Document production is perhaps the leading source of interlocutory skirmishes in civil litigation in British Columbia. MOBE Ltd. v. Loudoun, 2017 BCSC 1873, provides an example of the degree and duration of non-compliance with document production obligations that is necessary before the Court will order that a party's pleadings be struck and judgment granted.
The plaintiff, MOBE Ltd. ("MOBE"), and one of the defendants, Niche Marketing Inc. ("Niche"), each operated online businesses. The defendants Loudoun and Lim were the principals of Niche. MOBE alleged, and the defendants admitted, Loudoun wrote an article disparaging MOBE on January 30, 2014. MOBE also alleged the defendants encouraged their customers to write defamatory negative reviews of MOBE and provided a template for such reviews.
MOBE commenced two actions, which were later consolidated.
MOBE obtained a document production order on August 31, 2016. Further document production orders were made in January 2017 and August 2017.
During the entire course of the litigation, the defendants produced a total of eight documents. MOBE alleged all were either already in its possession or could have been obtained via the internet.
MOBE applied to strike the defendants' pleadings. The chambers judge adjourned this application on August 4, 2017, and it was resumed on September 18 to 20, 2017. In reasons of August 4, 2017, the chambers judge found the defendants had not been unable to comply with the August 31, 2016 order and that they had access to many more documents than those they had produced.
The September 18 to 20, 2017 hearing date was significant, as the trial was scheduled to commence for 40 days on October 10, 2017.
On the resumed application, the defendants argued: (1) they had produced all relevant documents; and (2) they could not produce documents related to individuals who had posted the negative reviews because they did not know the identities of those individuals. The chambers judge did not accede to these arguments, as she had already rejected them in previous applications that had resulted in orders against the defendants.
MOBE relied upon Rules 22-7(2) and (5), which permit the court to strike a response to civil claim and pronounce judgment where a defendant has failed to comply with the Supreme Court Civil Rules generally or with document production requirements specifically.
The chambers judge summarized the relevant principles from the case law as follows (at para. 14):
1. The discovery process and the litigation system is a litigant-driven process (Morbank Financial Inc. v. 0476779 B.C. Ltd., 2013 BCSC 2008 at paras. 36-38; Kendall v. Sun Life Assurance Company of Canada, 2010 BCSC 1556 at paras. 7, 9-13,15-16).
2. Striking a pleading is a drastic and draconian remedy (Schwarzinger v. Bramwell, 2011 BCSC 304 at para. 109-110).
3. Before a pleading is struck, the offending party is given a warning or a second chance to comply (Schwarzinger at paras. 113-115).
4. Striking must be proportionate to the facts, and the court should consider whether an alternate remedy is appropriate (Schwarzinger at paras. 118-121).
5. The offending party has the onus of explaining the adequacy of the default, its candour and contrition to be considered (Balaj v. Xiaogang, 2012 BCSC 231 at para. 28; Schwarzinger at paras. 135-137).
The defendants accepted these general principles, but argued the cases were distinguishable on their facts because in those cases the offending party clearly had possession or control of the documents at issue but refused to produce them. This argument, which had essentially been tried and failed on several prior occasions, was dismissed by the chambers judge as an attempt to obfuscate, which could not be condoned.
The chambers judge found there was deliberate and material non-disclosure on the part of the defendants and granted the order to strike the defendants' pleadings for the following reasons:
1. The defendants had been ordered to produce documents three times previously.
2. Despite a warning their defence could be struck, the defendants had not produced a single further document.
3. A further order would have no effect, given the recalcitrance of the defendants. There was no alternate remedy.
4. The trial was scheduled to occur in less than two weeks and the lack of document production would severely hamper the prosecution of MOBE's case.
5. The defendants had deliberately prolonged and obstructed the discovery process.
An order to strike an opposing party's pleadings for failure to comply with the Supreme Court Civil Rules is not easily achieved. In MOBE, the pleadings of the defendants were only struck after the defendants had failed to comply with three previous document production orders. The chambers judge was clearly of the view the conduct of the defendants was unacceptable and intentional and that their misconduct could not be addressed by any other order. Even in these circumstances, over a year passed from the original document production order to the order to strike the pleadings, which was only made on the eve of a lengthy trial.
MOBE provides guidance regarding the type of conduct "deliberate and material nondisclosure" which would result in prejudice to the opposing party or frustrate a trial of the action on the merits that will likely be required to obtain an order striking pleadings and granting judgment.