Court File and Parties

COURT FILE NO.: CV-11-50673 MOTION HEARD: 20190717 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Emmanuel Pantelakis, Plaintiff / Moving Party AND: J2 Global Canada Inc., carrying business as Protus IP Solutions, Defendant / Responding party

BEFORE: Master Kaufman

COUNSEL: Christopher McLeod and Alexander Bissonnette, Counsel for the Plaintiff Roberto Aburto and Scarlett Trazo, Counsel, for the Defendant

HEARD: July 17, 2019

Reasons for Decision

1The plaintiff brings this motion for an order compelling the defendant to serve a further affidavit and documents, and to permit further examinations for discovery. The defendant opposes this motion because the plaintiff has already set the action down for trial, has not brought a disclosure motion until 8 years after the action was commenced, and failed to comply with an ordered timetable requiring motions arising from answers to undertakings to be filed by December 15, 2016. The action was commenced in February 2011 and a trial is scheduled to commence in January 2020. Because the motion is brought after the action was set down for trial, the defendant argues that the plaintiff requires leave to bring this motion. The defendant also argues that granting the motion would delay the trial. It disputes the relevance of the information sought, and argues that the requested disclosure is disproportional.

2The issues to be decided are 1) whether leave is required, and if so, whether it should be granted; 2) whether the documents sought are relevant to a matter in issue; 3) whether the documents sought should be ordered produced; and 4) costs. The defendant concedes that if the Court ordered the defendant to produce a further affidavit of documents, additional discovery should follow.

Does the plaintiff require leave to bring this motion?

3Rule 48.04 [1] provides that a party who has set an action down for trial, and any party who has consented to the action being placed on a trial list, shall not initiate or continue any motion or form of discovery without leave of the Court. The defendant argues that that the plaintiff should not be granted leave because there has not been a substantial or unexpected change in circumstances such that a refusal to grant leave would be manifestly unjust or that this motion is necessary in the interests of justice: Hill v. Ortho Pharmaceutical (Canada) Ltd. , [1992] O.J. No. 1740 (Gen. Div.) . In addition, the plaintiff’s motion does not fall within one of the exceptions listed in Rule 48.04(2)(b).

4For his part, the plaintiff argues that he does not require leave because Justice Doyle, in the context of a pre-trial conference held on September 27, 2018, directed that the plaintiff’s motion to deal with production “will be held on May 13, 2019 for one day” (this motion was subsequently rescheduled to July 17, 2019). The plaintiff argues that Justice Doyle thereby granted the plaintiff leave to bring this motion.

5I agree with the plaintiff that, in light of Justice Doyle’s pre-trial endorsement, he does not require leave. Judges and masters conducting pre-trial conferences may establish timetables and make orders considered advisable with respect to the proceeding. Pursuant to Rule 50.07(2), these orders bind the parties. The plaintiff raised this disclosure motion at the pre-trial conference. When orders are made at a pre-trial conference, they are based on the Court’s assessment of what orders and directions are necessary to ensure that the action is ready for trial, and that the trial proceeds in an orderly and efficient manner.

6If the defendant wanted to oppose the filing of this motion on the basis that the plaintiff could not continue any form of discovery as a consequence of setting the action down, that objection should have been made before Justice Doyle. The defendant either consented to the order made or, if it objected to it, Justice Doyle nonetheless scheduled this motion for one day.

7Accordingly, I will deal with the merits of this motion.

Are the documents sought relevant to a matter in issue?

8The plaintiff argues that there are three categories of relevant documents that have not been produced. Rule 30.03(1) requires parties to disclose all documents relevant to any matter in issue in the action.

9Relevance is based on the parties’ pleadings. To determine if the documents sought are relevant, I must decide if the documents sought tend to prove or disprove a proposition or fact advanced in the parties’ pleadings.

Plaintiff’s allegations

10The plaintiff’s business consisted in sending bulk e-mail advertisements for online gambling services. The plaintiff generated revenue every time a person received his e-mails, clicked on the hyperlinks and spent money at online casinos.

11The defendant, for a fee, provided the use of a software known as “Campaigner” which was used to send mass marketing e-mails for its clients. However, because most Internet Service Providers (ISPs) use sophisticated filtering systems to prevent unsolicited e-mails from reaching their clients, companies such as the defendant’s must avoid these filtering systems to ensure delivery.

12The plaintiff alleges that the defendant was negligent by sending his e-mail advertisements and those of other clients using the same IP address. Specifically, with respect to the defendant’s other clients, the plaintiff pleads:

At least some (and perhaps many) of [the defendant’s] large volume clients did not follow proper email marketing methods, used non-permission-based lists or “bought lists” that contained spam traps, or otherwise received a large number of complaints from major ISPs. In pursuit of revenues, [the defendant] permitted questionable clients to use its email marketing platform. As a result, these clients damaged the reputation of [the defendant’s] IP addresses. Because they used a shared IP system, this made it more difficult for [the defendant] to deliver to the major ISPs for all of its clients, including Pantelakis. [2]

13The defendant denies that it permitted questionable practices to be used in its e-mail marketing platform which would have damaged the reputation of its IP address.

With respect to paragraphs 9 to 11 and 14 of the Second Amended Statement of Claim, Protus denies that it permitted questionable practices to be used in relation to its e-mail marketing platform which damaged the reputation of its IP addresses. Further, Protus denies that it failed to properly manage its system. [3]

14In other words, the plaintiff alleges that the defendant used the same IP address to send the plaintiff’s marketing e-mails and the e-mails of other clients who used questionable e-mail marketing practices. The plaintiff alleges, and the defendant denies, that sending these other clients’ e-mails from the same IP address as the plaintiff had the effect of damaging the “reputation” of the IP address, thereby reducing the number of e-mails that would reach their intended recipients (i.e. their deliverability).

Relevance of documents sought

15In its notice of motion, the plaintiff seeks production of three categories of documents: 1) documents identifying the other clients whose e-mails were sent from the same IP address as the plaintiff’s; 2) documents which relate to the nature of the other clients’ e-mails (such as the industry or content of the e-mails) and 3) documents relating to performance issues raised by other clients whose e-mails were sent from the same IP address as the plaintiff. [4]

16The defendant argues that the plaintiff has not established the relevance of the requested documents, but most of the arguments it makes relate to proportionality and to the timing of this motion (which I will address below).

17I agree with the plaintiff that the categories of documents 1 and 2 are relevant to a matter in issue, namely the negative impact allegedly caused by sending e-mails on behalf of other clients from the same IP address as the plaintiff. The defendant’s representative at the examinations for discovery admitted that the nature of the e-mails (gambling, affiliate pornography, bought lists, etc…) sent on behalf of other clients from the same IP address was a factor that could affect the deliverability of the plaintiff’s e-mails. [5] Evidence pertaining to the nature of these e-mails is required to either prove or disprove the plaintiff’s assertion.

18With respect to the third category of documents, namely complaints raised by other clients related to “performance issues”, which I interpret to mean issues regarding the deliverability of their e-mails, these documents also meet the test for relevance. If all clients using the same IP address saw a reduction in the number of e-mails that reached their destination, this could be because the plaintiff is correct (a client with questionable practices affected all clients on the same IP address) or it could be because, as the defendant pleads, ISPs used increasingly sophisticated filtering procedures for screening bulk e-mail distributors. Of course, the plaintiff could very well be the client with questionable practices. If, on the other hand, only some clients experienced lower deliverability, then that evidence could disprove the plaintiff’s assertion that there was a generalized impact on all clients using the same IP address.

19I conclude that the categories of documents sought are relevant in that they would tend to either prove or disprove a proposition or fact advanced in the parties’ pleadings.

Should the documents be disclosed?

20The defendant raises cogent arguments with respect to the timing of this motion as well as the proportionality of the request. However, I conclude that any prejudice arising from the late timing of this motion can be compensated with costs. The plaintiff has agreed to incur the costs associated with the collection of the documents sought, thereby mitigating the defendant’s proportionality concerns. In these circumstances, I conclude that the documents should be disclosed subject to the terms and directions outlined below.

Timing

21With respect to timing, I agree with the defendant that the plaintiff should have brought this motion much sooner. The action was commenced in 2011. The plaintiff did not object to the scope of the defendant’s affidavit of documents. When the defendant objected to questions about the defendant’s other clients, the plaintiff did not pursue the matter. He served a trial record in 2013, wherein he confirmed that documentary productions were complete. A first pre-trial conference was held in October 2013, where additional discoveries were ordered based on amended pleadings. The parties exchanged expert reports. A timetable order was issued on consent in October 2016, which provided that any motions arising from answers to undertakings had to be filed by December 15, 2016. The plaintiff first raised the issue of inadequate disclosure in July and August 2018, 7 years after the claim was commenced. I agree with the defendant that the timing of the motion may result in lengthening the proceeding and will certainly increase costs.

22That said, the Rules even allow for pleadings to be amended at trial (See Rule 26.06), and in those circumstances the prejudice caused by delaying the trial can be addressed with costs. [6] Here, the plaintiff’s late disclosure motion is made approximately six months before trial, and any prejudice to the defendant can also be compensated with costs.

Proportionality

23With respect to proportionality, the defendant’s evidence, which I accept, is that the documents sought are on a hard drive which can only be accessed using is a type of hardware that the defendant does not currently have. The vast majority of the requested documentation was contained on an old version of the Campaigner software that was decommissioned in 2011, and has not operated since that time. The defendant says that while there are no obvious physical issues with the hard drive containing these documents, there are no guarantees that the hard drive would operate if efforts were made to restart the system.

24To respond to the plaintiff’s request for the first two categories of documents, the old version of Campaigner would need to be reactivated and software developers would be need to be retained. The defendant estimates that 75 to 130 hours of consultant time would be required to accomplish this task. The defendant also estimates that hundreds of hours would be required to manually review the documents to ascertain the “nature of the e-mails” sent on behalf of other clients.

25With respect to the third category, the defendant states that most of the complaints would have come by way of e-mail which would have not have been kept beyond the 7 year retention policy. To the extent that complaints were documented in the CRM system, due to a number of migrations into different platforms, the information is unsearchable electronically and would require a manual review.

26The plaintiff points out that on discovery, Mr. Saibil testified that the plaintiff’s e-mails were sent on the same shared IP as those of “hundreds” of other customers. [7] The plaintiff submits that in the context of claim for more than $3,000,000 in damages, the request is proportional.

27Rule 29.2.03 lists the factors I am to consider in determining the proportionality of a request for disclosure. I must consider the time and the expense required to produce the document, if the order would cause the defendant undue prejudice, unduly interfere with the orderly progress of the action, and if the information is available from other sources. I must also consider if the order would result in an excessive volume of documents required to be produced.

28With respect to the time and expense of producing the documents, Mr. McLeod suggested that the plaintiff could pay the cost of retaining a consultant to review the hard drive, and that this review could be done in short order to preserve the scheduled trial dates. The plaintiff’s willingness to make these efforts weighs in his favour. I don’t have any evidence of undue prejudice to the defendant, as any prejudice can be compensated in costs.

29The order does have the potential to unduly interfere with the orderly progress of the action. If the parties cannot retain a consultant in good time, the trial may be delayed and add an additional layer of unexpected costs. The action was commenced in 2011. If the trial is re-scheduled, it may not be heard until sometime in 2022. This factor weights in favour of the defendant.

30I am satisfied that the information requested is not available from other sources. Moreover, in light of the evidence that there are “hundreds” of other clients, identifying them, the nature of the e-mails sent and, to the extent it is possible, any complaints they may have sent would not result in an “excessive” volume of documents in the context of a multi-million dollar commercial case. These factors also weigh in the plaintiff’s favour.

Conclusion

31I would not be making the order below if it weren’t for the fact that the documents requested speak directly to the plaintiff’s allegations. The plaintiff’s argument may ultimately not succeed, but it is not my role to assess its merit on this motion. My role is only to determine if the documents sought are relevant to a position advanced by the parties and I conclude that they are. Moreover, the plaintiff has agreed to incur the costs required to retrieve these documents, which mitigates to a considerable extent any prejudice to the defendant. I am also confining the documents to the period between October 2008 and February 2010, which is the period where the decrease in deliverability would have occurred.

32Rule 1.05 provides that in making an Order under the Rules, the Court may impose such terms and make such directions as are just. The Court orders that:

a. Within the next 14 days, the parties are to select a third party consultant with the knowledge, skill and expertise to retrieve the information set out below. Preference should be given to a third party consultant who can perform the requested services in a timely manner so as to avoid adjourning the trial.

b. If the parties cannot agree on a third party consultant, the plaintiff shall provide the defendant with three proposed consultants’ names, along with their CV. The defendant shall select one of them within 5 days of receiving the plaintiff’s names.

c. The consultant will sign a confidentiality undertaking (binding on the consultant and his or her staff), and shall not disclose the information received as part of this process to anyone except to the parties and to the Court.

d. The consultant’s task will be to retrieve the following from the hard drive:

i. One representative e-mail of every mass e-mail distribution sent on behalf of clients whose e-mails were sent from the same IP as the plaintiff for the period October 1, 2008 and February 28, 2010. If these e-mails cannot be retrieved, or if the parties, in discussion with the consultant, decide that there is a more economical and efficient manner of obtaining the information sought (client identity and nature of e-mail) the parties shall give these instructions to the consultant.

ii. Records of deliverability related complaints, to the extent they can be searched electronically, received by the defendant from clients whose e-mails were sent from the same IP address as the plaintiff’s, between October 1, 2008 and February 28, 2010. The parties, in discussion with the consultant, shall agree to appropriate search terms. If they cannot agree, the consultant shall decide which search terms are most appropriate after hearing from the parties.

e. The plaintiff will be responsible for the consultant’s fees and disbursements (including HST). This is without prejudice to the plaintiff’s right to claim these costs from the defendant at trial.

f. Unless otherwise agreed, after the consultant is retained, he or she shall not communicate with any party in the absence of the other party.

g. Once the consultant has retrieved the documents above from the hard drive, s/he will provide the defendant with the documents (in either electronic or paper format) and provide the plaintiff with a list containing a general description of the classes of documents retrieved from the hard drive.

h. The defendant shall review the documents received from the consultant and list them in the appropriate schedule to its affidavit of documents. If relevant documents are no longer available, the defendant shall list them in schedule “C”.

i. The parties shall schedule examinations for discovery, not to exceed 3.5 hours, on the newly disclosed documents.

j. Counsel for the parties, or their designate, shall appear before me on October 16, 2019 at noon to provide me with an update as to the status of their efforts, with a view to determining whether the trial must be rescheduled.

k. I will remain seized of matters relating to the implementation of this order.

Costs

33While the plaintiff was successful on this motion, I am exercising my discretion not to award costs.

34As I mentioned above, the plaintiff should have brought the motion much sooner. On this motion, the plaintiff relied on discovery transcripts from December 2011. Had the motion been brought shortly thereafter, it would have been much easier and less costly to conduct searches on the previous version of the Campaigner software. While the plaintiff will incur these costs, he may ultimately claim them back from the Defendant at trial. These additional costs could have been avoided.

35In addition, parties to civil proceedings must be aware that setting an action down for trial is not a mere formality. The plaintiff served a trial record on April 22, 2013, and confirmed that productions were complete. He failed to abide by a case management order imposing a deadline to bring this motion by December 15, 2016. I recognize that the plaintiff had four different counsel over the life of this action, and I am not criticizing Mr. McLeod, who recently took over carriage of this file, for the timing of this motion. But the plaintiff should bear the responsibility for bringing this motion after having certified that it was ready for trial.

36When parties set an action down for trial, they are indicating to the Court that the matter is ready to be tried and that all pre-trial steps are complete. Setting an action down for trial is not a way to obtain an earlier trial date with the expectation that remaining steps will be completed prior to trial. When parties proceed in this way, they frustrate the Court’s ability to provide speedy justice. Cases that are not ready to be tried are much more likely to require adjournments, which result in wasted court time because the Court cannot book other trials on short notice. They also deprive other litigants (who are ready for trial) from obtaining earlier trial dates. Here, there is a real prospect that the timing of the plaintiff’s motion will require an adjournment of the trial. The Court is not awarding costs in these circumstances to express its disapproval.

Master Kaufman Date: July 25, 2019

Footnotes

[1] Rules of Civil Procedure, R.R.O. 1990, Reg. 194. [2] Second Amended Statement of Claim, paragraph 11. [3] Amended Statement of Defence, paragraph 19. [4] Notice of Motion, paragraph 7. [5] Examination for discovery of Mr. Saibil, questions 1033-1037, Motion Record, Tab M. [6] Dee Ferraro Limited v. Pellizzari, 2012 ONCA 55 at para 15. [7] Examination for discovery of Mr. Saibil, questions 978-982, Motion Record, Tab L.