Indexed as:

Budd v. Gentra Inc.

Between

Raymond Budd, applicant, and

Gentra Inc., Michael A. Cornelissen, H.M. MacDougall, G.

Drummond Birks, Henry Collingwood, Eggerton W. King, Allen T.

Lambert, Kenneth Leung, Gilbert J. Newman, Pierre Taschereau,

Jean C. Wadds, R. James Balfour, Jean A. Beliveau, Kenneth R.

Clarke, E. Neil McKelvey, Earl H. Orser, Jack L. Cockwell,

James M. Tory, Marshall M. Williams, Melvin M. Hawkrigg,

Richard W. Pound, Roger Phillips, J. Trevor Eyton, Maurice

Riel, Thomas R. Bell, Brian A. Canfield, Adrienne Clarkson,

Gordon R. Cunningham, David L. Donne, Fraser M. Fell, Paul

Gobeil, F. Warren McFarlan, Margaret E. Southern, B. Lee

Bentley, Nicholas W.R. Burbidge, David W.S. Dunlop, Anthony

Flynn, William J. Inwood, Laurent M. Joly, Charles F.

Macfarlane, Ian A.C. McCallum, Ernst & Young, Trilon Holdings

Limited, Trilon Financial Corporation, Great Lakes Group Inc.,

Arteco Holdings Inc., Brascan Limited and Brascan Holdings

Inc., respondents

[1995] O.J. No. 3043

Court File No. B 102/95

 Ontario Court of Justice (General Division)

 Commercial List

Farley J.

Heard: October 6, 1995.

 Judgment: October 6, 1995.

(7 pp.)

[Ed. note: A Corrigendum was released by the Court October 20, 1995 and the correction has been made to the text.]

Practice -- Applications and motions -- Applications -- Disposition, application to proceed as action.

These were motions in support of an application for an oppression remedy.

HELD: The motions were stayed and the application converted to an action. The matter needed viva voce evidence and greater specificity. This required the conversion of the matter to an action.

Counsel:

Charles F. Scott and Lillian Y. Pan, counsel for the respondents Gentra Inc., B. Lee Bentley, N.W.R. Burbidge, M.A. Cornelissen, D.W.S. Dunlop, A. Flynn, W.J. Inwood, L.M. Joly, C.F. Macfarlane and I.A.C. McCallum.

Peter Y. Atkinson, counsel for the respondents Trilon Holdings Limited, Trilon Financial Corporation, Great Lakes Inc., Arteco Holdings Inc., Brascan Limited and Brascan Holdings Inc.

Peter H. Griffin, counsel for the respondents Ernst & Young.

Steven Sharpe and James Doris, counsel for the respondents 31 non-managing directors.

Raymond G. Colautti and Rudolph Lobl, Q.C., counsel for the applicant Raymond Budd.

1 FARLEY J.:-- This endorsement applies as well to the motions brought today by the balance of the respondents in this case. In light of my decision concerning the inappropriateness of continuing to pursue this matter by way of application it was not necessary to deal with the alternative relief requested of striking out the affidavits filed in support of the application.

2     As I advised it appears to me that this case cried out for viva voce evidence. I could not fathom it proceeding without the various respondents having the opportunity in court (and not by way of affidavit) to respond to the allegations. I would also note that the applicant made these allegations in a very broad and nonspecific way. The respondents would have a difficult time in responding to these allegations, some being of the most damning nature such as the allegation that there must have been a fraud or quasi-fraud engaged in concerning the preparation of financial statements when it was said at paragraph 5.5.17:

Although these loans were identified as doubtful, they do not appear to have been taken into account in the 1991 financial statements, although the transfer did occur in 1991. Some device may have been used to re-book these loans in a deceitful way as productive and viable (even though they had been previously been identified as doubtful).

When questioned about these "conclusions" which appear rather speculative, Mr. Colautti advises that his client is on the outside and therefore not privy to internal matters at Royal Trustco. He advised that was why he would be moving in the future for an investigation order. It would seem to me that this should have been the first order of business rather than forging ahead on multiple fronts with quasi-blind shotgun allegations.

3     If this litigation runs a full course then it will be massive no matter how efficiently run. If it is not controlled it will get quickly out of hand. It is the responsibility of the judge to control the process; it is the responsibility of counsel "to assist the judge by simplification and concentration and not to advance a multitude of ingenious arguments in the hope that out of ten bad points the judge will be capable of fashioning a winner": see Ashmore v. Corp. of Lloyd's, [1992] 2 All E.R. 486 (H.L.) at p. 493 (Lord Templeman). The Ashmore case also illustrates the aspect of inherent jurisdiction re controlling the court process.

4     An oppression claim may be made by application; however that does not preclude in appropriate circumstances that the proceeding be by way of action: see Chilian v. Augdome Corp. (1991), 2 O.R. (3d) 696 C.A. at p.710.

5     I would be of the view that the circumstances in this case would rival, if not exceed those in the Enfield matter. See the views of Gray J. at p. 316 of Renegade Capital Corp. v. Hees International Bancorp. Inc. (1990), 73 O.R. (2d) 311. The summary application procedure is not appropriate to deal with complex situations involving evidence other than documentary evidence and rulings on the credibility of witnesses.

6     I am satisfied that this case is one which would benefit from the discipline of an action (as opposed to an application). In conjunction with the streamlining we are able to achieve through the Commercial List procedures and self-discipline of counsel, I am confident that this will secure the most just expeditious and least expensive determination of this proceeding on its merits. See Sparling et al. v. Royal Trustco Ltd. et al. (1984), 45 O.R. (2d) 484 (C.A.) at p. 494. I agree with Adams J. and his observation that paragraph 18 of Levy - Russell Ltd. v. Shieldings Inc., [1995] O.J. No. 531 that:

Procedure must therefore be tailored to the nature of the litigation.

7     I would assume that counsel for the applicant will appropriately address the aspect of proper pleadings and thus there may not be the necessity of a cleansing motion. However, if the matter were to have continued as an application there would be the difficulty in doing this for the reasons set out in Zavitz Technology Inc. v. 146732 Canada Inc. (1991), 49 C.P.C. (2d) 26 (Ont. Gen. Div.) with the unfortunate result of a respondent who did not fit into the "some or all" category of having to respond to allegations inappropriately made against him.

8     I do not think it necessary in these circumstances to wait for responding material when the difficulty is so obvious on the applicant's material and it is axiomatic that the respondents will be vigorously defending this suit. I think it appropriate to take a realistic attitude - a pragmatic one - to this litigation.

9     I do not see that this motion by the respondents is a delaying tactic nor one designed to run up costs. The applicant took over one and a half years to surface with this application. Secondly there were informal discussions some 3 months ago about sharpening these proceedings.

10     It would seem to me that the applicant might well consider pruning his material. Some gardeners find that they have a more bountiful harvest in the long run by appropriate pruning early on in the season.

11     In closing it would seem that where there are allegations of serious misrepresentation (if not worse) at the heart of the case, then the credibility would be of crucial importance. The determination of credibility is best handled in the trial process.

12     Therefore the application is stayed and this matter should proceed by way of action. The applicant is to forthwith pay the respondents a total of $11,500 jointly with the respondents divulging the same up.

FARLEY J.

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