COURT FILE NO.: 06-CV-307599CP DATE: 20160705

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

DENNIS FISCHER, SHEILA SNYDER, LAWRENCE DYKUN, RAY SHUGAR, and WAYNE DZEOBA Plaintiffs – and – IG INVESTMENT MANAGEMENT LTD., CI MUTUAL FUNDS INC., FRANKLIN TEMPLETON INVESTMENTS CORP., AGF FUNDS INC. and AIC LIMITED Defendants

Counsel: Joel P. Rochon, Peter R. Jervis and Remissa Hirji for the Plaintiffs James D.G. Douglas and Graham Splawski for the Defendant AIC Limited Jessica Kimmel and Tamryn Jacobson for CI Mutual Funds Inc.

Proceeding under the Class Proceedings Act, 1992

HEARD: June 29, 2016

PERELL, J.

REASONS FOR DECISION

A. INTRODUCTION

[1] In the action, the Plaintiffs allege that the Defendants AIC Limited (“AIC”), which once managed approximately 50 mutual funds, and CI Mutual Funds Inc., now known as CI Investments Inc. (“CI”), which managed approximately 100 mutual funds, breached a duty of care and a fiduciary duty owed Class Members, who were investors in the mutual funds, by permitting other investors to engage in “market timing.” By order dated July 25, 2014, this action was certified as a class action under the Class Proceedings Act, 1992, S.O. 1992, c. 6.

[2] Market timing is a legal investment technique. It involves short-term “in-and-out” trading of mutual funds. The technique capitalizes on the fact that unlike other types of traded securities, whose value is determined throughout the trading day, the value of a mutual fund (known as the Net Asset Value or “NAV”) is calculated only once per day, at 4:00 p.m. EST. As a result, some funds use outdated prices to value securities held in their portfolio, and the prices do not necessarily reflect the “fair value” of the securities at the time the NAV is calculated. Investors using a market timing strategy will trade units of mutual funds that hold foreign equities when they believe that the price of the units in the fund on a given day may not reflect possible price movements on foreign markets the following day. The market timers trade in anticipation of those price movements. Effective market timing captures an arbitrage profit that adversely effects the long-term investors in the mutual fund who hold on to their units. This wealth transfer from arbitrage is known as “dilution.” Market timing activity also impedes the fund manager’s flexibility in buying and selling stocks for the benefit of the fund and it disrupts the management of the mutual funds.

[3] The class action has reached the examination for discovery stage, and the Plaintiffs examined Geri DeWeerd as AIC’s representative, and they examined Gregory Shin as CI’s representative.

[4] On the motions now before the court, pursuant to rule 31.03 of the Rules of Civil Procedure, the Plaintiffs seek leave to examine second representatives for AIC and CI, respectively; namely: (a) Michael Lee Chin, who was the President and CEO of AIC during the Class Period; and (b) Stephen MacPhail, who was an officer with CI Financial Corp., CI’s parent corporation, during the Class Period. Further, pursuant to rule 31.10 of the Rules of Civil Procedure, the Plaintiffs seek leave to examine for discovery non-party witnesses; namely: (a) Neil Murdoch, AIC’s former CFO, Executive Vice President, and a portfolio manager during the class period; and (b) Peter Anderson, who is a former employee of CI but who is currently the CEO of its parent corporation.

[5] For the reasons that follow, the Plaintiffs’ motions are dismissed.

B. DISCUSSION AND ANALYSIS

1. The Rules of Civil Procedure for the Examination of Discovery of Corporate Representatives

[6] Rules 31.03 (1) and (2) of the Rules of Civil Procedure, govern how a corporation may be examined for discovery. The rules state:

WHO MAY EXAMINE AND BE EXAMINED

Generally

31.03 (1) A party to an action may examine for discovery any other party adverse in interest, once, and may examine that party more than once only with leave of the court, but a party may examine more than one person as permitted by subrules (2) to (8).

On Behalf of Corporation

(2) Where a corporation may be examined for discovery,

(a) the examining party may examine any officer, director or employee on behalf of the corporation, but the court on motion of the corporation before the examination may order the examining party to examine another officer, director or employee; and

(b) the examining party may examine more than one officer, director or employee only with the consent of the parties or the leave of the court.

[7] Rule 31.03 (4) sets out the test for leave to examine a second representative of a corporation; the rule states:

Requirements for Leave

(4) Before making an order under clause (2) (b) or (3) (b), the court shall satisfy itself that,

(a) satisfactory answers respecting all of the issues raised cannot be obtained from only one person without undue expense and inconvenience; and

(b) examination of more than one person would likely expedite the conduct of the action.

[8] Rule 31.10 sets out the procedure for the examination for discovery of a non-party. The rule states:

DISCOVERY OF NON-PARTIES WITH LEAVE

General

31.10 (1) The court may grant leave, on such terms respecting costs and other matters as are just, to examine for discovery any person who there is reason to believe has information relevant to a material issue in the action, other than an expert engaged by or on behalf of a party in preparation for contemplated or pending litigation.

Test for Granting Leave

(2) An order under subrule (1) shall not be made unless the court is satisfied that,

(a) the moving party has been unable to obtain the information from other persons whom the moving party is entitled to examine for discovery, or from the person the party seeks to examine;

(b) it would be unfair to require the moving party to proceed to trial without having the opportunity of examining the person; and

(c) the examination will not,

(i) unduly delay the commencement of the trial of the action,

(ii) entail unreasonable expense for other parties, or

(iii) result in unfairness to the person the moving party seeks to examine.

[9] For the purposes of the discussion that follows, it is also necessary to note rule 31.06 (scope of examination), rule 31.07 (failure to answer on discovery), and rule 31.09 (information subsequently obtained) of the Rules of Civil Procedure. These rules state:

SCOPE OF EXAMINATION

General

31.06 (1) A person examined for discovery shall answer, to the best of his or her knowledge, information and belief, any proper question relevant to any matter in issue in the action or to any matter made discoverable by subrules (2) to (4) and no question may be objected to on the ground that,

(a) the information sought is evidence;

(b) the question constitutes cross-examination, unless the question is directed solely to the credibility of the witness; or

(c) the question constitutes cross-examination on the affidavit of documents of the party being examined.

Identity of Persons Having Knowledge

(2) A party may on an examination for discovery obtain disclosure of the names and addresses of persons who might reasonably be expected to have knowledge of transactions or occurrences in issue in the action, unless the court orders otherwise.

Expert Opinions

(3) A party may on an examination for discovery obtain disclosure of the findings, opinions and conclusions of an expert engaged by or on behalf of the party being examined that are relevant to a matter in issue in the action and of the expert’s name and address, but the party being examined need not disclose the information or the name and address of the expert where,

(a) the findings, opinions and conclusions of the expert relevant to any matter in issue in the action were made or formed in preparation for contemplated or pending litigation and for no other purpose; and

(b) the party being examined undertakes not to call the expert as a witness at the trial.

FAILURE TO ANSWER ON DISCOVERY

Failure to Answer Questions

31.07 (1) A party, or a person examined for discovery on behalf of or in place of a party, fails to answer a question if,

(a) the party or other person refuses to answer the question, whether on the grounds of privilege or otherwise;

(b) the party or other person indicates that the question will be considered or taken under advisement, but no answer is provided within 60 days after the response; or

(c) the party or other person undertakes to answer the question, but no answer is provided within 60 days after the response.

Effect of Failure to Answer

(2) If a party, or a person examined for discovery on behalf of or in place of a party, fails to answer a question as described in subrule (1), the party may not introduce at the trial the information that was not provided, except with leave of the trial judge.

Additional Sanction

(3) The sanction provided by subrule (2) is in addition to the sanctions provided by rule 34.15 (sanctions for default in examination).

Obligatory Status of Undertakings

(4) For greater certainty, nothing in these rules relieves a party or other person who undertakes to answer a question from the obligation to honour the undertaking.

INFORMATION SUBSEQUENTLY OBTAINED

Duty to Correct Answers

31.09 (1) Where a party has been examined for discovery or a person has been examined for discovery on behalf or in place of, or in addition to the party, and the party subsequently discovers that the answer to a question on the examination,

(a) was incorrect or incomplete when made; or

(b) is no longer correct and complete,

the party shall forthwith provide the information in writing to every other party.

Consequences of Correcting Answers

(2) Where a party provides information in writing under subrule (1),

(a) the writing may be treated at a hearing as if it formed part of the original examination of the person examined; and

(b) any adverse party may require that the information be verified by affidavit of the party or be the subject of further examination for discovery.

Sanction for Failing to Correct Answers

(3) Where a party has failed to comply with subrule (1) or a requirement under clause (2) (b), and the information subsequently discovered is,

(a) favourable to the party’s case, the party may not introduce the information at the trial, except with leave of the trial judge; or

(b) not favourable to the party’s case, the court may make such order as is just.

2. Factual and Procedural Background

(a) General Background

[10] In considering the Plaintiffs’ requests for additional examinations for discovery, it is necessary to note at the outset that:

• Some of the market timing events occurred more than 17 years ago and were the subject of investigatory and regulatory hearings by the Ontario Securities Commission. The proposed class action followed after the investigations of the Commission. For a more fulsome discussion of the background to the class action, see Fischer v. IG Investment, 2010 ONSC 296.

• AIC sold its mutual fund business in 2009, and with the exception of Mr. Lee Chin, its President and CEO, none of AIC’s current employees had been involved in the allegedly wrongful market timing activities.

• Mr. Murdoch was one of AIC’s former employees; he was AIC’s CFO, and he was a portfolio manager during the Class Period. Mr. Murdoch, however, is no longer an officer, director, or employee of AIC.

• Mr. MacPhail, who is proposed as the second representative of CI to be examined, was involved with the allegedly wrongful market timing; however, his involvement was for CI’s parent corporation, from which he retired as President and CEO effective June 1, 2016. Mr. MacPhail was never an officer, director, or employee of CI, and he is no longer associated with CI’s parent corporation.

• Mr. Anderson, who is proposed as a non-party to be examined, was involved with the allegedly wrongful market timing activities as an employee of CI; he was the President of CI for much of the class period and before that he was the Executive Vice President in charge of sales and marketing; however, Mr. Anderson resigned as an employee of CI and at the time of Mr. Shin’s examination for discovery Mr. Anderson was not associated with CI or with its parent corporation. Recently, however, Mr. Anderson returned to replace Mr. MacPhail as the CEO of the parent corporation.

(b) The Examination for Discovery of AIC

[11] Ms. DeWeerd is Vice-President Administration at AIC. She was not involved in the events giving rise to the Plaintiffs’ claims, and before her examination for discovery as AIC’s representative, Class Counsel wished to examine Mr. Lee Chin as the representative of AIC. However, Class Counsel were advised that Mr. Lee Chin did not have any recollection of the matters at issue and that no one currently employed at AIC had knowledge or recollection of the events.

[12] In these circumstances, Class Counsel agreed to the suggestion that Ms. DeWeerd, who had previously sworn an affidavit in response to a motion for a further and better affidavit of documents and who had been cross-examined for that interlocutory motion, could inform herself to the extent possible and be examined for discovery as the representative of AIC.

[13] Ms. DeWeerd familiarized herself with the relevant documents, and she diligently prepared for the examinations. She informed herself by making inquiries both before and after her examination for discovery. She was examined for discovery for three days, November 18, 19 and 23, 2015. Ms. DeWeerd was asked over 1,100 questions. Save for questions taken under advisement, she answered the questions and gave a total of 116 undertakings, all of which were answered. At the examination, she advised that she had made inquiries of Mr. Lee Chin, but he had no recollection or knowledge of the events. Ms. DeWeerd gave 34 undertakings to make specific inquiries of Mr. Lee Chin. She took 70 questions under advisement, of which she subsequently answered 57. After the discovery, the Plaintiffs submitted further questions by way of written interrogatories, which AIC answered.

[14] Through answers to undertakings, Mr. Lee Chin stated that: (a) he was not the Portfolio Manager of any of the four funds at issue; (b) he has no knowledge of the investment strategies employed by market timers during the Class Period; (c) he has no recollection of whether AIC took any steps relating to stale pricing or arbitrage trading during the Class Period, and to his knowledge there is no one with knowledge of these issues currently employed by AIC; (d) he has no knowledge of how the program between AIC and Reliance developed, or about the stop in trading by Reliance around September 17, 2001; (e) he has no knowledge regarding the nature of a portfolio manager’s concerns regarding market timing in June 2002; (f) he has no knowledge of why certain restrictions on trading were imposed in June 2002; (g) he has no knowledge relating to increased trading limits for Larry Ullman in November 2001; (h) he has no knowledge regarding the agreement between AIC and Pentagon dated October 24, 2002 or about trading both before and after that agreement was signed; (i) he has no knowledge of matters relating to trading by SII in AIC funds; (j) he has no knowledge relating to whether a message was conveyed by market timers to AIC during the Class Period; (k) he has no knowledge relating to the consideration of imposing a redemption fee of up to 2% for short term traders; and (l) he has no knowledge relating to certain email correspondence and other documents that he did not author or receive.

[15] Although Class Counsel never asked Ms. DeWeerd questions about Mr. Murdoch’s involvement, AIC voluntarily provided information from Mr. Murdoch about what he knew and recalled.

[16] The Plaintiffs have never brought a refusals motion with respect to the answers provided by Ms. DeWeerd for AIC.

(c) The Examination for Discovery of CI

[17] Mr. Shin is the Senior Vice President Fund & Trust Accounting, Portfolio Administration. He was involved - but not directly involved - in the market timing activities during the class period. His involvement was back office administration of CI’s mutual fund portfolios, and he had no role in the decision making about the management of the mutual funds.

[18] Before Mr. Shin’s examination for discovery as CI’s representative, Class Counsel wished to examine Bill Holland, who was the CEO and President and who had been involved with the market timing activities, but the Plaintiffs eventually agreed to examine Mr. Shin because neither Mr. Holland nor any employee of CI had comprehensive knowledge and because (similar to Ms. DeWeerd) Mr. Shin had already been involved in the documentary discovery for the action and was prepared to inform himself in order to represent CI at the examinations for discovery.

[19] Mr. Shin familiarized himself with the relevant documents and diligently prepared and informed himself by making inquiries both before and after his examination for discovery. Mr. Shin was examined for discovery for three days, November 10, 11, and 12, 2015. He was asked 2,274 questions and save for 10 refusals based on relevance and privilege, he answered the questions. He subsequently answered written questions. There were 48 undertakings that were answered. Of the 83 questions taken under advisement, 79 were answered. Of the 10 refusals, five were answered. In answering the questions, undertakings, and written interrogatories, Mr. Shin obtained information from over 10 current and former employees of CI and CI’s parent company, including Mr. MacPhail and Mr. Anderson and others who had been involved in the market timing activities. None of the five refusals or the residual four questions taken under advisement sought information from current or past employees of CI or its parent corporation.

[20] The Plaintiffs have never brought a refusals motion with respect to the answers provided by Mr. Shin for CI.

3. Analysis

[21] The Plaintiffs’ argument is the bald-faced assertion that the circumstances of this case satisfy the criteria of both rule 31.03 and also rule 31.10 entitling them to an examination for discovery of a second representative of AIC and of CI and also an examination for discovery of two non-parties. Their underlying submission is that as a matter of justice and the pursuit of the truth, the Plaintiffs are entitled to satisfactory answers and all information relevant to the material issues. The Plaintiffs submit that they have not had satisfactory examinations for discovery of Ms. DeWeerd for AIC and of Mr. Shin for CI and, therefore, they are entitled to examinations for discovery of Messrs. Lee Chin, Murdoch, MacPhail, and Anderson.

[22] I disagree with the Plaintiffs’ argument. As I shall explain below, the criteria for rules 31.03 and also rule 31.10 have not been satisfied, and the Plaintiffs (who may still have rights for further follow up examinations of Ms. DeWeerd and Mr. Shin) have no cause to complain that they have not had the examinations for discovery to which they are entitled under the Rules of Civil Procedure.

[23] Before I examine the application of rules 31.03 and rules 31.10 to the circumstances of this case, it is helpful to disabuse the Plaintiffs of what appears to be a fundamental misunderstanding of the nature of examinations for discovery under the Ontario Rules of Civil Procedure, which by design involve a single examination for discovery of each party. The examination of additional persons must be justified and approved by the court.

[24] Unlike the rules of procedure in other jurisdictions, most notably the United States, where there can be depositions from both the parties and also from their potential trial witnesses, rule 31.06 (1) of Ontario’s Rules of Civil Procedure is designed so that unless the court grants leave only one person for each party will be examined to “answer, to the best of his or her knowledge, information and belief, any proper question relevant to any matter in issue.”

[25] In Ontario, information about the testimony of witnesses or participants in the events is provided by hearsay evidence and by undertakings to provide information.

[26] The person examined for discovery may be questioned to provide personal knowledge and to provide hearsay evidence. This second source of discovery evidence is available because on an examination for discovery, the person being examined is required to disclose not only his or her personal knowledge but also his or her information and belief about the matters in issue: Van Horn v. Verrall (1911), 3 O.W.N. 439 (H.C.J.); Rubinoff v. Newton, [1967] 1 O.R. 402 (H.C.J.); Kay v. Posluns (1989), 71 O.R. (2d) 238 (H.C.J.).

[27] Any person who is to be examined for discovery has an obligation to prepare himself or herself to answer questions that could reasonably be expected to be asked: Air Canada v. McDonnell Douglas Corp. (1995), 22 O.R. (3d) 140 (Master), aff'd , 22 O.R. (3d) 382 (Gen. Div.); Mullen v. Canada Life Assurance Co., [2009] O.J. No. 5915 (S.C.J.). An unexplained lack of preparation by a representative of a corporation amounts to a constructive refusal to participate in the discovery process as required by the Rules of Civil Procedure: Metropolitan Toronto Condominium Corp. No. 979 v. Ellis-Don Construction Ltd., [1997] O.J. No. 353 (Master). Further, the practice of the profession, the rules and the case law about the practice and procedure envision that when the person being examined does not personally have knowledge of a matter in issue, then that person must undertake to provide the information by making inquiries of the persons with the knowledge.

[28] For present purposes, the point to elucidate to the Plaintiffs is that under Ontario’s model for examinations for discovery, it does not follow from the circumstance that the person being examined for a party does not have comprehensive personal knowledge of the party’s actions and omissions and it does not even follow from the circumstance that the person being examined has no personal knowledge of the party’s acts or omissions, that there will be more than one examination for discovery. Thus, in the immediate case, that Mr. Shin did not have comprehensive personal knowledge or that Ms. DeWeerd had no personal knowledge about their respective party’s involvement with market timers, does not mean that others with personal knowledge should be examined for discovery. In the immediate case, the Plaintiffs have no cause for complaint because of the lack of comprehensive personal knowledge of Mr. Shin or Ms. DeWeerd, both of whom met and went beyond the call of duty in preparing for the examinations for discovery and in undertaking to provide information.

[29] The Plaintiffs vociferously complain about how much Ms. DeWeerd did not personally know, but they ignore the circumstances: (a) that the Plaintiffs always knew that she was not involved in the market timing events; (b) that she had diligently and dutifully prepared for the examinations for discovery; (c) that giving undertakings to make inquiries about matters of which the party examined does not have personal knowledge is a norm of examinations for discovery; and, (d) that she did make inquiries and she did provide answers from Mr. Lee Chin and from Mr. Murdoch about what they knew or could recollect about events that occurred almost two decades ago.

[30] If these circumstances are not ignored, the Plaintiffs have no cause for complaint about the adequacy and fairness of the examination for discovery of AIC. The absence of any merits to their complaint is particularly true because they have not brought a refusals motion or asked for a follow up examination with respect to the answers to undertakings.

[31] The Plaintiffs made a similar argument for additional examinations because of the allegedly unsatisfactory examination for discovery of Mr. Shin for CI. The Plaintiffs submitted that Mr. Shin’s personal involvement was limited but that Messrs. MacPhail and Anderson were involved and they could provide a better account of evidence relevant to the material issues. Once again, the Plaintiffs ignore the circumstances associated with Mr. Shin’s less than comprehensive personal knowledge, which were known to be the case before his examination for discovery. As was the case with Ms. DeWeerd, the Plaintiffs knew that they were entitled to only one examination from a person who was obliged to inform himself about the matters in issue. Mr. Shin complied with his discovery obligations, and while the Plaintiffs may subjectively be disappointed with the information provided by Mr. Shin, they have no objective cause for complaint.

[32] During the argument of the motion, with respect to the discovery of AIC, the Plaintiffs submitted that the answers provided from the inquiries made of Messrs. Lee Chin and Murdoch were unsatisfactory and these participants in the market timing events should certainly have known more and should certainly have recalled more about the market timing events than they did. The Plaintiffs suggested that an examination for discovery of Messrs. Lee Chin and Murdoch would revive their memory and better answers would become available and only then would the Plaintiffs have received the examination for discovery to which they were entitled.

[33] The Plaintiffs made similar argument about an entitlement to examine Messrs. MacPhail and Anderson because of alleged deficiencies in what Mr. Shin disclosed and in anticipation and speculation of what Messrs. MacPhail and Anderson might say if compelled to attend an examination for discovery.

[34] These submissions about the quality of the answers on AIC’s and CI’s examinations for discovery are without merit for three reasons. First, the submissions reflect the fundamental misunderstanding of an examining party’s entitlements, discussed above, under Ontario’s scheme for examinations for discovery, which envision one examination by a person with an obligation to provide his or her personal knowledge and to make inquiries to provide disclosure of his or her information and belief about the material issues.

[35] Second, apparently to make the case that the AIC’s and CI’s answers were unsatisfactory, the Plaintiffs’ submission mistakenly understates what counts as an adequate, satisfactory, or functional discovery. The Plaintiffs’ submission misleadingly ignores that discovering what an opposing party admits that he or she does not know or recall is every bit as valuable as discovering what a party knows and recalls.

[36] For the purposes of making one’s case or in preparing to know what case to meet, there is as much utility in discovering what the opposing party does not know or recall as there is utility in discovering what the opponent does know or recall about the material issues. Pursuant to rule 31.09, where a party who has been examined for discovery subsequently discovers that his or her answer on the examination was incorrect or incomplete, then he or she is obliged to disclose the correct information and if the information subsequently discovered is favourable to the party’s case, the party may not introduce the information at the trial, except with leave of the trial judge. If the information is not favourable to the party’s case, the court may make such order as is just. Thus, in the context of the case at bar, the scarcity or paucity of the information provided by AIC’s and CI’s representatives would appear to be more harmful to their ability to defend the Plaintiffs’ tort claim, than harmful to the Plaintiffs’ ability to prove their claim. Thus, the Plaintiffs’ request for more discovery is overreaching and rather than asking for a level procedural playing field, they are seeking to gain a procedural advantage over the Defendants. Put shortly, there is no unfairness or injustice in refusing the Plaintiffs’ request for further examinations.

[37] Third, recognizing that the examined party is expected to provide answers based on his or her personal knowledge, information and belief, that the examining party is disappointed by those answers or believes that better answers might be available if another person with personal knowledge was examined is not a basis for a second representative of the party to be examined or a reason for a non-party to be examined. That the examining party is disappointed or does not believe the examined party’s answers does not make them unsatisfactory answers that would justify further examinations: Fortini v. Simcoe (County), 2012 ONSC 1034; Little v. Ellerbrock, 2014 ONSC 5945 at para. 23; Westcoast Transmission Co. Ltd v. Interprovincial Steel and Pipe Corporation Ltd. (1984), 49 C.P.C. 101 (B.C.S.C.) at pp. 111-112.

[38] In any event, the Plaintiffs have not satisfied the criteria for further examinations under rule 31.03 or rule 31.10.

[39] Under rule 31.03, for leave to be granted to examine a second representative, the moving party must demonstrate: (a) that it cannot otherwise obtain the discovery to which it is entitled from the examined party’s witness; and (b) that there are other special circumstances related to whether the initial representative was uninformed about the material issues: Baylis Estate v. Canada (Attorney General), [2000] O.J. No. 2531 (S.C.J.) at para. 9, leave to appeal refused [2000] O.J. No. 4931 (Div. Ct.)](https://www.canlii.org/en/on/onsc/doc/2000/2000canlii20601/2000canlii20601.html); ING Wellington Insurance Co. v. Alexander Forbes Risk Services UK Ltd., [2003] O.J. No. 1012, (Master); Mullen v. Canada Life Assurance Co., supra; Infinium Capital Corporation v. AB 2000 Software, 2010 ONSC 812 (Master); Fortini v. Simcoe (County), supra; Little v. Ellerbrock, 2014 ONSC 5945.

[40] The test for an additional examination for discovery is strict and orders to examine a second representative are rarely granted: Scintilore Explorations Ltd. v. Larche, [1995] O.J. No. 719 (Gen. Div.) at paras. 50 and 51; Infinium Capital Corp. v. AB 2000 Software Corp., supra at para. 8; Fortini v. Simcoe (County), supra; Little v. Ellerbrock, supra at para. 21.

[41] To show that an examination for discovery has been unsatisfactory so as to entitle a party to a second examination, it is necessary for the examining party to demonstrate that the examined party’s answers, including answers to proper questions to follow up on undertakings, have not been answered or that answers are incomplete, unresponsive, evasive, or ambiguous: Little v. Ellerbrock, supra at para. 21; Westcoast Transmission Co. v. Interprovincial Steel & Pipe Corp., supra; Mullen v. Canada Life Assurance Co., supra.

[42] In Fortini v. Simcoe (County), supra at para. 15, Justice Healey emphasized that the willingness and ability of the examined party to inform himself or herself is the critical matter in determining whether the examining party has been deprived of a meaningful examination for discovery. Justice Healey stated:

15. In my view, the principles set out in the cases reviewed in ING remain of critical importance when addressing the question of whether leave should be granted to examine a second person under Rule 31.03(2) or (3). These principles offer guidance on how the court should assess whether "satisfactory" answers have been given. It remains important to assess the willingness and ability of the deponent to provide the information sought, and to ensure that an evaluation of the quality of the evidence provided is measured by an objective standard, as opposed to the examiner simply being dissatisfied with the answers provided. It may be the case that it is only when these considerations lead to the conclusion that the party is likely to be deprived of a meaningful discovery that the court would go on to consider the other requirements of Rule 31.03(4).

[43] The fact that the examined party may have had to give undertakings to answer questions does not lead to the conclusion that an additional representative should be produced for discovery: Baylis Estate v. Canada (Attorney General), supra at para. 10; Silvercreek II Ltd. v. Royal Bank of Canada, 2014 ONSC 5994 at para. 9. A second examination will be permitted only where the party seeking the examination is able to establish that the representative produced for discovery had not informed himself or herself or was unable to inform himself or herself on the issues in dispute between the parties: Metropolitan Toronto Condominium Corp. No. 979 v. Ellis-Don Construction Ltd. (1997), 37 C.P.C. (4th) 57 (Ont. Master); Abitibi-Price Inc. v. Serada (1984), 43 C.P.C. 217 (Ont. H.C.J.), Westcoast Transmission Co. v. Interprovincial Steel & Pipe Corp., supra; Bank of Toronto v. Megaffin, [1946] O.W.N. 771 (H.C.J.).

[44] It is not enough that the evidence is important to the examining party, who must, rather demonstrate that to refuse another examination is to deprive him or her of a meaningful discovery because the person being examined cannot or will not satisfactorily inform himself or herself about the material issues: Famous Players Development Corp. v. Central Capital Corp. (1991), 6 O.R. (3d) 765 (Div. Ct.); Baylis Estate v. Canada (Attorney General), supra; Din v. Melady, 2010 ONSC 4865 (Master) at paras. 13-14; Little v. Ellerbrock, supra at para. 21;

[45] In the case at bar, the Plaintiffs have not established that they have been deprived of the examination for discovery to which they are entitled of either AIC or of CI. Accordingly, I dismiss their motion under rule 31.03 for the examinations of a second representative.

[46] I should also add that the Plaintiffs’ request pursuant to rule 31.03 to examine Mr. MacPhail as an officer, director or employee on behalf of CI also fails because Mr. MacPhail has never been an officer, director or employee on behalf of CI. Mr. MacPhail is a non-party who was involved in the market timing on behalf of CI’s parent corporation, which is also a non-party.

[47] In the case at bar, the Plaintiffs have also failed to satisfy the criteria of rule 31.10 for the examination for discovery of a non-party.

[48] The test under rule 31.10 for the examination of a non-party involves four components, all of which must be established for there to be an examination of a non-party; namely: (1) there is reason to believe that the non-party has information relevant to a material issue; (2) the examining party has been unable to obtain the information from the examined party or from the non-party; (3) it would be unfair to the examining party to proceed to trial without the examination of the non-party; and (4) the examination will not unduly delay the commencement of the trial of the action, entail unreasonable expense for other parties, or result in unfairness to the person the moving party seeks to examine. See: Rothwell v. Raes, [1986] O.J. No. 2495 (Div. Ct.); Famous Players Development Corp. v. Central Capital Corp. supra; Din v. Melady, supra; McDermid Paper Converters Ltd. v. McDermid, 2010 ONSC 5404; Manga Hotels (Toronto) Inc. v. GE Canada Equipment Financing G.P., 2014 ONSC 2699.

[49] To satisfy the test under rule 31.10, the party requesting an order to examine a non-party for discovery must show that the party who was examined for discovery refused or constructively refused to provide the information sought from the non-party: Famous Players Development Corp. v. Central Capital Corp., supra.

[50] In the case at bar, the Plaintiffs satisfy the first and possibly the fourth components for the examination for discovery of a non-party, but for the reasons already expressed above, the Plaintiffs fail to satisfy the second and third components of the test.

[51] Accordingly, I dismiss their motion under rule 31.10 for the examinations for discovery of non-parties.

C. CONCLUSION

[52] For the above reasons, the Plaintiffs’ motions are dismissed. If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with AIC’s and CI’s submissions within 20 days of the release of these Reasons for Decision followed by the Plaintiffs’ submissions within a further 20 days.

Perell, J.

Released: July 5, 2016