The Plaintiff, Falcon Lumber Limited, sought to strike the pleadings of the Lotey Defendants due to their persistent and deliberate failure to comply with numerous court orders for document production and examinations for discovery over a three-year period.
The Lotey Defendants engaged in a "corporate shell game" involving undisclosed security agreements, receivership, and asset transfers to new companies controlled by Mr. Lotey, all while obstructing discovery.
The court found the defendants' conduct to be contumelious, demonstrating a flagrant disregard for the Rules of Civil Procedure and judicial orders.
Consequently, the court struck the Lotey Defendants' pleadings without leave to amend, noted them in default, and allowed the Plaintiff to obtain default judgment.
Additionally, the court awarded full indemnity costs of the motion against the Lotey Defendants' counsel personally, finding counsel complicit in the deliberate delay and obstruction of justice.
