Court File and Parties

Court File No.: CV-17-569281 Date: March 6, 2026

Superior Court of Justice - Ontario

Re: Toronto Transit Commission v. Michael Hickey, Ronald Howard Spaeth and Specbilt Enterprises Inc., CV-17-569281 ("the TTC Action");

Re: Michael Hickey v. Toronto Transit Commission, CV-16-546770 ("the Hickey Action");

Before: Associate Justice C. Wiebe

Counsel: Giuseppe Agostino for the Toronto Transit Commission ("TTC"); Marc Lemieux for Michael Hickey; Kyle C. Armagon for Ronald Howard Spaeth and Specbilt Enterprises Inc.;

Heard: March 5, 2026.

Reasons for Decision

[1] The TTC brought a motion in the TTC Action seeking an order inter alia requiring that the defendants in that action answer certain questions they refused at their examinations for discovery, that Mr. Hickey produce certain income tax and bank records, and that the defendants reattend at their discovery to answer questions arising from their answers to undertakings and refusals. Mr. Hickey brought a motion at the same time seeking an order that the representatives of the TTC at discoveries, Zac Nettleson in the Hickey Action and Ian Jordan in the TTC Action, reattend at their discoveries to answer questions arising from their answers to undertakings and refusals. Mr. Lemieux indicated in argument that, should his client defeat the TTC motion, he would not be pursuing the Hickey motion.

[2] The TTC motion was originally scheduled as a short motion returnable November 26, 2025. But I rescheduled it as a long motion before me returnable March 5, 2026 and set a schedule. By the time of the hearing of the motion on March 5, 2026 the TTC motion concerning Mr. Spaeth and Specbuilt Enterprises Inc. ("Specbilt") was resolved, and I signed a consent order in that regard that day. The TTC motion concerning Mr. Hickey was argued before me on March 5, 2026.

[3] It was undisputed that the TTC motion concerning Mr. Hickey turned almost entirely on the issue of whether that motion was preempted by the doctrine of issue estoppel due to the fact that the issues of disclosure from Hickey that TTC now seeks were the subject matter of an appeal of a decision of Associate Justice Jolley dated August 9, 2022 concerning the Mr. Hickey's discovery refusals. The appeal was argued before Justice Cavanagh on March 23, 2023. During the argument of the appeal, the TTC withdrew its appeal concerning Mr. Hickey. It is also undisputed that such an abandonment of the appeal renders the decision of Associate Justice Jolley on the issues of the abandoned appeal final, subject to the caveat that the TTC now relies upon.

[4] In Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, 2001 SCC44, 2 S.C.R. 460 at paragraph 20, the Supreme Court of Canada outlined the test to be met for issue estoppel: (i) the same question has been decided; (ii) the judicial decision said to give rise to the estoppel is final; and (iii) the parties to the judicial decision or their privies were the same persons as the parties to the proceeding in which the estoppel is raised or their privies. This test appears to be met in this case: it is undisputed that the issues are the same as the ones on the abandoned appeal; the decision of Associate Justice Jolley on these issues is final; and the parties to the abandoned appeal, the TTC and Mr. Hickey, are the same as the parties on this part of the TTC motion.

[5] There is an obvious exception to the issue estoppel doctrine that the TTC relies upon, namely where the original decision turns on hidden material facts or material factual misrepresentations by the party seeking to rely on the issue estoppel, and these hidden facts then get exposed. The courts are sensitive to the misuse of the doctrine in such circumstances; see Metropolitan Toronto Housing Authority v. Nutakor, 2001, 162/2000, Div.Crt. at paragraph 5.

[6] TTC asserts there is such a hidden material fact and material factual misrepresentation concerning Mr. Hickey. TTC alleges in these actions that Mr. Hickey profited from the dealings Mr. Spaeth and Specbilt had with the TTC. Mr. Hickey, on the other hand, maintains that he was never a shareholder in Specbilt and never received payment from Specbilt and Mr. Spaeth. He stated this under oath at his discovery. He then at discovery refused the request for T1s and T5s for the years 2009 to 2016 on the grounds that he did not have income from the co-defendants. At the refusals motion Associate Justice Jolley sustained this refusal as there was no evidence that Mr. Hickey received income from the co-defendants. TTC appealed this decision and then abandoned the appeal concerning Mr. Hickey during argument. TTC says it relied upon the representations made by the defendants under oath that there were no payments between them and that records demonstrating such payments do not exist.

[7] Pursuant to the appeal order of Justice Cavanagh, Specbilt produced financial statements and Mr. Spaeth produced tax records. These records show that Specbilt paid $224,000 in dividends to shareholders of which Mr. Spaeth received $142,000 and "other unknown shareholders" received $81,400 during the relevant period. TTC argues that this material nondisclosure of dividend payouts by Specbilt to Mr. Spaeth and "other unknown shareholders" undermine the validity and integrity of Associate Justice Jolley's decision on the Hickey refusals, thereby nullifying the application of the issue estoppel doctrine. TTC says it would not have abandoned the appeal had this evidence been known at the time.

[8] I do not agree. This evidence does not undermine the validity and integrity of Associate Justice Jolley's decision. It does not show that Mr. Hickey received income from the co-defendants. It does not show that Mr. Hickey misrepresented these facts at discovery. Mr. Agostino argued that Mr. Spaeth's misrepresentation about Mr. Spaeth not receiving income from Specbilt should impugn Mr. Hickey's position on this motion. I do not agree. There was no evidence linking the evidence of the two defendants in this way. The issue is whether there is now evidence that Mr. Hickey received income from the co-defendants. There is none. That position may change with time and more evidence, but not at this point.

[9] TTC also wants production by Mr. Hickey of his bank records from February 1, 2015 to January 31, 2016. The TTC demand for this documentation was made for the first time in the TTC amended motion record dated January 31, 2025. Mr. Hickey has produced a letter from his bank, the Royal Bank of Canada, stating that it does not keep records beyond seven years. Therefore, Mr. Hickey argues that these bank records no longer exist, a conclusion that was not challenged.

[10] I, therefore, dismiss the TTC motion as it pertains to Mr. Hickey.

[11] Because of this result and the Hickey position on his motion as explained by Mr. Lemieux (see above), I dismiss the Hickey motion for an order requiring a reattendance at discovery of Messrs. Jordan and Nettleson as well.

[12] I deal now with the costs of the TTC motion concerning Mr. Hickey and the Hickey motion. Mr. Hickey filed a costs outline for both motions that showed $51,320.08 in substantial indemnity costs. The TTC filed two costs outlines, one for the TTC motion showing a total of $29,257.89 in partial indemnity costs, and the other for the Hickey motion showing a total of $2,400 in partial indemnity costs.

[13] I asked for submissions on costs depending on the result. Mr. Lemieux confirmed that the Hickey costs outline pertains to the entirety of the TTC and Hickey motions and for both the attendance on November 26, 2025 and March 5, 2026, not an unreasonable position. However, the Hickey costs outline shows a total of 68 hours spent by Mr. Lemieux at a substantial indemnity rate of $585/hour. Mr. Lemieux argued that substantial indemnity costs in favour of Mr. Hickey were appropriate should Mr. Hickey succeed, as he warned Mr. Agostino against bringing the motion, given the clarity of the issues concerning Mr. Hickey. He said he warned Mr. Hickey would seek substantial indemnity costs in that event. The TTC costs outline shows a total of only 62.5 hours spent by Mr. Agostino on the entirety of both motions. I expressed the view that I found that Hickey costs outline quite excessive given the rather uncomplicated issues concerning Mr. Hickey and more limited time spent on these motions by Mr. Agostino.

[14] At this point, counsel pointed out that offers to settle were exchanged. They asked that I reserve my decision on costs pending brief written costs submissions by counsel. That is what I did. I order that TTC and Mr. Hickey serve and file written submissions on costs of no more than one page on or before March 13, 2026, and brief reply written submissions on costs of no more than half a page on or before March 17, 2026. I will then render a brief ruling on costs.

DATE: March 6, 2025

ASSOCIATE JUSTICE C. WIEBE