In Medi Group Incorporated v. Silver Streams Homes (Puccini) Inc., 2024 ONSC 2648, plaintiffs Pilbro III Inc. and E.D. Carpenters Ltd., moved for leave to bring a motion requiring the defendants to answer questions refused on examination for discovery.
“This case shows that the culture of complacency continues its long-established reign in the civil justice system in Ontario,” said Justice Frederick Myers in the decision.
Leave was necessary because the action was set down and confirmed ready for trial. To bring the proposed motion, the plaintiffs also needed to vary the schedule that was consented to by all parties in 2021. The schedule required that all interlocutory motions be served and filed by May 1, 2022.
“That date came and went well before the plaintiffs set the action down for trial and then served and filed this motion,” noted Justice Myers.
The defendants Imran Jinnah and his wife Asma Jinnah were principals of defendant Silver Stream companies, which were involved in the construction of 118 residential homes. Defendant Jack Greenberg was a lawyer and principal of a group of investors who helped finance the project.
According to information detailed in the decision, “the plaintiffs allege that when the developer had financial problems, they were called into a meeting at which Mr. Jinnah and Mr. Greenberg convinced them to forbear from exercising their lien rights and to continue to build houses. Mr. Greenberg agreed to be escrow agent to receive and manage funds paid into the project by house purchasers.
"The end result, the plaintiffs claim, is that they are owed more money than before they were induced to sign the forbearance and escrow agreement," wrote Justice Myers. "The plaintiffs invested their funds and sweat to complete homes. This let Mr. Jinnah and Mr. Greenberg bring in sales proceeds that went to the Greenberg lenders rather than to the trades as promised.”
The Silver Stream companies all failed as a proposal was made in bankruptcy. The plaintiffs asserted that they were misled and that Greenberg had “yet to account properly or fully for funds received and disbursed by him as escrow agent.”
Many deadlines in the scheduling order were not met. The defendants were said to be in breach of the court’s order requiring them to deliver undertakings and the plaintiffs let the date for answering undertakings slide by repeatedly.
“In passing the trial record, a party confirms they are ready for trial," noted Justice Myers. "That means that the discovery phase of the action is over. … That is why, with limited exceptions, Rule 48.04 (1) precludes a party who has set an action down for trial from initiating or continuing, ‘any motion or form of discovery without leave of the court.’”
“In this case," he added, "the parties agree that there has been no substantial or unexpected change in circumstance since the plaintiffs set the action down for trial. What the plaintiffs did not expect was the defendants to refuse to grant a fourth extension of time without notice that their position had changed.”
The defendants were put in a prejudiced position, the court found, because despite all parties being ready for trial since November 2022, the plaintiffs had not filed the required certificate to bring their motion. As a result, the action had not been assigned a trial date or a pretrial conference date 18 months after having been set down for trial.
“This action commenced in 2014," wrote Justice Myers. "It bears a 2023 court file number because it was assigned a new number on moving from the Commercial List. In my view, the parties are extremely near or even past the time when ‘unnecessary expense and delay can prevent the fair and just resolution of this dispute."
“Waiting another two to three years for a refusals motion that was ordered to have been brought two years ago undermines the fairness of the process and the justness of the outcome," he added. "It makes a mockery of the orders of judges setting agreed schedules. It perpetuates the culture of complacency that accords no value to the parties’ needs to get their disputes resolved fairly — efficiently and affordably.”
The motion was dismissed.
Counsel for the plaintiffs was Sonja Turajlich of Bisceglia & Associates
Counsel for the defendants was Stephen Schwartz of Chaitons LLP.
Counsel for Greenberg was Marco Drudi of Drudi Alexiou Kuchar LLP.
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