Date: 20251008

Docket: T-116-19

Citation: 2025 FC 1949

Toronto Ontario, October 8, 2025

PRESENT: The Honourable Mr. Justice Lafrenière

BETWEEN:

UNILIN BEHEER B.V. FLOORING INDUSTRIES LIMITED, SARL

Plaintiffs

and

6035558 CANADA INC. aka MISSISSAUGA FLOORING SOLUTIONS INC. 2364651 ONTARIO INC. aka EPICO FOREST PRODUCTS INC. 2184372 ONTARIO INC. dba HARDWOOD GIANT MANMOHAM GREWAL RAVNIT KAULDHAR RAJVIR GREWAL

Defendants

ORDER

I. Overview

[1] By motion dated September 12, 2025, the Defendants seek an order setting aside subparagraph 1b) of the Order of Associate Judge Cotter [AJ Cotter] dated September 3, 2025 requiring the Defendants to produce discovery documents by November 28, 2025 [Order under Appeal]. The Defendants also seek an order staying any requirement for them to complete further steps in this matter pending disposition of their security for costs motion filed on August 5, 2025 [Security for Costs Motion].

[2] The Defendants submit that AJ Cotter made a reviewable error in law, or alternatively a palpable and overriding error, in scheduling further substantive steps in respect of the Defendants while the Security for Costs Motion was outstanding. The Defendants argue they should not have to incur significant disbursements and legal fees prior to the posting of security for costs, otherwise those expenditures could be unrecoverable, in particular if the Plaintiffs elect to not post security for costs. The Defendants maintain that the Security for Costs Motion raises a serious issue to be tried, that there is potential irreparable harm if a stay is not granted, and that the balance of convenience strongly favours staying the action until the said motion is disposed of.

[3] For the following reasons, this motion is dismissed.

II. Procedural Background

[4] The procedural background to the present motion is somewhat long and convoluted. I will outline it briefly below as it is necessary to place the motion in proper context.

[5] On January 15, 2019, the Plaintiffs commenced the underlying patent infringement action against the Corporate Defendants.

[6] On August 2, 2019, the Plaintiffs paid into Court security for the Corporate Defendants’ costs in the agreed amount of $30,000.00 for the steps up to and including the completion of examinations for discovery.

[7] The Corporate Defendants filed their Statement of Defence on October 7, 2019 and the Plaintiffs’ Reply was filed on October 15, 2019.

[8] Examinations for discovery of the Corporate Defendants were conducted on December 16, 17, and 18, 2020.

[9] On December 21, 2021, the Plaintiffs moved for an order to compel the Corporate Defendants to answer undertakings given during the examinations, and to answer certain questions under objection.

[10] On February 28, 2022, Justice Mandy Aylen granted the Plaintiffs’ motion in part.

[11] On April 17, 2023, Associate Judge Martha Milczynski [AJ Milcynski] issued an oral Order, with reasons to follow, granting the Plaintiffs leave to serve and file a second Amended Statement of Claim to implead three individual directors of the Corporate Defendants as additional Defendants in this matter [Individual Defendants]. The same day, the parties jointly submitted a proposed timetable governing the next steps in the proceeding, including the filing of the Corporate Defendants’ Amended Statement of Defence and the Individual Defendants’ Statements of Defence, production of documents, examinations for discovery, answers to undertakings, and the filing and hearing of motions that may result from discovery.

[12] On April 27, 2023, the Defendants filed a bare notice of motion to appeal and set aside the Order of AJ Milczynski granting the Plaintiffs leave to amend their pleading [Appeal Motion].

[13] On May 19, 2023, the Plaintiffs filed the Second Amended Statement of Claim. AJ Milczynski issued an Order formalizing the timetable on May 23, 2023 [Scheduling Order].

[14] On June 2, 2023, the Corporate Defendants filed an Amended Statement of Defence and the Individual Defendants filed their respective statements of defence.

[15] The Plaintiffs filed an Amended Reply on June 12, 2023.

[16] On July 21, 2023, the Chief Justice ordered that AJ Cotter Cotter be assigned as Case Management Judge in place of AJ Milczynski.

[17] On May 1, 2024, AJ Cotter issued an Order removing the Defendants’ former counsel as solicitors of record and ordered that the Defendants appoint new solicitors of record, bring a motion to have a corporate representative represent the corporate Defendants, or deliver a Notice of Intention to Act in Person for the Individual Defendants within 30 days. The Defendants failed to do so by the required deadline.

[18] On June 19, 2024, AJ Milczynski issued her written Order and Reasons further to her oral Order of April 17, 2023 granting the Plaintiffs leave to amend their pleading.

[19] On August 21, 2024, the Plaintiffs served and filed a motion to strike the Defendants’ Statements of Defence and have them noted in default.

[20] The Defendants filed a Notice of Change of Solicitor on September 10, 2024, appointing Aird & Berlis LLP as solicitors of record.

[21] By letter dated October 1, 2024, counsel for the Defendants provided a status update to the Court to advise as follows. The Plaintiffs had accepted to withdraw their motion to strike, without prejudice to their right to file a similar motion should the Defendants’ behaviour warrant it in the future. The parties had also agreed that the remaining steps set out in the Scheduling Order should be stayed pending final determination of the Appeal Motion. The Defendants’ position was that if the appeal was successful, then the Defendants’ obligations would be significantly minimized. The Defendants indicated that they would be seeking a significant increase in the security for costs to be paid into Court, but not at the current time, reserving their rights to make a request following final determination of the appeal.

[22] On October 3, 2024, AJ Cotter issued a Direction requiring the parties to submit a joint letter within 30 days of the determination of the Appeal Motion [Direction].

[23] On March 25, 2025, Justice Jocelyne Gagné issued Order and Reasons dismissing the Appeal Motion [Appeal Order].

[24] The Plaintiffs contacted the Defendants on April 2, 2024, to put in place the scheduling of next steps in the proceeding in accordance with the Direction.

[25] On April 4, 2025, the Defendants filed a Notice of Appeal in the Federal Court of Appeal seeking to overturn the Appeal Order (Court Docket: A-132-25).

[26] On April 24, 2025, counsel for the Defendants submitted a letter to the Court further to the Direction. The Defendants’ position was that the deadlines in the Scheduling Order should continue to be extended while the appeal in the Federal Court of Appeal was ongoing. Counsel wrote that “any work towards the claims against the individuals, including discovery, would result in unnecessary work incurred and significant costs thrown away if the Federal Court of Appeal overturns the Appeal Order.” Counsel also signalled the Defendants’ intention to bring a motion for security for costs to determine the quantum, adding that:

It would be best to determine the quantum of security for costs once the decision of the Federal Court of Appeal is decided, as if that appeal is successful, no security for costs will be necessary for the individual Defendants, and the issues will be far less complex in the matter going forward.

[27] On June 6, 2025, following a case management conference held on May 26, 2025, and ahead of another case management conference that was scheduled for June 9, 2025, the parties separately wrote to the Court to provide their respective positions on scheduling. Both parties proposed specific deadlines for the various upcoming steps in this action, including discovery of the Individual Defendants. The Plaintiffs noted that the Defendants had announced their intention to file a motion for security for costs by June 20, 2025, and therefore proposed that the Plaintiffs file their responding record by July 11, 2025, and the Defendants file written representation in reply by July 18, 2025. The Defendants’ proposed the same timetable in respect of the anticipated motion for security for costs, adding that it “proceed simultaneously with the other steps, including the examinations for discovery of the inventors and further documentary discovery.”

[28] AJ Cotter presided over another case management conference on July 7, 2025, during which the parties and the Court addressed various scheduling issues. Ahead of that case management conference, the parties jointly wrote to the Court to present their respective positions. The Defendants took the position that the Individual Defendants should not be ordered to produce discovery documents until their yet-to-be-filed motion for security for costs would be decided and the Plaintiffs would file security accordingly, in a yet-to-be-specified amount.

[29] On July 7, 2025, AJ Cotter issued a further direction that reads in part as follows:

The following schedule shall apply in connection with the Plaintiffs’ Document Request:

a) By July 25, 2025, the defendants shall produce the documents requested in items 11 to 13 of the Plaintiffs’ Document Request.

b) By August 1, 2025, the defendants shall provide the plaintiffs with the defendants’ position on the outstanding document requests in the Plaintiffs’ Document Request, including: i) the availability of the classes of documents requested, and ii) the date by which the defendants propose producing them.

c) By August 6, 2025, the plaintiffs will provide their position in response.

d) By August 8, 2025, the parties shall provide a status update to the Court including proposed deadlines for the production of documents.

The following schedule shall apply in place of that set provided in the Direction dated June 9, 2025, for the motion by the defendants for additional security for costs:

1. by August 4, 2025, the defendants shall serve and file their moving parties’ motion record;

2. by September 5, 2025, the plaintiffs shall serve and file their respondents’ motion record;

3. by September 12, 2025, the defendants shall serve and file serve any written representations in reply (this step is optional); and

4. If there are to be cross-examinations on any affidavit evidence served, the parties are to confer and submit a letter to the Court with any proposed changes to the schedule set out above.

[30] On August 8, 2025, ahead of a further case management conference that took place on August 22, 2025, the Defendants wrote to AJ Cotter to summarize the parties’ respective positions on scheduling. The Plaintiffs’ position was that their document requests were directed at documents that are relevant to the issues pleaded in the Second Amended Statement of Claim, were specific, were limited in time, and were explicitly limited in number. The Plaintiffs proposed setting a deadline of September 22, 2025 for the production of the documents. The Plaintiffs maintained their position that discovery should move forward in parallel with the Defendants’ motion for security for costs and, therefore, the deadline for the Defendants to respond to the Plaintiffs’ request for documents should not be dependent on the timing of that motion. The Defendants’ position was that they should only be ordered to produce the Individual Defendants’ documents within ninety (90) days of the Plaintiffs posting security for costs in an amount to be decided in the context of their now pending Security for Costs Motion filed on August 5, 2025.

[31] During a case management conference held on August 22, 2025, AJ Cotter fixed deadlines for completion of the next steps in the proceeding. He decided, among other things, that Individual Defendants should produce discovery documents by November 28, 2025. He also fixed deadlines for the service and filing of the Plaintiffs’ motion record in response to the Security for Costs Motion and the Defendants’ written representations in reply. The decision was formalized in the Order under Appeal dated September 3, 2025.

[32] The Plaintiffs filed their responding materials for the Security for Costs Motion on September 9, 2025. The Defendants’ filed their reply submissions on September 17, 2025. The only step remaining is the decision of AJ Cotter in respect of same.

III. Issues

[33] The issues on this motion are as follows:

1. What is the applicable standard of review?

2. Whether the Order under Appeal should be set aside and replaced by the schedule proposed by the Defendants on this motion?

3. Whether the Defendants are entitled to a stay of the Order under Appeal pending the disposition of this motion?

4. Costs of the motion.

A. Standard of Review

[34] The parties agree that the standard of review applicable to discretionary decisions of associate judges is correctness for questions of law, and palpable and overriding error for findings of fact and inferences of fact: Hospira Healthcare Corporation v Kennedy Institute of Rheumatology, 2016 FCA 215 at paras 64, 66 [Hospira]; Housen v Nikolaisen, 2002 SCC 33 at paras 19–37.

[35] The associate judge who issued the Order under Appeal in this case did so as a case management judge. A discretionary order made by a case management judge who is intimately familiar with the relevant circumstances is entitled to a high degree of deference. As the Federal Court of Appeal observed at paragraph 11 of L’Hirondelle v Canada, 2001 FCA 338, and reaffirmed in Constant v Canada, 2012 FCA 87 at paragraph 12, case management judges must be afforded some “elbow room” to manage cases. In Lukács v Canada (Public Safety and Emergency Preparedness), 2023 FCA 55 at para. 6 the Federal Court of Appeal reinforced that the Court “should only interfere with orders made in the course of case management in the clearest case of a misuse of judicial discretion.”

[36] As was stated by Justice David Stratas in Turmel v Canada, 2016 FCA 9 at para 12:

[…] what is common to all of these verbal formulations is that in the absence of an error of law or legal principle an appellate court cannot interfere with a discretionary order unless there is an obvious, serious error that undercuts its integrity and viability. This is a high test, one that the case law shows is rarely met.

B. Whether the Order under Appeal be set aside

[37] The Defendants submit that AJ Cotter reviewably erred in law by compelling the Individual Defendants to proceed with documentary discovery prior to security for costs being posted by the Plaintiffs. They argue that the security for costs regime, which is governed by Rules 415 to 418 of the Federal Court Rules, SOR/98-106, is premised on a defendant not being required to take further steps that incur costs which may not be recoverable and that the regime would otherwise be defeated because a defendant may have no reasonable means of recovering its costs incurred if successful. I disagree.

[38] Rule 416(3) provides that a plaintiff may not take further steps in an action “until the security required by an order under subsection (1) or (2) has been given.” At the time of issuance of the Order under Appeal, there was no order requiring the Plaintiffs to give security for costs. Rule 416(3) therefore has no application here.

[39] The Defendants cite the decision in Shipdock Amsterdam BV v Cast Group Inc, 1999 CanLII 9085 [Shipdock Amsterdam] for the proposition that it would not be in the interests of justice to bring simultaneous and costly legal proceedings if a plaintiff is later ordered to post security and does not do so – leading to the entire case being dismissed and costs incurred by the defendant being unrecoverable against a foreign plaintiff. However, the passages relied on by the Defendants are taken out of context.

[40] In Shipdock Amsterdam, the defendants first brought a motion for security for costs on October 12, 1999, returnable on October 25, 1999. At the plaintiff’s request, the hearing was adjourned to November 22, 1999. In the intervening period and for what clearly appears to be tactical reasons, the plaintiff filed a motion for summary judgment on November 2, 1999. It is in that context that the Court stayed the motion for summary judgment in favour of the already pending motion for security for costs, on the basis that “[i]t seems logical that a matter properly before the Court should not be defeated by a subsequent step taken by another party.” The Court relied upon Bruce v John Northway & Son Ltd, [1962] OWN 150 (Ont Master) at 151, for the proposition that, “[a]fter service of a notice of motion, as a general rule, any act done by any party affected by the application which affects the rights of the parties on the pending motion will be ignored by the Court.”

[41] This is not the fact situation that was facing AJ Cotter when he issued the Order under Appeal. The Individual Defendants were impleaded in the action in April 2023, and the scheduling of next steps was first ordered by AJ Milczynski in May 2023, including deadlines for service of affidavits of documents and further oral discoveries. The Defendants had ample time to move for additional security and yet did not do so until August 5, 2025, over two years later.

[42] Prior to bringing their Security for Costs Motion, the Defendants had proposed scheduling of next steps on specific dates, albeit dates different from what the Plaintiffs proposed. These dates were not contingent on the timing of a future motion for security for costs. Counsel for Defendants instead wrote on June 6, 2025 that “[t]he Defendants intend for the motion for security for costs to proceed simultaneously with the other steps, including the examinations for discovery of the inventors and further documentary discovery.” [My emphasis.]

[43] It is only later, in the context of the case management conference that led to the issuance of the Order under Appeal, that the Defendants took the position that their Security for Costs Motion should be decided and the Plaintiffs should post security as ordered before the Defendants are made to comply with their discovery obligations. This is certainly not a case where, as in Shipdock Amsterdam, the issue of security for costs was pending before the Court first.

[44] At the hearing at the motion, counsel for the Defendants was pressed to identify an error in law allegedly committed by AJ Cotter. He failed to do so. The Defendants also failed to establish any palpable and overriding error by AJ Cotter in ordering that document discovery can proceed in parallel with the Security for Costs Motion.

[45] When the Defendants formally announced an intention to seek additional security for costs, they confirmed that they were ready to continue with the discovery process in parallel with their proposed motion. It was only after their Security for Costs Motion was filed on August 5, 2025 that they back-tracked from their earlier position and requested that the discovery process be stayed pending security being posted.

[46] Given the procedural history, the substantial delays in the proceeding and the last-minute change of position by the Defendants, I conclude that it was reasonably open to AJ Cotter to order the parties to move forward with the long-outstanding discovery of documents while at the same time requiring the Defendants’ motion be perfected within short deadlines. No clear case of misuse of judicial discretion has been shown by the Defendants.

C. Whether the Order under Appeal should be Stayed

[47] The Defendants also requested a stay of parts of this proceeding (their obligation to provide documents related to the Individual Defendants) pending the disposition of the present motion. At the hearing, counsel for the Defendants acknowledged that the relief would not be required if the Court disposed of the motion expeditiously. As there has been no delay in disposing of the motion, there is no need to address this issue.

IV. Costs

[48] The Plaintiffs seek elevated costs in the amount of $7,500 on the grounds that the motion was doomed to fail and that it was a waste of the parties’ and the Court’s resources. For their part, the Defendants submit that costs of the motion should be fixed in the range of $2,500 to $3,000.

[49] I find no reason to deviate from the customary rule that the successful party is entitled to costs. The Plaintiffs were entirely successful in defending the motion and are entitled to their costs.

[50] The threshold for awarding elevated costs is high. While there is no clearly defined test or criteria to justify such awards, the Federal Court of Appeal has awarded elevated costs where the dispute involves “sophisticated, commercial parties” and where the case is totally devoid of merit: Sport Maska Inc v Bauer Hockey Ltd, 2019 FCA 204 at paras 51–52. This is such a case here.

[51] On the record before me, I find that the Defendants have been stonewalling the Court’s efforts and frustrating its ability to case manage the proceeding in an effective and expeditious manner. Despite counsel for the Defendants’claim that his clients were not resiling from their position when they wrote to the Court on August 8, 2025, I find that they were clearly walking back on their earlier agreement to schedule specific deadlines (as they had presented in their letter of June 6, 2025), and coming up with a new excuse to indirectly stay this proceeding after their attempt to do so based on their pending appeal had failed (as they had presented on April 24, 2025). I consider the present motion to be one more delay tactic being employed by the Defendants that verges on an abuse of process.

[52] Taking into account the factors set out in Rule 400(1), I award costs to the Plaintiffs in the amount of $6,000, inclusive of GST and disbursements, payable in any event of the cause, but not forthwith.

THIS COURT ORDERS that:

1. The motion is dismissed.

2. Costs of the motion shall be paid by the Defendants in any event of cause in the amount of $6,000, inclusive of GST and disbursements.

blank	“Roger R. Lafrenière”
blank	Judge