A Cautionary Tale of Non-Compliance with Documentary Production Obligations by Jonathan Beiles
Jun 26, 2020
The decision of the Court of Appeal authored by Justice David Brown on behalf of a unanimous panel which also included Justices Grant Huscroft and Eileen Gillese in Falcon Lumber United v 2840375 Ontario Inc., ONCA 310 serves as a cautionary tale of the significant consequences attached to non-compliance with documentary production obligations. In Falcon Lumber, the Court of Appeal upheld the motion judge’s decision to strike out a statement of defence and a $6,246 costs order against the Defendants’ lawyer for breach of documentary production obligations.
Governing Principles of Documentary Production
Justice Brown first outlined three important requirements imposed by the Rules of Civil Procedure, which govern documentary production obligations:
- a party must disclose every relevant document to any matter in issue [r. 30.02(1)];
- a party’s lawyer must certify in the party’s Affidavit of Documents that the lawyer has explained “the necessity of making full disclosure of all documents relevant to any matter in issue in the action” and what kinds of documents are likely to be relevant to the allegations made in the pleadings” [r. 30.03(4) and 76.04(4)]; and
- the obligation to disclose and produce is a continuing one (r. 30.07).
Justice Brown went on to emphasize that these aforementioned requirements serve the purpose of facilitating a more efficient civil justice system as envisioned by the Supreme Court of Canada in Hryniak.
Striking Out a Party’s Pleading Under 30.08(2)
Justice Brown outlined a framework to guide Courts when deciding on whether to strike out a party’s pleading for breach of production obligations. First, a party breaching a series of earlier production orders is not a precondition to striking out a pleading. Second, Courts are to consider the following “common sense” factors when deciding on a motion to strike under r. 30.08(2):
- whether the party’s failure is deliberate or inadvertent;
- whether the failure is clear and unequivocal;
- whether the defaulting party can provide a reasonable explanation for its default;
- whether the substance of the default is minimal or material;
- the extent to which the party remains in default at the time of the request to strike out its pleading; and
- the impact of the default on the ability of the court to do justice in the particular case.
Third, the merits of a party’s claim have a limited role where breaches of production obligations are alleged. Lastly, Courts must determine whether striking out a pleading constitutes a proportional remedy in the circumstances by taking into consideration:
- the extent to which the defaulting party’s conduct has increased the non-defaulting party’s costs of litigating the action, including the proportionality of those increased costs to the amount actually in dispute in the proceeding; and
- to what extent the defaulting party’s failure to comply with its disclosure and production obligations has delayed the final adjudication of the case on its merits, taking into account the complexity of the claim and the amount of money in dispute.
Awarding Costs Against Counsel
Justice Brown stated that the awarding of costs is to be afforded significant deference. Leave to appeal a costs order is granted only when there are strong grounds to believe that the lower court erred.
The Court of Appeal held that the record clearly showed the Defendants had been in continued non-compliance with their documentary production obligations for over a two-year period. The motion to strike was held to be proportionate in light of the modest amount of money in dispute and the simplicity of the case. In upholding the motion judge’s costs order, Justice Brown placed significant weight to the Defences’ counsel’s role in facilitating unnecessary delay. Further, Justice Brown articulated concern with defence counsel for giving an appearance of a conflict of interest by seeking leave to appeal the cost order while simultaneously acting for their client on his appeal.
The Falcon Lumber decision illustrates the Courts waning tolerance for conduct by litigants and counsel which results in unnecessary delay of proceedings. Even in the current COVID-19 environment, litigants and lawyers should be alert to the consequences of non-compliance with production obligations. In Wang v 2426483 Ontario Ltd, 2020 ONSC 2040 Justice Fred Myers chastised counsel for seeking to bring before the Court non urgent matters after the Courts were shuttered by the pandemic. Even before the pandemic, many judges and masters were getting exasperated with the volume of undertaking motions clogging their dockets. There is a big disconnect between not fulfilling production obligations and not clogging the courts with motions to compel parties to fulfil their production obligations. It is heartening to note that our province’s highest court has come down hard on a party who has failed to conform to their obligation. This should incentivize lawyers to be attentive to fulfilling production obligations.
At one end of the spectrum, there are far too many instances like in Falcon Lumber where parties are in default of production obligations over a period of years. At the opposite end of the spectrum, there are instances where parties are too quick to bring forward an undertakings motion. In Delmark Anthony St. Clair et al. John Doe, Master Brott rebuked a party that brought forward an undertakings motion after sending only one follow up letter. In her condemnation of the moving party, Master Brott stated that “undertakings should be resolved as between the parties … they are not matters that the courts should be dealing with as a matter of course”. The master was of the view that the majority of the undertakings involved non parties, and should thus have been the subject of a Rule 30.10 motion rather than an undertakings motion.
In my brief experience as a summer student, I have witnessed first-hand that getting a party to respond to an undertakings request is like pulling teeth. The only way that lawyers can unburden the bench from having to address a plethora of undertakings motions is to satisfy their production obligations in a prudent fashion. Therefore, it is heartening to note that our province’s highest court has come down hard on a party who has failed to conform to their obligation. This should incentive lawyers to be attentive to fulfilling production obligations
Jonathan Beiles is the author of this blog and a summer student at ZTGH. If you have a question about this blog, please contact Jonathan: email@example.com or Appellate practice group co-chair Eric Grossman firstname.lastname@example.org