Archive for the ‘Rules of Civil Procedure’ Category

How NOT To Bring a Motion for Interim Recovery of Personal Property

January 22, 2014

[2]        On other occasions, I have seen and expressed – both orally and in handwritten endorsements – concerns about the approach adopted on matters such as these.   Since this motion follows the same path, I am hopeful a more formal endorsement may have the effect a less forceful approach did not.

….

[8]        The court must be vigilant to ensure that orders are not made without notice easily.  The moving party must satisfy the court that all procedural and substantive requirements have been met.  Even then, the terms of the order should be carefully tailored to ensure that rights are not trampled.  Its terms and duration should be no more than is required to ensure that the court can effectively and fairly adjudicate the ultimate dispute.

[9]        This case provides a useful example of one requiring caution.

So begin the sobering reasons of Justice Grace in Paccar Financial Services Ltd. v. 2026125 Ontario Limited, 2014 ONSC 456 (CanLII),. a cautionary tale of the perils of moving without notice when notice is not only advisable,  but mandatory. It also serves as an object lesson in the vital importance of formulating a sound litigation strategy, including filing a factum that cites not only the applicable procedural rules, but also the cases upon which one intends to rely.

The plaintiff’s motion under  Rule 44 of the Rules of Civil Procedurewould appear to most practicing commercial litigation as relatively straightforward.  The problem identified by Grace, J. is that plaintiff’s counsel failure to follow basic procedural requirements:

[12]       Rule 44 establishes a number of requirements.  For example, an affidavit filed in support of a motion for interim recovery of personal property must contain listed information.  Rule 44.01(2) addresses the issue of service in these terms:

The notice of motion shall be served on the defendant unless the court is satisfied that there is reason to believe that the defendant may improperly attempt to prevent recovery of possession of the property or that, for any other sufficient reason, the order should be made without notice.

[13]        If a motion is made under Rule 44 without notice, the court may make an interim order.  Rule 44.03(2) provides in part:

On a motion for an interim order for the recovery of possession of personal property made without notice to the defendant, the court may,

(a)…direct the sheriff to take and detain the property for a period of ten days after service of the interim order on the defendant before giving it to the plaintiff… [Italics added]

[14]       I noted that the draft order provided by Paccar’s counsel contained no temporal limitation.  It did not comply with Rule 44 and importantly if signed, completely obliterated the rights of a party given no voice.

[15]       Furthermore, rule 44.03(2) clearly contemplates that an order for interim recovery of personal property will be enforced by the sheriff.[2]  That comes as no surprise.  Section 141(1) of the CJA provides that the court’s orders arising out of a civil proceeding shall be directed to the sheriff for enforcement in Ontario unless a statute provides otherwise.

[16]       The draft order contemplated enforcement by a bailiff retained by Paccar.  That, too, is not in accordance with the CJA or rule 44.

Although moving party’s counsel also relied upon  s. 67 of the Personal Property Security Act, R.S.O. 1990, c. P.10 (“PPSA”)which empowers a judge to “grant a range of orders at the request of, among others, a secured party ‘[u]pon application’.  ”  Since the proceeding was commenced by way of a notice of action, it too failed to follow the correct procedure.

Justice Grace’s consternation is evident:

[26]       Those differences are not cosmetic.  By way of example only, an affidavit filed in support of a motion may contain statements of the deponent’s information and belief.  An affidavit filed in support of an application must confine such statements “to facts that are not contentious”: see rules 39.01(4) and (5).  Much of the solicitor’s affidavit in this case is based on information and belief.  In paragraph 11 of his affidavit, the solicitor deposed:

I do verily believe that the acts of each of the Defendants are intentional and designed to deprive the Plaintiff of the Equipment and convert same to their own use.

[27]        The affidavit strays beyond issues which can be termed “not contentious”.

[28]       On a motion under Rule 44, the general rule applicable to facta applies.  A party may file a factum but is not obligated to do so: rule 37.10(6).  On an application, a factum is required: rule 38.09(1) (a).  While, in my view, even on motions counsel should file copies of provisions of statutes that are not included within publications containing the Rules, the importance of a factum in a case like this should be obvious.  The PPSA is not referenced on a daily basis on dockets in this region.  I suspect that is so elsewhere in Ontario with the possible exception of the Commercial List.

 The learned judge also expresses dismay over the lack of notice:

[37]       One would have thought that an inquiry would have been made before a motion was brought without notice.  One would have thought that the duty to provide full and frank disclosure necessitated disclosure of the existence of a lawyer who was believed to represent 125 in a piece of litigation raised by Paccar in support of its position before me.[6]  One would have thought that, out of an abundance of caution if nothing else, that lawyer would have been given notice – even if abridged – of the January 14, 2014 attendance.  One would have thought that full and accurate information would have been volunteered to the court.

[38]       After raising the issue, I was told that a copy of Paccar’s motion record had been sent to 125’s lawyer after the first attendance.  At my request, counsel filed a copy of the January 16, 2014 e-mail enclosing same and advising 125’s lawyer of the January 17, 2014 return date.

[39]       For now I will go no further than expressing my profound disappointment.  Advocacy has boundaries.  They were not respected.  Some notice could and should have been provided.  The solicitor’s affidavit on this motion was sworn on January 7, 2014, the very day that the same lawyer was writing to 125’s lawyer in respect of the CLE matter.

[40]       While my concerns with the lack of notice have overtaken my concerns with the procedure Paccar adopted, I will address the procedural issues too.

Ultimately, the motion failed for a variety of procedural deficiencies, the most telling of which was that interim relief was sought, yet no return date for the defendant was provided.  After telegraphing on what terms the court may be willing to entertain an application under  s. 67 of the PPSA,  Grace J. ends with this parting shot:

[61]                … Whirlwind justice is rarely just.  Paccar’s current motion is flawed in every respect.  It is dismissed without prejudice to the right of Paccar to start afresh.   

Back to the drawing board.

[Updated] Just Say No! (To Refusals Motions)

December 11, 2013

RefusedOver at slaw.ca, Matt Maurer writes about “An Interesting Approach To a Routine Motion” referring to a recent decision of Justice David M. Brown of the Toronto Commercial List Court. In 1416088 Ontario Limited v. Deloitte & Touche Inc., 2013 ONSC 7303 (CanLII); Brown J. offered counsel two options in respect of refusals: (more…)

The Do’s and Don’ts of Examination for Discovery: Refusals Edition

November 12, 2013

[5] Plaintiff’s counsel is not a litigation lawyer. She was retained by the plaintiffs “as a favour” because they all speak Serbian. This was plaintiff’s counsel’s first examination for discovery of her career. It is her evidence that she was not obstructionist. In her view, she was simply attempting to protect Tondera, whose deceased grandfather was found, based on documents notarized by the defendant Dorothy Fox (“Fox”), to have died intestate. The grandfather had held property in Montenegro which, according to the plaintiff, was allegedly transferred based on fraudulent documents.

[6] Her further evidence is that because Tondera kept saying “I guess” or “I don’t remember” counsel was following up her client’s evidence by asking “Do you know?, to ensure that the transcript would be clear. Counsel also objected to the repetitive nature of defence counsel’s questions. Plaintiffs’ counsel asserts that the examination for discovery was improperly terminated. It is her submission that the examination should have continued and thereafter the defendants could have moved on the refusals, if they chose to do so.

[8] Rule 34.14(1) states that an examination may be adjourned when there are improper interruptions, when the examination is being conducted in bad faith, when the party being questioned is unresponsive or when there are improper refusals to produce documents. Master Dash in Madonis v Dezotti 2010 ONSC 2180 (CanLII), 2010 ONSC 2180 details a set of principles for proper conduct at an examination. They may be summarized as follows:

(a) An examining party has a right to ask questions at an examination for discovery without unnecessary interruptions.

(b) The lawyer for a party being examined may interrupt the proceeding for the purpose of objecting to an improper question, placing the objection on the record and directing the party, either to not answer or, to answer under objection.

(c) The lawyer for the party being examined may interrupt the examiner if necessary to ensure that the witness and counsel understand the question.

(d) It is the party who is being examined and not his other lawyer.

(e) There is often a spirit of co-operation at an examination for discovery where counsel allow some latitude and permit the lawyer for the witness to offer assistance.

(f) It is the duty of the party and not the lawyer to correct an answer given even if the answer given by the party is wrong.

(g) Counsel must not communicate with his or her client during the examination except on the record and even then, only sparingly so as not to interfere with the flow of the examination.

[9] As Case Management Master, I have had some history with this action. In my view, much of the difficulty thus far in this action stems from plaintiff’s counsel’s lack of familiarity with the litigation process. As opposed to finding her behavior obstructionist, I find it obtuse, but with good intention – that being to protect her client. Plaintiff’s counsel has, throughout the proceedings, been not only critical, but also suspicious of defence counsel. Defence counsel, in response, has taken a particularly hard line.

[10] Plaintiff’s counsel clearly failed to accept the relevance of the questions asked to the claim and/or to the defence. She should have simply refused to answer the questions. If she was of the view that there was duplication, or multiple confusing questions which I believe there were, she should have simply stated on the record that the question has already been asked and answered, leaving it to a Master on a motion to determine whether the questions are proper. An experienced litigation lawyer would have done so.

[11] There is a clear distinction to be drawn between questions refused on an examination and improper conduct. Although plaintiff’s counsel’s interruptions were annoying, I find them to be based on lack of experience and her feeling of necessity to be overly protective. She was instructing her client to answer questions truthfully based on her recollection. Perhaps her demeanour was somewhat aggressive rather than particularly civil. The Principles of Civility provide lawyers with some guidance in litigation where it is stated that “counsel, during examinations for discovery, should at all times conduct themselves as if a Judge were present”. I do not find based on the principles outlined above, that there has been improper conduct on the part of plaintiff’s counsel.

[12] As Tondera’s examination is incomplete, it is ordered that Tondera shall re-attend for her examination. In an effort to assist the parties to keep this action moving forward, I will make myself available by telephone at the re-attendance of Tondera’s examination for discovery and at the examination of Maryon Tondera, to make rulings on questions in ‘real time’. All counsel are urged to operate with a spirit of co-operation! This action is crying out for resolution so the sooner the parties can get through the discovery process to reach a mediation or pre-trial, the better all parties will be served.

[13] With respect to costs, each party shall bear their own expense for costs thrown away and for costs for re-attendance and for costs of this motion. None of the parties’ hands are completely clean. [emphasis added]

(Access to) Justice Delayed, (Access to) Justice Denied

September 17, 2013

Access To Justice Problem Solved

Yamri Taddese at Law Times reports on some welcome, albeit late, efforts to resolve the interminable motion delays in Toronto:

Acknowledging there are “real delays” with scheduling long motions in Toronto, Smith said she and regional senior Justice Edward Then “have already begun to review scheduling efficiencies and how the court’s judicial resources can be maximized.”

Then has asked Superior Court Justice Geoffrey Morawetz to lead a motions effort to identify ways of maximizing both facilities and judicial resources for a more efficient system, Smith said, noting the review will also consider the issue of better case management.

The Law Times article adds,

Superior Court Justice Mary Vallee called the delays “shameful” and decided against moving the case to Toronto.

A case, of course, would need some connection to Toronto for counsel to bring up the idea of moving it there, says Oatley. But his firm has decided that even when there’s some connection to Toronto, it will challenge such motions on access to justice grounds.

“The government is simply going to have to accept the fact that if we’re going to have a viable justice system in Ontario, they need to provide the administration of justice the resources to do the job,” he says.

Whenever he can, lawyer John McLeish says he’ll book cases outside of Toronto. “It’s a shame because the judges here are great,” he says.

In my opinion, the causes of the systemic delay are easily identifiable:

1. The revision of the Rule 77 case management rule has hoisted onto plaintiff’s counsel’s shoulders the sole burden to move a case along to trial. Defence counsel are prone to bringing superfluous motions to tie up the litigation, armed with the knowledge of institutional delay of 6-7 months to secure a motion date in Master’s court;

2. The concept of a Litigation Timetable and Discovery Plan is great in theory; however, the failure to abide or comply with a consent or court-ordered timetable rarely results in any tangible consequences for non-compliance, such as substantial indemnity costs or striking of a defence. Having to wait half a year to bring a motion to force an opposing party to comply is quixotic;

 

3.  The Rules of Civil Procedure are skewed towards procedural inefficiency. For example, while any Superior Court judge has jurisdiction to hear all motions, many motions are implicitly designated to be brought “to the court” (i.e. Masters), leaving an access to justice vacuum.

4.  There are simply not enough Masters appointed to hear motions based upon the sheer volume of court files in Toronto. This is a function of chronic underfunding of the civil justice system in Ontario.  What is the Ministry of Attorney General’s response?

Brendan Crawley, spokesman for the Attorney General of Ontario, said the ministry isn’t planning on appointing new masters.

The ministry, he said, has worked with the legal community “to improve and modernize Ontario’s civil justice system, making it more accessible and affordable for the public.”

I am cautiously optimistic that Mr. Justice Morawetz —who is among the leading jurists in Ontario and fully conversant with judicial efficiency on the Commercial List Court — will find a practical and practicable solution to this motion court boondoggle.  The following are my unsolicited solutions:

1.  Restore the procedural balance under the Rules of Civil Procedure by imposing an equal obligaiton between plaintiffs and defendants and counsel of record to ensure that a case moves efficiently and speedily towards trial;

2.  Consider revising Rule 77 case management screening when an action is commenced by allowing the plaintiff or defendant to request case management as an option, rather than an exception to litigation management;

3. The Ministry of the Attorney General  must appoint at least 3 additional full-time Masters and loosen the requirement of Regional Senior Justice judicial oversight for case management transfers;

4. When all else fails, amend the mechanism of administrative dismissal by the Registrar, by allowing Status Hearing judges or Masters to transfer matters to case management sua sponte, or upon request of one or more of the parties; rather than slavish reliance on consent litigation timetables;

5. Allow Masters or Judges to schedule case conferences via telephone or email ,rather than requiring in person attendances, where available.

Access to Justice is inchoate unless it is equal, timely, effective and efficient:  Justice delayed is justice denied.

What’s The Difference Between Partial Indemnity and Substantial Indemnity Costs?

August 19, 2013

Image via stephensockett.com

Newbould J. in Stetson Oil & Gas Ltd. v. Stifel Nicolaus Canada Inc , 2013 ONSC 5213 has done many Ontario litigators a great service by making the calculation of costs less of an art and more of a science.

Rule 57.01(1) of the Rules of Civil Procedure, RRO 1990, Reg 194, (as am.) [the "RCP"] sets out the general principles and factors for the court to consider when exercising its discretion to award costs under section 131 of the Courts of Justice Act.

Sub-rule 57.01(5) of the RCP requires a party who is awarded costs to serve a bill of costs (Form 57A) on the other parties and file it with proof of service.

Pursuant to sub-rule 57.01(6) of the RCP, unless there is prior agreement on costs, each party intending to seek costs for any step in the proceeding must bring to the hearing a costs outline (Form 57B) not exceeding three pages.

The common approach is to set out the lawyer’s name, year of call and hourly rate and provide a table with three columns: Actual Rate, Partial Indemnity Rate and Substantial Indemnity Rate. The degree of variation of what comprises the partial indemnity or substantial indemnity rate is well-known. Some lawyers specify 50% for partial indemnity, while others set out 60%, or more. As far as substantial indemnity rates are concerned, I have seen some lawyers claim between 75% to over 90%, approaching Full Indemnity Rate.

Fortunately, Justice Newbould has provided a straightforward calculation as follows:

[25]           I think it appropriate to award costs at 60% of the time charged for partial indemnity costs and 90% for substantial indemnity costs for the work after the offer to settle. The rates charged, however, must be reduced because the rates have been claimed throughout at the 2013 rates.


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