SUPERIOR COURT OF JUSTICE - ONTARIO
RE: DCM Erectors Inc. v. The Guarantee Company of North America
MOTION HEARD: May 10, 2018
BEFORE: MASTER R.A. MUIR
COUNSEL: Andrew Punzo for the defendant Douglas G. Loucks for the plaintiff
ENDORSEMENT
1The defendant brings this motion seeking an order for answers to undertakings and questions refused on discovery. The defendant also seeks re-attendance of a witness on behalf of the plaintiff.
2This action involves a claim on a surety bond. The City of Ottawa entered into a contract with Concreate USL (GP) Inc. (“Concreate”) to build a bridge. Concreate entered into a sub-contract with the plaintiff for the structural steel work on the project. The plaintiff has made a claim against the defendant on a labour and material payment bond for allegedly unpaid amounts owing by Concreate to the plaintiff under the subcontract.
3In determining the issues on this motion in relation to relevance, I have applied the test set out in Rules 30.03 and 31.06. I have also considered the proportionality requirements of Rule 29.2.03. I am also mindful of the principles relating to the scope of discovery as summarized in Ontario v. Rothmans Inc., 2011 ONSC 2504 (SCJ) at paragraph 129.
4Many of the issues on this motion were resolved prior to argument. However, a number of refused questions remain in dispute and were the subject of argument.
5The first set of refusals argued relate to what the defendant has described as “foundational” information.
6Three questions seek additional production and particulars in relation to costs incurred by the plaintiff on the project. This claim is based on a stipulated price lump sum contract. This is confirmed by the defendant at paragraph 15 of its statement of defence. This lump sum contract
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is the basis for most of the plaintiff’s claims. The plaintiff’s costs are not relevant to this portion of the plaintiff’s claim. However, part of the statement of claim refers costs incurred by the plaintiff in terms of extras, demobilizing and Concreate’s insolvency. See paragraphs 11, 16 and 18 of the amended statement of claim. To the extent that the “costs” relate to these items, questions 596, 717 and 1907 shall be answered. These questions shall also be answered in respect of any other portion of the claim the plaintiff is making on a time and material basis. The plaintiff’s witness gave evidence that at some point the plaintiff was in fact working on a time and material basis.
7The other two questions in this category relate to a report prepared by Revay and Associates Limited (“Revay”) as part of the plaintiff’s request for compensation. The plaintiff intends to call Revay as a witness at trial. The defendant has requested production of the plaintiff’s complete file with respect to the preparation of the Revay report along with copies of any draft reports pursuant to Rule 31.06(3). In my view, the defendant is entitled to some production in relation to questions 732 and 739. See Andreason v. Thunder Bay (City), 2014 ONSC 314. The plaintiff shall identify for the defendant the documents and information reviewed and considered by Revay in preparing its report. If any of those documents and information have not been produced or provided to date, the plaintiff shall do so in answer to these questions.
8I am not prepared to include in this order the production of communications between Revay and counsel or copies of the Revay draft reports. Those documents only need to be produced in particular circumstances that are not present here. See Moore v. Getahun, 2015 ONCA 55 at paragraphs 74 to 78.
9The next set of refusals argued are described by the defendant as financial information to support the plaintiff’s claim for lost profit/overhead. These questions seek documents and information in relation to how the plaintiff calculates its overhead and profits and the specifics that make up that calculation.
10In my view, these questions are not relevant and need not be answered. The basis of the plaintiff’s claim in this respect is the lump sum contract it entered into with Concreate. That contract price included an amount for overhead agreed to by the parties. The plaintiff has simply extended that agreed to amount over the additional weeks of the project. This is consistent with the decision in Ellis-Don Ltd. v. Parking Authority of Toronto, [1978] OJ No. 2342 (HCJ). The fact that unlike in Ellis-Don, the job in this action was not completed is not important in my view. It does not change the plaintiff’s entitlement. It simply makes the calculation of the period of delay more complex. This is not a case like AlarmForce Industries v. CAA South Central Ontario, [2008] OJ No. 2202 (SCJ – Master) where the plaintiff was seeking damages for lost profits generally as a result of defamation and interference with contractual relations. The plaintiff in this action is not seeking damages for lost opportunity or general loss of profit damages. Questions 1177, 1178, 1475, 1537, 1550, 1551, 1813 and 1816 need not be answered.
11The next series of refusals all relate to whether the plaintiff has paid, or plans to pay, trades and suppliers it retained as part of its scope of work. There are several outstanding
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amounts shown on its payables list dated February 29, 2012. In my view, these questions are not relevant. They do not relate to whether or not the work under the plaintiff’s contract was done or not done, just whether it was paid for. Information about whether or not the payables remain outstanding or whether the plaintiff intends to pay will not assist the court in resolving the issue of what work was done by the plaintiff. As well, I do not see these questions as relevant to the issue of whether or not the plaintiff breached its contract with Concreate. The plaintiff’s accounts payable statement of February 29, 2012 clearly shows unpaid trades and suppliers at the time of Concreate’s insolvency. The plaintiff’s future actions in paying those parties or expressing an intention to pay those parties is not relevant to the issue of whether it breached its contract by not paying its trades and suppliers when the project was ongoing. Questions 602, 605, 606, 855, 856, 1225, 1228 and 1232 need not be answered.
12In my view, the next category of refusals are relevant and shall be answered for the most part. These questions seek general information about why the plaintiff’s representative swore false statutory declarations, whether the plaintiff’s management instructed her to do so or was aware she was doing so. The question of whether the statutory declarations were true or false is relevant to the issue of whether the plaintiff was in breach of its contract with Concreate. The defendant has pleaded that the plaintiff was in breach of its contract by, among other things, failing to pay its trades and suppliers. The statutory declarations are relevant to that matter in issue. The question of why the false declarations were provided may also be relevant. For example if Concreate had instructed the plaintiff to provide false declarations. The extent of the plaintiff’s corporate knowledge of this practice is also relevant to this issue.
13However, I see no relevance to the question about the plaintiff’s understanding of the purpose of the statutory declaration generally. The matter in issue is whether the declarations were true or not and why false declarations may have been provided and not the plaintiff’s understanding of industry practice.
14Questions 1988, 2010, 2017, 2018, 2020, 2021 and 2159 shall be answered. Question 2022 need not be answered.
15The balance of the refusals not referenced in this endorsement were withdrawn.
16The parties have resolved the issues related to undertakings, re-attendance and the person to be examined on behalf of the plaintiff.
17To the extent that I have ordered questions to be answered, the answers shall be provided within 60 days.
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18If the parties are unable to resolve the issue of the costs of this motion, they shall provide the court with brief submissions in writing by June 18, 2018. These submission may be sent directly to me by email.
Master R.A. Muir
DATE: May 10, 2018