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.

“It’s Just A Flesh Wound”: Update on the (Late?) Javad Heydary

January 21, 2014

Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.—Benjamin Franklinin a letter to Jean-Baptiste Leroy, 1789

Ben Franklin was right about taxes, but death? Not so much.

When I blogged about the fate of Javad Heydary a couple of months ago, the Law Society of Upper Canada was 100% sure the body repatriated to Canada from Heydary’s native Iran was, in fact, his.

As far the LSUC is concerned, he was dead, really dead:

Javad Heydary LSUC Directory Listing

Now the LSUC is not so sure. According to Rachel Mendleson  of the Toronto Star:

More than a month after a funeral was held for Javad Heydary, the case surrounding the embattled Toronto lawyer and his boutique firms is still being held up by a nagging question: Is he really dead?

A much-anticipated report by the Law Society of Upper Canada, presented in Ontario Superior Court on Monday, offers a glimpse into how more than $3 million belonging to a Mississauga couple was siphoned out of Heydary Hamilton’s trust account.

However, the status of the lawyer at the centre of the scandal remains somewhat less clear. Although the regulator’s directory lists the lawyer as “deceased,” the manager of trustee services told the court the body repatriated from Iran in December “was difficult to identify with 100 per cent certainty.”

To add further confusion, according to the Toronto Star report:

Margaret Cowtan said three “relatively independent individuals” identified the remains, and provided affidavits to the law society following the funeral service and burial in Richmond Hill.

“All indicated to some degree or another that the body belonged to (Heydary),” she told the court.

However, Cowtan said they could not be certain “because the body had not been embalmed in a manner consistent with North America.”

Heydary, 49, was best known for the lawsuit he launched on behalf of investors in the Trump International Hotel & Tower.

The law society received word in mid-December that his body had been repatriated from his native Iran, where he had reportedly fled amid allegations of missing money.

When asked why more scientific means were not used to identify the body, Cowtan told the Star the regulator “does not have the power to declare people dead or alive or obtain DNA evidence.” [emphasis added]

I suppose the LSUC didn’t bother to consult the Office of the Chief Coroner for advice on behalf of Heydary’s former clients before declaring that Heydary was deceased.

Of course, you can just Google it next time: What if a loved one dies outside of Canada?

Mark Twain famously once said: ” “The report of my death was an exaggeration”. Perhaps Heydary may yet appear and utter: “The report of my near death was an experience.”

From the sublime to the ridiculous. This entire Heydary saga is devolving into  this famous Monty Python And The Holy Grail skit:

Archibald, Jull and Roach, “Corporate Criminal Liability: Myriad Complexity in the Scope of Senior Officer”

January 20, 2014

The Honourable Mr. Justice Todd L Archibald (Ontario Superior Court of Justice and Osgoode Hall Law School – York University) Kenneth E. Jull (Baker & McKenzie) and Kent Roach (University of Toronto – Faculty of Law) have posted “Corporate Criminal Liability: Myriad Complexity in the Scope of Senior Officer” , 2013 50(3) Criminal Law Quarterly. Here is the abstract:

The authors of this article argue that the Canadian model for corporate criminal liability is one that ought to be studied by other jurisdictions as an efficient model that strikes the right balance between the previous “directing mind” doctrine and the vicarious liability model that is utilized in the United States. This article reviews the recent cases of Global Fuels and Metron as case studies of how this model works.

Global Fuels was convicted of price fixing where a regional manager participated in collusion and let territory managers participate in collusion with his knowledge without interference. In the context of criminal negligence, the Ontario Court of Appeal in the case of Metron Construction has affirmed that the actions of an independent agent who manages an important aspect of a corporations’ activities and qualifies as a senior officer may result in a conviction of that corporation for criminal negligence causing death where the agent demonstrates a marked and substantial departure from the standard that could be expected of a reasonably prudent person. Companies must now be fully aware of the reality that the scope of what constitutes a “senior officer” has been significantly broadened. The result is that potential criminal corporate liability has been dramatically increased.

Corporate compliance must operate on myriad levels of complexity. At the senior officer level, compliance systems must recognize the wider ambit of persons who qualify as senior officers, including agents and contractors who manage an important aspect of the organization’s activities. New compliance programs in leadership, training, monitoring and auditing must be specifically designed for the new classes of senior officers at both policy and operational levels. A different level of compliance programme must also be developed for the spheres under the supervision of senior officers; at this level, the taking of reasonable measures may qualify as a defence.

A major advantage of the Canadian model is that it encourages and rewards corporate compliance by recognizing defences based on reasonable measures taken by senior officers with respect to those sectors under their supervision.

Download a copy of he article via SSRN here.

My New Paper: “Recognition and Enforcement of Foreign Judgments in Canada”

January 16, 2014

I’ll be speaking at the upcoming Ontario Bar Association Institute 2014, “Internationalizing Commercial Contracts” program and have prepared a paper entitled “Recognition and Enforcement of Foreign Judgments in Canada”. Here’s the abstract:

This paper provides an overview of the governing conflict of laws principles for the recognition or enforcement of foreign judgments, including an analysis of the recent Court of Appeal for Ontario decision in Yaiguaje et al. v. Chevron Corporation et al. and its implications for the recognition and enforcement of foreign judgments, generally. The issue of state immunity as an obstacle to foreign judgment enforcement is also considered.

A copy of the paper is available on SSRN here.

Tanya J. Monestier, “Jurisdiction and the Enforcement of Foreign Judgments”

January 16, 2014

Tanya J. Monestier (Roger Williams University School of Law) has published “Jurisdiction and the Enforcement of Foreign Judgments”, The Advocates’ Quarterly, Vol. 42, p. 107, 2013/ Roger Williams Univ. Legal Studies Paper No. 143. Here’s the abstract:

In April 2012, the Supreme Court of Canada released its decision in what has become the pivotal case on personal jurisdiction in Canada, Van Breda v. Club Resorts Ltd. In Van Breda, the Court laid out a new framework for, and defined more precisely the content of, the “real and substantial connection” test that governs the assertion of jurisdiction over ex juris defendants. Specifically, the Court created four presumptive connecting factors that courts are to use in jurisdictional determinations. The presumptive connecting factors approach to jurisdiction was intended to increase certainty and predictability in jurisdictional determinations.

One issue that was alluded to, but ultimately left unanswered, by the Supreme Court in Van Breda was what effect the new presumptive factors framework for the real and substantial connection test had on the enforcement of judgments. Since the Supreme Court’s seminal decision in Morguard Investments Ltd. v. De Savoye in 1990, it is well established law that the real and substantial connection test for jurisdiction simpliciter is intended to be “correlated” with the real and substantial connection test used as a predicate for enforcing foreign judgments. Does this mean that courts are now supposed to use the new Van Breda framework for jurisdiction simpliciter in the judgment enforcement context? This article argues that the real and substantial connection framework established by the Court in Van Breda for jurisdiction simpliciter should not be exported outside of the particular context in which it was developed. The Van Breda approach to jurisdiction simpliciter, although seemingly straightforward, is actually a blunt tool for assessing jurisdiction – and any concerns with its application would only be magnified if applied to the enforcement of foreign judgments.

A copy of the article is available at SSRN here.

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