SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: 866/08
DATE: 20130913
RE: Urbacon Building Groups Corp. v. City of Guelph
BEFORE: MacKenzie J.
COUNSEL:
Mr. M. Drudi, for the plaintiff/responding party
Mr. D. Schmuck, for the defendant/moving party
Ms. M. Ruberto, carriage counsel for lien claimants
E N D O R S E M E N T
RE: Motion to read in evidence given on discovery
by (a) Lien Claimant(s)
Introduction
[1] The defendant, City of Guelph (“Guelph”) moves in writing under Rule 31.11(1) for an order granting it leave to read into evidence for Guelph excerpts from the examinations for discovery of some of the lien claimants pursuant to Rule 31.11(1), s. 15 of the Ontario Evidence Act and/or the Construction Lien Act. The motion is opposed by the plaintiff Urbacon Buildings Group Corp. (“Urbacon”) and by carriage counsel on behalf of approximately 18 lien claimants.
Overview
[2] The salient facts giving rise to the motion may be briefly stated.
[3] On or about July 4, 2006, Urbacon and Guelph entered into an extensive building construction contract for a new and improved public administration facility for the City of Guelph (the Contract). As is customary in such projects, a substantial amount of the work involved in the Contract was performed by Urbacon through the agency of various subtrades.
[4] The Contract was significantly delayed in calendar years 2006 and 2007. The nature and extent of the delay is not relevant for purposes of this motion. In the result, Guelph terminated the Contract on or about September 19, 2008. In sum, Guelph took the position that Urbacon and its forces and/or agents (subtrades) were in substantial breach of the performance milestones set out in the Contract, thus entitling Guelph to terminate the Contract. Urbacon contests this view of the circumstances giving rise to Guelph’s termination of the Contract, and takes the position that Guelph wrongfully terminated the Contract. In any event, Urbacon brought this action claiming payment of the outstanding balance owing under the Contract and Guelph counterclaims for its costs incurred in arranging for another contractor to step into the place and instead of Urbacon and complete the outstanding work.
[5] At the date of termination, various subtrades who had performed work in the project had not received payment and they have accordingly filed claims for lien. The validity of their claims and the quantification of their accounts are issues that are not relevant in Guelph’s motion.
[6] The motion arises specifically in the context of Guelph not completing its evidence as of the date the trial went into recess, approximately March 28th, 2013. It should be also noted the trial began on or about January 22nd, 2013, it being understood by all parties that this commencement date was for the first phase of the trial with respect to liability issues, both vis-a-vis Urbacon and Guelph, and with respect to the exposure of Urbacon and Guelph to the claims of the subtrades as lien claimants under the Construction Lien Act.
[7] Corbett J. of this court did extensive case management of the action prior to trial. Among other things, he ordered that the trial of the liability issues between the principals to the contract and the subtrades vis-a-vis those principals would be tried together.
The motion by Guelph under Rule 31.11(1)
[8] Guelph’s position essentially is that the subcontractors as lien claimants are parties for purpose of the liability phase of the trial, and as such, they are adverse in interest to Guelph; and that Guelph is permitted under sections 57 and 59 of the Construction Lien Act to treat them as parties to the action.
[9] From this position, Guelph contends that it is entitled under Rule 31.11(1) as well as section 15 of the Ontario Evidence Act to have read into its evidence at trial evidence given by the representatives of various lien claimants on their examinations for discovery.
[10] Guelph in paragraph 24 of its Factum states: “There is no other appropriate status the Subtrades hold but that of an adverse party to the City of Guelph” (emphasis added).
[11] Guelph further contends that the term “adverse party” in Rule 31.11 is broader than the term “opposite party,” used in a predecessor Rule (R. 329) and that the intention of the term “adverse party” is to permit additional evidence of a broader set of parties before the trial judge: see para. 34, Factum. In support of this, Guelph refers to sections 51 and 67 of the Construction Lien Act, which sets out the objectives of the Act is to have the trial judge completely dispose of the action in a procedure that is as far as possible summary in character: see para. 35, Factum. In sum, Guelph’s motion seeks an order that the evidence provided by the Subtrades at their examinations for discovery be admitted into evidence at the trial where findings will be made on the project that gives rise to the lien claims of those Subtrades and Urbacon: see para. 41, Factum.
[12] Urbacon’s position on the motion is quite straightforward. In its Factum, Urbacon frames the issue in the following words: “Can Guelph use read-in evidence of a party against a party other than the party who was examined at discovery? In other words, can Guelph rely upon read-in evidence from transcripts of subtrades’ discoveries against Urbacon?” see para. 8, Factum.
[13] In its submissions, Urbacon makes two concessions:
Subtrades are parties adverse in interest to Guelph as well as parties adverse in interest to Urbacon.
Urbacon and/or Guelph can read in portions of discovery transcripts of the subtrades against the subtrades to deal with issues that involve the subtrades. However, Urbacon contends that Urbacon and/or Guelph cannot use read-in evidence provided by the subtrades on their discoveries against each other, i.e. Urbacon and/or Guelph.
[14] Urbacon refers to the language in Rule 31.11 in the following manner:
At the trial of an action, the party may read into evidence as part of the parties’ own case against an adverse party any part of the evidence given on the examination for discovery (a) the adverse party; or (b) a person examined for discovery on behalf of, or in place of, or in addition to the adverse party (emphasis added). Urbacon contends that the word “the” in Rule 31.11 on its face restricts the use of read-in evidence on discovery against the party who gave the evidence and not against an adverse party, ie. other than the party who gave the evidence on discovery.
[15] In support of this position, Urbacon states:
To suggest that transcript evidence of one party can be read in against the interest of all other parties to the proceedings in a multi-party action, assuming the existence of some degree of adversity, is very problematic in that it subjects the party to face the evidence of persons who are not in court and where there is no opportunity to cross-examine the witness. In many cases, such is the case at hand, the information provided by the subtrades on the discoveries are without proper foundation, often based on hearsay, may involve speculation, and can be explained later in the transcripts. See para. 12, Factum
[16] Counsel for Urbacon points out that Guelph has provided no authority to indicate that discovery evidence can be read in against any party other than the party who gave it. In contrast, Urbacon refers to a decision of this court, Cain v Peterson, [2005] 24 CPC. (6) 298, which dealt with the issue before the court on this motion. Counsel refers to the decision of Mr. Justice Drambutt addressing the very question raised by Urbacon:
I see no escape for the plaintiff from the plain language from the Rule. It simply does not permit him to read in the evidence of Mr. Allen and Mr. Beer against Mr. Peterson. Nor do I see any unfairness in this result. The use of a party’s prior statement in evidence against him is commonplace in our law. The need for a Rule to govern such use in the case of discovery flows presumably from the compulsory nature of discovery. The use of one defendant’s prior statements against another, on the other hand, offends the rule against hearsay. The strictures of that Rule may of course be relieved against by the application of the modern principled approach of the admissibility of hearsay. see para. 12
[17] Counsel for Urbacon cites a subsequent case in the British Columbia Supreme Court wherein reviewing a rule similar to our Rule 31.11, the court stipulated that evidence on discovery could only be admissible against the adverse party who was examined: see MacEachern v. Rennie [2009] 80 CPC (6th) 1.
[18] The gist of Urbacon’s position is clearly set out in paragraph 17 of its Factum:
With respect, Guelph is attempting to admit evidence of the Subtrades be used against Urbacon in Part 1 [Liability] of the trial, which requires the Court to determine whether Urbacon breached its contract with Guelph, and whether Guelph was entitled to terminate its contract with Urbacon. As stated above, Urbacon concedes that both Urbacon and Guelph can utilize the discovery evidence of the subtrades against those subtrades in the damages portion of the trial [Part 2] but only against the subtrades who provided the evidence. Neither Guelph nor Urbacon can read in the discovery evidence of a subtrade against Urbacon, Guelph or any of the other subtrades; it can only be utilized against the subtrade.
[19] Carriage counsel for the lien claimants (Subtrades) informed the court by letter dated September 5, 2013 that she concurred with the position of Urbacon and, absent Guelph seeking to read-in discovery evidence against the Subtrades, would not file any responding material. As of September 11, 2013, this court has not received any notice by Guelph of its intention to read-in such evidence against the Subtrades. In the absence of such notice, this court has proceeded in its disposition of the issues raised in the motion.
Analysis
[20] The positions of Urbacon and Guelph are set out above. I am of the view that the submissions made by Guelph in relation to the referenced sections of the Construction Lien Act and the Ontario Evidence Act do not counter the submission of Urbacon in relation to the meaning to be ascribed to the use of the word “the” preceding the term “adverse party”. In essence, as noted above, Urbacon’s interpretation of the word “the” preceding the term “adverse party” used in Rule 31.11 is supported by authority. To give effect to the position taken by Guelph would be to ignore the clear intention of the Rules Committee in using the word “the” before the term “adverse party” as opposed to using the word “an” before the term “adverse party”. In sum, the word “the” as opposed to the word “an” in the language of Rule 31.11(1) is dispositive of the issue in this motion. In the result, I accept the position of Urbacon and reject the position of Guelph on the motion.
Disposition
[21] Guelph’s motion will be dismissed; the costs of this motion are reserved.
MacKenzie J.
DATE: September 13, 2013
COURT FILE NO.: 866/08
DATE: 20130913
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Urbacon v. City of Guelph
BEFORE: MacKenzie J.
COUNSEL:
Mr. M. Drudi, for plaintiff/responding party
Mr. D. Schmuck, for the defendant/moving party
Ms. M. Ruberto, carriage counsel for lien claimants
ENDORSEMENT
MacKenzie J.
DATE: September 13, 2013