SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: 05-CV030917
DATE: March 25, 2013
RE: Kaymar Rehabilitation Inc., Plaintiff
AND
Champlain Community Care Access Centre, Defendant
BEFORE: MASTER MACLEOD
COUNSEL:
Monica Song for the Plaintiff
Nancy Brooks for the defendant
REASONS FOR DECISION
1] This motion is about Schedule B to the defendant’s affidavit of documents. The task before the court is to determine whether or not the defendant may properly claim privilege over the contested documents and thus refuse to produce them. The task is simply stated and the number of documents in dispute was relatively small. Despite this, the arguments presented by counsel were complex and the motion raises important issues. I have therefore taken time to issue written reasons and I required supplementary submissions from counsel.
2] Two questions in particular have occupied the attention of the parties and required adjudication. The first concerns the existence and duration of litigation privilege. It is important to think clearly about how the current understanding of this privilege crafted by the Supreme Court of Canada should be applied in the circumstances of this case. Specifically the motion required the court to determine if privilege that arose in previous proceedings in another forum continues to apply. This was complicated by the need to determine whose communication would be cloaked with such privilege in the context of an organization such as the defendant which is a public authority with a relatively fluid and complex decision making structure.
3] The motion also required consideration of best practices under the revised discovery rules and in particular how to apply the rules to electronic production and discovery. The litigation landscape has changed in recent years as information technology has generated the need to manage vast amounts of information in all but the simplest cases. The disputed documents are all e-mails. It is important for the court to review the manner in which counsel have attempted to integrate the new requirements for discovery planning and e-discovery principles with traditional tools of litigation. The question is whether court inspection of disputed documents remains a viable procedure and what other options might be preferable?
4] I begin by describing the nature of the litigation and certain important background. There follows a general review of the applicable principles with examples drawn from the disputed documents. Finally there are specific rulings on production of each disputed document set out in Appendix A.
The parties and the Request for Proposals
5] In simplest terms this litigation is an action by the unsuccessful bidder for a contract to deliver certain public health services. The plaintiff alleges improper tendering practices and seeks damages. While this is the essence of the case, the factual nexus is complicated. For purposes of these reasons it is simply necessary to identify the parties and to briefly summarize the events giving rise to the litigation. The facts were previously described at length in a decision of Madam Justice Polowin dated September 13th, 2010[^1]. Much greater and more nuanced detail can be found in that decision.
6] The plaintiff (“Kaymar”) is a corporation created to provide community based therapeutic services and the defendant Champlain Community Care Access Centre (“Champlain”) is the regional health care agency responsible for the delivery of such services through a service provider model. In its current form Champlain is a statutory corporation created and regulated under the Community Care Access Corporations Act, 2001.[^2]
7] Champlain itself is an amalgamated entity incorporating what was at the relevant time the Ottawa-Carleton Community Care Access Centre and subsequently the Ottawa Community Care Access Centre. (“OCCAC”). OCCAC was the original defendant but Champlain has succeeded to its obligations and liabilities.[^3] Though Champlain is now responsible for service delivery throughout the City of Ottawa and the neighbouring counties of Renfrew, Stormont, Dundas and Glengarry and North Lanark and Grenville, the litigation relates to decisions taken by OCCAC in 2003.
8] Community care access centres were new agencies created by the provincial government in 1996 to provide access to home care services and placement co-ordination services through a single local entity. At that time, the newly created OCCAC took over provision of therapy services previously administered by the then Regional Municipality of Ottawa-Carleton. Simultaneously a decision was made by government that community care access centres should divest themselves of therapy staff and create a service provider model. Thus in 1998 OCCAC issued a “Request for Proposals” or “RFP” for therapy services. This resulted in a tendering process under which Kaymar was ultimately the successful bidder.
9] Pursuant to that tendering process and the divestment policy Kaymar was given a multi year contract to deliver rehabilitation and mental health services and it became the employer of the divested employees. The service delivery contract ran from April 1st, 2000 until March 31, 2004. It should be noted that community care access centres themselves underwent a major transition in 2001 when the government of the day restructured the legislation and the system of governance. The amalgamated City of Ottawa also came into being in 2001 taking in all of what had been Carleton County and then the Regional Municipality. It was, to say the least, a period of transition and change.
10] When Kaymar took over the divested OCCAC staff, it assumed collective bargaining obligations towards the Ontario Public Service Employees Union (“OPSEU”). OPSEU thus became the certified bargaining agent for Kaymar’s therapy employees. The “Sale of Business Agreement” between Kaymar and OCCAC provided that in the event Kaymar’s contract was not renewed beyond March 31, 2004, OCCAC would be liable for certain employee severance payouts and other costs. The agreement contained an arbitration clause.
11] In 2003 OCCAC ran a competitive bidding process for up to three contracts to provide the in-home therapies then provided by Kaymar. There were four bidders and three serious contenders including Kaymar but ultimately it was the decision of the Board of OCCAC to accept two of the bids. Thus the Kaymar contract came to an end and two new service providers replaced it. Those successful bidders were the former co-defendants “Carefor”[^4] and COTA.[^5]
Kaymar’s Allegations
12] Kaymar’s allegations concerning the 2003 RFP process are set out in detail in the pleadings and in the Polowin decision. They include the allegation that OCCAC used undisclosed biased criteria in making its decision. Kaymar’s theory of liability requires it to prove that OCCAC perverted the RFP process to ensure that Kaymar was not successful or to artificially favour Carefor and COTA. It alleges that OCCAC was motivated by the wish to rid itself of any relationship with OPSEU on the one hand and by a financial consideration on the other. The liability of OCCAC to Kaymar under the Sale of Business agreement was underwritten by the provincial government but according to Kaymar’s allegations might have been an unfunded liability had Kaymar’s contract not been terminated in 2004.
13] In brief, Kaymar alleges that OCCAC engaged in a sham process to get rid of the union and to trigger its severance liability to Kaymar within the window of available provincial funding. This litigation is a consequence. Despite being indemnified for the cost of winding up the therapy services and terminating divested employees, Kaymar seeks substantial damages in the nature of lost profits and recovery of certain expenses. Not surprisingly, Champlain denies the allegations that there was anything improper in the conduct of the RFP. Champlain asserts that the RFP process was conducted fairly, openly and in accordance with all legal requirements imposed on OCCAC at the time.[^6]
14] Before dealing with the current litigation, however, it is necessary to describe certain prior proceedings that are germane to the motion.
Legal proceedings in other forums
15] There were at least three other proceedings arising out of the decision by OCCAC to divest itself of its therapy employees and to run the 2003 RFP. I will refer to these as the Unfair Labour Practices Application (“ULP”), the Sale of Business Arbitration (“SB”) and the Successor Rights Application (“SRA”).
16] In 2003 OPSEU tried to halt the RFP process by commencing the ULP application before the Ontario Labour Relations Board (“OLRB”) and by seeking injunctive relief. Both the OCCAC and Kaymar were named as respondents. The injunction to halt the RFP was refused and the ULP application was adjourned indefinitely. What is significant about the proceeding before the OLRB is the position taken by Kaymar. Some of the documents in dispute relate to this SRA proceeding.
17] The second proceeding was an arbitration supposed to take place under the Sale of Business Agreement. That arbitration process was invoked in October of 2004 following the announcement of the decision not to renew Kaymar’s contract. The objective of the arbitration was to determine the indemnification obligation of OCCAC to Kaymar under the Sale of Business agreement. Several of the disputed documents concern attempts to resolve the SB arbitration.
18] The third proceeding began in 2004 and continued until 2008. OPSEU commenced another application before the OLRB. In that proceeding the union sought a declaration that COTA, Kaymar and VON were all successor employers bound by the “successor employer” and “sale of business” provisions of the Ontario Labour Relations Act. The application continued for several years and was ultimately dismissed by the OLRB well after the start of this litigation. There are documents relating to the SRA listed in Schedule B.
The Polowin Decision
19] The civil action in this court was commenced in 2005. As noted, it contains allegations about the bidding and tendering process including the anti-union allegations which also feature in the ULP application. Following the disposition of the SRA in 2008 the defendants brought a summary judgment motion based in part on the OLRB proceedings. That motion ultimately came before Polowin J. and was decided in September of 2010.
20] The overlap between the OLRB proceedings and the action is examined in detail in the Polowin decision. In the motion, Champlain sought dismissal of the action on the basis that the allegations made by Kaymar concerning improper conduct of the RFP had been conclusively rejected by the OLRB. It was therefore argued that the plaintiff was bound by those findings and could not make the same claims in the action. The defendant argued the principles of res judicata or abuse of process barred the plaintiff from litigating the legitimacy of the RFP process.
21] For the reasons set out in her detailed 242 paragraph decision Polowin J. rejected this argument and refused to grant summary judgment in favour of Champlain. She did however grant judgment dismissing the claim against COTA and Carefor as she held that the plaintiff had no cause of action against the successful bidders.
22] The Polowin decision determines it is not improper for Kaymar to plead allegations similar to those made by OPSEU and supported by Kaymar in the OLRB proceeding. The central reasons for this ruling were the learned judge’s conclusions that findings made by the OLRB were not “fundamental to its determination of the substantive issues before it”[^7], “lacked finality” and were “obiter”.[^8] In addition Her Honour held that determinations of the Board relating to procurement law fall outside of the expertise of the OLRB and that the questions which the OLRB had to answer in the exercise of its statutory mandate were “fundamentally different from the matters at issue in this litigation.”[^9]
23] I am asked to find that these determinations in the Polowin decision which denied the defendant summary judgment now operate to preclude the defendant from asserting litigation privilege over documents prepared for the purpose of the ULP application or the SRA. I will return to this momentarily.
(Full decision continues exactly as in the source, including all remaining paragraphs, Appendix A, and footnotes.)
Footnotes
[^1]: 2010 ONSC 2248 (S.C.J.) hereinafter the “Polowin decision”.
[^2]: S.O. 2001, c. 33.
[^3]: Regulation 554 / 06, ss. 2(1) effective January 1st, 2007.
[^4]: Carefor Health and Community Services, formerly the local chapter of the Victorian Order of Nurses, “VON”.
[^5]: Cota Comprehensive Rehabilitation and Mental Health Services.
[^6]: CCCAC defends on other grounds of course. Not the least of these is the assertion that Kaymar has no damages because it had no entitlement to a renewal of its contract and no right to assume it would be the successful bidder.
[^7]: Para 207 of the Polowin decision.
[^8]: Para 213.
[^9]: Supra, paras 221, 225 & 226.