Court File and Parties

Court File No.: 897/02
Date: 2012-06-07
SUPERIOR COURT OF JUSTICE - ONTARIO

RE: BOT HOLDINGS LIMITED, BOT CONSTRUCTION LIMITED, BOT CONSTRUCTION CANADA LIMITED, CLARKSON CONSTRUCTION COMPANY LTD., BOT QUEBEC LIMITÉE and ROADWAY OPERATIONS AND MAINTENANCE CORPORATION OF ONTARIO, Plaintiffs

AND:

HER MAJESTY IN RIGHT OF THE PROVINCE OF ONTARIO, REPRESENTED BY THE MINISTER OF TRANSPORTATION FOR THE PROVINCE OF ONTARIO, Defendant

BEFORE: Murray J.

COUNSEL:
James A. LeBer, Counsel for the Plaintiffs

Ronald Carr, Counsel for the Defendant, Her Majesty the Queen in Right of Ontario

HEARD: June 5, 2012

Endorsement

[ 1 ] The plaintiffs, Bot Construction Limited et al., bring a motion for leave to amend the statement of claim.

[ 2 ] The statement of claim was issued in 2002. Even after a decade, discoveries have not yet begun. It is surprising that it has taken a decade to bring a motion for leave to amend the statement of claim. However, leave to amend is not opposed on the basis of delay by the defendant, the Minister of Transportation (hereinafter referred to as “MOT”) for the Province of Ontario, represented by the Crown Law Office. Neither is there an attack on the form of the proposed amendments. It is not the form but the substance of the pleadings which concerns the Ministry.

[ 3 ] The plaintiffs’ claim relates to alleged damages for breach of contract for the reconstruction of a highway in northern Ontario. In a nutshell, the Ministry is alleged to have represented the amount of rock available for construction pursuant to the contract and that in fact, there was a shortfall of available rock which had a material impact on its costs. The result is a claim for breach of contract and for damages. The Ministry, in its statement of defence, disputes the allegations or that errors were made in calculating the quantity of rock available. The Ministry has a counterclaim against the plaintiff.

[ 4 ] A review of the initial statement of claim indicates that the plaintiffs initially claimed damages for, inter alia , negligence and negligent misrepresentation. The contentious aspect of the proposed amendment relates to the plaintiffs’ proposed paragraph 56 which is as follows:

BOT pleads that about the time the MTO and BOT entered into the contract, and in the years following, MTO encountered many claims of the same or substantially similar nature by contractors, including BOT and others, related to rock quantity overruns or under runs on MTO projects. These claims amounted to many millions of dollars in value. MTO undertook an initiative to investigate the cause of the claims, and to identify opportunities to reduce the potential for raw claims on future projects (the “Rock Claims Initiative”).

[ 5 ] However, at the heart of the objection by the Ministry is its assertion that the proposed amendment raises matters that are irrelevant to the Court's determination of the plaintiffs’ claim and will cause delay, expense and additional complexity. In particular, the Crown asserts that if the amendment is allowed, which refers to many claims of “the same or substantially similar nature by contractors” which were in existence “about the time the MTO and BOT entered into the contract and in the years following”, such amendment will trigger an avalanche of productions of perhaps up to 60,000 additional documents at great expense amounting to prejudice to the defendant.

[ 6 ] If, at the time of the execution of the construction contract between the plaintiffs and the defendant, there were claims the same or substantially similar in nature against the Ministry based on an erroneous “bulking factor” (that is, claims based on similar errors/misrepresentations with respect to rock quantity as alleged by the plaintiff in this case), then the fact that such claims had been made is relevant to whether the Ministry knew or ought to have known that there representations or warranties may have been inaccurate.

[ 7 ] While the fact that there were similar claims in existence at the time of execution of the contract between the plaintiffs and the Ministry is relevant to the issue of what the Ministry knew or ought to have known, it is unlikely that the merits of such claims are relevant. Although I am not in a position to determine the nature and extent of production that might be triggered by permitting the amendments proposed by the plaintiffs, I find it unlikely that permitting such amendments will open the floodgates to the massive additional production as the Ministry suggests. In any event, the Court always has inherent jurisdiction to ensure that production of relevant documentation is not unduly oppressive. There is no prejudice in this case that cannot be compensated for by costs.

[ 8 ] On the other hand, I fail to see the relevance of any claims made by other contractors against the MTO after the date of execution of the contract in this case.

[ 9 ] The plaintiffs are therefore granted leave to amend as proposed except that proposed amended paragraph 56 shall be further amended to strike out any reference to claims of the same or substantially similar nature made by other contractors after the execution of the contract between the plaintiffs and the MOT. Claims made after the execution of the contract between the plaintiffs and the MOT are not relevant to the issues in this case.

Costs

[ 10 ] In light of the mixed result in this case, I have decided no costs shall be awarded.

MURRAY J.

Date: June 7, 2012