks, none of these findings have been appealed.
24However, by strictly applying the three-part test, I find that leave to withdraw the admission should be granted.
25The first part of the test requires the moving party to show that the proposed amendment raises a triable issue. The threshold is low.
26While the previous court endorsements speak to the issue of the non-disclosure of Mr. McConville’s assets before September 18, 2019, Mr. McConville has presented affidavit evidence that was previously filed on March 5, 2019. In that affidavit, Mr. McConville deposed that he had sold all his assets. There is no explanation before me as to why Ms. Horrocks did not act upon this admission nor why this affidavit evidence was not raised during the subsequent court appearances before MacEachern J. or Ryan Bell J.
27Whether or not the affidavit evidence of March 2019 will be sufficient to convince the court that Mr. Horrocks had previously disclosed the sale of his assets, remains to be seen.
28There is contradictory evidence regarding the disclosure of the sale of Mr. McConville's assets, and it must be properly tested. I find that there is a triable issue that deserves to be addressed on a full record.
29With respect to the second part of the test, Mr. McConville claims that the admission was made in error or by inadvertence. Ms. Horrocks says that Mr. McConville failed to obtain an affidavit from his previous counsel that drafted the Statement of Defence.
30It is debatable whether an affidavit from previous counsel would have been helpful or whether such an affidavit would have to contain solicitor-client privilege and is therefore not appropriate. Regardless, I do not find that it is essential for this case.
31I can appreciate Mr. McConville’s argument that he was only prepared to admit to the facts in paragraph 25 of the Statement of Claim and not the position that Ms. Horrocks alleges flows from the admission of the facts, because there is some ambiguity in the wording of paragraph 25 that can easily lead to confusion. In addition, based upon the March 2019 affidavit, there is some evidence to support Mr. McConville’s position that the admission was made in error or by inadvertence.
32I am satisfied that there exists a reasonable explanation for the change of position.
33The third part of the test is that the withdrawal will not result in any prejudice that cannot be compensated by costs.
34This action was issued in 2020 but it remains in the early stages of litigation. To my knowledge, it is not listed for trial and there are numerous steps that still need to be taken in this proceeding. The stage of this proceeding is relevant in the determination of prejudice.
35There is no resulting prejudice that could not be compensated by costs.
Disposition
36Mr. McConville's motion to amend his Statement of Defence in the form attached to his motion record is granted.
37In terms of costs of this motion, both parties have filed very similar costs outlines, in the event of a successful outcome.
38Costs are at the discretion of the court. Although Mr. McConville would presumptively be entitled to costs because he was successful in this motion, I am of the view that no costs should be awarded. Mr. McConville’s motion was necessary because of his own error or wrongdoing. Even though Ms. Horrocks was unsuccessful, I am of the view that she was justified in resisting the request for the withdrawal of the admission.
39I reiterate the troublesome behaviour that was demonstrated during the hearings before Ryan Bell J. and the misrepresentations made to the court. This matter should have been dealt with much earlier, and there has been a significant delay in bringing this motion.
40There shall be no costs for this motion.
M. Smith J Released: September 21, 2023