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.
