Jackson v. Toronto Police Assn.

Ontario Judgments

Ontario Superior Court of Justice

A.L. Harvison Young J.

Heard: November 25, 2008.

Judgment: December 29, 2008.

Court File No. 07-CV-332939PD1

[2008] O.J. No. 5309 | 173 A.C.W.S. (3d) 745 | 2008 CanLII 68152

RE: Walter Jackson and Maria Taylor (Plaintiffs), and Toronto Police Association, Toronto Police Association
Financial Assistance for Legal Services Plan and Fund, David Wilson, Douglas Corrigan, Rick Perry, Larry
Molyneaux, Thomas Froude, Edward Costa, Mike Abbott, George Tucker and Tim Zayack (Defendants) and v.
Wagman, Sherkin (Third Party)

(24 paras.)

Case Summary

Civil litigation — Civil procedure — Discovery — Examination for discovery — Range of examination — Relevancy
— Production and inspection of documents — Affidavit or list of documents — Appeals — From Master's decision
— Interlocutory proceedings in appeal — Jurisdiction — Ontario — Appeal by the defendants from a Master's order
that ordered two of the individual defendants to be examined in connection with a pending motion dealing with the
legal status of one of the defendants and for one of the defendants to deliver an affidavit of documents, allowed in
part — Portion of the order dealing with the examination was set aside — Two defendants had no relevant evidence
to provide in connection with the motion — Affidavit was to be delivered because there was no reason for the
defendant, who was a party, not to deliver it — Ontario Rules of Civil Procedure, Rule 39.03.

Appeal by the defendants from a Master's order that ordered the defendants Froude and Zayack to be examined
pursuant to Rule 39.03 and for the defendant Toronto Police Association Financial Assistance for Legal Services
Plan and Fund deliver an affidavit of documents. The plaintiffs sued for wrongful dismissal from their employer, the
Toronto Police Association. They also sued the Plan and the individual defendants who were directors of the Plan.
This motion and appeal arose out of a pending motion and cross-motion brought which concerned the legal status
of the Plan and whether it was a separate legal entity capable of being sued. The defendants brought the main
motion to dismiss the action against the Plan and to delete it from the style of cause. The plaintiffs then brought a
cross-motion to substitute the directors of the Plan as defendants in place of the Plan or to add the directors of the

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Association as defendants. The plaintiffs sought to examine Froude and Zayack and alleged they had evidence
relevant to the questions to be answered by the judge on the main motion that pertained to the Plan's status.
HELD: Appeal allowed in part.

The portion of the order that required the Plan to deliver an affidavit of documents was upheld while the portion of
the order that required Froude and Zayack to be examined was set aside. It was set aside because their evidence
was not relevant to the determination of the Plan's legal status, and particularly its ability to be sued. The Master
erred in law when he thought that their evidence would be relevant to this issue. Regarding the affidavit of
documents the Plan was a party and there was no reason not to order delivery of the affidavit of documents.

Statutes, Regulations and Rules Cited:

Ontario Rules of Civil Procedure, Rule 21, Rule 21.01(3)(b), Rule 39.03

Counsel

Julian Heller, for the Plaintiffs.

Robert Rueter / Greg Temelini, for the Defendants, Toronto Police Association, David Wilson, Douglas Corrigan,
Rick Perry, Larry Molyneaux, Thomas Froude, Edward Costa, Mike Abbott, George Tucker and Tim Zayack.

Andrew Parley, for the Defendant, Toronto Police Association Financial Assistance for Legal Services Plan and
Fund.

ENDORSEMENT

A.L. HARVISON YOUNG J.

Overview

1 This is an appeal from an order of Master Linton dated September 11, 2008 in which he ordered (i) that Messrs.
Froude and Zayack be examined pursuant to Rule 39.03; and (ii) that the defendant Toronto Police Association
Financial Assistance for Legal Services Plan and Fund ("LAP") deliver an affidavit of documents.

2 The action underlying this motion is brought by the Plaintiffs, Walter Jackson and Maria Taylor, for wrongful
dismissal against their former employer, the Toronto Police Association ("TPA"), LAP as well as each of the
individual directors of the LAP.

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3 This motion and appeal arose out of a pending motion and cross motion brought which concerns the legal status
of LAP and, in particular, whether it is a separate legal entity capable of being sued. The Plaintiffs TPA and David
Wilson brought the main motion to dismiss the action against LAP and delete its name from the style of cause. The
Plaintiffs then brought a cross-motion to substitute the directors of the LAP as Defendants nunc pro tunc, in place of
the LAP or to add the directors of the TPA as Defendants in their personal and representative capacities. The
Plaintiffs subsequently sought to examine Messrs. Froude and Zayack pursuant to Rule 39.03 alleging that they
had evidence relevant to the questions to be answered by the judge on the main motion. They also sought an order
that LAP deliver an affidavit of documents. Master Linton granted the orders sought. The Defendants, TPA and the
individual Defendants, appeal to this Court from the Master's decision.

4 The Appellants' main argument is that the Master effectively "pre-empted" at least part of the matter to be
decided by the judge on the main motion, and that the Master misapprehended and misapplied the principles
relating to Rule 39.03. The Appellants maintain that Rule 39.03 places the onus of demonstrating a reasonable
evidentiary basis that the proposed examination would relate to issues relevant to the pending motion on the
Plaintiffs; and that using a Rule 39.03 examination to conduct a general discovery would be an abuse of process.
The Respondents submit that the Master applied the correct test correctly and did not misapprehend the evidence
such as to constitute a palpable and overriding error. LAP, represented by Andrew Parley, appeared and advised
that it is taking no position on this motion but that it will be opposing the Appellants' motion to strike and urged this
Court not to prejudge that motion.

The Standard of Review on an Appeal from a Decision of a Master

5 The standard of review of a master's order is well established and is set out in Zeitoun v. Economical Insurance
Group (2008), 91 O.R. (3d) 131 at para. 26 (Div. Ct.). According to that standard, a master's order will not be
interfered with unless the appellant shows that he has erred in law or exercised discretion based on wrong
principles or misapprehended the evidence such that there is a palpable and overriding error. Having read the
Master's decision, the materials filed, and heard the submissions of counsel, I conclude that the appeal should be
allowed in part. The appeal from the order that LAP deliver an affidavit of documents should be dismissed. The
appeal from the order that Messrs. Froude and Zayack should be examined pursuant to Rule 39.03 in relation to the
main motion is allowed. My reasons follow.

The Grounds of Appeal

6 The Appellants make the following submissions:

(i) Master Linton erred in law in ordering LAP to deliver an affidavit of documents;

(ii) Master Linton erred in law in interpreting and applying Rule 39.03.

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Did the Master err in ordering LAP to deliver an affidavit of documents?

7 The Appellants' first submission is that the Master erred in law in ordering LAP to deliver an affidavit of
documents as "the question of the LAP's legal capacity is the matter to be determined in the pending motion." I
disagree. Master Linton specifically said that he was not deciding the main motion but that unless or until that
motion determined otherwise, LAP was a party and there was no reason not to order the delivery of an affidavit of
documents. I would add that Master Linton would have been just as open to the accusation of having decided the
main motion if he had not so ordered. In addition, and as the Respondents note, it is problematic for the TPA to
appeal on this ground when it did not oppose the motion before Master Linton.

Did the Master err in law in interpreting and applying Rule 39.03 to the issues in this Rule 21 motion?

8 The Appellants submit that the Master erred in law in his interpretation and application of Rule 39.03. They argue
that he conflated the two elements of the test, and that, given the nature of the issue at the heart of the main
motion, there can be no relevance to any evidence that the proposed witnesses could give, and that accordingly,
the proposed examination would amount to a general discovery relating to the main action. The Respondents argue
that there is no basis for interfering with the Master's decision and submit that the proposed examination did meet
the semblance of relevance requirement.

The Test for Examining Witnesses Pursuant to Rule 39.03

9 It is well established that a witness may be examined on a pending motion pursuant to Rule 39.03 where the
examining party can show:

(i) the examination would be on issues relevant to the

pending motion on a reasonable evidentiary basis; and

(ii) the proposed witness (or witnesses, in this case) is in a position to offer relevant evidence.

10 As Abella J.A. (as she then was) stated in Ontario Federation of Anglers & Hunters v. Ontario (Ministry of
Natural Resources), 211 D.L.R. (4th) 741, [2002] O.J. No. 1445 at para 30 (C.A.):
The onus is on the party seeking to conduct the examination to show on a reasonable evidentiary basis that
the examination would be conducted on issues relevant to the pending application and that the proposed
witness was in a position to offer relevant evidence.

11 Once the party seeking to examine establishes these two elements, a prima facie right to examine is
established, which may be displaced if the resisting party can show that the examination would be an abuse of
process. This onus lies on the resisting party. (See Canada Metal Co. v. Heap (1975), 7 O.R. (2d) 185; Manulife

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Securities International Ltd. v. Société Générale (2008), 90 O.R. (3d) 376.) As the Respondents note, the level of
relevance need not be shown to be more than a semblance of relevance. (See Alpa Forest Products Inc. v. Hanna,
[2006] O.J. No. 3212, 2006 CarswellOnt 4846; Société Générale, supra.)

Analysis

12 The Appellants submit that the Master erred in law in that he conflated the two elements of the test and failed to
consider them separately so that, in the result, he did not apply the applicable test. They state, first of all, that the
Master confused the onus on the party seeking the examination and the issue of abuse of process, and second,
that he confused the abuse of process branch of the test with the relevance of evidence branch of the test.

13 With respect to the first point, the Appellants cited para. 12 of Master Linton's reasons in support of its
submission:
I am not satisfied that, given the nature of the issues raised on the motion and cross-motion, at this stage
there can be no relevance to the evidence such that to tender it would amount in law to abuse of process.

14 The Appellants refer to this passage in support of the second point as well. In oral submissions, Mr. Reuter for
the Appellants argued that Master Linton did not apply all the elements of the test. Mr. Heller for the Respondents,
however, submitted that this was an unfair reading of Master Linton's decision and that read in context it was clear
that he had applied all the elements of the test. He referred in particular to para. 6 where the Master noted that
The witnesses (also defendants) which the plaintiffs wish to examine are and were members of the board of
directors of the TPA, and the plaintiffs submit that they have evidence relevant to the questions to be
answered by the judge.

15 Mr. Reuter urged this Court to find that Master Linton had misapplied the test by allowing, in essence, too broad
or open-ended an interpretation of what evidence might be relevant to the motion. He submitted that the subject of
the main motion is simply the legal capacity of LAP to be sued and that this is exclusively a legal question to which
no "factual matrix" can be relevant, and that accordingly, the proposed examinations can be understood only as a
fishing expedition in relation to the action and are not in any way relevant to the main motion or cross-motion. Mr.
Heller, however, cited a number of cases that suggest that the issue of whether LAP has capacity to be sued is not
as clear cut as Mr. Reuter maintains.

16 The Respondents also submitted that the Appellants are effectively asking the Court on this motion to prejudge
the main motion. While I agree with the Respondents that this Court is not dealing with the main motion, it is
necessary to articulate the issues at play in the Rule 21 motion in order to assess whether the Master applied the
test correctly. It is, in my view, not possible to assess relevance pursuant to the Rule 39.03 test without scrutinizing
the nature of the issue at the heart of the proceeding to which it relates.

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The Issue of Whether LAP is a Legal Entity Capable of Being Sued

17 The main motion, brought by the Defendants TPA and the individual directors, concerns the issue of whether or
not the LAP is a legal entity separate and apart from the TPA. The Appellants submit that it is "difficult to imagine
what evidence could bear upon this issue other than the Letters Patent and the by-laws of the TPA" (Appellants'
Factum, para. 31). The Respondents submit that the legal issue to be determined is not as narrow as the
Appellants suggest, and further submit that, in any event, even a narrow legal issue must be determined within the
context of the surrounding "factual matrix".

18 In my view, it is clear that the question of the legal status of LAP is not one with respect to which the
Respondents established any semblance of relevance. As the cases cited by the Appellants indicate, the question
of whether a party has the capacity to be sued requires the court to consider the narrow issue of whether a party is
a natural person, a corporation or a body which has been given that capacity by legislation: see, for example, S.
(J.R.) v. Glendinning (2000), 191 D.L.R. (4th) 750, [2000] O.J. No. 2695 (S.C.J.); McNamara v. North Bay
Psychiatric Hospital (1994), 16 O.R. (3d) 633 (C.A.); Re Indian Residential Schools, 2001 ABCA 216, 286 A.R. 307.
The Respondents rely on two cases in support of its suggestion that the test is broader than this: see Warkentin v.
Sault Ste. Marie Board of Education, [1985] O.J. No. 1616, 49 C.P.C.31 (Dist. Ct);Ontario Federation of Labour. v.
Ontario (1996), 31 O.R. (3d) 302 (Ct. Gen. Div.), but neither case involves a motion to strike pursuant to Rule
21.01(3)(b) or its counterpart legislation in other provinces. Having reviewed the materials, and particularly the
Court of Appeal authority relied on by the Appellants, I am satisfied that the determination of the Rule 21.01(3)(b)
motion will be made on the basis of LAP's actual status. I agree with the Appellants that, on the basis of the
authorities I have reviewed, it is difficult to imagine what relevance either of Messrs. Froude's or Zayack's evidence
could have in relation to this.

19 The Respondents submit that Messrs. Froude and Zayack were the only directors who voted against the TPA
Board's resolution that led to the termination of the Plaintiffs' employment and that they have evidence regarding
the contradictory positions of the TPA regarding whether the LAP is a separate legal entity, and whether the
Plaintiffs were employed by TPA or LAP.

20 The problem with this submission is twofold. First, I have just found that the legal test on the Rule 21.01(3)(b)
motion is not one that can be affected by what these individuals (or any others) "thought" the legal status was.
Accordingly, anything that the proposed witnesses might have to say on this issue cannot meet the "semblance of
relevance" test. Second, the evidence that these proposed witnesses may have is clearly much more related to the
main action. These witnesses voted against the resolution that resulted in the dismissal of the Plaintiffs. This fact
lends some credence to the Appellants' position that this proposed examination is extraneous to the Rule 21 motion
and appears, as the Appellants submit, to be in the nature of general discovery. As Sharpe J.A. stated in Payne v.
Ontario (Human Rights Commission) (2000), 192 D.L.R. (4th) 315, 2000 CarswellOnt 2717 (C.A.) at para. 165

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[A] Rule 39.03 examination may not be used where the purpose is simply to conduct a general discovery.
That would amount to an "ulterior or improper purpose" contemplated by Canada Metal and should not be
allowed.

21 In short, the Master, in attempting to avoid a determination of the main motion, also avoided an articulation of
the issues at stake in the main motion. This resulted in an inadequate scrutiny of the potential relevance of the
evidence to be offered by the proposed witnesses and gives rise to the appearance of a conflation of the tests as
submitted by the Appellants. Because of this, his analysis appears to presume the presence of some semblance of
relevance which has the effect of reversing the burden of the first limb of the test articulated above, and thus
constitutes an error of law.

22 The Appellants also objected to the breadth of the Notice of Examination which stipulated that the witnesses
should bring with them the following:
All books, papers, letters, copies of letters and other writings and documents in your custody, possession or
power containing any entry, memorandum or minute relating to the matters in question in this action.

23 The Appellants argued that the use of the word "action" instead of "motion" evidenced the fact that the purpose
of the examination was general discovery. The Respondents submitted that the use of the word "action" was a
simple error and should be read as "motion". I agree with the Respondents on this point. Having said that, however,
the fact remains that the Notice, which is essentially the standard discovery notice, does not articulate any particular
relevance of the proposed witnesses' evidence to the Rule 21 motion. In a proper case, the breadth of the notice
would not, in itself, be fatal to the Rule 39.03 motion, although an order might be made limiting the notice to matters
meeting the test of relevance to the motion itself as distinct from the broader proceedings.

24 For the foregoing reasons I conclude that the appeal against the Master's order that LAP deliver an affidavit of
documents must be dismissed and that the appeal against the order that Messrs. Froude and Zayack be examined
be allowed. If the parties are unable to agree as to costs, they may make brief written submissions to me, with the
Respondents to serve and file their submissions no later than January 15, 2008, and the Appellants within 10 days
thereafter. As LAP took no position on the appeal per se, except to ask this Court not to prejudge the main motion
at which it will assert that it does have legal status, I am of the view that costs in respect of LAP should be reserved
to the judge hearing the main motion.

A.L. HARVISON YOUNG J.

End of Document

Susan Toth