SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-09-4731-00
DATE: 20120329

RE:

Meloro Restaurants Ltd., William Boxberger, Lorraine Boxberger,
Meredith Boxberger and Brandon Boxberger

v.

Little Caesar of Canada Inc., Richard Greville and Kenneth Mills

BEFORE: MacKenzie J.

COUNSEL:
B. Hanuka, for the plaintiffs
D. Ronde, for the defendants

HEARD: March 21, 2012

E N D O R S E M E N T

Introduction

[ 1 ] The defendants move for the following orders:

(1) striking the plaintiffs’ motion to compel the production of documents from non-parties, Malik Restaurants (Newmarket Inc.), Malik Restaurants (Richmond Hill Inc.) and Mr. Chad Curtis, hereinafter referred to as the “Curtis Parties.” The Curtis Parties are not parties to this action.

(2) quashing the plaintiffs’ summons to witness served upon Mr. C. Curtis for examination under rule 39.03.

[ 2 ] The defendants wish to strike the plaintiffs’ motion for the production of documents from the Curtis Parties on the basis the plaintiffs have no standing to bring their documentary production motion having served a trial record and having set the matter down for trial. In this regard, rule 48.04(1) of the Rules of Civil Procedure (the Rules ) requires the plaintiffs to seek and obtain leave of the court to bring among other things a motion for production from non-parties and they have failed to do so.

[ 3 ] In the context of moving to quash the plaintiffs’ summons to witness served on Mr. Curtis, the defendants base their motion on two grounds, namely:

i. the plaintiffs have incorrectly sought to examine Mr. Curtis in Toronto instead of his county of residence being the Regional Municipality of York, as stipulated under rule 34.03 of the Rules ;

ii. the proposed examination of Mr. Curtis is an alleged abuse of process on the basis that through the summons directed to him, the plaintiffs are seeking production of documents that are in essence the subject of their motion for production of documents founded on rule 30.10.

[ 4 ] The plaintiffs move for the following orders:

(1) dismissing the motion of the defendants to strike the plaintiffs’ motion for production of documents from the Curtis Parties;

(2) production of the documents by the Curtis Parties of documents sought in the plaintiffs’ notice of motion per rule 30.10 of the Rules ;

(3) Mr. Curtis to attend an examination in accordance with the summons to witness directed to him.

Background

[ 5 ] The defendant, Little Caesar of Canada Inc., is an Ontario business corporation which carries on the business of franchising take-out pizza and Italian food restaurants.

[ 6 ] The plaintiffs own and operate a restaurant in Newmarket, Ontario as a franchisee of Little Caesar of Canada Inc.

[ 7 ] In 2009, approximately one year after they opened their Little Caesar franchised restaurant in Newmarket, the plaintiffs began this action, claiming among other things that the defendants breached their disclosure obligations under the Wishart Act, 2000. The defendants deny these allegations and have entered a statement of defence accordingly.

[ 8 ] The non-parties Malik and Curtis operate another restaurant in Newmarket, where the plaintiffs’ restaurant is located, under the same Little Caesar franchise. The plaintiffs allege breach by the franchisor, Little Caesar of Canada Inc., of their franchise agreement. The essence of the alleged breach is that the franchisor failed to disclose to the plaintiffs that Malik had been marketing and advertising its services and implementing delivery of pizza product to residence in the plaintiffs’ franchise territory before and after the plaintiffs’ had obtained their franchise.

[ 9 ] The following are the salient points in the conduct of the litigation giving rise to these motions:

(1) The representative of Little Caesar of Canada Inc., the defendant Richard Greville (Greville), was examined for discovery in his capacity as representative of Little Caesar and on his own behalf on or about September 21, 2010. In the course of his examination, various undertakings were given, some questions were taken under advisement and other questions resulted in refusals relating to documents in the possession of Little Caesar and his personal possession.

(2) The plaintiffs served and filed a trial record on or about October 7, 2010 for the purpose of setting the matter down for trial.

(3) In furtherance of setting the matter down for trial, the plaintiffs on or about February 14, 2011 submitted a Report of Counsel/Party indicating that the plaintiffs were ready for trial.

(4) On or about February 28, 2011 a pre-trial was scheduled for July 6, 2011 with a trial date scheduled for sittings in September 2011.

(5) At the pre-trial conference on July 6, 2011, the presiding judge (van Rensburg J.) directed the parties to attend before court on October 24, 2011 for the purpose of scheduling a long trial in the year 2012.

(6) The undertakings given on the Greville examination for discovery were answered by the defendants in or about January 2011 and the refusals were answered in September 2011. At that time, there were no outstanding requests for documents in relation to the Curtis Parties and the plaintiffs brought no further motions or sought further relief from the defendants pursuant to the Rules .

The Issues

(1) Should the plaintiffs’ motion for production of documents from the Curtis Parties be struck?

(2) Should the plaintiffs’ summons to witness, served upon Mr. Curtis be quashed?

Analysis

[ 10 ] The positions of the moving and responding parties have been previously stated in paragraphs 2, 3, and 4. The relief being sought by the defendants and the opposition to such relief by the plaintiffs engages rule 48 of the Rules .

[ 11 ] The specific subrules that are engaged in the motions are: rules 48.01 and 48.04(1).

[ 12 ] Rule 48.01 provides:

WHEN AND BY WHOM ACTION MAY BE SET DOWN FOR TRIAL

48.01(1) After the close of pleadings, any party to an action or to a counterclaim or crossclaim in the action who is not in default under these rules or an order of the court and who is ready for trial may set the action down for trial, together with any counterclaim or crossclaim.

[ 13 ] Rule 48.02(1) provides that:

... a party who wishes to set a defended action down for trial may do so by serving a trial record on every party to the action. (paraphrased)

[ 14 ] The pertinent provisions of rule 48, in the context of the present motion, are found in rule 48.04(1) which provides as follows:

48.04 (1) Subject to subrule (3), any party who has set an action down for trial and any party who has consented to the action being placed on a trial list shall not initiate or continue any motion or form of discovery without leave of the court. (emphasis added)

[ 15 ] The case law interpreting rule 48.04(1) establishes that setting a matter down for trial is not a mere technicality and that relief from the clear and unequivocal language of prohibition in rule 48.04(1) will be granted only in the most limited instances.

[ 16 ] In Hill v. Ortho Pharmaceutical (Canada) Ltd. [1992] O.J. 1740 (Gen. Div.) , E. MacDonald J. summarized the authorities in the following words:

The authorities make it clear that setting a matter down for trial is not a mere technicality of procedure. Before it can be vacated to prevent any further discovery or other interlocutory proceedings, there must be a substantial or unexpected change in circumstances such that a refusal to make an order under S. [sic] 48.04(1) would be manifestly unjust.

[ 17 ] The above concept has been adopted and amplified in numerous decisions since 1992.

[ 18 ] In White v. Winfair Management Ltd. [2005] O.J. No. 1542 (Master Dash) , the court interpreted the words “any form of discovery” found in rule 48.04(1), in the following language:

Once a party has delivered a trial record he is bound by the provisions of rule 48.04(1) which provides that “any party who has set an action down for trial ... shall not initiate or continue any motion or form of discovery without leave of the court.” ... The phrase “any form of discovery” includes documentary discovery. This is confirmed by rule 1.03(1) which defines “discovery” as includes discovery of documents, examinations for discovery ... as provided under rules 30-33.

As a result, once a party files a trial record he is prohibited from bringing any motions, conducting an examination for discovery or compelling discovery of documents without leave of the court. A party therefore generally does not file a trial record until he is satisfied that he does not need to conduct any or any further oral examination for discovery, is satisfied there is no need to pursue any questions refused at examination for discovery, has received the opposing party’s affidavit of documents and is satisfied that all relevant documents have been produced and that no claim for privilege is unfounded: See paragraphs 12 and 13. (Emphasis added)

[ 19 ] The basic answer to the position of the plaintiffs in responding to the defendants’ motion is that they have failed to seek leave under rule 48.04(1) to bring their motion for production of the Curtis Parties’ documents. However, even if the absence of a formal motion by the plaintiffs for leave would be excused by the court, the plaintiffs have failed to establish that there has been a substantial or unexpected change in circumstances such that a refusal by the court to grant leave would be manifestly unjust. The relief being sought by the plaintiffs is not within the stipulated exceptions in rule 48.04(2) and the plaintiffs have led no evidence on the motion that there has been a substantial or unexpected change in circumstances.

[ 20 ] The plaintiffs argue strenuously that the conduct of the Curtis Parties as competing franchisees relates directly to the plaintiffs’ claims in the action and is evidence crucial to the just disposition of the plaintiffs’ claims. In this regard, the plaintiffs rely heavily on the provisions of rule 31.10 wherein the court is empowered to grant leave where there is reason to believe such person has information relevant to a material issue in the action.

[ 21 ] This rule does not preempt the operation of rule 48.04 relating to the consequences of setting an action down for trial. It appears the plaintiffs made a tactical decision in setting the action down for trial before pursuing any concerns or lines of inquiry as to the evidence from the Curtis Parties: in the plaintiffs’ factum page 4, paragraph 17, counsel states:

It is submitted that the plaintiffs rightly proceeded, in the interest of time and efficiency to set the matter down for trial in the fall of 2010 rather than having the matter drag out for another year while answers to the undertakings and refusals were being dealt with.

[ 22 ] This exception relating to outstanding undertakings and refusals differs to a significant extent from the nature of the discovery of the non-party Mr. Curtis and production of documents from him that is the subject of the relief being sought by the plaintiffs’ herein.

[ 23 ] The courts have stated that delays in obtaining a trial date do not justify setting a case down for trial before the completion of discovery: a motion for leave under rule 48.04(1) was denied on the basis that to permit leave in those circumstances would be countenancing, a form of “queue-jumping”: see LML Investments Inc. v. Choi , (2007) 2007 8926 (ON SC) , 85 O.R. (3d) 351 (Ont. S.C.J.).

[ 24 ] For the foregoing reasons, the defendants’ motion to strike the plaintiffs’ motion for documentary production by the Curtis Parties is granted.

[ 25 ] I will deal now with the plaintiffs’ motion to examine Mr. Curtis.

[ 26 ] As noted above, the summons is in non-compliance within the provisions of rule 34.03 which stipulates that the place for examination of a party in Ontario shall be the county in which that proposed examinee resides unless all parties have agreed including the party being examined or the court orders otherwise. There is no question that the summons is directed to examine Mr. Curtis in the Toronto Region whereas he resides in Keswick, in the Regional Municipality of York. In the absence of an agreement of the parties or any court order directing otherwise, the place for Mr. Curtis’ examination is in the Regional Municipality of York and not Toronto region and accordingly the summons may be struck on this ground alone.

[ 27 ] The defendants also argue that the plaintiffs are, through the proposed examination of Mr. Curtis as a non-party to the action, seeking to obtain production of documents that would otherwise have been the subject of their motion under rule 30.10 and that such tactics should also be regarded as an abuse of process. It is unnecessary to dispose of the defendants’ motion to quash the summons on the ground of abuse of process since the subject summons directs the examination of Mr. Curtis in Toronto Region. The summons being in non-compliance with rule 34.03, it must be quashed.

Disposition

[ 28 ] Orders shall issue striking the plaintiffs’ motion to compel the production of documents from the Curtis Parties and quashing the plaintiffs’ summons served upon Mr. Curtis.

[ 29 ] The costs of this motion shall be the subject of written submissions in the format and on the schedule set out below:

• written submissions not to exceed four pages in length, excluding supporting materials;

(1) by the defendants within 14 days of the date of issuance of this endorsement;

(2) responding submissions by the plaintiffs within 10 day of their receipt of the submissions of the defendants; and

(3) reply, if any, by the defendants within seven days of their receipt of plaintiffs’ responding submissions.

MacKenzie J.

DATE: March 29, 2012

COURT FILE NO.: CV-09-4731-00
DATE: 20120329

SUPERIOR COURT OF JUSTICE - ONTARIO RE: Meloro Restaurants Ltd., et. al . v. Little Caesar of Canada Inc., et. al. BEFORE: MacKenzie J. COUNSEL: B. V. Hanuka, for the plaintiffs D. Ronde, for the defendants HEARD: March 21, 2012 ENDORSEMENT MacKenzie J.

DATE: March 29, 2012