Superior Court of Justice – Ontario
Court File No.: CV-17-2267 Date: 2022-11-29
Between: Edward Bruce Fulcher, Robert Austin Fulcher and 1644000 Ontario Inc. Applicants
– and –
Novitherm Canada Inc., Frank Snyder a.k.a Franklin Deland Snyder, Steven Snyder, David Snyder, Christine B. Lee, 1562447 Ontario Inc., The Canadian Plastics Group Ltd., Ceilings International Inc., 1772482 Ontario Limited, Sensory Care Inc., 975357 Ontario Limited, Del Rossi Imports Ltd., Del Rossi Agencies, 6294189 Canada Limited, the Estate of Kathleen Lee by the Estate Trustee Christine B. Lee Respondents
Counsel: Ms. Angela Assuras, for the Applicants Mr. Frank Spizzirri, for the Respondents
Heard: November 25, 2022
Reasons for Decision on Motions
Conlan J.
I. The Application, the Motions, and the Positions of the Parties
The Application
[1] This case commenced with a Notice of Application made by the Applicants, Edward Bruce Fulcher, Robert Austin Fulcher, and 1644000 Ontario Inc. (collectively referred to as “Fulcher”), against the Respondents, Novitherm Canada Inc. (“Novitherm”), Frank Snyder (“Frank”), and others.
[2] Novitherm is a company based out of Oakville, Ontario that manufactures, markets, and sells heat reflectors – an energy conservation product for pre-1980 buildings with hot water hydronic heating systems.
[3] The Application was started in April 2017. It seeks a wide range of relief but, in the main, an order that an independent valuation of Novitherm be done and an order compelling Novitherm or Frank to purchase Fulcher’s shares in Novitherm without a minority discount and in accordance with the independent valuation and an audit of the company’s books and records [clause 1(a) of the Notice of Application].
[4] The Application alleges that two families, the Fulchers and the Snyders, own Novitherm, with Fulcher as the minority shareholder, and that the Snyders were conducting the business affairs of Novitherm in an oppressive manner that was unfair to Fulcher.
[5] On the evidence filed on the motions, there is no dispute that Fulcher owns 35% of the shares of Novitherm. The Snyder family owns the majority of the shares, 65%.
[6] The Application, simply put, relies upon the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended, and specifically what is sometimes referred to as the oppression remedy under section 241 of that statute.
[7] The Respondents are contesting the relief being sought by Fulcher.
The Motions
[8] On November 25, 2022, by Zoom, this Court, as the case management judge of the proceeding, heard three motions – two by Fulcher and one by the Respondents.
[9] The motion brought by the Respondents was delivered first in time, with the two motions by Fulcher coming afterwards. For the purposes of these reasons, however, because I think it makes more sense to dispose of the motions in the following order, the two motions brought by Fulcher will be discussed before any assessment of the Respondents’ motion.
The Conversion Motion
[10] A motion was brought by Fulcher to convert the Application into an action.
[11] Fulcher alleges that the conversion is necessary because there are material facts in dispute, credibility issues between the parties, anticipated expert evidence, and because this Court, way back in September 2019, told counsel at an appearance that it looked like the matter might have to be converted into an action.
[12] The latter is true, this Court said that, and neither counsel at the time said anything against the idea of conversion; in fact, counsel for Fulcher responded by saying “[w]e expect a conversion” if the dispute could not be settled (page 42 of the transcript, that excerpt attached to Fulcher’s factum on the conversion motion).
[13] The Respondents make several arguments against the request for conversion, including that Fulcher’s motion is not supported by a proper affidavit sworn to or affirmed by someone with any actual knowledge of the case (but rather by an assisting lawyer based solely on information provided by Ms. Assuras herself), and that the motion has been unduly delayed for five years, and that the motion raises no specific facts or issues that cannot be fairly adjudicated by way of an application (in fact, the supporting affidavit sets out no disputed facts at all, the Respondents submit), and that it would be unfair and prejudicial to the Respondents to grant the relief sought.
The Contempt Motion
[14] This motion, also brought by Fulcher, seeks to find the Respondents in contempt and an order that the Respondents purge their contempt within thirty days or have their pleadings struck.
[15] Fulcher alleges that the Respondents have failed to comply with two aspects of the Order of Justice Miller made on June 21, 2017 – that they “shall provide copies of all bank statements and investment account statements on an ongoing basis and returned cheques and vouchers as well as bank statements prior to this date in respect of all Novitherm bank accounts…” [clause 1(f) of the Consent incorporated into the Order], and that they “shall permit the IT expert of the Applicants and Ron Smith to inspect all servers, backups, residual metadata in native and archived format and to provide copies of same in hardcopy or electronic format as may be requested by them with data over which privilege or privacy is claimed to be clearly marked and identified and the adjudication of that data’s disclosure to be subject to further order of this Court” [clause 1(h) of the Consent incorporated into the Order].
[16] Fulcher alleges further that the Respondents have failed to comply with two aspects of this Court’s Order made on October 1, 2019 – that “effective January 2019 and until varied or terminated by a subsequent Court Order, the monthly compensation (monies and benefits) paid by Novitherm to Edward Bruce Fulcher that were being paid up to the end of December 2018 shall be reinstated” (paragraph 25), and that the Respondents “shall advise counsel for the Applicants, without delay and in writing, of the general nature and date of any such document/record/data”, referring to any item that the Respondents withhold from disclosure on the ground that it is the subject of a confidentiality agreement with a third party (paragraph 34).
[17] Fulcher also alleges that the Respondents have failed to comply with this Court’s Order made on June 2, 2022 – that they “shall provide to counsel for the Applicants the IT data by 4:00 p.m. on 29 July 2022”. It is alleged that the Respondents delivered to Ms. Assuras a USB on November 14, 2022, well after the deadline.
[18] The Respondents take the position that they ought not to be found in contempt. They advance several arguments, including that Rule 60.11(1) of the Rules of Civil Procedure expressly excludes the availability of a contempt motion relating to an order for the payment of money, and that the Respondents have in fact complied with all of the disclosure-related orders but for those that are beyond their control such as CRA responses, and that the Respondents have done their very best to comply with the payment order but just, at some point, could not continue to pay Fulcher without severe economic consequences. In fact, the Respondents allege that they have paid to Fulcher over $288,000.00 during the litigation and while Fulcher has been working for a competitor.
[19] There is no dispute by the Respondents that they did, in fact, stop making the monthly payments to Fulcher after the June 2021 payment. There is equally no dispute in the evidence that Novitherm sustained net losses in each of 2020, 2021, and 2022.
[20] In oral submissions on the motions, Ms. Assuras conceded that, in light of Rule 60.11(1), the Respondents cannot be found in contempt for the stopped monthly payments to Fulcher after June 2021, however, counsel submitted that the Respondents have definitely breached the Order made on October 1, 2019.
The Respondents’ Motion
[21] The third motion, but the one delivered first in time, brought by the Respondents, seeks to vary this Court’s Order made on October 1, 2019, namely, to terminate or suspend the monthly payment to Fulcher ($5000.00 plus HST) and to terminate or suspend the obligation to secure a benefits plan for Fulcher. Other relief is sought as well: to require Fulcher to pay back all monthly payments made to him since the commencement of the Application or at least since October 1, 2019, and to prohibit Fulcher from obtaining an expert report or at least requiring that one be delivered by a specific deadline (given this Court’s Order made in the Fall of 2019 which required that experts reports be delivered long ago), and a disclosure order as against Fulcher, and an order dismissing the Application as against several of the Respondents, and setting a deadline for the delivery of Fulcher’s reply materials on the Application, and an order for a timetable.
[22] The Respondents allege that Fulcher has permitted the litigation to languish and, thus, they have been forced to bring their own motion “to get this litigation back on track” (paragraph 3 of the Respondents’ factum on their motion).
[23] There were four pillars that grounded counsel for the Respondents’ oral submissions at court on these three motions: (i) the Applicants have done nothing to move this litigation along at anything close to a reasonable pace, (ii) it is the Snyders, not Fulcher, who have “skin in the game” and real risk with Novitherm, (iii) a recurring theme in this litigation is that Fulcher requests disclosure, and the Respondents provide it, and then Fulcher does nothing with it and does not complain about it until the eve of a court attendance to deal with something else, and (iv) Fulcher has engaged in reactionary litigation tactics (my expression), for example, his contempt motion was only brought after the Respondents delivered their own motion to vary the October 1, 2019 Order. Counsel for the Respondents questions how serious Fulcher really is about his own contempt motion, and perhaps the evidence of his lack of seriousness about it is the fact that he chose not to file any reply materials on that motion over the past several months, the Respondents submit.
[24] Fulcher resists the relief being sought by the Respondents. He submits that to dismiss the Application against certain Respondents would be tantamount to summary judgment, a remedy that is not available on an application. Besides, he submits, there are proper claims being advanced as against all of the Respondents. Fulcher takes the position that there is no basis in law or in fact to amend this Court’s Order made on October 1, 2019, as that relief has not been pleaded by the Respondents and, further, the monthly payments to Fulcher were agreed to by the parties and their counsel. Similar arguments are made by Fulcher with regard to the request by the Respondents that he pay back monies already received during the litigation. Fulcher argues that the Respondents’ request about an expert report is not authorized by the Rules of Civil Procedure and would be unfair because disclosure is not complete. He denies that he owes any further disclosure. Finally, he states that he is agreeable to the establishment of a timetable for the Application if his motion for conversion is dismissed.
[25] In oral submissions on the motions, Ms. Assuras countered the Respondents’ complaint about delay by pointing out that it took the Respondents more than four years to respond to the Application. The originating process began in April 2017, and the first response came in August 2021.
II. Analysis
The Conversion Motion
[26] In this Court’s view, it is clear that the Application must be converted into an action. Fulcher’s motion is therefore granted.
[27] Mr. Spizzirri closed his oral submissions by saying that this Court should do what will enable the parties to have the matter adjudicated in the most expeditious manner possible.
[28] With respect, that misses the point. The point is that the case cannot be fairly adjudicated on the basis of a paper record; a trial will be required. That was my opinion more than three years ago, and that remains my opinion today.
[29] That there has been inordinate delay in moving the case along, which inordinate delay this Court agrees has occurred, and which unreasonable delay this Court lays at the feet of both sides, does not make any practical difference to the assessment.
[30] A case that was not capable of being fairly adjudicated by way of an application three years ago remains a case that is incapable of being so adjudicated today.
[31] On the procedural point raised by the Respondents, this Court agrees that it would have been preferable for the supporting affidavit filed on behalf of Fulcher to not have been so generic as it is and to not have been deposed by an assisting lawyer based entirely on information provided to that lawyer by Ms. Assuras.
[32] This Court cannot allow that to get in the way of what is obvious, however, and what is obvious from the pleadings and the affidavits of Fulcher and Frank is that this proceeding requires a trial and must take the shape of an action rather than an application.
[33] Under Rule 14.05(3)(h) of the Rules of Civil Procedure, for a matter where the rules do not expressly authorize the commencement of the proceeding by way of an application, an application may nonetheless be appropriate “where it is unlikely that there will be any material facts in dispute requiring a trial”.
[34] On the hearing of an application, the court may order that the whole application, or any issue, proceed to trial and give such directions as are just. Rule 38.10(1)(b).
[35] There is no dispute between the parties that the phrase “on the hearing of an application” does not mean that the conversion may only occur on the actual hearing date of the application. Rather, the conversion may occur on a motion that is brought in advance of the actual hearing date of the application. University Health Network v. Made in Japan Japanese Restaurants Ltd., 2003 46976 (ON SC), at paragraphs 7-11.
[36] Where a trial of the whole application is directed, the proceeding shall then be treated as an action, subject to the court’s directions. Rule 38.10(2).
[37] In terms of the test and the factors that the court should take into consideration on such a motion for conversion, the Respondents cite the decision of Justice Kristjanson in Fountain Asset Corp. v. First Global Data, 2017 ONSC 4780. This Court agrees that the said decision is instructive, and I set out below paragraph 15 of that decision, which paragraph relies on the decision of Firestone J. (as His Honour then was) in Przysuskiv v. City Optical Holdings Inc., 2013 ONSC 5709.
[15] The following general principles should be considered in determining whether to convert an application into an action (Przysuskiv v. City Optical Holdings Inc., 2013 ONSC 5709 (SCJ) per Firestone J. at paras. 5-8):
(a) An application should be used when there is no matter in dispute and when the issues to be determined do not go beyond the interpretation of a document;
(b) A good reason to convert an application into an action is when the judge will hear the matter cannot make a proper determination of the issues on the application record;
(c) When issues of credibility are involved the matter should proceed by way of action;
(d) Whether material facts are in dispute;
(e) The presence of complex issues that require expert evidence and/or weighing of evidence;
(f) Whether there is a need for pleadings and discoveries; and
(g) The importance and impact of the application and of the relief sought.
[38] In the opinion of this Court, every one of those factors, (a) through (g), points in favour of converting this application into an action.
[39] With regard to item (a), the sheer number and the extent of the material matters in dispute in this proceeding will be dealt with below. Further, the matters in dispute have nothing to do with and, thus, certainly go well beyond the interpretation of a document or documents.
[40] Regarding items (b) and (d), which factors are related, it is clear to this Court that no judge would be able to fairly determine the issues on the basis of written application materials, alone, because there are numerous material facts that are in dispute.
[41] Frank denies Fulcher’s allegation that Fulcher is a director of Novitherm. That is a material fact, a very basic one, that is in dispute. If Fulcher is not even a director of the corporation, then how can he justify some of the relief that he is seeking in his originating process, such as an order that Frank disclose all projects that Novitherm is involved in and all potential projects that the company is currently negotiating?
[42] Frank denies Fulcher’s allegation that Novitherm operated without a Minute Book. That is a material fact, also a very straightforward one, that is in dispute. It is relevant to Fulcher’s allegations that Novitherm was a shoddy operation (my expression) that was poorly managed by Frank and managed in a way that was designed to keep things secret from Fulcher.
[43] Fulcher denies Frank’s allegations that Fulcher has worked for a business called Watershed since 2017, at the latest, and that Watershed is a close competitor of Novitherm. Those are material facts, again quite simple ones, that are in dispute. They are relevant to whether Fulcher was wrongfully dismissed and, if so, his damages.
[44] Fulcher and Frank disagree sharply on the financial health of Novitherm, currently and since the onset of the COVID-19 pandemic. That is a material fact that is in dispute. It is relevant to whether the Snyders have been siphoning funds out of Novitherm to the prejudice of Fulcher, something that Fulcher has alleged.
[45] Frank refutes all of Fulcher’s allegations about Fulcher’s “car loan” and whether Novitherm is in any way responsible for paying it. The existence of that loan is a material fact that is in dispute. It is relevant to what obligations Novitherm has towards Fulcher and whether it has ignored those obligations, which in turn is relevant to Fulcher’s overarching allegation that the Respondents have conducted the business affairs of Novitherm in a manner that is oppressive, unfairly prejudicial to and that unfairly disregards the interests of Fulcher.
[46] Frank refutes all of Fulcher’s allegations about Fulcher’s $50,000.00 loan, including whether it even exists and whether Novitherm is in any way responsible for paying it. The existence of that loan is a material fact that is in dispute. It is relevant for the same reasons as the alleged car loan.
[47] Frank denies Fulcher’s allegation that Novitherm operated without ever having shareholders’ or directors’ meetings. That is a material fact, a most basic one, that is in dispute. It is relevant for the same reasons as the Minute Book.
[48] Frank and Fulcher cannot even agree on whether Fulcher resigned from Novitherm or was fired. That is a material fact, a simple one, that is in dispute. It is relevant to whether Fulcher was wrongfully dismissed and, if so, his damages, and it is relevant to an understanding of the entire context of the relief sought in the originating process. If Fulcher quietly quit (to use Frank’s expression), as opposed to being fired for asking a few legitimate questions about Novitherm’s finances, then Fulcher’s invocation of the oppression remedy takes on a different flavour.
[49] These are just some examples. The Court could go on and on. The point is that there are facts in dispute, highly material ones, and many of them. They cannot be properly resolved on the basis of a written record.
[50] With regard to item (c), nothing brings the credibility of a litigant more to the forefront than the other side saying that his/her allegations are simply “false”. Not just mistaken.
[51] That is exactly what Frank asserts in this proceeding (see, as just two examples, paragraphs 12 and 22 of Frank’s affidavit sworn on 16 February 2022). For his part, Fulcher accuses Frank of distorting the facts and making utterly false statements simply in an effort to malign him (paragraphs 2 and 39 of Fulcher’s affidavit sworn on 23 February 2022).
[52] There are serious issues of credibility that pervade this proceeding. An action is required. A trial is required.
[53] Regarding item (e), this proceeding will definitely require expert evidence. We know already that the Respondents will be relying upon expert opinion evidence in the form of a valuation report that values Novitherm and Fulcher’s shares in the company. That report, yet to be disclosed, was prepared in the context of the within litigation.
[54] In addition, we know that the Respondents will be relying upon earlier expert opinion evidence, namely, the SF Valuations Report dated May 17, 2017.
[55] And we know from the affidavit of Fulcher sworn on 23 February 2022 that he takes issue with the Respondents’ expert evidence that he has seen, and that he has retained two of his own experts, Mr. Smith and Ms. Posel.
[56] These are complex issues – the extraction and interpretation of raw data from Novitherm’s server, back-ups, and email systems, and the analysis of Novitherm’s financials, and the proper approach to and methodology for the valuation of the corporation and its shares. Without hearing from the experts, how could the justice fairly resolve the anticipated competing expert opinions? A written application record is simply not practical in these circumstances.
[57] With regard to item (f), proper pleadings are required because the affidavits that have been filed to date are voluminous and, quite frankly, are chock-full of argument (on both sides). The proceeding is bereft of concise statements of the alleged facts and the relief being sought, and that vacuum will be filled with a proper statement of claim, a proper statement of defence, and, if necessary, a proper reply.
[58] Examinations for discovery are also required, in my opinion. Discoveries are generally wider in scope than cross-examinations on affidavits, and discoveries generally provide more opportunity to ask for undertakings. I would describe both of those enhancements as being particularly valuable here, given the complexity of the issues and the number of material facts in dispute.
[59] Finally, regarding item (g), there is no dispute between the parties that the within proceeding is extremely important and, whichever way that it is decided, will have a substantial impact on them. In fact, it would not be hyperbolic to say that the relief sought in the originating process, if granted, would effectively terminate the Respondents’ ability to run Novitherm at all.
[60] In totality, there is no question that the proceeding must be converted from the current application into an action and must proceed to a trial, and this Court therefore orders so.
The Contempt Motion
[61] Fulcher’s contempt motion is dismissed. This Court makes no finding that the Respondents are in contempt of any court order.
[62] A party seeking to establish civil contempt must prove that (i) the order allegedly breached states clearly and unequivocally what shall and shall not be done, and (ii) the alleged contemnor had actual knowledge of it, and (iii) the alleged contemnor intentionally did the act that the order prohibits or intentionally failed to do the act that the order compels. The moving party must establish each of those three elements by proof beyond a reasonable doubt. Even then, the court retains an overriding discretion to decline to make a contempt finding where the three factors are met but where the court is of the opinion that it would be unjust to make the contempt finding. Carey v. Laiken, 2015 SCC 17, [2015] 2 S.C.R. 79, at paragraphs 32-37.
[63] The contempt power should be used cautiously and with great restraint. It cannot be reduced to a mere means of enforcing judgments or orders. It is an enforcement power of last resort. Carey v. Laiken, supra, at paragraph 36; Ruffolo v. David, 2019 ONCA 385, at paragraph 18.
[64] In our case, assuming without deciding that Fulcher has established the three elements of the test for civil contempt beyond a reasonable doubt, this Court is of the view that the Respondents have acted in good faith in taking reasonable steps to comply with the disclosure orders of Justice Miller and this Court, and thus, it would be an injustice in the circumstances of this case to make a finding of contempt against the Respondents. Carey v. Laiken, supra, at paragraph 37.
[65] Regarding clause 1(f) of the Consent incorporated into the Order of Justice Miller, I accept the evidence of Frank at paragraphs 46 through 51 of his affidavit sworn on 16 February 2022 (which, in summary, is that the Respondents have provided all of the documents for all of the corporation’s bank accounts).
[66] More important, in the event that Frank is mistaken about that, this Court is not about to make a finding of contempt on the basis of the evidence of Fulcher, which evidence is confined to this single paragraph in his affidavit sworn on 17 February 2022, paragraph 10.
- The Respondents have failed to provide copies of all of the bank statements and investment account statements on an ongoing basis of Novitherm, as ordered by Miller J. I have yet to receive copies of the statements for all investment accounts and not all vouchers are available on line. The on- line access is still limited which limits I believe are imposed by the Respondents.
[67] With respect, Fulcher has to provide more specific evidence than that before this Court takes the serious step of finding that the Respondents have not, at a minimum, made all reasonable efforts in good faith to comply with the said order.
[68] With regard to clause 1(h) of the Consent incorporated into the Order of Justice Miller, I accept the evidence of Frank at paragraph 19 of his affidavit sworn on 16 February 2022. For whatever reason, the Respondents did not, at the time that the raw data was disclosed, clearly mark and identify that over which claims of privilege or privacy were being advanced by the Respondents, which is what the Order contemplated.
[69] The result of that failure has resulted in non-compliance with the Order, as Fulcher alleges, but it is also true that the Respondents have taken reasonable steps to clear the impasse, and in that regard I accept the evidence of Frank at section B.2. of his affidavit referred to immediately above.
[70] To his credit, Fulcher himself wants to work to overcome the impasse (paragraph 6 of his affidavit sworn on 17 February 2022). Until that is done, however, a contempt finding is not in the interests of justice.
[71] There is overlap between clause 1(h) of the Consent incorporated into the Order of Miller J. and paragraph 34 of this Court’s Order made on October 1, 2019. For similar reasons articulated above, no contempt finding is appropriate regarding the said paragraph 34.
[72] Similarly, there is overlap between clause 1(h) of the Consent incorporated into the Miller J. Order and this Court’s Order made on June 2, 2022. Likewise, no contempt finding is appropriate regarding the said June 2nd Order.
[73] Finally, paragraph 25 of this Court’s Order made on October 1, 2019 has been violated by the Respondents. Before unilaterally stopping the monthly payments to Fulcher, the Respondents had an obligation to ask the court to vary or terminate the Order.
[74] This is the second time that the Respondents have decided that they can determine when they are at liberty to stop adhering to an agreement or a court order for the payment of money to Fulcher. They did the same thing before this Court’s Order was made on October 1, 2019.
[75] Given Ms. Assuras’ concession about Rule 60.11(1), however, which concession was properly made, no contempt finding can be made. The wilful non-compliance of the payment order by the Respondents will be dealt with by way of costs.
[76] Fulcher’s contempt motion is, therefore, dismissed.
The Respondents’ Motion
[77] The Respondents’ motion is allowed in part. There shall be an order terminating the obligation to secure a benefits plan for Fulcher, and there shall be an order requiring that Fulcher deliver an expert’s report by a specific deadline, and there shall be an order for a timetable to get what is now an action moving at a reasonable pace.
[78] Otherwise, the Respondents’ motion is dismissed.
[79] The Respondents’ Notice of Motion sets out two major arguments in favour of their request to terminate or suspend the monthly payment obligation in favour of Fulcher: (i) it was not disclosed at the time that the parties, through counsel, made the agreement for Novitherm to pay the $5000.00 plus HST per month to Fulcher that Fulcher was gainfully employed with Watershed, and (ii) since April 2017, Fulcher has failed to diligently prosecute the Application (paragraphs 13 and 15 of the Notice of Motion dated January 20, 2022).
[80] In this Court’s view, there is little merit to either argument.
[81] First, even if the non-disclosure of the Watershed employment is true, it is very unlikely that Fulcher’s unemployment was the basis for the agreement in the first place. Rather, the basis for the agreement would have been the fact that Fulcher was presumptively entitled to the continuation of the status quo that was in place before the litigation, pending a resolution of the litigation and without prejudice to the Respondents’ position that Fulcher was/is not entitled to any payments from Novitherm. Frank’s own evidence points towards that - paragraph 31 of Frank’s affidavit sworn on 18 January 2022.
[82] Second, the Respondents are equally responsible for the very slow progress of the within litigation. It took them until August 2021, more than four years after being served with the Application, to formally respond to it. With respect, they cannot use delay as a reason for discontinuing the monthly payments to Fulcher.
[83] The benefits plan for Fulcher is a different matter, however. I accept the evidence of Frank that “since the commencement of this proceeding the Applicants have only submitted one (1) small and unsupported claim” for benefits (paragraph 56 of Frank’s affidavit sworn on 18 January 2022).
[84] It is obviously not a pressing matter for Fulcher, and it has now been years since he had a status with Novitherm that would have entitled him to any company benefits. It is high time to end that obligation on the part of the Respondents.
[85] This Court rejects the request by the Respondents to have Fulcher pay back all monthly payments made to him since the commencement of the Application or at least since October 1, 2019.
[86] Frankly, the Snyders do not come to court with clean hands to make such a request. They have twice unilaterally stopped complying with their contractual/court-ordered obligation to make regular monthly payments to Fulcher. They have, in doing so, effectively disentitled themselves to make such a request.
[87] It would not result in a fair trial to prohibit Fulcher from delivering any expert report. It is reasonable, however, to set out a new deadline for that report, and this Court does so below in these reasons.
[88] The within Application has been converted into an action, and there shall be examinations for discovery. Any further disclosure sought by either side will be dealt with by way of affidavits of documents and the timetable ordered below.
[89] Finally, even if true, it is moot that the “Notice of Application does not raise any specific or even a general claim or claims against any of the Respondents Steven Snyder, David Snyder, Christine Lee, and Kathleen Lee (who has since passed away)”, as alleged at paragraph 71 of Frank’s affidavit sworn on 18 January 2022, as to effectively grant partial summary judgment against Fulcher and dismiss his claims against some of the Respondents must await the delivery of the pleadings in the now action.
[90] This Court does agree with Frank and with his counsel that the proceeding has unreasonably languished. The timetable ordered below is a strict one and will alleviate any concern about further unwarranted delays.
III. Conclusion and the Order of the Court
[91] For all of these reasons, Fulcher’s conversion motion is granted, and Fulcher’s contempt motion is dismissed, and the Respondents’ Motion is allowed in part.
[92] This Court orders that the within Application shall be converted into an action and shall be heard by way of a trial.
[93] This Court orders further that the Respondents’ obligation to secure and maintain a benefits plan for Fulcher is terminated, effective immediately.
[94] This Court orders further that Fulcher shall deliver an expert’s report by a specific deadline, as per the below court-ordered timetable.
[95] This Court orders further that the parties shall comply with the following timetable:
(i) Fulcher shall issue and serve his Statement of Claim by January 6, 2023;
(ii) the Respondents shall deliver their Statement of Defence by January 27, 2023;
(iii) Fulcher shall deliver his Reply, if any, by February 3, 2023;
(iv) if there is a counterclaim or a crossclaim or a third party claim, then counsel shall present to this Court, on consent, an amended timetable for steps (ii) and (iii) above, failing which consent the Court shall impose an amended timetable;
(v) the discovery of documents procedure for both sides (Rule 30) shall be completed by March 3, 2023;
(vi) the examinations for discovery procedure for both sides (Rule 31) shall be completed by June 2, 2023, including the service and filing (but not necessarily the hearing) of any motion arising therefrom;
(vii) a further case management conference with this Court shall be scheduled for a date as soon as possible after June 2, 2023, at which time this Court, among other things, shall impose a further timetable for pretrial procedures, listing for trial, admissions, and the trial itself, and anything else that may be appropriate in the circumstances;
(viii) Rule 53.03 applies to this action, subject to the below modification;
(ix) in order to have a productive next case management conference as soon as possible after June 2, 2023, each side shall, not less than 30 days before the said case management conference, serve on the other side every expert report being relied upon; and
(x) no changes to the within timetable, even if on consent, shall be permitted without a further court order.
[96] This timetable will accomplish what the Respondents want and what is required – to get the litigation back on track, fairly but quickly, within about six months’ time.
[97] On the issue of the costs of the three motions disposed of herein, the Respondents shall not be entitled to any costs because of their unilateral decision to stop complying with this Court’s payment order made on October 1, 2019.
[98] To be clear, that payment Order remains in place and in full force and effect.
[99] Without knowing anything about offers to settle, if any, it may be that Fulcher is entitled to some costs, however, counsel must consider that there was divided success when the three motions are looked at in totality.
[100] If costs are pursued by Fulcher, then submissions in writing will be accepted. Each submission shall not exceed three pages in length, excluding attachments. Fulcher shall serve and file his submissions within thirty calendar days of the date of these reasons. The Respondents shall serve and file their submissions within fifteen calendar days of their counsel’s receipt of Fulcher’s submissions. No reply is permitted.
[101] One final point – counsel shall ensure that a formal Order is taken out in accordance with these reasons.
Court File No.: CV-17-2267 Date: 2022-11-29
Ontario Superior Court of Justice
Between: Edward Bruce Fulcher, Robert Austin Fulcher and 1644000 Ontario Inc. Applicants
– and –
Novitherm Canada Inc., Frank Snyder a.k.a Franklin Deland Snyder, Steven Snyder, David Snyder, Christine B. Lee, 1562447 Ontario Inc., The Canadian Plastics Group Ltd., Ceilings International Inc., 1772482 Ontario Limited, Sensory Care Inc., 975357 Ontario Limited, Del Rossi Imports Ltd., Del Rossi Agencies, 6294189 Canada Limited, the Estate of Kathleen Lee by the Estate Trustee Christine B. Lee Respondents
Reasons for Decision on Motions
Conlan J.
Released: November 29, 2022