Peoples Trust Company c. Berger  
2022 QCCS 2958  
SUPERIOR COURT  
(Civil Division)  
CANADA  
PROVINCE OF QUÉBEC  
DISTRICT OF MONTREAL  
No.:  
500-17-109876-196  
DATE: 3 August 2022  
_____________________________________________________________________  
PRESIDED BY THE HONOURABLE AZIMUDDIN HUSSAIN, J.S.C.  
_____________________________________________________________________  
PEOPLES TRUST COMPANY  
Plaintiff  
v.  
JACOB BERGER, ABRAHAM (AVI) ICZKOVITS,  
-and-  
BORUCH MOSES ROSENBERG et al.  
Defendants / Plaintiffs in warranty / Defendants in warranty  
-and-  
BEN ZION SCHWARTZ  
-and-  
JOSEPH GROSSMAN  
Defendants in warranty  
-and-  
BORUCH MOSES ROSENBERG et al.  
Plaintiffs in warranty  
v.  
DAN DERHY  
Defendant in warranty1  
_____________________________________________________________________  
JUDGMENT  
(PROFESSIONAL SECRECY, OBJECTIONS DURING PRE-TRIAL EXAMINATIONS)  
_____________________________________________________________________  
1
A complete list of the parties with their respective party statuses is found in Annex A.  
500-17-109876-196  
PAGE: 2  
TABLE OF CONTENTS  
I.  
II.  
III.  
OVERVIEW...........................................................................................................3  
CONTEXT.............................................................................................................4  
ANALYSIS.............................................................................................................8  
Distinction between objection to discovery questions and professional  
secrecy preventing Mtre. Derhy’s full answer and defence.............................8  
AUTHORIZATION TO RELEASE MTRE. DERHY FROM HIS OBLIGATION  
OF PROFESSIONAL SECRECY..................................................................10  
Mtre. Derhy’s right to full answer and defence against the Declaration of  
Forced Intervention in Warranty.............................................................10  
a) The law regarding professional secrecy and the exception for full answer  
and defence...........................................................................................12  
b) Application of the law to the facts of the present case...........................13  
Mr. Iczkovits’s renunciation of professional secrecy ..............................15  
DISCOVERY QUESTIONS SUBJECT TO AN OBJECTION BASED ON  
NOTARIAL PROFESSIONAL SECRECY.....................................................17  
DISCOVERY QUESTIONS OBJECTED TO ON GROUNDS OTHER THAN  
NOTARIAL PROFESSIONAL SECRECY.....................................................22  
Martin Mallich.........................................................................................22  
Dovid Muller...........................................................................................30  
Ervin Hofman.........................................................................................34  
Joseph Grossman..................................................................................36  
Ben Zion Schwartz.................................................................................38  
Abraham (Avi) Iczkovits.........................................................................38  
Jacob Berger .........................................................................................50  
ANNEX A LIST OF PARTIES AND THEIR RESPECTIVE PARTY STATUSES............73  
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PAGE: 3  
I.  
OVERVIEW  
In the context of a multi-party dispute involving multiple recourses, some of the  
[1]  
parties who are defendants-in-warranty/plaintiffs-in-warranty are suing in warranty the  
notary Mtre. Dan Derhy for professional liability because of alleged faults in connection  
with a contract that the notary drafted and to which they are parties.  
[2]  
One of the parties in the present case, Mr. Iczkovits, who was a client of Mtre.  
Derhy but is not suing him, refuses to release Mtre. Derhy from the professional secrecy  
imposed on the notary by virtue of the notary-client relationship that led to the preparation  
and signing of the contract.  
[3]  
In light of one party’s refusal to release Mtre. Derhy from the professional secrecy  
that binds the notary, the latter applies for court authorization to be released from the  
obligation so that he can defend himself against the lawsuit.  
[4]  
For the reasons set out below in section III.B, the Court grants Mtre. Derhy’s  
application.  
[5]  
Aside from Mtre. Derhy’s application to be released from the obligation of notarial  
professional secrecy, various parties seek adjudication of a plethora of objections to  
questions posed during pre-trial examinations involving seven witnesses. One category  
of the application for adjudication of objections relates back to notarial professional  
secrecy. The decision of the Court in connection with that category is set out in section  
III.C.  
[6]  
The decisions of the Court on the various other objections are set out in section  
III.D.  
II.  
CONTEXT  
[7]  
Mtre. Derhy is but one party in the present proceedings, which is a complex  
litigation involving 29 parties. Many of these parties have multiple statuses in the  
proceedings given the number of recourses, such as being defendants, defendants-in-  
warranty, and plaintiffs-in-warranty simultaneously, and multiple statuses in the contract  
known as the Master Agreement”,2 such as owner, director, guarantor, etc. The Master  
Agreement is dated 1 January 2016, and signed by various parties in March 2016.  
[8]  
At its origin, the dispute relates to a loan made in 2010 by the Plaintiff People’s  
Trust Company (Peoples) to Société en commandite Portage (Portage)3 for the  
2
Exhibit P-12. This is also referred to as the Indemnification Agreement, see Defendant’s Abraham  
(Avi) Iczkovits Application to Call in Simple Warranty at para 5.  
Also described in the Re-Amended Judicial Demand to Institute Proceedings (Re-Amended Demand)  
3
as the Nominee Borrower.  
500-17-109876-196  
PAGE: 4  
purchase of an immoveable residential complex (Property) in the city of Saguenay. The  
loan was secured by a hypothec in favour o Peoples.  
[9]  
While there were separate proceedings for the receivership of Portage, the present  
court file was initiated by Peoples against the Defendants Jacob Berger, Abraham  
Iczkovits, and 6811728 Canada Inc. (681 or General Partner4) seeking to recover  
$4,208,000 allegedly due by them as guarantors of the loan to Portage.  
[10] In addition to suing the Defendants Messrs. Berger and Iczkovits, and 681,  
Peoples is also suing a group of defendants it refers to as the “Beneficial Owners”  
(known under the Master Agreement’s Schedule B as “Real Owners, the term is used  
interchangeably with the latter in this judgment5) on the basis of the Master Agreement,  
a group of 24 parties6 made up of individuals,7 numbered companies, and a family trust.  
[11] As an aside, it should be noted that the list of Real Owners at Schedule B of the  
Master Agreement is not to be conflated with the list of Real Owners appearing at pages  
1-3 of the Master Agreement, despite the same nomenclature, since the latter list contains  
the names of two people who do not appear in the list in Schedule B and Peoples’ list of  
Beneficial Owners, Messrs. Joseph Grossman and Ben Zion Schwartz. There will be  
more discussion about the various subsets of parties below.  
[12] Peoples claims a total of $7,379,850.49 against the Beneficial Owners, the sum  
being divided according to the alleged proportionate share of liability of each of the  
Beneficial Owners.  
[13] The Master Agreement essentially purports to be a counter letter within the  
meaning of articles 1451-52 of the Civil Code of Québec (CCQ), and Peoples seeks to  
avail itself of it in its action against the Real Owners. The Master Agreement is also  
invoked in the various other actions within the Court file.  
[14] The Master Agreement is the third in a trilogy of prête-nom agreements covering  
the 2010-2016 period (collectively, Counter Letters) and creating what is referred to in  
the proceedings as a “tiered prête-nom system”,8 such that, in 2010, when Portage acted  
4
This party is unrepresented in the proceedings and it is not suing Mtre. Derhy. It is the general partner  
of Portage.  
5
It should be noted that Peoples is suing an individual, Liba (Winternitz) Sanders, who actually is not a  
party to the Master Agreement and does not appear on the list of Real Owners contained in Schedule  
B to the Master Agreement. In its Re-Amended Demand at para 14, in the table of Beneficial Owners,  
Peoples lists her on the same line as Mr. Chaim Sanders, her husband, who is a party to the Master  
Agreement and appears in Schedule B.  
6
Schedule B of the Master Agreement contains a list of 23 Real Owners, but the missing party, Boruch  
Moses Rosenberg, appears in the list of Real Owners at the beginning of the document, his name  
having been handwritten.  
The list of Real Owners includes Messrs. Berger and Iczkovits. They have multiple statuses under the  
7
Master Agreement and in the proceedings since they are defendants to the suit by Peoples as  
guarantors of the loan granted by Peoples, they are among the Real Owners under the Master  
Agreement, and they are “First Level Nominees” for the Real Owners under the Master Agreement.  
8
See e.g. Declaration of Forced Intervention in Warranty against Mtre. Derhy at para 7.  
500-17-109876-196  
PAGE: 5  
as the contractual counterparty vis-à-vis Peoples for the loan to purchase the Property, it  
was actually acting as agent for the Real Owners, who remained undisclosed to Peoples.  
[15] A subset of parties9 who are the Beneficial Owners, as well as Ben Zion Schwartz  
and Joseph Grossman,10 are being sued in warranty (Group Defendants-in-Warranty)  
respectively by Mr. Berger and Mr. Iczkovits11 for indemnification of any amount the latter  
might have to pay to Peoples. There are 26 parties among the Group Defendants-in-  
Warranty.  
[16] The action by Mr. Iczkovits against the Group Defendants-in-Warranty is an  
important piece of the puzzle in the analysis of his litigation position refusing to renounce  
the professional secrecy to which Mtre. Derhy is bound. More will be discussed about this  
in section III.B, below.  
[17] Just as the Master Agreement is the contractual basis for the suit by Peoples  
against the Beneficial Owners, so too is it the basis for the action-in-warranty by Messrs.  
Iczkovits and Berger.  
[18] In turn, a subset12 of 20 parties from the Group Defendants-in-Warranty,  
constituting itself as plaintiffs-in-warranty (Group Plaintiffs-in-Warranty), is itself suing  
in warranty Messrs. Berger and Iczkovits for various faults in connection with the Property:  
misrepresentation of condition, value, and own experience, and mismanagement of the  
Property.  
[19] In addition to other alleged faults, Messrs. Berger and Iczkovits are also alleged  
by the Group Defendants-in-Warranty to have disclosed the Counter Letters to Peoples,  
thereby increasing the liability of the Beneficial Owners.  
[20] Thus, the Group Plaintiffs-in-Warranty wear the hats of both defendants-in-  
warranty (against the applications of Mr. Berger and Mr. Iczkovits) and plaintiffs-in-  
warranty (against Mr. Berger and Mr. Iczkovits, in relation both to their applications and  
the application of Peoples).  
9
Messrs. Berger and Iczkovits are themselves part of the Beneficial Owners, hence the reference to a  
“subset” of the Beneficial Owners. The Beneficial Owners consist of individuals, numbered companies,  
and a family trust.  
10  
The two are signatories to the Master Agreement and designated in it as “New Apparent Owners”  
(see Master Agreement, Articles 3(a)(vi) and 7(c)) and the new principals of Portage, which in turn acts  
as prête-nom/nominee (see Master Agreement, Articles 3(a)(i) and 4) of the Real Owners, but they are  
not sued by Peoples.  
11  
Mr. Berger’s Application in Forced Intervention in Simple Warranty includes Mr. Iczkovits and the  
Iczkovits Family Trust as part of the Group Defendants-in-Warranty. The application of Mr. Iczkovits  
and the Iczkovits Family Trust, entitled Defendant’s Abraham (Avi) Iczkovits Application to Call in  
Simple Warranty, does not include Mr. Berger as part of the defendants-in-warranty named in their  
application.  
12  
Ms. Miriam Kuperstein, Mr. Chaim Hershkowitz, and 681 are not suing Messrs. Berger and Iczkovits.  
They are not represented in the proceedings.  
500-17-109876-196  
PAGE: 6  
[21] A complexity, if not a procedural curiosity, in the Group Plaintiffs-in-Warranty’s  
Declaration of Forced Intervention in Warranty is that in addition to the relief of  
indemnification in connection with the claim of Peoples against them, which is naturally  
the essence of a warranty application, they also seek the relief of indemnification against  
Messrs. Berger and Iczkovits’s own claim of indemnification against them. In other words,  
the Group Plaintiffs-in-Warranty seek indemnification against Messrs. Berger and  
Iczkovits for any indemnification they must make to the latter.  
[22] The issues before the Court for the present judgment do not require a  
disentangling of these various recourses.  
[23] The reason for Mtre. Derhy’s application to be released from the obligation of the  
professional secrecy to which he is subject is that he is being sued by way of a Declaration  
of Forced Intervention in Warranty by almost13 all of the Group Defendants-in-Warranty,  
who in turn are constituted by almost all of the Beneficial Owners,14 by way of an action  
in warranty (Group Plaintiffs-in-Warranty-against-Notary).  
[24] There are 2015 parties who constitute the Group Plaintiffs-in-Warranty-against-  
Notary. They allege that they paid for the services of Mtre. Derhy “via Portage”.16  
[25] The action in warranty against Mtre. Derhy alleges various professional faults  
against him in connection with the Master Agreement, which he drafted. Some of the  
alleged faults are the following:  
clerical, conceptual, and conflictual errors in the Master Agreement;  
errors in the Master Agreement which increased the potential liability of the  
Group Plaintiffs-in-Warranty-against-Notary;  
unclear and vague hold-harmless and release provisions in the Master  
Agreement leading to potentially absurd scenarios;  
comprehensive release of Mr. Iczkovits in connection with his management of  
the Property before he commenced that management, and failure to explain  
this aspect of the Master Agreement;  
design of prête-nom structure potentially exposing the solidary liability, as  
opposed to joint liability in proportion to their ownership interest, of the Group  
13  
Ben Zion Schwartz, Joseph Grossman, Miriam Kuperstein, Chaim Hershkowitz, and 681 are not suing  
the notary even though they are part of the Group Defendants-in-Warranty. Mr. Berger is not suing the  
notary and he is not part of the Group Defendants-in-Warranty.  
Mr. Berger, Mr. Iczkovits, and the Iczkovits Family Trust are part of the Beneficial Owners but Mr. Berger  
14  
is not part of the Group Defendants-in-Warranty. None are suing the notary.  
Liba (Winternitz) Sanders is part of the group suing the notary, she is part of the Group Plaintiffs-in-  
15  
Warranty, the Group Defendants-in-Warranty, and the Defendants, but she is not among the Real  
Owners under the Master Agreement.  
Declaration of Forced Intervention in Warranty at para 10.  
16  
500-17-109876-196  
PAGE: 7  
Plaintiffs-in-Warranty-against-Notary for the claims of Messrs. Berger and  
Iczkovits, and failure to explain this aspect of the Master Agreement;  
failure to ascertain the level of education, knowledge, and experience of the  
individuals constituting the Group Plaintiffs-in-Warranty-against-Notary prior to  
having them sign the Master Agreement;  
failure to read the Master Agreement with or to any of the individuals  
constituting the Group Plaintiffs-in-Warranty-against-Notary, and failure to  
explain to them the legal consequences of signing the Master Agreement.  
[26] The action in warranty against Mtre. Derhy seeks an indemnification for:  
any amount that they would have to pay under the action by Peoples against  
the Beneficial Owners, a maximum of around $7,379,850.49,17 and  
any amount that they would have to pay under the action in warranty by Messrs.  
Berger and Iczkovits against the Group Defendants-in-Warranty, a maximum  
of $4,208,000.  
[27] Mr. Berger, Mr. Iczkovits, and the Iczkovits Family Trust, all of whom signed the  
Master Agreement, are not suing Mtre. Derhy.  
[28] Mr. Joseph Grossman and Mr. Ben Zion Schwartz, who also signed the Master  
Agreement, are not suing Mtre. Derhy, even though they are being sued by Messrs.  
Berger and Iczkovits as part of the Group Defendants-in-Warranty. Mr. Joseph  
Grossman’s son, Mr. Abraham Grossman, is suing the notary as part of the Group  
Plaintiffs-in-Warranty-against-Notary.  
[29] Only Mr. Iczkovits refuses to renounce professional secrecy in respect of Mtre.  
Derhy’s role regarding the Master Agreement. Since Mr. Iczkovits has not sued the notary,  
he takes the position that he cannot be deemed to have renounced professional secrecy.  
[30] Given the complexity of the proceedings, a useful colour-coded list of the parties  
with their respective statuses, notably from the perspective of who is/is not suing Mtre.  
Derhy and who has/has not renounced professional secrecy, was provided by Mtre.  
Derhy. The Court relied on this summarizing document in preparing the list that appears  
in Annex A.  
17  
Since the Group Plaintiffs-in-Warranty-against-Notary does not include Mr. Berger, Mr. Iczkovits, the  
Iczkovits Family Trust, Miriam Kuperstein, and Chaim Hershkowitz, but that the latter are being sued  
by Peoples as part of the Beneficial Owners, the maximum amount that could be claimed against the  
notary would need to take into account a deduction for the proportionate share of their liability.  
500-17-109876-196  
III. ANALYSIS  
PAGE: 8  
DISTINCTION BETWEEN OBJECTION TO DISCOVERY QUESTIONS  
AND PROFESSIONAL SECRECY PREVENTING MTRE. DERHY’S FULL  
ANSWER AND DEFENCE  
[31] We now come back to the two categories of applications before the Court as they  
relate to notarial professional secrecy. The third application consists of objections to pre-  
trial examination questions unrelated to notarial professional secrecy.  
[32] The first application relating to professional secrecy is Mtre. Derhy’s application to  
be released from the obligation of notarial professional secrecy so that he can make full  
answer and defence against the lawsuit he faces.  
[33] The second application relating to professional secrecy concerns the objections to  
pre-trial examination questions invoking notarial professional secrecy.  
[34] The two applications are actually distinct, although they were not presented that  
way by the parties. The distinction between the two is important because the analysis of  
professional secrecy is different depending on which of the two applications is being  
analyzed. That being said, there is a convergence in the result in that Mtre. Derhy is  
released from the obligation of notarial professional secrecy and the objections to pre-  
trial examination questions based on notarial professional secrecy are dismissed.  
[35] The distinction between the two categories should be understood as follows.  
[36] Mtre. Derhy’s application is made because for him to be able to set out his grounds  
of defence and make proof under those grounds, he needs to be released from his  
obligation to maintain the professional secrecy of his clients, almost all of whom are suing  
him.  
[37] It is impossible for Mtre. Derhy to defend himself otherwise. As he describes it in  
the relief sought in his application:  
Lever le secret professionnel de Me Dan Derhy afin de lui permettre de témoigner  
en toute liberté et de produire tout document propre à cette fin, le cas échéant, afin  
qu’il bénéficie du droit à une défense pleine et entière.18  
[38] The Court grants his application. The Court’s reasoning is set out in section III.B,  
below.  
[39] The second application referring to notarial professional secrecy is distinct. The  
pre-trial examination questions to which objection was made on the basis of notarial  
professional secrecy raise no issue of full answer and defence of the notary since the  
questions were not posed to Mtre. Derhy.  
18  
Demande du défendeur en garantie Me Dan Derhy pour lever le secret professionnel at 5.  
500-17-109876-196  
PAGE: 9  
[40] Rather, the objections prevent the witnesses (Messrs. Grossman, Schwartz, and  
Iczkovits) from answering the questions posed to them. The objections were made  
variously by Mr. Iczkovits and Mtre. Derhy to questions about witnesses’ knowledge of  
the relationship with Mtre. Derhy. All three witnesses are parties to the Master Agreement  
but are not suing the notary.  
[41] In summary, for the Court to deal with the objection based on professional secrecy,  
since it was made in respect of questions posed to other individuals during their pre-trial  
examinations, it does not need to address Mtre. Derhy’s dilemma of having to divulge  
confidential information for his defence. It is for this reason that the Court makes a  
distinction between the two applications involving notarial professional secrecy.  
[42] That being said, the objection to pre-trial questions invoking notarial professional  
secrecy is also dismissed.  
AUTHORIZATION TO RELEASE MTRE. DERHY FROM HIS  
OBLIGATION OF PROFESSIONAL SECRECY  
[43] Mtre. Derhy is being sued by 20 parties alleging that he committed professional  
faults in connection with notarial services provided to them. The services in question are  
Mtre. Derhy’s drafting of the Master Agreement and steps he took (or omitted to take)  
leading up to the finalization and signature of the Master Agreement by the various parties  
in March 2016 (Mandate).  
[44] Mtre. Derhy’s application seeks the Court’s authorization for him to be released  
from his obligation of professional secrecy in relation to the Mandate. There are two  
reasons to grant the application and dismiss Mr. Iczkovits’s contestation:  
1) Mtre. Derhy needs to be released from his obligation of professional secrecy in  
order to be able to make full answer and defence against the lawsuit directed at  
him, and  
2) Mr. Iczkovits actually renounced professional secrecy in suing the Group  
Defendants-in-Warranty on the basis of the Master Agreement, which was  
prepared by Mtre. Derhy.  
[45] The reasons set out above are interrelated in that Mtre. Derhy would not need to  
apply to be released from the obligation of professional secrecy if he had not been sued,  
and he would not have been sued had Mr. Iczkovits (as well as others) not sued the Group  
Defendants-in-Warranty. The two foregoing points are addressed in turn.  
[46] While the Court authorizes the release of Mtre. Derhy from the obligation to  
maintain professional secrecy to which he is subject in connection with the Mandate, the  
Court emphasizes that the release is limited to the extent necessary for Mtre. Derhy to  
make full answer and defence, notably to file defence proceedings, testify about all  
relevant facts, and produce all relevant documents, against the Declaration of Forced  
Intervention in Warranty dated 14 April 2021.  
500-17-109876-196  
PAGE: 10  
Mtre. Derhy’s right to full answer and defence against the  
Declaration of Forced Intervention in Warranty  
[47] Mr. Iczkovits is the only party contesting Mtre. Derhy’s application. He is a party to  
the Master Agreement as one of the Real Owners, both in his personal capacity and as  
trustee for the Iczkovits Family Trust.  
[48] The other hats worn by Mr. Iczkovits under the Master Agreement or one of the  
instruments in the loan from Peoples are: New Apparent Owners (as defined in the Master  
Agreement), shareholder and director of the General Partner, unitholder of Portage, and  
personal guarantor of the obligation to reimburse the loan to Peoples.  
[49] Mr. Iczkovits is not suing Mtre. Derhy, and therefore his position is that he cannot  
be deemed to have renounced professional secrecy.  
[50] The end result of Mr. Iczkovits’s contestation, should it prevail, would essentially  
be to have Mtre. Derhy held hostage to professional secrecy while 20 plaintiffs get the  
benefit of what would amount to a judgment by default since Mtre. Derhy would not be  
able to make allegations to contest the lawsuit. The situation is untenable from the point  
of view of basic fairness and the law does not support Mr. Iczkovits’s position.  
[51] The fact that the notary faces the jeopardy of a potential damages award of  
almost19 $7,379,850.49 and a blot on his professional reputation potentially affecting his  
future earning capacity are not per se relevant in the analysis.  
[52] However, these factors do serve to bring into sharp relief the issues at stake as  
Mr. Iczkovits refuses to renounce professional secrecy.  
[53] As a factual matter, the following response to a question from the lawyer for  
Peoples during pre-trial examinations provides a window on how Mr. Iczkovits perceives  
his relationship with the notary:  
Q. So you mandated Me Derhy then, am I understanding correctly?  
A. Me or me and Mr. Berger. I mean, if we were the ones on the loan and we  
wanted indemnification from the rest of the parties, so then it would have been  
somehow a collaboration on all our parts between us on one side and them on the  
other, but yes, the outcome being the same.20  
19  
See footnote 17, above, for the explanation of why it would not be the entire amount of $7,379,850.49.  
Examination of Abraham (Avi) Iczkovits (13 September 2021) at 166. It should be noted that Mr. Berger  
20  
waived professional secrecy explicitly during the pre-trial examination of Mr. Joseph Grossman by way  
of a stipulation on record through his lawyer: “our client was not the one who mandated Notary Derhy.  
So to that extent, we felt that there was never any privilege, and if there was, it was certainly waived on  
our part.” See Examination of Joseph Grossman (20 October 2021) at 60. The stipulation that Mr.  
Berger did not mandate Mtre. Derhy contradicts Mr. Iczkovits’s testimony and the allegation made by  
the Group Plaintiffs-in-Warranty-against-Notary to the effect that the notary was “mandated by Berger  
in order to prepare and see to the signature of the Master Agreement” (Declaration of Forced  
500-17-109876-196  
PAGE: 11  
[54] As for how the Group Plaintiffs-in-Warranty-against-Notary perceive their  
relationship with Mtre. Derhy, the various faults that they allege against him are listed  
further above, and they also allege that they paid the notary’s fees, through Portage, in  
connection with Mandate.21  
[55] Both Mr. Iczkovits and the Group Plaintiffs-in-Warranty-against-Notary assert  
being clients of Mtre. Derhy in relation to the Mandate.  
a)  
The law regarding professional secrecy and the  
exception for full answer and defence  
[56] The law on professional secrecy applicable to notaries is clear and uncontested.  
The issue in the present case is not whether there is any doubt about the general  
application and importance of professional secrecy in the notary-client relationship.22  
[57] Rather, the issue is how to reconcile a conflict where a group of clients renounce  
the right to secrecy, but one client insists on maintenance of the secrecy, and the result  
of that conflict is that the notary will be deprived of the right to make full answer and  
defence against the lawsuit directed against him.  
[58] Professional secrecy has two objectives: protecting the confidentiality of the  
relationship between a professional and his/her client, and ensuring the non-divulgation  
in legal proceedings of the confidential information arising from that relationship.23  
[59] It is also clear and uncontested that a notary, or any other professional bound by  
secrecy, has the right to consider secrecy to be renounced when sued for professional  
liability by the clients who benefit from the right:  
le notaire placé dans un état de nécessité qui doit, par exemple, se défendre à  
l’encontre d’une action en responsabilité, peut vraisemblablement dévoiler tout ce  
qui est nécessaire à sa défense pleine et entière.24  
[60] In Dominion, the Court of Appeal referred to a professional’s right to make full  
answer and defence as “la primauté du droit à une défense pleine et entière”.25  
Intervention in Warranty at para 9). This will be decided on the merits of the dispute, and it does not  
influence the analysis for the release of the obligation of professional secrecy.  
Declaration of Forced Intervention in Warranty at para 10.  
Charter of Human Rights and Freedoms, c C-12, s 9; Notaries Act, CQLR, c N-3, s 14.1; Code of ethics  
21  
22  
of notaries, CQLR c N-3, r 2, ss. 35-40; Professional Code, CQLR, c C-26, s 60.4; Tanzer c Spector,  
2017 QCCA 1090.  
23  
See Jean-Claude Royer & Sophie Lavallée, La preuve civile, 4th ed (Cowansville: Yvon Blais, 2008) at  
para 1155; Canada (A.G.) v Chambre des notaires, 2016 SCC 20; both of the foregoing were cited by  
the Court of Appeal in Dominion Nickel Investments c Mintz, 2016 QCCA 1939 at para 21 (Dominion).  
That case dealt with professional secrecy applicable to lawyers and accountants, but the principles are  
the same.  
24  
Paul-Yvan Marquis, La responsabilité civile du notaire (Cowansville, Yvon Blais, 1999) at para 291; see  
also Michel Jetté, “Le secret professionnel et la pratique notariale” (1989), 1 C.P. du N. 121 at para 83.  
Dominion, supra note 23 at paras 41-43.  
25  
500-17-109876-196  
PAGE: 12  
[61] However, the unusual issue in the present case arises from the fact that not all of  
the clients of the notary are suing him, and among those not suing him, one client takes  
the position that his right to professional secrecy must continue to be respected and that  
he cannot be deemed to have made any renunciation.  
[62] Therefore, there is a tension between the right to professional secrecy of one client  
and the right of the notary to make full answer and defence against a lawsuit filed by other  
clients within the same file giving rise to the lawsuit.  
b)  
Application of the law to the facts of the present case  
[63] The Court of Appeal’s judgment in the Dominion case is instructive, if not  
determinative, for the present analysis. It is worth delving into the details of that case as  
part of the exercise of applying the law to the facts of the present case.  
[64] In Dominion, the client Dominion Nickel Investments Ltd. (Dominion) sued its  
former lawyers, Barry Mintz and his firm, Kaufman Laramée LLP, as well as its former  
accountant, Jeffrey Mandel, for alleged professional negligence involving a tax planning  
structure that was supposed to allow for a significant tax deduction. The Canada Revenue  
Agency disallowed the deduction and the company was assessed an amount of  
$18,937,699.64.  
[65] By way of an action in warranty, the accountant Mandel sued three lawyers and  
their respective two firms. Among his various allegations, he alleged that the lawyers  
Stanley Kugelmass and Paul L. Schnier were also involved in the analysis and  
implementation of the tax planning structure in that they gave their opinion and  
recommendation in favour of it.26  
[66] The client suing the accountant Mandel, Dominion, had previously confirmed  
through the communication of documents prior to pre-trial examinations that the lawyers  
Kugelmass and Schnier, among others, advised on the “acceptability of the  
transactions”.27 The representative of Dominion also admitted in pre-trial examination that  
these two lawyers, among others, reviewed the proposed structure.28  
[67] However, Dominion did not sue the lawyers Kugelmass and Schnier. It chose to  
sue the accountant Mandel and the lawyer Mintz. The accountant Mandel then sued the  
lawyers Kugelmass and Schnier in warranty.  
[68] During the pre-trial examination of Dominion’s representative, objections based on  
professional secrecy were made to questions about the respective roles of the  
professionals, including the lawyers Kugelmass and Schnier.  
26  
Dominion, supra note 23 at para 11.  
Ibid at para 12.  
Ibid at para 13.  
27  
28  
500-17-109876-196  
PAGE: 13  
[69] The Court of Appeal confirmed the judge in first instance in dismissing the  
objections. It referred to the principle of the “primauté du droit à une défense pleine et  
entière” as allowing for access to information that would otherwise be subject to  
professional secrecy.29  
[70] The Court of Appeal stated that the lawyer Mintz and the accountant Mandel had  
the right to put questions to Dominion’s representative with the objective of breaking down  
the respective liabilities among the professionals involved, or to contest the causal link  
between the alleged professional fault and damages.30  
[71] Moreover, the Court of Appeal also stated that the lawyers Kugelmass and  
Schnier, being sued in warranty by the accountant Mandel, must be allowed to defend  
themselves “pleinement et entièrement”, and that the questions posed to the  
representative of Dominion by them sought to exclude their liability.31  
[72] The principle of full answer and defence articulated by the Court of Appeal in  
Dominion applies in the present case. Mtre. Derhy must be allowed to make full answer  
and defence against the lawsuit he faces.  
[73] An analogy with the Dominion case is that just like in that case where the client  
was arguing that it should not have to disclose secret information in connection with an  
action in warranty that it is not involved with, so too in this case, Mr. Iczkovits is arguing  
that secrecy should continue to apply since he is not part of the action in warranty against  
Mtre. Derhy.  
[74] The argument cannot serve to defeat the principle of full answer and defence.  
Mr. Iczkovits’s non-involvement in the suit against Mtre. Derhy does not mean that he  
should be allowed to impair the latter’s ability to defend himself.  
[75] The reasoning is perhaps best expressed through a description in stark terms of  
the implication of such an argument: Should Mtre. Derhy be asked to run the risk of a  
monetary award against him and judicial conclusions affecting his reputation as the price  
to be paid for Mr. Iczkovits’s right to professional secrecy? As the French expression  
goes, Poser la question c’est y répondre.  
[76] In Dominion, the Court of Appeal deals with the right of full answer and defence as  
an adjunct of the concept of renunciation of professional secrecy by the client, as set out  
in the following two paragraphs:  
[41] L’appelante affirme que le juge de première instance a erronément fait primer  
le droit à une défense pleine et entière des différents intimés sur son droit au  
respect du secret professionnel.  
29  
Ibid at paras 41-49.  
Ibid at para 46.  
Ibid at para 47.  
30  
31  
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PAGE: 14  
[42] Elle a tort. La divulgation autorisée par le juge de première instance est le  
résultat de la renonciation implicite de l’appelante au respect du secret  
professionnel. […]32  
[77] The topic of renunciation of the right to professional secrecy is addressed in the  
next section, below. In the present judgment, renunciation is treated distinctly from the  
right of full answer and defence because they exist as distinct concepts, at least on the  
facts of the present case.  
[78] The right of full answer and defence is treated distinctly from renunciation because  
even if Mr. Iczkovits had not sued in warranty those who make up the Group Plaintiffs-in-  
Warranty-against-Notary, the latter would still have sued Mtre. Derhy since they are also  
being sued by Peoples and Mr. Berger.  
[79] Accordingly, Mtre. Derhy would still have invoked the right of full answer and  
defence in order to be released from the obligation of professional secrecy, even if Mr.  
Iczkovits were absent from the warranty proceedings.  
Mr. Iczkovits’s renunciation of professional secrecy  
[80] Renunciation in the present case is a subsidiary basis for the Court to hold that  
Mtre. Derhy must be released from the obligation of professional secrecy. Mr. Iczkovits  
renounced professional secrecy when he sued the Group Defendants-in-Warranty, a  
subset of which then constituted itself as Group Plaintiffs-in-Warranty-against-Notary. The  
Court of Appeal’s reasoning in the Dominion case supports this conclusion, as set out  
below.  
[81] Mr. Iczkovits decided to sue in warranty the Group Defendants-in-Warranty for  
indemnification in case he loses his defence against Peoples’ lawsuit.33 The basis for his  
application in warranty is the Master Agreement. His theory of the case is that if he is  
liable to Peoples under the personal guarantee34 he gave to secure the loan for the  
purchase of the Property, then the Group Defendants-in-Warranty are liable to him under  
the Master Agreement.  
[82] Normally, the invocation of a legal instrument as the basis for a recourse by a  
plaintiff against given defendants does not entail renunciation of professional secrecy  
surrounding the relationship that led to that legal instrument coming into existence.  
[83] However, the wrinkle for Mr. Iczkovits in this case is that the Group Defendants-in-  
Warranty themselves had the same notary, i.e. a single professional, playing the role of  
legal advisor to the entire group of parties to the Master Agreement.35 The situation was  
32  
Ibid at paras 41-42.  
33  
Defendant’s Abraham (Avi) Iczkovits Application to Call in Simple Warranty, supra note 11.  
That guarantee is found in the suretyship section of the Deed of Hypothec, Exhibit P-3, alleged in the  
34  
Re-Amended Demand at para 23.  
See e.g. the Declaration of Forced Intervention in Warranty against Mtre. Derhy at paras 10-22; and  
35  
the testimony of Ben Zion Schwartz, 18 October 2021 (examined by Mtre. Mailloux) at 123: “No one  
500-17-109876-196  
PAGE: 15  
the equivalent of a jointly retained legal advisor, with the implications for secrecy that that  
represents.  
[84] In turn, for a subset of the Group Defendants-in-Warranty, namely the Group  
Plaintiffs-in-Warranty-against-Notary to defend themselves against Mr. Iczkovits’s claim  
based on the Master Agreement, they consider it necessary to sue the notary, Mtre.  
Derhy, who prepared the Master Agreement.  
[85] Upon being sued by the Group Plaintiffs-in-Warranty-against-Notary, Mtre. Derhy  
asks to be released from the obligation of professional secrecy in order to defend himself.  
[86] It was clearly one of the reasonably foreseeable possibilities that if Mr. Iczkovits  
sued the other parties to the Master Agreement, they would in turn sue the legal  
professional who prepared the Master Agreement. That professional would then need to  
be released from his obligation of secrecy so that he could defend himself. This  
reasonably foreseeable chain of events is why it can be said that Mr. Iczkovits renounced  
professional secrecy when he decided to sue the Group Defendants-in-Warranty.  
[87] The above reasoning is supported by the reasoning of the Court of Appeal in  
Dominion.  
[88] The Court of Appeal in that case said that the plaintiff party, Dominion, renounced  
the right of professional secrecy that existed between it and its lawyers Kugelmass and  
Schnier, and this even though Dominion did not sue the latter lawyers.  
[89] The essence of the Court of Appeal’s reasoning was that since Dominion sued the  
lawyer Mintz and the accountant Mandel, there is an implicit renunciation by Dominion of  
its right to professional secrecy throughout the chain of proceedings, even in connection  
with the lawyers Kugelmass and Schnier, whom it did not sue.36  
[90] Regarding the latter aspect, i.e. lawyers Kugelmass and Schnier being released  
from their obligation of secrecy, the Court of Appeal did not address directly the argument  
that is being made in the present case to the effect that the client is not suing them and  
so there should not be a deemed renunciation. However, the Court of Appeal arrived at  
the general conclusion that the lawyers Kugelmass and Schnier need to be able to defend  
themselves fully, notably because their client admitted their involvement in connection  
with the relevant facts.37  
[91] Implicit in the above conclusion is that the Court of Appeal applied a wide scope  
of renunciation under the following implicit reasoning. If Dominion had not sued the lawyer  
Mintz and the accountant Mandel, the accountant Mandel would not have sued in  
was represented by anybody other than Dan Derhy, if he was representing us. Nobody had another  
counsel.”  
Dominion, supra note 23 at para 42.  
Ibid at para 47.  
36  
37  
500-17-109876-196  
PAGE: 16  
warranty the lawyers Kugelmass and Schnier. The latter in turn would not have needed  
to defend themselves with information about the professional relationship with Dominion.  
[92] Accordingly, the plaintiff Dominion was deemed to have renounced the right to  
professional secrecy both in relation to the lawyer Mintz and the accountant Mandel  
(principal defendants), as well as the lawyers Kugelmass and Schnier (defendants-in-  
warranty).  
[93] A similar reasoning regarding implicit renunciation applies in the present case.  
[94] Mr. Iczkovits is suing the Group Defendants-in-Warranty. Partly because of his suit  
against them (and partly because of Mr. Berger’s suit and Peoples’s suit against them), a  
subset of the Group Defendants-in-Warranty is suing Mtre. Derhy in warranty.  
[95] The renunciation that Mr. Iczkovits is deemed to have made as part of his suit  
against the Group Defendants-in-Warranty is extended to the suit that the Group  
Plaintiffs-in-Warranty-against-Notary instituted against Mtre. Derhy since that action in  
warranty must be seen as a form of defence against Mr. Iczkovits’s action.  
DISCOVERY QUESTIONS SUBJECT TO AN OBJECTION BASED ON  
NOTARIAL PROFESSIONAL SECRECY  
[96] The above resolves the application made by Mtre. Derhy to be released from the  
obligation of professional secrecy in connection with the action in warranty against him.  
[97] We now turn to the discovery questions relating to the Mandate, which were  
objected to on the basis of notarial professional secrecy. These questions were posed to  
Messrs. Grossman (by Peoples), Ben Zion Schwartz (by Peoples), and Iczkovits (by  
Peoples and by the Beneficial Owners).  
[98] The questions under objection based on notarial professional secrecy are the  
following:  
Joseph Grossman  
Question  
by  
Court’s Decision  
Undertaking/Question  
Peoples  
I don’t want to put words in the Objection dismissed  
witness’ mouth, but he said it was  
Mr. Iczkovitz and Berger that were in  
communication with Me Derhy  
[Note by the Court: the foregoing is  
the text of the question as presented  
to the Court by the parties, but it is  
not actually a question]  
Peoples  
Did Me Derhy explain the document Objection dismissed  
at length? Did he read the document  
500-17-109876-196  
for the purposes of the people in  
PAGE: 17  
attendance in the room?  
Peoples  
Peoples  
So to your knowledge, did other Objection dismissed  
people raise questions, issues, with  
that document during that meeting?  
Okay.  
Were there any other Objection dismissed  
discussions to that effect? Or just,  
you know, and Dan Dehry told you?  
Were there meetings to discuss that  
fact after? That he was not to be  
released.  
Ben Zion Schwartz  
Question  
by  
Court’s Decision  
Undertaking/Question  
Peoples  
And who mandated Mr. Derhy for Objection dismissed  
the drafting of this document, to your  
knowledge?  
Peoples  
Do you know who Dan Derhy Objection dismissed  
communicated with at Peoples  
Trust?  
Abraham (Avi) Iczkovits  
Question  
by  
Undertaking/Question  
Court’s Decision  
Peoples  
UND -33 - So as Undertaking 33, I Objection dismissed  
would ask for a copy of, if it exists,  
the mandate letter to Me Derhy for  
the drafting of the document.  
Beneficial  
owners38  
Were there any drafts of this Objection dismissed  
agreement which were circulated  
(by anyone) to which you were  
copied?  
Beneficial  
owners  
Have you communicated with Me Objection dismissed  
Derhy at all since the proceedings  
38  
It should be noted that the parties submitted the objections tables indicating questions posed by the  
lawyer for the “Beneficial Owners”, even though this is essentially a shorthand term when used in the  
tables. The term is inaccurate for the tables because that lawyer does not represent Mr. Iczkovits, the  
Iczkovits Family Trust, Jacob Berger, Hirsch Schwartz, Miriam Kuperstein, and Chaim Hershkowitz, all  
of whom are part of the Beneficial Owners. That lawyer represents the Group Defendants-in-Warranty  
and the Group Plaintiffs-in-Warranty, as well as the Group Plaintiffs-in-Warranty-against-Notary. The  
Court has kept the reference to “Beneficial Owners” so that there is no confusion if the parties refer  
back to the tables they provided to the Court.  
500-17-109876-196  
PAGE: 18  
were taken in February 5 of 2020?  
(“ […] I’m not asking about  
anything pertaining to his  
attorney-client relationship.”)  
Beneficial  
owners  
Have you communicated with Me Objection dismissed  
Derhy at all since the month of  
April 2021, when you received the  
group Defendants’ Action in  
Warranty?  
[99] Mr. Iczkovits and Mtre. Derhy object to the above questions, invoking notarial  
professional secrecy. They do not object on the basis of the identity of the party posing  
the question, i.e. the fact that some of the questions are posed by Peoples even though  
Peoples is not suing the notary. In other words, their objection is based on professional  
secrecy, regardless of which party is asking the question. Therefore, the Court will  
address only that objection.  
[100] Mtre. Derhy objects out of a perceived obligation to protect secrecy on behalf of  
the entire group of clients of Mtre. Derhy. However, Messrs. Grossman and Schwartz do  
not object to the questions posed to them relating to the Mandate. They are not suing  
Mtre. Derhy, they are not being sued by Peoples, but they are being sued in warranty by  
Messrs. Iczkovits and Berger. Their respective sons, Abraham Grossman and Hirsch  
Schwartz, are suing Mtre. Derhy, are being sued by Peoples, and are being sued in  
warranty by Messrs. Iczkovits and Berger.  
[101] No one among the clients of Mtre. Derhy objects to the questions relating to the  
Mandate, other than Mr. Iczkovits. Therefore, Mtre. Derhy’s objection serves no separate  
purpose other than to buttress the objection of Mr. Iczkovits.  
[102] The fact that only Mr. Iczkovits is objecting among the clients (or putative clients39)  
of Mtre. Derhy undermines the objection he makes, at least insofar as the questions  
posed to Messrs. Grossman and Schwartz are concerned. The Court dismisses the  
objection for the reasons set out as follows.  
[103] If Messrs. Grossman and Schwartz are the holders of confidential information in  
connection with the relationship with Mtre. Derhy, it is either because they were clients  
(in which case it is open to them to renounce the right to secrecy, which they explicitly did  
during pre-trial examinations), or if they were not clients, then the confidentiality of the  
39  
Mr. Iczkovits takes the position that Joseph Grossman and Ben Zion Schwartz were not clients of Mtre.  
Derhy (see e.g. Examination of Joseph Grossman, 20 October 2021, examined by Mtre. Mailloux  
(lawyer for Peoples) at 59, and Examination of Ben Zion Schwartz, 18 October 2021, examined by  
Mtre. Mailloux at 121), although they themselves take the position that they were clients. This is  
discussed below. Furthermore, in an email exchange (Exhibit PG-18) between Mtre. Derhy and Mr.  
Schwartz some months after the Master Agreement, when discussing pending items in relation to  
Peoples, Mtre. Derhy stated: “Again, moving on paperwork is (1) obligatory as I was mandated by the  
20 investors and Berger and his corp (to stop working, I would need everybody to instruct me to do  
so)”.  
500-17-109876-196  
PAGE: 19  
information was not protected by whoever was the beneficiary of the right to professional  
secrecy, the information was transmitted in the ordinary course of interactions, and so  
they can proceed to testify as to what they know.  
[104] Messrs. Grossman and Schwartz took the position during pre-trial examinations  
that they were clients of Mtre. Derhy.40 In order to negate the renunciation that they would  
have the right to make as clients, Mr. Iczkovits takes the position that they were not  
clients.41  
[105] However, even if it were taken as true that Messrs. Grossman and Schwartz were  
not clients of Mtre. Derhy, Mr. Iczkovits must then address the reality that these witnesses  
as ostensible non-clients have information relating to the Mandate. If they have that  
information, then it obviously is no longer secret, by definition.  
[106] If information that would otherwise be covered by privilege is found within the  
knowledge of a non-client, that witness cannot be prevented from testifying as to what he  
knows unless he obtained the information in question through some kind of fraud, theft,  
or inadvertent disclosure.42 That is not the case here. Rather, Messrs. Grossman and  
Schwartz have knowledge of the Mandate by virtue of their own interactions with Mtre.  
Derhy. To the extent that they are not objecting, Mr. Iczkovits has no basis to object on  
their behalf.  
[107] It is as if Mr. Iczkovits is invoking a veto that could override the renunciation of  
professional secrecy or willingness of Messrs. Grossman and Schwartz to answer the  
questions posed to them about the Mandate. Neither the authorities nor logic support  
such a veto, and therefore Mr. Iczkovits’s argument does not hold by reason of authority  
or by authority of reason.  
[108] There are indeed authorities that implicitly speak of a veto held by one client among  
a group holding the right to professional secrecy, but the present case has features that  
do not seem to have been contemplated by those authorities.  
[109] A seminal text on the situation of a notary and the question of a veto belonging to  
each client in the group is the 1963 text on professional secrecy, “Le secret professionnel  
du conseiller juridique” by Jean-Louis Baudouin (professor at the time of publication,  
subsequently judge of the Court of Appeal of Québec), the underlining below being  
particularly relevant to the point about a veto:  
40  
See e.g. Examination of Joseph Grossman, 20 October 2021, examined by Mtre. Tessier (lawyer for  
Mtre. Derhy) at 6-7 (“Q. So at that time, you do recognize that there was a mandate given to Dan Derhy  
and it does relate to the properties in Jonquière? A. Correct.”), Examination of Ben Zion Schwartz, 19  
October 2021, examined by Mtre. Tessier at 6 (“Q. …what was the mandate given to Dan Derhy,  
according to you, with regard to adding you as a guarantor? A. According to me, the mandate was to  
take over the control, the ownership of the corporation. We didn’t want a company that a group of  
owners owned and it be controlled by somebody who…”).  
41  
See supra note 39.  
42  
Léo Ducharme, L’administration de la preuve, 4th ed (Montreal: Wilson & Lafleur, 2010) at paras 444,  
447-448.  
500-17-109876-196  
PAGE: 20  
En ce qui concerne les actes où plusieurs personnes sont parties (vente,  
transaction, etc...), l'obligation du notaire est double et absolue. Elle est double,  
parce que chaque partie à l'acte est créancière de l'obligation au secret dont le  
notaire est le débiteur. L'obligation étant double il semble qu'il faille le double  
consentement des parties à l'acte pour relever le notaire de son obligation.  
Cependant, une distinction s'impose. Si le notaire est requis de produire un tel acte  
dans une instance mue entre l'une des parties et un tiers, nous pensons qu'il doit  
exiger auparavant d'être formellement dispensé d'observer le secret par les  
parties; au contraire, si l'action est mue entre les parties à l'acte, l'autorisation  
d'une seule des parties suffit. La notion de propriété intervient ici; le notaire n'est  
pas propriétaire des documents il n'en est que simple dépositaire.43  
[110] A similar point is made by Prof. Léo Ducharme in the context of a joint consultation  
by clients of a lawyer: “dans le cas d’un litige entre l’un des titulaires et un tiers, le  
consentement de tous serait requis pour qu’il y ait renonciation.44  
[111] In a case involving a suit by a co-owner of the family home against the hypothecary  
lenders who were alleged to have been parties in bad faith to the husband’s transfer of  
the title, the Court of Appeal of Quebec endorsed the latter point made by Prof.  
Ducharme,45 but it still held that any communications between the lenders and the notary  
who prepared the deed of hypothec was no longer covered by professional secrecy since  
the lenders had renounced it. In other words, although the Court of Appeal did not  
specifically use the word “veto”, it essentially held that the husband had no veto over the  
renunciation made by the lenders, even though he was also a party to the deed of  
hypothec.46  
[112] To use the formulation from the Baudouin text quoted above, the present case is  
a combination of “instance mue entre l’une des parties et un tiers” (the Real Owners—  
parties to the Master Agreementbeing sued by Peoples, a third party to the Master  
Agreement) and “action est mue entre les parties à l’acte” (Messrs. Iczkovits and Berger  
suing in warranty Messrs. Grossman and Schwartz and the Real Owners, all parties to  
the Master Agreement).  
[113] The above-cited authorities do not support a veto belonging to Mr. Iczkovits.  
[114] As a matter of logic, the respective recourses (principal action by Peoples and the  
various actions-in-warranty) are so intertwined as to justify the description of the case as  
being one in which a significant part of the case is a dispute among the various parties to  
the Master Agreement invoking different interpretations of the instrument and different  
narratives on what the notary did and did not do, and what he ought to have done.  
43  
Jean-Louis Baudouin, “Le secret professionnel du conseiller juridique” (1963) 65:10 R du N at 508, as  
cited in Chambre des notaires du Québec c Canada (PG), 2010 QCCS 4215 at para 38 (emphasis  
added).  
44  
Ducharme, supra note 42 at para 457.  
The passage from the 2006 edition of Ducharme is cited with approval by the Court of Appeal in MBl v  
45  
RB, 2017 QCCA 1543 at para 10.  
Ibid at para 15.  
46  
500-17-109876-196  
PAGE: 21  
[115] Accordingly, Mr. Iczkovits has no veto of objection as regards the questions posed  
to Messrs. Grossman and Schwartz. Their renunciation as clients or, if they are not  
clients, their knowledge of information about the Mandate obtained through their own  
experience, constitutes the basis for the Court’s rejection of Mr. Iczkovits’s objection.  
[116] In light of the reasoning above, the procedure regarding the disclosure of  
professional secrets set out by the Supreme Court in the Foster Wheeler case is not  
applicable.47 As for Mr. Iczkovits’s objection to the questions posed to him regarding the  
Mandate, the same reasoning regarding renunciation of professional secrecy set out in  
section B.2, above, applies.  
DISCOVERY QUESTIONS OBJECTED TO ON GROUNDS OTHER THAN  
NOTARIAL PROFESSIONAL SECRECY  
[117] The following witnesses were asked pre-trial examination questions that are  
subject to objections based on grounds other than notarial professional secrecy: Martin  
Mallich (representative of Peoples), Dovid Muller (representative of 120305 Canada Inc.,  
one of the Beneficial Owners), Ervin Hofman (representative of 123645 Canada Inc., one  
of the Beneficial Owners), Joseph Grossman, Ben Zion Schwartz, Avi Iczkovits, and  
Jacob Berger. The objections are adjudicated as follows.  
[118] The Court conducts its analysis of the objections according to the general  
principles applicable to pre-trial examinations: a large and liberal interpretation of the  
concept of relevance, with the objectives of pre-trial examination being to promote as  
complete a disclosure as possible within the limits of proportionality.48  
Martin Mallich  
[119] Mr. Mallich was examined as the representative of Peoples, the principal plaintiff.  
The following questions posed to him were subject to objections, the Court’s decision on  
the objections is provided in the last column on the right:  
47  
Foster Wheeler Power Co. v Société intermunicipale de gestion et d’élimination des déchets (SIGED)  
inc, 2004 SCC 18, cited in MBl v RB, supra note 45 at paras 9, 15.  
Campagna c Procureur général du Québec, 2021 QCCA 1134 at para 18.  
48  
500-17-109876-196  
PAGE: 22  
Question  
by  
Objection Undertaking/ Objection  
Objection  
by  
Court’s  
Decision  
Objection  
No & Page  
O-2  
Question  
Beneficial  
GDU-1  
Settlement Jacob  
Owners49  
(p. 18)  
Provide  
Privilege  
Berger  
& maintained  
copies of all  
communicatio  
ns between  
Peoples  
counsel  
for  
Jacob Berger  
and either the  
Plaintiff  
and/or  
the  
Plaintiff’s  
counsel.  
What  
Beneficial  
Owners  
O-3  
(p. 21)  
Settlement Jacob  
Objection  
& maintained  
precipitated  
Privilege  
Berger  
the receipt of, Litigation  
at the very Privilege  
Peoples  
least,  
Master  
the Solicitor-  
client  
Agreement on privilege  
November  
fifth  
(5th),  
twenty-  
nineteen  
(2019)?  
Were  
any meetings client  
held either privilege  
internally or Settlement  
with Mr. Privilege  
Beneficial  
Owners  
O-5  
(p. 33)  
there Solicitor-  
Jacob  
Berger  
Peoples  
Objection  
& maintained  
Berger and/or  
Mr. Iczkovits  
or  
anybody  
representing  
them  
concerning  
my clients in  
twenty-  
eighteen  
(2018),  
twenty-  
nineteen  
(2019)?  
500-17-109876-196  
PAGE: 23  
Objection  
Beneficial  
Owners  
O-7  
(p. 38)  
Was  
there Solicitor-  
Jacob  
Berger  
Peoples  
any form of client  
agreement or privilege  
understanding Settlement  
& maintained  
in  
place Privilege  
between  
Peoples Trust  
and Jacob  
Berger and/or  
His counsel  
which  
precipitated  
the disclosure  
of  
these  
documents?  
Avi  
Iczkovits  
O-20  
(p. 183)  
U-44 - Advise Litigation  
Peoples  
Objection  
maintained in  
part  
Me  
Neil privilege  
Oberman  
what  
discussed  
with  
was  
the  
witness'  
superior  
regarding any  
possibility of  
assisting the  
borrower.  
[120] The questions subject to objections O-2, O-3, O-5, and O-7 above seek to obtain  
evidence of the circumstances of Mr. Berger’s disclosure of the Counter Letters to  
Peoples.  
[121] The Group Plaintiffs-in-Warranty, which encapsulate almost all of the Beneficial  
Owners,50 allege that Mr. Berger breached the confidentiality provision of the Master  
Agreement51 and thereby increased their liability from $4,208,000 to $7,379,850 given the  
action in damages against them by Peoples.52 They argue that the questions posed are  
relevant to that allegation.  
[122] The Group Plaintiffs-in-Warranty also argue that there is a requirement of good  
faith for Peoples to rely on art. 1452 CCQ, which allows third persons in good faith to avail  
49  
The parties submitted the table with the column indicating that the lawyer for the “Beneficial Owners”  
posed the questions, but it should be kept in mind that this is a misnomer, see supra note 38.  
See supra note 38 on “Beneficial Owners” being a misnomer in these tables.  
Master Agreement, Article 11.  
Declaration of Forced Intervention in Warranty at para 29.  
50  
51  
52  
500-17-109876-196  
PAGE: 24  
themselves of a counter letter. The requirement of good faith in order to avail itself of the  
Counter Letters is admitted by Peoples.53  
[123] If Peoples knew about the existence of the Counter Letters and the Real Owners  
under the Master Agreement, yet did not take action when they learned of the  
arrangement, this goes to its good faith and legal ability to invoke the Counter Letters,  
and notably the Master Agreement, as the basis for their addition of the Beneficial Owners  
to their suit, so the argument goes.  
[124] Mr. Berger and Peoples invoke settlement privilege for O-2, O-3, O-5, and O-7,  
and for two of the questions (O-5 and O-7), they also invoke solicitor-client privilege, i.e.  
professional secrecy, as a subsidiary argument. As a further subsidiary argument for O-  
3, they invoke litigation privilege.  
[125] Peoples and Mr. Berger also make the argument that the discovery by Peoples of  
the Master Agreement was inevitable because the Master Agreement was invoked by Mr.  
Berger in his action in warranty against the Group Defendants-in-Warranty. They  
therefore make a supplementary argument of relevance, in connection with their  
argument on settlement privilege.  
[126] The Group Plaintiffs-in-Warranty reply to this by saying it is “revisionist” to argue  
that the Master Agreement would have been disclosed anyway, and that it would have  
been possible to file it under seal.  
[127] It should be clear that the Group Plaintiffs-in-Warranty do not need the answers to  
the above discovery questions in order to discharge their burden of establishing as a  
matter of fact that Mr. Berger disclosed the existence of the Master Agreement to Peoples.  
This has already been admitted by way of a lawyer’s letter from Peoples stipulating the  
dates of communication by Mr. Berger (20 April 2018; 5 November 2019; 2 December  
2019) and the names of the various documents that were communicated (respectively:  
Initial Nominee Agreement, Master Agreement and Holding Structure Sale, Agreement of  
Sale and Initial Transfer Agreement).  
[128] The above arguments regarding O-2, O-3, O-5, and O-7 are addressed in turn  
below.  
[129] The main argument relates to settlement privilege. This privilege exists as a matter  
of judicial policy for the sound administration of justice: “La bonne administration de la  
justice requiert que les parties règlent elles-mêmes leurs différends avant l’institution  
d’une procédure judiciaire ou encore pendant une instance.”54  
[130] The judicial policy behind the privilege has been confirmed by legislative policy  
expressed in the Code of Civil Procedure (CCP): “Parties who opt for a private dispute  
53  
Re-Amended Demand at paras 40-42.  
Catherine Piché & Jean-Claude Royer, La preuve civile, 5th ed (Montréal: Yvon Blais, 2016) at para  
54  
1256; Union Carbide Canada Inc v Bombardier Inc, 2014 SCC 135.  
500-17-109876-196  
PAGE: 25  
prevention and resolution process [] undertake to preserve the confidentiality of  
anything said, written or done during the process”.55  
[131] The basic point of the existence of the privilege protecting settlement  
communications is that if parties did not have the reassurance that their compromising  
communications will be shielded from disclosure and will not be used against them,  
settlements would be much more difficult, if not impossible, to achieve.  
[132] There are three conditions to be met for settlement privilege to apply: 1) there must  
be a real or eventual litigation; 2) a written or verbal communication made with the  
intention of settling a dispute; and 3) an express or presumed intention that the  
communication not be disclosed without the consent of the parties.56  
[133] The three conditions are met in the present case. At the time of the communication  
of the various Counter Letters, i.e. 20 April 2018, 5 November 2019, and 2 December  
2019, Portage was on notice for having failed to pay its monthly instalments since August  
2017.57 Mr. Berger was the principal shareholder and sole director of the General Partner  
of Portage.  
[134] In light of the alleged default of Portage in August 2017, and the demand letter  
sent by Peoples at the time, it was clear for both Mr. Berger and Peoples in April 2018,  
the time of the first communication of one of the documents of the Counter Letters, that  
litigation was possible. Mr. Berger received a demand letter in his capacity as guarantor  
in August 2018.58 Receivership proceedings against Portage began in September 2018.59  
[135] As for the second criterion, the objecting parties assert that the communications  
requested in the discovery questions were made with the intention of settling a dispute  
between Mr. Berger and Peoples. The question posed by the Group Plaintiffs-in-Warranty  
under O-7 recognizes this since it asks whether “any form of agreement or understanding”  
was in place between Peoples and Mr. Berger prior to the disclosure of the Counter  
Letters.  
[136] The third criterion, an express or presumed intention that the communications not  
be disclosed without the consent of both parties, is satisfied in light of the fact that both  
parties to the communications, i.e. Mr. Berger and Peoples, are saying in unison that they  
intended their communications to be protected against disclosure.  
[137] That the three criteria of settlement privilege are met is not contested by the Group  
Plaintiffs-in-Warranty. They argue that settlement privilege was renounced by Peoples  
when it informed them by way of lawyer’s letter that Mr. Berger communicated the  
documents of the Counter Letters on various dates.  
55  
Article 4 CCP, see also arts 1(3) and 148 CCP.  
Piché & Royer, supra note 54 at para 1259.  
Re-Amended Demand at para 25.  
Ibid at para 36.  
56  
57  
58  
59  
Ibid at para 27, court file 150-11-004866-182.  
500-17-109876-196  
PAGE: 26  
[138] There was no renunciation of privilege by Peoples in providing the above  
information. The fact that the lawyer’s letter did not explicitly invoke settlement privilege  
on any other, related information that might be asked for, does not constitute a  
renunciation of privilege in relation to that information. In fact, a general caveat was made  
in the letter:  
The information provided above is communicated strictly under reserve of our  
client’s rights, and shall not be interpreted as an acceptance of the appropriateness  
of your request or an acknowledgment or undertaking to provide any other  
documents or information outside of the process agreed to [] 60  
[139] Aside from the renunciation argument, the arguments of the Group Plaintiffs-in-  
Warranty for obtaining the answers to their questions essentially amount to the position  
that their interests in proving that Mr. Berger breached the confidentiality provision of the  
Master Agreement and proving that Peoples does not have the requisite good faith under  
art. 1452 CCQ prevail over the interests of Mr. Berger and Peoples in wanting to maintain  
the privilege.  
[140] As the Supreme Court of Canada observed in Sable Offshore Energy Inc. v  
Ameron International Corp. (Sable), the exception to settlement privilege involves  
showing that “a competing public interest outweighs the public interest in encouraging  
settlement”.61 The Court in Sable also noted that that settlement privilege applies  
regardless of whether a settlement is achieved,62 and it applies even in the context of  
litigation regarding a third party.63  
[141] The reasoning of the Court in Sable is instructive in response to the argument of  
the Group Plaintiffs-in-Warranty regarding their interest in obtaining answers to the  
questions under objection.  
[142] Sable involved a lawsuit by an owner of offshore structures and onshore gas-  
processing facilities in Nova Scotia. The lawsuit alleged defective paint application  
against some 14 contractors and applicators. The plaintiff entered into settlement  
agreements with three of the defendants.64  
[143] Two of the defendants who did not settle wanted access to the settlement figures  
found in the settlement agreements. They already had access to the rest of the contents  
of the agreements. The defendants argued that they needed the settlement figures to  
conduct their litigation.  
60  
Exhibit PH-13, Letter from BLG to Oiknine & Associés dated 5 March 2021.  
Sable Offshore Energy Inc v Ameron International Corp, 2013 SCC 37 at para 19.  
Ibid at para 17.  
Ibid at para 20ff.  
61  
62  
63  
64  
These agreements are referred to as “Pierringer Agreements” when they occur in a multi-party litigation  
where one or more but not all of the defendants settle with the plaintiff. The agreement are named for  
a 1963 case out of the U.S. state of Wisconsin, Pierringer v Hoger, 124 NW (2d) 106 (Wis 1963), cited  
in Sable, ibid at para 6.  
500-17-109876-196  
PAGE: 27  
[144] The Court rejected their argument, stating that access to the settlement figures will  
not materially affect the non-settling defendants’ ability to know and present their case.65  
[145] In the present case, Mr. Berger and Peoples invoke privilege in relation to the  
question of whether there is an agreement between them (O-7). The Group Plaintiffs-in-  
Warranty have not established that their case will be materially advanced by knowing the  
answer to this question and the three other questions (O-2, O-3, O-5) under objection.  
[146] The Group Plaintiffs-in-Warranty want to prove Mr. Berger breached the Master  
Agreement by disclosing it to Peoples. It is already admitted that he disclosed it. Naturally,  
if Mr. Berger eventually seeks to invoke his communications with Peoples as part of his  
defence against the action by the Group Plaintiffs-in-Warranty, he will be foreclosed from  
doing so given his invocation of settlement privilege over those same communications in  
order to prevent the Group Plaintiffs-in-Warranty from obtaining them in discovery.  
[147] The Group Plaintiffs-in-Warranty, who are among the defendants being sued by  
Peoples in the principal action, want to explore whether Peoples has the requisite good  
faith under art. 1452 CCQ to be able to invoke the Counter Letters in its action against  
them. The argument is that if Peoples learned of the existence of the Counter Letters at  
an earlier stage, through its discussions with Mr. Berger, then its good faith is somehow  
affected with the lapse of time between its knowledge of the existence of the Counter  
Letters and amendment of its Judicial Demand to Institute Proceedings in order to include  
the Beneficial Owners as defendants.  
[148] The flaw in this argument is that the Group Plaintffs-in-Warranty have it backwards:  
if bad faith can be ascribed to Peoples by virtue of its knowledge of the existence of the  
Counter Letters, then that bad faith actually entails a requirement that Peoples avail itself  
of the Counter Letters and not the apparent agreement.66 In other words, the Group  
Plaintiffs-in-Warranty cannot argue that bad faith on the part of Peoples prevents it from  
availing itself of the Counter Letters. Bad faith prevents it from availing itself of the  
apparent contract.  
[149] A further flaw in the argument of good faith is that any lapse of time between  
knowledge of the Counter Letters and filing of an action against the Beneficial Owners is  
a question of prescription, not good faith.  
[150] As for the reply by the Group Plaintiffs-in-Warranty to the point made by Peoples  
and Mr. Berger to the effect that the Master Agreement would have been disclosed in any  
event since Mr. Berger filed an action in warranty against the Group Defendants-in-  
Warranty on the basis of that contract, the Group Plaintiffs-in-Warranty do not make a  
convincing argument.  
65  
Sable, supra note 61 at para 27.  
See Noël c Bérard, 2021 QCCA 299 at para 12: “seuls les tiers qui ignoraient l’existence de la contre-  
66  
lettre peuvent invoquer le contrat apparent.”  
500-17-109876-196  
PAGE: 28  
[151] There is nothing revisionist about what Peoples and Mr. Berger are saying. As a  
factual matter, Mr. Berger has filed an action against the Group Defendants-in-Warranty.  
That action depends on the Master Agreement as its juridical basis.  
[152] Therefore, if Mr. Berger had not communicated its existence in November 2019, it  
would have been available to Peoples when he filed his action in warranty in March 2020.  
Peoples would then have amended its action to include the Beneficial Owners as  
defendants. There is nothing in the record to indicate that the counter-factual would have  
been different.  
[153] In light of that reality, and against the backdrop of settlement privilege, it is difficult  
to see how the Group Plaintiffs-in-Warranty can be materially advanced in their litigation  
by digging further into the communications between Mr. Berger and Peoples regarding  
the disclosure of the Counter Letters.  
[154] As for the subsidiary reply argument made by the Group Plaintiffs-in-Warranty,  
namely that the Master Agreement could have been filed under seal in Mr. Berger’s action  
in warranty, this presumes that filing under seal would have survived a challenge by  
Peoples under the principle of open access to court proceedings, an unlikely scenario.67  
[155] Accordingly, objections O-2, O-3, O-5, and O-7 are maintained on the basis of  
settlement privilege. The subsidiary grounds of litigation privilege invoked for O-3 and  
professional secrecy for O-3, O-5, and O-7 are not necessary to address given the ruling  
on settlement privilege.  
[156] Objection O-20 is the last objection in the above table regarding Mr. Mallich. The  
objection is maintained only in part.  
[157] The question posed by Mr. Iczkovits seeks to know what was discussed with Mr.  
Mallich’s superior regarding the possibility of assisting the borrower, Portage, after the  
default in August 2017. The objection invoked by Peoples is litigation privilege.  
[158] For communication or a document to be validly covered by litigation privilege, it  
must be for the dominant purpose of litigation and the litigation must be pending or  
reasonably apprehended.68  
[159] The justification given by Mr. Iczkovits for posing the question is that he wants to  
explore what measures were taken by Peoples to mitigate its damages after the default  
in August 2017. He argues that art. 221 CCP calls for a large and liberal approach to the  
discovery process, and so disclosure is the rule.  
[160] It is possible to reconcile the question with litigation privilege. In asking what was  
discussed with Mr. Mallich’s superior, Mr. Iczkovits wants to know what measures were  
taken to mitigate the damages to be suffered by Peoples. In other words, what he wants  
67  
Art 11 CCP.  
68  
Lizotte v Aviva Insurance Company of Canada, 2016 SCC 52 at para 33.  
500-17-109876-196  
PAGE: 29  
to know is the opposite of communications whose dominant purpose is litigation. He wants  
to know whether anything was discussed that would avoid litigation.  
[161] Accordingly, the objection is maintained only in part. The witness can answer what  
was discussed with his superior regarding any possibility of assisting Portage, to the  
extent that the content was not for the dominant purpose of preparing for litigation and  
was for the purpose of reducing the damages to be suffered by Peoples.  
Dovid Muller  
[162] Mr. Muller was examined as the representative of 120305 Canada Inc., one of the  
Real Owners under the Master Agreement. It is part of the Group Defendants-in-Warranty  
in the action in warranty by Mr. Berger and by Mr. Iczkovits, and it is part of the Group  
Plaintiffs-in-Warranty against the latter. The company is the holding company for Mr.  
Muller’s investments.  
[163] The following are the questions posed to Mr. Muller that are under objection. The  
Court’s decision on the objections appears in the column on the right. The entry for O-13  
is provided in strike-out because the item was withdrawn from the Court’s consideration  
during the hearing.  
Question Objection  
Undertaking/  
Question  
Objection Objection  
by  
Court’s  
Decision  
by  
No &  
Page  
Jacob  
Berger  
O-1  
(p. 5)  
Q16:  
When  
you Fishing  
120305  
Objection  
dismissed  
received the cheques, expedition Canada  
am I safe to assume  
that you made the  
appropriate tax filings  
and declared this as  
income?  
Inc.  
Jacob  
Berger  
O-2  
(p. 6)  
Q17: Did you ever Fishing  
claim operating losses expedition Canada  
120305  
Objection  
dismissed  
in your taxes with  
Inc.  
respect  
to  
the  
property?  
Jacob  
Berger  
O-3  
(p. 6)  
Q18: Which years Fishing  
would you  
incorporated  
120305  
have expedition Canada  
Objection  
dismissed  
the  
Inc.  
operating losses in  
your taxes?  
Jacob  
Berger  
O-4  
(p. 7-8)  
U-10: For the periods of Fishing  
2010 until 2019, the tax expedition Canada  
filings for 120305 Inc.  
120305  
Objection  
dismissed  
Canada Inc., in which  
we would be able to  
500-17-109876-196  
PAGE: 30  
Question Objection  
Undertaking/  
Question  
Objection Objection  
by  
Court’s  
Decision  
by  
No &  
Page  
see whether or not  
there were capital the  
income was disclosed  
and whether or not the  
operating losses were  
disclosed.  
Avi  
O-1  
U-11 - To provide a Fishing  
copy of the Minute expedition Canada  
120305  
Objection  
maintained  
in part  
Iczkovits (p. 2)  
Book  
for  
120305  
Inc.  
Canada Inc. from the  
years 2010 to 2021  
Avi  
O-11  
Okay. Let’s just explore Hearsay  
Jacob  
Objection  
Iczkovits (p. 48)  
this  
very  
quickly  
Berger  
maintained  
because we have a  
limited amount of time  
here, sir. Did you hear  
that Mr. Berger was  
involved and I am  
not saying that I am  
suggesting this, for the  
record, because it  
would  
be  
an  
inappropriate allegation  
on my part, but I would  
like to know whether  
you heard that Mr.  
Berger was involved in  
some  
difficulties  
financial  
resulting  
from some business  
deals that might have  
gone  
badly  
in  
Cleveland? Is that the  
information that you  
would have had in your  
possession at that  
time?  
Avi  
O-12  
And did you hear that Hearsay  
he had to leave  
Cleveland because of  
those problems? Is that  
your knowledge?  
Jacob  
Berger  
Objection  
maintained  
Iczkovits (p. 50)  
500-17-109876-196  
PAGE: 31  
Question Objection  
Undertaking/  
Question  
Objection Objection  
by  
Court’s  
Decision  
by  
No &  
Page  
Avi  
O-13  
U-21 - To verify if the All  
Counsel  
Iczkovits (p. 53)  
Deponent or his entity, documents for  
or any entity under his in  
beneficial  
control, directly or possession owners  
indirectly, had any of  
the  
business dealings with witness  
Mr.  
Jacob  
Berger will  
be  
and/or  
Hampton provided  
Properties and/or any under  
other corporation, reserve.  
general partnership or  
other legal structure in  
which Mr. Jacob Berger  
would  
have  
been  
involved with, directly  
or indirectly, and to  
provide a copy of all  
supporting documents  
related  
investments  
Well, let me ask you Fishing  
this question; did you expedition Canada  
to  
those  
Avi  
O-18  
120305  
Objection  
dismissed  
Iczkovits (p. 81)  
instruct  
your  
Inc.  
accountant to take any  
losses associated with  
this investment; yes or  
no?  
Avi  
O-20  
Did you file any Fishing  
elections with either the expedition Canada  
Federal or Provincial  
Government seeking to  
take a loss against your  
120305  
Objection  
maintained  
in part  
Iczkovits (p. 81)  
Inc.  
corporate entity; yes or  
no? And to produce a  
copy of the same.  
U-27 - To provide a  
Avi  
O-21  
Fishing  
expedition Canada  
Inc.  
120305  
Objection  
dismissed  
copy of the Deponent’s  
Iczkovits (p. 81)  
financial  
statements  
from the year 2010 to  
the year 2021 with  
respect to the named  
Plaintiff / Defendant in  
Warranty, to see how  
the investment is listed  
500-17-109876-196  
PAGE: 32  
Question Objection  
Undertaking/  
Question  
Objection Objection  
by  
Court’s  
Decision  
by  
No &  
Page  
in  
said  
financial  
statement  
[164] Objections O-1 (p. 5), O-2, O-3, O-4, O-1 (p. 2), O-18, O-20, and O-21 can be  
grouped together since the purpose of the questions is the same and the objection is the  
same.  
[165] The purpose of the questions is for Mr. Berger and Mr. Iczkovits to understand the  
evidentiary basis for the allegations made by the Group Plaintiffs-in-Warranty, of which  
120305 Canada Inc. is a part, to the effect that they did not have significant experience  
in the real estate market69 and that they were never informed of any problems with the  
Property.70  
[166] The questions seek to ascertain whether it is actually the case that Mr. Muller, as  
representative of his holding company, did not have significant real estate experience and  
was never informed of any problems with the Property, by asking him whether his holding  
company recorded losses in the tax filings in relation to the Property.  
[167] If losses in relation to the Property were recorded in the tax filings of his holding  
company, and if the corporate minute book reflects this as well, this would mean that Mr.  
Muller was aware of problems with the Property and he had sufficient experience in real  
estate matters to understand that the nature of the problems with the Property translates  
into the possibility for claiming losses in the tax filings of the company, or at the very least  
merits a discussion with the company’s tax accountant.  
[168] The questions under objections O-1 (p. 5), O-2, O-3, O-4, O-1 (p. 2), O-18, O-20,  
and O-21, covering income, losses, and the corporate minute book, are relevant and do  
not constitute a fishing expedition to the extent that they are restricted to the Property.  
Accordingly, the objections are dismissed. The objections to O-1 (p. 2) and O-20 are  
maintained in part in order to make it clear that only the aspect related to the Property is  
required to be answered. Anything in the responsive documents that is unrelated to the  
Property may be redacted.  
[169] The Court gives effect to the offer by Mr. Berger to file under seal, should a party  
wish to put into evidence, any documents obtained under the above questions. It will be  
for the judge on the merits to decide eventually whether the seal should remain in place.  
[170] Objections O-11 and O-12 in the above table, based on hearsay, are addressed  
as follows.  
[171] The two questions seek to establish past ostensibly wrongful conduct of Mr. Berger  
in another jurisdiction, in relation to other matters, through the testimony of Mr. Muller  
69  
Declaration of Forced Intervention in Warranty at para 11.  
Ibid at para 21.  
70  
500-17-109876-196  
PAGE: 33  
stating what he heard from others. This obviously calls for hearsay evidence and it is  
inadmissible.71  
[172] Mr. Berger also argued that the questions seek to elicit similar-fact and bad-  
character evidence, and therefore they must be excluded for that reason also. These  
grounds were not invoked at the time that the hearsay objection was made. In any event,  
it is unnecessary to address those grounds here given the ruling based on the hearsay  
objection, and they are dealt with further below in connection with similar questions posed  
to Mr. Berger directly.  
Ervin Hofman  
[173] Mr. Hofman was examined as the representative of 123645 Canada Inc., which is  
one of the Real Owners under the Master Agreement. It is part of the Group Defendants-  
in-Warranty in the action in warranty by Mr. Berger and by Mr. Iczkovits, and it is part of  
the Group Plaintiffs-in-Warranty against the latter. Mr. Hofman is the representative of the  
company, which is a holding company for his investments.  
[174] The questions under objection posed to Mr. Hofman are similar to those posed to  
Mr. Muller:  
Question Objection  
Objection Objection  
by  
Court’s  
Decision  
Undertaking/  
Question  
by  
No &  
Page  
Jacob  
Berger  
O-6  
(p. 4-5)  
U-27: A copy of the Overly  
company and/or broad  
your tax filings and fishing  
Ervin  
& Hofman  
(123645  
Objection  
maintained  
in part  
the annual financial expedition Canada  
statements of the  
company, for the  
years in which the  
Inc.)  
witness  
company  
question,  
or  
the  
in  
123645  
Canada Inc., has  
declared the loss or  
has treated the loss.  
Jacob  
Berger  
O-7  
(p. 7-8)  
U-28: For the years Overly  
in which the cash broad.  
calls were made, to  
Ervin  
Hofman  
(123645  
Objection  
maintained  
in part  
obtain a copy of the (answered Canada  
company  
123645 that it was Inc.)  
Canada  
Inc.’s added to  
financial statements the  
net  
to see how these investment)  
71  
Article 2869 CCQ.  
500-17-109876-196  
PAGE: 34  
Question Objection  
Objection Objection  
by  
Court’s  
Decision  
Undertaking/  
Question  
by  
No &  
Page  
cash calls were  
treated  
by  
the  
company in respect  
of its own financials,  
if it was considered  
as  
supplementary  
investment  
whatnot.  
or  
Avi  
Iczkovits  
O-15  
(p. 37)  
Sir, did you ever Fishing  
instruct your expedition Hofman  
Ervin  
Objection  
dismissed  
accountant to write  
off for tax purposes  
your investment in  
(123645  
Canada  
Inc.)  
the  
Jonquière  
properties?  
Avi  
Iczkovits  
O-16  
(p. 38)  
And I reiterate again, Fishing  
if my colleague is expedition Hofman  
Ervin  
Objection  
dismissed  
prepared  
withdraw  
to  
his  
(123645  
Canada  
Inc.)  
objection, are you  
prepared to confirm  
whether you have in  
fact written off your  
investment in the  
Jonquière  
properties?  
[175] Mr. Hofman argued that his objections to the above questions on the tax treatment  
by his holding company of the losses related to the Property are made for the same  
reasons as those of Mr. Muller, addressed above. For the reasons given above regarding  
the dismissal of the objections to the questions posed to Mr. Muller, the objections O-15  
and O-16 are dismissed, with O-6 and O-7 being maintained in part in order to make clear  
that only information related to the Property can be compelled. All information unrelated  
to the Property may be redacted. The same mechanism as for Mr. Muller of filing under  
seal must be used in relation to exhibits to be filed emanating from answers obtained to  
the above questions.  
Joseph Grossman  
[176] Mr. Grossman is part of the Group Defendants-in-Warranty in the actionin-  
warranty by Mr. Berger and by Mr. Iczkovits, and he is part of the Group Plaintiffs-in-  
Warranty against them. The questions posed to Mr. Grossman for which notarial  
professional secrecy was invoked by Mr. Iczkovits have been dealt with further above.  
500-17-109876-196  
PAGE: 35  
The remaining question is the following, the second one being in strikeout because it was  
resolved between the parties during the hearing:  
500-17-109876-196  
PAGE: 36  
Question Objection  
Undertaking/  
Question  
U-35 - Provide a full Many  
copy of file related to grounds  
Objection Objection  
by  
Court’s  
Decision  
Objection  
by  
No & Page  
O-10  
Avi  
Joseph  
Iczkovits (p. 92)  
Grossman maintained  
in part  
Place du Portage  
(litigation  
privilege,  
solicitor-  
client  
privilege,  
fishing  
expedition)  
Avi  
O-11  
U-36 - Provide a Overly  
copy of whatever broad  
Joseph Grossman  
Joseph  
Grossman  
Iczkovits (p. 94)  
has  
in  
his  
possession  
from  
Immomarketing  
related to the object  
properties  
Jonquiere  
in  
[177] On the face of it, the question subject to objection O-10 is very wide and can touch  
upon documents that are privileged or confidential for some other reason.  
[178] Mr. Iczkovits explains that the reason to ask for the full copy related to the Property  
is to show that Mr. Grossman had knowledge of the state of the Property.  
[179] It is useful to remember that Mr. Grossman is not a Real Owner under Schedule B  
of the Master Agreement, although he is listed as such at page 1 of the contract. He is  
among the Group Plaintiffs-in-Warranty suing Messrs. Iczkovits and Berger, and he is  
among the Group Defendants-in-Warranty being sued by them. In the allegations of the  
Group Plaintiffs-in-Warranty, they assert that they relied on Mr. Berger’s representations  
as to the good condition of the Property and that they were never informed of problems  
with the Property.72  
[180] Since the main point of asking for Mr. Grossman’s file is to show that he had  
knowledge of the problems related to the Property, that is the subset of documents  
required to be communicated. Accordingly, Mr. Grossman is required to communicate  
those documents, and extracts of documents, from his file on the Property that relate to  
any problems regarding the Property. As for the rest, the objection is maintained.  
72  
Declaration of Forced Intervention in Warranty at paras 11 and 21.  
500-17-109876-196  
PAGE: 37  
Ben Zion Schwartz  
[181] Mr. Schwartz is part of the Group Defendants-in-Warranty in the action-in-warranty  
by Mr. Berger and by Mr. Iczkovits, and he is part of the Group Plaintiffs-in-Warranty  
against the latter. The questions posed to Mr. Schwartz for which notarial professional  
secrecy was invoked by Mr. Iczkovits have been dealt with further above.  
[182] The remaining question is under objection O-16, with O-11 having been decided  
verbally during the hearing and O-14 in strikeout being agreed to by Mr. Schwartz to be  
provided under reserve of objection:  
Question Objection  
Undertaking/  
Question  
Are you married Relevance Mr.  
Objection Objection  
by  
Court’s  
Decision  
Objection  
maintained  
by  
No & Page  
O-11  
Avi  
Iczkovits (p. 32)  
separate  
property?  
as  
to  
Schwartz  
Avi  
O-14  
Did you take that as Relevance Mr.  
Iczkovits (p. 34)  
a loss on your and private Schwartz  
income tax?  
life  
Avi  
O-16  
Okay. Who came up Relevance Mr.  
Objection  
Iczkovits (p. 38)  
with the funds for  
that particular  
investment?  
Schwartz  
maintained  
[183] Mr. Iczkovits argues that the purpose behind the question under objection O-16 is  
to show that Mr. Schwartz had a certain level of expertise in real estate investment,  
contrary to the allegation that he relied on Mr. Iczkovits. The question does not relate to  
investment in the Property, but rather a different project altogether.  
[184] The question of who is at the origin of funds for an investment different from the  
one in the Property is so irrelevant as to amount to an abusive question. Whether the  
witness is the source of funds or someone else is does not help in understanding the level  
of expertise of that witness in real estate investment matters, still less if the investment  
does not even relate to the case at hand. Accordingly, objection O-16 is maintained.  
Abraham (Avi) Iczkovits  
[185] Mr. Iczkovits is one of the defendants to the lawsuit by Peoples, he is a plaintiff-in-  
warranty against the Group Defendants-in-Warranty and a defendant-in-warranty against  
the Group Plaintiff-in-Warranty.  
[186] The questions posed to Mr. Iczkovits for which notarial professional secrecy was  
invoked have been dealt with further above. The remaining questions are the following,  
O-29 having been decided verbally during the hearing, and O-22 and O-23 (p. 118) in  
strikeout as items withdrawn from the Court’s consideration during the hearing:  
500-17-109876-196  
PAGE: 38  
Question Objection  
Undertaking/  
Question  
UND-4 - Me Oberman, Attorney-  
I would have copies, if client &  
it’s applicable, if it work-  
exists, obviously related  
Objection Objection  
by  
Court’s  
Decision  
Objection  
maintained  
by  
No & Page  
O-2  
Avi  
Iczkovits  
(Jacob  
Peoples  
(p. 41)  
Berger and  
Group  
copies  
of  
any privilege  
communications with  
Plaintiffs-  
in-  
Warranty  
consent to  
communica  
tion)  
Iczkovits  
between  
Mr.  
Mr.  
and  
Tobenstein.  
Beneficial O-2  
Do you recall whether Relevance Avi  
Objection  
owners  
(p. 6)  
Mr. Berger would have &  
Iczkovits  
maintained  
ever signed a Deed of legitimate  
Sale for that property interest  
on Gagnon?  
Beneficial O-3  
I’m going to show you Relevance Avi  
Objection  
owners  
(p. 7)  
a public document,  
which is your Deed of  
Sale, dated June the  
4th, 2012. Are you  
Iczkovits  
maintained  
aware  
of  
this  
company, 9263-7156  
Québec Inc.?  
Beneficial O-4  
Do you have an Relevance Avi  
Objection  
owners  
(p. 7)  
interest  
company (9263-7156 legitimate  
Québec Inc.)? interest  
“Here is the REQ for Relevance Avi  
9263-7156 Québec & Iczkovits  
in  
this &  
Iczkovits  
maintained  
Beneficial O-6  
owners  
Objection  
maintained  
(p. 8)  
Inc. as at 2:41 p.m. this legitimate  
afternoon, and I see interest  
that  
shareholder of this  
company is the  
the  
sole  
Iczkovits Family Trust  
and the sole director is  
yourself.  
Is  
that  
accurate?”  
Beneficial O-7  
I’m going to go back Relevance Avi  
Objection  
owners  
(p. 9)  
then to this Deed of &  
Sale. Do you have any  
Iczkovits  
maintained  
500-17-109876-196  
PAGE: 39  
idea why it says that legitimate  
it’s being — that the interest  
company, 9263-7156  
Québec Inc. is being  
represented by Jacob  
Berger  
for  
the  
signature of the Deed  
of Sale?  
Beneficial O-9  
U-1: verify whether a Relevancy Avi  
partnership agreement and Scope Iczkovits  
Objection  
maintained  
in part  
owners  
(p. 11)  
exists  
between should  
yourself, Mr. Berger be limited  
and/or your respective to the  
companies or entities property in  
and, if so, to kindly dispute  
communicate it.  
Beneficial O-11  
owners (p. 14)  
Beneficial O-12  
owners (p. 16)  
What were they [the Relevance Avi  
Objection  
maintained  
Objection  
maintained  
deals]?  
Iczkovits  
Have you invested in Relevance Avi  
any other deals with &  
Iczkovits  
Mr.  
Portage?  
Berger  
after legitimate  
interest  
Beneficial O-13  
owners (p. 16)  
In general, without Relevance Avi  
Objection  
maintained  
going into too many &  
Iczkovits  
details, how did your legitimate  
investments with Mr. interest  
Berger work out? Did  
you ever lose money?  
Beneficial O-19  
owners (p. 57)  
Have you done this Relevance Avi  
Objection  
maintained  
(reinvesting  
your &  
Iczkovits  
finder’s fee into equity legitimate  
in the property) in interest  
other  
deals  
also  
involving Mr. Berger or  
just this one  
Beneficial O-23  
owners (p. 80)  
Did you invest in any Relevance Avi  
deals with Mr. Berger & Iczkovits  
after 2015-2016? legitimate  
Objection  
maintained  
interest  
Beneficial O-20  
owners (p. 61)  
Have  
you  
ever Relevance Avi  
Objection  
maintained  
in part  
invested, in your part &  
experience,  
Iczkovits  
either legitimate  
through a corporation interest  
or through what’s  
500-17-109876-196  
PAGE: 40  
called  
a
limited  
partnership?  
Beneficial O-29  
Did you review Exhibit Attorney-  
P-12, being the Master client  
Agreement, with a privilege  
Avi  
Iczkovits  
Objection  
maintained  
owners  
(p. 102)  
legal  
professional  
before signing it and  
obtain an explanation  
from  
that  
professional?  
Beneficial O-18  
owners (p. 95)  
Do you have an Litigation  
agreement in place privilege  
Avi  
Iczkovits  
Objection  
dismissed  
with  
Mr.  
Lazarus Common  
whereby you agreed interest  
not to collect on any privilege  
judgments, should you Settlement  
obtain it, against him? privilege  
Beneficial O-22  
If a vote wasn’t taken, Asked and Counsel  
owners  
(p. 117)  
how was it done?  
answered  
for  
Avi  
Iczkovits  
Beneficial O-23  
How  
mandated  
were  
by  
you Already  
the asked and Iczkovits  
Avi  
owners  
(p. 118)  
group to negotiate and answered  
to make the proposal  
of delaying capital  
payments to Peoples  
Trust?  
Beneficial O-25  
Do you know why your Solicitor-  
counsel did not appear client  
to contest the order privilege  
that was sought by Litigation  
Avi  
Iczkovits  
Objection  
dismissed  
owners  
(p. 121)  
Peoples Trust?  
privilege  
Beneficial O-26  
Do you know if in Solicitor-  
pursuant — let’s say client  
the year 2018 and privilege  
through 2020, was  
Avi  
Iczkovits  
Objection  
dismissed  
owners  
(p. 122)  
your  
counsel  
communicating with  
Peoples Trust and/or  
its counsel?  
Beneficial O-27  
UND-45  
- “That is  
Avi  
Iczkovits  
Objection  
maintained  
in part  
owners  
(p. 123)  
communicate a copy protected  
of all correspondence by a form  
between  
yourself of  
500-17-109876-196  
PAGE: 41  
and/or your attorney attorney-  
and Peoples Trust client  
and/or its attorneys privilege or  
between January 20, derivative  
2018 and January thereof.”  
2020.  
[187] The question under objection O-2 (p. 41) seeks any communications between  
Mr. Iczkovits and Mtre. Tobenstein, given the latter’s drafting of the Initial Nominee  
Agreement (P-9). While Mr. Iczkovits recognizes that he did not mandate the lawyer, he  
objects on the basis of professional secrecy. He also argues that there is no usefulness  
to the question.  
[188] Peoples posed the question, and it argues that since Mr. Iczkovits admits that he  
did not mandate Mtre. Tobenstein, professional secrecy does not apply.  
[189] The arguments were thin on both sides, Peoples even left it to the discretion of the  
Court at the end of its arguments on this question.  
[190] Since professional secrecy is at issue, Peoples was required to be more detailed  
as to the justification for the question and the ways in which the witness should not be  
seen as a client of Mtre. Tobenstein. This was not forthcoming. No specific argument was  
provided as to why exactly all of the correspondence between the witness and the lawyer  
was necessary to materially advance Peoples’ case in the litigation.  
[191] Accordingly, objection O-2 (p. 41) is maintained.  
[192] Objections O-2 (p. 6), O-3, O-4, O-6, O-7, O-9, O-11, O-12, O-13, O-19, O-23 (p.  
80), O-20 were grouped together for the purposes of arguments made during the hearing.  
[193] During the hearing, Mr. Iczkovits agreed to answer the question that is subject to  
objection O-9 but only insofar as the Property is concerned. Therefore, whether a  
partnership agreement exists between Mr. Iczkovits and Mr. Berger, or their respective  
companies/entities, will be answered and the relevant document will be provided, if there  
is anything responsive that exists in connection with the Property.  
[194] The Court gives effect to that undertaking and accordingly maintains objection O-  
9 to the extent that the question goes beyond the Property. As for the other objections in  
the above group until O-23 (p. 80), they are maintained. Objection O-20 is maintained in  
part. The reasoning is set out below.  
[195] In the above grouping of objections, the objections until O-23 (p. 80) relate to  
questions having the aim on the part of the Group Plaintiffs-in-Warranty to prove an  
overall partnership arrangement between Mr. Iczkovits and Mr. Berger (the Partnership  
Questions). They argue that if it is shown that there was a partnership between the two  
on other investment projects, then it is more likely that there was one here.  
500-17-109876-196  
PAGE: 42  
[196] In turn, the Group Plaintiffs-in-Warranty argue that a finding of a partnership  
arrangement is important to the theory of their case because they can then impute to Mr.  
Iczkovits the knowledge and duties that Mr. Berger is alleged to have in their action-in-  
warranty. In this regard, they face the legal limitation of a partner’s liability towards third  
persons where the latter are unaware of a partnership.73  
[197] The Court addresses the Partnership Questions as follows.  
[198] First, it should be observed that the paragraphs of the Declaration of Forced  
Intervention in Warranty relating to the claim against Mr. Iczkovits do not contain an  
explicit allegation of any overall partnership arrangement between him and Mr. Berger  
across various investment projects. The legal attributes of a contract of partnership are  
set out in the Civil Code of Québec.74  
[199] Even for the investment in the Property, there is nothing explicit regarding a  
partnership for that particular project, but there is an allegation that “Iczkovits helped  
Berger syndicate the deal and find investors to purchase the Property and was one of the  
people responsible for inducing the Defendants in Warranty who invested in the Property  
to invest in same with Berger.75  
[200] One is left having to draw the conclusion, albeit tentative, that the verbs  
“syndicate”, “find”, and “inducing”, in one sentence in one paragraph, somehow add up to  
an allegation of a partnership between Mr. Iczkovits and Mr. Berger, even though it would  
have been rather simple to allege it explicitly.  
[201] The thinness of the allegation regarding a partnership is one strike against the  
argument of the Group Plaintiffs-in-Warranty seeking answers to a wide scope of  
questions on other investment projects. The thin nature of the allegation is further  
highlighted by the fact that article 2253 CCQ creates an obstacle for the argument of the  
Group Plaintiffs-in-Warranty in wanting to impute Mr. Berger’s knowledge and duties to  
Mr. Iczkovits. One would have thought that the allegations would have been much more  
extensive to overcome that obstacle.  
[202] In addition to the fact that the allegation regarding a partnership is thin, if not  
invisible, a second point needs to be made.  
[203] The Group Plaintiffs-in-Warranty refer the Court to caselaw on similar-fact  
evidence in civil matters76 to make the argument that if they can establish that there was  
a partnership between Messrs. Iczkovits and Berger in other investment projects, then  
there is a greater likelihood of one here.  
73  
Art 2253 CCQ.  
74  
See arts 2186-2266 CCQ, and notably arts 2250-2266 CCQ on undeclared partnerships.  
Declaration of Forced Intervention in Warranty at para 30.  
Caron c Voyer, 2013 QCCA 1335 at paras 72-77; Romanowski c Gewurz, 2014 QCCS 1085 at paras  
75  
76  
19-23; Ébénistrie classique inc c Société en commandite Gaz Métro, 2013 QCCS 1107 at paras 29-54.  
500-17-109876-196  
PAGE: 43  
[204] The Court rejects this argument.  
[205] The caselaw on similar-fact evidence referred to by the Group Plaintiffs-in-  
Warranty all relates to situations where the defendant in question was alleged to have  
orchestrated a larger wrongful scheme. In that context, it was relevant for the trier of fact  
to have evidence of other projects because the wrongfulness of the alleged acts is  
informed by alleged acts in other projects. The similarity of other facts has to rise to the  
level of establishing a modus operandi of wrongful conduct of the defendant.  
[206] The three cases cited by the Group Plaintiffs-in-Warranty refer to an alleged  
wrongful modus operandi of the defendants in those cases. The distinction with the  
present argument is obvious at the outset of the determination of the applicability of this  
caselaw to the present case: the allegation is not that Messrs. Berger and Iczkovits  
conspired to execute a wrongful scheme connected to a larger modus operandi, but  
rather, that they formed a partnership across various investment projects and the Group  
Plaintiffs-in-Warranty wants to avail itself of legally designated benefits that it claims  
accrue to it from that legal vehicle.  
[207] In other words, the caselaw shows that wrongfulness needs to be alleged if similar-  
fact evidence is to be allowed. As can be seen in the review below, even an allegation of  
wrongfulness is not enough on its own. In the present case, the Group Plaintiffs-in-  
Warranty are not alleging that the two individuals were wrongful in having a partnership,  
if they had a partnership at all.  
[208] Justice Brossard in Romanowski c Gewurz provides a useful review of the criteria  
that need to be met for similar-fact evidence to be admitted:  
[L]a preuve d’actes similaires est recevable si elle établit un modus  
operandi chez le défendeur et si ces actes sont si reliés à celui qui fait l’objet  
du litige qu’ils permettent de démontrer le système suivi par le défendeur en  
l’espèce;77  
La preuve qu’un défendeur aurait commis d’autres fautes que celles  
reprochées, plus ou moins semblables à celles-ci, n’est pas admissible si elle  
vise à faire la démonstration de son mauvais caractère et à amener le tribunal  
à en conclure à l’existence d’un comportement fautif dans le cadre dont il est  
saisi;78  
[L]a preuve d’actes similaires sera permise si elle a une fin pertinente au litige,  
autre que de démontrer une propension du défendeur à commettre des fautes,  
et si sa valeur probante n’est pas surpassée par son effet préjudiciable  
résultant de l’établissement du mauvais caractère du défendeur.79  
77  
Romanowski, ibid at para 21.  
Ibid at para 20.  
Ibid at para 22.  
78  
79  
500-17-109876-196  
PAGE: 44  
[209] Justice Brossard in his judgment refers to some examples where similar-fact  
evidence has been allowed:  
À titre d’illustration, dans le cadre d’un litige opposant la faute lourde à une  
clause de limitation de responsabilité, la preuve sera permise de faits  
similaires qui tendent à prouver une nonchalance chronique des préposés du  
défendeur et à ainsi établir le caractère insouciant du comportement de ce  
dernier lors de l’incident en litige;80  
Il peut s’agir par exemple de représentations faites à d’autres personnes dans  
des circonstances identiques et contemporaines.81  
[210] A further example can be found in the conclusion of the Court of Appeal in Caron  
c Voyer allowing similar-fact evidence to be adduced, in a context where two contradictory  
versions (prête-nom versus loan) of a juridical fact were being proffered by the parties.  
[211] After stating that the admissibility of evidence of similar facts must be evaluated in  
light of its relevance and that a fact is relevant when it helps the trier of fact evaluate the  
probative value of testimony, the Court of Appeal concludes that similar-fact evidence is  
admissible because the past conduct involves the same instruments as those at issue,  
the same issuing corporation, the same forms, and the same method of payment, all  
within a common time frame. 82  
[212] The Partnership Questions do not fall within the scope of the caselaw passages  
reviewed above. This is strike two against the arguments of the Group Plaintiffs-in-  
Warranty.  
[213] A third point is to be observed about the scope of the Partnership Questions.  
[214] It should be remembered that Mr. Iczkovits is willing to answer the question under  
objection O-9, whether a partnership agreement exists, if he has an agreement with Mr.  
Berger in connection with the Property. The answer will go to the heart of the inquiry of  
Group Plaintiffs-in-Warranty. The answer will be determinative and obviate the need to  
seek answers to questions about various other investment projects.  
[215] This is strike three against the arguments provided in support of the Partnership  
Questions.  
[216] We now leave the Partnership Questions and turn to the question under objection  
O-20 (p. 61). The Group Plaintiffs-in-Warranty ask Mr. Iczkovits if he ever invested in the  
past through a corporation or a limited partnership. The objection invokes relevance and  
legitimate interest in refusing to answer.  
[217] The argument provided in support of this question is that the Group Plaintiffs-in-  
Warranty have a theory of how the investment in the Property should have been  
80  
Ibid.  
Ibid at para 21.  
Caron, supra note 76 at para 77.  
81  
82  
500-17-109876-196  
PAGE: 45  
structured. They want to know if Mr. Iczkovits is familiar with the legal vehicle of a limited  
partnership and the possibility of grouping the Real Owners in the Master Agreement  
within a limited partnership and then having a prête-nom agreement between Portage  
and the limited partnership, rather than directly with the individual investors.  
[218] The question is not fit for purpose. It is too wide for the purpose sought to be  
achieved because it asks if he ever invested in the past through a corporation or a limited  
partnership.  
[219] However, what the question seeks to know is whether the witness has knowledge  
of the existence of the legal vehicles of a corporation and a limited partnership. Investment  
experience of using those legal vehicles is something larger that includes knowledge of  
those vehicles, i.e. if one has experience with them, one has knowledge of them by virtue  
of that very experience.  
[220] The converse is not true: one can have knowledge of those legal vehicles without  
having investment experience with them.  
[221] Accordingly, the objection is maintained in part. The witness need not answer  
about past investment experience with a corporation or a limited partnership, but must  
answer whether he has knowledge of these.  
[222] Objection O-29 was maintained through an oral judgment at the time of the  
hearing.  
[223] Objection O-18 invokes various forms of privilege (litigation privilege, common-  
interest privilege, settlement privilege) against the question of whether Mr. Iczkovits has  
an agreement with Mr. Lazarus, a named Real Owner under the Master Agreement but  
whose signature does not appear on it, whereby the former would have agreed not to  
collect on any favourable judgment against the latter.  
[224] The question is posed by the Beneficial Owners. Mr. Lazarus is listed as a Real  
Owner83 in Schedule B to the Master Agreement, although his signature does not appear  
on the copy filed as Exhibit P-12. Presumably, he has a position on whether he has an  
agreement with Mr. Iczkovits and that he is asking the question because he wants to  
obtain confirmation from the latter. The other Beneficial Owners are asking because they  
want to know if there is any impact on solidary liability, as discussed below.  
[225] Litigation privilege and common-interest privilege are obviously inapplicable to the  
question since Mr. Iczkovits is suing Mr. Lazarus, and vice-versa. There is no common  
interest between the two, and litigation privilege protects communications “whose  
dominant purpose is preparation for litigation”.84 The purpose of a communication  
between the two as regards the execution of a future judgment favourable to Mr. Iczkovits  
cannot possibly be for the purpose of preparation for litigation.  
83  
The term is used interchangeably with Beneficial Owners.  
Lizotte, supra note 68 at 36.  
84  
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PAGE: 46  
[226] For the sake of efficient use of judicial resources, the parties should note that it is  
important not to pile on irrelevant objections on top of a relevant one, in the hopes that  
one of them will stick.  
[227] The objection invoking settlement privilege is relevant, in contrast with the other  
privileges invoked. Whether Mr. Iczkovits has an agreement with Mr. Lazarus not to  
execute against the latter any favourable judgment that the former might obtain against  
the Group Defendants-in-Warranty gives rise to the question of whether settlement  
privilege applies.  
[228] Settlement privilege does not apply to the question at hand because there is an  
exception to the privilege that applies. There is a public interest in ensuring that  
defendants not be deprived of their right of subrogation against co-debtors and that the  
plaintiff not be overcompensated.85  
[229] Where settlement privilege shields the fact that a plaintiff has released one of the  
defendants and that the plaintiff has received sums or other consideration from one of the  
co-defendants in settlement of the claim against that one defendant, then an unfairness  
can result. The plaintiff can end up depriving the other defendants of their right to claim  
reimbursement from the released defendant based on their respective shares for the  
liability and the plaintiff can end up being overcompensated if the other co-defendants are  
required by a judgment to pay the original claimed amount.  
[230] In the present case, Mr. Iczkovits seeks indemnification against the Group  
Defendants-in-Warranty for any amounts that he is ordered to pay to Peoples. The claim  
is made on an in solidum basis,86 sometimes referred to as imperfect solidarity,87 meaning  
that the debtors are alleged to be solidarily liable to the creditor but on the basis of  
mutually distinct juridical grounds.  
[231] The law calls for a reduction of the claim that can be made against solidary debtors  
where one or more of them benefit from a release of the obligation by the creditor. 88 This  
area of the law applies regardless of whether the liability is in solidum rather than perfect  
solidarity.89  
[232] As a parenthetical aside, the Court notes that the allegations in the action in  
warranty filed by Mr. Iczkovits do not explain what those mutually distinct juridical grounds  
are, i.e. what makes the liability in solidum rather than solidary. The allegations refer to  
Article 9 of the Master Agreement, and that the Group Defendants-in-Warranty are  
“collectively liable” (para 7), that they “all” agreed to indemnify Mr. Iczkovits (para 8), that  
85  
Sable, supra note 61 at para 19; arts 1531 and 1690 CCQ.  
Defendant’s Abraham (Avi) Iczkovits Application to Call in Simple Warranty at paras B, C, D of the  
86  
conclusions.  
87  
Frédéric Lévesque, L’obligation in solidum en droit privé québécois (Cowansville: Yvon Blais, 2010) at  
115.  
88  
Arts 1531 and 1690 CCQ.  
Lévesque, supra note 87 at 152.  
89  
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PAGE: 47  
they were “all” included in discussions regarding the Master Agreement (para 10), and  
that they are “all” bound by the Master Agreement.  
[233] There is no allegation of the juridical distinction that might exist between the Real  
Owners, on the one hand, and Messrs. Ben Zion Schwartz and Joseph Grossman, on the  
other, as regards their alleged liability towards Mr. Iczkovits. In this regard, Mr. Berger for  
his part, seems to have covered all bases by seeking in his action-in-warranty, a first  
conclusion for indemnification against the Group Defendants-in-Warranty without  
specifying whether this is on a joint, solidary, or in solidum basis, and then a second  
conclusion on an in solidum basis. The Court closes the parenthetical observation about  
the allegations in Mr. Iczkovits’s action-in-warranty. The issue may very well have to be  
addressed by the trial judge.  
[234] As mentioned above, given the law on solidarity and the reduction of the claim  
where there is a release of the obligation or renunciation of solidarity, Mr. Iczkovits must  
disclose whether there is a settlement agreement with Mr. Lazarus to the effect that the  
former will not execute against the latter any favourable judgment in the present  
proceedings. If such a settlement agreement exists, Mr. Iczkovits must disclose it, either  
through a redacted version of the agreement or by way of stipulated answers if the  
agreement is verbal, the nature and extent of any release of obligation or renunciation of  
solidarity. He is not required to disclose any amount paid as part of the settlement.90  
[235] Objection O-25 is made by Mr. Iczkovits in response to the question of “why your  
counsel did not appear to contest the order that was sought by Peoples Trust”. The  
grounds invoked for the objection are professional secrecy and litigation privilege.  
[236] The Court dismisses the objection. The question does not seek to obtain  
communications between Mr. Iczkovits and his lawyer. The reference to “your counsel” is  
made simply because the witness himself said that he forwarded the receivership order  
issued by Justice Banford from court file 150-11-004866-182 to his lawyer. This was in  
response to the question posed to the witness as to whether he was made aware in  
September 2018 that Peoples was going to seek a receiver for the Property. The witness  
said his lawyer would have acted upon it.  
[237] It is following that answer that the Group Plaintiffs-in-Warranty asked why Mr.  
Iczkovits’s lawyer did not appear to contest the order sought by Peoples.  
[238] This was the lead-up to the question. The reason for the Court’s dismissal of the  
objection based on professional secrecy and litigation privilege is that the question has  
nothing to do with those privileges. The question simply seeks to know why Mr. Iczkovits  
did not contest the receivership order.  
90  
The Sable case, supra note 61, contains a discussion of the principles governing solidarity among  
debtors and settlements in multi-party litigation in a common-law context, but the analysis is no different  
in the context of Quebec civil law: see Société du Vieux-Port de Montréal inc. v Patel, 2019 QCCA at  
paras 46-55; and Canuel c 9127-9521 Québec inc. (Bistro Tapageur), 2017 QCCS 3835 at paras 30-  
34.  
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PAGE: 48  
[239] In fact, Mr. Iczkovits himself put the question in play when he sent a letter to the  
Real Owners on 9 April 2019. On page 2 of that letter, he states:  
In keeping with the Lender’s continuous failure and/or refusal to inform us of  
developments, both of these Orders [the Receivership Order and a previous order  
concerning financing repairs] came about without our effective input. They were  
the products of motions served to us on the eve of the hearings conducted in  
Chicoutimi, depriving us of any realistic chance to digest and determine a course  
of action based on the information alleged by the Lender. In the circumstances, it  
did not make sense to seek to appeal these Orders.91  
[240] The question under objection O-25 is simply a request to elaborate on what Mr.  
Iczkovits already told the group in the passage above, and notably an elaboration on the  
last sentence of the passage.  
[241] Moreover, Mr. Iczkovits continues on the theme when he gets to page 5 of his  
letter, where he states:  
They [Peoples] quickly and aggressively enforced their security on the Property.  
This culminated in a book-length legal motion and over 40 exhibits to the Court for  
appointment of a receiver, served only very briefly before the hearing was  
conducted (and order issued) on September 21, 2018.92  
[242] It is clear that Mr. Iczkovits is complaining about how Peoples conducted itself in  
getting the receivership order. It is relevant then to ask why the order was not contested.  
[243] Objections O-26 and O-27 invoke professional secrecy against questions from the  
Group Plaintiffs-in-Warranty seeking answers about communications with Peoples  
between 2018 and 2020. It seems that because the questions simply mention  
Mr. Iczkovits’s lawyer, Mr. Iczkovits invokes lawyer-client privilege. He also invokes its  
“derivative thereof.  
[244] The latter term was used in the examination at the time the objection was made. It  
was explained during arguments that what was meant by this was litigation privilege and  
settlement privilege. Those two forms of privilege are not derivative of lawyer-client  
privilege, but the Court is willing to consider that the objecting lawyer misspoke and  
actually meant other forms of privilege, not derivative forms of privilege.  
[245] Communications between Mr. Iczkovits’s lawyer and Peoples or its lawyer cannot  
be subject to professional secrecy given that the privilege protects communications  
between the lawyer and his client, not between the lawyer and an adverse party.  
Accordingly, the Court dismisses the objection invoking professional secrecy.  
[246] As for litigation privilege and settlement privilege argued for O-27 during the  
hearing, there is a distinction to be made between the two. It is difficult to see how litigation  
91  
Exhibit AI-12 at 2.  
Ibid at 5.  
92  
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PAGE: 49  
privilege can attach to correspondence between Mr. Iczkovits (or his lawyer) and Peoples  
(or its lawyers). These are parties adverse to each other, they are not preparing for a  
litigation together.  
[247] As for settlement privilege, this may very well attach to correspondence between  
Mr. Iczkovits and Peoples in the 2018-2020 period. Peoples had already sent a demand  
letter to Portage in August 2017. Mr. Iczkovits refers to this in his letter of 9 April 2019 to  
the Real Owners.93 The receivership proceedings occurred in September 2018.  
[248] Mr. Iczkovits specifies on the last page of his letter of 9 April 2019 that the Real  
Owners should consider retaining a separate lawyer since his own lawyer has been  
retained to advise him personally and does not purport to act for anyone else. The  
passage goes on to express the hope that Mr. Iczkovits’s interests and the interests of  
the others remain aligned, thus implying that they may diverge.  
[249] In light of the above, the Court concludes that question under objection O-27 must  
be answered, subject to the caveat that any communications between Mr. Iczkovits (or  
his lawyer) and Peoples (or its lawyers) can be redacted or excluded if it contains  
settlement communications. Accordingly, the objection is maintained in part.  
Jacob Berger  
[250] Like Mr. Iczkovits, Mr Berger is defendant to the lawsuit by Peoples, a plaintiff-in-  
warranty against the Group Defendants-in-Warranty and a defendant-in-warranty against  
the Group Plaintiff-in-Warranty.  
[251] The following questions posed to Mr. Berger are under objection; the entries in  
strikeout having been withdrawn during the hearing:  
Question Objection Undertaking/  
Objection  
Objection  
by  
Avi  
Iczkovits  
(Jacob  
Court’s  
Decision  
by  
No & Page  
O-3  
Question  
Plaintiff  
U-17 I would Litigation  
like a copy of privilege  
any and all Solicitor-  
(p. 64)  
exchanges  
between  
defendants  
regarding the  
drafting,  
commenting  
relating to the  
initial nominee  
agreement,  
Colleague,  
client  
the privilege  
Berger and  
Beneficial  
Owners  
consent to  
communi-  
cation)  
please.  
93  
Ibid at 2.  
500-17-109876-196  
PAGE: 50  
Objection  
Beneficial  
Owners  
O-3  
(p. 10)  
U-40  
-
to Relevance, Jacob  
Berger