Court File and Parties

COURT FILE NO.: CV-20-9125 DATE: 2020/05/07 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

PROVINCIAL DOORS INC. Plaintiff – and – TONY NASH, RONALD GILBEAU and NASH GIL DOORS INC. Defendants

COUNSEL: J. O'Donnell and T. Weisberg, for the Plaintiff/Responding Party G.S. Clarke, for the Defendants/Moving Parties

HEARD: In writing

REASONS FOR DECISION

Ellies R.S.J.

[1] The defendants move for an order transferring this action from Toronto to Sudbury. In my view, the motion should be granted for the reasons set out below.

BACKGROUND

[2] The plaintiff, Provincial Doors Inc. ("PDI"), is an Ontario corporation engaged in the manufacture, sale, and maintenance of door systems, including specialized mining doors. The defendants, Nash and Gilbeau, are former employees of PDI. The defendant, Nash Gil Doors Inc. ("NG Inc."), is a company owned principally by Nash and Gilbeau.

[3] PDI alleges that it suffered damages because the defendants used confidential information obtained by Nash and Gilbeau through their employment with PDI to compete unfairly against it in the mining door business.

[4] PDI commenced this action on July 23, 2019, in Toronto, where its lawyers are located. As far as I can tell, the action has not yet proceeded to the discovery stage, although that is not clear from the materials.

[5] The defendants argue that the fact that PDI's lawyers are located in Toronto is the only connection the action has with that venue. They submit that Sudbury is a significantly better place for the trial.

[6] PDI resists the motion not only on the merits, but also on the basis that the motion was brought after the expiry of a deadline set in a case management order.

ISSUES

[7] The parties raise two issues:

(1) Should the motion be dismissed because it has been brought too late? (2) If not, should the action be transferred from Toronto to Sudbury?

ANALYSIS

Issue 1: Should the motion be dismissed because it has been brought too late?

[8] This action is being case managed. On February 7, 2020, Master Sugunasiri ordered that this motion be filed by February 24. The defendants did not meet that deadline. Instead, the motion was brought three days later, on February 27. PDI submits that the motion should be dismissed for that reason. I disagree.

[9] PDI has not alleged that it was prejudiced in any way by the delay. I have a hard time seeing how it could be, given that the motion was served only three days after the deadline.

[10] At the same time, the defendants have not offered any explanation for the delay. However, I am not prepared to dismiss the motion for that reason. Rule 3.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, allows the court to extend or abridge any time prescribed by the rules or by an order on such terms as are just. As I will explain shortly, the test for transferring an action is whether such a transfer is in the interests of justice. I do not believe it would be just to dismiss a motion to transfer that may meet that test simply because it was brought three days later than ordered. The merits of the motion should be considered.

Issue 2: Should the action be transferred from Toronto to Sudbury?

[11] Unless a statute or a rule requires otherwise, a plaintiff has the right to commence an action in any court office in the Province of Ontario: r. 13.1.01(2); Chatterson v. M & M Meat Shops Ltd., 2004 ONSC 1987 (Div. Ct.), at para.14. Unless an action is transferred, the trial of the action shall be held in the county where the proceeding was commenced: r. 46.01.

[12] The court's power to transfer a proceeding is governed by r. 13.1.02. Rule 13.1.02(2)(b) provides that the court may transfer a matter to a county other than the one in which it was commenced where the transfer is desirable in the interests of justice [^1], having regard to:

(i) where a substantial part of the events or omissions that give rise to the claim occurred, (ii) where a substantial part of the damages were sustained, (iii) where the subject-matter of the proceeding is or was located, (iv) any local community’s interest in the subject matter of the proceeding, (v) the convenience of the parties, the witnesses, and the court, (vi) whether there are counterclaims, crossclaims, or third or subsequent party claims, (vii) any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits. (viii) whether judges and court facilities are available at the other county, and (ix) any other relevant matter.

[13] The list of factors set out in r. 13.1.02(2)(b) is to be considered holistically, and not as a purely numeric or mathematical exercise: Eveready Industrial Services Corp. v. Jacques Daoust Coatings Management Inc. (2005), 76 O.R. (3d) 390 (Ont. S.C.); Hallman v. Pure Spousal Trust (Trustee of), 2009 CarswellOnt 5795 (Ont. S.C.), at paras. 28-29; Chatterson, at para. 35; Bruce Power L.P. v. BNT Canada, L.P., 2018 ONSC 5968, at para. 16. No one factor is more important than any other: Patry v. Sudbury Regional Hospital, 2009 CarswellOnt 1462 (Ont. S.C.), at para. 13.

[14] An action will only be transferred at the request of a defendant where it is established that the defendant's proposed venue is significantly better than that chosen by the plaintiff: Siemens Canada Ltd. v Ottawa (City) (2008), 93 O.R. (3d) 220 (Ont. S.C.), at para. 24; Chatterson, at para. 29.

[15] However, it should be noted that r. 13.1.02(2) is permissive, not mandatory. The court is not required to transfer a proceeding even where a defendant establishes that another venue is significantly better than the original.

[16] Notwithstanding the holistic nature of the decision-making process, I find it convenient to deal separately with each of the factors listed in the rule in order to discuss the evidence relating to each.

Where a substantial part of the events or omissions that gave rise to the claim occurred.

[17] PDI submits that this is a neutral factor in this case. I do not agree.

[18] As PDI concedes, PDI "operates out of Sudbury": Affidavit of Michael Ceming dated March 2, 2020 (“Ceming affidavit”), at para. 18. Nash and Gilbeau worked for PDI in Sudbury. When they left their employment, they established NG Inc. in Sudbury, where it continues to operate.

[19] PDI relies on the fact that many of the clients for whose business the defendants are allegedly competing have their head offices in Toronto, including its largest client, Vale Canada Limited ("Vale"). That may be true, but it ignores the fact that Vale also has a very significant presence in Sudbury, as do Newmont Goldcorp Corporation and Pretium Resources Inc., both of which are also specifically mentioned as clients of PDI whom it alleges were solicited by Nash and Gilbeau using confidential information belonging to PDI: Statement of Claim, para. 43; Affidavit of Miranda Goudreau dated February 26, 2020, at para. 23.

[20] In my view, therefore, this factor is not neutral. It favours Sudbury as a venue for the trial.

Where a substantial part of the damages were sustained.

[21] PDI concedes that this factor favours Sudbury.

Where the subject-matter of the proceeding is or was located.

[22] PDI concedes that this factor also favours Sudbury.

Any local community's interest in the subject-matter of the proceeding.

[23] PDI contends that neither Toronto nor Sudbury have any interest in the subject-matter of this action. Again, I am unable to agree.

[24] In my view, the word "community" in r. 13.1.02(b)(iv) should be interpreted to mean not only the community at large, but also the business community. PDI's submission improperly fails to consider the evidence that there are a number of mining businesses located in Sudbury. It is not mere speculation to conclude that the result of this action will be of interest to that particular segment of the community.

[25] For this reason, I believe that this factor also favours Sudbury.

The convenience of the parties, the witnesses and the court.

[26] As I indicated above, all of the corporate and individual parties are located in Sudbury.

[27] According to PDI, a number of potential witnesses, however, are not. PDI submits that its three principal owners are potential witnesses in this action. None of them live in Sudbury. However, I fail to see how two of them are likely to be witnesses and why the third would be any more inconvenienced by having to attend Sudbury for the trial than he is by having to attend Sudbury for business.

[28] PDI submits that the defendants make allegations in their statement of defence against all three of the owners. However, the only allegations made in the statement of defence against two of the owners is exactly that: that they are owners: Statement of Defence, para. 19. That fact has been admitted by PDI in the course of this motion: Ceming affidavit, para. 19. Therefore, there is no need for those two owners to testify as far as that allegation is concerned and no other need for their evidence has been identified by PDI.

[29] Of the three owners, the only one against whom the allegations extend beyond ownership is Ceming himself. He is the President and Chief Operating Officer ("COO") of PDI. He lives in Port Lambton, Ontario. He deposes that, in order to travel to Sudbury, he must first fly to Toronto. While I accept that this makes Sudbury less convenient to Ceming than Toronto as a venue for the trial, it cannot be any more inconvenient to him than it is to travel to Sudbury for the purpose of fulfilling his role as COO of PDI.

[30] In addition to the owners of PDI, the defendants have referred in their statement of defence to Brian Lawlor, PDI's Director of Finance: Statement of Defence, at para. 39. Lawlor resides in Wasaga Beach, Ontario. The distance between Wasaga Beach and Sudbury is about 285 kilometres. Balanced against the inconvenience to Lawlor of travelling this distance is the fact that most of the other potential witnesses are likely to live in the Sudbury area. This will certainly include Nash and Gilbeau. It will also likely include employees of the Sudbury mining clients whose business PDI alleges the defendants improperly solicited.

[31] As far as witnesses and the parties are concerned, therefore, this factor favours Sudbury.

[32] As far as the convenience of the court is concerned, this factor is neutral.

Whether there are counterclaims, crossclaims, or third party or subsequent party claims.

[33] There are no counterclaims, crossclaims, third party or subsequent party claims in this action. However, the defendants allege that there is a related action that justifies transferring this one to Sudbury.

[34] The defendants place a great deal of emphasis on the submission that this action ("the PDI action") is connected to another action ("the Zacon action"), which was commenced in Sudbury by a company called Zacon Limited ("Zacon") a few months before the PDI action was commenced in Toronto. In the Zacon action, Zacon alleges that PDI has manufactured and supplied specialized mining doors in contravention of U.S. and Canadian patents held by Zacon. Zacon has also named one of PDI's clients, Pretium Resources Inc., as a defendant, alleging that it purchased and installed the specialized doors manufactured and sold by PDI: Zacon Action Statement of Claim, paras. 28-29.

[35] The defendants point to a paragraph in PDI's statement of claim in which PDI alleges that Nash and Gilbeau met with Zacon’s management and legal counsel after the Zacon action was commenced: PDI Action Statement of Claim, at para. 35. PDI alleges that the meeting was for the purpose of disclosing confidential information in order to advance the Zacon action. It points out that the same lawyer represents Zacon in its action and the defendants in the PDI action.

[36] I note that PDI has brought a motion to have that lawyer removed. However, even if that motion fails, I do not see how the Zacon and PDI actions are tied together sufficiently to justify transferring the latter to Sudbury. In my view, in order to justify such a transfer under r. 13.1.02(2)(b) on the basis that the two actions are connected, the defendants must satisfy that court that the actions are so closely related to one another that Zacon could succeed at obtaining an order under r. 6.01to have the actions consolidated, heard together, or tried one after the other. The defendants have failed to do that.

[37] The Zacon action is a patent infringement case. The PDI action is a breach of employee duty case. Based on the evidence, Nash and Gilbeau may be called as witnesses in the Zacon action in support of its allegation that PDI was infringing Zacon’s patents. As far as I can tell from the materials filed, however, the only significance of the fact that Nash and Gilbeau are being sued by PDI is that it may impact their credibility as witnesses for Zacon. The fact that PDI may have been infringing Zacon’s patents is not relevant to PDI’s allegation that the defendants in this action have used confidential information to solicit PDI’s former clients.

[38] The defendants further allege that the PDI action was commenced as a "pre-emptive strike" against a wrongful dismissal action by Nash and Gilbeau against PDI, which action I presume would be started in Sudbury. However, that action has not been commenced. For that reason alone, I would not treat this unfulfilled intention as a factor in favour of transferring the PDI action.

[39] For these reasons, I am not satisfied that either the existing Zacon action or the potential wrongful dismissal action favour a transfer to Sudbury.

Any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits.

[40] PDI submits that the availability of case management and mandatory mediation in Toronto favour keeping this action in that venue. However, as R. Gordon R.S.J. (as he then was) pointed out in Zhao v. Wikwemikong Nursing Home Ltd., 2016 ONSC 5400, at para. 30, these advantages also exist in the Northeast Region:

Each of the advantages alleged to exist in Toronto also exist in Gore Bay. That is, although mediation is not mandatory, judicial mediation and case management are both available on request in the Northeast Region for cases that would benefit from same. Similarly, the Judges of the Northeast regularly accommodate requests for chambers meetings outside of normal court sitting hours and often conduct these meetings by teleconference.

[41] Thus, this factor is neutral.

Whether judges and court facilities are available at the other county.

[42] A few months ago, I might have held that this factor favoured Toronto. Sudbury had two judicial vacancies that remained unfilled for years. However, recently, one of the judicial vacancies has been filled. In my view, there are now enough judges available in Sudbury to permit this matter to be heard as expeditiously there as it might be in Toronto.

[43] This factor, therefore, is neutral.

Any other relevant factor.

[44] PDI submits that two additional factors are relevant. The first is the delay by the defendants in bringing this motion. I fail to see how this is relevant to a determination of whether the action should be transferred in the interests of justice. However, even it is, as I have already pointed out, the delay is minimal and PDI has shown no prejudice arising from it.

[45] The other factor that PDI argues is relevant is the location of its lawyers’ offices. As PDI highlights, counsel for the defendants is also located out of Sudbury, in Collingwood, which it submits, is closer to Toronto. In my view, the location of counsel is a neutral factor for two reasons.

[46] First, as I indicated earlier, PDI has brought a motion to have counsel for the defendants removed, presumably on the basis that he is a witness, although that has not been made clear. Thus, he may not ultimately remain as counsel.

[47] Second, and more importantly, I do not view the location of counsel chosen by PDI as a factor to be considered in favour of keeping the action in Toronto in light of the other factors that I have found favour a transfer to Sudbury. I agree with the opinion expressed by M. Brown R.S.J. (as he then was) in Patry v. Sudbury Regional Hospital, 2009 CarswellOnt 1462, at para. 23:

A party who chooses to retain counsel who practices in a judicial centre that has no connection with the events in dispute should not be permitted to point to the expense of having counsel attend at a trial at a venue closer to the location at which the events occurred as justification for resisting that transfer.

CONCLUSION

[48] For the foregoing reasons, I believe that this action should be transferred to Sudbury. I have consulted with the Regional Senior Judge in Toronto by providing him with a draft of these reasons, and he agrees.

[49] Therefore, an order shall issue transferring this matter to Sudbury from Toronto.

COSTS

[50] I am not inclined to award costs to either party in this motion.

[51] As I mentioned, it was difficult to discern from the materials exactly what stage this action is at, even though the provincial practice direction states clearly that the parties must provide that information to the court. Rather than succinctly providing it, however, first the defendants and then the plaintiff filed copies of correspondence passing between their lawyers. Most of this was completely irrelevant. Moreover, much of it ought to have been embarrassing to counsel for both sides. The correspondence makes it clear that the acrimony between the parties has spilled into the relationship between the lawyers. This is in direct contravention of the standards of practice set by the Law Society of Ontario and the principles of civility recommended by such respected organizations as the Advocates’ Society.

[52] I am concerned that any award of costs in this case will be lorded over the successful party and will serve only to increase, not to decrease, the acrimony between counsel.

[53] For that reason, there shall be no order as to costs.

Ellies R.S.J. Released: May 7, 2020

[^1]: The rule refers to “interest of justice”, i.e. singular. However, given that the rules themselves identify more than one such interest, I will use the plural: see, for example, r. 1.04(1) (“the just, most expeditious and least expensive determination of every civil proceeding on its merits”).