St. Laurent Automotive Group Inc. v. Import Auto Leasing Inc., 2017 ONSC 6649

CITATION : St. Laurent Automotive Group et al v Sami’s Garage Ltd. et al , 2017 ONSC 6649 COURT FILE NO.: 13-58774 DATE: 2017/11/03 SUPERIOR COURT OF JUSTICE - ONTARIO BETWEEN: St. Laurent Automotive Group Inc. and Import Auto Leasing Inc. Plaintiffs AND Sami’s Garage Ltd., Yassine Jabbar, Sami Abi Khaled and Dmitri Khalife Defendants BETWEEN: Sami’s Garage Ltd. and Sami Abi Khaled Plaintiffs by Counterclaim AND St. Laurent Automotive Group Inc., Import Auto Leasing Inc., John Mierins, Andrea Chambers, Yassine Jabbar and Dmitri Khalife Defendants by Counterclaim BEFORE: Madam Justice H. J.

Williams COUNSEL: Jennifer Aouad, Counsel for the Plaintiffs and Defendants by Counterclaim Richard J. Bosada and Diane Condo, Counsel for Defendants and Plaintiffs by Counterclaim, Sami’s Garage Ltd. and Samy Abi Khaled HEARD: October 3, 2017 ENDORSEMENT [ 1 ] This is a motion about a

summary judgment motion. OVERVIEW: [ 2 ] The trial of this action is scheduled for three weeks beginning May 7, 2018. [ 3 ] The day before the May 17, 2017 pre-trial conference, the defendants Sami’s Garage Ltd. and Sami Abi Khaled (“the Sami defendants”) served a notice of motion for a

summary judgment motion to dismiss the claim against them. [ 4 ] At a case conference on June 13, 2017, the

summary judgment motion was scheduled to be heard on March 27, 2018, six weeks before the trial. [ 5 ] The plaintiffs have brought a motion to stay the

summary judgment motion on the basis that the Sami defendants require leave to bring their motion, that leave should not be granted and that the motion is not consistent with the goals of

summary judgment articulated by the Supreme Court of Canada in Hryniak v. Mauldin, 2017 SCC 7 . [ 6 ] For the reasons below, I have concluded that the Sami defendants do not require leave to bring their motion but I have permanently stayed their motion. FACTUAL BACKGROUND [ 7 ] The plaintiffs and the defendants were all in the business of selling cars. [ 8 ] In their action, the plaintiffs allege that the defendants were involved in a scheme that resulted in the misappropriation of 23 of the plaintiffs’ cars.

The plaintiffs claim damages for breach of trust, breach of fiduciary duty, breach of contract, theft, fraud, conspiracy and fraudulent misrepresentation. They also claim damages relating to investigation costs, a tracing order and punitive and exemplary damages. [ 9 ] The defendant Sami Abi Khaled (“Khaled”) is the director, officer and shareholder of the defendant Sami’s Garage Ltd. The

Sami defendants defended the action, counterclaimed against the plaintiffs and added the plaintiffs’ chief executive officer and general manager as defendants by counterclaim. [ 10 ] The defendant Dmitri Khalife (“Khalife”) did not defend the action; the plaintiffs do not know where he is. [ 11 ] The defendant Yassine Jabbar (“Jabbar”) defended the action and is representing himself. [ 12 ] Examinations for discovery took place in July of 2014 and July of 2015. [ 13 ] In October, 2016, the plaintiffs, in consultation with the lawyers for the Sami defendants, served a pre-trial certificate and request form. [ 14 ] On November 14, 2016, the parties were informed that a pre-trial conference would take place on May 17, 2017. [ 15 ] On May 16, 2017, shortly after the parties exchanged pre-trial conference briefs and on the eve of the pre-trial conference, the lawyers for the Sami defendants served a notice of motion for a

summary judgment motion. [ 16 ] At the May 17, 2017 pre-trial conference, Master Champagne, noting that the parties had all of their witnesses “ready to go” and that examinations had been completed, scheduled a three-week trial of the action for May 7, 2018. Master Champagne also scheduled a case conference for June 13, 2017 to consider the

summary judgment motion, which she described as a motion for partial

summary judgment, and whether the Sami defendants required leave to bring the motion. [ 17 ] On June 5, 2017, the plaintiffs’ lawyer wrote to the lawyers for the Sami defendants and said that the issue of whether leave was required was arguable but that, in any event, the

summary judgment motion should not proceed because it would not resolve all of the issues to be tried. The plaintiffs’ lawyer said that if the Sami defendants insisted on proceeding with their motion, the plaintiffs would move to seek a stay. [ 18 ] On June 13, 2017, Master Champagne scheduled the

summary judgment motion for March 27, 2018 for a full-day and noted that counsel were to agree on a timetable. [ 19 ] For the motion before me, I was provided with the notice of motion for the

summary judgment motion but not a complete record for the

summary judgment motion. ISSUES: [ 20 ] The plaintiffs raise two issues: 1. Do the Sami defendants require leave to bring a motion for

summary judgment and if so should leave be granted? 2. If leave either is not required or is granted, should the

summary judgment motion be stayed? LAW AND ANALYSIS Issue #1: Do the Sami defendants require leave to bring a motion for

summary judgment and if so should leave be granted? [ 21 ] The Rules of Civil Procedure , R.R.O. 1990, Reg. 194 (“the Rules ”) prohibit parties who set an action down for trial or who consent to an action being placed on a trial list from initiating or continuing any motions or forms of discovery without leave of the court: 48.04(1) Subject to subrule (3), any party who has set an action down for trial and any party who has consented to the action being placed on a trial list shall not initiate or continue any motion or form of discovery without leave of the court. [ 22 ] The plaintiffs argue that because the Sami defendants did not serve their notice of motion until more than six months after the pre-trial certificate and request form was filed and the pre-trial was scheduled, they require leave for their motion.

The plaintiffs argue that leave should not be granted because the motion could have been brought much earlier and because it could derail the trial or prejudice the plaintiffs, who would be required to respond to the motion at a time when they should be preparing for trial. [ 23 ] The Sami defendants argue that they did not consent to the action being placed on a trial list and that the action was not on a trial list at the time their motion was initiated. The Sami defendants filed evidence that they had confirmed with the court that as of May 9 or 10, 2017, the action was not on a trial list.

The Sami defendants’ notice of motion was served on May 16, 2017, the day before the trial date was set at the pre-trial conference. [ 24 ] Although the lawyers for the Sami defendants were consulted by the plaintiffs’ lawyers in the fall of 2016, when the plaintiffs’ lawyers filed the pre-trial certificate and request form, there is no evidence that the Sami defendants consented to the action being placed on a trial list. The evidence points to the contrary.

Master Champagne’s pre-trial conference endorsement of May 17, 2017 indicates that, at the pre-trial conference, the defendants stated that they objected to the matter being set down for trial.

Conclusion with respect to Issue #1: [ 25 ] The Sami defendants, having served their notice of motion before the action was placed on a trial list and not having consented to the action being placed on a trial list, do not require leave to bring their motion. Issue #2: Should the

summary judgment motion be stayed? The positions of the parties: [ 26 ] The plaintiffs submit that the Sami defendants’ motion is not appropriate because even if it were to be successful, it would not eliminate the need for a trial because there are two other defendants to the plaintiffs’ action and because of the Sami defendants’ counterclaim. The plaintiffs also argue that their action alleges a scheme among all of the defendants and that it would not be possible to extract one defendant or one set of defendants from the “fabric” of the case as a whole, particularly given anticipated conflicting evidence.

They also argue that the Sami defendants could have brought their motion much earlier, that the parties are ready for trial and that a trial date has been set which is just six weeks after the date for the

summary judgment motion. The plaintiffs argue that the motion could delay the trial. [ 27 ] The Sami defendants argue that this is not a complicated matter and that there is simply no evidence to support the plaintiffs’ allegations against them. In their notice of motion, the Sami defendants state that it is “pure speculation at best” on the part of the plaintiffs to have assumed that there was a conspiracy among the defendants to convert the vehicles and/or to defraud the plaintiffs.

The Sami defendants argue that, given the seriousness of the allegations the plaintiffs have made against them, the plaintiffs face an onerous burden of proof which the Sami defendants say they cannot meet. The Sami defendants also argue that the plaintiffs cannot establish elements of some of the causes of action they have pleaded. [ 28 ] The Sami defendants dispute the plaintiffs’ contention that it would not be practical to resolve the claim against them without dealing with the claims against the other defendants.

The Sami defendants maintain that the claims against the other defendants will be resolved through default hearings because Khalife did not defend the action and has disappeared and Jabbar has not been involved in the litigation since he filed his statement of defence [1] . [ 29 ] The Sami defendants acknowledge that their counterclaim would require a trial even if their

summary judgment motion is successful but argue that if the plaintiffs’ claims against them are dismissed on the motion, less court time overall will be required. [ 30 ] The Sami defendants also argue that they should not lose their right to bring a

summary judgment motion on the basis of its timing. They argue that although the motion has been scheduled to be heard just six weeks before the trial, they served their notice of motion almost one year before the trial date and that it is not their fault that an earlier date for a day-long motion was not available. [ 31 ] The Sami defendants submit that the merits of a

summary judgment motion should not be pre-judged on a stay motion because it would be unfair to do so in the absence of a complete record. Analysis [ 32 ] In Hryniak , the Supreme Court of Canada called for a shift away from conventional trials and toward more efficient and less expensive mechanisms for resolving disputes but also recognized that

summary judgment motions will not be the answer in all situations. Hryniak explicitly sanctioned motions for directions in the context of

summary judgment motions, including motions, such as the one before me, to stay or dismiss

summary judgment motions considered to be premature or inappropriate. [2] [ 33 ] In Drywall Acoustic Lathing and Insulation, Local 675 Pension Fund (Trustees of) v. SNC-Lavalin Group Inc., 2016 ONSC 5784 , a class action, Perell J., in staying two

summary judgment motions, considered the factors a court must take into account on such a stay motion: 130 In Ghaffari v. Asiyaban , 2012 ONSC 2724 (Ont. S.C.J.), which was not a class action, Justice Ferguson stated that a

summary judgment motion should only be stayed in the clearest of cases and only after the court had considered: (

a) whether the party seeking a stay has put its best foot forward to show that there is a genuine issue for trial or that the matter was too complicated for a judge to achieve a full appreciation of the case; and (

b) whether the complexity of the matter, the nature of the issues, and the nature of the evidence indicated that the case was not amenable to a judgment without a full trial. See also Stever v. Rainbow International Carpet Dyeing & Cleaning Co. , 2013 ONSC 241 (Ont. S.C.J.), leave to appeal refused 2013 ONSC 1574 (Ont. S.C.J.). 131 In considering whether to allow the

summary judgment motion to go ahead or how it should go forward, the court should consider factors such as: (

a) the nature and complexity of the issues; (

b) the extent of the anticipated record; (

c) the comparative prospects that the record will be sufficient to satisfy the test for a

summary judgment with or without examinations for discovery; (

d) whether the responding party have production and oral discovery similar to that available in the normal course; and (

e) whether more efficient means could be developed to ensure the just, most expeditious and least expensive determination of the case on its merits: George Weston Ltd. v. Domtar Inc. , 2012 ONSC 5001 (Ont. S.C.J. [Commercial List]) at paras. 53-55. [ 34 ] In George Weston Ltd. , Brown J. had considered the test in Ghaffari and, without rejecting it, had proposed a case management-based approach for dealing with motions on Toronto’s Commercial List.

[ 35 ] The case before me is ready for trial. As a result, some of the case management-related considerations in George Weston Ltd. do not apply and I consider the Ghaffari test to be more applicable to the situation. [ 36 ] The Sami defendants urged me not to “pre-judge” their

summary judgment motion in the absence of the complete record that would be available to the judge who ultimately hears the motion. However, the Ghaffari test requires that I consider the reasonable chances of success of the

summary judgment motion. [ 37 ] On the motion before me, the plaintiffs presented the following evidence to argue that there is a genuine issue requiring a trial: • The plaintiffs filed evidence that five of the 23 misappropriated cars were stolen from the plaintiffs and then transferred to the Sami defendants. The plaintiffs argued that, regardless of whether the Sami defendants were aware at the time that the cars had been stolen, title of stolen property cannot be transferred.

The plaintiffs’ evidence showed that, at his examination for discovery, Khaled acknowledged that he knew, by the time of the discovery, that the cars had been stolen. The plaintiffs argue that even if the balance of their claims against the Sami defendants fail, the Sami defendants have no defence to the plaintiffs’ claim in relation to the five stolen vehicles. In response, in their factum and their oral submissions on the motion before me, the Sami defendants argued that four of the five stolen cars had been recovered by the plaintiffs and that the fifth is no longer in the Sami defendants’ possession.

They did not indicate what had happened to the fifth car. They filed no evidence in relation to the fate of these cars to support this argument. • The plaintiffs filed evidence that the Sami defendants had given the defendant Khalife two unexplained loans totaling $192,000.00 in the weeks leading up to the misappropriation of the plaintiffs’ vehicles. The Sami defendants did not respond to this evidence. • The plaintiffs filed evidence that Jabbar will say at trial that the Sami defendants were aware that Khalife was transferring vehicles to them through Jabbar’s dealership.

In response, the Sami defendants deny that they had this knowledge. • The plaintiffs filed evidence that the evidence of the parties at trial will conflict and that findings of credibility will be required, particularly in relation to the plaintiffs’ allegation that the defendants worked together to defraud the plaintiffs. In response, the Sami defendants argued that no more evidence will be available at trial than would be available at the

summary judgment motion because Khalife has disappeared and Jabbar has not taken any steps in the litigation since filing a statement of defence. [3] The Sami defendants say that the trial will be no more than a default hearing as it relates to Khalife and Jabbar. [ 38 ] I recognize that I do not have before me the complete record that would be before the judge hearing the

summary judgment motion. However, based upon the evidence that is before me, I find that the plaintiffs’ claims against the Sami defendants may raise a genuine issue requiring a trial and that it is not at all clear that, if the Sami defendants’

summary judgment motion is allowed to proceed, it would be successful. [ 39 ] The Ghaffari test also requires consideration of the complexity of the case, the nature of the issues, the nature of the evidence and the law and whether that the case is amenable to judgment without a full trial. I have considered these factors and have concluded that, for several reasons, the plaintiffs’ claim against the Sami defendants requires a full trial and cannot be resolved on a

summary judgment motion. [ 40 ] The fundamental problem with the Sami defendants’ motion is that, even if it were successful, it would not eliminate the need for a trial. Even if the plaintiffs’ claim against the Sami defendants were dismissed, the plaintiffs’ claim against Jabbar and the Sami defendants’ counterclaim would still require a trial. The counterclaim alleges misrepresentation, defamation and conversion against the plaintiffs. It seeks damages for bad cheques and undelivered vehicles from Khalife. It alleges fraud against Jabbar.

The shared factual foundation for the plaintiffs’ claims and the Sami defendants’ counterclaim is acknowledged in para. 47 of the Sami defendants’ statement of defence in which the Sami defendants pleaded “that the claims made in the Counterclaim are clearly connected with the claims made by the Plaintiffs in their Statement of Claim and it would be inequitable not to allow a set-off with respect thereto.” [ 41 ] If the Sami defendants’

summary judgment motion proceeds, whether it is successful or not, a trial judge would be required to consider the same issues and much of the same evidence as the judge who heard the

summary judgment motion. [ 42 ] In Baywood Homes Partnership v. Haditaghi , 2014 ONCA 450 , the Court of Appeal reversed the decision of a motion judge who had granted partial

summary judgment. The Court of Appeal concluded that the judge had failed to consider the effect of the partial judgment on “the litigation as a whole”, a consideration raised in para. 60 of Hryniak : 60. The “interest of justice” inquiry goes further, and also considers the consequences of the motion in the context of the litigation as a whole. For example, if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant

summary judgment against a single defendant. Such partial

summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. On the other hand, the resolution of an important claim against a key party could significantly advance access to justice and be the most proportionate, timely and cost effective approach. [ 43 ] Quite apart from how difficult it would be to decide the claim against the Sami defendants separately from the claim against Jabbar, because the Sami defendants’ motion, if successful, would not eliminate the need for a trial of the plaintiffs’ claim against Jabbar

or of the Sami defendants’ counterclaim, allowing the motion to proceed would require this court to consider the same issues twice with the potential for inconsistent results. A

summary judgment motion at this time would also require the parties to expend time and incur costs associated with the motion at the same time as they are preparing for a fixed-date trial, not knowing what the issues at trial ultimately will be, dependent as they are on the outcome of the motion.

Further, because the motion is scheduled to be heard only six weeks before trial, particularly if the judge hearing the motion is unable to release a decision quickly or if the decision is released and then appealed, there is a significant potential for the parties to lose their trial date. [ 44 ] The parties were ready for trial when they attended the pre-trial conference before Master Champagne on May 17, 2017. Their trial is scheduled for May of 2018. Rather than ensuring “ the just, most expeditious and least expensive determination of the case on its merits” the Sami defendants’

summary judgment motion would likely delay the determination of the case and would certainly add to the cost and the uncertainty of the exercise. [ 45 ] I considered the submission of the Sami defendants to the effect that it was not their fault that their motion was not scheduled to be heard until March of 2018 when their notice of motion was served in May of 2017.

However, while an earlier motion date would have been less likely to delay the trial of the action, it would not have changed my conclusion with respect to the inappropriateness of the motion in the context of the litigation as a whole. [ 46 ] Finally, I note that in Butera v. Chown, Cairns LLP , 2017 ONCA 783 , which was released on October 13, 2017, 10 days after the hearing of the motion before me, the Court of Appeal held that motions for partial

summary judgment, in other words, motions that will not dispose of the entire action, “should be considered to be a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost effective manner.” At paras. 30 to 35 of Butera , the Court of Appeal reviewed the reasons these motions should be rare. Butera supports my conclusion with respect to the inappropriateness of the Sami defendants’ motion. Conclusion with respect to Issue #2: [ 47 ] A court should stay a

summary judgment motion only in the clearest of cases. ( Ghaffari , at para. 14 ). This is one of those cases. [ 48 ] The plaintiffs’ motion to stay the

summary judgment motion of the Sami defendants is allowed. The

summary judgment motion of the Sami defendants is permanently stayed. COSTS: [ 49 ] At the hearing of the motion, I had failed to ask the parties if they had agreed on the costs that would be payable to the successful party and, if not, whether they had exchanged costs outlines in accordance with the mandatory requirement in Rule 57.01(6) of the Rules . [ 50 ] In Fram Elgin Mills 90 Inc. v. Romandale Farms Ltd ., 2014 ONSC 4715 (Div.

Ct.), at para. 10 , Kiteley J. explained the rationale for the Rule 57.01(6) costs outlines: Rule 57.01(6) is designed to ensure that the issue of costs of a motion not take on a life of its own requiring additional written submissions and attracting additional unnecessary costs.

That rule also encourages fairness and balance in that counsel are expected to estimate their costs and prepare to take a position on costs without necessarily knowing the outcome of the motion. [ 51 ] The beauty of Rule 57.01(6) is that it requires parties to disclose their costs to each other before they know whether they are going to be awarded costs or paying costs. This is intended to have a moderating effect on the amount of costs claimed.

For this reason, ideally, the costs outlines are to be exchanged prior to or at the outset of a hearing, before the parties have a sense of which way the wind may be blowing that day.

This timing may also encourage settlement of the costs issue, particularly if the amounts claimed by the parties are similar. [ 52 ] Costs outlines enable the court to compare the parties’ costs claims which will help the court assess the reasonableness of the successful party’s claim. [ 53 ] An unsuccessful party will obviously be less likely to argue that the amount of time spent by or the hourly rate of the successful counsel is unreasonable if the time spent or rate charged by the unsuccessful party was comparable or higher. [ 54 ] Although it would have been preferable if I had done so before hearing the motion, before releasing this decision, I asked the parties to exchange and file Form 57B costs outlines if they had not agreed on the issue of costs. [ 55 ] I have now received the parties’ costs outlines. [ 56 ] I am prepared to decide the issue of costs based on the costs outlines.

However, although I am mindful of Kiteley J.’s observation that the costs issue should not take on a life of its own, there may be matters relevant to costs that could not be disclosed to me before the release of these reasons or which arise from these reasons. [ 57 ] Therefore, if the plaintiffs wish to deliver brief additional submissions with respect to costs, they may do so within two weeks of the date of release of these reasons. [ 58 ] If the plaintiffs do not deliver additional submissions, the Sami defendants may do so within four weeks of the date of release of these reasons.

If the plaintiffs do deliver additional submissions, the Sami defendants may deliver any responding submissions within

two weeks of the date of service of the plaintiffs’ submissions. [ 59 ] The plaintiffs may respond to the Sami defendants’ submissions, if any, within two weeks of the date of service of the Sami defendants’ submissions. [ 60 ] If the Sami defendants were the first to deliver additional submissions, they may respond to the responding submissions of the plaintiffs referred to in the previous paragraph of these reasons, within two weeks of the date of service of the plaintiffs’ responding submissions. [ 61 ] None of the parties’ submissions shall exceed three pages in length. [ 62 ] If I have not received any additional submissions within four weeks of the date of these reasons, I will decide the costs issue based on the costs outlines.

Madam Justice H.J. Williams Date: 2017/11/03 CITATION : St. Laurent Automotive Group et al v Sami’s Garage Ltd. et al , 2017 ONSC 6649 COURT FILE NO.: 13-58774 DATE: 2017/11/03

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: St. Laurent Automotive Group Inc. and Import Auto Leasing Inc. Plaintiffs AND Sami’s Garage Ltd., Yassine Jabbar, Sami Abi Khaled and Dmitri Khalife Defendants BETWEEN: Sami’s Garage Ltd. and Sami Abi Khaled Plaintiffs by Counterclaim AND St. Laurent Automotive Group Inc., Import Auto Leasing Inc., John Mierins, Andrea Chambers, Yassine Jabbar and Dmitri Khalife Defendants by Counterclaim ENDORSEMENT Madam Justice H.J. Williams Released: 2017/11/03