SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-10-40251500CP
DATE: 20130208

RE: Joseph Michael O’Neill, Plaintiff (Respondent)

– AND –

General Motors of Canada Limited, Defendant (Appellant)

BEFORE: Justice E.M. Morgan

COUNSEL:
Louis Sokolov and Christine Davies, for the Plaintiff (Respondent)

J. Brett Ledger and Eric Morgan, for the Defendant (Appellant)

HEARD: February 5, 2013

ENDORSEMENT

I. The Appeal and the Action

[1] The Appellant, General Motors of Canada, appeals the Order of Master Glustein. The learned Master required the Appellant to produce minutes of internal corporate meetings and dismissed its motion to strike certain corporate minutes and financial statements from the motion record filed on a pending summary judgment motion by the Respondent, Joseph Michael O’Neill.

[2] The Respondent is the representative plaintiff in a class action. The action challenges the Appellant’s ability to unilaterally change certain post-retirement benefits provided to executive and non-union employees who retired on or after January 1, 1995 (“Class Members”). The Respondent claims that a series of written documents provided by the Appellant to its employees set out the post-retirement benefits for those employees, and that these documents established for Class Members a vested contractual entitlement to the benefits described therein.

II. The Settlement Agreement and Certification Order

[3] The certification motion for the within action was scheduled to be heard on October 20, 2011. Five days prior to the hearing, on October 15, 2011, the parties reached an agreement settling the common issues and the terms of certification (the “Settlement Agreement”). The Settlement Agreement was incorporated into a Certification Order issued by Strathy J. on October 20, 2011.

[4] The Certification Order and Settlement Agreement provide, inter alia, that the action is confined to a series of documents common to the class. The specific documents are identified in an enumerated list appended as Schedule A to the Settlement Agreement. These include documents that were common to the Class Members in the sense that they are comprised of written communications widely distributed to Class Members regarding post-retirement benefits.

[5] In paragraph 9 of the Settlement Agreement, the parties anticipated that they would have an expedited route to trial of the action. Documentary exchange and discovery were to be narrowly confined. Specifically, the parties agreed to engage in “limited discoveries which will focus solely on determining whether there are additional common documents, i.e. historical benefits plan documents and documents widely distributed to Class Members respecting post-retirement benefits, to those described in Schedule A.”

III. Post-Certification Proceedings

[6] Following certification, the parties completed their pleadings and exchanged documents as anticipated in the Settlement Agreement. The Appellant provided the Respondent with copies of common documents relating to employee benefits that turned up on a more thorough search of the company’s files. Likewise, the Respondent provided the Appellant with documents relating that the employees had received from the Appellant that relate to post-retirement benefits.

[7] Subsequent to the exchange of documents, the Respondent moved for summary judgment on two of the common issues identified in the Certification Order: the breach of contract claim and the negligent misrepresentation claim. Included in the Respondent’s motion record were documents that were obtained by copying a motion record filed in another proceeding – a separate claim for post-retirement benefits commenced by a number of individual executive retirees of the Appellant who had opted out of the within class action (the “DiMartile Action”). These documents included board and committee minutes of the Appellant and its parent in the United States, together with certain memoranda and PowerPoint presentations circulated internally within the Appellant.

[8] The Respondent also included in his motion record copies of the Appellant’s 1994 and 1995 audited financial statements. These documents, like each year’s financial statements, are available publically. No other year’s financial statements were included in either party’s motion record.

[9] On August 16, 2012, counsel for the Appellant wrote to counsel for the Respondent stating that the Appellant’s board and committee minutes, memoranda, and PowerPoint presentations are not within the scope of documentary discovery described in the Certification Order. Similarly, on September 25, 2012, counsel for the Appellant wrote to counsel for the Respondent making the same point about the two years’ financial statements.

[10] In both letters, the Appellant took the position that the materials referred to were neither “common documents” nor “historical plan documents” within the meaning of paragraph 9 of the Settlement Agreement. The Respondent was asked to remove the identified documents from the materials it filed in the forthcoming summary judgment motion. The Respondent for the most part refused to do so, although he did consent to withdrawing the PowerPoint presentations from his motion record.

IV. The Masters Motion

[11] The Appellant moved to strike the balance of the DiMartile Action documents and the financial statements from the Respondent’s record. At the same time, the Respondent moved to compel further production of documents internal to the Appellant relating to the creation and terms of the benefits plans at issue in the within action.

[12] The motions were heard together by Master Glustein on December 20, 2012. He released his reasons for decision on most of the issues on December 22, 2012, with additional reasons addressing the admissibility of the financial statements on January 9, 2013.

[13] Master Glustein ruled that the Appellant must produce corporate minutes and resolutions concerning the creation of the employee benefits plans at issue in the action. At the same time, he dismissed the Appellant’s motion to strike the documents produced by the Respondent that came from the DiMartile Action. In addition, the Master Glustein dismissed the Appellant’s motion to strike the 1994 and 1995 financial statements from the Respondent’s record.

[14] The Appellant has appealed all of these rulings in one omnibus appeal.

V. Analysis

[15] The Appellant submits that the overriding error made by the Master was that he failed to properly interpret the applicable clauses in the Certification Order and Settlement Agreement. In particular, the Appellant argues that rather than approaching the those clauses as limiting discovery and admissibility, he approached the Respondent’s motion for production and the Appellant’s motion to strike by applying the general test of relevance that applies to an ordinary motion for production. I agree with this characterization of the Master’s approach.

a) Standard of Review

[16] As a preliminary matter, I note that what is at issue here is the interpretation of a contract – i.e. the Settlement Agreement. Contract interpretation is essentially a legal exercise whereby an erroneous interpretation amounts to an error of law. Plan Group v Bell Canada, 2009 ONCA 548, at paras 27, 30-32. Questions of law are reviewable on a correctness standard. Housen v Nikolaisen, 2002 SCC 33. The Court of Appeal has specifically held that where, as here, there are no particular facts in dispute, and the contractual “clause was to be interpreted in light of its own wording in the context of the Agreement as a whole”, the issues “tend toward questions of law, attracting review by this court on a standard of correctness.” Plan Group, supra, at para 33.

[17] That said, I do not think it matters in the present case whether the exercise in contract interpretation here is seen as raising a question of law or a question of mixed fact and law. The decision of Master Glustein must be set aside whether the standard of review is properly one of correctness or one of palpable and overriding error. The Master’s ruling undermined the essence of the Certification Order and Settlement Agreement, and is vulnerable to review on any conceivable standard. H.L. v Canada (Attorney General), 2005 SCC 25, [2005] 1 SCR 401, at para 110.

b) The Contract Documents

[18] Master Glustein started his ruling with the accurate observation that, on the issue of breach of contract, paragraph 2 of the Settlement Agreement “limited the common issues trial to a list of documents put before the court”. From there he reasoned that “the court’s determination of the terms of the contract…would be based on the documents in Schedule A.” In this respect, paragraph 2 is a form of what the Appellant calls an ‘entire agreement’ clause; when read together with paragraph 5, in which “any additional documents” are expressly excluded, the documents in Schedule A are clearly meant to form the entire basis of the Respondent’s contractual claim.

[19] The documents in Schedule A are all contract documents – that is, they are all documents that flowed between the parties and which could form part of an overall contract. Each of them was in some way shared between the Appellant as employer and the Class Members as employees. Furthermore, the content of the Schedule A documents makes them capable of having contractual effect with respect to post-retirement benefits.

[20] It is in keeping with this latter point that paragraph 3 of the Settlement Agreement requires the court in determining the terms of the post-retirement benefit plan to focus strictly on “the objective meaning” of the Schedule A documents. No unilaterally held, subjective meaning is admissible under these agreed-upon terms. Accordingly, no unilaterally produced document – and certainly no document that was never distributed to employees – is found within the Schedule A list.

[21] Master Glustein focused on the fact that the Appellant in its Statement of Defense spoke of the “intentions of the parties”, and concluded that this phrase put the Appellant’s internal state of mind in issue. That view, however, is directly contrary to paragraphs 2, 3, and 5 of the Settlement Agreement, which clearly restrict discovery and admissibility to documents that could potentially form part of the contract. Needless to say, corporate minutes and internal memoranda are unilateral documents. They cannot be said to be contractual in nature, as they were not distributed to or in any way shared with the Class Members. They are strictly internal creations of the Appellant that were not part of any agreement with the Class Members and on which Class Members cannot say that they relied.

[22] The same is true with the two years’ financial statements that the Respondent seeks to introduce. While these are public documents and may have been widely distributed in the financial community and among the Appellant’s stakeholders, they were not employment documents. They may obliquely refer to post-retirement benefit costs but, like the internal board and committee minutes, where not provided to the Appellant’s employees as part of or in explanation of their benefit package.

c) The Mistaken ‘Relevance’ Test

[23] Master Glustein acknowledged that paragraph 2 of the Settlement Agreement limited the determination of the terms of the contract between the Appellant and the Class Members relating to post-retirement benefits “to a list of documents to be put before the court as ‘set out in the documents listed at Schedule A.’” However, he also went on to find that the “Settlement Agreement contemplated that other documents might exist which were not known or available at the time of the certification hearing and which could be relevant to the certification motion.” [emphasis added]

[24] It was this test of relevance that he read into Item 20, the final item in the Schedule A list of documents. Item 20 provides: “any other documents that may be produced/discovered following certification in accordance paragraph 9”. In determining the scope of the phrase “any other documents” in Item 20, the Master fell back on a general test of relevance to the action as pleaded. What he overlooked was the limited nature of the documents that are otherwise specifically enumerated in Schedule A.

[25] In creating a Schedule A listed of admissible contract documents, and then including in that Schedule a final basket clause allowing for “any other documents”, the parties did not undermine the limited nature of the listed documents. Using ordinary tools of contract interpretation, it is evident that Item 20 refers to documents that are similar in kind to those found in Items 1 through 19.

[26] Item 20, in other words, makes provision for documents that may be found subsequent to certification, but it does not open up the Settlement Agreement beyond what was agreed. Schedule A lists 19 types of common documents whose point of identity is that they are all shared, contractual documents. Item 20 made room for other shared, contractual documents; it cannot be read as introducing the possibility of unshared and non-contractual documents. The basket clause is a safety valve for the agreement over documents, not a means of negating that agreement.

[27] The Master’s approach in considering internal documents such as the board and committee minutes and memoranda is highlighted by his reliance on another employee benefits case, Lacey v Weyerhaeuser Co., 2012 BCSC 353, [2012] BCJ No. 481. In a well-reasoned judgment following a five day trial, Saunders J. of the British Columbia Supreme Court found certain internal corporate documents admissible, but ultimately placed very little reliance on them in reaching his substantive interpretation of the contract at issue. The Respondent here argues that, in similar fashion, the Appellant’s internal minutes and memoranda are admissible in the upcoming summary judgment motion, and that the weight to be attributed to them should be reserved to the judge hearing that motion.

[28] Like the instant case, Lacey dealt with post-retirement employee benefits. Like the instant case, the Lacey decision considered the admissibility of internal corporate documents that were not distributed to the employees as part of a benefit plan; and like the instant case, the employees in Lacey wanted to introduce the internal documents in order to gain insight into the company’s understanding of the employee benefit package and to thereby shed light on its interpretation. Like the instant case, the employees in Lacey did not have a single, written benefit plan detailing the post-retirement benefits in question. Finally, like the instant case, the employee benefit package in Lacey had been described in an assortment of publications that the employer distributed to the employee over the years.

[29] Unlike the instant case, in Lacey there was no Certification Order and Settlement Agreement. There was no Schedule A of agreed-upon contract documents and no paragraphs 2 and 5 excluding all others. The Lacey ruling was highly cogent in its own terms – Saunders J. wisely balanced the wide admissibility rules applicable to contract interpretation with the narrower task of gleaning the mutual intent of the parties through their common documents. But this has precious little to do with the case at bar. Here, the issue is governed not by general principles of relevance at discovery and admissibility at trial, but by a Certification Order and Settlement Agreement that specifically restrict documentary discovery and admissibility.

[30] Indeed, it is not too much of a stretch to say that the very reliance on Lacey demonstrates that Master Glustein had to go beyond the Settlement Agreement in admitting the internal corporate documents. Those documents were admissible in Lacey for the same reason that they were admissible in the DiMartile Action, where the Respondent found them in the first place – that is, because they are potentially, albeit tangentially, relevant to a question of interpretation. This brings them within the usual test for production/admissibility of documents even as it confirms that they may not be especially useful. Absent anything akin to the Settlement Agreement here, this level of tangential relevance was sufficient in Lacey to have the documents produced and admitted into the record.

[31] However, this is precisely the type of documentary production that was excluded by the Settlement Agreement. The purpose of restricting discovery and listing the common documents in Schedule A was not to exclude irrelevant documents that in any case would have been excluded; rather, it was to exclude tangentially relevant documents that would have been admissible but potentially distracting to the task of interpreting the parties’ mutual understanding of the benefit plan. The Lacey judgment, with its dual rulings on admissibility and lack of weight, demonstrates precisely what the Settlement Agreement was designed to avoid.

d) The Ejusdem Generis Interpretation

[32] After listing 19 types of documents in Schedule A that are contract-like documents shared by the employer with the employees, it is obvious that the phrase “any other documents” in Item 20 refers to documents of a similar character. The Appellant urges the court to interpret Item 20 with a view to the ejusdem generis principle so that its meaning lines up with the 19 items that precede it.

[33] I agree that the ejusdem generis rule is appropriate to the interpretation of Item 20. That said, I hasten to add that the interpretation of Item 20 does not really need a special Latin tag. It clearly refers to other documents, not listed above it, that could form part of an employer-employee contract in that they set out some of the benefit plan terms and were shared by the Appellant with the Class Members. That is the only logical way to read it. The Latin maxim only reinforces the inherent logic of Schedule A.

e) Common Documents

[34] Item 20 refers back to paragraph 9 as the clause that limits discovery of documents. It will be recalled that paragraph 9 provides for “limited discoveries” only of “additional common documents, i.e. historical benefits plan documents and documents widely distributed to Class Members…” Accordingly, in order to be admissible any document must first be a common document, and then must be either a historical plan or be widely distributed to Class Members. In my view, the internal documents and the financial statements in issue fall into none of these categories.

[35] Internal corporate documents are the opposite of common; as between employer and employees, they are unique to the employer. The Respondent argues that they are “common” in the sense that they reference a subject that is common to all Class Members. To invoke that definition of “common”, however, not only misses the context in which the word is used, but introduces a definition that fails to limit discoveries at all. If “common” does not mean documents that were shared with Class Members, but simply means documents that are in some way relevant to issues raised in the action, there would be no “limited discoveries”. The discoveries would be as wide ranging as in any action. Paragraph 9 would mean nothing at all.

[36] Even if one could somehow overcome the hurdle of defining internal corporate minutes and memoranda as “common documents”, they would still have to be either historic plan documents or widely distributed to Class Members. The latter is a non-starter since they were not distributed at all, let alone widely. Class Members did not even know about the internal documents before they surfaced in the DiMartel Action.

[37] The Respondent submitted to me and to the Master below that the internal minutes and memoranda are “historical plan documents” since they are, literally, historical. Master Glustein concurred, opining that these documents speak to the inception of the benefit plan and therefore are part of its history.

[38] In my view, this approach emphasizes the word “historical”, and deemphasizes the rest of the phrase, in a way that changes its natural meaning. The phrase “historical plan documents” is used in paragraph 9 as an example of a common document. It must therefore be a version of, rather than the antithesis of, a common document.

[39] The only sensible reading of “historical plan documents”, therefore, is that the phrase refers to historical versions of the company’s post-retirement benefit plan – i.e. versions that were once, but are no longer, current. In their day, these historical plan documents would also have been shared in common with the employees. The phrase cannot logically refer to secret discussions from the inception of the current version of the plan that were never shared with the employees. Those are in no sense contractual documents or a sub-category of “common documents”.

[40] Master Glustein’s and the Respondent’s interpretation seems to take the word “historical” so literally as to be literalist. An understanding of this phrase that includes internal company documents that are not now, and never were, plan documents distributed to the employees, does not fit within the semantics or logic of paragraph 9. The Appellant’s internal minutes and memoranda are outside the scope of admissible documents under the Certification Order and the Settlement Agreement.

[41] As for the financial statements, the Respondent at least has an argument that they fit within the meaning of “common documents”. They are common to all stakeholders and others interested in the Appellant as a corporation in that they are accessible to everyone and speak to many matters within the corporation’s sphere of activity, possibly including aspects of the employee benefits plan.

[42] Master Glustein found not only that the financial statements are common documents, but that they are “widely distributed”. He therefore held them to be within the wording of paragraph 9 of the Settlement Agreement. In expressing this conclusion, he relied on the evidence of the Respondent’s affiant, who testified that the financial statements were “regularly provided” and “made available” to all, including the Class Members.

[43] With respect, Master Glustein’s interpretation makes too fine a point. The question is not whether the annual financial statements are “widely distributed”, but rather whether they are “widely distributed” within the meaning of paragraph 9. It is no more accurate to say that the company’s annual financial statements are “widely distributed to Class Members” and thus form part of the employee contract, than it is to say that they are “widely distributed to automobile purchasers” and thus form part of the consumer contract, or that they are “widely distributed to suppliers” and thus form part of the contract for everything the company purchases.

[44] A public company’s annual financial statements are “made available” to everyone who wants them. Indeed, there is nothing stopping anyone from posting them on the internet, thereby “widely distributing” them to the entire world. The company may well make its audited financial statements available at all kinds of meetings. But they are not distributed to employees or customers or suppliers in the sense that they form part of the company’s contracts with those parties.

[45] The purpose of the Settlement Agreement is to identify a set of post-retirement benefit terms specifically designated and shared by the Appellant with its employees as part of their contractual package. To include a document produced for an entirely different corporate purpose and never given to the employees as part of their benefit plan or contractual package is to ignore rather than to enforce the Settlement Agreement. The Appellant’s 1994 and 1995 financial statements, and any other year’s financial statements, are outside the scope of admissible documents under the Certification Order and Settlement Agreement.

VI. Conclusion

[46] In the result, the appeal is allowed and the order of Master Glustein is set aside. More specifically, the Respondent’s motion for further production of documents is dismissed, and the Appellant’s motion to strike exhibits 6, 64, 65, 66 71, 72, 118, and 119 to the affidavit of Lynn McCullough dated August 24, 2012, and paragraphs 15, 16, 60, 63, and 98 of that affidavit, all contained in the Respondent’s summary judgment motion materials, is allowed.

[47] The parties may make written submissions as to costs, to be sent to my attention within two weeks of the release of this endorsement.

Morgan J.

Date: February 8, 2013