Koolatron v. Synergex, 2017 ONSC 4245
CITATION: Koolatron v. Synergex, 2017 ONSC 4245
COURT FILE NO.: CV-15-1212-00
DATE: 2017-07-11
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
KOOLATRON CORPORATION
Jayson W. Thomas, for the Plaintiff
Plaintiff
- and -
SYNERGEX CORPORATION, SYNERGEX DE MEXICO S.A. de C.V., DAVID AIELLO, DAVID AELLO, TOM DAVIDSON, NEIL FLESHNER, JOHN SMILTH and PHILIP WALTON
Arlindo Aragao, for the Defendants
Defendants
HEARD: October 28, 2016, at Brampton, Ontario
Price J.
Reasons For Order
OVERVIEW
[1] For the past seven years, Koolatron, a Canadian manufacturer, supplied its goods to Wal-Mart Mexico through Synergex Corporation, a Canadian company whose subsidiary, Synergex de Mexico, maintains a warehouse in Mexico. Koolatron employed Synergex to deliver its goods because Wal-Mart Mexico will only buy goods from approved local vendors. In late 2013, Synergex owed Koolatron $185,500.00 for goods it had delivered to Wal-Mart Mexico. When Synergex failed to pay, Koolatron sued.
[2] Koolatron additionally sued the defendants for payment as well as for breach of trust for diverting amounts it says Wal-Mart Mexico paid Synergex de Mexico for goods Koolatron had supplied instead of remitting the funds to Koolatron in payment of its invoices. Koolatron alleges that Synergex de Mexico used the funds it owed to Koolatron to bring its vendor account with Wal-Mart Mexico back into good standing, so that it could continue distributing goods for itself and/or other suppliers.
[3] The defendants say that Synergex de Mexico was unable to pay Koolatron because Wal-Mart Mexico failed to pay Synergex the full amount for shipments Synergex had delivered to it on the ground that the trucks also contained goods being shipped to others.
[4] Koolatron now moves for an order compelling the defendants to comply with undertakings that Matthew Reinhart gave on behalf of Synergex and Synergex de Mexico, and that David Aiello gave, at their examination for discovery on April 15, 2016. The undertakings require the defendants to produce invoices, bank statements, and e-mail communications regarding payments received from Wal-Mart Mexico, tax remittances to the Government of Mexico, and amounts remitted to Koolatron.
[5] The defendants oppose the motion, arguing that the records requested are not relevant, and that producing them would impose an undue hardship on the defendants, as Synergex de Mexico is located in Mexico, has no employees on site, and is under receivership, with the result that someone would have to travel to Mexico to retrieve the records. Neither party has tendered evidence as to the cost that doing that would entail.
[6] The motion requires the court to re-examine, in this factual context, the extent to which the requirement of proportionality of questions asked at an examination for discovery, introduced into the Ontario Rules of Civil Procedure[^1] in 2010, restricts Koolatron’s right to discovery.
BACKGROUND FACTS
[7] Koolatron is an Ontario corporation that manufactures and sells retail goods to retailers, including Wal-Mart Mexico and other major retailers in Mexico. Wal-Mart Mexico will only buy goods from approved local vendors, so Koolatron employs Synergex, an Ontario corporation that operates a warehouse in Mexico through its subsidiary, Synergex de Mexico, to transport the goods it is supplying to Wal-Mart Mexico. Koolatron has done business with Synergex since 2010.
[8] Koolatron negotiates orders for the sale of its goods to Wal-Mart Mexico. Wal-Mart Mexico then issues a purchase order to Koolatron’s local invoicing agent, Synergex de Mexico. Based on the orders it has received, Koolatron prepares products in Canada, advises Synergex de Mexico that the goods are ready for pick-up, and issues invoices to Synergex de Mexico for the goods, payable upon Synergex de Mexico’s receipt of payment from Wal-Mart Mexico.
[9] Synergex coordinates the transportation of goods, and Koolatron sends funds to cover the cost of transportation and customs duties, unless Synergex de Mexico already holds funds from Koolatron, in which case Synergex deducts the transportation costs and duties from those funds. Koolatron delivers the goods to Synergex in Canada and Synergex then transports them to the warehouse operated by Synergex de Mexico in Mexico.
[10] Synergex de Mexico delivers the goods to Wal-Mart Mexico, and submits an invoice to Wal-Mart Mexico for payment to it. Synergex de Mexico remits the funds it receives from Wal-Mart Mexico to Koolatron, less fees owed to Synergex de Mexico for transportation costs and customs duties.
[11] In October 2013, amounts owing to Koolatron had accrued in the amount of approximately $185,500.00, being the Canadian equivalent of $2,578,157.02 pesos in Mexican currency. Koolatron demanded that Synergex and Synergex de Mexico pay it the funds, which it says they had collected in full from Wal-Mart Mexico. When it was not paid, it issued a Claim, amended pursuant to an Order of Fairburn J. dated September 16, 2016, in which it claims damages of approximately $185,500.00 CDN, and punitive and exemplary damages in the amount of $100,000.00, based on its allegation that Synergex de Mexico diverted funds it received from Wal-Mart Mexico for its supply of Koolatron’s goods, and used the funds to pay down its vendor account to keep in good standing with Wal-Mart Mexico and enable itself to continue transporting goods for itself and other suppliers.
[12] The defendants assert that they did not owe the monies, and were unable to remit full payment of the invoiced amounts, because Wal-Mart Mexico arbitrarily applied a discount on the amounts that Synergex de Mexico charged it, because the trucks that delivered the goods also contained goods being shipped to other customers.
[13] Koolatron examined the defendants’ representatives, Matthew Reinhart, and David Aiello, for discovery on April 15, 2016. Mr. Reinhart and Mr. Aiello gave undertakings to answer certain questions, refused others, and took under advisement others, which they ultimately failed to answer within the required time, with the result that they are now considered, in law, to have refused. The undertakings and refusals are listed later in these reasons.
[14] Koolatron moves for an order requiring the defendants to comply with their undertakings and to answer the questions they refused or failed to answer. The answers that Mr. Aiello and Mr. Reinhart undertook to provide are presumed to be relevant and proper. In any event, for the reasons that follow, I find that they are relevant, as they would afford evidence that the allegations in Koolatron’s Amended Claim are more or less likely to be true. The same applies to those questions that Synergex refused to answer or took under advisement and later failed to answer, which I have described below as “outstanding.
[15] The real issue in the motion arises from the defendants’ argument that producing the records requested would impose a disproportionate burden on them, having regard to the fact that the records are located in Mexico, where Synergex de Mexico, which is under receivership, does not have employees on site.
ISSUES
[16] In 2010, the Rules of Civil Procedure were amended to introduce the requirement that questions asked at Examinations for Discovery, besides being relevant, also be proportional. Because the facts that make a question disproportionate are often within the exclusive knowledge of the party being questioned, the amendment raises important questions as to who is required to satisfy the court that the requirement of proportionality was or was not met.
[17] The motion requires the court to determine the following issues:
a) Are the questions that Mr. Reinhart and Mr. Aiello undertook to answer relevant and proper?
b) Are the questions that they refused or failed to answer relevant and proper?
c) Should Mr. Reinhart and Mr. Aiello be required to re-attend for further examination?
d) Is Koolatron entitled to its costs of the motion?
PARTIES’ POSITIONS
[18] Koolatron argues that the questions Mr. Reinhart and Mr. Aielllo undertook to answer are presumed to be relevant and therefore must be answered, and that the questions refused or taken under advisement, which are now deemed to have been refused, are also relevant, proper, and proportionate, and must be answered. Koolatron seeks an order requiring the questions to be answered, and requiring Mr. Reinhart and Mr. Aiello to re-attend for further examination, and for its costs of the motion on a substantial indemnity scale.
[19] The defendants argue that they answered most of the questions and that any unanswered questions are immaterial because the defendants admit the amounts that Koolatron invoiced to them and the amounts that remain unpaid. Additionally, they argue that any unanswered questions are disproportionate to the amounts at stake in the action, principally because Synergex de Mexico is located in Mexico, has no employees on site, and is under receivership, with the result that it would be necessary for someone to travel to Mexico to retrieve the records stored there in order to produce them in response to the questions asked. The defendants ask that the motion be dismissed with costs.
ANALYSIS AND EVIDENCE
Legislative framework
[20] Rule 31.06(1) of the Rules of Civil Procedure provides that a person examined for discovery “…shall answer, to the best of his or her knowledge, information and belief, any proper question relevant to any matter in issue in the action…”. [Emphasis added.]
a) Are the questions that Mr. Reinhart and Mr. Aiello undertook to answer relevant and proper?
[21] Undertakings given at discoveries confer a presumption of relevance and propriety, including proportionality. In Towne v. Miller (2001), the court noted that an undertaking is an acknowledgment that a question is proper and that the subject matter of the undertaking is relevant.[^2] Therefore, counsel should not be permitted to renege on a production undertaking where counsel subsequently comes to the belief that a document or part of it is not relevant in the action.[^3] For these reasons, the answers that Mr. Aiello and Mr. Reinhart undertook to provide are presumed to be relevant and proper, and must be answered.
[22] The fact that Synergex de Mexico is under receivership is not determinative of whether it should be required to produce the documents which Koolatron is seeking. A receiver has a duty to comply with litigants’ reasonable requests for production of relevant documents that are in the receiver’s possession.
[23] In Battery Plus Inc., Re, (2002), Greer J. stated:
[16] Frank Bennett in Bennett on Receiverships, 2nd ed., Carswell Publishing, 1998, notes at p. 167, that a court-appointed receiver, in its managerial capacity takes charge of the management of the debtor’s assets… See also, p. 180 for duties of the court appointed receiver.
[24] Bennett does say, at p.181, supra, that:
As a fiduciary, the receiver owes a duty to make full disclosure of information to all interested persons. The receiver is obliged to respond to requests for information consistent with the position of the person making the request.[^4]
[25] In any event, I find the questions that the defendants undertook to answer are relevant. The answers make the following facts that Koolatron has alleged in its Amended Claim more, or less, likely to be true:
a) Whether Synergex de Mexico has Koolatron’s goods in storage with values equal to Koolatron’s accounts receivable (Q. 196-198). The fact that goods Koolatron supplied to Synergex are not in storage makes it more likely that Synergex de Mexico delivered them to Wal-Mart Mexico and that Wal-Mart Mexico paid an amount for them that Synergex de Mexico should have remitted to Koolatron.
b) The contact information of Synergex de Mexico’s other customers, including Verbatim. The customers can testify as to whether Synergex de Mexico continued delivering goods for them. If it did, it makes it more likely that Synergex de Mexico used the amounts owing to Koolatron to pay down its vendor account with Wal-Mart Mexico in order to keep in good standing with Wal-Mart Mexico so that it could continue delivering goods for itself and the other customers. Additionally, the customers can testify as to whether Wal-Mart Mexico discounted the amounts that Synergex charged for transporting those suppliers’ goods and whether Synergex, in turn, failed to pay those other suppliers (Q. 135 and 138). This fact would make less likely Synergex’s explanation that its non-payment of Koolatron was the result of Wal-Mart Mexico discounting the amounts that Synergex de Mexico charged it for transporting the goods that Koolatron supplied;
c) The contact information for the individual who was going to help Synergex de Mexico collect the IVA credit (“Impuesto al Valor Agregado” or, in English, “Value Added Tax”) owed with respect to Koolatron’s goods. If Synergex de Mexico collected this credit, it is more likely that it delivered Koolatron’s goods to Wal-Mart Mexico (Q. 292-293);
d) The invoice from the trucking company for the cost of shipping returned product to Koolatron in April 2015 (Q. 321). If such an invoice exists, it would be more likely that the goods Koolatron supplied to Wal-Mart Mexico were returned to Koolatron, with the result that Synergex does not owe Koolatron for them;
e) The warehouse invoices for the deduction of $96,379 by Synergex de Mexico in April 2015, which Synergex attributes to Wal-Mart Mexico’s deduction of a similar amount from the amount it owed Synergex for the goods, and the billing detail from Synergex de Mexico’s third party warehousing company for the April 2015 deduction, to the extent that detail is not in the invoice from the trucking company for the cost of shipping product to Wal-Mart Mexico (Q. 328). If such invoices exist, it would be more likely that Synergex’s explanation for its non-payment of Koolatron is true;
f) Any other reasons why Synergex de Mexico did not collect amounts owed to Koolatron (Q. 361). The existence of such reasons would make it more likely that Synergex does not owe Koolatron the amount it claims for goods Koolatron says Synergex de Mexico delivered to Wal-Mart Mexico;
g) The communications between ComTrax and Koolatron, on which Mr. Reinhart was copied, regarding the $78,597 paid to Koolatron, as indicated by the “IVA Offset-Comtrex” entry in Exhibit 3. (Q. 366); If Koolatron was paid this amount, it makes it more likely that Synergex de Mexico delivered its goods to Wal-Mart Mexico and that Wal-Mart Mexico remitted the funds to Synergex de Mexico that Koolatron says Synergex should have remitted to Koolatron;
h) The names and contact information of the individuals with whom Mr. Reinhart had dealings at Wal-Mart Mexico (Q. 382). Those individuals can testify as to whether Wal-Mart Mexico received the goods that Koolatron supplied to Synergex de Mexico, and whether Wal-Mart Mexico paid Synergex de Mexico for those goods.
[26] For the reasons stated above, the defendants will be ordered to answer the questions that Koolatron asked at the examination for discovery of the defendants, and that Mr. Reinhart and Mr. Aiello undertook to answer and have not yet answered. I will designate those questions as “outstanding” in the disposition column of the two charts of undertakings that follow.
[27] Matthew Reinhart gave the following undertakings on behalf of Synergex and Synergex de Mexico at their examination for discovery on April 15, 2016:
| Item | Page | Q# | Undertaking | Synergex's Response | Disposition |
|---|---|---|---|---|---|
| 1 | 11-12 | 55-60 | To provide a list of all of Koolatron’s inventory held by Synergex de Mexico as of today. | Synergex has provided the list in “Document #1” attached to the affidavit of Kimberlee Ruttan, sworn August 25, 2016. | Satisfied |
| 2 | 22 | 113 | To ask Mr. Aiello who was responsible for creating Synergex de Mexico’s Wal-Mart Mexico vendor account. | Ms. Ruttan, in the chart attached to her affidavit, (“her chart”), states that Mr. Aiello does not know, and that the account was opened by an employee in 2007. | Satisfied |
| 3 | 27 | 143 | To produce the document that governed Wal-Mart Mexico payment terms with respect to Koolatron’s goods | Ms. Ruttan, in her chart, states that she attaches the document entitled “Convenio Para Entregas Centralizadas y Operaciones Logisticas”, signed by Synergex de Mexico and Wal-Mart Mexico, and dated November 11, 2013. | Satisfied |
| 4 | 37 | 196-198 | To have someone look through the warehouse where Synergex de Mexico is storing Koolatron’s goods to determine whether Koolatron’s inventory – represented by the $393,192 uncollected Accounts Receivable figure in Mr. Reinhart’s email to Arun Kulkarni of April 11, 2015, at 10:13 a.m., found at Tab 6 of Exhibit 2, is still in the warehouse. | Ms. Ruttan, in her chart, states, “best efforts; unable to ascertain”. | Outstanding |
| 5 | 53-54 | 286 | To search the witness’ records and produce, if found, the letter received from the Mexican tax authority denying Koolatron’s IVA credit. | Ms. Ruttan, in her chart, states “best efforts; don’t have” | Satisfied. |
| 6 | 56 | 292-293 | To provide the contact information for Roman, the individual who was going to assist with attempting to collect the IVA credit owed with respect to Koolatron’s goods, and to make best efforts to provide Roman’s company’s contact information. | Ms. Ruttan, in her chart, states, “best efforts; roman-ojeda@hotmail.com; no company information.” | Elaboration is required. |
| 7 | 59 | 312 | To produce the remittance advice received in connection with the Q4 2014 Settlement Report. | Ms. Ruttan attaches, as document #3 to her chart, the remittance advice, listing 13 invoice numbers, with the dates and amounts. | Satisfied |
| 8 | 60-61 | 321 | To use best efforts to provide corroboration, namely, the invoice from the trucking company, for the cost of shipping product to Koolatron in April 2015. | Ms. Ruttan, in her chart, states, “Best efforts; don’t have.” | Outstanding |
| 9 | 61 | 321 | To use best efforts to produce the warehouse invoices for the deduction of $96,379 by Synergex de Mexico in April 2015, as indicated in the April 2015 column of Exhibit 3. | Ms. Ruttan, in her chart, states, “Best efforts; don’t have.” | Outstanding |
| 10 | 62 | 328 | To use best efforts to produce the billing detail from Synergex de Mexico’s third party warehousing company for the April 2015 deduction, to the extent that detail is not in the invoice produced in compliance with the undertaking at Q. 321. | Ms. Ruttan, in her chart, states, “Best efforts; don’t have.” | Outstanding |
| 11 | 63 | 335 | To use best efforts to provide the exact amount that Synergex de Mexico is charged by its third party warehousing company to store Koolatron’s goods. | Ms. Ruttan, in her chart, states, “Best efforts; $10.00 U.S. per skid.” | Satisfied |
| 12 | 69 | 361 | With respect to funds that Synergex de Mexico collected, as noted on pg. 1 of Exhibit 3 under the 2014 column near the bottom (where two rows of corrections are shown), to advise of any other reasons why those funds were not collected, other than as stated in response to Q. 360. | Ms. Ruttan, in her chart, states, “Other obligations to pay” | Elaboration is required |
| 13 | 70 | 366 | To produce the communications between ComTrax and Koolatron on which Mr. Reinhart was copied, regarding the $78,597 paid to Koolatron, as indicated by the “IVA Offset-Comtrex” entry in Exhibit 3. | Ms. Ruttan, in her chart, states, “Best effort; Kooltran has; difficult to obtain.” | Outstanding |
| 14 | 71 | 366 | Within 30 days, to advise what witnesses the defendants may call at trial, to provide will-say statements of their evidence, and to advise of their contact information. | Ms. Ruttan, in her chart, states, “no other witness contemplated at this time.” | Satisfied |
| 15 | 71-72 | 366 | To advise whether the defendants admit the authenticity of the emails contained in tabs 3-6 of Exhibit 2. | Ms. Ruttan, in her chart, states, “Yes” | Satisfied |
| 16 | 72-73 | 368 | To review the Sales Invoices from Koolatron to Synergex de Mexico and the attached corresponding Sales Invoices from Synergex de Mexico to Wal-Mart Mexico, found at Tab 2 of Exhibit 2, and To review Tab 1 of Exhibit 2, and admit or deny, on behalf of the defendants, the authenticity of the Sales Invoices and corresponding Facturas from Synergex de Mexico. | Ms. Ruttan, in her chart, states, “Tab 2 A-C – no issue with invoices; Kooltron summary and aging documents not admitted, no comment; Tab 1 (contract) – no issue.” | Satisfied |
| 17 | 75, 73 | 368 | To review the accounts receivable aging listing, the corresponding Sales Invoices from Koolatron to Synergex de Mexico, and the Facturas from Synergex de Mexico to Walmart Mexico, and advise whether the defendants take any issue with the accounts receivable listings at Tab 2 of Exhibit 2 and, if so, why. | Ms. Ruttan, in her chart, states, “No comment.” | Satisfied in the response noted for the same question, at pages 72-73. |
| 18 | 74 | 372 | To review the table found at Tab 7 of Exhibit 2 – specifically, the far right hand column of the table - and Synergex de Mexico’s warehouse records, and advise whether the witness agrees with the number found in the table. | Ms. Ruttan, in her chart, states, “No issue.” I interpret this to mean that the witness agrees with the number in the table at tab 7 | Satisfied |
| 19 | 75 | 378 | To provide the Skype account ID for Daniel Barajas | Ms. Ruttan, in her chart, states, “Daniel Caballero; Best effort” | Satisfied |
| 20 | 76 | 382 | To use best efforts to provide the names and contact information of the individuals with whom Mr. Reinhart had dealings at Wal-Mart Mexico. | Ms. Ruttan, in her chart, states, “Best effort; Daniel? – do not have information” | Outstanding. |
| 21 | 77 | 386 | To produce any remittance advices that Synergex de Mexico received in relation to this case with a zero balance (i.e., where no monies are being paid. | Ms. Ruttan, in her chart, states “Best efforts; don’t have.” | Elaboration required. |
[28] David Aiello gave the following undertakings at his examination for discovery on April 15, 2016:
| Item | Issue and Relevance | Page | Q# | Undertaking | Synergex's Response | Disposition |
|---|---|---|---|---|---|---|
| 1 | 11-12 | 42-45 | To advise if Mr. Aielllo’s information is otherwise than as provided, that from 2011 to today, he is the sole director of Synergex Corporation and Synergex de Mexico. | Ms. Ruttan, in her chart, states, “Information is not otherwise.” | Satisfied. | |
| 2 | 14 | 52 | To provide the contact information for the other individual defendants in this action. | Ms. Ruttan, in her chart, states, “Best effort; As per Claim” | Satisfied. | |
| 3 | 15-16 | 54 | To advise if the Form 1’s on behalf of the other individual defendants have not been filed with the relevant Ontario Ministry and, if not, to advise why not; and if the Form 1s have been filed since, or if they will be in the future, to advise of that fact. | Ms. Ruttan, in her chart, states, “Filed.” | Satisfied. | |
| 4 | 34 | 126 | Within 30 days, to provide will-say statements for any witnesses Mr. Aiello intends to call at trial. | Ms. Ruttan, in her chart, states, “No other witnesses contemplated at this time.” | Satisfied | |
| 5 | 34 | 126 | To provide the same undertaking that Mr. Reinhart did concerning the authenticity of documents referred to in Koolatron’s Affidavit of Documents. | Ms. Ruttan, in her chart, states, “Tab 1, 3-7, letter – no issue; Tabs 2, A-C – no issue with invoices, K. summary and aging documents not admitted. | Satisfied. | |
| 6 | 35-36 | 129 | To advise of all the customers or clients that Synergex de Mexico has worked with from 2013 to the present in supplying goods to Wal-Mart Mexico. | Ms. Ruttan, in her chart, states, “Just Verbatim.” | Satisfied. | |
| 7 | The current account representative is a contact person for Verbatim, who has relevant evidence, having regard to the response to Q. 129, and Koolatron’s allegation in para. 37 of the Amended Claim, that Synergex diverted payments from Koolatron in order to bring its vendor account with Wal-Mart Mexico back into good standing, so that it could carry on distributing goods for itself and/or other suppliers. | 36 | 134 | To provide contact information for Verbatim, the company that Synergex de Mexico distributes goods for to Wal-Mart Mexico, and to advise who the account representative is. | Ms. Ruttan, in her chart, states, “Best efforts; not relevant, after 2013. Refusal.” | Outstanding. |
| 8 | See comments re. Q. 134 | 38-39 | 138 | To advise when Synergex de Mexico began offering its services to companies for whom it has distributed goods since 2013, and if it stopped offering services to those companies, when that occurred. | Ms. Ruttan, in her chart, states, “Best efforts; not relevant, after 2013. Refusal. | Outstanding. |
b) Are the questions that the defendants refused or failed to answer relevant and proper?
[29] I will now turn to consider whether the questions that the defendants refused to answer, or that they took under advisement and that, by reason of their failure to answer them within 60 days, they are considered, in law, to have refused, are “proper questions relevant to any matter in issue” within the meaning of Rule 31.06(1).
[30] In 2287913 Ontario Inc. et al v. ERSP International Enterprises Ltd. et al, (2017), Perrell J. set out, in the context of a class action, a variety of grounds upon which it is proper for a deponent to refuse to answer a question at a cross-examination. These categories are equally apt in interpreting “any proper question relevant to any matter in issue in the action…” within the meaning of Rule 31.06(1) in relation to Examinations for Discovery. Justice Perell stated:
There are a variety of grounds upon which it is proper for a deponent to refuse to answer a question at a cross-examination. In several cases, I have identified and categorized eight grounds or reasons for properly refusing to answer a question, one of which is a ground particular to class actions. See: CIBC v. Deloitte & Touche, 2013 ONSC 917; 2038724 Ontario Ltd. v. Quizno's Canada Restaurant Corp., 2012 ONSC 6549; Axiom Plastics Inc. v. E.O. Dupont Canada, 2011 ONSC 4510. The categorization scheme is also pertinent to deciding the refusals motion now before the court. Thus, the categorical justifications for refusals are:
(1) unanswerable - the question is not capable of being answered, which is to say that the question is vague, unclear, inconsistent, unintelligible, redundant, superfluous, repetitious, overreaching, beyond the scope of the examination, speculative, unfair, oppressive, or a matter of rhetoric or argument;
(2) immaterial - the question is not material, which is to say that the question falls outside the parameters of the action and does not address a fact in issue;
(3) irrelevant - the question is not relevant, which is to say that the question does not have probative value; it does not adequately contribute to determining the truth or falsity of a material fact;
(4) untimely - the question is not relevant because it concerns events or matters temporally unconnected to a cause of action or defence;
(5) idiosyncratic or uncommon – in an action under the Class Proceedings Act, 1992, the question is not relevant to the common issues because it concerns an individual inquiry that was not certified for the common issues trial;
(6) answered – the question or the documents relevant to the question have already been provided by the party being examined;
(7) disproportionate - the question is disproportionate, which is to say that the question may be relevant but providing an answer offends the proportionality principle; and
(8) privileged – the answer to the question is subject to a privilege, including lawyer and client privilege, litigation privilege, or the privilege for communications in furtherance of settlement.[^5]
[31] These categories are not exhaustive, but they are a useful structure for addressing Synergex’s justifications for refusing to answer Koolatron’s questions. I will address the propriety of the questions in this case under each of the relevant categories of questions that may properly be refused.
1. Unanswerable
[32] The defendants do not argue that any of the questions is unanswerable in the sense that they are vague, unclear, inconsistent, unintelligible, redundant, superfluous, repetitious, overreaching, beyond the scope of the examination, speculative, unfair, oppressive, or a matter of rhetoric or argument.
2. Immaterial
[33] The defendants argue that any unanswered questions are immaterial because the defendants admit the amounts that Koolatron invoiced to them and the amounts that remain unpaid. I disagree. The questions are material to Koolatron’s allegations that the defendants diverted funds that Wal-Mart Mexico paid to Synergex de Mexico and that was owing to Koolatron, using the funds to bring its vendor account with Wal-Mart Mexico back into good standing so that it could carry on distributing goods for itself and/or other suppliers.
3. Irrelevant
Jurisprudence
[34] In Ramdath v. George Brown College of Applied Arts and Technology (2012), Strathy J., as he then was, stated:
The scope of discovery is informed by the purpose of discovery. The purpose is well known to enable the examiner to know the case to be met; to obtain admissions; to define and narrow the issues; to promote settlement.[^6]
[Emphasis added.]
[35] For evidence to be relevant, it must tend to "increase or diminish the probability of the existence of a fact in issue." There is “…no minimum probative value required for evidence to be relevant.”[^7] Therefore a question, to be relevant, must be likely to elicit a fact that tends to "increase or diminish the probability of the existence of a fact in issue." The facts in issue are those set out in Koolatron’s Amended Claim which the defendants have denied.
[36] The questions that Mr. Reinhart refused to answer, or took under advisement and later failed to answer, are relevant for reasons set out in the second column of the chart that follows, under the heading “Issue and Relevance”:
| Item | Issue and Relevance | Page | Q# | Question refused | Synergex's Response | Disposition |
|---|---|---|---|---|---|---|
| 1 | The alleged diversions of funds may post-date the period when invoices were paid. The Amended Claim, in para. 13, states that Synergex collected sums from buyers and remitted them to Koolatron until October 2013. In para. 19 and following, it is alleged that Synergex received monies and failed to remit them to Koolatron. | 27-28 | 144 | To produce the Synergex de Mexico bank statements/records for the accounts into which payments from Walmart were received from October 2013 to December 2015. | Ms. Ruttan, in her chart, states, “Not relevant; after the event.” | Outstanding |
| 2 | Giving Koolatron direct access to Synergex’s computer is unnecessary, provided that Synergex produces the data relating to Koolatron’s sales to Wal-Mart Mexico and the payments received. | 28-29 | 148 | To produce the data from Synergex de Mexico’s EDI system from October 2013 to December 2015 relating to the sale of Koolatron goods to Wal-Mart Mexico and payments received by Syndegex de Mexico during that period, or to give Koolatron access to the system for the purpose of retrieving that data. | Ms. Ruttan, in her chart, states, “Confidential information; not possible; proprietary information within.” | Outstanding. |
| 3 | 40 | 214 | To produce all communications from the witness’ email account relating to the matters at issue in the present action. | Ms. Ruttan, in her chart, states, “Proportionality/costs issue. Hard to obtain.” | Outstanding. There is insufficient evidence to support a conclusion that the cost of retrieving the emails would be disproportionate. | |
| 4 | 43 | 226 | To advise whether any of Synergex de Mexico’s video game inventory was not paid for (prior to liquidation), and to produce evidence or records from Walmart to that effect. | Ms. Ruttan, in her chart, states, “Proportionality/cost issue. Answer provided “impossible”; too difficult to obtain.” | Outstanding. There is insufficient evidence to support a conclusion that the cost of retrieving Wal-Mart Mexico’s records of video games that have not been paid for would be disproportionate. | |
| 5 | 46 | 245 | To use best efforts to advise of the date when Synergex de Mexico communicated to Wal-Mart Mexico that it could no longer supply Wal-Mart Mexico with video games. | Ms. Ruttan, in her chart, states, “Approximately October 2013.” | Satisfied | |
| 6 | 48 | 256 | To produce all communications received from Wal-Mart Mexico from 2013 to the present concerning the deductions Wal-Mart Mexico made to Synergex de Mexico’s vendor account. | Ms. Ruttan, in her chart, states, “Don’t have; Proportionality/cost issue.” | Outstanding. There is insufficient evidence to support a conclusion that the cost of retrieving and producing the communications would be disproportionate. | |
| 7 | The remittance advices respecting the Settlement Reports were provided above, in compliance with the undertaking Mr. Reinhart gave in response to this same question. | 59 | 312 | To produce all remittance advices received with respect to Settlement Reports from January 1, 2014, to December 31, 2015. | Ms. Ruttan, in her chart, states, “Proportionality/cost issue; not relevant; contains confidential information.” | Satisfied. |
| 8 | The defendants do not counterclaim for storage costs or claim a set-off for same. Storage charges would not make Koolatron’s allegations more likely and therefore, the response is not relevant. | 64-65 | 337-341 | To produce all invoices rendered by Synergex de Mexico’s third party warehousing company for storing Koolatron’s goods to the date of trial. | Ms. Ruttan, in her chart, states, “Not relevant.” | Not required. |
| 10 | This response amounts to an admission by Synergex as to the authenticity and accuracy of the records under tab 7 of Koolatron’s affidavit of documents. | 74 | 372 | With respect to the undertaking given at Q. 372, to produce the warehouse records to show what inventory Syndergex de Mexico’s third party warehouse company says Koolatron has in inventory. | Ms. Ruttan, in her chart, states, “Tab 7 of A/D of Plaintiff.” | Satisfied. |
| 11 | Synergex’s statement that it was unable to find a remittance advice for another product showing the remittance with a zero balance is responsive to this question. | 77 | 387 | If Synergex de Mexico has not received any remittance advices in relation to this case with a zero balance (i.e. where no monies are being paid), to produce one remittance advice received for another product showing the remittance with a zero balance. | Ms. Ruttan, in her chart, states, “Not relevant; could not find.” | Satisfied. |
| 12 | The response that Synergex’s last salse of video game productes to Wal-Mart Mexico was in October 2013, combined with its response to Q. 245, to the effect that it notified Wal-Mart Mexico of same at that time, is responsive. The trucking waybill from the last delivery would not make Koolatron’s allegation that the deliveries continued more likely, and is therefore not relevant. | 77-78 | 388-389 | To advise when Synergex de Mexico last made a sale or delivery of video game products to Walmart Mexico, and to produce the waybill from the trucking company hired by Synergex de Mexico to make the delivery or, if none exists, the other delivery record. | Ms. Ruttan, in her chart, states, “Best efforts; October 2013, approximately; Document not available.” | Satisfied. |
[37] Mr. Aiello refused to answer the following questions, or took them under advisement and later failed to answer them:
| Item | Issue and Relevance | Page | Q# | Question refused | Synergex's Response | Disposition |
|---|---|---|---|---|---|---|
| 1 | The incorporating document, if it identifies Mr. Aiello or Mr. Reinhart as Officers or Directors, may make it more likely that they were directing minds of Synergex de Mexico. | 10 | 37 | To provide the incorporating document for Synergex de Mexico. | Ms. Ruttan, in her chart, states, “Not relevant.” | Outstanding |
| 2 | Mr. Aiello’s knowledge of the Defences of other individual defendants does not make any of Koolatron’s allegations more likely and is not relevant. | 12-13 | 46-47 | To advise if Mr. Aiello has knowledge of the defences of the individual defendants in this proceeding, received by Koolatron’s counsel on May 5, 2015, sent with a cover letter from BioAdvantex, being served. | Ms. Ruttan, in her chart, states, “Not relevant.” | Response not required. |
| 3 | Mr. Aiello stated at Q. 48 that he did not know whether BioAdvantex has such an account. | 13 | 49 | To advise if BioAdvantex has an online fax account with www.myfax.com | Ms. Ruttan, in her chart, states, “Not relevant.” | Satisfied. |
| 4 | A Notice received from an individual resigning as director of Synergex may make it more likely that one was the directing mind of Synergex and is therefore relevant. | 16 | 57 | To produce the notices received from the individual directors/former directors in which they resigned as directors from Synergex Corporation. | Ms. Ruttan, in her chart, states, “Searching, may provide if found.” | Outstanding. |
| 5 | 18 | 64 | To ask Edgar Cosey whether he has signing authority over Synergex de Mexico’s account with HSBC and another Mexican institution, Banco Base. | Ms. Ruttan, in her chart, states, “E.C. does not have signing authority.” | Satisfied. | |
| 6 | Who has signing authority may make it more likely that the person was the directing mind of Synergex and is therefore relevant. | 18 | 64 | To provide confirmation from Synergex de Mexico’s financial institutions in Mexico as to who has signing authority. | Ms. Ruttan, in her chart, states, “Not relevant; Proportionality/cost issue.” | Outstanding. |
| 7 | See disposition of Q. 64. | 18-19 | 66 | To advise if Mr. Aielllo’s information about Mr. Cosey being the sole signing authority for Synergex de Mexico’s HSBC account changes. | Ms. Ruttan, in her chart, states, “Not relevant.” | Outstanding. |
| 8 | Such communications may make it more likely that one of the individual defendants was the directing mind of Synergex and is therefore relevant. | 21 | 72 | To produce any communications exchanged back and forth concerning the negotiation of the Third Party Logistics Agreement found at Tab 1 of Exhibit 2. | Ms. Ruttan, in her chart, states, “Not relevant; Proportionality/cost issue.” | Outstanding |
| 9 | The bank accounts may be evidence that Synergex received payments from Wal-Mart Mexico from which it should have paid Koolatron and are therefore relevant. | 30 | 118 | To ask Mr. Cosey to provide all bank account statements for Synergex de Mexico from 2013 to the present for all its bank accounts. | Ms. Ruttan, in her chart, states, “Not relevant.” | Outstanding |
| 10 | Synergex’s accounts receivable and whether and when they were paid may make it more likely that it received payments from Wal-Mart Mexico from which it should have remitted payments to Koolatron and are therefore relevant. | 30 | 118 | To produce financial statements for Synergex de Mexico from 2013 to the present. | Ms. Ruttan, in her chart, states, “Not relevant, after event; proportionality/cost issue.” | Outstanding |
| 11 | The consistency of Synergex’s reported income and the income that appears on its financial statements may make it more likely that the financial statements are accurate and the latter may make it more likely that Synergex received payments from Wal-Mart Mexico from which it should have remitted payments to Koolatron. | 30-31 | 118 | To produce Synergex de Mexico’s tax returns filed with Mexican tax authorities from 2013 to the present. | Ms. Ruttan, in her chart, states, “Not relevant; Proportionality/cost issue.” | Outstanding |
| 12 | Correspondence from Mr. Reinhold to Mr. Ailello may make it more likely that Synergex charged or received VAT and was able to recover such amounts from which it should have remitted payments to Koolatron, and are therefore relevant. | 32 | 123 | To produce all records letters, emails, legal counsel’s opinions, anything at all, that corroborate what Matthew Reinhart told Mr. Aiello of: (i) the denial of the VAT claimed in relation to Koolatron’s goods; (ii) appeals would have to be filed with the Government which would take a protracted period of time to adjudicate; and (iii) the underlying recoverability was not impossible but was difficult and slow. | Ms. Ruttan, in her chart, states, “Not relevant; position provided by M.R.; documents not available; proportionality/cost issue.” | Outstanding, in part. Counsel’s opinions may be privileged. |
| 13 | Current staff of Synergex de Mexico who were employed by the company during the period from 2011 to 2013 may have personal knowledge of whether Wal-Mart Mexico discounted its payments to Synergex and whether Synergex withheld payments from Koolatron. | 33-34 | 126 | To advise who Synergex de Mexico’s current staff are, and if they have any knowledge relevant to the matters at issue in this action, to advise what they know. | Ms. Ruttan, in her chart, states, “Not relevant; no knowledge” | Outstanding in part. Overly broad. Synergex shall advise Koolatron who, among the current staff of Synergex de Mexico, were employed by the company during the period from 2011 to 2013. It shall inquire and advise what knowledge such employees have of the issues in the action. |
| 14 | The existence of such companies makes more likely the allegation in para. 37 of the Amended Claim and is therefore relevant. | 37 | 136 | To search records and identify all companies for whom Synergex de Mexico has distributed from 2013 to the present. | Ms. Ruttan, in her chart, states, “Not relevant; proportionality/cost issue” | Outstanding. |
| 15 | Whether Synergex is paying its current customers does not make it more likely that Synergex received payments from Wal-Mart Mexico referable to Koolatron’s goods and is therefore not relevant. | 37-38 | 137 | To ask Mr. Reinhart whether the companies for whom Synergex de Mexico is distributing are being paid the monies owed to them by Synergex de Mexico, and if they are being paid, to advise why those monies are not being paid to Koolatron instead. | Ms. Ruttan, in her chart, states, “Not relevant; M.R. provided answer.” | Not required. |
4. Disproportional
Legislative Framework
[38] Since amendments to the Rules of Civil Procedure came into effect on January 1, 2010, Rules 1.04 and 29.2.03 of the Rules have imposed the further requirement that questions asked on an Examination for Discovery be proportional.[^8] Rule 1.04 (1.1) provides:
INTERPRETATION
General Principle
1.04 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.
[Emphasis added.]
[39] Rule 29.2.03(1) provides:
In making a determination as to whether a party or other person must answer a question or produce a document, the court shall consider whether,
(a) The time required for the party or other person to answer the question or produce the document would be unreasonable;
(b) The expense associated with answering the question or producing the document would be unjustified;
(c) Requiring the party or other person to answer the question or produce the document would cause him or her undue prejudice;
(d) Requiring the party or other person to answer the question or produce the document would unduly interfere with the orderly progress of the action; and
(e) The information or the document is readily available to the party requesting it from another source. [Emphasis added.]
[40] Also included among the 2010 amendments to the Rules was rule 29.1, which requires litigants to develop a discovery plan. Rule 29.1.03 provides:
29.1.03(1) Where a party to an action intends to obtain evidence under any of the following Rules, the parties to the action shall agree to a discovery plan in accordance with this rule: 1. Rule 30 (Discovery of Documents). 2. Rule 31 (Examination for Discovery) . . . . .
Timing
(2) The discovery plan shall be agreed to before the earlier of,
(a) 60 days after the close of pleadings or such longer period as the parties may agree to; and
(b) attempting to obtain the evidence. [Emphasis added.]
[41] In Ontario v. Rothmans Inc. (2011),[^9] Justice Perell set out the legal principles that have emerged from reported decisions on the proportionality of questions asked on an examination for discovery:
a) The examining party may not go beyond the pleadings in an effort to find a claim or defence that has not been pleaded. Overbroad or speculative discovery, known colloquially as a "fishing expedition," is not permitted.[^10]
b) Under the former case law, where the rules provided for questions "relating to any matter in issue," the scope of discovery was defined with wide latitude and a question would be proper if there is a semblance of relevance.[^11] The 2010 amendment of Rule 29.2.03(1), which changed "relating to any matter in issue" to "relevant to any matter in issue," suggests a modest narrowing of the scope of examinations for discovery.
c) The extent of discovery is not unlimited, and in controlling its process and to avoid discovery from being oppressive and uncontrollable, the court may keep discovery within reasonable and efficient bounds.[^12]
d) The witness on an examination for discovery may be questioned for hearsay evidence because an examination for discovery requires the witness to give not only his or her knowledge but his or her information and belief about the matters in issue.[^13]
e) The witness on an examination for discovery may be questioned about the party's position on questions of law.[^14] [Emphasis added]
[42] The Supreme Court of Canada expressed the importance of proportionality to access to justice in Hryniak v. Mauldin (2014). Justice Karakatsanis, speaking for the Court, stated:
Ensuring access to justice is the greatest challenge to the rule of law in Canada today. Trials have become increasingly expensive and protracted. Most Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot afford to go to trial. … Increasingly, there is recognition that a culture shift is required in order to create an environment promoting timely and affordable access to the civil justice system. This shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just.[^15] [Emphasis added]
[43] The court’s determination of motions to compel answers to questions asked at an Examination for Discovery must be informed by the general principle of proportionality (Rule 1.04(1.1)), as well as the more specific principles of proportionality that the court articulated in Sedona Canada in relation to electronic discovery, and which have since been incorporated into Rule 29.1.03.
[44] Applying the conventional tests for determining whether a question asked at an Examination for Discovery must be answered, and the additional tests for proportionality set out in Rule 29.2.03(1), a person may refuse to answer a question on an Examination for Discovery if:
a) The question is not relevant to any matter in issue in the action;
b) The question is not proper;
c) The question does not satisfy the proportionality requirement imposed by Rule 29.2.03.[^16]
[45] The issues to be determined, then, in relation to proportionality, include:
a) Is the information which Koolatron seeks available?
b) Why does Koolatron require production of the information? and
c) What, if any, undue burden would be imposed on the defendants to produce the information that is sought?
[46] Synergex argues that it should be relieved of its obligation of providing relevant documents because retrieving and producing them would be disproportional. The disproportionality, it says, results from the fact that Synergex owns Synergex de Mexico, and both companies are now in receivership.
[47] Mr. Reinhart used to work physically in Mexico, but states that since the receivership, Synergex de Mexico no longer has employees in Mexico, and instead uses independent contractors to forward goods that Synergex de Mexico is transporting for its customers. As a result, he would have to travel to Mexico to retrieve the documents that Koolatron has requested. He states that this would be costly and time consuming, but offers no evidence as to how expensive it would be.
[48] Requests to a receiver, like questions to any other litigant, must be proportional. They must not impose an unreasonable cost on the receiver. In Battery Plus Inc., Re, (2002), referred to above, Greer J., commenting on the Receiver’s duty to comply with requests for information, stated:
[16] Frank Bennett in Bennett on Receiverships, 2nd ed., Carswell Publishing, 1998, …does say, at p.181, supra, that:
If the cost of responding is excessive in the circumstances, the receiver can fix a fee for that cost, or otherwise apply to the court for directions.
[17]… [I]t is not reasonable to think that the receiver owes a duty to the owner of the shares or business in receivership, who was operating the business until the day before the interim receiver stepped in, to copy every single piece of paper that is now in the interim receiver’s possession. That is an expensive folly not worth considering.
[21] To allow all people involved in this Interim Receivership to automatically be entitled to access to all of the documents which came into the Interim Receiver’s hands could cause the interim receivership to waste untold hours for no purpose. I am satisfied that, while there is a right of an interested party to certain relevant documents, these documents must relate to a specific purpose….[^17] [Emphasis added]
[49] In Midland Resources Holding LTD v. Shtiaf, (2010), this court held that the onus is on the party seeking an order from the court to restrict the scope of document reproduction on the basis of proportionality to produce evidence to justify that order.[^18] In Seelster v. HMTQ and OLG (2015), Emery J. stated:
A party that seeks to limit the production of certain documents that are otherwise relevant on the basis of proportionality must put cogent evidence forward that addresses the factors under Rule 29.2 .03. If a party has not done so, the court has nothing to assess for the applicability of those factors. This is even more important when the evidence concerning a factor will not support limiting the production of relevant documents on the basis of proportionality….[^19] [Emphasis added]
[50] Neither Koolatron nor the defendants have provided evidence that would support a finding as to whether or not the production of the specific records sought by Koolatron would be disproportionate to the amounts at stake in the action. The question that arises from the 2010 amendments of the Rules is whether the amendments shifted the onus of establishing the proportionality of questions to the party who seeks an order requiring that they be answered.
[51] In Alpha Technologies Ltd. v. Arkhipov, (2016), Master Muir declined to rule on production of certain documents pending information on the cost to the plaintiff of obtaining these.[^20]
[52] In the present case, the court has no evidence as to the cost that the defendants would incur if required to produce the documents that Koolatron is asking it to produce. The court requires such evidence in order to determine whether the cost would be disproportional to the amount at stake in the action. In Whitty v Wells (2016), Myers J. stated:
…. “[t]his is a civil case. It is about money. Every step of the way is bounded by cost-benefit analysis and proportionality.” ….[^21] [Emphasis added.]
[53] Koolatron claims payment of approximately $185,500.00 and punitive damages in the amount of $100,000.00. It is not “a million dollar action”, let alone one involving $50 million dollars such as was before Myers J. in Whitty v. Wells. The more modest the claim, the more the court must scrutinize the cost of documentary discovery to determine whether it meets the test of proportionality.
[54] In Warman v. The National Post Company et al., (2010), Master Short held that the proportionality amendments had substituted proportionality for relevance as the “default rule” for discovery. The key question is who has the onus of establishing the proportionality of questions to which a party seeks answers. Master Short stated:
… the default rule for discovery should start with proportionality and “a recognition that not all conceivably-relevant facts are discoverable in every case”. Proportionality factors are already a part of our discovery rules. However, to date our profession has been provided with limited guidance in this area.
Reversing the default rule means proportionality would replace relevancy as the most important principle guiding discovery. Relevancy would remain a threshold requirement, but would not be a licence to obtain discovery regardless of the burden or expense imposed on the opponent if the costs of discovery outweigh the likely benefit.[^22]
[55] Later, Master Short stated:
Proportionality must be seen to be the norm, not the exception – the starting point, rather than an afterthought. Proportionality guidelines are not simply “available”. The “broad and liberal” standard should be abandoned in place of proportionality rules that make “relevancy” part of the test for permissible discovery, but not the starting point.[^23]
[56] In most cases, it is the party who is asked a question who is in possession of the evidence as to the cost of answering it. However, the same amendments that introduced the requirement of proportionality also provided for the process of a Discovery Plan as the means by which the party asking a question can obtain the necessary evidence to establish that the question is proportional.
[57] One of the purposes of a Discovery Plan is to require the parties to address the comparative costs of different methods and scopes of documentary discovery. In Lecompte v. Doran, (2010), Master MacLeod stated:
[11] Discovery planning is now required in all actions under the Rules of Civil Procedure…. Rule 29.1 is a new rule which establishes an obligation to meet, confer and to create a discovery plan before production and discovery get underway. The rule provides that a court may refuse discovery relief to parties that have not developed such a plan. The parties are specifically directed to consider proportionality which is a concept that is referred to in Rule 29.1 but also which now infuses all of the rules by virtue of Rule 1.04 (1.1)….
[14] Discovery planning is intended to permit the parties to map out the most efficient and effective way to organize the production and discovery needs of the particular action having regard to the complexity of the records, the issues in dispute and the amounts at stake. It cannot be an adversarial exercise. Planning is also intended to minimize the need for court intervention but obviously there will be situations in which there are legitimate disagreements. In a case managed environment a case conference may resolve this and in other cases the same end may be achieved by a motion for directions. Specific direction could have been sought on any of the occasions that this matter was previously before the court.[^24] [Emphasis added.]
[58] The task of determining the proper scope of documentary discovery in the present case is complicated by Koolatron’s allegations of wrongdoing by Synergex de Mexico. Those allegations extend the scope of relevance beyond Koolatron’s own transactions with Synergex de Mexico, to Synergex’s transactions with other suppliers. Koolatron’s allegation that Synergex diverted payments from Wal-Mart Mexico for goods that Koolatron had supplied in order to pay down its debt to Wal-Mart Mexico and keep in good standing with that company so that it could continue to deliver goods from other suppliers gives rise to Koolatron’s demand for the names of Synergex’s other customers, and records that may disclose differences in the way Synergex de Mexico treated Koolatron and the way it treated other suppliers. It is precisely in this kind of case, involving a modest claim and allegations of wrongdoing, that a Discovery Plan is essential.
[59] In Kaymar Rehabilitation v. Champlain CCAC (2013), Master MacLeod stated:
As is common in cases where a plaintiff pleads motive, impropriety, conspiracy or similar kinds of claims against an organization, the scope of documentary production is inherently problematic and can quickly grow to nightmarish proportions. The plaintiff in such cases will typically demand access to e-mails, minutes, records, correspondence and notes dealing with the process of decision making and the attitude of the decision makers to the relevant participants. Huge amounts of resources can be consumed in the effort to uncover every document which may contain an evidentiary nugget bearing on these questions.
The need for less adversarial and more collaborative approaches to documentary production has been apparent for many years giving rise to a series of recommendations and ultimately to rule amendments. The Rules were amended effective January 1, 2010 to require a formal discovery plan in which the parties were to apply the Sedona Canada Principles Addressing Electronic Discovery, to adopt a narrower and more focused definition of relevance and to incorporate the principles of proportionality, cost containment and efficiency.
Obviously the supervision of discovery processes and adjudication of disputes is a core function of the court and is a duty that cannot be shirked. Nevertheless, a well-crafted plan should minimize the need for court intervention and utilize adversarial adjudication as a last resort. A contested motion with court inspection of disputed documents is inherently a cumbersome and expensive way to resolve discovery disputes.[^25] [Emphasis added]
[60] A claim for punitive damages does not, by itself, justify a request for a broader scope of production of financial information from the defendants. The relevance of such requestd, based on the specific facts pleaded, must be determined on a case by case basis. In Filanovsky v. Filanovsky (2009), Master MacLeod stated:
[18] If the proposed discovery questions are not supported by allegations in the pleadings and appear to be only a fishing expedition, the court ought not to order the questions be answered.
[20] In my view the apparent conflict in the case law can be resolved. The majority of the cases, including Deveaux are in agreement that simply requesting punitive damages without more will not support a demand to discover the defendant on his or her finances….. If it is accepted that a bald pleading of punitive damages is not enough to render the means of the defendant relevant then a plaintiff does not get to bypass the ordinary test of relevance. It follows from the dicta in Whiten that if punitive damage claims are subject to the ordinary rules of pleading, discovery questions should be determined by the ordinary application of relevance to the specific facts that are pleaded. Whether particular discovery questions are relevant will then have to be determined on a case by case basis and there is no magic one way or the other to a punitive damages claim.[^26]
[61] In the present case, Koolatron’s pleadings are sufficiently detailed and specific to support its request for the records that would disclose whether Synergex de Mexico was diverting the payments it says Wal-Mart Mexico made for Koolatron’s goods to pay down its debt to Wal-Mart Mexico and enable it to continue delivering goods from other suppliers. The issue to be determined, in relation to such records, is whether they can be produced in a manner that is proportionate to the amounts at stake in the action.
[62] The defendants have provided prima facie evidence that the production of the documents requested may be disproportional. They have stated that Synergex de Mexico is under receivership, has no employees on site in Mexico, and that it would be necessary for someone to travel there to retrieve the requested documents. Koolatron has not contradicted this evidence, and has not sought to ascertain from the defendants exactly what the cost of obtaining the documents would be. In particular, there is no evidence that Koolatron or the defendants took steps to create a Discovery Plan, either before or after the examinations for discovery.
[63] The parties’ failure to create a Discovery Plan, especially in relation to the e-mail correspondence that Koolatron seeks, is a substantial impediment to the court’s ability to determine that issue at the present time. Master Short, in Siemens Canada Limited v. Sapient Canada Inc., (2014), summarized the Sedona Canada Principles that must be addressed by litigants in every case involving electronic discovery:
The Sedona Canada Principles Addressing Electronic Discovery-At A Glance
Electronically stored information is discoverable.
In any proceeding, the parties should ensure that steps taken in the discovery process are proportionate, taking into account (i) the nature and scope of the litigation, including the importance and complexity of the issues, interest and amounts at stake; (ii) the relevance of the available electronically stored information; (iii) its importance to the court's adjudication in a given case; and (iv) the costs, burden and delay that may be imposed on the parties to deal with electronically stored information.
As soon as litigation is reasonably anticipated, parties must consider their obligation to take reasonable and good faith steps to preserve potentially relevant electronically stored information.
Counsel and parties should meet and confer as soon as practicable, and on an ongoing basis, regarding the identification, preservation, collection, review and production of electronically stored information.
The parties should be prepared to produce relevant electronically stored information that is reasonably accessible in terms of Cost and burden.
A party should not be required, absent agreement or a court order based on demonstrated need and relevance, to search for or collect deleted or residual electronically stored information.
A party may satisfy its obligation to preserve, collect, review and produce electronically stored information in good faith by using electronic tools and processes such as data sampling, searching or by using selection criteria to collect potentially relevant electronically stored information.
Parties should agree as early as possible in the litigation process on the format in which electronically stored information will be produced. Parties should also agree on the format, content and organization of information to be exchanged in any required list of documents as part of the discovery process.
During the discovery process parties should agree to or, if necessary, seek judicial direction on measures to protect privileges, privacy, trade secrets and other confidential information relating to the production of electronic documents and data.
During the discovery process, parties should anticipate and respect the rules of the forum in which the litigation takes place, while appreciating the impact any decisions may have in related actions in other forums.
Sanctions should be considered by the court where a party will be materially prejudiced by another party's failure to meet any obligation to preserve, collect, review or produce electronically stored information. The party in default may avoid sanctions if it demonstrates the failure was not intentional or reckless.
The reasonable costs of preserving, collecting and reviewing electronically stored information will generally be borne by the party producing it. In limited circumstances, it may be appropriate for the parties to arrive at a different allocation of costs on an interim basis, by either agreement or court order.[^27]
[Emphasis added.]
[64] Rule 29.1 does not provide specific guidance with respect to imposing a Discovery Plan on litigants. In Oakdale Kitchens Inc. v. Williams & Partners (2011), later affirmed by the Divisional Court, Master Short determined that the court does have the ability to impose a Discovery Plan, where the parties have been unable to reach agreement. He stated:
If the parties couldn’t agree on that point, then they could have brought a motion seeking to have the court impose one. I believe that my decision in TELUS Communications Company v. Sharp, [2010 ONSC 2878, 102 O.R. (3d) 93; 97 C.P.C. (6th) 148; 2010 CarswellOnt 3351] still stands as authority for the parties seeking the court’s assistance to create a discovery plan for them in the event they are unable to agree upon one.”[^28]
[65] In the present case, there is no evidence that the parties have tried to develop a discovery plan. It would therefore be premature for the court to impose one on them.
5. Privileged
[66] Synergex relies on the confidentiality of certain of the records requested. This is a sub-category of the privilege exception referred to by Perell J. in the passage from 2287913 Ontario Inc. et al v. ERSP International Enterprises Ltd. et al, (2017), set out above.
[67] In Cacciato v. Grégoire, (2015), Master Roger addressed the production of allegedly confidential documents under the civil discovery process.
30 In the context of the ongoing civil action, privilege is claimed by the plaintiff under Wigmore. The common-law privilege under Wigmore is available if four fundamental conditions are met (see: Slavutych v. Baker (1975), 1975 CanLII 5 (SCC), [1976] 1 S.C.R. 254 (S.C.C.) at para. 260):
the information or communications must originate in a confidence that they will not be disclosed;
this element of confidentiality must be essential to the full and satisfactory maintenance of the relationship between the parties;
the relation must be one which in the opinion of the community ought to be sedulously fostered;
the injury that would inure to the relationship by the disclosure of the communications must be greater than the benefit thereby gained for the correct disposal of litigation.
31 All four conditions are required.[^29]
[68] In Alpha Technologies Ltd. v. Arkhipov, 2016, referred to above, Master Muir addressed how confidentiality concerns may be addressed, without precluding production.
12 …. Of course, all of the parties are bound by the deemed undertaking rule. In addition, if the plaintiffs are concerned about the public availability of sensitive financial documents a sealing order can be sought at the appropriate time on proper evidence….
15 The court has the inherent jurisdiction, as well as jurisdiction under s. 137(2) of the Courts of Justice Act and Rule 30.11 to grant a protective order restricting production of documents in circumstances where unlimited production would prejudice a party. Such an order may be made by a master of the court.
16 ….the making of a protective order is designed to strike a balance between the disclosure necessary for the conduct of an action and a party's bona fide right to protection of confidential and sensitive information. The courts have held that where the information at issue is such that the disclosure would allow a competitor to improve its competitive position, it is appropriate that a protective order be issued to guard against such effect.[^30] [Citations omitted; emphasis added]
[69] The defendants have provided prima facie evidence that producing some of the records Koolatron has requested would impose a disproportionate cost on them. Koolatron has failed to take steps to create a Discovery Plan that seeks an economic means for the production of such records. The defendants will therefore be ordered to comply with their outstanding undertakings, and to answer those questions it has failed or refused to answer that I have found to be relevant and whose answers the defendants do not say will impose a disproportionate cost on them. The motion for answers to the remaining questions will be dismissed without prejudice to Koolatron’s right to move again, after creating a discovery plan, and without prejudice to a cross-motion by Synergex for a sealing order in respect of confidential records.
c) Should Mr. Reinhart and Mr. Aiello be required to re-attend?
[70] In Trewin v. MacDonald (2007), Zelinski J. adopted the principles governing re-attendance, as set out by Master MacLeod in Senechal v. Muskoka (Municipality).[^31] Justice Zelinski stated:
In Senechal v. Muskoka (Municipality), Master C.U.C. MacLeod enunciated the principles which govern re-attendance as follows:
The question of examining “more than once” is in practice a question of whether the examination was actually completed. Improper refusals are an interruption of the discovery while undertakings are an acknowledgment that the question is a proper one and a promise to obtain and provide the answer. Generally speaking, had the discovery not been interrupted by the refusal or the answer to the undertaking been available, not only would the answer have been given under oath as part of the transcript but the examining party would have been entitled to ask appropriate follow up questions as part of the examination. Arguably then an answer that genuinely gives rise to follow up questions should give rise to a right to complete the oral discovery as if the question has been answered. In S.E. Lyons & Son Ltd. (1978) v. Nawock Holdings Ltd. …Master Sandler held that while it was perfectly sensible for the parties to agree to provide answers to undertakings in writing, if the examining party insisted upon it, the answers should be given under oath and proper follow up questions could be asked. For those purposes, he ordered a re-attendance. S. E. Lyons was upheld on appeal and was also specifically approved by the Divisional Court….
Do these later cases contradict the general principle enunciated in S.E. Lyons & Sons? In my view there is no contradiction and the principles enunciated in these cases may be resolved as follows:
• As a general principle a party giving undertakings or answering refusals may be required to re-attend to complete the discovery by giving the answers under oath and answering appropriate follow up questions. A party being examined may not compel the examining party to accept answers in writing simply by refusing to answer questions or by giving undertakings.
• On the other hand, the court will not automatically make an order for follow up discovery if it serves no useful purpose. Examples in which an order may not be appropriate would be cases in which a full and complete written response has been given to a simple question, in which the answer demonstrates that the question was not relevant or in which the parties have agreed that written answers will suffice.
• The court will generally make such an order if it appears necessary in order to fulfill the purposes of discovery. Examples of situations in which an order would be appropriate are situations in which the answers appear cursory or incomplete, where they give rise to apparently relevant follow up questions that have not been asked, if newly produced documents require explanation, or the discovery transcript supplemented by the answers will not be understandable or useable at trial.
• Even if answers do appear to require follow up, the court has discretion to order answers in writing or to decline to order further examination where it appears the cost or the onerous nature of what is proposed outweighs the possible benefit or where for any other reason it appears unjust to make such an order. Such discretion should be exercised only if the interests of justice require it.
The examples given above are not intended to be exhaustive. The point is that discovery rights are subject to court supervision and are not absolute rights. Discretion should normally be exercised to ensure the purposes of full and fair discovery are served but to prevent abuses of the discovery process. Procedural rules, it has been observed, should be the servants of justice and not its master. This principal is enunciated in Rule 1.04 (1). (Emphasis added)….[^32]
[71] Where Ms. Ruttan has stated, in her chart, “best efforts”, she must state what those efforts were. Where she has given cursory responses, such as “”Unable to ascertain”, or “other obligations to pay”, or “difficult to obtain”, or “not possible”, she must elaborate. Where the defendants are being required to produce documents, Koolatron is entitled to examine on them. For these reasons, an order shall issue requiring Mr. Reinhart and Mr. Aiello to re-attend.
d) Is Koolatron entitled to its costs of the motion?
The absence of a Discovery Plan
[72] Motions arising from non-compliance with undertakings have sometimes resulted in awards of costs on a substantial indemnity scale, especially where orders for compliance have been breached.[^33] Conversely, failure to make timely disclosure has resulted in successful litigants being deprived of their costs.[^34]
[73] The introduction to the Rules of Civil Procedure in 2010 of the shared obligation to develop a Discovery Plan has added a new factor for the court to consider when determining the appropriate costs order in a motion for compliance with undertakings. Where the moving party’s failure to create a Discovery Plan has contributed to the necessity of the motion, it can be deprived of costs that might otherwise have been awarded to it.
[74] The Rules deal with the consequences that can follow from a failure to agree on a Plan. Rule 29.1.05 provides, in that regard:
29.1.05 On any motion under Rules 30 to 35 relating to discovery, the court may refuse to grant any relief or to award any costs if the parties have failed to agree to or update a discovery plan in accordance with this Rule. [Emphasis added.]
[75] In The Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., (2014), Perrell J., in settling a Discovery Plan, stated:
Proportionality recognizes that perfection is the enemy of the good. Naturally enough, a litigant wants to know everything that might possibly be known to prove his or her case and a litigant wants to know everything about their opponent’s case so as to not be taken by surprise and to be ready to disprove the opponent’s case. But what a litigant wants is not necessarily what he or she needs, and the development and settling of a Discovery Plan should be approached by needs not wants.
And what goes for discovery and disclosure needs must be approached having regard to the proportionality principle that means that a litigant - and more precisely his or her advocate - must be re-cultured to accept that the adversary system needs far less in procedure than a perfectionist and sometimes obsessed advocate might wish for.[^35]
[76] In Hollinger Inc. (Re), (2012), C. Campbell J. cited a study by the Rand Institute that revealed that more than 70 cents of every dollar spent producing documents was devoted to reviewing issues of relevance and privilege. Justice Campbell continued:
[89] This study has brought even more focus on the importance of proportionality as an operative concept in civil litigation. The Non-Settling Defendants should have access to the documents they require for their defence, not necessarily every conceivably relevant document.
[105] Two rules in particular are intended to be applied with the flexibility necessary to balance the interests of parties who might otherwise be inclined to resort to what used to be known as a “war of attrition”. Rule 29 and, in particular, rule 29.1.01, require the parties to agree on a discovery plan that is consistent with the Sedona Canada Principles. If the parties do not agree, the court may intervene.[^36]
[Emphasis added.]
[77] In Guest v. Hirst, (2012), Master Short commented on the broad discretion the court exercises in the event of a failure to agree on a Discovery Plan. As the requirement for a Discovery Plan had recently been introduced to the Rules, he awarded costs on a partial indemnity scale, but intimated that the failure to negotiate a Discovery Plan could have costs consequences in the future. Master Short stated:
[20] Subrule 29.01.5 gives a court broad discretion in the event of a failure to agree upon a Plan.…
[72] Both parties could have potentially avoided these issues by focusing on an appropriate discovery plan at an earlier stage. Nevertheless the plaintiff was required to bring and argue this motion and was successful. As the need and uses for discovery plans become better clarified, the profession may encounter costs consequences to failing to agree upon a plan.[^37] [Emphasis added.]
[78] In Lecompte v. Doran, (2010), referred to above, Master MacLeod stated:
[12] The requirement for collaborative discovery planning was introduced into the rules as a result firstly of the Discovery Task Force chaired by the Honourable Mr. Justice Colin Campbell and secondly of the Civil Justice Reform Project chaired by the Honourable Coulter Osborne. Both of these studies concluded that in cases of any complexity discovery planning was an essential step in efficiently moving the dispute towards resolution. Both also recognized that this required a cultural shift and the development of best practices. It could not be achieved simply by a rule amendment.
[13] Osborne had the following to say about discovery planning:
[The requirement for a discovery plan would] ...state that the court may refuse to grant discovery relief or may make appropriate cost awards on a discovery motion where parties have failed to produce a written discovery plan addressing the most expeditious and cost-effective means to complete the discovery process proportionate to the needs of the case, including:
b. The issue of proportionality (i.e., the scope of discoverable documents and the associated costs of searches and production, balanced with the discovery-related needs of the case);
e. Time, cost, and manner of production of documents from the parties and any third parties who may have relevant documents; ….
[79] Koolatron was substantially successful in the motion, and would normally have been entitled to its costs. However, Koolatron’s failure to create a Discovery Plan contributed to the necessity of the motion, and to the dismissal of its request for records whose production the defendants argue would be disproportional, pending the creation of a Discovery Plan setting out an efficient plan for the production of such records, and the cost that their production will entail. For these reasons, there will be no order for costs.
CONCLUSION AND ORDER
[80] For the reasons stated above, it is ordered that:
[81] The defendants shall, by August 31, 2017, answer the following questions:
- From the examination for discovery of Mr. Reinhart:
(a) Questions: 196-198
(b) Questions: 292-293
(c) Question 321
(d) Question 328
(e) Question 361
(f) Question 366
(g) Question 382
(h) Question 386
- From the examination for discovery of Mr. Aiello:
(a) Question 37
(b) Question 57
(c) Question 64
(d) Question 66
(e) Question 72
(f) Question 118
(g) Question 123, except opinions from counsel
(h) Question 126, in relation to current employees who were employed at some time from October 2013 to the commencement of the action
(i) Question 134
(j) Question 136
(k) Question 144
(l) Question 148
(m) Question 214
(n) Question 226
(o) Question 256
Mr. Reinhart and Mr. Aiello shall re-attend for further examination in response to a Notice of Examination to be served on them, to confirm the answers they have given since their examinations and to answer questions arising from their answers.
The balance of the motion is dismissed, without prejudice to Koolatron’s right to bring a further motion, based on further and better evidence, after taking steps to create a Discovery Plan.
The defendants shall co-operate with Koolatron’s efforts to create a Discovery Plan, including providing specific information as to the whereabouts of the information and documents sought by Koolatron and the estimated cost of retrieving it, with detailed information as to how that cost has been calculated.
There shall be no order as to the costs of this motion.
Price J.
Released: July 11, 2017
CITATION: Koolatron v. Synergex, 2017 ONSC 4245
COURT FILE NO.: CV-15-1212-00
DATE: 2017-07-11
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
KOOLATRON CORPORATION
Plaintiffs
- and –
SYNERGEX CORPORATION, SYNERGEX DE MEXICO S.A. de C.V., DAVID AIELLO, DAVID AELLO, TOM DAVIDSON, NEIL FLESHNER, JOHN SMILTH and PHILIP WALTON
Defendants
REASONS FOR ORDER
Price J.
Released: July 11, 2017
[^1]: Rules of Civil Procedure, R.R.O. 1990, Reg. 194 [^2]: Towne v. Miller, 2001 CarswellOnt 3828 O.S.C.J., paras 8 - 9 [^3]: Vitullo Farms Inc. v DiPoce Management Limited, 2015 ONSC 6859, para. 6 [^4]: Battery Plus Inc., Re, 2002 CanLII 49569 (ON SC), at para. 16 to 21. See also: Turbo Logistics Canada Inc. v. HSBC Bank Canada, 2009 CanLII 55292 (ON SC), at para. 19, 21, 24 [^5]: 2287913 Ontario Inc. et al v ERSP International Enterprises Ltd. et al, 2017 ONSC 3499, at para. 28. [^6]: Ramdath v. George Brown College of Applied Arts and Technology, 2012 ONSC 2747, [2012] O.J. No. 2475, at para. 26. [^7]: R. v. Arp, 1998 CanLII 769 (SCC), [1998] 3 S.C.R. 339, at para. 38. [^8]: Rule 29.2.02 states that Rule 29.2 applies to any determination by the court under Rule 31 as to whether a person must answer a question. [^9]: Ontario v. Rothmans Inc., 2011 ONSC 2504, [2011] O.J. No. 1896, at para. 129. [^10]: Cominco Ltd. v. Westinghouse Can. Ltd., 1979 CanLII 489 (BC CA); Allarco Broadcasting Ltd. v. Duke (1981), 1981 CanLII 723 (BC SC). [^11]: Kay v. Posluns, 1989 CanLII 4297 (ON SC), 71 O.R. (2d) 238 (H.C.J.); Air Canada v. McConnell Douglas Corp., 1995 CanLII 7147 (ON SC), 22 O.R. (3d) 140, aff'd (1995), 1995 CanLII 7189 (ON SC), 23 O.R. (3d) 156 (Gen. Div.). [^12]: Graydon v. Graydon (1921), 1921 CanLII 444 (ON SC), 67 D.L.R. 116 (Ont. S.C.) at pp. 118 and 119 per Justice Middleton ("Discovery is intended to be an engine to be prudently used for the extraction of truth, but it must not be made an instrument of torture..."); Kay v. Posluns (1989), 1989 CanLII 4297 (ON SC), 71 O.R. (2d) 238, at p. 246; Ontario (Attorney General) v. Ballard Estate(1995), 1995 CanLII 3509 (ON CA), 26 O.R. (3d) 39, at p. 48 ("The discovery process must also be kept within reasonable bounds."); 671122 Ontario Ltd. v. Canadian Tire Corp., [1996] O.J. No. 2539 (Gen. Div.), at paras. 8-9; Caputo v. Imperial Tobacco Ltd., [2003] O.J. No. 2269 (S.C.J.). The court has the power to restrict an examination for discovery that is onerous or abusive: Andersen v. St. Jude Medical Inc., [2007] O.J. No. 5383 (S.C.). [^13]: Van Horn v. Verrall (1911), 3 O.W.N. 439 (H.C.J.); Rubinoff v. Newton, 1966 CanLII 198 (ON SC), [1967] 1 O.R. 402 (H.C.J.); Kay v. Posluns (1989), 1989 CanLII 4297 (ON SC), 71 O.R. (2d) 238 (H.C.J.). [^14]: Six Nations of the Grand River Indian Band v. Canada (Attorney General) (2000), 2000 CanLII 26988 (ON SCDC), 48 O.R. (3d) 377 (S.C. (Div. Ct.)); Ontario v. Rothmans Inc. 2011 ONSC 2504, at para. 129. [^15]: Hryniak v. Mauldin, 2014 SCC 7 at paras. 1-2, 27. [^16]: Redman v. Hospital for Sick Children, 2010 ONSC 3769, [2010] O.J. No. 2803, at para. 11 (S.C.). [^17]: Battery Plus Inc., Re, 2002 CanLII 49569 (ON SC), at para. 16 to 21. See also: Turbo Logistics Canada Inc. v. HSBC Bank Canada, 2009 CanLII 55292 (ON SC), at para. 19, 21, 24 [^18]: Midland Resources Holding LTD v. Shtiaf, 2010 ONSC 3772, [2010] O.J. No. 2767. [^19]: Seelster v HMTQ and OLG, 2015 ONSC 908, at para. 110. [^20]: Alpha Technologies Ltd. v. Arkhipov, 2016 ONSC 2722, at para. 13. [^21]: Whitty v Wells, 2016 ONSC 2266, at para. 19. [^22]: Warman v. The National Post Company et al., 2010 ONSC 3670, at paras. 65-68. [^23]: Warman, supra, at paras. 84-86. [^24]: Lecompte v. Doran, 2010 ONSC 6290, at paras. 11-14. [^25]: Kaymar Rehabilitation v. Champlain CCAC, 2013 ONSC 1754, at paras. 26-27, 30-38. [^26]: Filanovsky v. Filanovsky, 2009 CanLII 9457 (ON SC), at para. 20. [^27]: Siemens Canada Limited v. Sapient Canada Inc, 2014 ONSC 2314, at para. 62. [^28]: Oakdale Kitchens Inc. v. Williams & Partners, 2011 ONSC 3375, at para. 32, aff’d 2011 ONSC 6417 (Div. Ct.). [^29]: Cacciato v. Grégoire, 2015 ONSC 4751 (Ont. Master), at paras. 30-31 [^30]: Alpha Technologies Ltd. v. Arkhipov, above. [^31]: Senechal v. Muskoka (Municipality), 2005 CanLII 11575 (ON SC). [^32]: Trewin v. MacDonald, 2007 CanLII 10417 (ON SC). [^33]: Son v Khan, 2016 ONSC 7621, at paras. 17-18. [^34]: Kielt v. Gawne, [1993] O.J. No. 2570, (Gen. Div.), at paras. 27, 33; Solomah v. American Express Travel Related Services Co., [1998] O.J. No. 5329 (Ct. J. (Gen Div.)), Bailey v. Leamington (Town), [2001] O.J. No. 386 (S.C.), per Cusinato J., at para. 16; Craig v. Toronto (City), [2008] O.J. No. 1664, per Forestell J., at para. 22. [^35]: The Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2014 ONSC 660, at paras. 88-89 [^36]: Hollinger Inc. (Re), 2012 ONSC 5107, at paras. 89, 105-107. [^37]: Guest v. Hirst, 2012 ONSC 86, at paras. 19-20, 72-73.