The Defendants applied for Summary Dismissal of the claim on the basis that it was brought after the expiry of the limitation period, and alternatively, an Order for Security for Costs. The Plaintiff/Respondent contended that the running of the limitation period was suspended due to fraudulent concealment of a material fact.

The Defendants filed all transcripts arising out of Part 5 Questioning in support of the Application, including the transcripts of the Plaintiffs’ Questioning of the Defendants. Rule 5.31 only permits the use of a transcript of Questioning under Part 5 “against a party adverse in interest”. Master Schlosser noted that “[o]rdinarily you cannot use your own evidence by filing your own transcript even if your witness dies”, and indicated that the purpose of the Rule is to enable Questioning which is “generally, with impunity” to allow the exploration of the case to meet. Master Schlosser held that Rule 5.31(3) does not allow “‘carte blanche’ use of your own transcript”, but is rather directed at responding to competing evidence tendered by the opposing party which would be incomplete or misleading on its own. Master Schlosser accordingly held that the Defendants’ own Questioning transcripts were inadmissible.

The Plaintiff/Respondent attempted to rely upon an expert report which was appended as an exhibit to his own Affidavit, as opposed to being in a Form 25. Despite the report appearing to be sworn, Master Schlosser found that it was “only an enhanced form of hearsay” and noted that the evidence would be insufficient if the Plaintiff was the Applicant. As the Respondent however, the evidence was admissible and his only burden was demonstrating that he had a reasonable case, and the evidence presented was sufficient to do so. Master Schlosser therefore dismissed the Application for Summary Dismissal.

During Questioning, the Plaintiff had acknowledged that he failed to declare the property which was the subject matter of the litigation as an asset during a recent bankruptcy which he had been discharged from. Master Schlosser found that this failure was “at best, an offence under the [Bankruptcy and Insolvency] Act, and, at worst, perjury, as the declaration of assets is sworn.” Master Schlosser described this as a “gross abuse of the system” and a “reason to annul the discharge and to have a trustee reappointed” as the Action ought to have been vested in the trustee in bankruptcy or a creditor under section 38 of the Bankruptcy and Insolvency Act, RSC 1985, c B-3. Master Schlosser relied on Rule 1.4(2)(h) to order that the Action be stayed to allow the Court file to be provided to the bankrupt’s trustee for consideration.

Master Schlosser adjourned the Application for Security for Costs, noting that there was evidence that the Plaintiff had assets and income sufficient to respond to a Costs award, even one for enhanced Costs.