2018 ONSC 5227
COURT FILE NO.: CV - 15-0410/CV-18-0140
DATE: 2018-09-26
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: In the Matter of the Construction Lien Act, R.S.O. 1990, c.C.30
REVOLUTION ENVIRONMENTAL SOLUTIONS LP c.o.b. as TERRAPURE ENVIRONMENTAL and REVOLUTION ENVIRONMENTAL SOLUTIONS ACQUISITION GP INC.
Plaintiffs
- and –
SUPERIOR FINE PAPERS INC., RELIANCE HOLDINGS LIMITED and RELIANCE DEVELOPMENTS CORPORATION
Defendants
AND BETWEEN
SUPERIOR FINE PAPERS INC., RELIANCE HOLDINGS LIMITED and RELIANCE DEVELOPMENTS CORPORATION
Plaintiffs
- and -
NEWALTA CORPORATION and TODD SMITH
Defendants
HEARD: September 5, 2018
BEFORE: B. Warkentin R.S.J.
COUNSEL OF RECORD:
Timothy J. McGurrin, Miller Thomson LLP Counsel for the Plaintiffs in CV-15-410 and for the Defendant, Todd Smith in CV-18-0140
Alec McLennan, McLennan & Associates, Counsel for the Defendants in CV-15-410 and for the Plaintiffs in CV-18-0140
Emily Stock, Monaghan Reain Lui Taylor LLP, Counsel for the Defendant, Newalta Corporation in CV-18-0140
ENDORSEMENT AT PRE-TRIAL HEARING
[1] In April 2018, a two hour pre-trial hearing was scheduled for September 5, 2018. In attendance by CourtCall, telephone conference were Mr. McGurrin, counsel for the Plaintiffs in CV-15-410 and for the Defendant, Todd Smith in CV-18-0140 and Emily Stock, counsel for the Defendant, Newalta Corporation in CV-18-0140.
[2] Mr. McLennan did not appear, however on Saturday, September 1, 2018 he wrote to Mr. Rod Johansen of Johansen Law Firm in Thunder Bay, Ontario and to opposing counsel with a copy to the court in which he stated that he would not be attending the pre-trial conference because the Johansen Law Firm’s clients would be taking over the litigation. Mr. McLennan asked the court to “get me off the record in the circumstances”.
[3] A law student, Ms. Mayhew-Hammond appeared for Mr. Johansen who was tied up in another courtroom and unable to attend the pre-trial conference. On Mr. Johansen’s behalf she indicated that the Johansen Law Firm was not yet retained and sought an adjournment of the pre-trial for a period of one month.
[4] Pre-trial conference briefs had been filed by both Mr. McGurrin and Ms. Stock. No pre-trial conference brief had been filed by Mr. McLennan.
[5] Without a motion to be removed as solicitor of record or a Notice of Change of Solicitor having been filed, Mr. McLennan continues to be solicitor of record for Superior Fine Papers Inc., Reliance Holdings Limited and Reliance Developments Corporation in both actions (collectively referred to as “Superior et. al.”).
[6] While not relevant to the substantive issues in the pre-trial, for the purposes of understanding the events leading to the orders sought today, Mr. McGurrin informed the court that it was his understanding that Mr. McLennan’s clients, Superior et. al. were attempting to sell its company to clients of Mr. Johansen, however that transaction was not yet completed and it was unclear if a valid offer had been accepted.
[7] The Johansen Law Firm therefore had no standing to address the issues before the court in this pre-trial and no fault is attributed to the Johansen Law Firm for the failure of Mr. McLennan on behalf of his clients to file a pre-trial conference brief as required. Ms. Mayhew-Hammond was invited to remain for the pre-trial to take notes of the proceedings.
LITIGATION SUMMARY
[8] The Construction Lien Act claim (CV-15-410) seeks payment of $854,258.53 as a result of services, materials and environmental remediation completed by the Plaintiff in that action and its predecessor, at the habourfront site as against the defendants in that action, Superior et. al.
[9] In response to the Construction Lien Act claim, Superior et. al. brought a counterclaim and a separate action (CV-18-0140) against Newalta Corporation and Todd Smith that Superior et. al. commenced in Milton, Ontario. In early August 2017 Superior et. al.’s lawyer informed counsel for all parties of his intention to bring a motion to transfer the Construction Lien Act claim to Milton.
[10] In November 2017, Superior et. al.’s motion to transfer the Construction Lien Act claim to Milton was refused by Justice Lemay in Milton and costs against Superior et. al. of $7,000.00 in favour of the Plaintiffs in the Construction Lien Act claim were ordered to be paid within 14 days. Those costs remain unpaid.
[11] Both actions are now in the jurisdiction of the court in Thunder Bay and I have assumed a case-management role over the litigation.
STATUS – BREACH OF TIMETABLES AND FAILURE TO PAY COSTS AWARD
[12] By order, on March 22, 2017 the Construction Lien Act claim was set down for trial and the trial of the action was to commence on May 18, 2017 at which time the first lien pre-trial was to be held. At the request of Superior et. al. that pre-trial was adjourned to August 10, 2017 and was heard by me.
[13] On August 10, 2017, notwithstanding Superior et. al.’s intention to seek to have the Construction Lien Act claim transferred to Milton, I set out a litigation time-table that included a schedule for completing Examinations for Discovery in both actions, completing Answers to Undertakings and any resulting motions with a return date before me of March 20, 2018 for another pre-trial. The examinations for discovery, answers to undertakings and motions were to have been completed prior to March 20, 2018.
[14] Notwithstanding the timetable set out, Superior et. al. failed to abide by the terms of that litigation timetable to the extent that all dates for examinations for discovery were cancelled. Superior et. al. had failed to deliver its Affidavit of Documents and its productions.
[15] The second pre-trial, initially scheduled for March 20, 2018 was rescheduled to April 5, 2018 so that it could be heard by me. Mr. McGurrin filed a pre-trial brief that was relied upon by Ms. Stock. Mr. McLennan did not file materials. At that pre-trial a further litigation timetable was ordered by me regarding the same items that had been ordered by me in the August 10, 2017 pre-trial.
[16] All items in the litigation timetable were to be completed in the Construction Lien Act action before the end of June 2018. Both actions were set to the June 2018 Assignment Court for the purposes of setting trial dates for the fall of 2018. A further two hour pre-trial was ordered before me on a date to be set in September 2018; the date of this pre-trial. The purpose of the September 5, 2018 date was to attempt a resolution of all outstanding issues.
[17] At all times Mr. McGurrin and Ms. Stock sought to move these actions forward due to concerns about deliberate delays by Superior et. al.
[18] As of today’s date, Superior et. al. has failed or refused to comply with the two separate court-ordered timetables. To date no examinations for discovery have been conducted due to the failure of Superior et. al. to make its representative available, notwithstanding dates had been scheduled and agreed upon by the parties. A Certificate of Non-Attendance regarding the representative of Superior et. al. was granted on June 21, 2018.
STRIKING OF SUPERIOR’S PLEADINGS
[19] In light of the conduct of Superior et. al. and their failure to comply with court-ordered litigation timetables or to file materials and their failure to pay the costs ordered payable in November 2017, Superior et. al.’s pleadings in both actions are hereby struck.
[20] With respect to the Construction Lien Act action, costs for today’s pre-trial are ordered as against Superior et. al. to the Plaintiffs in the amount of $1,500.00 inclusive of HST and disbursements. The Plaintiffs may move for judgment of their claims, including costs of the litigation to date, in writing with supporting documentation without notice to Superior et. al.
[21] This order is made without prejudice to Superior et. al. bringing a motion to set aside the striking of its pleadings on the following terms:
- Prior to serving and filing their motion materials Superior et. al. shall pay the outstanding costs award of $7,000.00 as ordered by Lemay J. and the award of $1,500.00 ordered by me.
- The Plaintiffs may seek costs incurred by them to date in this litigation in both actions in their response to such a motion by Superior et. al. as a condition of the setting aside of my order striking Superior et. al.’s pleadings.
- Counsel for the Plaintiffs shall serve and file a factum setting out the jurisdiction of the court to granting the costs incurred in the litigation to date as a precedent to setting aside my order striking Superior et. al.’s pleadings.
[22] With respect to the related action, CV-18-140, in which Superior et. al. were the Plaintiffs, costs are awarded to the Defendants, Newalta Corporation and Todd Smith in the total amount of $10,000.00, with the sum of $5,000.00 payable to each Defendant.
[23] This order is made without prejudice to Superior et. al. bringing a motion to set aside the striking of its pleadings in CV-18-140 however, no such motion may be brought until the outstanding costs of $7,000.00 and $10,000.00, respectively have been paid in full, including any accrued interest.
[24] Counsel for Newalta Corporation and Todd Smith may prepare and provide a draft order in Court File No. CV-18-0140 to my attention without the need to obtain approval from counsel for Superior et. al.
Madam Justice B. R. Warkentin, R.S.J.
Released: September 26, 2018