Endorsement

Court File No.: CV-22-31549
Date: 2025-01-22
Corrected: 2025-01-22
Superior Court of Justice – Ontario

Re: William Edgar and Christine Edgar, Plaintiffs
And: Iryna Karpunov and Maxim Gorobets, Defendants

Before: Jennifer E. Bezaire
Counsel:
Ira E. Book, for the Plaintiffs
Antoine D’Ailly, for the Defendants
Heard: January 17, 2025

Corrected Endorsement:
The text at para. 35(0.b) of the original Endorsement released January 22, 2025, incorrectly states: “defendants” and has since been corrected to state: The plaintiffs ought reasonably to have expected to pay costs within the range provided in the cost outlines. The motion was scheduled as a half day special motion. Substantial material, including factums, were filed.

Background

[1] This is a motion by the defendants for an order compelling the plaintiffs to serve a supplementary affidavit of documents and to disclose the following:

a. all correspondence between the plaintiffs and Weichart Workforce Mobility Canada ULC (“Weichart”), or any of its representatives, including but not limited to all correspondence between the plaintiffs’ solicitor and any representative of Weichart; and

b. all correspondence between the plaintiffs and Ford Motor Company (“Ford”) or any of its representatives, including but not limited to all correspondence between the plaintiffs’ solicitor and any representative of Ford related to the sale of 1112 Charlotte Cres, Windsor (the “Property”), or the plaintiffs’ entitlements under the relocation benefits policy.

[2] The defendants also seek to have the plaintiffs' action dismissed on the basis that their conduct in refusing to produce the supplementary affidavit of documents and requested records warrants dismissal of their action.

[3] The plaintiffs' claim arises from an aborted real estate transaction regarding the Property, which was scheduled to close on July 29, 2022 pursuant to an Agreement of Purchase and Sale dated May 10, 2022 (the “APS”).

[4] On or around October 17, 2022, the plaintiffs sold the Property to Weichart pursuant to a relocation benefits policy available to them through employment with Ford.

[5] The underlying Statement of Claim was issued on or around November 14, 2022. The plaintiffs claim damages as a result of the defendants’ breach of the APS, including the sum of $96,000, being the difference between the agreed upon purchase price and the sale price to Weichart, and $31,184.19, being the carrying costs incurred pending resale of the Property to Weichart.

[6] The defendants' Statement of Defence was filed on or around January 12, 2023. They plead that the plaintiffs did not make reasonable efforts to sell the Property to an arm's length third party and opted instead to make private arrangements to transfer the Property to a related party.

[7] Affidavits of documents were exchanged in the spring of 2023. Examinations for discovery were held on July 7 and August 4, 2023.

[8] Upon learning of the relocation benefits policy, the defendants sought production of further documents, which were refused by the plaintiffs. At para 21 of the affidavit of William Edgar sworn July 23, 2024, Mr. Edgar states that “the benefits provided to [him] by Ford were benefits that are available only to [him] as an employee of Ford and are included in [his] overall compensation package. They are not any concern of these defendants who have no interest in them.”

[9] Nevertheless, and some time after the plaintiffs’ affidavit of documents was served, the plaintiffs produced additional documents, which are not contained in an affidavit of documents.

[10] The plaintiffs brought a summary judgment motion, which has been adjourned sine die pending the outcome of this motion.

Plaintiffs Shall Serve Supplementary Affidavit of Documents

[11] It is undisputed that the plaintiffs disclosed documents that are not contained in their affidavit of documents.

[12] The plaintiffs refuse to produce a supplementary affidavit of documents on the basis that all relevant documents have been produced either through a sworn affidavit of documents or as a sworn exhibit on the plaintiffs’ summary judgment motion. They claim that the distinction between documents produced in a sworn affidavit of documents and documents disclosed as exhibits to a sworn affidavit is an irregularity and should be treated as such unless clear prejudice can be shown.

[13] I disagree. Rule 30.07 is mandatory. If, after serving an affidavit of documents, a party comes into possession, power or control of additional relevant documents, the party shall forthwith serve a supplementary affidavit.

[14] It matters not that the plaintiffs disclosed all relevant documents, or that they were disclosed as an exhibit to a sworn affidavit. Affidavits of documents are necessary to document the disclosure for the purposes of trial. It can get very confusing when documents are produced separately and not in an organized fashion.

[15] Further, affidavits of documents are used to confirm full disclosure has been made. The affiant of an affidavit of documents must attest that to the full extent of his or her knowledge, information and belief, all relevant documents in his or her possession, control or power have been disclosed.

[16] I accept that it is sometimes necessary to disclose documents after service of an affidavit of documents, such as documents subsequently obtained from third parties, and that in practice, an updated affidavit of documents is not typically provided every time a new document is disclosed. But in circumstances where the opposing party requests an updated affidavit of documents and there is a pending summary judgment motion as is the case here, a supplementary affidavit of documents must be served.

[17] As held in Saxberg et al v. Seargeant Picard Incorporated, 2021 ONSC 5191 at para 8, counsel is well-advised to comply with r. 30.07 before pretrial so as not to get caught short at trial. This similarly applies to summary judgment motions.

[18] Therefore, I order that the plaintiffs shall serve a supplementary affidavit of documents in accordance with rr. 30.03 and 30.07 within 30 days of this endorsement.

Weichart and Ford Records to be Disclosed

[19] Rule 30.02 provides that 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 an action be disclosed.

[20] I find the requested Weichart and Ford records to be relevant to matters in issue in this proceeding. The pleadings refer to the sale of the Property to Weichart. The plaintiffs claim damages for the reduction in the sale price and for the added carrying costs. The defendants plead that the plaintiffs did not reasonably mitigate their damages.

[21] It is undisputed that the plaintiffs had relocation benefits with Ford, benefits were paid to the plaintiffs, and the purpose of those benefits was to minimize the financial impact on the plaintiffs. The requested Weichart and Ford records, therefore, go directly to the plaintiffs’ damages and efforts to mitigate.

[22] I also find that the records are in the plaintiffs’ power and control. The plaintiffs, unlike the defendants, can obtain them by asking for them. They relate to the plaintiffs' benefits and the sale of the plaintiffs’ property.

[23] In these circumstances, it is wholly inappropriate for the plaintiffs to do nothing, or to state that the files are none of the defendants’ concern. The plaintiffs must produce all relevant documents that are within their power and control.

[24] Rule 1.04 requires that the Rules of Civil Procedure be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. Opposing parties should not have to bring motions against third parties to obtain documents that could be obtained with a consent from the plaintiffs.

[25] The fact that the benefits are employment benefits and may or may not be deductible from the plaintiffs’ damages is an issue for the trial judge to determine, not one that would prohibit disclosure at this stage of the proceeding given the evidence before me.

[26] Therefore, I order that, subject to any claims of privilege, the plaintiffs shall make best efforts to disclose the requested Weichart and Ford records, including providing their consent for the release of the records and requesting them directly from Weichart and Ford.

Defendants Request that the Plaintiffs' Action be Dismissed

[27] While the plaintiffs' conduct was uncooperative and unnecessarily resulted in this motion, it would not be proportional to dismiss their action. First, and as acknowledged by the defendants, the plaintiffs’ action is not without merit.

[28] Second, the defendants have not suffered any prejudice that cannot be compensated for by costs. The plaintiffs’ summary judgment motion was adjourned sine die pending the results of this motion. The defendants will therefore have opportunity to file and rely upon any additional records obtained.

[29] It would, in my view, be unjust to dismiss a meritorious action on account of these production issues. The plaintiffs' conduct can be sufficiently sanctioned by costs. Accordingly, the defendants' request that the plaintiffs’ action be dismissed is denied.

Disposition on the Motion

[30] For these reasons, I order as follows:

a. The plaintiffs shall forthwith and no later than 30 days from the date of this endorsement, serve a sworn supplementary affidavit of documents in accordance with rr. 30.03 and 30.07.

b. Subject to any claims of privilege, the plaintiffs shall make best efforts to disclose all correspondence between the plaintiffs and Weichart, or any of its representatives, including but not limited to all correspondence between the plaintiffs’ solicitor and any representative of Weichart; and

c. Subject to any claims of privilege, the plaintiffs shall make best efforts to disclose all correspondence between the plaintiffs and Ford or any of its representatives, including but not limited to all correspondence between the plaintiffs’ solicitor and any representative of Ford related to the sale of 1112 Charlotte Cres, Windsor (the “Property”), or the plaintiffs’ entitlements under the relocation benefits policy.

d. The balance of the defendants’ motion is dismissed.

Costs

[31] The parties uploaded their cost outlines and an offer to settle to case centre. These documents were reviewed by me once my decision was finalized.

[32] The defendants were largely successful on the motion and are presumptively entitled to their costs. Their cost outline totals $13,466.21 (full indemnity) and $8,977.48 (partial indemnity).

[33] The plaintiffs’ cost outline totals $5,500.00 (full indemnity), $4,950 (substantial indemnity), and $3,500.00 (partial indemnity).

[34] The plaintiffs made an offer to settle the motion, but it was for the defendants to withdraw the motion and pay the plaintiffs partial indemnity costs. No offers were made by the defendants.

[35] In considering the factors at r. 57.01, I find as follows:

(0.a) The defendants' counsel, Mr. D’Ailly, is an eight-year call. He claimed an hourly rate of $300 (full indemnity) and $200 (partial indemnity). I find the rates claimed to be appropriate in the circumstances.

(0.b) The plaintiffs ought reasonably to have expected to pay costs within the range provided in the cost outlines. The motion was scheduled as a half day special motion. Substantial material, including factums, were filed.

(a) The plaintiffs claim $127,184.19 in damages as a result of breach of contract, as well as declaratory relief and unspecified general damages.

(b) N/A

(c) The defendants submit that the proceeding is of moderate complexity. I do not entirely agree. This is a relatively straightforward breach of contract claim. Most of the facts are undisputed. Further, the motion itself was quite straightforward, particularly given the mandatory language of the rules.

(d) The motion was important to both parties. For the defendants, their ability to advance a defence to the plaintiffs’ damages claim was in issue. For the plaintiffs, there was a risk their claim would be dismissed.

(e)-(f) The conduct of the plaintiffs was a significant issue on the motion. As noted above, I find this motion to be an unnecessary step in this proceeding, which was required because of the plaintiffs’ conduct. Rule 30.07 is mandatory. Further, the plaintiffs are obligated to disclose all relevant documents in their power and control and ought to have made best efforts to disclose the requested documents.

(g)-(i) N/A

[36] In consideration of the applicable rules and factors set out above, I exercise my discretion to award costs to the defendants fixed at $9,500.00, inclusive of fees, disbursements and H.S.T. Given the plaintiffs' conduct in unnecessarily requiring this motion, I award the defendants costs in excess of their partial indemnity costs. The defendants should be fairly compensated for the unnecessary costs incurred and the plaintiffs' conduct should be deterred. At the same time, this order recognizes that the defendants were not wholly successful on the motion and as such, are not entitled to costs on a substantial or full indemnity basis. They overreached in asking that the plaintiffs' claim be dismissed.

[37] These costs shall be paid at the conclusion of this proceeding irrespective of the result at trial. It is accepted that the plaintiffs’ claims are not without merit. It would not, therefore, be proportional to order that the costs be paid forthwith. They can be deducted from any damage award payable to the plaintiff, or if no award is made, paid by the plaintiffs at the conclusion of this proceeding.

Jennifer E. Bezaire

Date: January 22, 2025