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Discovery - Documentary

. Advanced Farm Technologies-JA v. Yung Soon Farm Inc.

In Advanced Farm Technologies-JA v. Yung Soon Farm Inc. (Ont CA, 2021) the Court of Appeal considered dismissal of pleadings for failure to comply with document disclosure rules [under R30.08(2)] and with interlocutory orders:
[10] This court has recently had the opportunity to address the issue of when it is appropriate to strike a pleading under Rule 30.08(2) of the Rules of Civil Procedure for non-compliance with document disclosure obligations in Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors), 2020 ONCA 310. In that case, the court summarized the applicable principles, at para. 57, as follows:
To summarize, several principles guide the exercise of a court’s discretion to strike out a party’s claim or defence under r. 30.08(2) for non-compliance with documentary disclosure and production obligations:

• The remedy is not restricted to “last resort” situations, in the sense that it must be preceded by a party breaching a series of earlier orders that compelled better disclosure or production. However, courts usually want to ensure that a party has a reasonable opportunity to cure its non-compliance before striking out its pleading;

• A court should consider a number of common sense factors including: (i) whether the party’s failure is deliberate or inadvertent; (ii) whether the failure is clear and unequivocal; (iii) whether the defaulting party can provide a reasonable explanation for its default, coupled with a credible commitment to cure the default quickly; (iv) whether the substance of the default is material or minimal; (v) the extent to which the party remains in default at the time of the request to strike out its pleading; and (vi) the impact of the default on the ability of the court to do justice in the particular case;

• The merits of a party’s claim or defence may play only a limited role where breaches of disclosure and production obligations are alleged as one would reasonably expect a party with a strong claim or defence to comply promptly with its disclosure and production obligations;

• In considering whether an order to strike out a pleading would constitute a proportional remedy in the circumstances, a court should consider:
. to 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 obligation to make automatic disclosure and production of documents has delayed the final adjudication of the case on its merits, taking into account the simplicity (or complexity) of the claim and the amount of money in dispute.
[11] Because the default in this case involved the appellant’s failure to produce an affidavit of documents, the principles articulated by the court in Falcon are clearly relevant and should apply accordingly. In this case, the appellant also breached a court order, which adds significantly to the impugned conduct. In addition, counsel, on behalf of the appellant, failed to respond to normal communications from opposing counsel with no explanation.
. Iannarella v. Corbett

In Iannarella v. Corbett (Ont CA, 2015) the Court of Appeal engaged in an extended consideration of surveillance video in a motor vehicle accident case, including it's treatment in documentary discovery, it's privileged status, and how and when it may be used at trial. The principles discussed apply broadly to conflicting issues of privilege, disclosure and subsequent use of such conflicted evidence at trial [paras 33-116].

. Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors)

In Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors) (Ont CA, 2020) the Court of Appeal discusses the fundamental obligation to disclose documents which is documentary discovery:
The fundamental obligation to disclose and produce relevant documents

[41] At the heart of the rules governing actions in the Superior Court of Justice lie the obligations of every party to an action to disclose every document relevant to any matter in issue in an action that is or has been in its possession, control or power, whether or not privilege is claimed in respect of a document, and to produce all such documents, unless privilege is claimed in respect of a document: Rules of Civil Procedure, rr. 30.02(1)-(2).

[42] Three requirements imposed by the Rules of Civil Procedure emphasize the importance of the obligation to disclose and produce relevant documents to the proper and fair functioning of the civil litigation process:
• First, the obligation to disclose all relevant documents is not limited to documents upon which the party intends to rely to establish its claim or defence. A party must disclose “every document relevant to any matter in issue”, whether or not the document helps or hurts the party’s case: r. 30.02(1);

• Second, in order to ensure that a party fully understands its obligation to disclose and produce all relevant documents, the 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”: Forms 30A and 30B; rr. 30.03(4) and 76.03(4). Courts expect that a party has received from its counsel legal advice that the documents it must disclose and produce are determined by their relevance to the issues pleaded, not by whether the party regards the document as favourable or harmful to its case. No doubt this advice may rub against the litigation instincts of some parties, who would prefer to “deep-six” relevant documents that might undermine their claims or defences; and

• Third, the obligation to disclose and produce is not a “one-time” obligation. It is a continuing one: Tripp v. Ontario (Ministry of Transportation) (1999), 1999 CanLII 3762 (ON CA), 123 O.A.C. 278 (C.A.), at para. 22. Where, after serving an affidavit of documents, a party comes into the possession or control of a relevant document or discovers that its Affidavit of Documents is inaccurate or incomplete, the party must “forthwith” serve a supplementary affidavit of documents “specifying the extent to which the affidavit of documents requires modification and disclosing any additional documents”: Rules of Civil Procedure, r. 30.07.
Taken together, these key rules are designed to ensure that parties make full disclosure of all relevant documents and production of all relevant non-privileged documents well in advance of the examinations for discovery permitted in Superior Court actions or, in the case of newly discovered documents, “forthwith” – i.e. within a few days – after their discovery.

[43] The goal of Ontario’s civil justice system is to provide the public with the just, most expeditious, and least expensive determination of every civil proceeding on its merits: Rules of Civil Procedure, r. 1.04(1); Rules of the Small Claims Court, r. 1.03(1). To achieve that goal, parties to every action must comply with their document disclosure and production obligations without the need for a court to intervene to compel their adherence. This court has stated, in regard to family law litigation, that a party’s fundamental duty to disclose financial information is automatic, immediate, and ongoing, and should not require court orders to obtain production: Roberts v. Roberts, 2015 ONCA 450, 65 R.F.L. (7th) 6, at paras. 11 and 13. The same applies to civil actions. The fundamental obligation to disclose relevant documents and produce those that are not privileged should be performed automatically by a party, without the need for court intervention.

[44] Of course, the Rules of Civil Procedure provide for means by which a party can seek the assistance of the court where an opposite party has ignored or breached its obligation to make automatic, immediate, and ongoing full disclosure and production. A party usually seeks the court’s intervention by bringing a motion against the defaulting party under either r. 30.06 or r. 30.08. In certain parts of the province, parties may have ready access to a case management judge who can deal more informally and expeditiously with requests for relief under these rules.[45] Rule 30.06 focuses on the situation where the served affidavit of documents is inadequate or the opposite party wishes to challenge the other party’s assertion of privilege over a document. It states:
30.06 Where the court is satisfied by any evidence that a relevant document in a party’s possession, control or power may have been omitted from the party’s affidavit of documents, or that a claim of privilege may have been improperly made, the court may,

(a) order cross-examination on the affidavit of documents;

(b) order service of a further and better affidavit of documents;

(c) order the disclosure or production for inspection of the document, or a part of the document, if it is not privileged; and

(d) inspect the document for the purpose of determining its relevance or the validity of a claim of privilege.
[46] Rule 30.08 overlaps to some degree with r. 30.06, as it deals with the situation where a party fails to disclose a document. But r. 30.08 also addresses a party’s failure to produce a document for inspection. Rule 30.08(1) authorizes a court to impose certain sanctions at the trial of an action. It states:
30.08(1) Where a party fails to disclose a document in an affidavit of documents or a supplementary affidavit, or fails to produce a document for inspection in compliance with these rules, an order of the court or an undertaking,

(a) if the document is favourable to the party’s case, the party may not use the document at the trial, except with leave of the trial judge; or

(b) if the document is not favourable to the party’s case, the court may make such order as is just.
[47] Rule 30.08(2) authorizes a court to impose certain pre-trial sanctions, including striking out a pleading. It states:
30.08(2) Where a party fails to serve an affidavit of documents or produce a document for inspection in compliance with these rules or fails to comply with an order of the court under rules 30.02 to 30.11, the court may,

(a) revoke or suspend the party’s right, if any, to initiate or continue an examination for discovery;

(b) dismiss the action, if the party is a plaintiff, or strike out the statement of defence, if the party is a defendant;[2] and

(c) make such other order as is just.
[48] However, each time a party defaults on its disclosure and production obligations and requires the opposite party to seek the court’s assistance to remedy the default, two things happen. First, the cost of the litigation increases. Motions are not cheap; they add significantly to the overall costs of a civil case. Second, the final determination of the case on its merits gets pushed back, delayed by the need to bring a defaulting party into compliance with its disclosure obligations.

The principles guiding the striking out of pleadings for breach of production obligations

[49] Limited jurisprudence exists about when it is appropriate to strike out a party’s pleading under r. 30.08(2)(b) for breach of documentary disclosure and production obligations. Given the variety of circumstances in which a party may resort to r. 30.08, the most pragmatic articulation of a guiding principle is that made by Wein J. in Newlove v. Moderco Inc., 2002 CanLII 34748 (Ont. Sup. Ct.), at para. 21, that “the scope of the remedy is one within the discretion of the Court, to be determined in the context of the particular case.” Several principles guide the exercise of that discretion.

[50] First, contrary to the appellant’s assertion, striking out a pleading under r. 30.08(2)(b) is not restricted to “last resort” situations, in the sense that it must be preceded by a party breaching a series of earlier orders that compelled better disclosure or production. Some cases have granted the remedy where previous orders were breached: DLE Consulting Inc. v. Graham, 2016 ONCA 315, 130 O.R. (3d) 799; Vacca v. Banks, 2005 CanLII 1054 (Ont. Div. Ct.). In others, no prior order had been made: Royal Bank of Canada v. Russo, 2002 CarswellOnt 73 (Ont. Div. Ct.). However, courts usually want to ensure that a party has a reasonable opportunity to cure its non-compliance before striking out its pleading: Koohestani v. Mahmood, 2015 ONCA 56, 124 O.R. (3d) 205, at para. 54.

[51] Second, a court should consider a number of common sense factors when deciding whether to strike out a pleading under r. 30.08(2): (i) whether the party’s failure is deliberate or inadvertent; (ii) whether the failure is clear and unequivocal; (iii) whether the defaulting party can provide a reasonable explanation for its default, coupled with a credible commitment to cure the default quickly; (iv) whether the substance of the default is material or minimal; (v) the extent to which the party remains in default at the time of the request to strike out its pleading; and (vi) the impact of the default on the ability of the court to do justice in the particular case: Royal Bank of Canada, at para. 12; and see the cases reviewed in King v. Belair Direct (2004), 2004 CanLII 19530 (ON SCDC), 184 O.A.C. 189 (Div. Ct.), at paras. 12-13.

[52] Third, although a court may also consider the merits of a party’s claim or defence, as it does under r. 60.12 dealing with the failure to comply with an interlocutory order[3], this factor may play only a limited role where breaches of production obligations are alleged as one would reasonably expect a party with a strong claim or defence to comply promptly with its disclosure and production obligations.

[53] Finally, a court must consider whether an order to strike out a pleading would constitute a proportional remedy that is consistent with the recent calls of the Supreme Court of Canada to alter the Canadian litigation culture.

[54] Parties who default on their documentary disclosure and production obligations impede the ability of our civil justice system to provide the fair, timely, and cost-effective adjudication of civil disputes on their merits. Their defaulting conduct promotes the culture of complacency towards delay decried by the Supreme Court, in the context of the criminal justice system, in R. v. Jordan, 2016 SCC 27, [2016] 1 S.C.R. 631, at para. 40. As well, such conduct undermines on-going efforts to shift the Canadian civil litigation culture in the direction of providing more accessible justice to the public. As the Supreme Court pointed out in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 27, the “developing consensus that the traditional balance struck by extensive pre-trial processes and the conventional trial no longer reflects the modern reality and needs to be re-adjusted.” (emphasis added) In Hryniak, the Supreme Court called for a civil justice system that not only provides a fair process that results in the just adjudication of disputes, but also is “accessible — proportionate, timely and affordable,” for without an accessible process, a fair process is illusory: at para. 28.

[55] Hryniak requires judges to actively manage the civil legal process in line with the principle of proportionality: at para. 32. Orders to strike out pleadings are one means by which to ensure that the civil justice process delivers justice that is proportionate, timely, and affordable. Accordingly, when considering whether to strike out a party’s pleading by reason of its failure to comply with its documentary disclosure and production obligations, in addition to the factors set out in paras. 50 to 54 above, a court should consider:
• 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 obligation to make automatic disclosure and production of documents has delayed the final adjudication of the case on its merits, taking into account the simplicity (or complexity) of the claim and the amount of money in dispute.
[56] Applying the principle of proportionality in the context of a motion to strike out a pleading for failure to perform document disclosure and production obligations means that the moment when a court may make the order to strike will come much earlier in a simple claim for a modest amount of money than it will in a complex case where millions are in dispute. Common sense dictates that the simple case should spend less time in the court system and impose lower legal costs on the litigants than the more complex one.

[57] To summarize, several principles guide the exercise of a court’s discretion to strike out a party’s claim or defence under r. 30.08(2) for non-compliance with documentary disclosure and production obligations:
• The remedy is not restricted to “last resort” situations, in the sense that it must be preceded by a party breaching a series of earlier orders that compelled better disclosure or production. However, courts usually want to ensure that a party has a reasonable opportunity to cure its non-compliance before striking out its pleading;

• A court should consider a number of common sense factors including: (i) whether the party’s failure is deliberate or inadvertent; (ii) whether the failure is clear and unequivocal; (iii) whether the defaulting party can provide a reasonable explanation for its default, coupled with a credible commitment to cure the default quickly; (iv) whether the substance of the default is material or minimal; (v) the extent to which the party remains in default at the time of the request to strike out its pleading; and (vi) the impact of the default on the ability of the court to do justice in the particular case;

• The merits of a party’s claim or defence may play only a limited role where breaches of disclosure and production obligations are alleged as one would reasonably expect a party with a strong claim or defence to comply promptly with its disclosure and production obligations;

• In considering whether an order to strike out a pleading would constitute a proportional remedy in the circumstances, a court should consider:
o 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

o to what extent the defaulting party’s failure to comply with its obligation to make automatic disclosure and production of documents has delayed the final adjudication of the case on its merits, taking into account the simplicity (or complexity) of the claim and the amount of money in dispute.






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