Court File and Parties

Court File No.: CV-22-0100 Date: 2024-06-12 Superior Court of Justice - Ontario

Re: Path Network Inc and Tempest Hosting LLC, Plaintiffs And: Curtis Michael Gervais, Packet Rabbit Inc., John Does, Jane Does and Doe Corporations, Defendants

Before: Chalmers J.

Counsel: David Debenham, for the Plaintiffs Michael A. Katzman, for the Defendants

Heard: June 11, 2024

Endorsement

[1] On November 21, 2022, the plaintiffs caused the Notice of Action to be issued in the Superior Court of Justice at Perth. The Statement of Claim is dated March 9, 2023. The causes of action include unlawful interference in economic interest, breach of contract, breach of fiduciary duty, breach of confidence, internet harassment, conspiracy and spoliation.

[2] The defendants Curtis Michael Gervais and Packet Rabbit Inc, (the defendants) bring this motion pursuant to Rule 13.1.02 for an order transferring the action from Perth to Toronto. The defendants also seek an order pursuant to Rule 77.05(2) that the action be assigned for case management. Regional Senior Justice Firestone delegated the responsibility of responding to the motion to me as the Co-Team Lead (Civil) in Toronto.

[3] In January 2023, the plaintiffs were granted a series of ex parte orders as against the defendants. The orders included an Anton Pillar Order and Mareva Injunction. After receiving notice of the orders, Mr. Gervais took steps to retain counsel in Perth. According to the defendants, no lawyers who practice in Perth were prepared to take on the file and they were required to retain counsel in Toronto.

[4] After retaining counsel, the defendants scheduled a motion to set aside the ex parte orders. The motion was returnable on June 2, 2023. The motion was adjourned to July 27, 2023. The defendants also brought a motion to strike out paragraphs of the claim on the basis that the paragraphs were prejudicial. The motion to strike was scheduled to proceed on May 11, 2023. The plaintiffs brought a motion to access the materials seized in furtherance of the Anton Piller Order. This motion was also returnable on May 11, 2023 and was to be heard together with the defendants’ motion to strike. The defendants also brought a Rule 30.10 motion for production of communications between counsel for the plaintiffs and a data centre. The Rule 30.10 motion was also returnable on May 11, 2023.

[5] On May 11, 2023, the motions judge only heard the plaintiffs’ motion for access to the materials seized pursuant to the Anton Pillar order. The defendants’ motions to strike and the Rule 30.10 motion that were scheduled to be heard the same day were adjourned. The motions judge stated that arrangements would be made to have the defendants’ motions heard as quickly as possible.

[6] The court did not accommodate the defendants’ request to schedule new dates for their outstanding motions. The decision on the plaintiffs’ access motion was released on July 25, 2023. The defendants immediately stated that it was their intention to seek leave to appeal the decision. The defendants’ motion to set aside the ex parte orders did not proceed on July 27, 2023.

[7] The defendants argued that the failure of the Perth courthouse to schedule their motions in a timely manner, created a reasonable apprehension of bias against the defendants. The defendants sought to schedule a motion before Justice Abrams that he recuse himself. From August 1, 2023 to September 14, 2023, the defendants requested that their recusal motion be scheduled. The Perth courthouse did not advise as to whether the motion would be scheduled.

[8] On September 14, 2023, Justice Abrams suggested that the balance of convenience may favour transferring the action from Perth to Toronto given that the counsel and the plaintiffs are more closely connected to Toronto. Justice Abrams later wrote to the parties stating that the limited judicial and courtroom resources at the Perth courthouse makes it difficult to manage the matter with the attention it requires. Justice Abrams asked whether there was consent to move the matter to either Toronto to Ottawa. The plaintiffs did not consent to a transfer of the action.

[9] On November 10, 2023, the defendants brought this motion to transfer the action to Toronto. The defendants also sought an order under R. 77 for case management. The motion came before RSJ Firestone. By endorsement dated November 15, 2023, he stated that he forwarded the motion to Justice Wilson to whom he had delegated the responsibility to respond to the motion for transfer. With Justice Wilson’s appointment to the Court of Appeal, the matter came to me for determination. I convened a case conference on June 11, 2024, to provide counsel with the opportunity to make submission with respect to the transfer of the action.

The Issues

[10] The defendants seek the following order:

a. Transfer of the action from Perth to Toronto; b. An order assigning this action for case management.

Discussion

Issue # 1 – Transfer of Action

[11] A plaintiff has a right to choose the venue and may commence a proceeding in any county where it sees fit, unless a statute or rule prescribes otherwise: Paul’s Haulage Ltd. v. Ontario, 2011 ONSC 3970, at para. 13. There is no rule or statute that prescribes the venue for this action. The drafters of the rule did not include a provision that required the proceeding to be commenced where the cause of action arose or where the subject matter of the litigation was located. The plaintiff has broad discretion as to where the action may be commenced, and that right should not be “abrogated lightly”: Stanko v. Core Biofuel Inc., 2019 ONSC 5352 (Stanko), at para. 3.

[12] The plaintiff’s choice of venue may be interfered with only after a review and consideration of all the factors. The action will be transferred to a different county, only if the transfer is desirable in the interests of justice. The other venue must be “significantly better” to justify interfering with the plaintiffs’ right to choose the venue: Stanko, at para. 5. The onus is on the moving party to satisfy the court that the transfer ought to be made.

[13] Rule 13.1.02 of the Rules of Civil Procedure sets out the test for a transfer of a proceeding to a different county. The moving party must satisfy the court of the following:

A. that it is likely that a fair hearing cannot be held in the county where the proceeding was commenced; or,

B. that a transfer is desirable in the interest of justice, having regard to,

(i) where a substantial part of the events or omissions that gave 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 advantage or disadvantage to a particular place with respect to securing the just, most expeditious and least expensive determination on its merits;

(viii) whether judges and court facilities are available at the other county, and

(ix) any other relevant matter.

[14] In determining whether it is in the interest of justice to transfer a proceeding, the court is to adopt a “holistic” approach: Chatterson v. M & M Meat Shops Ltd., 2014 ONSC 1897, at para. 22. The court is to “weigh and consider each of the factors enumerated in rule 13.1.02(2)(b) in order to determine whether the transfer of the action was desirable in the interest of justice”: Eveready Industrial Services Corp. v. Jacques Daoust Coatings Management Inc., 2005 ONSC 19797, at para. 19. None of the enumerated factors are more important than the other and all factors relevant to the location of the proceeding must be balanced together: Patry v. Sudbury Regional Hospital, [2009] O.J. No. 1060 (SCJ), at para. 13, and Hallman Estate (Re), 2009 ONSC 51192 (Hallman) at para. 29.

Is it Likely that a Fair Hearing Cannot be Held in Perth?

[15] The defendants argue that the Perth courthouse does not have the resources to provide this matter with the attention it requires. The defendants state that it is very likely that fair hearing of this matter cannot occur at the Perth courthouse.

[16] The defendants brought three motions in the first quarter of 2023. Two were scheduled to be heard on May 11, 2023 and one was to be heard on June 2, 2023 (later adjourned to July 27, 2023). The motions have not been heard. The defendants raised the issue of bias because they were not being provided with dates to have their motions heard. The court could not provide dates for a recusal motion.

[17] Justice Abrams has indicated that the Perth courthouse does not have the resources to provide the action with the attention it requires. The RSJ for the Ottawa Region, Justice MacLeod agreed that the Perth courthouse’s limited resources may prove to be insufficient for this case. It is a complex matter that will require the frequent involvement of the court in providing motion dates and case management.

[18] The plaintiffs concede that Perth does not have the resources to accommodate this action. However, the plaintiffs ask that the action be transferred to Ottawa. I do not have the jurisdiction to transfer the action to Ottawa. Only the RSJ for the Ottawa Region can deal with motions to transfer an action within the Ottawa region. The only issue before me is whether the action ought to be transferred to Toronto.

Consideration of the Enumerated Factors

[19] The defendants argue that when the enumerated factors are considered, the transfer of the action to Toronto is desirable in the interest of justice.

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

[20] The action was commenced in Perth. This is where Mr. Gervais resides. The corporate address of Packet Rabbit is in Ottawa however, Mr. Gervais operates the business out of his home. The Packet Rabbit server is located in Quebec. The Anton Piller order is to be executed at Mr. Gervais’ residence.

[21] I reviewed the lengthy statement of claim. It is alleged that Mr. Gervais breached his employment and confidentiality agreements. The defendants argue that those agreements provide that they are to be governed by the laws of the State of Arizona.

[22] The action involves the use of servers and the internet. I am of the view that where Mr. Gervais resides is of limited importance to the causes of action advanced by the plaintiffs.

b. Where a substantial part of the damages was sustained

[23] The plaintiffs seek damages for the amount paid to Mr. Gervais to purchase Packet Rabbit in the amount of $106,496. The plaintiffs also seek damages for loss of customers, dissemination of confidential information, loss of good will or confidence. Where damages are not easily ascertainable such as the loss of money, the damages are presumed to take place where the aggravated party is located: Bruce Power L.P. v. BNT Canada L.P., 2018 ONSC 5968 (Bruce Power), at para. 24. The plaintiff is a company incorporated under the laws of Delaware and is headquartered in Phoenix Arizona. The plaintiff provides online data housing, cybersecurity and related services. The plaintiff’s customers could be anywhere in the world. There is no allegation that the plaintiffs sustained damages in Perth. I am of the view that this is a neutral factor.

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

[24] The plaintiffs allege that Mr. Gervais breached the contract from his residence in Perth. The defendants argue that the subject matter of the proceeding is the contract between the plaintiffs and Mr. Gervais. The contract is subject to the laws of Arizona. I am of the view that this factor does not favour Perth or Toronto and is neutral.

d. Community interest

[25] The plaintiffs argue that the Packet Rabbit is a business operated by Mr. Gervais in Lanark, Ontario and that Toronto has nothing to do with community interest in the proceeding. I am of the view that this is a neutral factor.

e. Convenience to the parties and witnesses and the court

[26] The defendants argue that the convenience of the parties is served by the transfer of the action to Toronto.

[27] There are five potential witnesses that are known at this time. One is the individual defendant who resides in Lanark. He has deposed that it will be more convenient and less expensive matter for him if the proceedings are in Toronto. Another witness resides in Pembrooke. The remaining witnesses either reside closer to Toronto than Perth or are international. I take judicial notice of the fact that Pearson Airport in Toronto has direct flights to Phoenix, Arizona. To travel to Perth, the international witnesses would have to fly to Ottawa and then drive 85 km to Perth.

[28] I am of the view that this factor favours Toronto.

f. Counterclaims, Crossclaims or Third or Subsequent Party Claims

[29] There are no counterclaims or other proceedings. This is a neutral factor.

g. Any advantage or disadvantage to a particular place with respect to securing the just, most expeditious and least expensive determination on its merits

[30] The offices for the lawyers for the parties are not in Perth. The lawyers for the defendants are in Toronto. Counsel for the defendants argue that the defendants were unable to find local counsel in Perth who were prepared to take on this action. The plaintiffs initially had Toronto counsel, but after this transfer motion was brought retained counsel in Ottawa.

[31] The defendants argue that if the action is transferred to Toronto, it will limit the need for travel or hotel accommodation by counsel and will reduce the cost to the parties. Mr. Gervais states that the cost of having his lawyer travel to Perth and stay in Perth during the course of a 4 week trial would be prohibitive. Increased litigation costs resulting from increased travel time is a valid consideration on a motion to transfer the venue: Bruce Power, at para. 41.

[32] The defendants seek to have the action assigned to case management. The Perth courthouse is unable to accommodate case management. The availability of case management judges is a relevant consideration: Bruce Power, at para. 42. Case management is available in Toronto.

[33] I am of the view that this factor favours Toronto.

h. Availability of Judges and Court Facilities

[34] The Court must consider all relevant factors including judicial resources: Stolove v. Waypoint Centre for Mental Health Care, 2021 ONSC 7712.

[35] The Perth courthouse does not have the resources to accommodate this action. The courthouse has been unable to schedule and hear the defendants’ motions. It does not have the resources to provide case management. Justice Abrams and RSJ MacLeod have stated that the Perth’s limited judicial and courtroom resources makes it difficult to provide this action with the attention it requires.

[36] As the co-civil team lead in Toronto, I am aware that there are civil team judges available to case manage the action. Although there are delays in hearing civil motions in Toronto, urgent motions can be accommodated.

[37] I am of the view that this factor favours Toronto.

i. Other relevant factors

[38] The court is permitted to consider any other relevant factor.

[39] Both parties agree that the Perth courthouse does not have the resources for this complex action. This view is shared by Justice Abrams and RSJ MacLeod. The plaintiffs did not bring a motion to transfer the action to Ottawa. I am therefore left with ordering that the venue be changed to Toronto or leaving the matter in Perth. I have no jurisdiction to transfer the matter from Perth to Ottawa.

[40] I find that Perth cannot accommodate the action, but Toronto can. This factor favours Toronto.

Conclusion

[41] The plaintiffs have the discretion to choose where to commence the proceeding. That discretion will not be displaced lightly. The defendants have the onus to establish that Toronto is the “clearly superior” jurisdiction to Perth.

[42] I have considered whether the proposed transfer advances the just, expeditious and least expensive determination of the action on its merits. Here, Perth is not an appropriate venue for the action. This venue will not advance the just determination of the action. Toronto has the judicial resources to accommodate this complex action.

[43] I have considered the enumerated factors. Mr. Gervais resides in Perth and operates Packet Rabbit out of his home. All other factors are either neutral or favour Toronto. I am satisfied that the transfer of the matter to Toronto will result in the least expensive determination of the action on its merits. I conclude that the defendants have satisfied their onus to establish that Toronto is “clearly superior” to Perth for the hearing of the action.

[44] I order the transfer of the action to Toronto.

Issue # 2 – Case Management

[45] The RSJ or his designate may assign a proceeding for case management where the need for the court’s intervention is demonstrated. In considering whether to assign a proceeding for case management the judge shall have regard to all relevant circumstances including the complexity of the issues of fact or law, the number and type of parties, the amount of intervention by the court that the proceeding is likely to require, the time required for discovery, the number of experts and other witnesses, and the time required for the trial: R. 77.05(4).

[46] This is a very complex action. The statement of claim has 245 paragraphs. The plaintiffs seek injunctive relief and general, special, punitive, aggravated and exemplary damages. The following causes of action are pleaded, unlawful interference in economic interests and breach of confidence, breach of contract, both the employment agreements and the purchase agreement, breach of fiduciary duty and trust, internet harassment, conspiracy, and spoliation. Both parties agree that the action requires case management.

[47] The action is expected to require the intervention of the court. To date there have been several motions. The defendants’ motions to set aside the ex parte order and the motion to strike and for production from non-parties, have not been heard. There is an urgent need for those motions to proceed.

[48] Given the number of issues in dispute, I expect the trial of the action will be lengthy. Counsel for the defendants estimate that the trial could be 4 weeks.

[49] I am satisfied that the defendants have demonstrated that the court’s intervention is required for this action. I assign this matter for case management.

Disposition

[50] I allow the defendants’ motion to transfer the action to Toronto.

[51] I assign the action to case management.

[52] The defendants are successful on this motion and is presumptively entitled to its costs. If the parties are unable to agree on costs, the issue will proceed in writing. The defendants may deliver its written cost submissions of no more than 5 pages in length, excluding bills of costs and caselaw, within 15 days of the date of this endorsement. The plaintiffs may deliver their responding cost submissions on the same basis within 15 days of receiving the defendants’ submissions.

Chalmers J. Date: June 12, 2024