Court File and Parties

Court File No.: CV-15-536748-A1 Date: 2018-10-09 Superior Court of Justice - Ontario

Re: Carillion Construction Inc., Plaintiff – AND – City of Toronto, Defendant – AND – Metrolinx, Third Party

Counsel: Kevin O’Brien and Roger Gillott, for the City of Toronto Gregory Hersen, for Metrolinx

Before: E.M. Morgan J.

Heard: October 1, 2018

THIRD PARTY CLAIM – MOTION FOR PARTICULARS

[1] This Third Party Claim forms part of the complex massive civil litigation spawned by the large scale construction and renewal project ongoing at Union Station in Toronto. The City of Toronto, which owns much of Union Station, has been sued by the general contractor for the project, who has in turn been sued by numerous subcontractors and sub-subcontractors. The main action is by any measure large and complicated – the claim is for $159,000,000.00, the Statement of Claim runs on for some 414 paragraphs, and the City’s Statement of Defence and Counterclaim is 710 paragraphs long.

[2] The City has brought a third party claim against Metrolinx, which owns the other portion of Union Station, and which likewise has been engaged in a construction project of its own. From a reader’s point of view, the City’s claim against Metrolinx is mercifully short – a mere 23 paragraphs in length. Having said that, the City’s pleading goes on to adopt and incorporate its own voluminous pleading in the main action.

[3] Metrolinx, however, wants more – or, to be fair, more specificity. It is Metrolinx’ position that additional particulars of the claim against it are necessary before it can plead in its defence.

[4] The Statement of Claim in the main action was originally issued on September 18, 2015, and was amended a year later, on September 25, 2016. On June 15, 2017, the City issued its Statement of Defence and Counterclaim, and on October 17, 2017, just over a year after being sued in the main action, the City issued a Third Party Claim against Metrolinx. That pleading was a rather bald one, and appears to have been more of a placeholder than a final version of the claim.

[5] Counsel for the City has in effect conceded that its original pleading against Metrolinx was in need of particularization. On June 8, 2018, the City issued an Amended Third Party Claim which contains numerous factual allegations that were missing from the original pleading.

[6] Metrolinx remains unsatisfied with the level of detail contained in the Amended Third Party Claim. On July 13, 2018, Metrolinx served the City with a Demand for Particulars seeking further details of the City’s claim against it. Many of the requests in the Demand for Particulars emphasize Metrolinx’ desire for information relating to the itemization and quantification of the City’s claim for damages.

[7] On July 20, 2018, the City responded to the Demand for Particulars. In that response, the City provided additional information which Metrolinx acknowledged answered a few of its concerns. The balance of the City’s response indicated that the subject of Metrolinx’ demand was not proper at the pleadings stage, and that the answers would be forthcoming once the City had completed its expert report on damages in the main action.

[8] The dates of the various pleadings illustrate that Metrolinx is a relative late entry into this multi-party litigation. Pleadings are now closed as between the many parties to the main action and the many related actions, and I have set a schedule for those proceedings in my capacity as case management judge for the various actions. Most importantly, the parties have been working toward completion of what have been termed ‘executive discoveries’ and expert reports, all with a view to conducting an omnibus mediation of the disputes in March-April of this coming year.

[9] With the exception of Metrolinx, all of the parties to all of the related Union Station actions have indicated that they will be participating one way or another in the upcoming mediation. In my case conference endorsement of July 23, 2018, I indicated that Metrolinx can wait until the outcome of this motion but that sometime thereafter is to advise the City as to whether it will be in a position to participate in the mediation.

[10] That schedule has put some time pressure on the City and Metrolinx to at least finalize the pleadings. Metrolinx argues that it deserves to know the precise parameters of the Amended Third Party Claim so that it can assess the real extent of its exposure before making a decision as to whether to participate in the mediation session. The City states that Metrolinx knows the nature of the claim against it and the order of magnitude of that claim, and can now plead in its own defence. Counsel for the City argues that any further information that Metrolinx needs to assess its exposure will be forthcoming when the parties to the main action produce their expert reports in a number of months. Those reports are expected to flesh out the thousands of detailed work orders and change orders of which the various claims, counterclaims, and this Amended Third Party Claim are comprised.

[11] Under Rule 25.06(1) of the Rules of Civil Procedure, pleadings must contain “a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved.” It is elementary that a motion for particulars will only be successful where the information sought by the moving party is necessary for it to plead. Moreover, an Order for particulars is discretionary and will depend on the court being satisfied that it is just in the circumstances: Watson v. TrojanOne Ltd., 2016 ONSC 2740, paras 13-16.

[12] The motion court’s discretion is an important factor, especially in the context of case managed mega-litigation like this. Ontario’s Rules of Civil Procedure, like most modern procedural regimes, present themselves as trans-substantive. Unlike pre-19th century pleadings, where the forms of action dictated the applicable procedural and pleadings rules, the procedural regime is the same regardless of the substantive cause of action pleaded: Judicature Act, 1873, 36 & 37 Vict, c66, and 1875, 38 & 39 Vict, c77 (UK); Ontario Judicature Act, SO 1881, Chap. 5; see Geoffrey Hazard, “Discovery Vices and Trans-Substantive Virtues in the Federal Rules of Civil Procedure”, 137 U. Pa. L. Rev. 2237 (1989).

[13] That said, a judge hearing a motion for particulars, and especially a judge mandated to case manage the action through all of its pre-trial stages, has wide latitude to fashion procedures that are suitable to the parties and the action in question: Rule 77.04 of the Rules of Civil Procedure. This latitude includes the power to override any otherwise applicable Rule: see Rule 77.02(4) of the Rules of Civil Procedure. Thus, where an order to provide details of invoices work orders, etc. might be appropriate at the pleadings stage for a small home renovation with a half dozen documents in issue, a massive action with thousands of invoices and work orders will have to be managed somewhat differently or the action will never be able to proceed.

[14] Virtually all studies of the so-called mega litigation phenomenon in the common law world have recognized the need to deviate from uniform rules in fashioning case-specific solutions to large and complex cases: see Anna Olijnyk, Justice and Efficiency in Mega Litigation (University of Adelaide, Australia, 2014). As one U.S.-based scholar has put it, “we intuitively understand that the car accident at the corner and the massive securities case do not require the same procedures”: Jay Tidmarsh, Unattainable Justice: The Form of Complex Litigation and the Limits of Judicial Power”, 60 Geo. Wash. L. Rev. 1683, 1687 (1991-1992).

[15] As indicated above, the heart of the controversy over particulars here has to do with the thousands of work orders, invoices, and change orders that have to be analyzed in order to accurately itemize and calculate the financial scope of the City’s claim against Metrolinx. That laborious process is being done in preparation of the City’s expert report, which forms part of the discovery evidence in both the main action and the claim against Metrolinx. Under the terms of the schedule set out in my case conference endorsement of June 25, 2018, the City’s expert report is due to be produced by December 31, 2018.

[16] In the meantime, in its Amended Third Party Claim the City has set out in descriptive terms the various problems with the work engaged in by Metrolinx, including the removal of the roof over the train shed and the causing of water ingress into the City’s part of Union Station. In its pleading, the City has also indicated the order of magnitude of the damage alleged to have been thereby caused, although it has not particularized the damages beyond that.

[17] Metrolinx is not satisfied with the statements and allegations contained in the Amended Third Party Claim and the embellishment on those statements and allegations contained in the answer to the Demand for Particulars. It takes the view that it needs to be able to more accurately quantify its potential liability at this stage. It would appear, however, that what Metrolinx seeks is not more particulars, but more evidence. Each invoice, work order, and change order will be provided in the discovery process, and an overall analysis will be forthcoming in the form of an expert report. That level of precise evidence, however, is not required at the pleading stage.

[18] Master Short made precisely this point rather well in Sears Canada Inc. v. Pi Media Ltd., 2011 ONSC 2625, paras 49-51, which are worth setting out in full:

[49] Pleadings should not be confused with discovery, and the sufficiency of a pleading must be read in light of the discovery process in an action proceeding under the Rules. In my view, even with time limited discoveries, a Demand for Particulars should not be used as a “pre-pleading” discovery.

[50] One of the defendants’ demands was for particulars of the losses including damage to goodwill that Sears sustained as alleged in paragraph 19 of the Statement of Claim. In the Response to Demand for Particulars, Sears indicated that quantification of the loss will be provided prior to trial but that the damage to goodwill includes errors which diminish customer trust and the credibility of Sears. It also indicated that poor advertising damaged the Sears brand thereby also diminishing goodwill.

[51] Is this sufficient at this stage? Telus Communications Co. v. Kennedy, 2010 ONSC 2135, [2010] O.J. No. 3004, is authority for the proposition that ‘the moving defendants do not need to know the exact dollar extent of the detriment in order to plead to the statement of claim.’

[19] Given the magnitude of the case, and the agreed upon timetable in which expert reports will be produced within several months, Metrolinx’ desire for particulars of the damages is in effect a demand for pre-pleading discovery. The City has pleaded approximate amounts where they are known, and is waiting for its expert to report before advising of any further damages amounts. An outline of the damages claim suffices at the pleadings stage, whereas “ [t]he further specifics the defendant is seeking are evidence and properly a matter for discovery”: Duron Ontario Ltd. v. Cladit Siding Solutions Inc., 2018 ONSC 3897, at para 14.

[20] In addition, a number of the City’s claims are in the nature of indemnity claims, such that the amount it seeks from the Third Party has not yet been quantified. Under the circumstances, it is neither possible nor appropriate to order particulars of the damages sought: Lee v. Lee, 2017 ONSC 2690, at paras 13, 20.

[21] Likewise, allegations of delay and claims for loss due to delay need not be broken down in numbers. The City has pleaded an itemized list of examples that may have caused the alleged delay, and this kind of itemization is sufficient for the purposes of pleading: Duron Ontario Ltd., supra, at para 16.

[22] Metrolinx contends that it needs specific itemization of each incident of damage claimed by City so that it can assess, among other things, whether it has a potential limitations defence to any specific claim. While I understand Metrolinx’ desire to assert all defences that it may have, the fact that it may have a limitation defence with respect to some of the City’s claims is not itself a reason to order particulars where they are otherwise not warranted. If Metrolinx wishes to plead a limitations defence it can do so in a way that responds to the current state of the pleadings. Generally, limitations defences are considered much further down the road, often at trial. The Ontario Court of Appeal has stated as much in Boutin v. Co-Operators Life Insurance, 1999] OJ No 64, para 22:

…the application of the limitation period in this case depends upon findings of fact for its resolution… whether the respondent is entitled to rely on the limitation period in the policy has a significant factual component and is thus a matter which should be addressed at trial, not on a Rule 21.01(1)(a) motion.

[23] With those legal parameters in mind, Metrolinx’ Demand for Particulars is satisfied as follows:

• Para 1 is answered. The City has provided particulars of the Metrolinx contracts on which the contribution and indemnity claims are based.
• Paras 2,3,4,5,7,9,10,12,14, and 15 all relate to the quantification of damages claimed by the City. Some are contribution and indemnity claims that must await a determination of any liability that the City has in the main action, while others are a matter of compilation and analysis that will be done in the City’s expert report. They are all unnecessary to enable Metrolinx to adequately plead in its defence to the Amended Third Party Claim.
• Para 6 is answered. The City has provided particulars of the paragraphs in its Statement of Defence and Counterclaim on which it relies in the Amended Third Party Claim.
• Para 8 is answered. To the best of its knowledge, the City has provided particulars of the dates when the water ingress onto its property began to occur.
• Para 11 is answered. The City has provided the causes of action against Metrolinx, and para 18 of the Amended Third Party Claim sets out the facts that are pleaded in support of the various causes of action.
• Para 13 is answered. Metrolinx is aware of the work done both in the Train Shed Renewal work and in the Vertical Access work. Paras 13-18 of the Amended Third Party Claim provides details of what the City alleges was wrong with the work done in respect of both aspects of Metrolinx’ project.

[24] As a final matter, I note that Metrolinx complains that the City’s pleading contains an element of vagueness and open-endedness in that on a number of occasions it uses the phrase “without limiting the generality of the foregoing”. Metrolinx’ counsel submits that this provides the City with an opportunity to expand its claim at will.

[25] The City responds that this phrase is included as a matter of “defensive pleading”, and is included in order not to foreclose claiming compensation for damage that might not yet have been discovered. As counsel for the City explains it, the Union Station construction project is ongoing, and the discovery of damage and the need for repairs is likewise an ongoing process. It is the City’s allegation that damage due to water ingress is naturally difficult to find, and water continues to trickle into parts of the building.

[26] In my view, the defensive language employed by the City does not prevent Metrolinx from pleading at this stage. While the City’s pleading in this respect seems intentionally vague, the “without limiting…” phrase does not on its own establish any additional claim. If new damage not pleaded and not covered in the City’s forthcoming expert report is discovered down the road, the City will have to amend its pleading and Metrolinx will have a corresponding opportunity to amend its defence. If Metrolinx has a specific defence at that time, including a limitations defence, it will be in a position to raise it in response to the City’s amendment.

[27] Metrolinx’ motion is dismissed.

[28] Both parties have submitted Costs Outlines. Metrolinx has incurred costs considerably in excess of the City. That is understandable given that counsel for Metrolinx had to carefully review the City’s pleading, including the voluminous pleadings in the main action, in order to formulate its objections to the Amended Third Party Claim. The City, on the other hand, had its own pleading at issue and was already intimately familiar with its drafting and its content.

[29] Counsel for the City requests costs on a partial indemnity scale in the all-inclusive amount of $7,281.60. That is less than one-third the $28,185.78 that counsel for Metrolinx would seek. The City’s request, therefore, should not take Metrolinx by surprise or be beyond “the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed”: Rule 57.01(1) (0.b) of the Rules of Civil Procedure.

[30] Metrolinx shall pay the City costs of this motion in the total amount of $7,281.60, inclusive of all fees, disbursements, and HST.

Morgan J. Date: October 9, 2018