|
Civil Litigation Dicta - Non-Compliance with Rules [RCP 2]. Rimon v. CBC Dragon Inc.
In Rimon v. CBC Dragon Inc. (Ont CA, 2024) the Court of Appeal considered (and dismissed) an appeal against an order striking defence pleadings in response to non-compliance with document discovery undertakings:[12] Applying the principles and factors set out in Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors), 2020 ONCA 310, the motion judge found that the appellants had not provided any reasonable explanation for their non-compliance to date and there was no evidence that their failure to comply was inadvertent or based on a lack of understanding of their obligations. Given the relevance of the transaction records to the central issue of “what happened to the money”, he concluded that the appellants’ non-compliance was not “immaterial or minimal and clearly ha[d] an impact on the ability of the court to do justice in this particular case.” He observed that, given finite court resources, failure to comply with disclosure obligations impacts not only the just and expeditious determination of this case, but other pending matters.
[13] The motion judge concluded that striking the appellants’ statement of defence and counterclaim, without leave to amend, was an appropriate and proportionate remedy in the circumstances.
...
[19] ... They further contend that striking a pleading is not a remedy available for the failure to answer undertakings, citing Newlove v. Moderco Inc., 2002 CanLII 34748 (Ont. S.C.).
[20] Given the history of the litigation, it was open to the motion judge to reject Mr. Chan’s evidence that he only belatedly realized that he could not answer some of the undertakings given. This explanation for the appellants’ non-compliance was entirely new and, as noted by the motion judge, stood “in complete contrast to the position [the appellants] [had] maintained throughout over the last period of approximately two years, to the effect that they understood exactly what was required and were working diligently on it, but simply required more time.” The motion judge further observed that the appellants had not, as one would have expected, “put forward any evidence of good faith efforts and due diligence to obtain, for example, documents from third parties such as banks or other financial institutions.”
[21] Newlove does not stand for the proposition that striking a pleading is never a remedy available for a failure to answer undertakings. Rules 30.08(1) and (2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 give the court wide discretion to impose remedies where a party fails to disclose or produce a document or serve an affidavit of documents as required by the Rules or by a court order. Rule 30.08(2) specifically contemplates an order to strike a pleading, and both Rules empower the court to make any order “as is just”. At para. 21 of Newlove, Wein J. held that dismissal of an action should be granted only exceptionally but that “the matter of the scope of the remedy is one within the discretion of the Court, to be determined in the context of the particular case.”
[22] Newlove concerned a motion at the outset of trial seeking to dismiss an action for the plaintiff's failure to comply with undertakings or in the alternative to preclude the plaintiff from relying on certain documents at trial. There was no prior court order. In this case, the appellants’ conduct includes not only a failure to answer undertakings but to comply with multiple court orders. Rule 60.12(b) explicitly provides that the court may strike out a party’s defence where a party fails to comply with an interlocutory order.
....
[25] I cannot fault this reasoning. The Rules are intended to ensure that parties to civil suits disclose all relevant information in a timely manner at all stages of a proceeding. A party’s failure to comply with their disclosure obligations increases the costs of litigation and frustrates the opposing party’s ability to move the proceeding forward. The Falcon Lumber principles apply even more forcibly when a party fails to disclose records when repeatedly ordered by the court to do so within a specific deadline. In such a case, the defaulting party does not simply delay or prevent an adjudication on the merits but undermines the court’s authority.
[26] The motion judge applied the correct principles of law and evaluated the record before determining that the order sought by the respondents was just. As observed in Falcon Lumber, at para. 73, citing Starland Contracting Inc. v. 1581518 Ontario Ltd., 2009 CanLII 30449 (ON SCDC), 252 O.A.C. 19 (Div. Ct.), at para. 26:The authority to dismiss proceedings for repeated failure to comply with court orders and flagrant disregard for the court process is an essential management tool. A case management judge or master who has a continuous connection with an action, the parties and their counsel is well-positioned to monitor the conduct of the participants throughout the proceedings, and to determine whether anyone is deliberately stalling, showing bad faith or abusing the process of the court when deadlines are missed and defaults occur under procedural orders. [27] I agree that the appellants’ failure to comply with the successive orders of the court to disclose critical records and information, including a final “last chance” order, opened the door to the exceptional discretionary order made here.
|
