SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: 1416088 Ontario Limited, carrying on business as Danbury Industrial, Plaintiff

AND:

Deloitte & Touche Inc., in its capacity as Court-Appointed Interim Receiver, Receiver and Trustee of Harwell Hesco Electric Supply Co. Limited and HSBC Bank Canada, Defendants

BEFORE: D. M. Brown J.

COUNSEL:
S. Crocco, for the Plaintiff

D. Gadsden, for the Defendants

HEARD: November 25, 2013

case management directions

[1] In this dispute over an inventory liquidation contract, the plaintiff failed to file its pre-trial conference memorandum in sufficient time to enable a productive pre-trial conference with clients to occur. I have directed that the pre-trial conference take place on December 10, 2013 at 4:30 p.m. before me. I expressed the view that since no more than $500,000 was at stake in this action, the parties’ estimate of an 8 to 10 day trial was extravagant, and that the trial should not take more than 5 days. I suggested that the parties review the directions for a hybrid trial given in my decision last year in Wood v. Arius3D Corp., 2012 ONSC 5596 and, in the event this matter does not settle at the pre-trial conference, I am inclined to give similar directions for a hybrid trial of this action.

[2] In the meantime, I canvassed with counsel what steps remained to ready this far-too-old case for trial. Neither side likely will call expert evidence. All that remains is for the plaintiff to deliver answers to undertakings and for the defendants to move on some refusals. As to the former, I order the plaintiff to deliver answers to all outstanding undertakings within 30 days.

[3] As to the refusals, the defendants have prepared a refusals motions. I give the defendants the choice of two options:

(i) Option A: I am prepared to write an endorsement which states that the parties have agreed to refrain from bringing refusals motions, but on the clear understanding that by so doing they will not be faced at trial with the submission by an opposite party that their failure to move on refusals should work against them. Under this scenario, if, at trial, an issue arises about a question refused, then the trial judge can consider the matter. If the trial judge concludes that the refusal was proper, so be it. If the trial judge concludes that the refusal was improper, then an adverse inference would be drawn against the refusing party for failing to disclose material evidence; or,

(ii) Option B: Alternatively, the defendants may deliver, to my attention, a motion record for a motion in writing no later than 5 p.m. tomorrow, Tuesday, November 26, 2013. The plaintiff shall deliver any responding motion record or materials, to my attention, no later than December 6, 2013. I shall deal with the motion as a motion in writing.

However, as indicated at the conference this morning, I wish to give the parties a “heads-up” that if they proceed by way of motion, I am considering approaching the issue of the costs of that motion on an “amount per refusal” basis, perhaps something in the neighbourhood of $1,500.00 per refusal. That is to say, if the defendants move on 8 refusals, but succeed only on two, they may risk adverse cost consequences of up to $6,000 (i.e. success on 2 refusals (+$3,000) less failure on 6 refusals (-$9,000), or a “net” adverse cost award of $6,000). At this point I simply am considering that as a possible approach to costs and wish to communicate that to the parties so they may shape their reasonable expectations about the cost consequences of a refusals motion accordingly. I suspect that by so focusing on the cost consequences of such a motion, the parties will take a sober look at exactly how many refusals are material for a fair determination of the issues at trial and require adjudication by this Court.

D. M. Brown J.

Date: November 25, 2013