CITATION: 1117322 Ontario Inc. (COB Telecore) v. Her Majesty the Queen in Right of Canada et al, 2016 ONSC 4951
COURT FILE NO.: 10-49022
DATE: August 12, 2016
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1117322 Ontario Inc. (COB Telecore) Plaintiff
and
Her Majesty the Queen in Right of Canada et al Defendants
BEFORE: Master Champagne
COUNSEL: Joseph O’Regan, self-represented
Kirk Shannon and Ani Mamikon on behalf of Alain Préfontaine, for the Defendants
HEARD: July 26, 2016
E N D O R S E M E N T
[1] The Attorney General of Canada brings this motion on behalf of Public Works and Government Services of Canada (PWGSC) against 117322 Ontario Inc. carrying on business as Telecore, for an order that it produce a further and better affidavit of documents and its complete corporate tax returns, including all schedules, notices of assessment and financial statements from 2006 to 2012.
Background and Evidence
[2] This motion arises out of a claim by Telecore related to two requests for proposals (RFPs) by PWGSC, one awarded to Telecore and later cancelled, and another not awarded to it.
[3] Trial of the substantive issue is set to be heard in November 2016.
[4] In 2007, PWGSC granted Telecore a contract (RFP2) to produce antennas for the Department of National Defence (DND). Telecore claims it was unable to fulfill the contract as PWGSC did not provide it with the necessary specifications and information required to complete the work. PWGSC terminated that contract at its convenience in July 2008 before its completion. Telecore bid on a second contract (RFP4) in 2011 to provide batteries for the Canadian Border Services Agency (CBSA). That bid was rejected by PWGSC.
[5] Telecore claims as follows in an Amended Amended Statement of Claim drafted by its principal, a non-lawyer named Joseph O’Regan:
a) “damages for breach of contract and lost opportunity in the amount of $150,000.00 for RFP2 and $129,000.00 for RFP4;
b) damages for professional negligence in the amount of $400,000.00;
c) damages for quantum merit [sic] in RFP2 in the amount of $40,000.00;
d) damages for unjust enrichment in RFP2 in the amount of $40,000.00;
e) for further damages for negligent misrepresentation for an amount to be determined;
f) punitive damages in the amount of $100,000.00 or as this honourable court deems just;
g) cost for this action on a scale of substantial indemnity basis;
h) such further and other relief as this honourable court deems just, for the bid preparation of RFP1, RFP2, RFP4;
i) Pre-and post-judgment interest;
j) Charter damages in the amount of $60,000.00”.
[6] In addition, in the body of the Amended Amended Statement of Claim, Telecore also claims that it suffered indirect damage in the loss of goodwill.
[7] Joseph O’Regan swore an affidavit in defense of the motion and he made submissions on Telecore’s behalf. Mr. O’Regan’s evidence is that in 2007, Telecore was awarded a contract to build and provide antennas for DND. He states that he was unable to obtain appropriate diagrams and specifications from PWGSC to complete the work. His evidence is that PWGSC terminated the contract prior to completion. He states that Telecore lost the profit it would have made on the contract and it had to pay people who worked on the contract by giving them shares in Telecore rather than cash. His evidence is that the shares were given a value of one dollar each. Telecore also appears to claim for the rejected 2011 bid to provide certain batteries to CBSA. Again, payments to people who worked on the bid proposal appear to have been made by way of shares in Telecore.
[8] PWGSC’s evidence is that it requires Telecore’s corporate tax returns and corporate records in order to defend its claim. It points to Justice Sheard’s November 30, 2015 order for the plaintiff to produce documents relevant to damages including those related to its overhead costs and mitigation of damages. Mr. O’Regan made it clear in his submissions that he has no documents regarding overhead as there were no overhead costs. He also stated that he did not mitigate his damages because there was nothing to mitigate. Mr. O’Regan explained that the loss of goodwill relates to Telecore’s lost relationship with a technologist who specialized in making antennas, and not contract losses caused by the dispute that led to this litigation. The technologist severed the relationship because of events that gave rise to the suit. With respect to Telecore’s claim for lost opportunity, Mr. O’Regan clarified that the loss refers to the opportunity to fulfil the two RFPs in question and not other contracts.
Analysis
[9] Rule 30.06 of the Rules of Civil Procedure sets out that a court may make an order for a party to produce a further and better affidavit of documents if there is evidence that the party has omitted relevant documents in his/her possession.
[10] Rule 30.02 requires parties to produce all documents relevant to the matter in issue.
[11] PWGSC argues that Telecore’s corporate tax returns, notices of assessment, and financial statements are relevant to its claim and are required to defend against the claim. Telecore contends that the documents in question are irrelevant. PWGSC says it is entitled to the production of Telecore’s corporate tax returns and records, based on the case of Collins v. Beach, 1988 CanLII 10092 (ON SC), [1988] 24 C.P.C. (2d) 228, [1988] 1 C.T.C. 261. I disagree that there would be a general entitlement to a plaintiff’s corporate tax returns and records. In order for such records to be required to be produced, they must be relevant. The Collins case was an action for damages arising from a motor vehicle accident. In that case, the plaintiff’s tax returns were ordered to be produced in order to assess the plaintiff’s loss of income claim as they were relevant to the claim. The present case can be distinguished on the facts. Telecore is not claiming for lost income; it solely claims losses associated with the terminated and unsuccessful RFP bid. In the circumstances, I am of the view that PWGSC’s request for the production of corporate tax returns, notices of assessment and financial statements is overbroad. I do not find the requested documents to be relevant to Telecore’s claim or to PWGSC’s defense of it except to the extent that they relate to the distribution of shares in Telecore to individuals who worked on the two RFPs in question.
[12] In my view, all corporate records or communications relating to the distribution of shares are relevant and should be produced but not Telecore’s corporate tax returns.
[13] I will therefore only order the production of all of Telecore’s corporate records and communications relating to any shares given to any person who worked on the two RFPs in question, including all documents, emails, and recordings in corporate minute books.
[14] Given that success on this motion was divided, I will not order costs.
Master Nathalie Champagne
COURT FILE NO.: 10-49022
DATE: 2016-08-03
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1117322 Ontario Inc. v. Her Majesty the Queen in Right of Canada et al
BEFORE: Master Nathalie Champagne
COUNSEL: Joseph O’Regan, self-represented
Alain Préfontaine, counsel for the Defendants
ENDORSEMENT
Master Nathalie Champagne
DATE: Click here - type date