Div. Ct. Takes Liberal Approach to Affidavits on Information and Belief

In Carevest Capital Inc. v. North Tech Electronics Ltd. et al., 2010 ONSC 1290 the Divisional Court allowed an appeal from a ruling by Mr. Justice Ted Matlow, in which he had refused to admit two affidavits on a motion for summary judgment, on the basis that they failed to comply with the requirements of subrule 39.01(4). That subrule says: “An affidavit for use on a motion may contain statements of the deponent’s information and belief, if the source of the information and the fact of the belief are specified in the affidavit.”

(Carevest is one of at least two 2009 decisions by Matlow J., in which he refused to admit into evidence affidavits that, in his view, did not satisfy the requirements of subrule 39.01(4). The other was Kailayapillai v. Azzam 2009 CanLII 11812 (ON S.C.). Justice Matlow’s original decision in Carevest can be found here.)

In Carevest, the claim was on a guarantee. The plaintiff moved for summary judgment and relied primarily on two affidavits. Both contained assertions by the deponents that were to the following effect:

The facts set forth herein are within my personal knowledge or determined from the face of the instruments and documents attached hereto as exhibits, from my review of the relevant documents comprising the files of CareVest and from information and advice provided to me from others. Where I have relied upon such information and advice, I verily believe same to be true.

Justice Matlow said:

In my view, it is not sufficient for a deponent to state that he or she was informed by one or more documents. The source of the information must be a named person. There is no assurance that facts inferred from a document created by others in circumstances unknown to the deponent that is not otherwise admissible can be relied upon.

Nor is it sufficient for a deponent to state that his or her evidence is a combination of personal knowledge and hearsay evidence without distinguishing which parts of his evidence are personal knowledge and which parts are hearsay. Each piece of hearsay evidence must be clearly identified as such and the source of the information and the fact of belief must be stated.

The Divisional Court held that Justice Matlow was in error. The panel (Justices Greer, Lederman and Sachs) said that the respondent had not argued before Matlow J., that the affidavits were inadmissible and, as a result, the appellant had not had an opportunity of making any submissions on this issue.

Secondly, the Divisional Court said that Justice Matlow had “ignored the principles as set out in subrule 1.04(1)”.

But most importantly, the Court held that the findings of the motions judge were “contrary to case law which sets out the appropriate legal principles in determining the sufficiency or otherwise of the affidavit material before the Motions Judge on a summary judgment motion”.

The Court referred to Abco Box & Carton Co. v. Dafoe & Dafoe Inc., [1987] O.J. 2395 (Dist. Ct.] at paras. 112 to 19 and D’Angelo v. Maco Security Monitoring Inc., [2006] O.J. 3542 (S.C.J.) at para. 27 and said that the principles that emerge from those cases are:

(1)               The rules of civil procedure are to be liberally construed so as to secure the most just, expeditious and least expensive determination of a proceeding.

(2)               Where an affidavit relied upon in support of a motion for summary judgment does not state the source of the information and the fact of the deponent’s belief, the court may nevertheless rely upon the substance of the exhibits to the affidavit in evaluating the merits of the applicant’s case.

(3)               Statements in affidavits based on information and belief that fail to state the source of the information are not automatically struck out. Statements that deal with non-contentious matters can be saved through the application of rule 1.04 of the Rules of Civil Procedure.

The Court allowed the appeal and granted summary judgment.

We have some difficulty with the Divisional Court’s analysis of the rules governing the use of affidavits on motions and applications. Our concern is mostly with the second of these three principles.

The first of the above “principles” does not actually emerge from the caselaw, but is drawn directly from the language of Rule 1.04. There is no doubt that this provision applies, regardless of what the jurisprudence might say.

The third principle does raise some questions. The Rules deal separately with affidavits on information and belief that are used on motions and applications. The applicable subrules are 39.01(4) and (5). The language in the two is different. In the case of applications, the subrule says: “An affidavit for use on an application may contain statements of the deponent’s information and belief with respect to facts that are not contentious, if the source of the information and the fact of the belief are specified in the affidavit.” The words in bold do not appear in the subrule applicable to motions.

(It should also be noted that subrule 20.02 deals specifically with affidavits on information and belief used on motions for summary judgment.)

However, returning to principle #3, the Divisional Court’s statement of the law would appear to result in subrules 39.01(4) and (5) being equivalent. (In fairness, this case is not the first time that principle #3 has been held to be the law. In Cameron v. Taylor (1992), 10 O.R. (3d) 277 (Ont. Ct. (Gen. Div.), Granger J. made the same statement and cited as authority Abco Box & Carton Co. v. Dafoe & Dafoe Inc. (1987),  20 C.P.C. (2d) 128 (Ont. Dist. Ct.).

The Divisional Court principle #3  is also fairly uncontroversial. While there is an abundance of caselaw that has held that a court cannot receive an affidavit that fails to state the source of the deponent’s information and the fact of belief, this has been confined to matters which are contentious.

Principle #2 though, strikes us as problematic. Perhaps it is simply the way in which the principle has been phrased: “Where an affidavit relied upon in support of a motion for summary judgment does not state the source of the information and the fact of the deponent’s belief, the court may nevertheless rely upon the substance of the exhibits to the affidavit in evaluating the merits of the applicant’s case.”

Actually, this language was taken almost verbatim from D’Angelo v. Maco Security Monitoring Inc., one of the cases referred to by the Divisional Court. (The other two principles stated by the court also came from that case.) For principle #2, the main difference in wording was that D’Angelo referred to “evaluating the merits of the affiant’s case” and the Divisional Court said, “evaluating the merits of the applicant’s case.”

Stated this broadly, principle #2 would suggest that on a motion for summary judgment, even on a contentious point, the absence of any identified source of the evidence and the failure of the deponent to say that he or she believes the information that has been conveyed to him or her, is not fatal. The court could look to the exhibits to the affidavit in order to judge the case.

How can this be? Surely an exhibit that is attached to a hearsay affidavit in which neither the source of the information nor the fact of belief has been specified, has no probative value at all for any substantive proposition, unless the exhibit is admissible on its own in some other way (e.g., a medical report, a business record). But in the latter case, what would be the point of having filed an affidavit in the first place?

The D’Angelo case relied on Abco Box (another decision cited by the Divisional Court) as support for the statement of law that became the Divisional Court’s principle #2. In Abco Box, an affidavit filed by the president of the plaintiff company, on a motion for summary judgment, failed to specify the source of his information and the fact of his belief about the quantity of goods manufactured, shipped and paid for. The motions judge, however, said that “exhibits to this affidavit have completely persuaded me as to the quantity of goods manufactured and shipped and paid for”. (The nature of the exhibit was not specified.) This would suggest that the judge was able to fill in the missing pieces of the affidavit (at least in relation to the source of information) by looking at an exhibit. Summary judgment was granted.

If principle #2 was intended to mean only that a court can fill in the source of information if it is contained in an exhibit (and perhaps infer the unstated fact of belief), that would perhaps be acceptable. But as worded, the principle suggests that sworn testimony is not really necessary if the exhibits themselves are persuasive. In our view, that would invite rulings based on wholly inadmissible evidence.

It is to be hoped that principle #2 can be re-stated in future jurisprudence, so that its meaning is clearer.

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