Court File and Parties

COURT FILE NO.: CV-14-517481 MOTION HEARD: December 13, 2018 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jack Ganz Consulting Ltd. Plaintiff

AND:

Recipe Unlimited Corporation Defendant

BEFORE: Master J. Josefo

COUNSEL: Patricia Virc for the Plaintiff, Moving Party, Email: pvirc@sthilaw.com Hayley Peglar and Ken Prehogan, for the Defendant, Responding Party, Email: hpeglar@weirfoulds.com; kprehogan@weirfoulds.com

HEARD: December 13, 2018

REASONS FOR DECISION and Order

[1] As described in the Notice of Motion, Jack Ganz Consulting Ltd, the plaintiff in this within action (“JGC” or “the plaintiff”) seeks “an order that the defendant produce for inspection the documents set out in Schedule A” pursuant to Rules 30.06 and 30.08 of the Rules of Civil Procedure. Recipe Unlimited Corporation (“Recipe” or “the defendant”) initially resisted that result. While certain documents in Schedule A were agreed to be produced or, during argument of the motion there was pragmatic agreement that these had been produced, Recipe maintained in its concluding submissions that the motion should be dismissed because:

• The plaintiff is attempting by in essence backdoor means to vary the scheduling order of Justice Cavanaugh made November 7, 2017, as it pertained to the then, and still pending, summary judgment motion which the defendants are seeking to have heard,
• Issue Estoppel applies,
• The plaintiff has already had much documentary discovery and is not entitled to more pending the summary judgement motion, and,
• The plaintiff has not led convincing evidence, but rather has only offered speculation, pertaining to the existence of other documents, and the relevance of such documents.

[2] By way of a preliminary matter, both parties agreed that I should disregard the affidavit of Helga Turi sworn December 10, 2018, and contained within the plaintiff’s Supplementary Motion Record. Yet the parties agreed that I could consider the exhibits which form part of that record. I have thus done so.

Background

[3] The overall dispute in this case between JGC and Recipe arises out of the 2006 engagement of JGC by Cara Operations Ltd. (“Cara”), the private company which existed before Recipe, and then the allegedly ongoing engagement of JGC by Recipe, for the provision of technology services. The individual Jack Ganz (“Ganz”) at, inter alia, paragraphs five through eight of the amended statement of claim, is described as managing director of JGC, with paragraph eight describing the engagement of JGC by Cara beginning in 2006. The defendant ostensibly ended this engagement in or about October or November 2014. The parties have been subsequently involved in this within litigation.

[4] As described above, the defendant has been trying to bring on a summary judgment motion. Yet, somewhat like Charlie Brown and the football, when the parties get close to the motion, the plaintiff raises an issue which ends up delaying matters. The parties have prior to this appearance before me attended on a number of occasions at court:

• On May 10, 2017, the parties appeared before Master Muir, whose endorsement recounted that both sides then sought a further and better affidavit of documents. Master Muir addressed what he found were some deficiencies in production by both sides. Given divided success, no costs were awarded.
• On November 7, 2017, Justice Cavanaugh approved a timetable which omitted any mention of documentary or other forms of discovery, yet provided for the service of motion and responding and cross-motion materials, reply materials, with cross-examinations to be done by April 30, 2018, and factums to be served on May 31, 2018. There was also no suggestion in the endorsement that there had been any failure of production by the defendant subsequent to the Order of Master Muir, or that the plaintiff required additional documents so it could respond to the summary judgment motion.
• On June 15, 2018, Justice Nishikawa allowed the plaintiff to make argument seeking leave to amend its claim on what the Justice noted was a proposed “last minute amendment” to the pleadings. This, I observe, was after Ms. Virc swore an affidavit dated June 11, 2018 in support of the request to amend the claim, that the proposed amendment “does not prejudice any party, nor does it delay the defendant’s hearing of the motion for summary judgement”. Justice Nishikawa, however, recognizing that the motion could not proceed, awarded the defendants costs thrown away at $20,000.00. An important take-away for me is that Ms. Virc was then of the opinion that, other than amending her claim, the plaintiff had all the production it needed to proceed to the summary judgment motion, and was ready to proceed in that regard. I so conclude given that nothing was mentioned in her affidavit about missing necessary documents.
• On August 14, 2018 Master Jolley, who heard the pleadings motion, allowed the plaintiff to amend its claim, and awarded costs against the plaintiff in the amount of $5,000.00 for the likely additional costs that the defendant would incur to amend its pleading in response.
• I understand that only quite recently did the plaintiff deliver its amended claim, with the defendant now turning its attention to prepare its amended Defence—so, even now, pleadings have still not closed. The summary judgment motion, originally to be heard on June 15, 2018, is still to be scheduled, and so will only be heard at some point in 2019.

Analysis

[5] Addressing briefly the arguments of the defendants, I do not agree that I am without jurisdiction to hear this motion for production. I am not varying the timetable order of Justice Cavanaugh. Rather, I am considering whether the plaintiff is entitled to additional documentary discovery pursuant to the applicable Rules. Issue estoppel, I also find, does not apply. This is a motion for production different, at least in some part, from what was raised before Master Muir. The plaintiff also conceded any similarities when addressing the specific issues sought in Schedule A.

[6] Yet I tend to agree that the plaintiff in this matter has, if I may refer to Stephen Leacock, “rode [his horse] madly off in all directions” at once. By that I mean while confirming to be ready for the process of summary judgment, he wants more (and more) discovery. Justice Emery, however, in 1870553 Ontario Inc. v. Kiwi Kraze, 2018 ONSC 205 makes clear at paragraph 51 of that decision that there is a distinction between the process for summary judgment and the process for a conventional trial. In this matter, the plaintiff indeed has been to a large extent already indulged with productions pursuant to discovery, as well to what he has been provided when following the summary judgment road (however reluctantly, and with whatever delaying tactics, that road has been followed by the plaintiff).

[7] I temper the above observations with the concomitant need to ensure that, when facing a summary judgment motion which could, if successful, end the plaintiff’s hope for compensation arising out of the ending of its engagement, the plaintiff (indeed, any party faced with responding to a summary judgment motion) obtains proportionately appropriate disclosure of all relevant material so it can make complete answer. On that basis I now turn to Schedule A to review the specific documents which the plaintiff claims are required for that purpose:

• Documents supplied to legal counsel to prepare pages 11, 14, 16, 21, 22, 23 of Cara’s prospectus: Ms. Virc advised that this request was withdrawn.
• Minutes of the “Leadership Team” meetings held September 18, 2014 and October 16, 2014: Mr. Lantz, the Vice President, General Counsel of the defendant, swore an affidavit on December 7, 2018. Therein, he deposed that he was “not aware of the existence” of any minutes, “and do not believe minutes were kept for these meetings”. There is no evidence to the contrary. Mr. Lantz was not sought to be cross-examined (Ms. Virc did not seek to adjourn for that purpose, nor did she seek to cross-examine Mr. Lantz prior to the motion being heard). At the hearing, Ms. Virc purported to amend her request to anything else (other documents) if there were no minutes. Yet that type of general fishing expedition was addressed by Master Muir in his above-referenced May 10, 2017 endorsement: “The plaintiff must lead convincing evidence of missing documents and this has not been done”. In my view, the plaintiff in this instance has not done so. Such questions, about what else might exist (if anything) could have been put to Mr. Lantz via cross- examination, yet again, this was not sought to be done. This request is denied.
• Board Packages, and Minutes of August 15, 2014 and December 4, 2014 board meetings: In his afore-mentioned affidavit, Mr. Lantz partially answers this; and Ms. Virc agreed that at tab GG of volume 2 of the defendant’s motion record, production of the Minutes (redacted, with the redactions satisfactorily explained to me and to Ms. Virc given the on-the-record assurance by defendant’s counsel that all parts of the minutes relevant to the within issues have been produced) was made. Defendant has agreed to deliver the Schedule A referenced at page 448 of that same record to plaintiff by close of business, December 14, 2018.
• Continuing with the same issue, I address the “Board Packages” which Ms. Virk still seeks. In my view, once the Board members have reviewed their packages and have discussed, debated, and voted upon an issue, the ultimate decision of the Board is what is potentially relevant. The underpinning documents or information which led to that decision I find to be far less so. After all, what leads up the decision in this case, when addressing entitlement to options, etc., is I find far less relevant than the actual decision itself pertaining to who gets what in the way of options. In that regard, the Board packages are I find not of relevance, especially not for the pending summary judgment motion. This would also be unlikely to assist the plaintiff for that motion. This request is thus denied.
• The Post-IPO 2015 Share Option Plan referenced at page 16 of Cara’s Prospectus: Once referenced to tab HH to the affidavit of Mr. Lantz (page 451 of that same record), Ms. Virc was satisfied that this met her request.
• Documents relating to the options granted to Mr. Gregson as an employment inducement…: With respect, I do not see how anything beyond what is contained in the Prospectus, which has been disclosed and is part of this record (and is quite detailed), could possibly be relevant. Mr. Ganz, after all, was not an employee of the defendant. Rather, his firm JGC was engaged to provide services. Moreover, Mr. Gregson was the CEO, at least one level above someone at an upper management level, if that could be said to be the equivalent of the position of Mr. Ganz.
• Kenneth Grondin’s employment contract dated October 31, 2013: my observations immediately above apply to this point. Moreover, it is trite that employment contracts are dependent upon what is negotiated for and by each individual. I therefore see no genuine relevance of what Mr. Grondin, an employee, received, vis-à-vis the consulting arrangement entered into by JGC.
• Any correspondence, minutes or other documents that reference Jack Ganz’s entitlement to options…: Mr. Lanz swears in his affidavit that this was already answered, provided, and there is nothing else. Ms. Virc agreed that this had in any case been previously asked and answered.
• Documents related to the severance packages of Don Robinson and Stephen Smith: While Mr. Ganz arguably has some contractual entitlement for options in the event Cara “went public” while he was engaged, it was submitted by Ms. Peglar, and not disputed, that the employment of these two gentlemen ended prior to that relevant time. Thus, in addition to my prior observations pertaining to the difference between employment and engagement, and the individuality of employment contracts, from a timeline perspective alone I find this request to be well beyond the scope of relevancy to the matters in dispute generally, and will not likely assist the plaintiff to respond to the pending summary judgment motion.
• Documents related to the severance packages of all management level employees whose employment ended in between October 31, 2013 and April 1, 2015: Again, Mr. Ganz was not an employee. On that basis alone I fail to see how whatever certain employees in a broad-brush group (“management level”) of a large Canadian entity obtained by way of a (vague and ill-defined) “severance package” (does this mean only what was offered initially, or does it include after negotiation, or mediation, or after a wrongful dismissal trial?) helps the plaintiff respond to the pending motion. This request I find is neither relevant nor proportionate. Again, there is no evidence to which I was referenced of how this could be relevant or helpful. It is a fishing expedition, on a large scale. This request is thus denied.

Costs

[8] I now turn to costs. Preliminarily, it appears that there was seemingly divided success in this motion, as some of the new material was tendered by the defendant only on December 7, 2018, in the affidavit of Mr. Lantz. I appreciate that the defendant did so without admitting that it was obliged to do so. Overall, however, I find that the concessions the defendant made were appropriate, again to ensure that the plaintiff in this case fairly and proportionately has the material required so that, once pleadings close, the summary judgment motion may (finally) proceed. Some of what the plaintiff sought it did not obtain for reasons set out herein. Again, that reflects arguably the ostensible divided success.

[9] It is thus my preliminary view that, in these circumstances, costs of this motion be “in the cause”. The Judge determining the summary judgment motion can fix costs depending on the outcome of that motion. If that is acceptable, the parties need do nothing more before me.

[10] Yet, if the parties choose to address costs of this motion, they may do so by making written submissions. These are not to exceed three pages each (plus a Bill of Costs). The parties can each deliver to each other and to me (through my ATC Mr. Backes) such cost submissions within one week of receipt of this endorsement. There is no right of reply.

Master J. Josefo Date: December 14, 2018