Court File and Parties

COURT FILE NO.: 08-CV-352127PD3 DATE: 20240723 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: AMERICAN ENVIRONMENTAL CONTAINER CORP., SAN JUAN PRODUCTS, INC. and KIJO LEASING ULC., Plaintiffs – and – PAUL KENNEDY, LEANNE KENNEDY, DARREN GREEN, SAN JUAN PRODUCTS (CANADA) LTD., SJP ENTERPRISES (CANADA) LTD., SJP ENTERPRISES INC., AECC/SAN JUAN, OASIS FIBERGLASS POOLS INC., BACKYARD OASIS, 2001530 ONTARIO INC., O/A SOUTHERN COMFORT and SAN JUAN ENTERPRISES (CANADA) INC., Defendants

BEFORE: Justice E.M. Morgan

COUNSEL: Avrum D. Slodovnick, for the Plaintiffs Rohit Kumar and Tina Kaye, for the Defendants, Paul Kennedy and Leanne Kennedy

HEARD: Costs submissions in writing

Costs Endorsement

[1] On May 28, 2024, I dismissed the motion brought by the Defendants, Paul Kennedy and Leanne Kennedy (the “Kennedys”), to set aside the judgment of Perell J. dated October 28, 2013: American Environmental Container Corp. v. Kennedy, 2024 ONSC 2941.

[2] I have no hesitation in saying that it was a motion that should never have been brought. It was based on manipulation of basic facts, regurgitation of issues already addressed and rejected in previous motions in this action, and specious arguments. As I outlined in my reasons for decision in the motion, the Kennedys have a long history of this kind of litigation conduct. In fact, I concluded my reasons, at para. 76, by quoting an endorsement in this same action by Justice Frank dated September 18, 2013:

The Defendants deliberate misconduct precludes a determination of the issues in these actions on the merits. Through their conduct the Defendants have lost the right to be heard by the court in these proceedings. [emphasis added]

[3] The Kennedys repeated their 2013 approach in the present motion. They did not simply get the law wrong, nor did they put forward a tenuous but potentially credible argument that might, with a sympathetic hearing, succeed where others have failed. They deliberately tried to confuse and obfuscate the matter in hopes that the court would not be able to discern that their motion was an attempt to re-litigate what they had already lost several times over. And what they had already lost several times over were not esoteric interpretations of law; they were motions straightforwardly requiring them to adhere to court orders which they ignored.

[4] The Plaintiffs were put to entirely unnecessary expense in responding to the Kennedys’ motion. They deserve their costs. More than that, the civil justice system deserves better than what the Kennedys tried to hand it. The wheels of justice move slowly enough on their own; the system cannot afford parties who deliberately try to bog it down by ignoring court orders and bringing diversionary challenges so that their case can never end.

[5] The motion is therefore precisely what substantial indemnity costs are designed to address. As Justice Lax explained in Manning v. Epp, at para. 7, “Costs on the higher scale can be awarded as a form of chastisement and as a mark of the court’s disapproval of a litigant’s conduct. This is intended to punish as well as to deter others from engaging in similar conduct.” Here, the Kennedys have not just failed to adhere to a court order; they have exhibited defiance of repeated court orders.

[6] Furthermore, the present motion was concocted in the same way as the debunked allegations about the Plaintiffs that the Kennedys invented in bringing the motion to strike before Justice Frank in 2013. The present motion has merely been the latest twist in their tactic of inventing allegations and excuses for non-compliance with orders, causing enormous delay, and putting the Plaintiffs to tremendous expense.

[7] I began my reasons in this motion with the question “when is enough enough?”: American Environmental, supra, at para. 1. It was a rhetorical question. The court has had enough of this conduct.

[8] Costs are discretionary under section 131 of the Courts of Justice Act. Guidance for exercise of that discretion is provided by the factors listed in Rule 57.01(1) of the Rules of Civil Procedure. These include, inter alia, “…(c) the complexity of the proceeding; (d) the importance of the issues; (e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; (f) whether any step in the proceeding was, (i) improper, vexatious or unnecessary, or…(g) a party's denial of or refusal to admit anything that should have been admitted”. Each of these describes an aspect of the Kennedy’s approach to this motion.

[9] Using a substantial indemnity scale, the Plaintiffs seek $60,351.90 in fees and $1,854.73 disbursements, plus HST, for a total of $70,052.37. All things considered, that is a surprisingly modest amount.

[10] Responding to the Kennedys motion took a substantial amount of digging through old files and walking the court through previous procedures and several different intertwined actions. It was a time-consuming enterprise for the court to parse through all of that material and to understand how repetitive and obfuscatory the present motion has been, and I know from that experience how time-consuming it would have been for counsel to put it all together. Fortunately, or perhaps unfortunately, Plaintiffs’ counsel is all too familiar with this case. He was able to do a very effective job with relative efficiency.

[11] Using a round number for convenience, the Kennedys shall pay the Plaintiffs costs of this motion in the all-inclusive amount of $70,000.00.

Date: July 23, 2024 Morgan J.