Court File and Parties

COURT FILE NO.: CV-10-1236 DATE: 2013/04/24

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: MAPLE INDUSTRIES INC. (Plaintiff) - and - UNIMAC GROUP LTD., LEON HUI, KEN TSUI, WILL CHEUNG and CLEO HUI (Defendants)

BEFORE: JUSTICE L. C. LEITCH

COUNSEL: Kyle MacLean, for the Plaintiff Justin P. Baichoo, for the Defendants

HEARD: March 19, 2013

ENDORSEMENT

[1] The plaintiff brought a motion in which it contended that the defendant Leon Hui was in contempt of the litigation timetable order of Rady J. dated November 16, 2012.

[2] The plaintiff sought an order permitting it to move without notice for judgment if the litigation timetable order was not complied with and if the parties did not attend for examination for discovery in accordance with the agreement reached at the hearing of the motion.

[3] At the hearing of the motion, I indicated that I was not inclined to make an order that would deprive the defendants of notice. The remaining issue was related to the issue of costs.

[4] The defendants submit that the plaintiff’s motion was ultimately unnecessary and seek their costs of the motion.

[5] In contrast, the plaintiff submits that the defendants have continually delayed the progress of the action. Plaintiff’s counsel endeavoured to settle the motion without any attendance on behalf of Mr. Hui and “earnestly” tried to obtain a consent order, but this could not be accomplished. As a result, the plaintiff seeks its costs.

[6] In order to resolve the competing claims for costs, it was necessary to review the materials filed on the motion. I set out the following pertinent details:

TIMELINE OF KEY EVENTS

May 11, 2010 – Plaintiff commences action against Unimac for unpaid supplies and against Unimac and Mr. Hui for breach of trust.

March 23 – June 8, 2011 – Plaintiff moves for summary judgment against Unimac and Mr. Hui. Summary judgment is granted against Unimac for non-payment, but dismissed against Unimac and Mr. Hui for breach of trust, in reasons released June 8, 2011.

July 4, 2011 – Unimac files Notice of Appeal of summary judgment. The plaintiff decides to await the results of the appeal to determine whether it should proceed to trial against one or both of the defendants on the breach of trust issue.

July 10, 2012 – Plaintiff receives a Status Notice from the court advising that its action will be dismissed for delay shortly.

September 28, 2012 – Unimac’s appeal of the summary judgment is dismissed by the Court of Appeal as a result of Unimac failing to perfect its appeal in time.

September 28 – October 1, 2012 – Mr. MacLean writes to the London Trial Co-ordinator requesting a status hearing for the action. He is advised of available status hearing dates on October 16, November 16, and December 21, 2012 and informed that the action will be dismissed on October 14, 2012 for delay.

October 2, 2012 – Mr. MacLean writes to defence counsel requesting consent to the filing of a litigation timetable pursuant to Rule 48.14(11) in an attempt to avoid automatic dismissal of the action.

October 3, 2012 – Unimac and Mr. Hui serve a Notice of Change of Lawyers appointing Mr. Baichoo as their new counsel.

October 4, 2012 – Mr. MacLean writes to Mr. Baichoo requesting his consent to the litigation timetable, including a draft consent and order. The proposed litigation timetable contemplates exchange of affidavits of documents and productions by December 31, 2012, completion of examinations for discovery by April 1, 2013, and any undertakings and refusals motions completed by July 15, 2013.

October 4, 2012 – Mr. MacLean speaks to Mr. Baichoo’s assistant who advises that Mr. Baichoo is out of the office until October 9, 2012 and will not be able to respond to the proposed litigation timetable until that date. This delay makes it necessary for Mr. MacLean to bring a motion for an extension of time and to have that motion returnable before the October 14 automatic dismissal date.

October 5, 2012 – Mr. MacLean serves motion record for an extension of time, along with draft consent and a proposed litigation timetable order, on Mr. Baichoo.

October 9, 2012 – Hockin J. orders the automatic dismissal of the action be extended to December 21, 2012 to give the plaintiff time for a status hearing. Mr. MacLean sends a copy of Hockin J.’s order to Mr. Baichoo by e-mail, with another copy of the draft consent and timetable order, and advises that, unless an agreement is reached on the timetable, the plaintiff would request a status hearing for November 16, 2012.

October 12, 2012 – Mr. Baichoo responds that the defence cannot consent to anything without reviewing the clients’ file in its entirety.

October 14, 2012 – Mr. MacLean requests an anticipated date for when Mr. Baichoo will have received and reviewed the defendants’ file and be prepared to respond to the plaintiff’s position.

October 16, 2012 – Mr. Baichoo informs Mr. MacLean that Unimac and Mr. Hui’s former counsel is away for two weeks and that delivery of the file will be arranged upon his return (the week of October 29, 2012).

October 18, 2012 – Mr. MacLean receives a Notice of Status Hearing for October 19, 2012. He e-mails a copy of the Notice of Status Hearing, together with a copy of the letter requesting the hearing to Mr. Baichoo, and advises that he will attend on October 19 and request an adjournment to the following month if Mr. Baichoo consents.

October 18, 2012 – Mr. Baichoo provides consent to adjournment by response e-mail.

October 19, 2012 – Mr. Baichoo’s computer server is replaced. Further correspondence from plaintiff’s counsel is redirected to the ‘junk mail’ folder.

October 19, 2012 – Mr. MacLean e-mails Mr. Baichoo advising that the new date for the status hearing would be November 16, 2012 and asking whether he would consent to the litigation timetable order.

November 8, 2012 – Mr. MacLean e-mails defence counsel seeking an update on his review of the defendants’ file and inquiring whether Mr. Baichoo is prepared to consent to the litigation timetable order.

November 16, 2012 – A status hearing is held and Rady J. signs the litigation timetable order which notes that no one appeared for the defendants. The court orders that the parties adhere to the timetable attached to the order, which prescribes the same dates as the proposed timetable previously presented to Mr. Baichoo by plaintiff’s counsel.

November 16, 2012 – Mr. MacLean e-mails defence counsel to advise that he attended the status hearing and attaches a copy of Rady J.’s litigation timetable order requiring affidavits of documents and productions be exchanged by December 31, 2012, examinations for discovery be conducted by April 1, 2013, and any undertakings and refusal motions be brought by July 15, 2013. No response is received from Mr. Baichoo.

December 19, 2012 – Mr. D’Ascanio e-mails Mr. Baichoo referencing the non-response to Mr. MacLean’s e-mails of October 19, November 8 and November 16 and reminding of the approaching deadline for production under the litigation timetable order. Mr. D’ascanio also requests dates in February or March for scheduling examinations for discovery. Mr. D’Ascanio receives ‘bounce back’ e-mail message from Mr. Baichoo indicating he would be out of the office from December 10, 2012 to January 28, 2013.

December 19, 2012 – Mr. D’Ascanio faxes a copy of his e-mail to the attention of Mr. Baichoo’s assistant and asks that it be brought to the attention of another lawyer in the firm so that the court order for production can be complied with in a timely fashion. Mr. D’Ascanio also notes that if production is not made, the plaintiff would bring a motion to strike the defence.

January 2, 2013 – Mr. D’Ascanio e-mails Mr. Baichoo noting, in part, that the defendant Mr. Hui is now in default of the order to make production and demands immediate delivery. Mr. D’Ascanio again receives a ‘bounce back’ e-mail message indicating defence counsel would be out of the office until January 28.

January 2, 2013 – Mr. D’Ascanio faxes a copy of the e-mail to Mr. Baichoo’s assistant and requests she bring the issue to the attention of another lawyer in the firm to avoid a motion to strike the defence and a request for costs.

January 7, 2013 – Mr. Baichoo’s assistant advises that she had just discovered the issue with the new computer server (that messages were being incorrectly directed to the ‘junk mail’ folder) and that she would bring the plaintiff’s matter to Mr. Baichoo’s attention upon his return on January 28.

January 7, 2013 – Mr. D’Ascanio e-mails Mr. Baichoo’s assistant reminding her that he had also faxed his correspondence and attachments to her attention.

January 30, 2013 – Mr. Baichoo’s assistant advises Mr. D’Ascanio that Mr. Baichoo has returned to the office and intends to bring a motion to set aside the judgment and requests hearing dates.

January 30, 2013 – Mr. D’Ascanio responds by e-mail, indicating that Mr. Baichoo may not fully appreciate the history of the matter: the judgment was rendered in June 2011, an appeal of that decision was dismissed, and as such it would not be possible for defence counsel to have the judgment set aside. Mr. D’Ascanio also adds that Mr. Hui’s affidavit of documents and productions are required immediately to cure his default.

January 31, 2013 – Mr. Baichoo responds by e-mail advising that he continued to be intent on moving to set aside the summary judgment and that he was not aware of, and did not agree to, the timing for delivery of productions and would not have done so if advised of the proposed timetable. Mr. Baichoo indicates he will provide his client’s affidavit of documents within a reasonable time.

January 31, 2013 – Mr. D’Ascanio replies by e-mail repeating his belief that the judgment could not now be set aside and indicating that the plaintiff’s position had been made clear through the delivery of a proposed litigation timetable, repeated requests for consent, and the notice of the status review hearing. Mr. D’Ascanio also indicates that, as a result of the litigation timetable order, it was his view that the defendant Mr. Hui was now in breach of a court order and in contempt of court by failing to provide productions. Mr. D’Ascanio indicates that he would bring a motion to strike Mr. Hui’s defence.

January 31, 2013 – Mr. Baichoo responds by e-mail, indicating he would be bringing the motion to set aside the judgment in March and reiterating that he would deliver his client’s affidavit of documents within a reasonable period of time and labelling Mr. D’Ascanio’s conduct as “overly aggressive”.

February 5, 2013 – The plaintiff delivers a Motion Record for the contempt motion.

February 11, 2013 – Mr. Baichoo corresponds with Mr. D’Ascanio indicating that the plaintiff’s motion is unnecessary as he had already advised that Mr. Hui’s production would be completed in a reasonable time.

March 8, 2013 – Mr. Baichoo provides Mr. Hui’s affidavit of documents.

March 11, 2013 – Mr. Baichoo writes to Mr. D’Ascanio indicating that plaintiff’s counsel is in a conflict of interest which must be rectified.

March 12, 2013 – Mr. Baichoo provides Mr. D’Ascanio with Mr. Hui’s Schedule ‘A’ productions.

March 13, 2013 – Mr. Baichoo provides Mr. D’Ascanio with Mr. Hui’s availability for examinations for discovery and requests counsel’s availability. Mr. Baichoo also requests that, in light of production being made, the motion for contempt be withdrawn.

March 14, 2013 – Mr. D’Ascanio advises that, in order to withdraw the motion for contempt, the plaintiff would require costs in the amount of $2,500 and the defence’s consent for an order that the plaintiff could move unilaterally, without notice, to strike Mr. Hui’s defence and obtain judgment if Mr. Hui filed to comply with any other term of the litigation timetable order.

March 14, 2013 – Mr. Baichoo informs Mr. D’Ascanio that the request for costs and consent is unacceptable, and that the motion for contempt is both unnecessary and premature. Mr. Baichoo also indicates that if the motion for contempt is continued, he would be forced to travel from Toronto to attend and would seek costs on a substantial indemnity basis for the wasted time and resources of counsel and the court.

March 14, 2013 – Mr. Baichoo writes to Mr. MacLean reiterating the perceived conflict of interest and demanding compliance with the Rules of Civil Procedure and the Rules of Professional Conduct.

[7] The position of Mr. MacLean is that he and Mr. D’Ascanio gave Mr. Baichoo notice by e-mail of both their intention to seek the litigation timetable order and of the granting of the order by Rady J. In addition, Mr. MacLean argues that plaintiff’s counsel pursued timely disclosure in accordance with the terms of the order by e-mail and fax communications. It is Mr. MacLean’s position that, when Mr. Baichoo discovered that Mr. Hui was in default, he was required to take immediate steps to rectify the situation and his response that the order did not receive his consent and that disclosure would be made in an imprecise “reasonable time” was insufficient to bring Mr. Hui into compliance with the litigation timetable order.

[8] Mr. Baichoo’s position is that the motion was unnecessary and premature and Mr. MacLean’s conduct in moving forward with the matter was overly aggressive in the circumstances. Mr. Baichoo takes the position that the litigation timetable order was requested and granted without his knowledge, consent or input and that its terms were such that compliance was not possible given his planned absence. He further submits that as disclosure of Mr. Hui’s relevant documents has now been made and he has provided availability for examinations for discovery, the litigation timetable order has been complied with and the motion for contempt was unnecessary and is moot.

[9] In my view, prior to the litigation timetable order, Mr. Baichoo was not responsive to Mr. MacLean’s attempt to accelerate the progress of the case. Although Mr. Baichoo submits that from October 2012 until January 2013, no e-mail correspondence was received as a result of a server error, it is equally clear that Mr. Baichoo was aware of the plaintiff’s desire to establish a litigation timetable prior to his computer server being replaced and that no steps were taken by him to contact Mr. MacLean in this regard after receipt of Mr. Hui’s file. Further, Mr. Baichoo was aware that the status hearing was adjourned from October to November and he did not attend. In addition, there is no explanation for the failure to provide disclosure or other correspondence from another lawyer of the firm after receipt of the faxes in December 2012 and January 2013 outlining the potential and actual breach of the litigation timetable order.

[10] Once Mr. Baichoo returned to the office in January 2013 and became aware that his client was in breach of a court order, his position was that the order was somehow invalidated by his lack of consent and that disclosure would be made in a reasonable time as he defined. That disclosure was not in fact made until March 2013. Clearly the litigation timetable order was disregarded by Mr. Baichoo.

[11] I find that Mr. MacLean and Mr. D’Ascanio were not overly aggressive. The court expected the litigation timetable order to be complied with. Mr. MacLean and Mr. D’Ascanio made every effort to follow up with Mr. Baichoo before this motion was brought.

[12] In these circumstances I am satisfied that it is the plaintiff that is entitled to the costs it seeks of $2,500 “all in”. An order will go in favour of the plaintiff awarding such costs.

“Justice L.C. Leitch”

Justice L. C. Leitch

Date: April 24, 2013