COURT FILE NO.: CV-21-661520 DATE: 2024 11 22

Superior Court of Justice - Ontario

RE: JINILINDA GALAM, Executor and Trustee for THE ESTATE OF JOHN STEWART, Plaintiff - and - DOMARINA THERESA MALEK, DANIEL IRMYA, and SARAH AMAZON RESORT AMAZING HEALTH INC., Defendants

BEFORE: Associate Justice Todd Robinson

COUNSEL: B. Fulton, for the plaintiff (moving party)

PARTIES: D. Malek, in person and as representative of the defendant, Sarah Amazon Resort Amazing Health Inc.

HEARD: August 22, 2024 (by videoconference)

Reasons for Decision (Motion for Production of Bank Records)

[1] The plaintiff moves for production of bank records in three categories: (i) bank records for the bank account where funds given to Domarina Malek by the now-deceased John Stewart were deposited; (ii) bank records showing when John Stewart was added and removed as a signing authority for the account; and (iii) bank records for the account(s) into which the funds received from John Stewart were ultimately transferred. The first two are sought from the Toronto-Dominion Bank (“TD”). The third is sought from the defendants themselves.

[2] Ms. Malek and Sarah Amazon Resort Amazing Health Inc. oppose the motion, arguing primarily that the production request is an overreaching invasion of privacy. Although Daniel Irmya previously expressed an intention to oppose the motion, he did not appear and did not deliver any responding materials. TD takes no position.

[3] This motion was originally scheduled for August 2023. It became the subject matter of a series of case conferences before me and was ultimately re-scheduled for this hearing at a case conference in March 2024. At the outset of the hearing, Ms. Malek sought an adjournment of the motion. For reasons given at the time, I denied that request.

[4] Subsequent to the motion hearing, both Ms. Malek and Mr. Irmya have sent various lengthy emails to my attention or the attention of my Assistant Trial Coordinator. It is not clear to me if all of them relate to this motion, in whole or in part. Some clearly do. They were submitted following the motion hearing and reserving this decision. The submissions were not requested by the court and were not on consent of all parties. The communications were and are contrary to rule 1.09 of the Rules of Civil Procedure, RRO 1990, Reg 194 (the “Rules”). I have not considered them in deciding this motion.

[5] I am granting the motion, in part. I am satisfied that the bank records of the account into which Mr. Stewart’s drafts were deposited and records confirming the dates during which Mr. Stewart had signing authority on the account are relevant documents and that it would be unfair to require the plaintiff to proceed to trial without having discovery of them. I am not ordering production of the remaining bank records, though, since their relevance is tenuous and the request appears more in the nature of a tracing order.

Analysis

[6] This motion is brought in the context of the defendants having failed to produce affidavits of documents and Schedule A productions in compliance with the order of Graham A.J. dated October 13, 2022. Pursuant to that order, the defendants were to have served their affidavits of documents and Schedule A documents by January 13, 2023. They failed to do so. As of the motion hearing before me, they remained in breach of that order.

[7] The plaintiff has accordingly brought this motion for production of bank records argued to be relevant to the underlying dispute from both TD and the defendants themselves.

Production from the Toronto-Dominion Bank

[8] Production from TD is sought under subrule 30.10(1) of the Rules, which provides as follows:

30.10 (1) 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.

[9] Accordingly, to obtain production from TD, the plaintiff must demonstrate four elements: (i) the documents are in the possession, control or power of TD; (ii) the documents are not privileged; (iii) the documents are relevant to a material issue in the action; (iv) and it would be unfair to require the moving party to proceed to trial without having discovery of the document.

[10] I wish to deal first with Ms. Malek’s position in response to the production request. She has tendered a responding affidavit and factum. However, the substance of her affidavit and most of her written and oral submissions are not material to the plaintiff’s production requests. They instead focus on why this action should be dismissed. That issue is not before me. As explained in my case conference endorsement made on March 28, 2024, Ms. Malek’s proposed motion to dismiss this action appears more properly brought to a judge. I had encouraged the parties to seek a case conference with a judge for directions on the various competing motions that were or appeared to be beyond the jurisdiction of an associate judge. That does not appear to have happened. No motion to dismiss has been initiated, so I find no reason that this production motion cannot be heard.

[11] Notably, this is a discovery motion. It is not a motion for which I must make findings of fact in this action. Many of Ms. Malek’s arguments focus on facts that will need to be proved at trial and substantive arguments that will be made when the case is decided, such as whether Mr. Stewart gifted the funds to Ms. Malek, as alleged, and whether the plaintiff estate can prove fraud when a police investigation is said to have resulted in a dismissal of fraud charges.

[12] Apart from there being limited evidence on the circumstances under which the funds were given to Ms. Malek and no evidence before me of the police’s fraud investigation, neither are material to this motion. It is not for me to decide whether the plaintiff is able to prove that the funds were not a gift and that Mr. Stewart was defrauded. That is for the trial judge. On this discovery motion, I am only concerned with whether the requested documents are relevant based on the pleadings and fairly produced in this litigation. I must thereby decide the motion looking to the pleaded allegations as they stand, not the merits of the parties claims and defences.

[13] In support of production relief, the plaintiff relies on the Supreme Court of Canada’s decision in R. v. O’Connor, [1995] 4 SCR 411, in which the approach for production of records in the possession of third parties was discussed. No case law has been cited by either side dealing directly with production under rule 30.10 of the Rules.

[14] O’Connor was a criminal case dealing with production of sexual assault counselling records in the possession of third parties that were requested by the accused. At paras. 137-156, the Supreme Court of Canada detailed a two-stage approach for dealing with such production requests at trial:

(a) First, the accused must demonstrate that the information contained in the records is likely to be relevant either to an issue in the proceedings or to the competence to testify of the person who is the subject of the records.

(b) Second, if the information is likely relevant to an issue at trial or to the competence of the subject to testify, the court must then balance the salutary and deleterious effects of ordering the production of the records and the effect of such production on the privacy and equality rights of the subject of the records.

[15] I acknowledge that O’Connor has been applied in the civil context, but there is more recent case law addressing the analysis under rule 30.10, which I cannot ignore. Notably, although not cited by the parties, case law supports that the threshold for granting an order under rule 30.10 is high. That threshold has been discussed in cases such as Spina v. Shoppers Drug Mart Inc., 2020 ONSC 4000, at paras. 114-116.

[16] In Spina, Perell J. observed that documentary discovery as of right is generally limited to parties to the proceeding. Rule 30.10 permits the court, where necessary, to order production from non-parties. However, the information sought must be relevant to a “material issue” in the action and an order under rule 30.10 should only be made in exceptional circumstances. Perell J. outlined six factors that may be considered: (1) the importance of the document to the issues in the litigation; (2) whether production at the discovery stage as opposed to production at trial is necessary to avoid unfairness to the moving party; (3) whether the examination of the opposing party with respect to the issues to which the documents are relevant would be adequate to obtain the information in the document; (4) the availability of the document or its information from another source that is accessible to the moving party; (5) the relationship of the non-party from whom production is sought to the litigation and the parties to the litigation; and (6) the position of the non-party with respect to production.

[17] Although the Supreme Court of Canada does not specifically outline them, the factors outlined in Spina are all considerations that could properly be assessed under the second branch of O’Connor. However, they were not specifically argued by the parties on this motion. Nevertheless, the plaintiff is represented and put forward only one case, which is now somewhat dated. The defendants are self-represented. I find it appropriate in the circumstances, particularly taking into account the parties’ acrimonious ongoing procedural disputes, to apply the above factors in deciding this motion, which is to the benefit of the defendants.

[18] I am satisfied that both bank records for the bank account into which the funds from John Stewart were deposited and records showing when John Stewart was added and removed as a signing authority for the account are documents reasonably within the possession, control, and power of TD. Notably, neither Ms. Malek nor TD have taken a position otherwise.

[19] The plaintiff asserts that the documents are relevant to demonstrating that the funds were deposited and withdrawn without Mr. Stewart’s approval. Ms. Malek’s position is that the sole issue to be determined in the action is whether the funds in question were a gift, for which the defendants’ bank records are not needed. Ms. Malek submits that the request amounts to a “fishing expedition”, citing M(A) v. Ryan, [1997] 1 SCR 157. In that case, at para. 37, the former Chief Justice commented, “Fishing expeditions are not appropriate where there is a compelling privacy interest at stake, even at the discovery stage.” Ms. Malek argues that making a production order would be a significant violation of her personal privacy.

[20] I agree that fishing expeditions are not appropriate in the discovery process, but the former Chief Justice’s comment has been taken out of context. It was made while discussing whether and when to find privilege in psychiatrist-patient records. The comment is immediately preceded by an observation that “in most cases, the majority of the communications between a psychiatrist and her patient will have little or no bearing on the case at bar and can safely be excluded from production.” That context is not the same as in this case.

[21] Relevance is determined by reference to the pleadings. The pleadings in this action support that the bank records sought from TD are relevant. Notably, at paras. 16 and 20 of the statement of claim, it is alleged that Mr. Stewart withdrew his life savings and deposited the funds into Ms. Malek’s TD business account, that Mr. Stewart and Ms. Malek agreed to add Mr. Stewart as a signatory, and that all funds were withdrawn from the account without his signature. At paras. 24, 31-32, 35, and 52 of Ms. Malek’s statement of defence, she admits that the funds were deposited into her business account, that Mr. Stewart was giving signing authority as a courtesy, and that the funds were removed from the TD account. However, the defence alleges that the funds were a “special gift” and that, ultimately, Mr. Stewart’s signing rights were removed following false accusations of fraud and embezzlement and the funds were moved to “another major business bank account, as a precaution for [Ms.] Malek’s safety and security”.

[22] In my view, this motion is not a fishing expedition, at least insofar as the production sought from TD. The documents are all in respect of the bank account into which the parties agree that the disputed funds were deposited. The plaintiff has alleged breach of trust. If the funds are found not to have been a gift, then the court will still need to determine the terms of the trust and whether use and withdrawal of the funds was contrary to those terms. In my view, the circumstances under which the funds were deposited, used, and withdrawn are directly implicated by the pleadings. So, too, is the timing of and circumstances under which Mr. Stewart was removed from the business account as a signatory.

[23] Ms. Malek argues that I should consider subrule 30.04(8) of the Rules, which permits the court to grant leave to withhold disclosure or production of a document that will only become relevant after the determination of an issue. The subrule does not assist Ms. Malek’s position. It requires the party seeking to withhold production to bring a motion for leave to withhold, which Ms. Malek has not done. In any event, it also requires that production of the document before the issue has been determined would seriously prejudice the party requesting leave to withhold. I am unconvinced by Ms. Malek’s arguments that she will be prejudiced by the production order, let alone seriously prejudiced. In my view, this is not a case where deferred production of the requested records from TD is necessary or appropriate.

[24] No argument has been made that the documents are privileged. I find that they are not.

[25] On the final element, the plaintiff argues that it would be unfair to require them to proceed to trial without these documents given the failure of the defendants to produce documents. Production of the bank records from TD, which are limited to the bank accounts directly involved in the transfer of the disputed funds, will allow the action to advance.

[26] Ms. Malek argues that it would not be unfair for the plaintiff to proceed to trial without discovery on the bank records. She submits that a production order should only be made after it has been decided whether the funds in question were or were not a gift and that the plaintiff is not prejudiced in the litigation, or otherwise, if production is made after that determination.

[27] For reasons discussed above, the deposit, use, and withdrawal of the disputed funds is relevant to the alleged breach of trust. If Ms. Malek’s position at trial is unsuccessful and the funds are found to have been subject to a trust, then the plaintiff will be prejudiced if the breach of trust issue cannot be decided without further production. It could well result in a bifurcated trial process.

[28] Also, none of the defendants have served affidavits of documents. The plaintiff has the evidentiary burden at trial of proving the claim and is already in a position of having no documents from the defendants that may (or may not) support the pleaded allegations on misuse of the funds. I find it unfair to require the plaintiff to proceed to trial without documents addressing the timing of the disputed transactions. For example, Ms. Malek pleads that Mr. Stewart was removed as a signing authority as a precaution for her safety following allegations of fraud and embezzlement by Mr. Stewart. Documents confirming when Ms. Malek actually removed Mr. Stewart as a signing authority is directly probative to that position.

[29] This is also not a case where examining the defendants on these issues will adequately provide the information. The defendants are in ongoing breach of the prior production order. In my view, based on my own dealings with the parties at case conferences and my review of prior endorsements, there has been a complete lack of cooperation by the defendants in advancing this action to a determination on the merits. I have little confidence that they will voluntarily provide by way of examination for discovery the information that they have opposed on this motion. I am also satisfied that, if Ms. Malek will not willingly provide the information that is contained in the banking records (as she has not), then there is no other source than TD from which the plaintiff may obtain the information.

[30] Given the foregoing, and since TD takes no position on the production request, I am order production of the bank records from TD. However, the date range sought of January 1, 2019 to February 1, 2023 is overreaching. Per the record before me the two drafts made out by Mr. Stewart to the corporate defendant were dated February 27 and March 5, 2019. The statement of claim pleads that Mr. Stewart discovered that the funds had been fully withdrawn from the TD business account on March 10, 2020 (although there is no evidence before me supporting how it was discovered). In my view, the appropriate date range for a production order is from February 27, 2019 to March 31, 2020.

[31] Ms. Malek seeks a term that any ordered bank records be redacted. However, having failed to comply with the order of Graham A.J. to produce documents, I decline any such term. It would have been open to Ms. Malek to produce redacted banking records in her affidavit of documents. Having failed to comply with Graham A.J.’s order, and remaining in breach of it, I see no unfairness in now ordering TD to produce the unredacted bank records. In my view, the deemed undertaking rule in rule 30.1 of the Rules adequately protects Ms. Malek’s privacy interests with respect to unredacted disclosure of the business banking records.

Production from the defendants

[32] As already noted, the defendants have failed to produce affidavits of documents in compliance with Graham A.J.’s order dated October 13, 2022. The plaintiff seeks production from the defendants of specific bank records that, if relevant, ought to have been included in their affidavit of documents. Specifically, the plaintiff seeks an order pursuant to subrule 30.02(4) of the Rules for the bank records for the account(s) into which the funds received from John Stewart were ultimately transferred for the period from January 1, 2019 to February 1, 2023.

[33] Subrule 30.02(4) of the Rules provides that 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.

[34] I have already noted that Ms. Malek admits, at para. 52 of her statement of defence, that the funds were moved to “another major business bank account.” However, I am not convinced that a tracing of the funds following the withdrawal is relevant. If there was a trust on the terms alleged by the plaintiff in the statement of claim, then that withdrawal would itself seem to be a breach of trust. The scope of requested production is also broad and overreaching. It speculates that there are other bank accounts and does not identify other corporations controlled by the defendants that may be implicated. The plaintiff is seeking what amounts to a broad tracing order prior to judgment. I am not convinced that such a tracing order is relevant to proving the allegation that the defendants took the disputed funds from Mr. Stewart or is otherwise supported as relevant by the pleadings.

[35] In my view, into what bank account the funds were deposited is an issue that may be explored during examinations for discovery, which will be aided by production of the bank records from TD. Production requests made during discoveries may then be addressed by way of a refusals and undertakings motion, for which relevance of more targeted production requests arising from the discovery questions may be argued.

[36] I am accordingly dismissing the relief with respect to production from the defendants, without prejudice to moving again for such production, more narrowly defined, at a later date.

Costs

[37] In the event of success, the plaintiff seeks $6,000 in costs on a substantial indemnity basis, citing the defendants conduct and breaches of court orders as supporting heightened costs.

[38] I am indeed concerned with the defendants’ failure to comply with court orders. This motion may have been entirely unnecessary had the defendants simply complied with the ordered production deadline. They continue to disregard that order, which in my view made this motion necessary at least with respect to the banking records sought from TD, which have not been produced by Ms. Malek. However, I am also mindful that Ms. Malek has been partially successful in opposing this motion insofar as production relief against the defendants. There has been a measure of divided success that is also a factor in deciding costs.

[39] The plaintiff failed to prepare a costs outline in advance of the hearing as required by subrule 57.01(6) of the Rules. As Ms. Malek points out, the draft order submitted sought only $3,000 in costs. I have no means of verifying or considering the actual fees and disbursements incurred for the motion. That said, I am satisfied that the costs claimed in the draft order are not unreasonable for a motion of this nature and, in my view, it would be unfair to the plaintiff to deny any costs. The defendants ought reasonably to have expected that they would pay some costs if a production order was granted. The fact that Mr. Irmya did not appear or oppose does not insulate him from an adverse costs award. He consistently indicated his intention to oppose leading up to the motion.

[40] In all the circumstances, and considering the factors in subrule 57.01(1) of the Rules, I fix costs of the motion in the amount of $2,500, including HST, plus the motion fee, for a total of $2,839, payable jointly and severally by the defendants to the plaintiff within thirty (30) days.

Disposition

[41] For the foregoing reasons, I order as follows:

(a) TD shall, within thirty (30) days of being served with this order, produce to counsel for the plaintiff bank records and account statements, including the account number and accountholder’s name, for the period from February 27, 2019 to March 31, 2020, for the TD bank account where the following two cheques were deposited:

(i) Scotiabank bank draft no. 578848 dated February 27, 2019 in the amount of $80,000.00 made payable to Sarah Amazon Resort Amazing Health Inc.; and

(ii) Scotiabank bank draft no. 578925 dated March 5, 2019 in the amount of $40,000.00 made payable to Sarah Amazon Resort Amazing Health Inc.

(b) TD shall, within thirty (30) days of being served with this order, produce to counsel for the plaintiff copies of any records confirming the dates on which John Stewart was added and removed as a signatory or signing officer to the TD business account held by Sarah Amazon Resort Amazing Health Inc.

(c) The plaintiff shall pay to TD its reasonable costs of producing the documents ordered above.

(d) The balance of the plaintiff’s motion is dismissed without prejudice to moving again at a later date.

(e) The defendants shall pay to the plaintiff costs of this motion fixed in the amount of $2,839.00, including HST and disbursements, payable within thirty (30) days.

(f) There shall be no costs of this motion as against TD.

(g) This order is effective without further formality.

[42] The above order significant varies from the draft order submitted. A revised draft order may be submitted by email to my Assistant Trial Coordinator, Christine Meditskos, in Word format. Approval as to form and content by the defendants is hereby dispensed with. I will settle and sign the formal order once the revised draft is submitted.

ASSOCIATE JUSTICE TODD ROBINSON DATE: November 22, 2024