COURT FILE NO.: CV-16-543855
DATE: 2019 08 16
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: YORK REGION CONDOMINIUM CORPORATION NO. 890 and PACIFIC MALL DEVELOPMENTS INC., Plaintiffs
- and -
MARKET VILLAGE MARKHAM INC., THE REMINGTON GROUP INC., KENNEDY CORNERS REALTY INC. and KENNEDY-STEELES HOLDINGS LIMITED, Defendants
BEFORE: Master Todd Robinson
COUNSEL: K. Prehogan and L. Boritz, for the moving defendants, Market Village Markham Inc. and The Remington Group Inc.
J. Lancaster and H. Skinner, for the plaintiffs
HEARD: May 30 and June 13, 2019
REASONS FOR DECISION
[1] The defendants, Market Village Markham Inc. and The Remington Group Inc. (together, “Market Village”), move for orders that the plaintiffs, York Region Condominium Corporation No. 890 (“YRCC 890”) and Pacific Mall Developments Inc. (together with YRCC 890, “Pacific Mall”), improperly refused questions, that answers given by Pacific Mall pursuant to Rule 34.12(2) of the Rules of Civil Procedure, RRO 1990, Reg 194 be admissible at trial, and that Pacific Mall’s representative re-attend examination for discovery to answer the refused questions and proper questions arising from his answers to undertakings. The motion is opposed by Pacific Mall. The remaining defendants, Kennedy Corners Realty Inc. and Kennedy-Steeles Holdings Limited, take no position.
[2] A separate motion was brought concurrently by Pacific Mall on undertakings and refusals, which was also before me on May 30, 2019. That motion was resolved by the parties prior to the hearing. Argument proceeded only in respect of Market Village’s motion.
[3] For the reasons that follow, I have determined that most refusals were proper. In the case of the refused questions already answered under Rule 34.12(2), the questions need not have been answered. In the case of the refused questions for which the refusal has been maintained with no answer, those questions need not be answered. Some refusals, however, were improper and Market Village is entitled to rely on the answers given under Rule 34.12(2) for discovery purposes and ask proper follow-up questions arising from them.
BACKGROUND
[4] YRCC 890 and Market Village Markham Inc. are the owners of adjacent parcels in a triangular piece of land at Steeles Avenue and Kennedy Road in Markham, each operating retail condominium centres. YRCC 890 is a condominium corporation, with the lands actually owned by various unit owners. The legal and beneficial ownership of the subject lands is not particularly clear from the motion materials, but is not material to the disposition of this motion. For the purposes of this motion, it is sufficient to note that YRCC 890 operates the Pacific Mall Centre and Market Village Markham Inc. operates the Market Village Centre. The overall site is subject to various agreements and reciprocal easements between the parties to the action. Pacific Mall Developments Inc. is the prior owner of the lands now owned by YRCC 890, and is pleaded to have an interest in YRCC 890 as well as being the owner of lands adjacent to YRCC 890’s lands. The role of The Remington Group Inc. in the overall litigation is not clear from the materials filed, but it is also not material to disposition of this motion.
[5] The dispute between the parties relates to the redevelopment by Market Village of the Market Village Centre. Market Village terminated all tenancies and demolished the existing structure in preparation for construction of a multi-storey retail condominium development to be known as “The Remington Centre”0. In 2016, Pacific Mall commenced this action seeking a permanent injunction preventing Market Village from continuing development of the Remington Centre on the basis that it will substantially interfere with Pacific Mall’s easement rights over those lands.
[6] A related action in Court File No. CV-19-616660 was commenced by YRCC 890 against the same defendants pursuant to Section 23(1) of the Condominium Act, 1998, SO 1998, c.19. In that action, YRCC 890 seeks substantially the same relief as is sought in this action. The two actions are being heard together.
[7] On March 11 and 13, 2019, Eli Swirsky was examined for discovery as the representative of both plaintiffs. At that time, trial of the two related proceedings was scheduled to commence on May 13, 2019, so the parties reached an agreement to answer any refusals pursuant to a Rule 34.12(2). Pacific Mall has maintained that the questions answered under Rule 34.12(2) are irrelevant and that the answers and documents provided should not be admissible at trial.
[8] On May 3, 2019, given issues raised and the positions of the parties, Justice Firestone adjourned the trial to January 2020 and set a timetable for remaining steps. An expedited long motion hearing was arranged between Justice Firestone and the Administrative Master for the parties to address disputes on refusals and undertakings, which are the two motions that came before me.
PRELIMINARY ISSUE
[9] At the outset of the motion hearing, and prior to Market Village commencing submissions on this motion, Pacific Mall’s counsel asked to make submissions on appropriate exercise of my discretion to make rulings on the use at trial of answers given pursuant to Rule 34.12(2). There was some debate over whether Pacific Mall was effectively arguing a motion to quash Market Village’s motion in the absence of having served any materials to that effect. However, in my view, the substance of Pacific Mall’s request was rooted in perceived efficiencies. Pacific Mall sought leave to address at the outset of the hearing one of its responding legal arguments on why I should decline to make any ruling on use of the Rule 34.12(2) answers and instead defer such rulings to the trial judge. If Pacific Mall’s argument was accepted, the long motion would then be narrowed to only a few refusals.
[10] Although breaking from the traditional motion format of moving submissions, responding submissions, and reply submissions, I agreed to permit Pacific Mall to bring forward its responding submissions in preliminary argument regarding why, on a general basis, I should decline to make any ruling on the Rule 34012(2) answers. Market Village was then afforded an opportunity to respond. After hearing the submissions, I advised counsel that, for reasons to follow, I was not prepared to decide all Rule 34.12(2) answers on a global basis, but that I would entertain the argument on an item-by-item basis as we moved through the refusals. My reasons for that determination follow.
[11] Pacific Mall relied on the decision of Justice Myers in 2287913 Ontario Inc. v. ERSP International Enterprises Ltd., 2017 ONSC 7185, for the proposition that rulings on the relevance, admissibility and use of Rule 34.12(2) answers should be made by a trial judge and not by another judicial official. Market Village put forward the decision of Master Jolley in Industrial Alliance Securities Inc. v. Kunicyn, 2017 ONSC 7711, in which Master Jolley acknowledged Justice Myers’ decision, but nevertheless went on, at paragraph 10, to state as follows:
This court is routinely asked on motions that are heard well in advance of a hearing to make findings on the relevance of questions asked on examination for discovery and I find that there is nothing inappropriate about proceeding to obtain a ruling on the question from a judicial officer who will not hear the ultimate hearing. In fact, the master or judge on the substantive motion or the judge at trial may have expected those refusals to have been dealt with by motion in advance rather than clog trial time.
[12] Pacific Mall pointed to Master Jolley’s acknowledgement at paragraph 11 of her reasons that different considerations apply where a matter is case managed and the parties are ordered or agree to answer refused questions under Rule 34.12(2). Pacific Mall submitted that Justice Firestone has now become a de facto case management judge for this action. Pacific Mall also submitted that the parties’ agreement to answer the refused questions pursuant to Rule 34.12(2) was made because of proximity to the then-scheduled trial dates in May 2019 and in the context of letting the trial judge deal with them. Pacific Mall argued that leaving these determinations to the trial judge is the appropriate way to proceed.
[13] The difficulty I had with Pacific Mall’s position is that there is no evidence of any clear agreement by the parties to leave determinations on use of Rule 34.12(2) answers to the trial judge. No order regarding Rule 34.12(2) answers has been made by any master or judge in this proceeding, including by Justice Firestone. It also does not appear that the 20-day trial scheduled by Justice Firestone to commence in January 2020 was scheduled with time allotted for rulings on admissibility and use of the Rule 34.12(2) answers. Leaving these determinations to trial could result in adjournment for further examination or production. If I had accepted Pacific Mall’s position, the purpose of Justice Firestone scheduling this long motion hearing also becomes unclear.
[14] Had there been no Rule 34.12(2) answers, then Market Village would have been entitled to move on the refusals and obtain a ruling on relevance in advance of trial. It seems inconsistent to permit Market Village to move for rulings of relevance on refusals for which no Rule 34.12(2) answer has been given, but deny it the same rulings where an answer under Rule 34.12(2) has been given. That inconsistency is a concern acknowledged by Master Jolley in Industrial Alliance Securities Inc., supra, at paras. 12-14.
[15] In my view, whether or not determinations on the relevance of refused questions and use of the Rule 34.12(2) answers is appropriately deferred to the trial judge depends on the nature of the questions asked and relevance in the overall litigation. I accordingly did not find it appropriate to make a general ruling that only the trial judge should rule on relevance and use of Pacific Mall’s answers pursuant to Rule 34.12(2). In making that determination, though, I did not foreclose Pacific Mall’s argument on any particular Rule 34.12(2) answers. As noted above, I invited Pacific Mall’s counsel to identify specific refusals during responding submissions where the arguments should be re-considered on an item-by-item basis.
ANALYSIS
[16] Refusals were conveniently organized, and I am appreciative of counsel working cooperatively in their presentation of argument. Argued refusals were divided into six issues in Market Village’s materials. However, in my view, they are somewhat more cleanly divided into two broad categories, with the first category being then subdivided into five sub-issues, as follows:
(a) Refusals maintained by Pacific Mall, but for which answers were provided under Rule 34.12(2), divided as follows:
(i) Questions relating to the development applications submitted by Pacific Mall and Market Village in or around 2010 and the vote of YRCC 890’s unit owners regarding those development plans;
(ii) Questions relating to Pacific Mall’s refusal to accept various features proposed by Market Village to facilitate integration of the two malls;
(iii) Questions relating to the form of redevelopment that Pacific Mall would support, including acceptable parking arrangements;
(iv) Questions relating to negotiations between the parties over which Pacific Mall claims settlement privilege; and
(v) Questions relating to Pacific Mall’s intentions since 2010 to redevelop the Pacific Mall Centre lands; and
(b) Refusals regarding financial information maintained by Pacific Mall on the basis of relevance.
[17] I have considered and dealt with the refusals in the groupings outlined above, which is generally consistent with how counsel argued the motion. Certain refusals where answers were given by Pacific Mall under Rule 34.12(2) fall into more than one sub-issue, but the five sub-issue categories are, broadly speaking, an accurate separation of the questions refused and thereafter answered.
[18] In determining the propriety of the questions taken under advisement and refused, I have applied both the relevance test stated at Rule 31.06 and the principles of proportionality set out at Rule 29.2.03. I have further considered the scope of discovery as summarized by Justice Perell in Ontario v. Rothmans Inc., 2011 ONSC 2504 at para. 129.
[19] I have also distinguished between making rulings on the relevance of refused questions and rulings on admissibility of the answers at trial. In Market Village’s notice of motion, they seek the latter. I decline to do more than rule on the relevance of the questions asked and whether they ought to be answered. Having further considered the decisions in 2287913 Ontario Inc., supra, and Industrial Alliance Securities Inc., supra, in the specific context of this action, I have determined that the trial judge is in the best position to determine what evidence is or is not admissible at trial. It is, however, appropriate for me to make rulings on relevance of the questions asked for the purpose of discoveries, which will permit follow up questions to be asked and relevant issues to be properly explored prior to trial. Relevance for discovery and admissibility of evidence at trial are separate matters. Whether or not relevant evidence is admissible, and for what purpose, is best left for the trial judge.
Refusals – Rule 34.12(2) Answers
Issue 1 - Questions relating to the development applications
[20] This group of questions (Q78-79, Q81-82 and Q921) deal with Pacific Mall’s internal discussions with unit owners and decisions made regarding a joint proposed redevelopment plan submitted to the City of Markham in 2010. It appears to be undisputed that Pacific Mall’s management supported at least the concept of the redevelopment (see, for example, Q928-929 in the transcript of the examination of Eli Swirsky on March 11, 2019), but that YRCC 890’s unit owners ultimately voted against the proposal. Market Village seeks to explore the internal communications with unit owners about the proposal, including obtaining copies of meeting minutes and other documents relating to the vote.
[21] Pacific Mall maintains the refusals and identifies these Rule 34.12(2) answers as ones that should properly be left to determination by the trial judge. Pacific Mall submits these all relate to Market Village’s allegation that Pacific Mall acted with improper motive. Pacific Mall argues that failure to get sufficient support for the 2010 redevelopment plan has nothing to do with this litigation. I do not agree. Market Village pleads that the 2010 redevelopment was supported by Pacific Mall, but voted down by YRCC 890’s unit owners, and was substantially the same as Market Village’s redevelopment proposal now strenuously opposed by Pacific Mall as being prejudicial: see paras. 14.1-14.2 of the amended amended statement of defence. The 2010 redevelopment plan is also raised by Pacific Mall in the statement of claim: see para. 59 of the amended statement of claim.
[22] I am accordingly satisfied that the questions asked about discussions and ultimate vote by YRCC 890’s unit owners regarding the 2010 redevelopment plan are relevant based on the pleadings. These questions were improperly refused and should have been answered. Market Village may treat the Rule 34.12(2) answers as Pacific Mall’s answers to those questions and is entitled to ask proper follow-up questions arising from them. The extent to which this discovery evidence is admissible at trial, and the weight to be given to it, is a matter for the trial judge.
Issue 2 - Questions relating to refusal of integration features
[23] I have reviewed the six questions falling under this issue. Five of those questions (Q459, Q464, Q469, Q473 and Q561) essentially seek Pacific Mall’s position on what could now be done to make the proposed integration features acceptable. In my view, these are all improper questions.
[24] Market Village’s position, as pleaded, challenges the bona fides of Pacific Mall’s opposition to Market Village’s development proposal. Market Village specifically pleads that Pacific Mall previously supported the relevant integration features and that Pacific Mall’s actions are improperly motivated: see paras. 17.2 and 25.2-25.5 of the amended amended statement of defence. While the reasons for having rejected the integration features prior to litigation may be relevant, what may now be acceptable to Pacific Mall is irrelevant to the disputed issues. These questions would be more appropriate in the context of a business negotiation or without prejudice discussions. They are not proper discovery questions on relevant issues. Pacific Mall’s refusals to these five questions were proper and answers need not have been provided.
[25] For the remaining question (Q210), Pacific Mall takes the position in its answer given under Rule 34.12(2) that the question implicates settlement privileged discussions. However, having reviewed the actual question asked in context from the transcript, I need not address settlement privilege. The question is improper for similar reasons to the other five questions in this category. The exchange during discoveries was as follows:
Q. All right, so I’m asking you and I’m suggesting to you that you, sir, have refused, the plaintiffs have refused my client’s willingness that you’re aware of to create a bus lane, level the grading between the two properties, number 1. Number 2 a pedestrian overpass. My client is willing to build that pedestrian overpass, you’re not willing to accept it. Number 3, my client is willing to build an underground connection in the parking lots and you refuse that willingness, you don’t want it from your side?
MR. LANCASTER: Refused as asked.
Q. I suggest to you, sir, each of these individually would benefit Pacific Mall. You agree with that?
A. Not if it comes with what’s proposed, I don’t see any benefit.
[26] I do not read the question actually asked to be dealing with pre-litigation settlement negotiations or discussions. The compound question is present tense, i.e., Pacific Mall’s refusal of Market Village’s willingness to proceed with the integration features at the time of the examination. In my view, as outlined above, Pacific Mall’s current willingness (or unwillingness) to entertain the integration features is not relevant to why Pacific Mall may have changed its position on them in the pre-litigation period. Q210 was also properly refused and need not have been answered.
Issue 3 - Questions relating to acceptable forms of redevelopment
[27] The questions under this category (Q1848, Q223-230, Q556-560 and Q1915) all relate to possible outcomes of current negotiations or what may be acceptable to Pacific Mall that may allow Market Village’s redevelopment to proceed. For reasons set out in paragraph 24 above, these are improper questions that do not deal with relevant issues. What may be acceptable to Pacific Mall today is not relevant to Pacific Mall’s reasons or intentions behind the decision to oppose Market Village’s redevelopment proposal.
Issue 4 - Questions relating to settlement privilege negotiations
[28] There is some overlap in this category with the categories above. Of the four refusals in this category, I have already addressed Q210 and Q223-230, which are questions that I have determined were properly refused. The remaining questions (Q1453 and Q1454) concern matters that Pacific Mall says arise from settlement privileged discussions. Market Village concedes that they deal with pre-litigation meetings and settlement discussions.
[29] As framed in the refusals chart, Q1453 and Q1454 are in substance the same question. A review of the transcript discloses that both the refusal (Q1453) and advisement (Q1454, now deemed a refusal) derive from the same question asked as follows:
Q. And I will ask whether other meetings took place after August 15th with Market Village, and if so, what was discussed.
[30] Although Pacific Mall and Market Village agree that privilege attaches to the communications, neither party provided any case law on waiver of settlement privilege. I accordingly asked for supplementary facta, authorities and further oral submissions on that legal issue. Counsel did so, and re-attended to complete argument on waiver of privilege.
[31] It is agreed by both sides that delay is a defence to a permanent injunction. That defence has been raised by Market Village in this action. Market Village argues that Pacific Mall’s decision to rely on settlement discussions as an explanation for delay in commencing this proceeding, as pleaded in paragraph 17 of the amended amended reply, constitutes waiver of privilege. Market Village argues that it matters whether Pacific Mall was seeking either monetary compensation or design changes and accommodations in the negotiations, and that Market Village should be able to examine about those discussions, which may be led at trial. The substance of the pre-litigation negotiations is argued to be relevant in assessing whether Pacific Mall’s delay is excusable.
[32] In Pacific Mall’s supplementary written and oral submissions on waiver, Pacific Mall argues that only the fact of settlement discussions is raised in the pleading, but not the substance of those discussions. Moreover, Pacific Mall points out that paragraph17 of its amended amended reply only states that the period of delay identified by Market Village is a period in which settlement discussions were ongoing.
[33] It is established law that settlement privilege is a class privilege for which there is a prima facie presumption of inadmissibility: Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 at para. 12. Settlement privilege is a privilege belonging to both parties to the communication, so cannot be unilaterally waived by one party, but rather must be waived by both parties: Hallman v. Pure Spousal Trust (Trustee of), 2009 ONSC 49643 at para. 14. The party asserting waiver has the onus of establishing it by showing express or implied intent to waive or by satisfying the court that fairness requires that it be waived: Hallman, supra at pars. 15-16.
[34] The argument advanced by Market Village is essentially that if Pacific Mall would have been satisfied with monetary compensation during negotiations, then that would support the defence position at trial that a permanent injunction was not contemplated and/or is not an appropriate remedy. However, Market Village’s argument is, in my view, a slippery slope. Assuming for a moment that the substance of the pre-litigation discussions was acceptable monetary compensation, it is not implausible for Pacific Mall to have opposed the proposed encroachment into its easements, yet been willing to consider monetary compensation on a without prejudice basis, but when those discussions fell apart maintained to its position that encroachment was unacceptable. The protection afforded by settlement privilege exists precisely to encourage and permit parties to explore alternative, creative and even non-linear options that could resolve a dispute. It is a key aspect of settlement privilege that willingness to explore other options is not subsequently used as a sword against a party after the fact.
[35] I agree with Pacific Mall that there is nothing in the pleadings and no evidence before me supporting that the substance of settlement discussions is relied upon by Pacific Mall to explain the delay in commencing this proceeding. Only the fact of settlement discussions is raised by Pacific Mall’s reply pleading. Whether or not the fact of settlement discussions over a lengthy period, without delving into the substance of those discussions, will be found an acceptable explanation of delay is an issue for the trial judge to decide. The only issue before me is whether reference to the fact of settlement discussions in the context of providing an explanation for delay waives privilege over those discussions.
[36] Since settlement privilege cannot be unilaterally waived by one party, even if Market Village wants to waive the privilege, so too must Pacific Mall waive either expressly or by implication. In my view, Pacific Mall has not waived privilege by pleading the fact of settlement discussions. Similar to the finding in Hallman, supra at para. 23, this is not a case where Pacific Mall has disclosed part of a privileged communication and tries to withhold the balance. Reference by Pacific Mall in its reply to the fact of settlement discussions, and not the substance of those discussions, is insufficient to give rise to express or implied waiver of privilege.
[37] I also do not accept Market Village’s argument that waiver should be found as a matter of necessity. There must be a competing public interest here outweighing the public interest in encouraging open settlement discussions: Sable Offshore, supra at para. 19. I do not accept Market Village’s arguments that unfairness in these circumstances implicates a broader prejudice to litigants in general. If there is unfairness to Market Village (and I am not satisfied there is such unfairness), then it is limited to this litigation. I do not see a broader public policy issue arising from reliance on settlement privilege in the manner done by Pacific Mall.
[38] Market Village’s question was plainly seeking the content of the parties’ settlement discussions. While Market Village wishes to waive settlement privilege over the pre-litigation meetings and discussions, Market Village has not met its onus of demonstrating intentional waiver by Pacific Mall or necessity for such waiver. Based on that determination, I need not consider relevance. Pacific Mall’s refusal of Q1453 and Q1454 was proper and answers need not have been given.
Issue 5 - Questions relating to Pacific Mall’s redevelopment intentions
[39] These four questions (Q1542, Q1543, Q1546 and Q1547) relate to Pacific Mall’s intentions and ability to develop the Pacific Mall Centre lands. Market Village argues that these questions are relevant to allegations in the pleadings regarding Pacific Mall’s true motivation behind opposing Market Village’s redevelopment, namely that Pacific Mall seeks to restrain Market Village from developing the adjacent lands because Pacific Mall cannot obtain approval from YRCC 890’s unit owners for development. Several paragraphs of the parties’ pleadings are cited by Market Village as supporting relevance of these questions, but it appears to me that only paragraph 25.4 of the amended amended statement of defence potentially supports relevance of Pacific Mall’s own plans. That paragraph, however, was not pleaded at the time of the examination for discovery. It was added by further amendment on May 10, 2019, which followed receipt of Pacific Mall’s answers under Rule 34.12(2).
[40] During argument of the motion, I asked counsel to address the issue of which pleadings should apply to determinations of relevance: the pleadings as they stood at the time of the examination, when the refused questions were asked, or the pleadings as they stand today. My disposition of the other refusals has not required consideration on this issue, but it is necessary for Q1542, Q1543, Q1546, and Q1547 given that the questions are only potentially relevant based on a pleading advanced after the discovery.
[41] Market Village’s position is that the former pleadings no longer exist, and it is only the amended pleadings that should be referenced by the court in determining relevance on this motion. Market Village relies on the decision in SNC-Lavalin Engineers & Constructors Inc. v. Citadel General Assurance Co. (2003), 2003 CanLII 64289 (ON SC), 63 OR (3d) 226 at para. 27, in which Master Dash held as follows:
In my view it would defeat the case management principles of reducing delay and costs to consider the refusals on the basis of the pre-amendment pleadings and then require a second attendance to ask and answer (or refuse to answer) the very same questions on the amended pleadings. Although the questions were asked on the original pleadings, the statement of claim, after the amendments, no longer exists in that form and there is no good reason to compel the artificiality of re-attending to answer twice. The defendant has had the opportunity to reconsider whether it should answer the questions on the amended pleadings before arguing the motion. The court will consider the refusals in light of the pleadings as amended. The fact that the questions were refused before there was a claim for bad faith may be considered in the determination of costs of these motions, and the costs of any further examination arising out of the refusals or the amendments.
[42] Pacific Mall argues that the prior pleadings should apply, since to hold otherwise would have a chilling effect on parties providing answers under Rule 34.12(2), which has practical utility in litigation that should be encouraged. Pacific Mall argues that parties will be discouraged from answering under Rule 34.12(2) if those answers are used to amend pleadings after-the-fact to create a basis of relevance for questions that were otherwise properly refused. No case law was provided to support this position.
[43] I agree there is a chicken-and-egg aspect to Market Village’s argument. There is no question that, in determining the propriety of a refusal, the court must have regard to relevance of the precise question asked based on the pleadings. Had this motion been brought prior to the further amendment, then the pre-amendment pleadings would clearly be applicable and relevance of the questions refused would be based on those pre-amendment pleadings. Where amendments are based entirely on Rule 34.12(2) answers, which is evidence that would not have been available had the refusal simply been maintained, there would be a procedural inequity in using the post-amendment pleadings to determine relevance. Pacific Mall made submissions on appropriate methods by which such inequity might be addressed.
[44] However, having more closely assessed the subject refusals, I am satisfied no procedural inequity arises here from following SNC-Lavalin, supra and using the pre-amendment pleadings to determine these four refusals. I thereby need not deal with Pacific Malls proposed methods of dealing with any inequity. While Market Village acknowledges that a portion of paragraph 25.3 of the amended amended statement of defence has been drawn from the Rule 34.12(2) answers, the relevant paragraph in that pleading for these refusals is paragraph 25.4, which is not clearly derived from Rule 34.12(2) answers. From what I have been directed to and seen in the transcript, that amendment is supported by answers given to other questions asked during the examination that were not refused. According, the concern that an answer to an otherwise properly refused question has been used to create relevance does not arise here.
[45] I am satisfied that the questions asked about Pacific Mall’s plans or intentions to redevelop the Pacific Mall Centre are relevant for discovery purposes, but the extent of financing sought or obtained by Pacific Mall for such redevelopment is not relevant. Accordingly, Q1542, Q1543 and Q1546 were improperly refused and should have been answered. Market Village may treat the Rule 34.12(2) answers as Pacific Mall’s answers to those questions and is entitled to ask proper follow-up questions arising from them. Q1547 was properly refused and need not have been answered.
Refusals – Financial Information
[46] This was “Issue 6” in the materials filed, but in my view is distinct from the other five issues since Pacific Mall has maintained its refusals to these questions without providing any answer under Rule 34.12(2) (although I understand did separately provide some financial statements subject to that rule). These five questions (Q2201, Q2202-2203, Q2208, Q2224-2228 and Q2229-2230) all relate to financial disclosure from Pacific Mall for the five years prior to the examination. Market Village seeks financial statements for YRCC 890, corporate income tax returns, notices of assessment and reassessment, sales ledges or financial statements for retailers doing business in the Pacific Mall Centre, and rent ledgers for unit owners.
[47] The core dispute on these refusals arises from Market Village’s position that Pacific Mall is not entitled to the injunctive relief if damages is found by the court as a quantifiable and appropriate alternative remedy. The financial information sought is said to be relevant to the appropriateness of an injunction as a remedy, particularly financial performance of the retail operations before and after demolition of Market Village Centre.
[48] Market Village provided no case law supporting necessary production by a plaintiff of full financial records where it seeks permanent injunctive relief. Market Village relies solely on relevance based on the pleadings. In particular, Market Village points to paragraph 65 of the amended statement of claim and paragraphs 21-22 of the amended amended reply in support of relevance of these documents. These paragraphs essentially outline Pacific Mall’s position that prejudicial impacts of the redevelopment are such that permanent injunctive relief is the only appropriate remedy. Market Village’s position is that Pacific Mall will not suffer any prejudice from redevelopment of Market Village Centre, as pleaded at paragraph 25.1 of its amended amended statement of defence.
[49] Pacific Mall maintains that its refusals were proper, arguing that there is, at best, tenuous relevance and that the requested production lacks proportionality. Pacific Mall also argues that there is a reverse primacy of relief in injunction cases, pointing to the decision of the Supreme Court of Canada in Canadian Pacific Ltd. v. Paul, 1988 CanLII 104 (SCC), [1988] 2 SCR 654 at para. 29, which held as follows:
Generally speaking, an injunction will issue to restrain an interference or anticipated interference with a person's rightful enjoyment of the use of his land. Robert J. Sharpe has noted in his book entitled Injunctions and Specific Performance (1983), at p. 180 that “The discretion in this area has crystallized to the point that, in practical terms, the conventional primacy of common law damages over equitable relief is reversed. Where property rights are concerned, it is almost that damages are presumed inadequate, and an injunction to restrain continuation of the wrong is the usual remedy.”
[50] I agree with Pacific Mall. The financial performance of the plaintiffs or the retailers and unit owners in Pacific Mall Centre are not relevant. Pacific Mall has not pleaded and is not seeking damages as an alternative remedy to permanent injunctive relief. Market Village also does not expressly plead that damages are an appropriate remedy, but rather pleads at paragraph 25.1 of the amended amended statement of defence that Pacific Mall will not suffer any prejudice and should thereby be denied a permanent injunction.
[51] The extent of financial disclosure sought by Market Village is also not proportionate. I do not accept that the trial judge will be unable to determine whether or not damages are an appropriate alternative remedy absent full financial disclosure from Pacific Mall. In my view, there is a distinction between satisfying the trial judge as to the sufficiency of damages as an alternative remedy and quantifying those damages. The disclosure sought goes only to the quantum of damages, not the sufficiency of damages as an alternative remedy. If the trial judge finds that Market Village has breached its obligations, and accepts Market Village’s position that damages is an appropriate remedy in lieu of a permanent injunction, it will then be within the purview of the trial judge to direct the manner and means for how damages will be quantified, if the parties cannot agree.
[52] I am further mindful of the inefficient use of court resources in expending trial time hearing substantive evidence on quantification of damages prior to any determination that damages are an appropriate alternative remedy.
[53] I accordingly find that Q2201, Q2202-2203, Q2208, Q2224-2228 and Q2229-2230 were properly refused and need not be answered.
Re-Examination of Pacific Mall
[54] Given my determinations on questions that were improperly refused, it flows that Market Village is entitled to further examine Pacific Mall on questions arising from the answers to those refused questions. Accordingly, if requested by Market Village, Pacific Mall shall accordingly produce Mr. Swirsky for re-examination on questions arising from the refusals that I have found were improper and any proper questions arising from answers to undertakings given by Pacific Mall (if not already examined upon). Given that not all refused questions have been ordered answered, costs of any such further examination shall be claimable in the ordinary course in the litigation.
[55] I understand the parties previously agreed that any further examinations for discovery would be completed by August 31, 2019, which was made part of Justice Firestone’s timetable order on May 3, 2019. If further discoveries have already been scheduled, but are not yet completed, then any examination by Market Village of Pacific Mall in accordance with paragraph 55 above should be done concurrently.
ORDERS
[56] For the foregoing reasons, I accordingly order as follows (using the same order in which questions appear in the refusals chart):
(a) Pacific Mall’s refusals of Q78-79, Q81-82, Q921, Q1542, Q1543 and Q1546 were improper, and the answers previously given pursuant to Rule 34.12(2) shall stand as Pacific Mall’s answers to those questions.
(b) Pacific Mall’s refusals of Q210, Q459, Q464, Q469, Q473, Q561, Q1848, Q223-230, Q556-560, Q1915, Q1453, Q1454 and Q1547 were proper and answers to those questions need not have been given.
(c) Pacific Mall’s refusals of Q2201, Q2202-2203, Q2208, Q2224-2228 and Q2229-2230 were proper and answers to those questions need not be given.
(d) Pacific Mall shall produce Eli Swirsky for re-examination on questions arising from the improperly refused questions and related answers identified in subparagraph (a) above, and any proper questions arising from answers to undertakings given by Pacific Mall (if not already examined upon), on a date to be agreed by counsel for the parties acting reasonably or, if further examinations have already been scheduled, during such examinations.
(e) The parties’ costs of any further examination pursuant to subparagraph (d) above shall be claimable in the ordinary course in the litigation.
(f) This order is effective without further formality.
[57] The parties have agreed that costs of this motion shall be in the cause. Since Pacific Mall has been substantially successful in opposing Market Village’s motion, they should have their partial indemnity costs of this motion, subject to any applicable offers to settle, in the cause.
MASTER TODD ROBINSON
DATE: August 16, 2019