SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 10-CV-399368

MOTION HEARD: September 7, October 24 and December 7, 2012

Between:

Geoff & Krista Sims Enterprises
Inc. c.o.b. Wilkinson Chutes Canada

Plaintiff

v.

Waste Solutions Group Inc. and
Jason Tower

Defendants

BEFORE: Master Thomas Hawkins

APPEARANCES:

Peter Henein for moving plaintiff
Fax: (647) 259-7974

Brian Skolnik for responding defendants
Fax: (416) 865-6636

No one for other parties

REASONS FOR DECISION

[1] In this action for alleged infringement by the defendants of the plaintiff’s registered trademark “Wilkinson” the plaintiff moves under rule 60.12 for an order striking out the defendant’s statement of defence for failure of the defendants to comply with the consent order of Master Dash made in this action July 21, 2011 (the “Consent Order”).

[2] Rule 60.12 provides as follows.

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) make such other order as is just.

[3] The Consent Order is an interlocutory order.

[4] The events leading up to the Consent Order include the following.

[5] The defendant Jason Tower (“Tower”) swore the affidavit of documents of the defendant Waste Solutions Group Inc. (“Waste Solutions”). Tower also swore his own affidavit of documents. The Waste Solutions affidavit of documents listed 12 documents in Schedule “A”. Tower’s own affidavit of documents did not list any documents in Schedule “A”.

[6] Neither the Waste Solutions affidavit of documents nor that of Tower states that any relevant documents have been lost or destroyed.

[7] Plaintiff’s counsel examined Tower for discovery on December 15, 2010. During his examination Tower gave 30 undertakings, refused to answer 17 questions and took 13 questions under advisement. When Tower delayed in answering his undertakings and defence counsel failed to respond to several letters from plaintiff’s counsel, plaintiff’s counsel brought a motion to compel answers to Tower’s undertakings and other relief. The motion was returnable on July 21, 2011. On July 19, 2011 defence counsel delivered purported answers to Tower’s undertakings and answers to some of the questions which Tower took under advisement.

[8] This was followed by negotiations between counsel which led to the terms of the Consent Order on July 21, 2011.

[9] Although the Consent Order dealt with subjects in addition to the production of documents by the defendants, that subject is central to the plaintiff’s complaints in this motion. The Consent Order required the defendants to produce

(1) for inspection by counsel only, those documents referred to in numbers 2, 5 and 12 of the list of under advisements, specifically being:

(i) all of the proposals or quotes that are in Waste Solutions’ possession;

(ii) the specifications for projects that Waste Solutions’ is doing work for; and

(iii) for the 15 or less projects that the defendants have been awarded since 2003 related to linen and garbage chutes, all specification documents, proposals, invoices, payment information, and any other documents similar to the document requests asked for with respect to the Anson House and Castle Arms House projects;

(2) for inspection by counsel only, those documents referred to at numbers 5, 8, 10, 11, 12, 13 and 14 of the list of refusals, specifically being:

(iv) all of the documents relating to the projects that were worked on by the defendants;

(v) all customer lists, client names, invoices and any marketing efforts of Waste Solutions and Tower with respect to any products sold from 2003;

(vi) all sales records from 2003 onwards, whether in hard copy or electronic format;

(vii) all sales information relating to garbage or linen chutes, parts or serving parts from 2003 onwards;

(viii) all records for all garbage chutes, linen chutes, and, to the extent that they are sold, doors or service provided with respect to the doors of the chutes, from 2003 onwards;

(ix) all records of service completed on any projects where the defendants have installed garbage or linen chutes or doors; and

(x) records of all replacement doors sold by the defendants;

(3) all documents identified and agreed upon by counsel upon inspection as relating to the bid for, installation, replacement, service or sale of Wilkinson products; and

(4) all general ledgers, trust statements, accounts receivables, however they are calculated or recorded and financial statements for all bids, installation, replacement, service and sale of any Wilkinson products, as identified by counsel in paragraph (iii) above.

[10] The Consent Order also required the defendants to answer Tower’s refusals numbered 1, 2, 3, 4, 7, 16 and 17, specifically being to;

(1) advise who Tower spoke to, other than his counsel, in order to prepare for the examination for discovery;

(2) advise of the particulars of any discussions Tower had with rob Sinopoli of Waste Solutions with respect to preparing for the examination for discovery;

(3) produce a comprehensive list of all products, whether doors, chute doors, latches, etc. purchased from any of the Wilkinson U.S. companies by Waste Solutions, Aqua-Jett or any of the related companies that amalgamated from 2003 to today; and

(4) produce a summary of all products purchased, in terms of categories, from the U.S. Wilkinson companies from 2003 to the present.

[11] Plaintiff’s counsel wrote to defence counsel several times to arrange a time and place for plaintiff’s counsel to inspect the documents which the defendants produced in order to comply with the Consent Order. This led to further defence foot dragging.

[12] Finally, arrangements were made for plaintiff’s counsel to inspect the documents which the defendants produced in purported compliance with the Consent Order on the afternoon of October 31, 2011. The inspection did not take very long. All the defendants produced were eight single page invoices, none of which related to a time period relevant to this action. No one was made available to explain why this was all that was produced in response to the Consent Order.

[13] That state of affairs led to the present motion. Although the motion was originally returnable on April 16, 2012 it was adjourned to enable the parties to conduct cross-examinations. Initially the defendants expressed a desire to cross-examine Stephanie Mills on two affidavits which she swore in support of this motion. In the end they never cross-examined her.

[14] Tower swore a two page affidavit on April 13, 2012 in response to this motion. In that affidavit he swore that in response to the Consent Order he had the operations manager and the office manager of Waste Solutions conduct what he described as a lengthly and extensive search for the files ordered produced. In addition Tower swore that he conducted his own search. Tower says all they found were the eight invoices described above in paragraph [12].

[15] When cross-examined, Tower admitted that the searches he referred to in his affidavit were not made in order to comply with the Consent Order. They were made in 2010 shortly after this action was commenced. In essence, no search was conducted in order to comply with the Consent Order.

[16] When Tower swore this affidavit on April 13, 2012 he was clearly in error under oath. This error cannot have been an innocent one.

[17] In addition, when Tower was cross-examined he conceded that the accountant and the bookkeeper for Waste Solutions may have many documents relevant to the Consent Order but that he has never spoken to them in order to obtain documents so as to comply with the Consent Order.

[18] Tower says in his affidavit that some relevant documents may have been inadvertently lost when Waste Solutions moved offices in 2010. He also says that a disgruntled former employee of Waste Solutions may have destroyed relevant documents.

[19] These statements are sheer speculation.

[20] In summary, the defendants have done nothing to comply with the Consent Order.

[21] I decline to strike out the defendants’ statement of defence at this time. I will give the defendants a further 30 days to comply with the Consent Order. The defendants should regard this as their last chance to avoid having their statement of defence struck out.

[22] I made this last chance order subject to the following terms.

(a) The defendants are within 30 days jointly and severally to pay the plaintiff the costs of this motion on a substantial indemnity basis fixed at $18,000; and

(b) With 60 days the defendants are to post security in the sum of $70,000 for the payment of any costs of this action which this court may order the defendants or one of them to pay to the plaintiff.

Master Thomas Hawkins

DATE: March 27, 2013