Carbone et al. v. DeGroote et al., 2015 ONSC 1629

COURT FILE NO.: CV-14-499554
DATE: 20150312

SUPERIOR COURT OF JUSTICE - ONTARIO

RE:

ANTONIO CARBONE and FRANCESCO CARBONE

Plaintiffs

-AND-

MICHAEL DeGROOTE, ANDREW MICHAEL PAJAK, ZELJKO ZDERIC aka PAVLE KOLIC aka ALEX VISSER aka SASHA VUJACIC, EDWARD ZBIGNIEW KREMBLEWSKI, GIANPIETRO TIBERIO, BRENDA MARIE JOYCE KOVER and PETER ALFRED SHONIKER

Defendants

BEFORE: F.L. Myers J.

COUNSEL: Byron Shaw and Richard Lizius for Michael DeGroote

Adam Justin Marchioni for the plaintiffs

HEARD: March 11, 2015

ENDORSEMENT

[1] The plaintiffs request an adjournment of Mr. DeGroote’s motion to dismiss the action under rule 56.06 due to the failure of the plaintiffs to post security for costs as ordered by the court. The basis for the security for costs order was the plaintiffs’ failure to pay costs awarded to Mr. DeGroote in another proceeding among the same parties. Thus the issue of repeated failures by the plaintiffs to obey court orders weighs heavily in this matter.

[2] Moreover, the issues in this action overlap with another proceeding commenced by Mr. DeGroote previously. The plaintiffs have raised a counterclaim in that matter and it is difficult to understand why there are two separate lawsuits proceeding in different branches of the court in relation to the same underlying matter. There is therefore a question as to whether this entire action is an abuse of process. However, it seems to me that the judge who is carrying the other matter on the Commercial List is best positioned to determine the degree of overlap and whether the matters should be combined (if this case continues).

[3] The basis for the adjournment request is that the plaintiff Antonio Carbone has been jailed and is apparently being held without bail in the Dominican Republic. The underlying business that both outstanding lawsuits concern is in that country.

[4] Mr. Marchioni made submission to the court to the effect that Antonio Carbone’s evidence is needed for this motion. Mr. Marchioni says that although Francesco Carbone has delivered two affidavits for this motion including one that recites information and belief evidence from his brother, Antonio’s evidence is required and it would be unfair to proceed without him having a chance to appear. Mr. Marchioni represented as fact to the court that Antonio has been the “champion” of the cases before the court and that he knows the “ins and outs” of the issues better than Francesco Carbone. Mr. Marchioni represented as fact to the court that Antonio Carbone has been the brother “on the ground” in Dominican Republic so that he has better knowledge than Francesco Carbone.

[5] It is not clear to me why detailed knowledge of the business is relevant to the issue of why the plaintiffs have failed to post security for costs as required. The payment was due on December 29, 2014, almost a month before Antonio Carbone was jailed. Moreover, Francesco Carbone swears that he has but one asset, being shares in the underlying business and that he is therefore impecunious. In his Affidavit of February 22, 2015, Francesco Carbone swears on information and belief from Antonio that “his situation is identical to mine”. It is interesting to note that on August 20, 2014, both brothers swore affidavits in the other lawsuit which listed their assets. The assets listed by each brother overlapped extensively and included, for Francesco: shares in 12 corporations, 16 subsidiaries, cash of about $51,000 and current liabilities of about $96,000; and for Antonio, shares in the same 12 corporations and 16 subsidiaries and shares in another 10 corporations that appear to be related to the tobacco industry and a paint store. The fact that Francesco Carbone swears that they now have shares in but one company suggests that (a) one or both of their affidavits from last summer or this motion is untrue; or (b) the Carbones have transferred assets in breach of the existing Mareva injunction that remains outstanding against them in the other action.

[6] Mr. Marchioni is a lawyer and represented to the court as fact that Francesco Carbone “does not know the intricacies that are known by his brother”. The court relies on the integrity of counsel’s submissions. Thus, while I might have otherwise found insufficient basis to adjourn this matter, if Mr. Marchioni represents that he needs the evidence of Antonio Carbone and Antonio Carbone’s superior knowledge in order to properly answer this motion, the court should pay heed to its officer’s word.

[7] In all, there is no prejudice to Mr. DeGroote in waiting a few weeks to have this motion heard. If the Carbones rectify their breaches before the return of the motion, Mr. DeGroote will have a substantial amount of security for costs posted with the court. If not, his position is no different than it is today. I recognize the frustration of delay. I am very sensitive to the need for speedy justice. See: Letang v. Hertz Canada Limited, 2015 ONSC 72 at para. 19. But given the overlap of the two lawsuits in any event, it is not at all clear that dismissing this case will do much but end one tactical front in an ongoing battle.

[8] Mr. DeGroote’s motion under rule 56.06 is therefore adjourned to May 12, 2015. As the plaintiffs cannot tell when Antonio Carbone will be available, I have picked a date that is approximately 60 days away. That will give enough time for Francesco Carbone and for Mr. Marchioni to obtain any evidence that they require on information and belief from Antonio Carbone if he is not released before then. The motion is peremptory to the plaintiffs. I note that the parties took out the order of Firestone J. without using the wording of Form 56A. If it is unclear, under Rule 56.05, the plaintiffs shall not take any step in this preceding until the security ordered by Firestone J. has been posted. The plaintiffs will pay Mr. DeGroote costs thrown away by the appearance today of $2,500 forthwith.

________________________________ F.L. Myers J.

Date: March 12, 2015