Orgaworld v. Corp. of the City of Ottawa, 2016 ONSC 1088
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Orgaworld Canada Ltd.
Applicant
– and –
The Corporation of the City of Ottawa
Respondent
Thomas J. Corbett, for the applicant
Ronald F. Caza, for the respondent
HEARD: In Writing (London)
REASONS ON MOTION FOR LEAVE TO APPEAL
HOCKIN J.
1This is a motion for leave to appeal to the Divisional Court brought pursuant to r. 62.02(4)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 from the order of Justice Leitch dated January 30, 2015 by the applicant, Orgaworld Canada Ltd.
Procedural History and Background
2Orgaworld Canada Ltd. (“Orgaworld”) and the Corporation of the City of Ottawa (“Ottawa”) in March, 2008 entered into a contract for the disposal and composting of Ottawa’s organic waste. In time, they were unable to agree on where and how leaf and yard waste was to be handled at peak times.
3The contract provided for a dispute resolution process and by agreement to resolve their disagreement, the parties entered into the “arbitration agreement” in January 2011.
4The hearing ended in December 2013 when the parties entered into an “Argument Agreement” which, it is alleged by the applicant, provided for the coincidental exchange of written submissions, the coincidental exchange of a reply, followed by a short appearance before the arbitrator for oral submissions.
5The decision of the arbitrator was delivered June 26, 2014.
6Orgaworld considered the result on a number of the questions submitted for decision to be unfavourable and by Notice of Application dated July 25, 2014, moved to set aside the award on two bases:
(1) the process leading to the Award was flawed such that Orgaworld was denied its right to be treated equally and fairly, pursuant to section 46 (1) of the Arbitration Act, 1991, (the “breach of natural justice challenge”) and, alternatively, (2) seeking leave to appeal from the Award on a question of law (pursuant to section 45 of the Arbitration Act, 1991);
7The natural justice challenge under s. 46(1) of the Act was supported by the affidavit of Paul Hendrikx.
8A hearing date of February 25, 2015 was set for the application.
9On December 4, 2014 Ottawa delivered a notice of motion to strike the Hendrikx affidavit or for an order to cross-examine him on the affidavit. The motion included the following request for relief at para. (d) i, ii of the motion:
(d) In the further alternative, an Order
i. That the affiant Paul Hendrikx attend for cross-examination on his Affidavit dated July 25, 2014 forthwith and on issues relevant to the Application;
ii. That the affiant Paul Hendrikx bring a copy of Advocates LLP’s Orgaworld litigation file from December 13, 2013 to June 26, 2014 to the cross-examination for the purposes of cross-examination, and specifically a copy of P. Hendrkx’s “review [of the file] for Mr. Corbett’s review, on April 17, 2014”, as outlined at para. 23 of the Affidavit of Paul Hendrikx dated July 25, 2014;
10Paragraph 23 of the Hendrikx affidavit reads as follows:
- I reviewed the City Reply submissions of March 21, 2014, after [sic] they were received on March 22, 2014. The City Reply submissions were not set up to be responsive to the Orgaworld written submissions of February 21, 2014. It was a very difficult and time-consuming task to assess which parts of this City Reply was [sic] legitimate reply and which parts were not legitimate reply but, rather, split argument. There also were, with all due respect, many factual submissions without reference or with inaccurate references. The City Reply submissions speak for themselves in this respect. I synthesized my review, for Mr. Corbett’s review on April 17, 2014, one week before the oral submissions.
11The motion was heard December 31, 2014 by Madam Justice Leitch. In comprehensive reasons delivered January 30, 2015 she ruled that on the s. 46(1) natural justice challenge under the Arbitration Act, 1991, S.O. 1991, c. 17, Mr. Hendrikx could be cross-examined on his affidavit. On the motion, Orgaworld argued that on two areas of the affidavit, litigation privilege applied to prevent or limit cross-examination. The two areas were the alleged breach by Ottawa the “Argument Agreement” and the suggestion by Orgaworld of “unfairness” within the meaning of the s. 46(1) test under the Act from Ottawa’s split argument. Orgaworld’s position, from the material, was that it should enjoy the protection afforded by litigation privilege with respect to its law firm’s litigation file between the dates set out in Ottawa’s motion and para. 23 of the Hendrikx affidavit.
12For my purpose, the relevant parts of the reasons of the motion judge are paras. 100- 102 which had as follows:
100The applicant also resists cross-examination asserting litigation privilege. In Blank v. Canada (Minister of Justice), 2006 SCC 39, the court made clear that litigation privilege, which is separate and distinct from solicitor-client privilege, exists to provide a “zone of privacy” for the preparation of litigation. At para. 60, the court noted that litigation privilege should be viewed as a limited exception to the principle of disclosure and not as an equal partner of the broadly interpreted solicitor-client privilege.
101Here Mr. Hendrikx has sworn an affidavit to establish what the applicant describes as the argument agreement. Having chosen to swear an affidavit to be relied on in support of the application, I question how the applicant can now assert that that information is subject to a zone of privacy.
102I am satisfied that the respondent is entitled to cross-examine Mr. Hendrikx on his affidavit sworn in support of the application and all relevant documentation shall be produced one week in advance.
13Once reviewed, Mr. Hendrikx and Mr. Corbett wondered whether “all relevant documentation” for the purpose of the cross-examination included the contents of their litigation file between the dates of December 13, 2013 and June 26, 2014, along with the the Hendrikx/Corbett review of April 17, 2014 mentioned at para. 23 of the affidavit. An invitation to counsel for Ottawa to clear this up with a re-attendance before Leitch J. went unheeded and on March 16, 2015 Orgaworld brought a motion under r. 59.06 for an order “clarifying or settling the terms of the order” on the following grounds:
(a) The Decision, inter alia, addresses cross-examination on the affidavit of Paul Hendrikx (the “affidavit”) and, in particular, refers to paras. 10-12 and 23 of that affidavit in para. 15 of the Decision;
(b) Paras. 10-12 of the affidavit deals with what is referred to as the “argument agreement” in the Decision;
(c) Para. 23 of the affidavit deals with the City reply argument in the arbitration;
(d) Para. 100 of the Decision refers to litigation privilege. Para. 101 of the Decision refers to the argument agreement. Para. 101 indicates that information associated with the argument agreement is not subject to the “zone of privacy” associated with the litigation privilege;
(e) The Decision does not address litigation privilege relating to para. 23 of the affidavit, or the extent of any waiver of privilege with respect to those issues, or the extent of the production of “relevant documentation” arising therefrom, as required by para. 102 of the Decision;
(f) The parties do not agree on their respective interpretations of the Decision on the waiver of privilege;
(g) The Decision should be clarified, or made, for the purposes of cross-examination and production of documents, and for the purpose of settling the terms of the order associated with the Decision for the purposes of limiting or avoiding future motions associated with refused questions on cross-examination, production of documents and issues associated with settling the form of the order arising from the Decision;
14Mr. Corbett’s effort to get a date to attend before the motion judge was unsuccessful and after counsel for Ottawa on April 14, 2014 served a notice of appointment to settle the order on April 22, 2014, Mr. Corbett delivered a new motion in identical terms to the March 16, 2015 motion. It was delivered to the motion judge. It was returnable April 28, 2015 for the purpose of setting a date for argument before the motion judge.
15However, on April 21, 2015 Leitch J. released a Supplementary Endorsement without hearing from counsel. On proceeding without hearing from Mr. Corbett the motion judge at paras. 35- 40 explained her decision to proceed in this manner as follows:
35Because of the completeness of the applicant’s motion record and the extent of the materials filed, including all of the email exchanges between counsel setting forth their respective positions on these issues, I am satisfied that the interests of justice do not require the parties to incur further costs to participate in a hearing or to make further submissions in writing.
36The applicant relies on r. 59.06, which provides that an order that contains an error arising from an accidental slip or omission or requires amendment on any particular on which the order did not adjudicate may be amended on a motion in the proceeding.
37I note that there has not yet been an order or judgment taken out. It appears that the position of the applicant’s counsel is that if the draft order presented by the respondent’s counsel was taken out, this order would contain an error from an omission or it will require amendment in a particular on which the court did not adjudicate.
38I am satisfied that an order prepared in accordance with para. 102 of the Decision will not contain an error arising from an accidental slip or omission nor will it require an amendment in any particular on which the court did not adjudicate.
39Putting it another way, the draft order presented by respondent’s counsel correctly expresses the intention of my Decision.
40There is no error arising from an accidental slip. There is no omission in the order. There is no amendment required in any particular on which the court did not adjudicate.
16In my view, the test for leave set out in r. 62.02(4)(b) is met for the following reasons.
17The conclusion of the motion judge at para. 102 of her reasons of January 30, 2015 and paras. 47-51 of her Supplementary Endorsement of April 21, 2015 defines the scope of the cross-examination of Mr. Hendrikx and the extent of his law firm’s documentary disclosure for the purpose of the cross-examination. The firm will be obliged to produce the contents of its litigation file from December 13, 2013 to June 26, 2014; and Mr. Hendrikx may be questioned on his April 17, 2014 review of the litigation with his partner, Mr. Corbett. Two reasons are given for this result:
On the strength of Blank v. Canada (Minister of Justice), 2006 SCC 39, [2006] 2 S.C.R. 319, para. 60, “litigation privilege should be viewed as a limited exception to the principle of full disclosure and not as an equal partner of the broadly interpreted solicitor-client privilege”.
When Mr. Hendrikx delivered his affidavit in support of the application, there was nothing in the affidavit which was “subject to a zone of privacy”. See para. 102 of the January 30, 2015 reasons. The effect of this is that nothing in the affidavit or its underlying source of information or belief was protected by litigation privilege and nothing in the firm’s litigation file was protected.
Disposition
18In my view, there is good reason to doubt the correctness of the order on either or both of these bases. Blank is not a case which diminishes the nature and reason for litigation privilege. The point of Blank is that the duration of litigation privilege expires with the end of the litigation. Para. 60 of Blank, reads as follows:
60 I see no reason to depart from the dominant purpose test. Though it provides narrower protection than would a substantial purpose test, the dominant purpose standard appears to me consistent with the notion that the litigation privilege should be viewed as a limited exception to the principle of full disclosure and not as an equal partner of the broadly interpreted solicitor-client privilege.
19This litigation continues. I would have thought that the law firm’s litigation file and the review of the litigation by Mr. Hendrikx and Mr. Corbett on April 14, 2014 might attract protection to “facilitate … investigation and preparation … by the adversarial advocate”. This is accomplished as Justice Fish pointed out at para. 34 by creating a “zone of privacy in relation to pending or apprehended litigation” of the decision.
20The Supplementary Endorsement was delivered without hearing from counsel for Orgaworld on its motion for the court’s direction on how to carry out the order. This was not a motion under r. 59.06(1), as the motion judge believed was the case, but under r. 59.06(2). Rule 59.06(2) reads:
(2) A party who seeks to,
(a) have an order set aside or varied on the ground of fraud or of facts arising or discovered after it was made;
(b) suspend the operation of an order;
(c) carry an order into operation; or
(d) obtain other relief than that originally awarded, may make a motion in the proceeding for the relief claimed.
21Counsel for the applicant did not suggest an error or omission. He sought clarification or limits on what was to be disclosed from his file and the scope of the cross-examination of Mr. Hendrikx on para. 23 of his affidavit. The point of this was that the motion judge’s use of the phrase “all relevant documentation” begged greater definition. Counsel for the applicant was entitled to be heard on this, it seems to me.
22The motion judge at para. 35 of the Supplementary Endorsement explained the reason for proceeding without a hearing as follows:
35Because of the completeness of the applicant’s motion record and the extent of the materials filed, including all of the email exchanges between counsel setting forth their respective positions on these issues, I am satisfied that the interests of justice do not require the parties to incur further costs to participate in a hearing or to make further submissions in writing.
23The proposed appeal involves a matter of fundamental importance viz whether a costs consideration overrules the fundamental right to a hearing.
24I have not overlooked Ottawa’s argument that the leave motion was brought out of time. The time, in my view, runs from April 21, 2015. Until then, it was reasonable for Orgaworld to assume that it would be heard and that there still existed an opportunity for the motion judge to limit the scope of the cross-examination under r. 59.06(2).
25Leave to appeal, therefore, is granted.
26Costs submissions by months’ end. Limit, five pages each with the usual outline.
Justice P. B. Hockin
Released: February 16, 2016
CITATION: Orgaworld v. Corp. of the City of Ottawa, 2016 ONSC 1088
COURT FILE NO.: 3733-14
DATE: 20160216
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Orgaworld Canada Ltd.
Applicant
– and –
The Corporation of the City of Ottawa
Respondent
REASONS ON MOTION FOR LEAVE TO APPEAL
HOCKIN J.
Released: February 16, 2016