Court File and Parties
MOTION HEARD: 20190815
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Performance Analytics Corporation, Performance Analytics Group Corporation and Performance Analytics Consulting Corporation, Plaintiffs
AND:
Justin McNeely, Michael Matrick, Patrick Hickey, Sean Antonello and Jump Analytics Inc., Defendants
AND:
Justice McNeely, Michael Matrick and Patrick Hickey, Plaintiffs by Counterclaim
AND:
Performance Analytics Corporation, Performance Analytics Group Corporation, Performance Analytics Consulting Corporation, 2504338 Ontario Inc., Grambo Inc., Graham Finney in his personal capacity and as Trustee of the Jadac 2016 Family Trust and Peter Digby in his personal capacity and as Trustee of the Digby 2016 Family Trust
BEFORE: Master Jolley
COUNSEL: Andrew MacDonald, Counsel for the Defendants other than Antonello and for the Plaintiffs by Counterclaim
Matthew E. McCarthy, Counsel for the Plaintiffs and the Defendants by Counterclaim
HEARD: 15 August 2019
REASONS FOR DECISION
1Both parties bring motions before me related to the sufficiency of the affidavits of documents produced by the other. The plaintiffs also request a timetable order as part of their motion.
A. Defendants’ Motion for Further and Better Affidavit of Documents
2The defendants’ motion has two main aspects. First, it raises issues concerning the consistency, content and usability of the plaintiffs’ affidavit of documents and supplementary affidavit of documents. Second, it seeks production of documents not included in either of the plaintiffs’ affidavits of documents.
3The plaintiffs have produced their affidavit of documents and productions in two methods. They first produced an excel spreadsheet with links to each document. When the defendants objected to that form of production, they then produced the documents as PDFs on a USB. They also produced two affidavits of documents. The supplementary affidavit of documents dealt exclusively with hard copy documents that were categorized somewhat differently, as a result, from the first affidavit that contained primarily electronic documents. The defendants argue that the methodology chosen has resulted in inconsistencies in dates of documents at best and mischaracterization of document dates at worst and, additionally, given missing information on the spreadsheets, has greatly increased, rather than lessened, the work required of the defendants. Counsel for the plaintiffs takes the position that nothing turns on this slightly differing manner of production, which is simply a result of the parameters of the e-discovery methodology of inputting the documents.
Issue 1 – Issues with date and descriptions of the documents
4This issue stems in good part from the plaintiffs adding columns to the supplementary affidavit of documents that were not present in the original affidavit of documents. With respect to the date issue, the plaintiffs’ supplementary affidavit of documents added a column headed Lead Date in addition to the column Doc Date. The defendants requested clarification of the purpose and meaning of these columns in June 2019 but were not provided with an answer until 1 August 2019. Unfortunately, the answer provided was not at all clear. This confusion could have been cleared up had both counsel spoken after August 1 and the plaintiffs provided the information that was given to me in court. In short, the Lead Date represents only the date that the document was scanned. The Doc Date is the actual date of the document.
5At present the plaintiffs’ supplementary affidavit of documents lists the documents chronologically by Lead Date, which is a relatively unhelpful sort term. However, I am advised that the documents can be sorted by any column so that if the defendants sort the documents based on Doc Date, they will have the documents in actual chronological order. The affidavits need not be re-done by the plaintiffs to accomplish a true chronological listing.
6Additional confusion arises over the use of both a To column and a Recipient column. I was advised on the motion that where the recipient of a document was populated automatically in the supplementary affidavit of documents, the recipient was listed in the To column. Where no information automatically populated in the To column and a person was required to read the document and determine the recipient, the name of the to/recipient is listed under Recipient to indicate that it was determined by a person who read the document and not simply populated automatically.
7The columns From and Author (Coding) were similarly distinguished. Plaintiffs’ counsel advised that the Author (Coding) column represents authors as determined by a person who read the document and inputted the name. An entry in the From column denotes that the author was picked up in an electronic read.
8With respect to the Email Subject column and the Doc Title column, counsel for the plaintiffs advised that the Email Subject column populates through an electronic review of the document. When it does not populate, the descriptor is added in the Doc Title column by the person who read the document (see, for instance, PAC 1205 which has nothing in the Email Subject column but which was described manually by the person reading the document in the Doc Title column as “Performance Analytics Corporation – Financial Statements – December 31, 2018”).
9On each of these issues, the columns were not clear on their face and these explanations given at the motion would have gone a long way to clarifying the difference between the Recipient and the To columns, the Author (Coding) and From columns and the Email Subject and Doc Title columns in the supplementary affidavit of documents and would have eliminated the need for much of this motion.
10This also explains why there are additional columns in the supplementary affidavit of documents as the work done by a person is listed in Recipient and Author (Coding) columns, which are not relevant for the original affidavit of documents. The affidavit of documents and supplementary affidavit of documents are not required to contain the exact same columns, given one contains additional information. If counsel for the defendants wishes those Lead Doc, Recipient and/or Author (Coding) columns removed, the spreadsheet can be printed without those columns.
11As for the nature of the document, the supplementary affidavit of documents contains descriptions in the Doc Title column (see, for instance, PAC 1203 – “Confidential - Managing Partner Compensation Plan”). Where a description has not been provided, the document is accessible by the click of a link, which is not so onerous that the plaintiffs should be ordered to produce a further and better affidavit of documents to avoid that effort.
12Date format seems to be a function of the party opening the document as they appear to be month/day/year in the printed versions. Similarly, the concern that a party opening a document automatically alters the path can be remedied by a change in the settings on the defendants’ end. If there is any difficulty rectifying those concerns, counsel shall sort the issue out by telephone with the assistance of their respective IT staff, as required.
13As for the concern about the names of email creators or recipients, the samples I was shown do include a specific name somewhere in the email IP address. If there is no name at all, the plaintiffs shall provide the name of the creator or recipient.
14The documents noted that contain no description (ex 854-858) may be irrelevant individually but were produced as they were attached to a document that would be incomplete without the attachments. Unfortunately, the program gave these documents individual numbers 854-858 rather than 853.1 - 853.5, by way of example, but the plaintiffs advised that the samples listed are attachments (or children) to the parent document at 853. This is also the case for 1125-1126, 1217-1219 (which relate to 1216) and for 1115 (which clarification the plaintiffs provided to the defendants on 28 March 2019). This explanation is sufficient for the defendants to understand the documents listed. If there are other documents in this category that are unclear, counsel should arrange a call to sort out any stragglers before the examinations for discovery.
15Documents 1279-1281 are to be corrected so that it is clear that Michael Matrick did not send emails to Graham Finney in December 2017 as it presently reads. The proper date is not the December 2017 date when Finney forwarded the Matrick email to himself but the actual date of the Matrick email. The date of Document 1298 is to be described and to be corrected to reflect either that it is undated or its correct date given. If it is irrelevant, as appears to be the case, it is to be removed. The plaintiffs shall produce the exhibit referenced in Document 1238.
Issue 2 – Additional documents sought to be produced
16The defendants requested that the plaintiffs produce the financial statements and financial documentation they rely on to support the quantum of damages being claimed. The plaintiffs have agreed to produce those documents and I so order.
17The defendants have requested that the plaintiffs produce mitigation documents including those addressing (a) efforts they made to reach out to Performance Analytics Corporation (“PAC”) prospects and PAC customers after Hickey, Matrick and McNeely departed; (b) which PAC customers if any have been lost and correspondence or documentation relating to the loss of such customers; (c) correspondence between PAC and SAP and Onestream objecting to those entities doing business with Jump Analytics Inc. (“Jump”); (d) correspondence between PAC or Gowlings and contractors, consultants or customers of PAC advising of restrictive covenants in place with Hickey, Matrick and McNeely or otherwise asking such contractors, consultants or customers of PAC to refrain from any dealings with Hickey, Matrick and McNeely.
18The plaintiffs are prepared to provide this information other than correspondence from Gowlings, as it does not wish to waive privilege. I find that the letters as described, including correspondence from Gowlings to PAC contractors, consultants or customers can be produced without waiving privilege. I order the above-noted documents to be produced. With respect to any Gowlings correspondence to PAC customers, contractors or consultants, I make the express directive that any such production does not constitute any waiver of privilege including but not limited to the instructions given by the plaintiffs to write those letters.
19The defendants seek the plaintiffs’ documents and correspondence in respect of PAC’s Freedom of Information request to Capital Region District between September 2017 and present in which attempts were made to inquire about Capital Regional District working with Jump. There is no evidence before me that any request was made and no sufficient basis for me to order that these documents be produced at this stage as part of a further and better affidavit of documents. The defendants may ask questions about this customer at examinations for discovery and seek production of the documents, once relevance is established. I note that counsel for the defendants advised that Jump will be seeking to add a counterclaim in respect of the apparent loss of this client and perhaps others. If that amendment is made, the documents will most likely be relevant on the face of the pleading and producible.
20The plaintiffs have agreed to produce their financial statements for 2014, 2015, 2016 and 2017, their minute books, shareholder registers, director and officer registers, articles and certificates of the corporate parties making up the plaintiffs. They have also agreed to produce their tax returns for 2014-2018 and I so order.
21The defendants have requested the same information set out in paragraph 20 above from the defendants by counterclaim. They argue that the information is relevant to their claim for wrongful dismissal damages and their claim for an equity interest in the plaintiffs that they say was promised to them. I find that, at this stage, the defendants will have sufficient information from the plaintiffs’ productions as ordered concerning the value of the companies to address the claim for loss of an ownership interest. The remaining documents can be requested at the examinations for discovery, if the defendants are of the view that they are necessary.
22The defendants have requested and the plaintiffs have agreed to produce any emails between Finney and Digby relating to the employee share option plan in 2016, Digby’s proposed buy-out of Finney or Finney’s proposed buy-out of Digby between 2016 and 2017, the setting up of family trusts, the corporate restructure in 2016, the hiring of Michael Cheung and efforts to follow up with any customers or prospects identified in the transition plans of Hickey, McNeely and Matrick and I so order.
23These additional documents ordered produced above shall be produced by 30 September 2019.
B. Plaintiffs’ Motion for a Further and Better Affidavit of Documents
24The plaintiffs seek further financial productions and business records from the defendant Jump.
25Jump has agreed to produce its financial statements and income tax returns. Otherwise, it takes the position that the breadth of documents requested are not relevant as they cover the entirety of Jump’s business, not just the business that was carried on by the plaintiffs and allegedly usurped by Jump and which is the subject of the statement of claim.
26I agree, at this stage. The statement of claim is focused on business that belonged to the plaintiffs. The claim alleges that the individual defendants used the plaintiffs’ confidential information to start a competing business and it seeks an order that the defendants refrain from soliciting the plaintiffs’ customers (if such solicitation is intended or calculated to obtain the custom or trade of such customers for a business which competes with the business as it is carried on at the time that this agreement is terminated) and refrain from providing services of any kind to a competitor of the plaintiffs or to a customer of the plaintiffs to whom they provided services while employed by the plaintiffs.
27The plaintiffs allege that the products and services offered by Jump are directly competitive with those offered by Performance Analytics and are exact substitutions for the plaintiffs’ solutions and services (statement of claim, paragraph 96).
28In the grounds for its motion, the plaintiffs state that “the plaintiffs allege in the statement of claim that McNeely, Matrick, and Hickey devised a collective plan to resign from their employment with the plaintiffs on the same day, and then commence a competing business. Antonello was complicit in the collective plan. The plaintiffs also allege, among other things, that McNeely, Matrick, Hickey, and Antonello knowingly and deliberately usurped business opportunities from the plaintiffs; misappropriated confidential and proprietary information; deleted data in an effort to conceal their collective plan; deleted confidential and proprietary information belonging to the plaintiffs;….” While it is only a summary of the claims, the clear focus is on business that competes with the plaintiffs.
29Jump shall produce its financial statements from the date of incorporation until present and its minute book, as agreed. It shall produce its income tax returns and notices of assessment. It shall also produce its forecasts, business plans and any business valuation, which it may redact at this stage to the kind of work that is carried on by Performance Analytics. It shall produce invoices it issued for services rendered for the kind of work that is carried on by Performance Analytics. Jump shall advise who its shareholders are but need not produce the shareholders agreements at this stage. It shall produce the employment contracts as they are directly relevant to the claims of the personal plaintiffs by counterclaim for damages for constructive dismissal and their mitigation efforts.
30The plaintiffs have also requested the text and WhatsApp messages between McNeely and/or Matrick and/or Hickey and/or Sean Antonello. Those messages are to be produced during the currency of their employment until their departure on 31 July 2017. Thereafter the messages are to be produced to the extent they relate to business that the Performance Analytics carries out. These documents are to be produced by 30 September 2019.
31This is without prejudice to the plaintiffs examining the defendants to determine whether they used the plaintiffs’ confidential information to start a line of business not carried on the plaintiffs. If they determine a link from their confidential information to new businesses, they may seek production of those documents or, alternatively, bring a motion at that stage once relevance is made out.
C. Timetable
32In order to move this matter forward, the parties shall adhere to the following timetable:
All parties to produce outstanding documents – by 30 September 2019
Jump to amend pleading to add counterclaim – by 31 October 2019
All parties to agree on a mediator – by 30 November 2019
Plaintiffs to file defence to amended counterclaim – by 30 November 2019
All examinations for discovery to be completed – by 28 February 2020
All parties’ motions on undertakings and refusals to be commenced – by 30 April 2020
Mediation to be completed – by 30 June 2020.
D. Costs
33Both parties seek their costs of the motions on a partial indemnity scale.
34The defendants did not obtain much of what they sought on their motion. However, this is primarily because the plaintiffs provided the information that had been requested either after the motion was brought or in argument on the date of the motion. Had that discussion taken place earlier, both parties could have avoided most of the costs of the defendants’ motion. The defendants did obtain additional production, to which the plaintiffs consented at or just prior to the motion.
35The plaintiffs similarly were only partially successful on their motion. Jump was ordered to produce documents but they were limited, at this stage, to that aspect of the business that competes with the plaintiffs and to which it, for the most part, consented.
36Given the divided success on both motions, I make no order as to costs.
Master Jolley
Date: 20 August 2019