Way v. Schembri
AL WAY, KINGSLEY FINANCIAL INC.
TRIUMPH FINANCIAL HOLDINGS INC.
GORDON SCHEMBRI
Law Firm / Organization
Teplitsky LLP
SCHEMBRI FINANCIAL LIMITED
Law Firm / Organization
Teplitsky LLP
41 COLUMBIA INC.
Law Firm / Organization
Teplitsky LLP
KING & COLUMBIA INC.
Law Firm / Organization
Teplitsky LLP
69 COLUMBIA ST. INC.
Law Firm / Organization
Teplitsky LLP
5 RITTENHOUSE INC.
Law Firm / Organization
Teplitsky LLP
THE BLOCK INC.
Law Firm / Organization
Teplitsky LLP
THE BLOCK I INC.
Law Firm / Organization
Teplitsky LLP

Overview

  • This case involves a 15-year dispute between Al Way and Gordon Schembri over a real estate joint venture.
  • The court dismissed Schembri’s claim and struck his defense in Way’s action due to deliberate and repeated non-compliance with document disclosure orders.

Background

  • 2007: Way and Schembri formed Triumph Financial Holdings Inc. for real estate development.
  • 2008: A shareholders’ agreement required Schembri to offer Way a right of first refusal (ROFR) on properties in Waterloo Region.
  • 2010 & 2012: The dispute led to two lawsuits:
    • Schembri Action (2010): Schembri sued Way.
    • Way Action (2012): Way alleged Schembri breached the ROFR clause by developing 26 properties without offering them to Triumph.

Failure to Disclose Documents

  • 2018: Schembri undertook to disclose documents if his summary judgment motion failed.
  • 2020: The Court of Appeal reversed the dismissal, but Schembri refused to comply.
  • 2021-2023: Multiple court orders directed Schembri to produce documents, including a Production Order (Sept. 2023).
  • Feb. 2024: A Peremptory Order imposed strict deadlines.
  • Aug. 2024: Schembri missed the final deadline, citing technical issues, which the court found unsubstantiated.

Court’s Decision

  • Applying Falcon Lumber (2020 ONCA 310), the court ruled:
    • Schembri’s failures were deliberate and prolonged.
    • His excuses were inadequate.
    • His conduct delayed proceedings and increased costs.
    • Striking his defense was a proportionate remedy.

Outcome

  • Schembri’s claim (CV-42-11) was dismissed.
  • His defense in the Way Action (CV-457-12) was struck.
  • The parties must either settle costs or submit written arguments?.
  • The court did not specify a monetary damages award in this decision.
Superior Court of Justice - Ontario
CV-12-457; CV-11-42
Corporate & commercial law
Plaintiff