Firm Capital Corporation v. Moncada, 2016 ONSC 815

CITATION: Firm Capital Corporation v. Moncada, 2016 ONSC 815

COURT FILE NO.: CV-14-518739

DATE: 20160201

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Firm Capital Corporation, Firm Capital Properties Inc., FCC Investors Corporation, Dadouch Investment Partnership, LP, FC Mortgage Credit Corp. and Dadouch & Company Limited, Plaintiffs

AND:

Mary Moncada, Defendant

AND BETWEEN:

Mary Moncada, Plaintiff by Counterclaim

AND:

Eli Dadouch, Jonathan Mair, Firm Capital Corporation, Firm Capital Properties Inc., FCC Investors Corporation, Dadouch Investment Partnership, LP, FC Mortgage Credit Corp., Firm Capital Mortgage Corporation and Dadouch & Company Limited, Defendants to the Counterclaim.

BEFORE: Madam Justice Darla A. Wilson

COUNSEL: Jonathan Lisus and Shawn Laubman, Counsel for the Plaintiffs

Nicholas Tibollo, Counsel for the Defendant

David Chernos and Bryan Smith, for the non-party Bielak

HEARD: February 1, 2016

ENDORSEMENT

[1] The Plaintiffs bring this motion for an urgent order that the Defendant return immediately the confidential information that she has in her possession related to the Plaintiff corporations, which I shall refer to as the “Firm Capital Parties”.

[2] It is not disputed that the Defendant, Mary Moncada [“Moncada”], was an employee of Firm Capital Corporation for more than 20 years. She held the position of Vice President of Finance and Accounting when she was terminated on May 28, 2014. Moncada in her position received and had access to confidential information about the Firm Capital Parties and the principal, Eli Dadouch [“Dadouch”]. It is not disputed that Moncada has confidential information related to the Plaintiffs on her personal computer.

[3] The Plaintiffs allege that Moncada stole in excess of $400,000 from the companies during the course of her employment and this claim was issued in December 2014 against Moncada. She counterclaimed for wrongful termination.

[4] Dadouch is engaged in matrimonial litigation with his former wife, Anita Bielak [“Bielak”]. Bielak alleges that she met with Moncada and was provided with information concerning the financial affairs of Dadouch, in particular, information about assets that Dadouch has not disclosed to Bielak in the matrimonial proceedings. Bielak made notes of the information she was given by Moncada and they are contained in her affidavit sworn January 24, 2016.

[5] Bielak sought and obtained an order in the matrimonial proceedings that Moncada attend for questioning. That examination is scheduled for February 3, 2016. Bielak also has a motion pending, returnable in March, 2016, for an order granting her intervener status.

[6] In early January, 2016, The Plaintiffs brought a motion on notice to Moncada for an order restraining the Defendant from disclosing any confidential information obtained during the course of her employment by the Plaintiffs and an order requiring the Defendant to provide a list of and return to the Plaintiffs all Firm Capital documents in her possession.

[7] Counsel for the parties and for Bielak had various discussions and attempted to resolve the issues surrounding the confidential information in Moncada’s possession. At today’s hearing, counsel agreed that Deloitte would copy the confidential information from Moncada’s computer and thereafter delete it. They also agree that this would be done under the supervision of an Independent Supervising Solicitor from Stockwoods LLP. There is a schedule for this which was arrived at during an attendance before Justice Archibald in CPC on January 12, 2016.

[8] The 2 main issues that the parties do not agree on is whether the IT expert from Deloitte’s should take an image of Moncada’s hard drive from her computer for preservation at the time the confidential documents are copied and deleted and whether Moncada ought to be obligated to give a sworn affirmation that what has been produced constitutes all confidential documentation in her possession. The Plaintiffs argue that the answers to both issues ought to be yes and Mr. Tibollo, counsel for Moncada in these proceedings, argues the answer should be no. Counsel for Bielak in the matrimonial action takes no position on whether the hard drive ought to be imaged but wants any order made today to be without prejudice to Bielak’s rights to move for further documentation.

[9] I have concluded that both issues require affirmative answers. Contrary to what Mr. Tibollo argues, the relief sought by the Plaintiffs today does not amount to an Anton Pillar order and the cases he provided dealing with such orders are of no assistance to me. I have read the affidavit material filed by the parties and Bielak. Without question, there are significant credibility issues in both this action and the matrimonial litigation. Moncada has documentation in her possession that is confidential that arises from her employment with the Firm Capital Parties. She admits meeting with Bielak but denies providing confidential information about the businesses to her as asserted by Bielak.

[10] I have no way of knowing at this juncture what questions will be asked of Moncada during her questioning in the family law matter, nor do I know what requests for further documentation or undertakings will be made. The Plaintiffs do not seek production of Moncada’s hard drive, including all sorts of personal documentation. What is being requested is that an image of the hard drive be made at the time the confidential documentation is obtained and deleted, to be done by an independent third party. In my view, given the issues in this action and being mindful of the court ordered questioning of Moncada which is to take place in 2 days as well as the pending motion for intervener status for Bielak, it is in the interests of all parties that an order issue preserving the contents of the hard drive of Moncada’s computer at this time. I see no prejudice or intrusion to Moncada’s privacy which will result from this order; rather, in my view, it will obviate potential problems down the road if there is a concern that there is other data that is relevant on her computer which was not produced as part of the confidential information. This is very different from an order requiring production of the contents of Moncada’s hard drive of her computer.

[11] I turn now to the issue of how to ensure that what Moncada produces constitutes all of the confidential documentation in her possession. Mr. Tibollo objects to Moncada swearing an affirmation and suggests that opposing counsel ought to be satisfied with a letter from him to that effect. I do not agree. Credibility issues are central in this litigation. There is evidence that Moncada has provided information to Bielak to assist her in her matrimonial litigation with Dadouch, although that is denied by Moncada, who deposes that any information given to Bielak was public.

[12] Briefly put, the parties in this litigation do not trust each other; and it is clear that Bielak does not trust Dadouch in the family law litigation. Numerous requests through counsel were made of Moncada to return all confidential Firm Capital documents and records –see exhibits L through R of the affidavit of Sandy Poklar sworn January 8, 2016. The documents were not returned and although in her affidavit Moncada asserts that she did nothing wrong and it was only in the fall of 2015 that she was asked to return the documents, there is no explanation for her failure to do so. Rather, Mr. Tibollo’s response was that “…the data is stored on a personal cell phone and computer. The data is electronic. We do not wish to become the custodian of Ms. Moncada’s property since she intends to preserve it and there is no need for such measure.”

[13] I make no finding in my endorsement today concerning whether or not the confidential information is truly confidential. However, it is not up to Moncada to make that determination. Counsel have been referring to this documentation as the “confidential documentation” and I have done the same but I make the observation that to be accurate, it is allegedly confidential documentation. In my view, requiring Moncada to confirm she has provided all of the confidential information is no different than requiring a party to swear an Affidavit of Documents.

[14] I make the following orders:

(1) Deloitte, the independent party agreed to by all counsel, shall make an image of the hard drive of the computer of Moncada and shall preserve it;

(2) Deloitte shall copy and delete from Moncada’s computer and cell phone all confidential information as set out in paragraph 1 of the draft order provided to me by counsel;

(3) The copy and deletion I have referred to shall take place on or before February, 3, 2016;

(4) Moncada shall not copy or disclose the confidential information pending completion of the copying and deletion by Deloitte’s;

(5) Moncada shall forthwith provide sworn confirmation that what has been copied and deleted constitutes all confidential information in her possession;

(6) Stockwoods LLP shall preserve an imaged copy of the hard drive of Moncada’s computer and the confidential information pending further order of this court;

(7) The interim costs of the Review by Deloitte’s and of the preservation by Stockwoods LLP shall be shared equally between the Plaintiffs and Bielak, subject to further order of this court;

(8) Unless this order is extended by further order of this court, or the parties and Stockwoods LLP consent in writing, Stockwoods LLP shall be discharged from its responsibility pursuant to my order within 12 months of today’s date and may proceed at that time to destroy the preserved materials in its possession;

(9) My order is without prejudice to the position of the parties and Bielak on the injunction motion and any addition or furfure proceedings in the Superior Court of Justice or in the the matrimonial litigation between Bielak and Dadouch.

[15] If any of my endorsement requires clarification I may be contacted.

D.A. Wilson J.

Date: February 1, 2016