Court File and Parties

COURT FILE NO S.: CV-17-582560, CV-18-598782, CV-15-520309, CV-17-583090, CV-15-543109, CV-16-557406 MOTIONS HEARD: 2019-02-25 REASONS RELEASED: 2019-03-06

SUPERIOR COURT OF JUSTICE – ONTARIO

In the Matter of the Construction Act, R.S.O. 1990, c. C.30, as amended

BETWEEN:

WALSH CONSTRUCTION COMPANY CANADA Plaintiff

• and-

TORONTO TRANSIT COMMISSION, YORK UNIVERSITY, UNITED PARCEL SERVICE CANADA LTD., THE REGIONAL MUNICIPALITY OF YORK, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO AS REPRESENTED BY THE MINISTER OF INFRASTRUCTURE, and CITY OF TORONTO Defendants

BEFORE: MASTER M.P. McGRAW

COUNSEL: B. Halfin and G. Smith Email: bhalfin@goodmans.ca -for Walsh Construction Company Canada

E. Morgan, V. Cotric and M. Aboud Email: emorgan@osler.com -for Toronto Transit Commission

M. Marrie Email: megan.marrie@shibleyrighton.com -for IBI Group Architects (Canada) Inc.

D. Boan and D. Major Email: dboan@blg.com

• for WSP Canada Inc.

REASONS RELEASED: March 6, 2019

Reasons For Endorsement

I. Introduction

[1] As set out in my Reasons For Endorsement dated February 22, 2019 (the “February 22 Endorsement”)(Walsh Construction Company Canada v. Toronto Transit Commission, 2019 ONSC 1630), this litigation arises from the construction of the Steeles West (Pioneer Village) Subway Station in Toronto (“SW”). SW is one of 6 stations on the Toronto York Spadina Subway Extension, a $3.184 billion construction project (the “TYSSE”).

[2] The main action is brought by Walsh Construction Company Canada (“WCC”), the general contractor for SW, against the Toronto Transit Commission (“TTC”), the owner of TYSSE. Construction of TYSSE including SW was plagued by significant delays causing the actual substantial performance date to exceed the initial projected date by over 2.5 years.

[3] WCC claims $218,751,335 and TTC counterclaims for $22,381,666.34. Numerous actions have been commenced against WCC by its subcontractors, and in some cases directly against TTC. WCC is advancing all claims by its subcontractors against TTC alleging that TTC is responsible for the delays, due to, among other things, negligent, incomplete, inaccurate and uncoordinated design. WCC alleges that over 3,100 revisions were made to the original 1,690 drawings necessitating 2700 Requests For Information by WCC and its subcontractors which led to the issuance of almost 900 further changes. As a result, TTC commenced a Third Party Claim on January 31, 2018 for contribution and indemnity against, among others, Lea Consulting Ltd. (“Lea”), IBI Group Architects (Canada) Inc. (“IBI”) and WSP Canada Inc. (“WSP”, collectively the “Designers”) which together comprise the joint venture known as The Spadina Group Associates (“TSGA”). TTC previously commenced three separate actions against the Designers in December 2013, December 2015 and December 2017.

[4] The February 22 Endorsement relates to 9 motions to compel answers to approximately 680 refusals heard over 3 days involving WCC, TTC and 4 of WCC’s subcontractors. With the exception of one adjourned motion and other issues arising from the February 22 Endorsement, the motions proceeding today relate to refusals arising from examinations for discovery as between TTC and the Designers.

[5] Initially, there were 5 refusals motions as between the Designers and TTC. Three (3) of these motions have been resolved and withdrawn: TTC’s motions as against WSP and Lea; and Lea’s motion as against TTC. Accordingly, only 2 motions are proceeding: WSP’s motion as against TTC and IBI’s motion as against TTC.

II. The Law and Analysis

Generally

[6] Rule 31.06 of the Rules of Civil Procedure provides that:

(1) 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….

[7] Rule 29.2.03 of the Rules of Civil Procedure sets out the proportionality factors which apply to both oral and documentary discovery:

(1)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.

(2) In addition to the considerations listed in subrule (1), in determining whether to order a party or other person to produce one or more documents, the court shall consider whether such an order would result in an excessive volume of documents required to be produced by the party or other person.

[8] Relevance, the scope of discovery and proportionality are summarized by Perell J. in Ontario v. Rothmans Inc., 2011 ONSC 2504 and Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2013 ONSC 917. Discovery questions must be relevant to the issues as defined by the pleadings such that they must have probative value and adequately contribute to the determination of the truth or falsity of a material fact. Overbroad and speculative discovery and “fishing expeditions” are not permitted (Rothmans at paras. 129 and 154-157).

[9] I have also applied Rule 1.04(1) of the Rules of Civil Procedure which provides that the Rules of Civil Procedure shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. Further, Rule 1.04(1.1) of the Rules of Civil Procedure requires the court to make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved in the proceeding.

WSP Motion Re: TTC

[10] There are 4 refusals on WSP’s motion as against TTC. WSP is an engineering firm and part of TSGA.

[11] Refusals #1 and #2 – As set out in the February 22 Endorsement, WCC asserted claims (the “Contract Claims”) under the process provided for in its contract with TTC (the “Contract”). On August 14, 2014, WCC submitted its “Claim for Adjustment of Contract Price and Extension of Time (the “Red Book”). On September 19, 2017, four days after commencing its action against TTC, WCC delivered an updated claim entitled “Claim #2 For Adjustment of Contract Price and Extension of Time” for all claims up to and including December 31, 2016 (the “Blue Book”, collectively with the Red Book, the “Books”). WCC and TTC dispute whether TTC has complied with its obligations to respond to the Contract Claims. WCC submits that because TTC has not responded to the Books it has not received documents relevant to the Contract Claims.

[12] TTC claims litigation privilege over all documents with respect to its review of the Books. TTC asserts privilege on the basis that WCC brought a crossclaim against TTC in an action commenced against TTC by Interborough Electric Incorporated (“IEI”), one of WCC’s electrical subcontractors, before WCC delivered the Red Book. Therefore, TTC submits that all documentation with respect to the Books was generated when there was a reasonable prospect of litigation and for the dominant purpose of litigation and is therefore protected by litigation privilege. WCC concedes that since the Blue Book was delivered after WCC commenced its action against TTC, documents with respect to TTC’s review of the Blue Book are subject to litigation privilege.

[13] As set out in the February 22 Endorsement, given the timing of the Contract Claims and overlapping multiple actions, I was unable to determine when litigation was reasonably contemplated and whether the relevant documents were created for the dominant purpose of litigation on the record before me. Therefore, I ordered TTC to, within 60 days, review all documents which are relevant to the refusals at issue regarding its litigation privilege claims and produce a Supplementary Affidavit of Documents setting out the relevant documents at Schedules “A”, “B” and “C”, as applicable in accordance with the Rules. WCC will review the Supplementary Affidavit of Documents and the parties shall have further discussions with respect to what documents may be produced by agreement and what documents are in dispute and the parties may then seek further directions from the Court.

[14] WSP requests whether TTC has a report or review with respect to the Red Book (Refusal #1) and if TTC ever provided a report, review or response to WCC with respect to the Red Book (Refusal #2). The parties have agreed to adjourn these refusals pending the resolution and/or disposition of the refusals from WCC’s motion which relate to TTC’s claims of litigation privilege.

[15] Refusal #3 – TTC refuses to produce evidence outside of its expert report to support its allegations of delay by TSGA as set out at paragraph 28(g) of its Third Party Claim. Further, TTC submits that its delay analysis is subject to expert evidence, that it will comply with the Rules regarding expert reports and that it relies on all parties’ productions and the totality of the evidence from discovery.

[16] I agree with WSP that TTC is obligated to provide more than a simple deferral to its expert report. In doing so, I adopt the reasoning of Master Pope in Delta Investments Corp. v. HSBC Securities (Canada) Inc., 2015 ONSC 3938 at para. 43. Further, TTC’s position that it relies upon the totality of productions and discovery evidence is impossibly vague, particularly given the significant number of productions in these proceedings.

[17] The main issues are timing and identification. TTC states that to date, it has produced all evidence in support of its allegations of delay which it currently has in its possession or control. However, given the significant productions ordered in the February 22 Endorsement from both TTC and WCC, additional relevant documentation of the kind sought by WSP may be produced. In circumstances where it is not apparent that there are further relevant documents to produce at a particular point in an action, the proper procedure is not to order further productions but to re-attend on discovery to ask further questions including those regarding the existence and availability of additional documents (BDD Solutions Inc. et al v. Huynh et al, 2017 ONSC 2869 at para. 36; Arenza Global Technologies Corp v. Cue Network Ltd., [2000] O.J. No. 1524 (S.C.J.)).

[18] In my view, a reasonable, appropriate and proportionate resolution to this refusal is for WSP to review TTC’s productions to date, and those produced in response to the February 22 Endorsement and to ask any additional questions arising either in writing or upon re-attendance on discovery. To the extent to which WSP requires TTC to specifically identify which documents it relies on in support of its delay claims, WSP shall so advise TTC and TTC shall do so within 60 days of receipt of any such request. Consistent with the February 22 Endorsement and its ongoing discovery obligations, TTC shall produce all documents a minimum 180 days before trial, subject to further Order of the Court including any timetables or other orders and directions of Justice Koehnen who is case managing these proceedings.

[19] Refusal #4 – TTC refuses to advise why it did not replace WCC as general contractor and one of WCC’s electrical subcontractors. I reject TTC’s assertion that this question is not relevant.

[20] The possible replacement of WCC and an electrical subcontractor is referenced in the minutes from a meeting between representatives of TTC and TSGA on March 11, 2014. Further, TTC’s deponent admitted on examination for discovery that TTC was considering replacing WCC and an electrical subcontractor in March 2014.

[21] TTC alleges that WCC and its subcontractors were responsible for the delays and seeks contribution and indemnity for WCC’s claims from the Designers. Any reasons why TTC did not replace WCC and chose to allow WCC to complete the Contract and SW are probative of, among other things, what TTC did or did not do which may have mitigated its damages or what steps it may have otherwise taken to reduce the delay and address its concerns with WCC and its subcontractors. TTC shall answer this question within 30 days.

IBI Motion Re: TTC

[22] There are 2 questions at issue on IBI’s motion as against TTC. IBI is an architectural firm and part of TSGA.

[23] Refusal #1 – TTC refuses to advise whether the bolt specifications referred to in Item 197 of TTC’s Scott Schedule overrode any detail which directed the use of self-tapping screws. Specifically, IBI seeks confirmation as to which document took precedent, the specifications or the details. TTC refuses on the basis that this question calls for its deponent to provide a legal interpretation.

[24] I reject TTC’s submissions. It is well settled law that where a party’s legal position is relevant to issues in the action, the party is obligated to provide its legal position (Six Nations of the Grand River Band v. Canada (Attorney General), 2000 CarswellOnt 1342 (Div. Ct.) at paras 9-14; Rothmans at para. 129). TTC shall provide its legal position with respect to this question within 30 days.

[25] Refusal #2 – IBI seeks the amount and breakdown of indirect costs which TTC is claiming from TSGA. TTC advises that it is claiming for all indirect costs set out in the Books with respect to design errors and omissions. TTC has agreed to make best efforts to provide the amount and breakdown of indirect costs which it is seeking with respect to design errors and omissions from TSGA and it shall do so within 60 days.

February 22 Endorsement: IEI Motion Re: TTC

[26] As set out in the February 22 Endorsement, the motion by IEI as against TTC with respect to approximately 149 refusals was adjourned to today’s attendance. As IEI and TTC continue to review the February 22 Endorsement with a view to resolving and/or narrowing as many issues as possible, this motion is further adjourned on consent to March 22, 2019. As set out in my Case Conference Endorsement dated February 14, 2019, this is the same date on which IEI’s refusals motion as against Travelers Canada is scheduled to proceed before me.

February 22 Endorsement: The Bechtel Report

[27] As set out in the February 22 Endorsement, Bechtel Canada Co. (“Bechtel”) was retained by TTC to conduct an assessment of the TYSSE. On February 5, 2015, Bechtel delivered the Spadina Subway Extension Project Assessment Report (the “Bechtel Report”) and in April 2015, TTC engaged Bechtel as an independent third party project manager.

[28] WCC seeks an unredacted copy of the Bechtel Report (Refusal #121) which affects 13 other refusals. In the February 22 Endorsement, I ordered TTC to advise within 30 days if it would produce an unredacted version and if so, produce one and/or produce a version with less redactions. The balance of the refusals were adjourned until it is determined if these questions are answered by the production of any version of the Bechtel Report or discussions between the parties.

[29] TTC has now produced another version of the Bechtel Report with less redactions. WCC is not satisfied with the new, less redacted version of the Bechtel Report and maintains its request for an unredacted version. The parties wish to seek further directions of this Court regarding the production of the Bechtel Report which shall proceed before me on May 3, 2019 for 2 hours. The parties also wish to file additional materials and have advised that they will do so on a timetable to be agreed between counsel.

III. Order and Costs

[30] Counsel may submit a form of Order for my review and approval through the Masters Administration Office.

[31] To the extent to which the parties cannot agree on the terms of an Order or require clarification, a telephone case conference may be scheduled. If the parties cannot agree on the costs of these motions, a timetable for written costs submissions can be spoken to on a future attendance or telephone case conference.

[32] Counsel may contact the Masters Administration Office to schedule a telephone case conference in advance of the attendances on March 22 and May 3 to speak to any outstanding issues. Alternatively, any issues can be spoken to on these attendances.

Released: March 6, 2019

Master M.P. McGraw