SUPERIOR COURT OF JUSTICE - ONTARIO

Court File No.: CV07-635-00
Date: February 24, 2012

RE: MREL Group of Companies Ltd. v. Her Majesty the Queen in Right of
Ontario and the Ontario Provincial Police Service

Before: The Honourable Mr. Justice John M. Johnston

Counsel:

David M. Adams, for the Plaintiff/Responding Party, MREL Group of Companies Ltd.

Leonard Marsello and William MacLarkey, for the Moving Parties/Defendants, Her Majesty the Queen in Right of Ontario and the Ontario Provincial Police Service

RULING ON MOTION

[ 1 ] The Moving Parties, Defendants in the Statement of Claim, bring this motion seeking leave to appeal the interlocutory Order of Quigley J., dated December 1, 2010, which required the Crown to produce specific documents outlined in a letter by the Plaintiff’s lawyer, dated May 4, 2010.

[ 2 ] Specifically, the Order required the defendants/moving party in this motion, hereinafter referred to as the “Crown”, to produce all documents listed in a six page letter from the Plaintiff’s lawyer. The letter contains approximately 63 requests for documents. The Defendants argue the motion Judge failed to provide sufficient reasons, failed to properly consider the Rules of Civil Procedure, in particular Rule 29.2, requiring an analysis of proportionality before requiring production of a document; completely failed to provide reasons relating to Orders for production of various documents from the Ontario Provincial Police.

Background

[ 3 ] The Plaintiff has operated a research and development, test and evaluation facility (RDTE Facility) for over twenty years on lands it leased from the Crown in a remote area, just north of Sharbot Lake. The sole access to this facility is by way of a road, which is also the sole access to a large area of Crown lands over which the Crown, Her Majesty the Queen in Right of Ontario, has granted prospecting rights to a uranium mining operation, known as Frontenac Ventures Corporation (“Frontenac”).

[ 4 ] The lands leased by the Plaintiff is the subject of a significant land claim brought by the Algonquins of Ontario, which has been under negotiation with the Crown for a number of years. There appears to have been no problems between the Plaintiff and the local First Nations community during the Plaintiff’s tenancy on the land, until the uranium mining operation.

[ 5 ] The Plaintiff served notice of this action pursuant to the Proceedings Against the Crown Act, RSO 1990 c.P.27, as amended, on June 27, 2007. The Plaintiff served a Statement of Claim on December 20, 2007. The Defendants served a Statement of Defence on February 1, 2008. The Claim alleges that the OPP breached duties to ensure safe and continued access to the Plaintiff’s business, near Sharbot Lake, during a First Nation’s blockade of its access road in June 2007. Members of the Algonquin First Nation erected the blockade to protest the granting of uranium prospecting rights to Frontenac Ventures Corporation (“Frontenac”) which share the same access road with the Plaintiff.

[ 6 ] The Defendants served a List of Documents on August 1, 2008. On consent, the Plaintiff amended its Claim on August 7, 2009, substantially widening its claim to include allegations it suffered damages as a result of the Crown’s failure to consult with the Algonquin First Nation before granting mining rights to Frontenac over lands that were subject to an Algonquin land claim. The Plaintiff alleges that the Crown’s failure to consult led to the blockade and the damages suffered by the Plaintiff. The Plaintiff now also claims it relied upon representations and warranties both express and implied made by the Crown relating to lands leased to the Plaintiff by the Crown, including representation that use of the lands would be unfettered and/or that the lands were suitable for use by the Plaintiff in conjunction with its RDTE Facility. The Plaintiff claims the very lands form part of the agreement they have with the Crown are part of the Algonquin Land Claim, which has been accepted for negotiation by the Governments of Ontario and Canada since 1991. The Plaintiff alleges the Crown did not advise it the land claim had, in fact, been accepted by the Crown for negotiation, or that it had granted uranium mining rights over these lands. Further, the Crown did not disclose it had failed to consult with the involved First Nations Peoples in granting the uranium mining rights. The new claims made by the Plaintiff as to the grounds of Crown liability include:

➢ The Crown had a constitutional and common law duty to consult with Aboriginal Peoples when it contemplates conduct that might adversely affect Aboriginal Peoples;

➢ The Crown breached its duty to consult with Aboriginal Peoples prior to granting highly contentious uranium mining rights over these lands;

➢ The Crown knew or ought to have known that a blockade or other significant interference was the likely result of the discovery by First Nations Peoples or uranium mining activities;

➢ The blockade was a natural and foreseeable consequence of the breach of duty by the Crown;

➢ The Crown knew or ought to have known that the business activities of the plaintiff would be irreparably harmed;

➢ The Crown knew or ought to have known that access by the plaintiff to its critical facility was over the Access Road (which was blockaded);

➢ The plaintiff claims negligent misrepresentation against the Crown;

➢ The plaintiff relied to its detriment on the express and implied representations and warranties made by the Crown and the Crown either negligently or purposefully withheld critical information relating to the plaintiff leased lands from the Crown;

➢ The Crown had a duty to disclose to the plaintiff the existence of the land claim;

➢ The Crown was also the landlord or the plaintiff and as such, owed a duty of care to its tenant to ensure that the property was suitable for the uses for which it was intended;

The Plaintiff alleges the Defendants relied on their “List of Documents” which they had produced as a result of the original Statement of Claim. The Plaintiff alleges that these documents are deficient.

[ 7 ] Counsel for the Plaintiff wrote to Defendants’ counsel on May 4, 2010 of the deficiency of documents. No further “List of Documents” has been provided since that time by the Defendants. A copy of the May 4 letter is attached to the Quigley Order as Schedule “A”. Counsel for the Defendants replied to the letter with a letter of his own dated May 7, 2010, suggesting the Crown provide counsel with affidavits, that discoveries proceed and that this recommended procedure was in keeping with the new modifications to the Rules respecting discovery placing greater weight on proportionality and practicality. Counsel stated:

That said, because the OPP documents were prepared before the amendment to your pleading, we are reviewing redacted documents to determine if there is anything redacted which might now be relevant (to) the newly pleaded aboriginal issue, but again, this is no reason for the earlier examination not to have proceeded. Otherwise, we are confident that the documentation we have produce (two bound volumes, 103 tabs) and the manner in which we have produced it is appropriate and we have no intention of changing anything. It appears, in fact, that much of that which you allege to be missing has actually been produced. However, incidents and discussions having nothing whatever to do with MREL are simply not relevant and are exactly the kind of thing the recent Rule amendments seek t avoid as they added significant added cost to the process.

[ 8 ] The Defendants state they sought to address the amended claim by providing two affidavits filed in support of the Crown’s intervention in Frontenac Ventures Corporation ats. Algonquin First Nation et al. The affidavits of Doug Carr, sworn August 17, 2007 and Robert Ferguson, sworn August 20, 2007, are supported by 25 exhibits and set out evidence concerning the Crown’s negotiation of the Algonquin land claim and the Crown’s communications and consultations regarding Frontenac’s activities. The Defendants argue before the motion’s Judge and this Court that it sought to deal with the amended claim in this manner because searching for and producing records relating to a land claim that dates back to 1772 and that has been the subject of negotiations for almost 20 years would take the Crown four to six months to complete. The Defendants offered to produce two representatives for examinations for discovery, each familiar with the OPP and Aboriginal issues. I note it has been over eleven months since the decision of the motions Judge and there has been no production of documents pending this motion seeking leave to appeal.

The Law

[ 9 ] On a motion for leave to appeal an interlocutory order of a Judge, the moving party must satisfy a two prong test under Rule 62.01:

(i) “there appears to the judge hearing the motion good reason to doubt the correctness of the order in question,” and

(ii) “the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted”

Is there good reason to doubt the correctness of the decision of the motion judge?

[ 10 ] With respect to the first prong of the test, for there to be “good reason to doubt the correctness” of the decision, a judge need not consider it to be “wrong” or even “probably wrong” (Can. Egg Marketing Agency v. Sunnylea Foods Ltd (1977) 3 C.P.C. 348 (Ont. H.C.)).

Position of the Defendants/Moving Party

[ 11 ] In its factum, the Defendants list three reasons to doubt the correctness of the Judges’ Order. In oral argument, counsel for the defendants argues five reasons to doubt the correctness of the motion Judges’ decision; broken down into two subgroups. I will deal with the argument as presented orally.

Group one : documents related to the Ontario Provincial Police (OPP).

First: the motion Judge failed to provide reasons why the OPP documents were ordered produced;

Second : the motion Judge made substantive errors, ordering production of OPP documents that are not properly producible pursuant to Rule 62: such as lists and graphs;

Group two : documents related to the “Crown’s duty to consult”

Third : the motion Judge provided no analysis of the requirement of Rule 29.2 to consider proportionality of the request for document production;

Fourth : the motion Judge was confused as the test to apply for relevance of documents;

Fifth : the motion Judge engaged in improper speculation and consequently made improper factual finding that the Crown had possession of the documents sought to be produced.

[ 12 ] Upon careful review of the Reasons for Decision, the factums of the parties, the pleadings, most importantly, the Statement of Claim and Revised Statement of Claim, I conclude there does not appear to be good reason to doubt the correctness of the order in question on any of the five grounds advanced by the Defendants.

[ 13 ] I review the basis of my finding dealing first with the OPP documents.

Did the motion Judge provide reasons for his Order requiring Production?

[ 14 ] When read as a whole, considering the written and oral record from the motion, I am satisfied the Judge provided reasons. The Judge found, at paragraph 23 of his decision, that the documents requested were relevant to the issues pleaded and should be produced. One of the issues in the case, as outlined in the Amended Claim, is the allegation the Plaintiff had one access point to its research facility and its business. The access point was cut off by the blockade. Further, it is alleged that the OPP, who had jurisdiction in the area, did not provide the Plaintiff with safe access to the lands they leased from the Crown and in part as a result, its business effectively could not operate and they lost money.

[ 15 ] Counsel acting for both Defendants argues that many redacted statements of officers have been produced to the Plaintiff and the other notes and recording of the police at the blockade are simply not relevant, because they do not mention or do not deal with the Plaintiff. There is ample evidence on the record to support the motion Judge’s finding that the blockade was relevant to the Plaintiff’s claim. The police officers conduct at the blockade, near the Plaintiff’s property, is highly relevant to the issue of access by the Plaintiff to its property. It is not a fishing expedition on behalf of the Plaintiff to suggest that notes of officers at the scene are relevant. This is not a situation where the officers’ notes have a possible ‘semblance of relevance’, as the old Rules provided. The officers in question were the very individuals who arguably had the authority and responsibility to ensure the Plaintiff had safe access to its property. The Defendants argue that because in paragraph 23 of his decision the Judge did not recite his reasons for weighing relevance that creates a ‘serious debate’ on whether he applied the proper test of relevance.

[ 16 ] The Judge was very clear that the documents sought were relevant to the issues pleaded. He found the documents to be of such high relevance that he was surprised the Defendants would not have reviewed them in preparation for the defence. I do not interpret the Judge found the defendant Crown had them in his possession. However, he did refer to the letter of May 7, 2010 where counsel for the Defendants specifically stated they would review the police officers redacted notes to determine if they ought to be produced.

[ 17 ] While counsel for the Defendants did not argue the issue of proportionality in relation to the Group one documents, relating to the OPP, I will. It is implicit in the Judge’s reasons that the degree of relevance of the OPP documents outweighed the inconvenience, time or expense in gathering the documents. Further, it is implicit that he considered the volume of documents which might be required to be disclosed; but again found the documents in question to be highly relevant. Time and expense as it relates to the police records of officers at the blockade was before the motions judge. I again refer to the May 7 th letter indicating the police notes would all be reviewed. It is difficult for the Defendants to now argue it would be too time consuming or expensive to do what they said they would do. Counsel for the Defendants argues the Judge had uncontradicted evidence from the two affidavits dated August 2007 that it would take four to six months to obtain the requested documents. This predates the May 7, 2010 letter.

[ 18 ] The motions Judge was alive to the issues requiring proportionality and provided brief reasons, he set out Rule 29.2 at paragraph 18 of his decision. Subsequent to reciting the law, the Judge addressed at paragraph 22 of his decision the Defendants’ proportionality argument: wherein the Defendants stated that it would take four to six months to complete the production request.

[ 19 ] The Defendants rely upon Vine Hotels Inc v. Frumcor Investments Ltd [2003] O.J. No. 4768 (Ont. Sup. Crt) to argue the absence of reasons results in a finding that there exist good reason to doubt the correctness of the order. The court in Vine, supra, found that the motion’s judge presiding over a motion for summary judgment gave insufficient reasons; which is sufficient to demonstrate that the correctness of the order is “open to very serious debate”. The Court found that:

“the wording of the endorsement makes it difficult, if not impossible, to determine the basis upon which the learned motions judge disposed of the matter. In fact, the endorsement does not actually set out how the rule 20 motion was disposed of.”

[ 20 ] Unlike Vine, supra, it is clear in the present case the basis of the decision of Quigley J. He ruled the documents were relevant, notwithstanding the defence assertion it would take 4 to 6 months to comply with the order. It is implicit in the decision that disclosure was ordered because of the high degree of relevance to the issues in dispute, based upon the amended pleadings. In paragraph 15 of his decision, he states that the Defendant has not produce specific evidence relating to the action of the Ontario Provincial Police during the blockade. It is the actions of the OPP at the blockade that form the basis of part of the claim.

Did the motion Judge make substantive errors, ordering production of OPP documents that are not properly producible pursuant to Rule 62, such as lists and graphs?

[ 21 ] The Defendant argues that many of the documents are not producible, such as requiring lists, charts and graphs and a party is not required to summarize. While I agree with this portion the Defendant’s argument, the information that is relevant to an issue in dispute is producible. The real thrust of the Order is the information be produced, not the format of disclosure of such information. Accordingly, I do not find the correctness of the Order is open to ‘very serious debate’ on this issue.

Did the motion Judge provide sufficient analysis of the requirement of Rule 29.2 in consideration of the proportionality of the request for document production?

[ 22 ] Counsel for the Defendants states that grounds three to five relate to the Plaintiff’s claim resulting from the Defendants’ breach of ‘Duty to consult’ with First Nations peoples prior to granting uranium mining rights to Frontenac. I dealt in part with the allegation the Judge did not consider and provide reasons for his ‘proportionality’ analysis when dealing with the OPP records. It is clear in the case law that sufficient reasons do not require lengthy reasons. Interlocutory orders require reasons; but only to the extent that interested parties can understand the basis of the decision. Counsel for the Defendants argues one specific requirement of the Order is too broad and therefore not proportionate. For instance, Quigley J. ordered inter alia: “any and all documents, memos, correspondence, emails, or notes with respect to the Crown’s review of the relevant land claim and the duty of the Crown to consult”. The Defendants argue it is neither relevant nor proportionate to require production of documents relating to the land claim itself that could date back to documents over one hundred years ago. However, the Plaintiff, through counsel at the original motion and again on this motion for leave to appeal, make it clear they are not seeking production of documents from a century ago. The Order itself is clear. The obligation relates to documents “with respect to the Crown’s review of the relevant land claim and the duty of the Crown to consult.” In my view, it is implicit and not speculative that the obligation relates to not just land claims but the claim in conjunction with the Crown duty to consult. By requiring production of only documents that relate to both issues is a proportionate balance.

[ 23 ] While the reasons for the judge concluding the documents are producible in the light of the proportionality requirement are not lengthy, they are present and, in my view, sufficient.

Did the motion Judge confuse the test to apply for relevance of documents?

[ 24 ] The Judge set out in his reasons the appropriate test. He states the Rules of Civil Procedure were amended and the test is changed from ‘semblance of relevance’ to ‘relating to any matter in issue’. By setting out the issues raised in the pleadings, it is clear the motions judge related the relevance to an issue alive in the litigation. I am not satisfied the Defendants have met the onus of establishing there is a serious issue the wrong test was applied.

Did the motion Judge engage in improper speculation and consequently make improper factual finding that the Crown had possession of the documents sought to be produced?

[ 25 ] In my view, the Judge’s comments: “I would be surprised if the defendants’ counsel would not have reviewed these requested productions in order to plan and conduct the defence” is obiter. The Judge cannot be taken as making a finding of fact that counsel in had the documents. It is, however, an indication of the high degree of relevance the Judge ascribed to the documents in question. I agree with counsel for the Defendants that it is an error in law to make a finding of fact based upon speculation. I do not find the motion judge made factual findings as alleged and, therefore, no factual findings were made on speculation.

Ruling

[ 26 ] For the above reasons, I find the Defendants have failed to satisfy their onus of establishing ground on which leave to appeal may be granted pursuant to Rule 62.02 of the Rules of Civil Procedure. Specifically, I find the Defendants failed to establish ‘there appears to the judge hearing the motion good reason to doubt the correctness of the order’. I, therefore, do not deal with the argument the proposed appeal involves matter of such importance that leave to appeal should be granted.

[ 27 ] The motion for leave is dismissed. Counsel shall discuss the issue of costs between themselves. If an agreement cannot be reached, the Plaintiff shall serve and file its submissions within 30 days and the Defendants within fifteen days thereafter. Submissions shall be in writing, no more than three pages, together with bill of costs.

MR. JUSTICE JOHN M. JOHNSTON

DATE: February 24, 2012

Released: February 24, 2012