COURT FILE NO.: CV-14-359-00 DATE: 2023 10 19

SUPERIOR COURT OF JUSTICE – ONTARIO 7755 Hurontario Street, Brampton ON L6W 4T6

RE: Liudmila Sidorova, Plaintiff AND: Vera Silajeva also known as Vera Sila and LV Rehabilitation Clinic Inc., Defendants AND BETWEEN: Vera Silajeva also known as Vera Sila and Dimitri Malafeev, Plaintiffs by Counterclaim AND: Liudmila Sidorova, Radion Tarlo and DR Independent Medical Assessment Inc., Defendants by Counterclaim

BEFORE: Justice Bloom

COUNSEL: Arkadi Bouchelev, counsel for the Plaintiff and Defendants by Counterclaim Macdonald Allen, counsel for the Defendants and Plaintiffs by Counterclaim

HEARD: March 23, 2023 and July 24, 2023

ENDORSEMENT

I. INTRODUCTION

[1] The Plaintiff and Defendants by Counterclaim on the one hand and the Defendants and Plaintiffs by Counterclaim on the other have brought cross-motions.

[2] Those motions raise three categories of issue: (1) they seek orders compelling the answer of questions on examination for discovery in respect of which there were undertakings, under advisements, or refusals; the relief sought would also include further examinations for discovery in respect of the answers ordered; (2) access by the Plaintiff and Defendants by Counterclaim to the computer software used by the Defendant, LV; and (3) a timetable for subsequent steps in the proceeding.

[3] On March 23, 2023, I heard only argument on the category (1) issues on the motion by the Defendants and Plaintiffs by Counterclaim. I heard argument on the rest of the issues on July 24, 2023.

II. UNDISPUTED FACTS

[4] Sidorova is married to Tarlo. Silajeva is married to Malafeev.

[5] The claim and counterclaim relate to the alleged entitlement of the two couples to interests in, and profits of, LV and DR. LV operated a physiotherapy business and DR operated an injury assessment business; the two companies operated in a close relationship.

[6] A disagreement between the two couples arose in 2013 relating to the businesses operated by the two corporations.

III. APPLICABLE RULES ON MOTIONS TO COMPEL ANSWERS

[7] Rule 31.06 (1) and (2) address the scope of examination for discovery and provide as follows:

31.06 (1) General-- A person examined for discovery shall answer to the best of his or her knowledge, information and belief, any proper question relevant to any matter in issue in the action or to any matter made discoverable by subrules (2) to (4) and no question may be objected to on the ground that,

(a) the information sought is evidence;

(b) the question constitutes cross-examination, unless the question is directed solely to the credibility of the witness; or

(c) the question constitutes cross-examination on the affidavit of documents of the party being examined. R.R.O. 1990, Reg. 194, r. 31.06 (1) ; O. Reg. 438/08, s. 30 (1).

(2) Identity of persons having knowledge-- A party may on an examination for discovery obtain disclosure of the names and addresses of persons who might reasonably be expected to have knowledge of transactions or occurrences in issue in the action, unless the court orders otherwise. R.R.O. 1990, Reg. 194, r. 31.06

[8] Rule 34.15 addresses remedy in respect of questions not answered on examination for discovery:

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. R.R.O. 1990, Reg. 194, r. 34.15 (1) .

(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. R.R.O. 1990, Reg. 194, r. 34.15 (2) .

[9] The rules governing documentary discovery on this motion are the definitions of “document” and “electronic” in Rule 1.03; Rules 30.01(1) (a) and (b); Rule 30.02 (1), (2), and (4); and Rule 30.04 (5):

1.03 (1) In these rules, unless the context requires otherwise,

“document” includes data and information in electronic form; (“document”)

“electronic” includes created, recorded, transmitted or stored in digital form or in other intangible form by electronic, magnetic or optical means or by any other means that has capabilities for creation, recording, transmission or storage similar to those means, and “electronically” has a corresponding meaning;

30.01 (1) In rules 30.02 to 30.11,

(a) “document” includes a sound recording, videotape, film, photograph, chart, graph, map, plan, survey, book of account, and data and information in electronic form; and

(b) a document shall be deemed to be in a party’s power if that party is entitled to obtain the original document or a copy of it and the party seeking it is not so entitled. R.R.O. 1990, Reg. 194, r. 30.01 (1) ; O. Reg. 427/01, s. 12; O. Reg. 132/04, s. 6.

Scope of Documentary Discovery

Disclosure

30.02 (1) Every document relevant to any matter in issue in an action that is or has been in the possession, control or power of a party to the action shall be disclosed as provided in rules 30.03 to 30.10, whether or not privilege is claimed in respect of the document. R.R.O. 1990, Reg. 194, r. 30.02 (1) ; O. Reg. 438/08, s. 26.

Production for Inspection

(2) Every document relevant to any matter in issue in an action that is in the possession, control, or power of a party to the action shall be produced for inspection if requested, as provided in rules 30.03 to 30.10, unless privilege is claimed in respect of the document. R.R.O. 1990, Reg. 194, r. 30.02 (2) ; O. Reg. 438/08, s. 26.

Subsidiary and Affiliated Corporations and Corporations Controlled by Party

(4) The court may order a party to disclose all relevant documents in the possession, control or power of the party’s subsidiary or affiliated corporation or of a corporation controlled directly or indirectly by the party and to produce for inspection all such documents that are not privileged. R.R.O. 1990, Reg. 194, r. 30.02 (4) .

Court may Order Production

30.04 (5) 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. R.R.O. 1990, Reg. 194, r. 30.04 (5) .

[10] Rule 30.08 addresses remedy in respect of documentary discovery:

Effect of Failure to Disclose or Produce for Inspection

Failure to Disclose or Produce Document

30.08 (1) Where a party fails to disclose a document in an affidavit of documents or a supplementary affidavit, or fails to produce a document for inspection in compliance with these rules, an order of the court or an undertaking,

(a) if the document is favourable to the party’s case, the party may not use the document at the trial, except with leave of the trial judge; or

(b) if the document is not favourable to the party’s case, the court may make such order as is just. R.R.O. 1990, Reg. 194, r. 30.08 (1) ; O. Reg. 504/00, s. 3.

Failure to Serve Affidavit or Produce Document

(2) Where a party fails to serve an affidavit of documents or produce a document for inspection in compliance with these rules or fails to comply with an order of the court under rules 30.02 to 30.11, the court may,

(a) revoke or suspend the party’s right, if any, to initiate or continue an examination for discovery;

(b) dismiss the action, if the party is a plaintiff, or strike out the statement of defence, if the party is a defendant; and

(c) make such other order as is just. R.R.O. 1990, Reg. 194, r. 30.08 (2) .

[11] Rule 29.2 addresses proportionality in discovery:

Definition

29.2.01 In this Rule, “document” has the same meaning as in clause 30.01 (1) (a). O. Reg. 438/08, s. 25.

Application

29.2.02 This Rule applies to any determination by the court under any of the following Rules as to whether a party or other person must answer a question or produce a document:

1. Rule 30 (Discovery of Documents).

2. Rule 31 (Examination for Discovery).

3. Rule 34 (Procedure on Oral Examinations).

4. Rule 35 (Examination for Discovery by Written Questions). O. Reg. 438/08, s. 25.

Considerations

General

29.2.03 (1) In making a determination as to whether a party or other person must answer a question or produce a document, the court shall consider whether,

(a) the time required for the party or other person to answer the question or produce the document would be unreasonable;

(b) the expense associated with answering the question or producing the document would be unjustified;

(c) requiring the party or other person to answer the question or produce the document would cause him or her undue prejudice;

(d) requiring the party or other person to answer the question or produce the document would unduly interfere with the orderly progress of the action; and

(e) the information or the document is readily available to the party requesting it from another source. O. Reg. 438/08, s. 25.

Overall Volume of Documents

(2) In addition to the considerations listed in subrule (1), in determining whether to order a party or other person to produce one or more documents, the court shall consider whether such an order would result in an excessive volume of documents required to be produced by the party or other person. O. Reg. 438/08, s. 25.

[12] In Paul M. Perell and John W. Morden, The Law of Civil Procedure in Ontario , 2 nd ed (Toronto: LexisNexis Canada, 2020) at paras. 7.40 to 7.42 the learned authors state:

7.40

The extent of the documents that a party must disclose in his or her affidavit of documents is broad, both in terms of the kinds of objects that are considered “documents” and in terms of the kinds of information a document may contain. In Hill v. R. , 1 many years ago, Humphreys J. in England appreciated that the form of a document did not matter and that the essence of a document was that it conveyed information. He stated: “I think the meaning of the word ‘document’ which originates, no doubt, from the Latin word ‘ doceo ,’ is that it must be something which teaches you, something from which you can learn something; in other words, something which gives you information.”

7.41

While the term “documents” ordinarily connotes paper records, for the purposes of documentary discovery, this term includes communications recorded in the full range of media — paper, computer files, audio and videotape recordings, etc. Rule 1.03(1) defines “document” to include “data and information in electronic form” and states that ‘electronic’ includes created, recorded, transmitted or stored in digital form or in other intangible form by electronic, magnetic or optical means or by any other means that has capabilities for creation, recording, transmission or storage similar to those means, and ‘electronically’ has a corresponding meaning”.1 Under rule 30.01(1)(a), documents are defined to include sound recordings, videotapes, films, photographs, charts, graphs, maps, plans, surveys, books of account, and information recorded or stored by means of any device.

7.42

Financial records, bank statements and income tax returns may be relevant documents and should be disclosed.1 Documents may include medical records.2 A tape-recording is a document.3 A computer diskette is a document.4 A document may be purely electronic. An electronic database is within the definition of a document.5 A mirror image of a hard drive is a document.6 E-mail in electronic format is a document.7 Discovery obligations apply to the contents of a party’s computers, handheld wireless devices ( e.g. , BlackBerrys), and data storage devices of any kind that they may have in their possession, power, ownership, use or control, directly or indirectly.8 The content of Web-based social networking sites such as Facebook constitute “data and information in electronic form” producible as “documents” under the Rules .9

[13] Rule 1.05 provides for the use of directions:

Orders on Terms

1.05 When making an order under these rules the court may impose such terms and give such directions as are just. R.R.O. 1990, Reg. 194, r. 1.05 .

IV. THE MOTION BY THE DEFENDANTS AND PLAINTIFFS BY COUNTERCLAIM FOR ANSWERS AND RELATED RELIEF

[14] As agreed by the parties I am using to refer to questions the Refusals and Undertaking Charts for Sidorova and Tarlo, uploaded to Caselines for the bundle respecting the Long Motion of the week of March 20, 2023. They are in that bundle respectively Plaintiff Documents Tab A6 Current bundle number A1398-A1407 updated March 22, 2023 and Tab A7 Current bundle number A1408-A1425 updated March 22, 2023. I am also referring to the question number.

[15] In this ruling in Parts IV and VI wherever I order a question answered by a party, I now make clear that I am ordering further examination for discovery incidental to the answer, which answer is to be provided in writing. The dates for providing answers and for further examination will be set out in the portion of my ruling setting out a timetable for further steps.

[16] I shall first address the questions to Sidorova.

[17] I rule that under advisement question 735 is to be answered. I accept the argument of the Moving Parties that the question is whether the expenses in issue were personal or corporate, and, therefore, proper. The Responding Parties accepted that the question so construed was proper.

[18] Regarding under advisement questions 1673 and 1674, the Responding Parties took the position that the questions should be answered as part of their expert report. I disagree; the questions are to be answered and supporting documents, if available, produced. This order is pursuant to both the above cited rules regarding examination for discovery and those relating to documentary discovery.

[19] Regarding refusal question 205, I order the provision of the names and addresses of the mothers of Sidorova and Tarlo. In my view, despite the argument of the Responding Parties that this information is not relevant, I find that it is relevant and should be provided under Rule 31.06 (2), because, as argued by the Moving Parties, the Responding Parties have put in issue whether Sidorova was working in LV while the two people in question were taking care of her children.

[20] I am now addressing refusal questions 639 and 641. I order that the parts, if any, of Sidorova’s income tax returns and notices of assessment for 2009 to 2013 referring to whether she earned income from LV as a shareholder or in another capacity be produced, because that information is relevant to the nature of her claims to an ownership interest in LV. The Responding Parties had argued against answering the questions on the basis of lack of relevance, specifically that the capacity in which income was earned might not be shown; I have addressed that point in my order.

[21] I shall now address the questions to Tarlo.

[22] Regarding refusal question 558, I order that Tarlo produce his T4’s for 2009, 2010, 2011, and 2013 issued by DR because, contrary to the submission of the Responding Parties, they are relevant to the profits made by DR, since they show how much DR paid Tarlo in years subject of the litigation.

[23] Regarding refusal question 1437, I order that Tarlo answer the question. The Responding Parties argue that the question should not be answered, since the document may not be genuine. The question is relevant, since it bears upon whether Tarlo could have manipulated the financial records of DR, and thus relates to the profits claimed by the Plaintiffs by Counterclaim out of DR. The question is to be answered.

[24] Regarding refusal questions 501 and 516, despite the arguments of the Responding Parties on the basis of relevance and proportionality, I order that the Responding Parties provide to the Moving Parties a statement showing the amounts and dates of monies funded by Sidorova and Tarlo before and after May 28, 2010, into LV and DR and the amounts paid back by either company to either of them before and after that date. That date relates to third party financing; more importantly the funds provided by Sidorova and Tarlo to both companies are central issues to the litigation.

[25] Regarding refusal question 1527, the Responding Parties have argued that the answer is not relevant nor is providing it appropriate having regard to the principle of proportionality. They have also already answered that the payments for the referrals to DR were funded by Sidorova and Tarlo. The only remaining information sought by this question is who made the referrals. The Moving Parties argue that this information is relevant to the ownership of LV issue, because Silajeva made all referrals to DR. Since the business relationship between LV and DR is clearly relevant, I order that Tarlo provide the information as to who made the referrals, if he remembers that information; the Moving Parties have not asked for more than his memory on that point.

V. ACCESS TO THE SOFTWARE OF LV

[26] The Plaintiff seeks access to the accounting software system of LV called “Antibex” or “Universal.” Sidorova in the Amended Statement of Claim claims relief based on her alleged ownership of 50% of the equity in LV. The affidavit of Haley Russell sworn March 31, 2020, provides evidence that Antibex has been employed to provide the raw information used to prepare the financial statements of the company; and that Sidorova has been deprived of access to Antibex since the summer of 2013.

[27] The Defendants oppose an order for access to Antibex on the grounds of lack of relevance and proportionality. In my view, access for the Plaintiff to Antibex records from July 1, 2013 to one day before the commencement of trial is necessary to allow her to prepare for trial. Her claim and the evidence of Russell justifies that access on the basis of relevance and proportionality. I order that access. Moreover, on the issue of expense, I order that any expense be payable by Sidorova within 30 days of receiving any invoice from the Responding Parties; and that the expenses be ultimately the subject of any order that the trial judge makes on costs relating to the proceeding.

[28] In making this order I recognize that with the availability of comprehensive electronic records such as those in the case at bar, documentary discovery should be simplified. Accordingly, I am granting discovery employing those records; and will, as a consequence, limit unnecessary and duplicative hard copy documentary discovery.

VI. THE MOTION BY THE PLAINTIFF AND DEFENDANTS BY COUNTERCLAIM FOR ANSWERS AND RELATED RELIEF

[29] In conformity with the manner in which the motion was argued orally I am referring to questions by their number as set out in the charts for undertakings, refusals, and under advisements of Silajeva and Malafeev respectively found in Caselines at Master A248 to A263 and A265 to A274.

[30] In my view the access provided by my order relating to Antibex obviates the necessity of addressing Silajeva under advisement Questions 1083 to 1084. While the records there sought go back to January 1, 2009, the Amended Statement of Claim and evidence makes clear that Sidorova had access to Antibex until July 1, 2013 and that Antibex contained the records sought in the questions at issue. Further, based on the principle of proportionality the claims made in the Amended Statement of Claim do not justify further response to the questions in issue beyond the order I have made relative to the software.

[31] As to Silajeva under advisement Questions 1107, 1121, and 1128 my order for access to Antibex renders unnecessary my ruling on those questions. I make the same ruling regarding Silajeva under advisement Questions 738, 1175, and 1190, and Silajeva refusal Questions 1138 and 1163.

[32] As to Silajeva under advisement Questions 732 and 737, the Moving Parties seek the T2 corporate income tax returns for LV for the taxation years 2013 to trial and the Notices of Assessment for LV for the taxation years 2009 to 2014, and 2019 to trial. The Responding Parties take the position that they have provided any of the requested documentation regarding which the Rules require production; and that they were not requested to provide records to which they have access from the files of the Canada Revenue Agency.

[33] In my view the purposes of documentary discovery, even having regard to proportionality, require that the T2 corporate income tax returns and Notices of Assessment of LV be produced to the Moving Parties for the taxation years requested. Accordingly, I order production by Silajeva of those records to the Moving Parties, including requiring her to obtain and produce copies of them from the Canada Revenue Agency, unless she provides to the Moving Parties her affidavit showing how and when they were already provided. By way of clarification, I note that the commencement of trial is the cut-off date for both the T2 documents and Notices of Assessment, so that only for taxation years completed before the commencement of trial are those records to be produced.

[34] The Moving Parties seek answers to refusal questions 56, 70, 75, and 79 of Silajeva on the basis that the evidence sought is relevant as relating to proof that she was instrumental in a fraud on insurers relating to billings similar to the expense fraud she is alleged to have committed in the case at bar. I accept the argument of the Responding Parties that this basis of relevance is too tangential to justify ordering an answer.

[35] Regarding under advisement question 663 to Silajeva, respecting proof that she invested proceeds from the sale of house and a line of credit in the business of LV, the Responding Parties take the position that the information has been provided. I order that it be produced to the Moving Parties, or alternatively the Responding Parties produce an affidavit from Silajeva stating how and when this information was already produced.

[36] Regarding under advisement questions 1130 and 1132 to Malafeev and refusal questions 1183 and 1187 to him, I am satisfied that my order relating to access to Antibex renders unnecessary a ruling in relation to these questions.

[37] I rule that refusal questions 1234, 1240, and 1246 to Malafeev need not be answered. They target the asset position of Malafeev and Silajeva at the start of their involvement in the matter before the court; in my view, they are not sufficiently relevant, having regard to proportionality.

[38] Finally, under advisement question 1200 to Malafeev seeks information as to how much he and Silajeva earned in 2009 to 2013. I am not ordering the question answered. It is simply not as framed sufficiently relevant to justify its being answered in light of the principle of proportionality.

VII. NEXT STEPS

[39] Pursuant to the agreement of the parties I order that answers as ordered above be provided within 45 days; and that within 90 days thereafter any further examination for discovery on the information provided be conducted.

[40] I doubt that I have jurisdiction to order mediation as requested by the Plaintiff and Defendants by Counterclaim; even if I do have jurisdiction, I decline to order mediation so as not to further delay the matter.

[41] I order that the Plaintiff and Defendants by Counterclaim serve any expert report within 60 days following the conclusion of the additional examinations for discovery ordered; and that the Defendants and Plaintiffs by Counterclaim serve any responding expert report 60 days after service of the report of the Plaintiff and Defendants by Counterclaim.

[42] Finally, I order that the proceeding is to be set down on or before October 31, 2024.

VIII. COSTS

[43] The success on the matters before me was divided. Accordingly, I am reserving costs on the motions before me to the trial judge.

Bloom J. Released: October 19, 2023

COURT FILE NO.: CV-14-359-00 DATE: 2023 10 19 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: LIUDMILA SIDOROVA Plaintiff

• and - VERA SILAJEVA also known as VERA SILA and LV REHABILITATION CLINIC INC. Defendants
• and - B E T W E E N: VERA SILAJEVA also known as VERA SILA AND DIMITRI MALAFEEV Plaintiffs by Counterclaim
• and - LIUDMILA SIDOROVA, RADION TARLO AND DR INDEPENDENT MEDICAL ASSESSMENT INC. Defendants by Counterclaim Endorsement Bloom J. Released: October 19, 2023