2023 NLSC 17, 2023 NLSC 17

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Cabana v. Wells , 2023 NLSC 17 Date : February 8, 2023 Docket : 202001G3963 Between: Brad Cabana First Plaintiff And: Katherine Cabana Second Plaintiff And: Joe Wells First Defendant And: Rod Murphy Second Defendant And: RE/MAX Eastern Edge Realty Ltd. Third Defendant And: Katrina A. Brannan Fourth Defendant And: Hughes & Brannan Law Offices Fifth Defendant And: John D. Berghuis Sixth Defendant And: Control Surveys Limited Seventh Defendant

And: Bill Martin Eighth Defendant And: Bill Martin Construction Limited Ninth Defendant And: Newfoundland and Labrador Credit Union Tenth Defendant Before: Justice Garrett A. Handrigan Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: January 24, 2023

Summary: Brad and Katherine Cabana sued ten Defendants for damages arising from their purchase of a house and land in Hickman’s Harbour on Random Island, NL. Eight of the ten Defendants filed applications for security for costs and the Cabanas responded to the 6th and 7th Defendants with two affidavits appending documents they received from disciplinary proceedings conducted by the Association of Newfoundland Land Surveyors. The 6th and 7th Defendants applied by Interlocutory Application to strike the affidavits from consideration on their application for security for costs.

The Cabanas also responded to the applications for security for costs with further applications requiring the Defendants to provide details of their errors and omissions and professional liability and litigation insurance. Six of the Defendants responded to the applications for disclosure, but the Cabanas asked leave of the Court to withdraw them.

The Court dismissed the 6th and the 7th Defendants’ Interlocutory Application to strike the Cabanas’ Second Affidavit from consideration on their application for security for costs and directed that the costs of that application would be in the cause of the application for security for costs. As to the applications for disclosure, the Court granted leave to the Cabanas to withdraw them but ordered the Cabanas to pay the costs of the 1st, 2nd, 3rd, 6th, 7th and 10th Defendants up to and including January 24, 2023, to be taxed on Column 3 of the Scale of Costs.

Appearances: Brad Cabana Appearing on his own behalf Katherine Cabana Appearing on her own behalf

Christopher J. Peddigrew, K.C. Appearing on behalf of the First, Second and Third Defendants R. Barry Learmonth, K.C. Appearing on behalf of the Fourth and Fifth Defendants Sheri H. Wicks and Raymond G. Critch Appearing on behalf of the Sixth and Seventh Defendants Jennifer A. McCarthy Appearing on behalf of the Eighth and Ninth Defendants Bionca Bastarache Appearing on behalf of the Tenth Defendant Authorities Cited: CASES CONSIDERED: Bellows v. Quik Cash Ltd., 2004 NLSCTD 191; Adelaide Capital Corp. v. Smith's Field Manor DevelopmentLtd., (1994), (NS SC), 129 N.S.R. (2d) 241, 362 A.P.R. 241 (N.S.

S.C.); Chopik v. Mitsubishi Paper Mills Ltd.(2002), 115 A.C.W.S. (3d) 39, 26 C.P.C. (5th) 104 (Ont. Sup. Ct.); Pardy v. Bayer Inc., 2003 NLSCTD; STATUTES CONSIDERED: Land Surveyors Act, 1991, S.N.L. 1991, c. 37 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Handrigan, J.: INTRODUCTION [1] On July 28, 2020, Brad Cabana and Katherine Cabana filed a Statement of Claim in this Court naming ten Defendants. Thenames of the Defendants appear in the style of cause in this matter so I will not repeat them here.

It is sufficient to note for presentpurposes that the Cabanas sued two real estate agents and their firm, a lawyer and her firm, a surveyor and his firm, a building contractorand his firm and a credit union. The Cabanas claim that all ten Defendants were involved when they bought a residential property inHickman’s Harbour, on Random Island, NL. The Cabanas removed an older home from the property and built a new one in its place. [2] All the Defendants had filed their defences to the claim by October 6, 2020.

Various matters happened over the next five to sixmonths as several solicitors withdrew as solicitors of record and others replaced them; the Court received and allowed an application tocase-manage the cause; and counsel and Mr. Cabana, who speaks for himself and Ms. Cabana, appeared before the Court periodically tospeak to those processes. [3] On May 11, 2021, John Berghuis and Control Surveys Limited, his company, whom the Cabanas named as the 6th and 7thDefendants in their Statement of Claim, filed an interlocutory application under Rule 21.01 (

a) of the Rules of the Supreme Court. 1986,S.N.L. 1986, c. 42, Sch. D (the “Rules”) asking for security for costs. Six other Defendants also submitted interlocutory applications forsecurity for their costs over the next six weeks, so that by June 1, 2021, all but Katrina Brannan and Hughes and Brannan Law Offices,the 4th and 5th Defendants were asking for the same relief.

[ 4 ] The Cabanas responded quickly to the Interlocutory Applications for security for costs. On May 11, 2021, Mr. Cabana filed Interrogatories, requesting particulars of Control Surveys Limited’s and the other Defendants’ errors and omissions and professional liability and litigation insurance coverage. When the Defendants refused to provide those particulars, Mr. Cabana filed an Interlocutory Application on June 7, 2021, to compel the Defendants to “…produce any and all errors or omissions, professional liability and/or any litigation insurance policies that they possess”.

On July 14, 2021, all Defendants but Katrina Brannan and Hughes and Brannan Law Offices appeared before this Court on Mr. Cabana’s June 7, 2021, Interlocutory Application and the Court scheduled it and the Defendants’ Interlocutory Applications for security for costs to be heard on January 24, 2022. [ 5 ] On October 19, 2021, Brad Cabana filed an Interlocutory Application asking for leave of the Court to apply to find all Defendants except for Katrina Brannan and Hughes and Brannan Law Offices and Bill Martin and Bill Martin Construction Limited in contempt of Court.

He alleged that counsel for the six Defendants he named in the Interlocutory Application had, in their applications for orders that Mr.

Cabana provide security for costs, “…sworn affidavits that contain information that is false, and that falsity is clearly intended to perverse the course of justice regarding these proceedings before this Court” (para. 2 of Brad Cabana’s Interlocutory Application filed on October 19, 2021). [ 6 ] Meanwhile, on December 13, 2021, Brad Cabana filed an affidavit (the “First Affidavit”), as he said, “in support of the Respondents’ [Brad Cabana and Katherine Cabana] Memorandum of Fact and Law, and in defence of the Applicants’ [John Berghuis and Control Surveys Limited] Application for Security for Costs” (Page 2 of the Affidavit Brad Cabana filed on December 13, 2021).

Mr. Cabana attached several documents to his Affidavit, including a letter dated December 3, 2021, that he and Katherine Cabana received from Josh Mailman, P.Eng., NLS, Secretary-Treasurer of the Association of Newfoundland Land Surveyors (ANLS), and a Report of a Discipline Committee Investigation Panel (DCIP) dated August 25, 2021, with several appendices. These documents relate to a Formal Complaint against Mr. Berghuis that the Cabanas made to the ANLS on May 5, 2020. [ 7 ] On January 6, 2023, Mr.

Cabana filed a second affidavit (the “Second Affidavit”) pertaining to the response that the ANLS made to the complaint that he and Katherine Cabana filed with the Association on May 5, 2020. The Second Affidavit was a modified version of the document that he filed with the Court on December 13, 2021, in that its only attachment was the ANLS’s Discipline Committee Hearing Panel’s (DCHP) decision on their complaint.

None of the other documents that had been attached to the First Affidavit were appended to the Second Affidavit. [ 8 ] On January 13, 2022, John Berghuis and Control Surveys Limited filed an Interlocutory Application to strike Mr. Cabana’s First Affidavit, on various grounds but especially as they stated in paragraph 1 of their Application, that it is “…scandalous, irrelevant and otherwise oppressive”.

The Applicants asked that “…this matter be addressed as a preliminary matter at the upcoming hearing [of the security for costs Applications] scheduled for January 24, 2022, as it is understood that the Respondent [Brad Cabana] intends to rely on the Subject Affidavit in his argument to the Court” (para. 2 of the Application). [ 9 ] The next day, on January 14, 2022, counsel for Mr. Berghuis and Control Surveys Limited filed their Memorandum of Fact and Law in support of the Interlocutory Application to strike the Affidavit. The hearing that was scheduled for January 24, 2022, did not go ahead as planned.

The minutes from April 6, 2022, which was the next date on which the matters were called, indicate that the “…the previous dates [were] vacated in January [2022] due to Covid-19…” and the matters were then rescheduled for hearing on June 29, 2022. [ 10 ] The matters were not heard on June 29, 2022, because the justice who was then assigned to the file was not available. Thus, the matters were rescheduled for hearing to January 24, 2023, when I heard some of them. [ 11 ] On that date Mr.

Cabana advised me that he had filed a request for a Case Management Meeting in this matter on December 1, 2022 to discuss two issues. Mr. Cabana is correct in that he filed the request and the date on which he did so. From the filed request, it appears that Mr. Cabana wished to discuss two issues in the Case Management Meeting:

a) The with drawal (sic) of their [his and Katherine Cabana’s] Application for disclosure prior to the Application for security for costs Application made by the Defendants.

b) The amending of the Affidavit of Brad Cabana to remove the investigation finds (sic) in the response to the Sixth and Seventh Defendants [John Berghuis and Control Surveys Limited] Application to strike. [ 12 ] The Case Management Meeting did not take place but Mr.

Cabana stated at the start of proceedings on January 24, 2023 that he had requested the meeting and he also advised the Court, as noted in the minutes for that day “…the purpose of that meeting was to advise the Court and counsel that he will be withdrawing his original Affidavit and his application for disclosure to avoid further proceedings delays”; and further, “…that the only applications that need be heard today relate to the Second Affidavit and security for costs”. [ 13 ] Counsel for the various parties, and for the 6th and 7th Defendants [John Berghuis and Control Surveys Limited], in particular, consented to Mr.

Cabana withdrawing his Interlocutory Application for disclosure of their errors and omissions and professional liability insurance, as well as the First Affidavit he filed in response to the 6th and 7th Defendants’ security for costs Application. However, all counsel reserved the right to speak to the costs consequences of responding to the Interlocutory Application for disclosure and as well, for the 6th and 7th Defendants, in particular, the costs consequences of addressing the First Affidavit Mr.

Cabana filed in response to their Application for security for costs. [ 14 ] I granted the Cabanas leave to withdraw both the Interlocutory Application for disclosure of the errors and omissions and professional liability insurance and the First Affidavit they filed in response to the 6th and 7th Defendants’ Application for security of costs from him but reserved my ruling on the costs consequences of their withdrawals. the issues [ 15 ] Based on the foregoing, these are the issues I will deal with at this time:

1. May the Cabanas use the Second Affidavit that they filed in response to the 6th and 7th Defendants’ Application for security ofcosts from them? 2. Should the Cabanas pay the costs that the Defendants incurred in responding to the Cabanas’ Application for disclosure of errorsand omissions and professional liability and litigation insurance; and, if so, which of the Defendants should receive those costs, and onwhat basis? the law Rules of the Supreme Court – Striking an Affidavit [16] Rule 48.02 of the Rules, provides: 48.02.

(1) An affidavit used on an application may contain statements as to the belief of the deponent with the sources and groundsthereof.

(2) Unless the Court otherwise orders, an affidavit used on a trial shall contain only such facts as the deponent is able of his or her ownknowledge to prove. [17] Rule 48.11 of the Rules provides: 48.11 The Court may order any matter that is scandalous, irrelevant or otherwise oppressive to be struck out of an affidavit. Case Law – Striking an Affidavit [18] In Bellows v. Quik Cash Ltd., 2004 NLSCTD 191, Goulding, J. of this Court, drawing on Adelaide Capital Corp. v. Smith'sField Manor Development Ltd., (1994), (NS SC), 129 N.S.R. (2d) 241, 362 A.P.R. 241 (N.S.

S.C.) and Chopik v.Mitsubishi Paper Mills Ltd. (2002), 115 A.C.W.S. (3d) 39, 26 C.P.C. (5th) 104 (Ont. Sup. Ct.), stated the principles that the Court shouldconsider when deciding whether to strike all or portions of affidavits: 34 In Adelaide Capital Corp. v. Smith's Field Manor Development Ltd., 1994 CarswellNS 136 (N.S.

S.C.) Saunders, J. found that"scandalous, irrelevant or otherwise oppressive" is disjunctive and therefore, either scandalous or irrelevant or some other oppression willsuffice in order to reject a defective affidavit (par. 25). 35 The principles with respect to affidavit evidence are succinctly summarized by Shaughnessy, J. in Chopik v. Mitsubishi PaperMills Ltd., [2002] O.J. No. 2780 (Ont. S.C.J.) as follows: [26] 1.

Affidavits on a motion that fail to state the source of the deponent's information and belief will be struck if the paragraphdeals with a contentious matter; but it may be saved by Rule 1.04 if it deals with non-contentious matters and the exhibits to theaffidavit or other evidence filed on the motion reveal the source of the information and belief. (Cameron v. Taylor (1992), (ON SC), 10 O.R. (3d) 277 Ont. Ct. (Gen. Div.). 2. Improper hearsay, argument and irrelevant information should not be contained in an affidavit. Similarly, legal argumentbelongs in a factum or brief, not an affidavit.

Legal submissions contained in affidavits are superfluous and should be struck.(Canada Post Corp. v. Smith (1994), (ON SC), 20 O.R. (3d) 173 at 188 (Div. Ct.) And Czak v. Mokos (1995), (ON SC), 18 R.F.L. (4th) 161 at 165 (Master). 3. Offensive allegations made for the purposes of prejudicing another party and inflammatory rhetoric directed at a party arescandalous and should also be struck. (Ontario (Ministry of Natural Resources) v. Ontario Federation of Anglers andHunters (2001), 143 O.A.C. 103 at 111-112 (S.C.J.) Aff'd. [2001] O.J. No. 5320 (Div. Ct.)." 4.

Where it is clear in law that evidence is inadmissible, to leave the evidence on the record is embarrassing and prejudicial to thefair hearing of the motion or application. A party should not be put to the needless expenditure of time and resources inresponding to evidence which can have no impact on the outcome of the proceeding. (Noble China Inc. v. Lei) (1998), (ON SC), 42 O.R. (3d) 69 at 94-95 (Gen. Div.). [emphasis added in original] …

[ 19 ] In Pardy v. Bayer Inc. , 2003 NLSCTD 130 , Mercer, J. (then of this Court) discussed Rule 48.02 (1) of the Rules : “Hearsay statements are therefore permissible on an application if the sources are disclosed. This is an exception to the general rule that affidavits should only contain such facts as the respondent is able of his knowledge to prove…” (para. 58). Mercer, J. was, as noted, referring to Rule 48.02 (1) when he made that statement.

In particular, he noted that admitting hearsay if the affiant disclosed the sources of his beliefs is an exception to the requirements of Rule 48.02 (2) which says that “…an affidavit used on a trial shall contain only such facts as the deponent is able of his or her own knowledge to prove”. [ 20 ] But while Mercer, J. accepted that affidavits tendered under Rule 48.02 (1) might contain “hearsay” he also observed that “… [ Rule 48.02 (1) ] does not otherwise modify or eliminate the applicability of other rules of evidence”.

Goulding, J. discussed some of the “other rules of evidence” in the quotation that I included above from her judgment in Bellows . [ 21 ] The authorization that Rule 48.02 (1) provides for submitting “[a]n affidavit [to be] used on an application… contain[ing] statements as to the belief of the deponent with the sources and grounds thereof” is also subject to the overriding discretion provided to the Court in Rule 48.11 , “… [to] order any matter that is scandalous, irrelevant or otherwise oppressive to be struck out of an affidavit”. [ 22 ] This is the law I will apply to decide whether the Cabanas’ Second Affidavit should be struck from consideration on the 6th and 7th Defendants’ Application for security for costs.

I turn now to analyze that issue and the matter of costs on the Cabanas’ withdrawal of the first Affidavit and their Application for disclosure of the Defendants’ errors and omissions and public liability insurance. analysis Background [ 23 ] In paragraph 45 of the Statement of Claim, the Cabanas filed in this matter on July 28, 2020, they allege that, John Berghuis, the 6 th Defendant: • “…negligently misrepresented that the property [they acquired in Hickman’s Harbour, on Random Island, NL] as free of encumbrances when it was not”. • “…breached his fiduciary [duty] to them by failing to perform an accurate Real Property Report in 2010 and 2015, and by failing to personally notify them of the discrepancies he uncovered in his 2018 Real Property Report”. [ 24 ] Overall, they claim that Mr.

Berghuis showed “repeated and wanton recklessness” in the survey work he did for them and that his “recklessness…is sufficient to qualify as fraudulent misrepresentation”. In paragraph 46 of the Statement of Claim, the Cabanas claim that Control Surveys Ltd. employs Mr.

Berghuis and that he “is also an owner in Control Survey (sic)”, so that Control Surveys is “vicariously liable” to them. [ 25 ] On May 5, 2020, almost three months before the Cabanas issued their Statement of Claim, the Cabanas filed a “formal complaint” with the ANLS, which is a self-governing professional association that derives its mandate from the Land Surveyors Act, 1991 , S.N.L. 1991, c. 37 . Mr.

Berghuis is a member of the ANLS and is subject to its supervision. [ 26 ] A Discipline Committee Investigative Panel (the “DCIP”) of the ANLS investigated the Cabanas’ Complaint and issued a report on August 25, 2021 in which it recommended that a Discipline Committee Hearing Panel (the “DCHP”) consider the matter. That recommendation was accepted and the Panel’s review was tentatively scheduled for January 17, 2022.

Meanwhile the ANLS provided the Cabanas with a copy of the August 25, 2021 DCIP Report. [ 27 ] The Cabanas filed an affidavit on December 13, 2021 (the “First Affidavit”) which they submitted “in support of the Respondents’ [the Cabanas’] Memorandum of Fact and Law, and in defence of the Applicants’ [John Berghuis, 6 th Defendant’s and Control Surveys Limited, 7 th Defendant’s] Application for security for costs. The package of materials they received from the ANLS included: 1.

A covering letter from the ANLS advising them of the DCIP investigation and its recommendation and the date, time and place of the DCHP hearing. 2. The 13-page DCIP Investigation Report dated August 25, 2021, with Appendices A-K: A. Statement of Formal Complaint. B. Minutes of Meeting. C. Clarification Questions. D. McInnes Cooper [legal counsel for John Berghuis and Control Surveys Limited] Correspondence. E. Response to McInnes Cooper. F. Formal Letter to John Berghuis. G. Responses to Request for Clarification. H. Alvin H. Barrow [2005] Survey. I. 2010 R[eal]P[roperty]R[eport].

J. 2015 R[eal]P[roperty]R[eport]. K. 2018 Sketches. [ 28 ] The First Affidavit which the Cabanas submitted with these materials attached to it consists of two pro forma paragraphs, as here, sworn to by Brad Cabana: 1. I have read and I understand Exhibit “A” attached hereto, being a covering letter addressed to the Respondents [Brad Cabana and Katherine Cabana] from the Association of Newfoundland and Labrador, dated December 3, 2021, and Exhibit “B” attached hereto, being a Discipline Committee Investigation Report produced by the Association of Newfoundland Surveyors, dated August 25, 2021. 2.

I have personal knowledge of the facts contained therein and they are true to the best of my knowledge, information and belief. [ 29 ] For greater certainty, Exhibit “A” in paragraph no. 1 is the same as no. 1 in the list that precedes it and Exhibit “B” in paragraph no. 1 is the same as no. 2 in that list. [ 30 ] Counsel for John Berghuis and Control Surveys Limited filed a Memorandum of Fact and Law on January 14, 2022 in support of their clients’ Interlocutory Application to strike the Affidavit.

They asserted four “principles” of law that the Affidavit violated and further that it contravened Rule 48.11 of the Rules . [ 31 ] This is how counsel expressed it in paragraph 13 of their Memorandum: 13. Given the foregoing, the Applicant [John Berghuis and Control Surveys Limited] requests that the Affidavit of December 6, 2021, filed by Mr.

Cabana and attaching the ANLS letter and report be struck from the record, as their inclusion would be scandalous or otherwise oppressive and their inclusion is irrelevant for the purposes of the assessment of the Applicant’s application for Security for Costs. [ 32 ] The Cabanas filed their own Memorandum of Fact and Law on May 12, 2022, which they say in paragraph 34, is “…intended to refute the Sixth and Seventh Applicants application to strike the Respondents’ affidavit”. [ 33 ] The 6 th & 7 th Defendants’ Application to strike the Cabanas’ Affidavit was set for hearing on January 24, 2022, then moved to June 29, 2022 and ultimately moved again until January 24, 2023, when I heard it.

Meanwhile, on December 1, 2022, the Cabanas filed a “ REQUEST FOR CASE MANAGEMENT MEETING ” at which they indicated they wished to “discuss” two issues, the second which pertains now, being: (

b) The amending of the affidavit of Brad Cabana to remove the investigation finds (sic) in response to the Sixth and Seventh Defendants application to strike. [ 34 ] In fact, the Cabanas did not want so much to “amend” the Affidavit as to file a modified version of it, which they did on January 6, 2023, supported by an affidavit (the “Second Affidavit”), that Mr. Cabana swore on December 20, 2022. On January 18, 2023 Counsel for the 6 th and 7 th Defendants filed a further Memorandum of Fact and Law in support of their Interlocutory Application to now strike Mr. Cabana’s Second Affidavit.

In the main, the second Memorandum repeats many of the submissions they made in their January 14, 2022 Memorandum and calls for the same relief. [ 35 ] Mr. Cabana, as I noted above, swore the Second Affidavit on December 20, 2022 and filed it on January 6, 2023. The Second Affidavit consists of three paragraphs, with one attachment as Exhibit “A”. The attachment is a copy of a decision that the Disciplinary Committee Hearing Panel (“DCHP”) of the ANLS filed on December 5, 2022 after it reviewed the Formal Complaint that the Cabanas made to the ANLS on May 5, 2020.

The DCHP was, of course, the next step that the DCIP anticipated would follow after it issued its investigative report recommending a further review by the DCHP. [ 36 ] The Cabanas want to rely on the Second Affidavit and Mr. Cabana moved at the outset of proceedings on January 24, 2023 to withdraw the First Affidavit and replace it with Second one. The Second Affidavit omits the paragraph 2 (“I have personal knowledge of the facts contained therein and they are true to the best of my knowledge, information and belief”.) that was in the First Affidavit. [ 37 ] Mr.

Cabana “swears’ in paragraph 1 of the Second Affidavit that “…I have knowledge of the facts deposed herein except where stated to be based on information and belief”; and he offers as the basis for his “knowledge” that “…I represented myself, and was therefore in the position of counsel during the Disciplinary Committee Hearing of the Association of Newfoundland Surveyors which, during the 15 th , 16 th , 17 th , and 19 th days of November, 2022, did conduct a disciplinary hearing against the Sixth Defendant, John Berghuis…”.

Then he attached a copy of the Panel’s “formal decision” to his Affidavit as Exhibit “A”. Discussion – Striking the Cabanas’ Affidavit [ 38 ] The 6 th and 7 th Defendants rely on the principles of law that Goulding, J. stated in Bellows to challenge the Second Affidavit. They say that: • The affidavit fails to properly state the source of the information and belief on which it is based. • The affidavit is essentially “opinion” evidence which addresses the standard of care for a surveyor, a matter of critical importance in these proceedings.

• The affidavit contains hearsay evidence. • The affidavit is made to undermine Mr. Berghuis and is intended to negatively influence the trier of fact. • The affidavit is otherwise scandalous, oppressive and is irrelevant to the Defendants’ application for security for costs. [ 39 ] The Cabanas defend Mr. Cabana’s Second Affidavit assiduously. They claim that the ANLS created the documents attached to it in the normal course of its business and the documents are inherently reliable, whether or not Mr. Cabana has personal knowledge of them. Regardless, they say that Mr.

Cabana was heavily involved in the ANLS process, in that he and his wife filed the formal complaint from which the covering letter and the DCIP originated and that Mr. Cabana was “…in the position of counsel during the Disciplinary Committee Hearing”. [ 40 ] But the Cabanas argue even more emphatically that the Affidavit is critically important to their response to the 6 th and 7 th Defendants’ Application for security for costs.

On May 12, 2022, the Cabanas filed a Memorandum of Fact and Law to the Defendants’ Application to strike the First Affidavit from consideration on security for costs. [ 41 ] This is how they expressed the importance of the Affidavit in paragraph 39 of that Memorandum: 39. The covering letter and the DCIP Investigation Report of the [ANLS]…directly address the issue of whether the Respondents’ [the Cabanas’] claim that (sic) is frivolous or vexatious , or not. Both documents make it abundantly clear that there are grounds for the Respondents’ claim.

To allow the Applicants’ application to strike would deny the Respondents’ right to a full defence. (Emphasis Added) [ 42 ] Elsewhere in paragraph 37 of their Memorandum, the Cabanas are even more direct about the “significance” of their Affidavit: 37.

If the Applicants [the 6 th and 7 th Defendants] were to be successful in their application for security for costs, and the Respondents [the Cabanas] were unable to satisfy those costs within ten days as evidenced by their [the Applicants’] previous affidavit in this matter, an order for costs would result in the termination of their claim. [ 43 ] I gave the Cabanas leave to withdraw the First Affidavit on January 24, 2023 and I will not strike their Second Affidavit.

Let me explain why. [ 44 ] Rule 48.02. (1) of the Rules says that “[a]n affidavit used on an application may contain statements as to the belief of the deponent with the sources and grounds thereof” (Emphasis Added); in other words, an affidavit presented on an application, as we have here, does not have to be based on the “personal knowledge and belief” of the deponent, so long as it is clear from the affidavit what the deponent relies on to express his knowledge and belief. [ 45 ] This conforms with what I quoted from Mercer, J. in Pardy earlier in these reasons: “Hearsay statements are therefore permissible on an application if the sources are disclosed.

This is an exception to the general rule that affidavits should only contain such facts as the respondent is able of his knowledge to prove…”. Thus, in the first instance, neither Mr. Cabana’s First nor his Second Affidavit, in particular, offends Rule 48.02 (1) . He makes clear in both Affidavits that he is relying on the materials that he attached to them and which he received from the ANLS; whether it was the full suite of materials he received from the DCIP or just the hearing decision that he received from the DCHP. [ 46 ] But additionally, neither of Mr.

Cabana’s Affidavits say anything that offends Rule 48.11 , in that he expresses no personal opinions, he makes no observations, and he offers no commentary in either of them that criticize Mr. Berghuis. He simply says, as in the First Affidavit that he read the materials attached and that he has “personal knowledge of the facts contained therein, and they are true to the best of my knowledge, information and belief”. It may be somewhat disingenuous of Mr.

Cabana to say in the First Affidavit that he has “personal knowledge of the facts”, but I acknowledge that he was personally involved in some aspects of the investigation, and that he did contribute to the factual matrix from which it arose. [ 47 ] Rule 21.01 of the Rules provides for security for costs. Rule 21.01 (

f) states that security for costs may be ordered where, “(

f) upon the examination of a plaintiff it appears that there is a good reason to believe that the proceeding is frivolous and vexatious , and that the plaintiff is not possessed of sufficient property within the jurisdiction to pay costs” (Emphasis Added). [ 48 ] It appears that the Cabanas may be concerned the 6 th & 7 th Defendants will rely on that

section of the Rules to ground their Application for security for costs; to offset which, they want to rely on the findings of either or both Disciplinary Panels of the ANLS to ensure that their claim is not seen as “frivolous or vexatious”. Mr. Cabana is more restrained in his Second Affidavit (perhaps because of the criticism that the 6 th & 7 th Defendants directed at him for his First Affidavit) and simply avers that he has “…knowledge of the facts deposed herein except where stated to be based on information and belief ” (Emphasis Added). [ 49 ] None of what Mr.

Cabana attests to in either Affidavit is scandalous or oppressive of the 6 th & 7 th Defendants, nor may it be said that it is irrelevant to the Application for security for costs. That said, I make no findings as to how relevant, if at all, the Affidavits may be to the Applications for security for costs.

I will leave that finding until I hear those Applications, now set for March 1, 2023. [ 50 ] Overall, I find that the Second Affidavit the Cabanas filed in response to the Interlocutory Application the 6 th & 7 th Defendants filed for an order for security for costs, • does not offend Rule 48.01 (1) of the Rules ; and • does not offend Rule 48.11 of the Rules , while I reserve the right to decide if, and to what extent, it is relevant to the 6 th & 7 th Defendants’ Application for security for costs.

[ 51 ] In the result, I dismiss the Interlocutory Application of the 6 th & 7 th Defendants to strike the Affidavits. The costs of their Interlocutory Application to strike the Affidavits are in the cause of the Interlocutory Applications that eight of the ten Defendants have filed for security for costs.

Discussion - Withdrawing the Interlocutory Application for Disclosure [ 52 ] As I noted earlier, the Cabanas responded quickly to the several interlocutory applications the Defendants filed for security for costs and proceeded twofold: filing Interrogatories with the Defendants asking them to disclose the details of their errors and omissions and professional liability and litigation insurance coverage; and when the Defendants refused to disclose the information, filing an Interlocutory Application for an order compelling the Defendants to provide disclosure. [ 53 ] The Cabanas’ Interlocutory Application was set for hearing before me on January 24, 2023.

At the beginning of proceedings that day, Mr. Cabana advised that he and his wife, Katherine Cabana, the other Plaintiff, wished to withdraw the Interlocutory Application for disclosure. I accepted the Cabanas’ decision to withdraw the Application as did counsel for the Defendants towards whom the Cabanas had directed the Application; but counsel advised their clients wished to be heard on costs. I agreed to their request and heard counsel and Mr.

Cabana on costs and reserved my ruling until now. [ 54 ] Before proceeding further, let me provide some background to the Interlocutory Application for disclosure, starting with a timeline: • May 11, 2021: The 6 th & 7 th Defendants file an Interlocutory Application for security for costs. • May 16, 2021: The Cabanas request the 6 th & 7th Defendants provide them with details of their errors and omissions and professional liability and litigation insurance. • May 18, 2021: The Cabana send Interrogatories to all Defendants to answer questions about their insurance coverage. • June 7, 2021: The Cabanas file an Interlocutory Application requesting an order that all Defendants disclose their insurance coverage. • July 14, 2021: The Court set the Interlocutory Application for hearing on January 24, 2022 (postponed to June 29, 2022 and postponed again until January 24, 2023). • December 1, 2021: The Cabanas give notice of their intention to seek leave of the Court to withdraw their Interlocutory Application for disclosure by filing a Request for a Case Management Meeting to discuss it. • December 3, 2021: The Cabanas file their Memorandum of Fact and Law on the Interlocutory Application. • December 30, 2021: The 6 th & 7 th Defendants file their Memorandum of Fact and Law on the Interlocutory Application. • January 6, 2022: The 10 th Defendant files its Memorandum of Fact and Law on the Interlocutory Application. • January 11, 2022: The 1 st , 2 nd , & 3 rd Defendants file their Memorandum of Fact and Law on the Interlocutory Application. • January 24, 2023: I grant the Cabanas leave to withdraw the Interlocutory Application and reserve my decision on costs. [ 55 ] Rule 19 of the Rules provides for “Discontinuance and Withdrawal” of proceedings.

Rules 19.02 and 19.03 pertain. They read, as relevant here: 19.02.

(1) At any time after a proceeding is entered for trial or its hearing is commenced in chambers, (

a) a plaintiff may…withdraw any cause of action therein against any defendant; … by filing a notice of… withdrawal on which is endorsed the consent of all parties of record, or by leave of the Court .

(2) An order of the Court under Rule 19.02(1) may contain such terms as to costs … or otherwise, as are just. 19.03.

(1) Subject to rule 19.02, a party discontinuing a proceeding or withdrawing any cause of action therein… shall pay the costs of any opposing party to the date of giving notice of discontinuance or withdrawal to the party…

(Emphasis Added) [ 56 ] Rule 19.02(1)(

a) requires an applicant to obtain leave of the Court to withdraw an interlocutory application after its hearing is commenced in chambers. Rule 19.02(2) gives the Court discretion over costs when it grants leave to withdraw the application.

If the Court does not exercise the discretion that Rule 19.02(2) confers, it is clear by Rule 19.03 that a party withdrawing an application, as the Cabanas are doing here, shall pay the costs of any opposing party to the date of giving notice of its intended withdrawal. [ 57 ] First, let me say that the Cabanas were right to seek leave of the Court to withdraw their Interlocutory Application. They did not produce a notice of withdrawal bearing the written consent of the six Defendants who were actively involved in the Interlocutory Application, so their only option to withdraw it was with leave.

They informed the Respondents of their intention to seek leave to withdraw by filing the “Request for Case Management Meeting” on December 1, 2022, in which they indicated they wished to discuss two issues, the first being: “The with drawal (sic) of their Application for disclosure prior to the Application for security for costs made by the Defendants”. [ 58 ] Notwithstanding Rule 19.03, I will depart from the default position it states that costs are payable up “…to the date of giving notice of its intended withdrawal”.

While the Cabanas gave notice of their intention to withdraw the Application on December 1, 2022, they could not withdraw it then, on their own initiative, but only with leave of the Court.

The Cabanas actually filed their Memorandum of Fact and Law on the disclosure Application on December 3, 2022, two days after they filed the request for a Case Management Meeting, and the 1 st , 2 nd , 3 rd , 6 th , 7 th & 10 th Defendants followed the Cabanas and filed their Memoranda in response to it over the next month or so. [ 59 ] Counsel for those six Defendants also appeared on January 24, 2023, when the Interlocutory Application would have been heard, and the Cabanas asked leave to withdraw it.

Counsel who appeared for the Defendants on January 24, 2023 did not oppose the Cabanas’ request for leave to withdraw and with the exception of counsel for the 6 th & 7 th Defendants, did not take

part in the proceedings; but all counsel asked for costs on the Interlocutory Application for disclosure. [ 60 ] The Cabanas claim that their liability for costs, if ordered, should not extend beyond December 1, 2022 when they filed their request for a case management meeting to discuss withdrawing the Interlocutory Application for disclosure.

They also say that it should not lie on them but “on the court” that the Case Management Meeting did not occur in a more timely manner. [ 61 ] It is disingenuous for the Cabanas to say that: The Application was set for hearing on January 24, 2023; they filed their Memorandum of Fact and Law on December 3, 2022, two days after they submitted the request for the Case Management Meeting and the Court was heading into an annual holiday period. Moreover, by December 1, 2022 the Interlocutory Application had been outstanding for 18 months since they issued it on June 7, 2021.

There was sufficient time in that interval to apply in a timelier way to seek leave to withdraw it. [ 62 ] In the result, I order that the Cabanas pay the costs of all six Defendants (the 1 st , 2 nd , 3 rd , 6 th , 7 th & 10 th Defendants) on the Interlocutory Application for disclosure of their errors and omissions and/or professional or litigation liability insurance up to an including January 24, 2023. Costs will be taxed on Column 3 of the Scale of Costs.

Summary and Disposition [ 63 ] Brad and Katherine Cabana sued 10 Defendants for damages arising from their purchase of a house and land in Hickman’s Harbour on Random Island, NL. Eight of the 10 Defendants filed Applications for security for costs and the Cabanas responded as to the 6 th & 7 th Defendants with Affidavits appending documents that they received from disciplinary proceedings conducted by the Association of Newfoundland Land Surveyors.

The 6 th & 7 th Defendants applied by Interlocutory Application to strike the Affidavits from consideration on their Application for security for costs. [ 64 ] The Cabanas also responded to the Applications for security for costs with further Applications requiring the Defendants to provide details of their errors and omissions and professional liability and litigation insurance.

Six of the Defendants responded to the Applications for disclosure but the Cabanas asked leave of the Court to withdraw them. [ 65 ] The Court dismissed the 6 th & 7 th Defendants’ Interlocutory Application to strike the Cabanas’ Second Affidavit from consideration on their Application for security for costs and directed that the costs of that Application would be in the cause of the Application for security for costs. [ 66 ] As to the Applications for disclosure, the Court granted leave to the Cabanas to withdraw them but ordered the Cabanas to pay the costs of the 1 st , 2 nd , 3 rd , 6 th , 7 th & 10 th Defendants up to and including January 24, 2023, to be taxed on Column 3 of the Scale of Costs.

Order [ 67 ] In the result, I order that: 1. The Interlocutory Application 6 th & 7th Defendants filed to strike the Cabanas’ Second Affidavit from consideration on their Interlocutory Application for security for costs is dismissed. 2. Costs of this Interlocutory Application are in the cause of the Interlocutory Applications for security for costs.

3. The Cabanas have leave to withdraw their Interlocutory Application for the Defendants to provide details of their error and omissions and professional liability and litigation insurance. 4. The Cabanas will pay the costs of the 1 st , 2 nd , 3 rd , 6 th , 7 th & 10th Defendants on this Interlocutory Application up to and including January 24, 2023, to be taxed on Column 3 of the Scale of Costs. _____________________________ Garrett A. Handrigan Justice