Executive Summary: Key Legal and Evidentiary Issues

• Bombardier sought leave under Rule 39.02(2) of the Rules of Civil Procedure to file a supplementary affidavit after cross-examinations had already taken place on IPACO’s motion for summary judgment.
   
• At the core of the underlying action is IPACO’s claim for unpaid commissions under a Sales Representative Agreement dated October 14, 2015.
   
• Section 3.4 of the agreement, which Bombardier says bars payment of commissions until it can confirm they would not contravene the agreement or any applicable laws or regulations, featured in the court’s finding that the new evidence was relevant.
   
• Potential corruption concerns raised by Airbus, following discussions with the U.S. Department of Justice, formed the subject matter of the supplementary evidence.
   
• All four criteria of the test in First Capital Realty Inc. v. Centrecorp Management Services Ltd. were found to be met.
   
• Questions about the weight to be given to the affidavit, including hearsay concerns, were left to the judge hearing the summary judgment motion.
   

Facts of the case

IPACO Consult is an Egyptian company that provides consulting, sales and marketing services in the aviation industry. Bombardier Inc. is a Canadian public company engaged in, among other things, the design, manufacture, marketing and sale of aircraft. The two are parties to a Sales Representative Agreement (SRA) dated October 14, 2015. IPACO alleges it is owed commission for work performed under that agreement.

IPACO issued its statement of claim on January 19, 2021, and Bombardier’s statement of defence is dated June 1, 2021. In its amended statement of claim of May 31, 2023, IPACO seeks four amounts: USD $10,000,000 for breach of contract and/or unjust enrichment and/or quantum meruit, USD $10,000,000 for breach of the duty of good faith, USD $5,000,000 in punitive damages, and USD $300,000 for the costs of an audit. On June 12, 2023, Bombardier amended its defence to, among other things, counterclaim for its costs incurred in performing the audit. IPACO’s reply and defence to counterclaim is dated September 6, 2023.

On June 27, 2025, IPACO served a motion record for summary judgment. It sought USD $10,000,000 in damages, USD $5,000,000 in punitive damages, USD $300,000 for audit costs, and dismissal of the counterclaim. Bombardier served its responding record on August 29, 2025, and cross-examinations were held on December 17, 2025. IPACO served its moving factum on March 27, 2026, and Bombardier served its responding factum on May 26, 2026. That same day, Bombardier also served a supplementary responding motion record. It consists of a three-page affidavit, without exhibits, from law clerk Elizabeth Ford, affirmed May 26, 2026. IPACO advised the same day that it did not consent to its delivery.

The parties attended Civil Practice Court on May 27, 2026. The summary judgment motion was scheduled for a one-day hearing on February 9, 2027, and the parties were told they could seek an urgent hearing of a motion for leave to file the supplementary affidavit. Bombardier brought that motion, which was heard on September 21, 2026. IPACO opposed it.

Policy and legislative provisions at issue

Rule 39.02(2) applies to a party who has cross-examined on an adverse party’s affidavit. That party may not later deliver an affidavit for use at the hearing, or conduct an examination under rule 39.03, without leave or consent. The court must grant leave, on just terms, where it is satisfied that the party should be permitted to respond to a matter raised on the cross-examination with evidence in the form of an affidavit or a rule 39.03 examination transcript. Rule 1.04 adds the overriding principle that the rules are to be interpreted liberally to ensure a just and timely resolution of the dispute.

On the contract side, Bombardier relies on section 3.4 of the SRA. As Bombardier frames it, no commissions are payable unless and until it can confirm that such payments would not contravene the SRA or any applicable laws or regulations.

Reasoning and analysis

The court applied the four questions set out by the Divisional Court in First Capital Realty:

1. Is the evidence relevant?
2. Does it respond to a matter raised on cross-examination, not necessarily for the first time?
3. Would granting leave cause non-compensable prejudice?
4. Did the moving party reasonably explain why the evidence was not filed at the outset?

That test calls for a flexible, contextual approach. The court also cited Shah v. LG Chem, Ltd., 2015 ONSC 776, where leave under the rule is described as something to be “granted sparingly,” with a “very high threshold” for the moving party.

The court found the evidence relevant in light of the parties’ competing positions. IPACO alleges breach of the SRA through a failure to pay commissions it claims. Bombardier, in turn, points to section 3.4 and to concerns identified by Airbus, with which it had entered into investment and acquisition agreements. On March 8, 2023, Airbus told Bombardier it needed additional information and documents about IPACO to conduct an independent review of IPACO and potential corruption issues. Airbus said this request took into account discussions with the U.S. Department of Justice’s Foreign Corrupt Practice [sic] Act Unit. Bombardier argues that issues requiring a trial arise, including whether those concerns engage potential breaches of the SRA or applicable legal and regulatory frameworks, and whether they preclude payment until resolved. Ford’s affidavit adds evidence about the nature of those alleged potential corruption issues.

As for the second criterion, IPACO’s counsel had cross-examined Bombardier’s witnesses, Ms. Panetta and Ms. Cardillo, on the existence of the DOJ investigation and their personal knowledge. On the third, the court found that granting leave would not cause non-compensable prejudice. Bombardier had consented to IPACO cross-examining Ford and, if necessary, delivering reply evidence, and enough time remained before the hearing to do so.

The court accepted Bombardier’s explanation for the timing. Bombardier had written to Airbus on June 13, 2025 and August 28, 2025 requesting particulars, but Airbus did not identify specific “preliminary red flags” until May 25, 2026. The affidavit was affirmed and served the following day. Applying a contextual approach and having regard to Rule 1.04, the court concluded that granting leave was in the interests of justice. On the separate question of weight, including hearsay, the court agreed with Bombardier’s submissions based on James v. Chedli, 2018 ONSC 2559. Those issues were left to the judge hearing the summary judgment motion.

Ruling and overall outcome

Bombardier succeeded on the motion. It was granted leave to deliver Ford’s affidavit, affirmed May 26, 2026, for use at the hearing of IPACO’s summary judgment motion. The parties agreed that the successful party would be entitled to costs of $35,000, all-inclusive. Consistent with that agreement, the court fixed costs on consent in that amount, payable by IPACO to Bombardier. The endorsement is dated October 2, 2026. IPACO’s claims and its request to dismiss the counterclaim remain to be addressed at the summary judgment hearing set for February 9, 2027.