Endorsement
COURT FILE NO.: C-7221/03 and 9435/06
DATE: 20120213
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1239122 Ontario Inc. and Transport Development Inc. and William George Armstrong and William George Armstrong, Estate Trustee for the Estate of George Armstrong, deceased, Plaintiffs
AND:
Randall Russell, Glenn Fuller, 1417338 Ontario Limited and 1447311 Ontario Limited and Leighton Roslyn, Defendants
AND RE: George Armstrong Investments Ltd., George Armstrong and William George Armstrong, Plaintiffs
AND:
Randall Russell, Glenn Fuller, and 1311913 Ontario Inc., Defendants
BEFORE: The Hon. Mr. Justice Robert G.S. Del Frate
COUNSEL:
Michael S. Hebert, Counsel for the Plaintiffs in both Actions
Leighton T. Roslyn, Counsel for the Defendants Russell and Fuller “Ottawa Action”
D. Peter Best, Counsel for the Defendants “Sudbury Action”
HEARD: February 1, 2012
ENDORSEMENT
[1] Today’s attendance was for the purpose of a status hearing on both of these actions referred to as “Sudbury Action” and “Ottawa Action”. However, in the “Sudbury Action”, counsel for the Defendants brings a motion to dismiss the plaintiffs’ action for failure to comply with the undertakings given at the cross examination of William George Armstrong.
Background
[2] On July 31, 2008, William Armstrong was cross-examined on an affidavit and some 29 undertakings were given. As of today’s attendance, six remain outstanding. I propose to deal with them in the order in which they were argued.
No. 4, Page 43
Undertaking requested and given to provide some information as to how much TDI currently owes.
No. 5, Page 60
Undertaking requested and given to provide documentation that relates to the $400,000 loan.
No. 9, Page 72
Undertaking requested and given to look and see what financial records are available that will demonstrate best the financial status of 123 today and to provide same.
No. 10, Page 73
Undertaking requested and taken under advisement to provide the 2007 income tax return for the company.
No. 3, Page 19
Undertaking requested and given to produce copies of all the financial statements done for TDI from 1995 until the year when they were last done and if Mr. Caldwell doesn’t have such records, to make inquiries of Revenue Canada.
No. 26, Page 242
Undertaking requested and given to waive solicitor/client privilege with respect to the trust.
Positions of the Parties
[3] The defendants submit that the plaintiffs have had sufficient time to comply with the undertakings yet, they have not done so in spite of the Orders of Justice Tranmer in May 2008 and my Order of December 2011.
[4] The defendants allege that the plaintiffs have been cavalier in obtaining the information and that the answers provided on the last day permitted, are either non-answers or a total failure to comply with the undertakings. Accordingly, because of such irresponsible actions, the plaintiffs’ action ought to be dismissed.
[5] Counsel for the plaintiffs candidly admits that his clients may not have been as diligent as they could have been. However, substantial compliance has been made and thus their action ought not to be dismissed. As well, much of the information that is requested is not relevant to the issues that will eventually be determined at trial.
Discussion
[6] I agree with the defendants’ position that the plaintiffs have not been diligent in complying with the undertakings. I also agree with the defendants’ positions that the attempted compliance is more in the nature of non-answers to the undertakings.
[7] I do not accept the plaintiffs’ contention that failure to comply with the undertakings is irrelevant since the undertakings dealt with parties that are no longer included in these proceedings.
[8] Although the actions by TDI and 123 have been dismissed, the plaintiff William Armstrong is still advancing a personal claim whereby he alleges that any losses sustained by those companies are in fact his personal losses as a share holder of those companies. Accordingly, in my view, compliance is not only relevant, but material. Therefore, I conclude that undertakings 4 and 5 have not been answered.
[9] Undertakings 9, 10 and 26 deal with providing financial records and income tax returns as well as particulars of a trust that was set up by Mr. Mastin. I find that with some effort, those undertakings could have easily been fulfilled. For whatever reasons, Mr. Armstrong chose not to proceed in a diligent fashion, and thus, these undertakings have not been fulfilled.
[10] Likewise, with undertaking number 3, a diligent and timely effort to obtain that information could have obtained fulfilment of the undertaking.
[11] In summary, in my view none of the outstanding undertakings have been fulfilled.
Remedies
[12] Rule 60.12 states:
Where a party fails to comply with an interlocutory order, the court may in addition to any other sanction provided by these rules,
a) stay the party’s proceeding;
b) dismiss the party’s proceeding or strike out the party’s defence; or
c) To make such other order as is just.
[13] The defendants submit that this case is similar to the fact of Vacca v. Banks & Starkman , [2005] O.J. No. 147 , and thus, the plaintiffs’ action ought to be dismissed. In that case, Master Birnbaum dismissed the plaintiffs’ action for repeated non-compliance with court orders. On appeal, Ferrier J. upheld the decision stating that the non-compliance not only affected the parties, but significantly increased the cost of the administration of justice due to the impact on administrative and judicial resources.
[14] This case has been outstanding for a considerable time and numerous court proceedings have taken place. All parties have brought motions and cross-motions and appeals and unfortunately not much progress has been made towards proceeding to trial or attempting to resolve the issues.
[15] In my view, dismissing the plaintiffs’ action at this stage would not be a reasonable result. However, some sanctions must be imposed in view of Mr. Armstrong’s conduct.
[16] In my view, the defendants are prejudiced since the information requested is relevant and material to the defendants’ defence. Accordingly, because of the non-compliance, I rule that the plaintiffs are precluded from advancing at trial any evidence of damages that was sustained by either TDI or 123. Further, the plaintiffs Armstrong, are precluded from advancing any claim that they allege resulted from the losses sustained by TDI and 123.
[17] Should this Endorsement need clarification on what actions are precluded by the plaintiffs, the parties may address me at the Status Hearing.
[18] Further, should the issue of costs require an attendance, then the parties may make arrangements through the trial coordinator’s office within the next 30 days.
Mr. Justice Robert G.S. Del Frate
Date: February 13, 2012