Case In Point
Appellate Court Strikes Pleading for Failure to Comply with Production Obligations
Date: May 27, 2020
The Ontario Court of Appeal has upheld the decision of a motion judge to strike out a statement of defence as a remedy for repeated failures to comply with judicial orders to produce requested relevant documents.
In Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors), the Court articulates the core principles and rationale underlying documentary production in civil litigation and outlines the considerations for exercising the judicial discretion to strike a pleading as a remedy for repeated failures to comply with production obligations.
The motion judge reviewed the defendant’s failure to comply with production orders, specifically:
- there had been 30 dates for motions, cross-motions, and case conferences
- on most court attendances the primary issue had been the failure to provide complete productions
- 22 orders or judicial endorsements had been made
- six court production orders had been made, and
- as of the date of the motion, the defendant still had not made full and complete production of relevant documents.
In upholding the motion judge’s decision to strike the statement of defence, the Court of Appeal emphasized that the fundamental obligation to disclose relevant documents and produce those that are not privileged should be performed automatically by a party in civil litigation, without the need for court intervention.
Repeated failures to comply with documentary production obligations can be remedied by striking a pleading pursuant to r. 30.08(2)(b) of the Rules of Professional Conduct. At paragraphs 50 – 53, the Court articulated the following factors for determining whether the exercise of discretion to strike a pleading is an appropriate remedy for repeated failures to disclose relevant documents:
- Striking out a pleading under r. 30.08(2)(b) is not restricted to “last resort” situations, rather it must be preceded by a party breaching a series of earlier orders that compelled better disclosure or production.
- 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.
- Although a court may also consider the merits of a party’s claim or defence, 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.
- 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. This may entail a consideration of:
- the increased costs of litigating the action, and
- the increased delay in a final adjudication of the case on its merits.
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