Superior Court of Justice – Ontario
Court File No.: CV-21-00661762-0000
Date: 2025-02-03
Re: Sound Insurance Services Inc. v. Greensides & Breen Insurance Brokers Limited and Chris Hossein
Before: Associate Justice Rappos
Counsel:
Jeffrey Levine and Anthony Labib, for Greensides & Breen Insurance Brokers Limited
Stephen Gleave, for Sound Insurance Services Inc.
Philip Horgan and Raphael Fernandes, for Chris Hossein
Heard: September 20, October 21, and October 22, 2024
Reasons for Decision
Overview
1Sound Insurance Services Inc. and Greensides & Breen Insurance Brokers Limited are insurance brokerage firms. Chris Hossein was a salesperson for Sound from 2007 to April 22, 2021, when he started working for Greensides.
2Sound commenced this action on May 5, 2021 against Greensides and Mr. Hossein. The relief sought by Sound includes damages against Mr. Hossein for breach of his producer agreement and fiduciary duties, and damages against Greensides for allegedly inducing Mr. Hossein’s breach of contract and fiduciary duties and for civil conspiracy to misappropriate Sound’s clients.
3A representative of Sound, Matthew Girardetti, was examined for discovery on October 11, 2023. Mr. Hossein was examined on December 4, 2023.
4Greensides brings a motion for an order compelling Sound and Mr. Hossein to answer certain questions they refused to answer during their respective examinations, or have since been deemed to have been refused as unanswered questions taken under advisement. Greensides also seeks an order that Sound satisfy certain undertakings given at Mr. Girardetti’s examination.
5There are two main issues raised in this motion. The first is whether Greensides requires leave of the Court to bring this motion under rule 48.14 of the Rules of Civil Procedure. If the Court determines that leave is not required or, if it is required, grants leave, then the second issue is whether Sound and Mr. Hossein should be compelled to answer the refused questions and Sound should be compelled to provide better answers to the undertakings in question.
6For the reasons that follow: (a) Greensides did not require leave of the Court to bring its motion; (b) Sound and Mr. Hossein do not have to provide answers to the refused questions; and (c) Sound has to provide further and better answers for the undertakings in question.
Issue I – Is Leave Required?
7Subrule 48.04(1) of the Rules of Civil Procedure provides that “a party who has set an action down for trial shall not initiate or continue any motion or form of discovery without leave of the court”.
8An action is set down for trial when a party serves a trial record.[1] The Rules of Civil Procedure do not refer to any other way of setting down a matter for trial.
9Sound served its trial record on April 11, 2024, and filed it on April 12, 2024.
10Sound argues that a former version of subrule 48.04(1) is applicable on this motion. The version listed above came into force on July 1, 2021. Prior to that date, the section read as follows:
“any party who has sent an action down for trial and any party who has consented to the action being placed on a trial list shall not initiate or continue any motion or form of discovery without leave of the court” [emphasis added].
11Sound argues that the version of subrule 48.04(1) in force at the time the action started (May 5, 2021) is the applicable version, and that Greensides consented to the action being placed on a trial list. As a result, Greensides requires leave of the Court to bring its motion.
12Greensides argues that the current version of subrule 48.04(1) is applicable. They rely on subsection 52(4) of the Legislation Act, 2006, which provides that “The procedure established by the new or amended Act or regulation shall be followed, with necessary modifications, in proceedings in relation to matters that happened before the replacement or amendment.”
13Greensides also relies on CIBC v. Deloitte & Touche, 2013 ONSC 2166, paras. 88-91, where Justice Perell cited subsection 52(4) and held that:
“purely procedural provisions are presumed to have immediate affect and apply retrospectively to existing proceedings, unless a contrary intention is expressed in the legislation… As a general rule, procedural enactments apply retrospectively; i.e. they take immediate effect and apply even to matters that were commenced before the new procedure came into force, unless the contrary intention is expressed in the legislation… A litigant does not have a vested right in procedure or in the manner or mode of proof and rules of procedure and rules of evidence can be changed and will be applied in ongoing proceedings”.
14The submissions made by Sound and Mr. Hossein on this issue do not, in my view, result in a differing view than what was held by Justice Perell and is set out in subsection 52(4) of the Legislation Act, 2006.
15Based on the statutory language and Justice Perell’s decision, I conclude that the language of subsection 48.04(1) as it has read since July 1, 2021 is applicable to this motion, and the issue of whether Greensides consented to have the action being placed on the trial list is not applicable.
16As it was Sound, and not Greensides, that set the action down for trial, the current wording of subrule 48.04(1) does not apply to Greensides.[3] Accordingly, Greensides does not require leave to proceed with its refusals and undertakings motion.
17I note that, if I had concluded that the former version of subrule 48.04(1) was applicable, I still would hold that Greensides does not require leave to bring its motion.
18The parties appeared at Civil Practice Court (“CPC”) on April 12, 2023 to address the scheduling of summary judgment motions. During that attendance, Justice Akbarali scheduled a two-day summary trial during the week of March 18, 2024. Justice Akbarali noted that the summary trial had only been proposed that morning, and that “not all parties agree that a summary trial is appropriate”, there was a “question of whether the scope of the summary trial will be partial”, that discoveries had yet to occur, and that counsel to Greensides did not have “an opportunity to fully consider the implications of a summary trial”.
19A follow up case conference was held on June 7, 2023 to determine whether a summary trial was an appropriate process to be employed. During the case conference, Justice Akbarali determined that the summary trial should proceed in March 2024.
20Justice D.A. Wilson (as she then was) held pre-trial conferences on December 12, 2023 and January 10, 2024. The Endorsement dated January 10, 2024 indicates that the parties were preparing for the trial then scheduled for March 18, 2024, and set out a timetable.
21The trial was not held in March 2024. Following an appearance before Justice D.A. Wilson at To Be Spoken To Court on March 25, 2024, the trial was rescheduled to the week of December 9, 2024. Subsequently, the trial has been rescheduled for March 31, 2025.
22I do not read the Endorsements of Justice Akbarali and Justice D.A. Wilson as providing any support for the position that Greensides consented to the matter being put on a trial list. They reflect that Sound requested that the action be added to the trial list, and that request was granted by the Court. While I appreciate Sound’s argument that the Rules of Civil Procedure should be interpreted liberally, former subrule 48.04(1) requires consent of a party, and there is nothing in the record, including copies of e-mails exchanged by the parties, that indicates that Greensides in any way consented to the matter being added to the trial list.
23Sound and Mr. Hossein also argue that Greensides required leave of the Court to bring this motion since on November 29, 2023, Greensides served a notice of motion regarding enforcement of refusals as against Sound. Greensides subsequently took no steps to secure or confirm that motion, and thus it was deemed to have been abandoned under the Rules of Civil Procedure.[4]
24Neither Sound nor Mr. Hossein pointed me to a provision of the Rules of Civil Procedure or any case law that has held that a motion, once deemed abandoned, cannot be brought on again without leave of the Court.
25As a result, for these reasons Greensides does not require leave of the Court to bring its motion.
Issue II(A) – Should the “Litigation Landscape” Refused Questions be Answered by Sound and Mr. Hossein?
26Greensides’ motion includes a request for Sound to answer questions deemed to have been refused during Mr. Girardetti’s examination.
27As background, Sound served a motion for summary judgment on March 21, 2023. On April 6, 2023, Mr. Hossein’s counsel, Philip Horgan, advised that he would be bringing a motion for summary judgment limited to the issue of indemnities of Mr. Hossein by Greensides, and would be requesting at the CPC attendance to have the motion heard at the same time as Sound’s motion.
28In an e-mail exchange amongst counsel, Sound’s counsel, Stephen Gleave of DLA Piper, said that he had spoken with Mr. Horgan prior to Mr. Horgan sending his email to Mr. Gleave and Greensides’ counsel on April 6, 2023.
29During the examinations for discovery, Greensides’ counsel asked questions that were focused on whether there had been any discussions between Mr. Gleave and Mr. Horgan about Mr. Hossein’s evidence and about the procedure to be using during the action (summary judgment vs. summary trial).
30More specifically, the four questions asked of Mr. Girardetti were whether DLA Piper: (a) learned from Sound or anybody else that Mr. Hossein had made audio recordings of conversations with Greensides prior to Mr. Hossein’s examination; (b) had advance notice of any sort, from any source, of what Mr. Hossein’s evidence was going to be on his examination; (c) discussed with Mr. Horgan what Mr. Hossein’s evidence will be at trial since that time; and (d) had discussions with Mr. Horgan prior to the parties’ appearance in CPC.
31Mr. Hossein was asked the following questions during his examination: (a) confirm if Mr. Horgan’s office and DLA Piper discussed the existence of the indemnity before Mr. Hossein served his amended pleading; (b) confirm if Mr. Horgan’s office and DLA Piper discussed the fact that Mr. Hossein had audio recordings of phone calls with Greensides and Stoneridge; (c) confirm if Mr. Horgan’s office and DLA Piper discussed, at any time before Mr. Hossein delivered his amended pleading, Mr. Hossein’s allegation that Greensides had taken control of the negotiations away from Mr. Hossein; (d) advise whether Mr. Horgan’s office previously discussed with DLA Piper what Mr. Hossein’s amended pleadings were going to include; and (e) confirm if Mr. Horgan’s office and DLA Piper are collaborating on the procedure in the case in any way that is to the exclusion and detriment of Greensides.
32Greensides argues that any discussions between Mr. Gleave and Mr. Horgan changed the “litigation landscape” and should have been immediately disclosed to Greensides. Greensides analogizes the matter to settlement agreements between a plaintiff and one of multiple defendants that are required to be disclosed immediately to the other defendants.
33Greensides is clear in its notice of motion and factum that if there had been any discussion about evidence and/or collaboration on procedure between counsel, this was not in any way improper. It is their view that they are entitled to know whether it had occurred and, if so, to ask follow-up questions and to be provided with a summary of the evidence discussed so that all parties are on equal footing at trial regarding the anticipated evidence of Mr. Hossein.
34During submissions, counsel to Sound and Mr. Hossein confirmed that there has been no settlement between the parties. As well, they note that the affidavits from Sound and Mr. Hossein to be used at the trial have already been served.
35Sound and Mr. Hossein have made numerous arguments as to why the questions were improper and should not be answered. I do not need to recite the arguments in full for the purposes of this decision.
36In my view, the questions do not need to be answered. Questions on an oral examination for discovery are to be answered by the person being examined.[5] The person being examined is expected to answer “proper question[s] relevant to any matter in issue in the action”.[6] A question may be answered by counsel to the person being examined if there is no objection.[7]
37I have reviewed the examination transcripts. The questions were not posed to Mr. Girardetti or Mr. Hossein, but were instead posed of counsel during the examination. They are focused on counsel’s knowledge, not the knowledge of the person being examined. I do not see how they could be considered appropriate questions during an examination for discovery.
38I also struggle to see the relevance of the questions to the matters at issue in the action, or what benefit would be obtained from these questions being answered by counsel. The decision as to how to procedurally proceed in this action was made by Justice Akbarali and continued by Justice D.A. Wilson. Greensides is aware of the evidence that Mr. Hossein and Sound will lead at trial since they have already served their affidavits.
39As well, during the examination of Mr. Hossein, Mr. Horgan confirmed that there was no agreement between Sound and Mr. Hossein. I do not see how Greensides is at all disadvantaged or not on the same footing as the other parties.
40I am guided by the following comments made by Justice Myers in 2287913 Ontario Inc. v. ERSP International Enterprises Ltd., 2017 ONSC 7185, para. 13 in considering a refusals motion: “The primary consideration is not counsel’s convenience or the absolute determination of every single possible issue so as to enhance counsel’s ability to prepare masterfully for a hearing” and “how many [of the refused questions] will really result in evidence that is important for the trial”?
41In my view, even if the questions posed of counsel during the examination were proper, which I do not believe they were, any answers to the questions are completely irrelevant. The trial procedure has been set. Sound is continuing with its claim against Mr. Hossein. Sound and Mr. Hossein have served their affidavits. Sound is continuing its action against Mr. Hossein. There is nothing to be gained that would be important for the trial if counsel answers the refused questions.
42As a result, I conclude that the questions posed of counsel to Sound and Mr. Hossein during the examinations for discovery of their respective clients do not need to be answered.
Issue II(B) – Should the Remaining Refused Questions be Answered by Mr. Hossein?
43During the examination of Mr. Hossein, Greensides asked for production of Mr. Hossein’s book of business at Oracle, which is his current employer. They sought a report showing all of the policies and clients that are coded to him in any way. Greensides also sought that the report be broken out to show what of his current book formed part of the original Sound book and what was new at Oracle.
44Greensides argues that this question relates to damages at trial, as if there are clients that went directly from Sound to Oracle, Greensides should not be held liable for any such loss of business.
45Mr. Hossein argues that Sound’s damages calculation is $432,000, which is based on a 2021 valuation of 50% of Mr. Hossein’s book of business. This is what was sought in Sound’s summary judgment motion and its affidavit for the trial. No party has retained any other expert to give evidence at trial.
46In the amended statement of claim, Sound alleges that it had a 50% interest in the book of business produced and serviced by Mr. Hossein, that Mr. Hossein agreed to purchase Sound’s interest, and that a valuator valued Sound’s interest at $432,000. The parties agreed that Mr. Hossein would purchase the interest at this amount.
47Based on my review of the claim, I do not see how Mr. Hossein’s client base at Oracle is relevant to whether he breached his contractual or other duties to purchase Sound’s interest in the book of business. I also do not see how Greensides can be held liable for clients at Oracle that were not part of the book of business from 2021 that served as the basis of the agreement between Mr. Hossein and Sound and the valuation that was conducted in 2021.
48As a result, Mr. Hossein is not required to answer this question.
Issue II(C) – Should Sound Be Required to Provide Further Answers to Undertakings?
49Based on Greensides' draft order, Sound provided five (5) undertakings that Greensides argues require further answers.
50At the outset, I note the importance of a party answering undertakings provided during examinations for discovery. This can be seen in subrule 31.07(1)(c) (answers to undertakings are to be provided within 60 days), subrule 31.07(4) (that nothing in the rules relieves a party who undertakes to answer a question from the obligation to honour the undertaking), and subrule 48.04(2)(a) (that subrule 48.04(1) does not relieve a party from complying with undertakings).
51Greensides asked Mr. Girardetti if he still had access to his e-mail account from 2007 for the purpose of production of e-mails and documents. The producer agreement between Sound and Mr. Hossein was entered into in 2007. Sound’s response is that he made best efforts and cannot access the e-mail account.
52I agree with Greensides that a more detailed answer is required of Sound with respect to this undertaking. That answer must set out what efforts Mr. Girardetti took to access the e-mail account, and the reasons why he was unable to access the account.
53The next three undertakings deal with inquiries to be made by Sound of Bank of Montreal regarding a financing arrangement that described the book of business, details regarding PPSA registrations, and production of a security agreement. Sound’s answers were that its best efforts with the BMO documents did not disclose any description of the book of business, and that requests had been made of BMO.
54Again, I find Sound’s answers to be insufficient. They are required to provide updated answers regarding what they have learned from Bank of Montreal, and to detail what steps they did take with the Bank regarding reviewing documents that described the book of business. These questions are relevant to the issue of the value of Sound’s interest in the book of business.
55I agree with Greensides that more detailed answers and productions are required of Sound with respect to these three undertakings.
56The last undertaking at issue is whether Sound has or had a security interest in Mr. Hossein’s assets, and if so, to produce the security agreement. Sound has confirmed, subject to rule 34.12(2), that it had a security interest, but has not produced the security agreement.
57In my view, this undertaking has not been completed by Sound until it produces the agreement in question. As a result, Sound is directed to produce the agreement.
Conclusion and Costs
58For the reasons set out above, Greensides did not require leave of the Court to bring its motion, Sound and Mr. Hossein are not required to answer any of the refused questions at issue, and Sound is required to provide further and better answers to the five undertakings at issue.
59I strongly urge the parties to come to an agreement on costs. If they are unable to do so, they may seek direction from me regarding the exchange of written costs submissions by contacting my Assistant Trial Coordinator.
Associate Justice Rappos
Date: February 3, 2025
Footnotes
[1] Subrule 48.02(1), Rules of Civil Procedure.
[2] CIBC v. Deloitte & Touche, 2013 ONSC 2166, paras. 88-91.
[3] Tyner v. Phillips, 2023 ONSC 5207, para. 13.
[4] Subrule 37.10.1(4), Rules of Civil Procedure.
[5] Rule 31.08, Rules of Civil Procedure.
[6] Subrule 31.06(1), Rules of Civil Procedure.
[7] Rule 31.08, Rules of Civil Procedure.
[8] 2287913 Ontario Inc. v. ERSP International Enterprises Ltd., 2017 ONSC 7185, para. 13.