2015 QCCA 2178, 2015 QCCA 2178

Rossdeutscher (Estate of) c. Organisation d'éducation et d'informatique logement de Côte-des-Neiges (OEIL) 2015 QCCA 2178 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-025328-154 (500-17-074630-123) MINUTES OF THE HEARING DATE: December 18, 2015 CORAM: THE HONOURABLE YVES-MARIE MORISSETTE , J.A. FRANÇOIS DOYON , J.A. NICHOLAS KASIRER , J.A. APPELLANTS COUNSEL THE ESTATE OF THE LATE EISIG ROSSDEUTSCHER, duly represented by HEDY BLANK, in her capacity as liquidator. HEDY BLANK RAPHAEL ROSSDEUTSCHER Mtre LIONEL ROSSDEUTSCHER ( Lionel Rossdeutscher & Associé

s) RESPONDENTS COUNSEL ORGANISATION D’EDUCATION ET D’INFORMATIQUE LOGEMENT DE CÔTE- DES-NEIGES (OEIL) CLAUDE DAGNeAU ABSENT

IMPLEADED PARTY COUNSEL JESSICA ANNE LIPES ABSENT On appeal from a judgment rendered on May 5, 2015, by the Honourable Mr. Justice Michel Déziel, of the Superior Court, District of Montreal. NATURE OF THE APPEAL : Revocation of judgment Clerk: Shirley Thomas Courtroom: Pierre-Basile-Mignault HEARING 9:30 Resumption of the hearing of 15 December 2015. The parties were excused from appearing in Court this morning. 9:31 BY THE COURT: Judgment – See page 3. 9:32 Conclusion of the hearing.

SHIRLEY THOMAS Clerk BY THE COURT JUDGMENT [ 1 ] The Eisig Rossdeutscher estate, Hedy Blank and Raphael Rossdeutscher appeal from a judgment of the Superior Court, District of Montreal (the Honourable Michel Déziel presiding), rendered on May 5, 2015, which dismissed their motion for revocation of judgment, filed pursuant to

article 483 C.C.P., at the stage of reception. [1]

[ 2 ] The appellants had sought to revoke a judgment of the Superior Court, rendered by Mainville J. on April 9, 2014, that granted a motion to dismiss an action in defamation in which the appellants had claimed over $5.6M in damages from the respondents. [2] Mainville J. declared the appellants’ motion to institute proceedings in defamation as improper pursuant to

article 54.1 C.C.P. She characterized the appellants’ defamation action as a “poursuite-bâillon” (strategic lawsuit against public participation, or SLAPP), holding that its purpose was not to obtain compensation for a civil wrong but to limit the respondents’ freedom of expression.

This Court dismissed an appeal from the judgment of Mainville J. and an application for leave to appeal to the Supreme Court was also dismissed. [3] [ 3 ] Before Déziel J., the appellants asked that Mainville J.’s judgment be revoked because of their former counsel’s alleged error in failing to quantify their losses, the falsity of certain documents presented before Mainville J., and new evidence that justified revocation pursuant to

article 483 C.C.P. The respondents, in turn, filed a motion to dismiss the motion in revocation, arguing that the various grounds for revocation were without merit and that the time limits for revocation in

article 484 C.C.P. had expired. *** [ 4 ] Déziel J. granted the respondents’ preliminary motion and dismissed the motion in revocation. In his view, the new accounting expertise submitted to quantify the appellants’ losses would not have altered Mainville J.’s decision. The new evidence, including a video made subsequent to the judgment in which certain of the respondents were supposedly shown defaming the appellants, was not grounds for revocation. The judge also held that the motion for revocation, filed seven months after Mainville J.’s judgment, was prescribed. *** [ 5 ] The appellants submit that the trial judge erred in four principal respects in dismissing the motion for revocation: (

i) he failed to apply the proper “ prima facie analysis” appropriate to revocation at the stage of reception; (ii) he erred in underestimating the importance of the accounting expertise that was not submitted to Mainville J. because of an alleged error of counsel; (iii) he erred in denying the appellants the right to adduce certain exhibits as new evidence; and (iv) he erred in deciding that the appellants’ motion was filed outside the time limits for a motion in revocation as fixed by

article 484 C.C.P. Each of the appellants’ submissions will be considered in turn. *** (

i) Prima facie analysis at the reception stage [ 6 ] The appellants argue that the judge failed to take their allegations in the motion as proven, as he was bound to do at the reception stage. Instead, they say, he wrongly undertook an assessment of the case on the merits. They cite paragraph [44] of the judgment to demonstrate the supposed error where the judge wrote “[s]o the prima facie notion does not apply in this case”.

They refer further to paragraph [29] in which the judge is said to have examined the merits of an accounting expertise that had not been before Mainville J. and dismissed it as a basis for revoking the judgment. [ 7 ] This ground of appeal is without merit. The judge did not adopt an inappropriate method of analysis for dismissing the motion at the reception stage. [ 8 ] It bears recalling that while a judge must take allegations in the motion as true at the reception stage, he or she is not bound by those allegations alone.

At the reception stage, a judge is entitled not only to dismiss motions in revocation that are late, but also those motions which, on the face of the whole record, show no reasonable prospect for success. [4] By way of example, in Entreprises C.J.S. inc. , [5] this Court held: Le juge auquel une requête en rétractation est présentée pour réception doit décider si prima facie les faits allégués sont suffisants pour justifier la réception.

Si au stade de la réception, les faits allégués doivent être tenus pour avérés, cela ne veut pas dire que le juge soit nécessairement lié, dans l'exercice de sa discrétion, par les allégations de la requête. Il pourra refuser de recevoir la requête si, par exemple, il acquiert par des moyens juridiques la conviction que la nouvelle preuve que l'on veut faire est telle que le jugement n'aurait pas été différent si elle avait été faite au procès (Voir Fontaine c. Baril , [1974] C.A. 234 ). [ 9 ] Prima facie means “on its face”.

Evaluating the plausibility of written allegations of fact in pleadings allows, indeed calls for, a measure of careful scrutiny of the allegations as part of a judge’s task at the reception stage. [ 10 ] A review of the whole of the judge’s reasons confirms that he did apply this standard to the various grounds raised by the appellants to justify the revocation of Mainville J.’s judgment. [ 11 ] The appellants have quoted the judge’s comment in paragraph [44] out of context. Paragraph [41] indicates plainly that the judge understood that the allegations must be taken as proven.

In paragraph [43], the judge referred to his earlier analysis, undertaken on the prima facie standard, of the different grounds for revocation raised by the appellants. While paragraph [44] might well have been phrased more clearly – so said respectfully – when the judgment is read as a whole, it is clear that the judge used the correct standard of review at the reception stage.

No reviewable error as to method has been made. (ii) Accounting expertise detailing the appellants’ losses [ 12 ] The first substantive ground of revocation concerns the impact of the alleged erroneous legal opinion of the appellants’ previous counsel. The appellants contend that this lawyer’s mistake explains why they did not produce an expert report before Mainville J. An expert’s report would have quantified their damages arising out of the allegedly wrongful conduct of the respondents.

Had that been done, they say, Mainville J,’s judgment would necessarily have been different: she would not have blamed the appellants for failing to bring proper evidence of their losses and, as a result, she would not have characterized their action in defamation as a SLAPP. [ 13 ] In support of revocation, therefore, the appellants filed an expert’s report before Déziel J., dated November 10, 2014, that

purports to fix the rental losses resulting from vacancies in the appellants’ apartment buildings between 1999 and 2012 at $2,386,408. The appellants argued that, but for their former lawyer’s error, Mainville J. would have had a comparable expertise in hand. In the circumstances, her conclusion that the appellants’ damages had not been adequately quantified would have been different, as would her evaluation of the improper character of the action.

Moreover, in refusing to consider the losses recorded in the expert’s report, the judge is said to have overstepped his role at the reception stage and decided the motion for revocation on the merits. As a result, they say, the judgment granting the motion under

article 54.1 C.C.P. should be revoked. [ 14 ] The appellants are mistaken. [ 15 ] Déziel J. read the expert’s report and decided that, on its face, the caveat made by the accounting firm in the explanation of its mandate meant that the report would not have changed Mainville J.’s judgment. As the judge noted in paragraph [26] of his reasons, the report records the loss of income due to the vacancies but is explicit in saying that it does not take into consideration what explained these vacancies.

When Mainville J. stated that the appellants had failed to quantify their losses, it is plain that she referred to the losses from vacancies caused by the conduct of the respondents. [ 16 ] It is no doubt true, as the appellants say, that Mainville J. criticized the appellants for having failed to adequately quantify their damages in the abstract. In and of itself, however, the new evidence does not make up for the lack of proof of a causal link between the financial losses and the fault alleged upon which Mainville J. also insisted.

Moreover the expertise says nothing of the moral and punitive damages alleged which remain unsubstantiated. [ 17 ] As the judge suggested in paragraph [29], on its very face the report does not explain which of the losses associated with the vacancies are attributable to the respondents, if any, and which are associated with other factors. The report would thus have had no overriding impact on Mainville J.’s judgment. It should also be noted that, contrary to what the appellants have argued, the unquantified amount of financial losses was not the “foremost factor” leading to Mainville J.’s conclusion.

She also observed the presence of other allegations in the appellants’ proceeding that aimed at preventing the respondents from exercising their right to freedom of expression, as well as the economic inequality between the parties, the unspecified basis for claiming moral and punitive damages, the fact that the appellants chose to claim $11M in their first proceeding, and other signs of intimidation inherent in the action. It was appropriate to dismiss this argument at the reception stage.

No reviewable error has been shown. (iii) New exhibits relating to the respondents’ alleged misconduct [ 18 ] The appellants produced exhibits before Déziel J. that, they argued, are grounds for revocation of Mainville J.’s judgment pursuant to

article 483 C.C.P. that he mistakenly ignored These include a video recording of the respondents’ allegedly defaming the appellants obtained on November 10, 2014, as well as a CD of an incomplete audio hearing of a Rental Board hearing on March 18, 2014 and an accompanying letter from the board. [ 19 ] Déziel J. disagreed. Addressing himself specifically to the video recording, he wrote at paragraphs [39] and [40]: “This is an ongoing situation begun in 1999 according to this proceeding. First, the Petitioners asked Manville J. to adduce new evidence; permissions denied.

Secondly, her judgment was maintained by the Court of Appeal. This ground is denied”. [ 20 ] The appellants say that the judge misunderstood the character and timing of the new evidence. They recall that the exhibits only came into existence after the judgments of Mainville J. in April, 2014 and that they had not asked her or the Court of Appeal to permit this evidence to be adduced. [ 21 ] This argument is rejected.

The appellants have again misconstrued Déziel J.’s judgment. [ 22 ] Firstly, Déziel J. was plainly aware that the exhibits post-dated the trial, as the references to the appropriate dates all appear in his judgment. [ 23 ] Second, the reason Déziel J. dismissed this ground for revocation is clear from the first sentence in paragraph [39] of his reasons quoted above. His comment that the evidence in the video was part of an “ongoing situation begun in 1999” indicates that the exhibits reflect the same kind of conduct that was already documented in the record.

In this sense, the new exhibits are similar to the evidence that the appellants had adduced before Mainville J. at the hearing on

article 54.1 C.C.P. It was also similar to the evidence that Mainville J. had refused to allow in a special motion the appellants had brought to re-open the hearing after the file had been taken on reserve. [6] While it is true that the exhibits before Mainville J. and this Court were different than the ones advanced before Déziel J., the same issue of their impact on the eventual judgment is at issue. [ 24 ] Déziel J. was therefore entitled to take the same view of this evidence – that it was more of the same kind of allegations made before Mainville J. – and decide that, on its face, it did not justify revocation pursuant to

article 483 C.C.P. Where a motion for revocation on the basis on new evidence is in fact an indirect attempt to re-try the case, it should, as is the case here, be dismissed. [7] (iv) Is the motion for revocation prescribed? [ 25 ] The motion for revocation was filed on November 20, 2014, more than seven months after Mainville J.’s judgment rendered on April 9, 2014. Déziel J. decided that the motion was presented outside both the 15-day limit set forth in

article 484 C.C.P and the six- month prescription period provided in the same article. [ 26 ] The appellants argue that the judge erred in that he should have calculated the delay from the time they only received the accounting expertise on November 11, 2014. The appellants say that, when calculated from this date, their motion for revocation filed on November 20, 2014 was well within the 15-day limit in

article 484. Moreover, the judge erred further in his

interpretation of the relationship between the 15-day limit and the six-month prescription period. The appellants add that the judge also failed to take into

account an interlocutory judgment and a case management ruling that had, they say, the effect of suspending the time limits. [ 27 ] The appellants have not convinced us that the judge erred on this point. They have failed to explain adequately why the time limit in

article 484 should not run from the time they discovered the alleged error of their lawyer. Had they filed a motion in revocation at that time, the appellants would have satisfied the strict time limits in

article 484 C.C.P. But, in any event, even if the motion were to be considered as brought within the time limits, all of the grounds of revocation are without merit. [ 28 ] FOR THE FOREGOING REASONS , the Court: [ 29 ] DISMISSES the appeal, without costs given that the respondents are foreclosed from filing arguments. YVES-MARIE MORISSETTE, J.A. FRANÇOIS DOYON, J.A. NICHOLAS KASIRER, J.A.