COURT FILE NO.: C-6034-16OT
DATE: 2021-05-31
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Bot Construction Limited, Bot Holdings Limited, Bot Construction (Canada) Limited, Clarkson Construction (Ontario) Limited, Bot Management Services Ltd.
Plaintiffs/Responding Party
– and –
Her Majesty the Queen in Right of Ontario as represented by the Minister of Transportation and Aecom Canada Ltd.
Defendants/Moving Party
E. Grigg, for the Plaintiff/Responding Party
E. Wagner, for the Defendant/Moving Party
HEARD: October 16, 2020
DECISION ON MOTION
HENNESSY J.:
Introduction
[1] This is a motion brought by the Defendant (the “Moving Party”), Her Majesty the Queen in Right of Ontario as represented by the Minister of Transportation and Aecom Canada Ltd. (“HMQ”) for orders compelling the plaintiffs to provide answers to undertakings and questions refused or taken under advisement during examinations for discovery and to re-attend examinations for discovery once answers are provided.
[2] This action concerns a road construction contract to widen a section of Highway 69 near Sudbury. It is not controversial that the central dispute between the parties concerns the source of and responsibility for additional rock left over at the end of the project.
[3] The Plaintiffs (the “Responding Party”) Bot Construction Limited, Bot Holdings Limited, Bot Construction (Canada) Limited, Clarkson Construction Company Limited, Bot Construction (Ontario) Limited and Bot Management Services Ltd. (the “Plaintiffs”), claim that they are entitled to damages for costs of removing this additional rock. The parties have a long relationship in road construction. They have litigated the issue of excess rock in the past.
The Plaintiffs’ Position
[4] The Plaintiffs claim that the Defendant misstated the amount of rock in the tender documents upon which the Plaintiffs relied. The Plaintiffs assert that the additional rock comes from two sources: an alleged “design error” concerning the extent of rock “shatter” under the roadbed, as well as an alleged “bulking factor” error. The latter refers to the extent to which crushed or broken rock takes up more volume compared to rock that is sitting in the bank.
[5] The Plaintiffs’ position is that this case is fundamentally about whether two pieces of information provided by the Defendant to bidders on the contract were incorrect and if so, was the price the Plaintiffs’ bid for the contract artificially deflated by its reliance on that incorrect information such that it suffered a loss and what if anything was the extent of that loss: See Plaintiffs’ Factum, dated February 28, 2020, [Plaintiffs’ Factum], at para. 15.
The Defendant’s Position
[6] The Defendant asserts that the Plaintiffs are responsible for the excess rock because of the way it conducted the work on the project. For the Defendant, the issue at trial will be the techniques used by the Plaintiffs and its sub-contractors, specifically their “means and methods”.
[7] The Defendant takes the position that the quantity of rock generated on the site was within the “means and methods” of the Plaintiffs’ contractor and is therefore the Plaintiffs’ responsibility. The Defendant asserts that the source of the additional rock is the drilling and blasting techniques employed by the Plaintiffs and its subcontractors. Specifically, one source of additional rock would be over-blasting by the Plaintiffs: blasting beyond the design lines of the contract, also referred to as “overbreak”. While over-blasting is permitted, disposal of any additional rock generated by over-blasting would be the responsibility of the Plaintiffs.
[8] The Defendant submits that the answers to these questions contain significant information central to the issues in the action and are required to allow the moving party to defend the action. The Plaintiffs reject this characterization and respond that the answers do not advance the purpose of discovery and offends the proportionality principle that is at the center of discoveries.
Discussion and Proportionality
[9] The guiding principles of discovery are well known and not controversial.
[10] The scope of discovery is informed by the purpose of discovery. The purpose of discovery is to enable the examiner to know the case to be met; to obtain admissions; to define and narrow the issues; to promote settlement: Ramdath v. George Brown College of Applied Arts & Technology, 2012 ONSC 2747, [Ramdath], at para. 26., Kissoon v. Aviva Insurance Company of Canada, 2018 ONSC 2167, [Kissoon], at para. 18.
[11] There is no absolute right to follow up examination for discovery—the onus is on the moving party to establish that it would serve a useful purpose: Ramdath, at para. 32.
[12] In this action, the parties have been through two rounds of discoveries over three days. This case is not complex. It is a contractual dispute between two parties who deal with each other in the road building sector. They have litigated this issue before. The issue in dispute is well defined, i.e., who is responsible for the excess rock. The contractual term “means and methods” incorporates fact-based concepts which are in dispute between the parties. The amount in dispute, $20,000,000, is large but that fact alone does not render the dispute more complex than it is.
[13] Proportionality with respect to discovery, ought to be the norm and not the exception: Warman v. National Post Co., 2010 ONSC 3670, 103 O.R. (3d) 174, [Warman], at para. 85. The “broad and liberal” standard should be abandoned in place of the proportionality rules which make “relevancy” part of the test for discovery, and not the mere starting point: Warman, at para. 85: See also: Rule 29.2.03 of the Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Courts of Justice Act, R.S.O., 1990, c. C. 43.
The Issues in Dispute
[14] The following items were the subject of this motion: (Plaintiffs’ Factum, starting at p.12.)
Refusal No. 1 Q 415 In light of the 1994 decision, how, if at all, did Bot change its estimating and bid practice for rock excavation?
Refusal No. 2 Q 416 Production of any memos or internal correspondence that deals with Bot’s response to the 1994 decision.
Undertaking No. 3 Q 39 If the 3.3-meter error is simply a conversion error, how do they use it for further calculations and rely on it to generate the volume and the required blast force?
Undertaking No. 6 Q 139 Were any blasting concerns raised by Bot to Castonguay with respect to the size of the blast, blasting patterns and the depth of the blast?
Under Advisement No. 1 Q 97 Request to inquire of the individuals responsible for preparing Bot’s bid for the rock items whether they accept that a reasonable contractor would allow a ten percent additional volume of rock excavation for overbreak? And if not, why not?
Under Advisement No. 2 Q 97 (see also Undertaking #11) What are the advancements in blasting and drilling techniques which are referenced in the answer to undertaking on whether 10% contingency on bidding is reasonable.
Under Advisement No. 3 Q 103 Request to make best efforts to find the original bid from Castonguay (subcontractor for blasting).
Under Advisement No. 7 Q 182 How would you have bid the job differently? (without the design error).
[15] The moving party states that the items outlined above can be grouped in three categories:
• Questions concerning the 1994 litigation between the parties (items 1, 2, 5, 6)
• Undertakings that were answered incompletely (items 3, 4)
• Outstanding under-advisements. (items 7, 8)
Questions concerning the 1994 Litigation
[16] The 1994 litigation dealt with the same parties and the same issue, rock overbreak: Bot Construction Ltd. v. Ontario (Ministry of Transportation and Communications), [1994] O.J. No. 389 (Gen.Div.) at paras. 13, 35. In this decision, Rosenberg J. (as he then was) relied on evidence from HMQ’s expert that a reasonable contractor would build in a 10% contingency for overbreak into their bidding calculations. The case was not pleaded by HMQ in this litigation. Below, I will explain the significance of this in greater detail.
[17] The Plaintiffs refused to answer the two questions at Items 1 and 2 above and also now refuse to answer the two Questions 97 which were originally taken under advisement.
[18] HMQ submits that the reasonableness of the Plaintiffs’ approach to bidding is an issue and that the questions 415 and 416 related to the 1994 litigation go to damages. HMQ submits that given the 1994 finding that the Plaintiffs were responsible for the overbreak, they now need to know how, if at all, the Plaintiffs have changed their estimating approach. According to HMQ, this is a necessary part of determining whether the Plaintiffs’ estimate now is a reasonable one.
[19] The Plaintiffs respond that the reasonableness of their estimate for rock excavation and overbreak for this contract is not in issue and further submits that whether or not it adjusted its approach to estimating rock excavation since 1994, whether in response to the 1994 decision or otherwise, is not material and not relevant.
[20] The Plaintiffs agreed that certain issues with respect to including a contingency fee within the bid were relevant and provided responses which included the actual amount of the contingency included in the bid , how the amount was calculated and the factors taken into consideration to determine the amount of the contingency.
[21] The claim here is for damages for the removal of rock which the Plaintiffs say was in excess of their estimate and their contingency, which estimates were based on “intentionally and materially” misstated quantities disclosed in the tender package. The Plaintiffs state that the difference between their contingency of 4% for overbreak and HMQ’s assertion that 10% is a reasonable contingency is not the issue. The Plaintiffs indicated in oral submissions that the excess rock was approximately 26 times more than was estimated resulting in 12% of rock left over.
Analysis of 1994 litigation
[22] I agree that the Plaintiffs’ response to the 1994 decision is not the issue in this case. The 1994 decision was based on factual evidence before the court in that trial. Given HMQ did not plead this case, it remains a finding in another trial based on facts and expert opinions that were put before the court in that trial. Whether the Plaintiffs adjusted their bidding approach subsequent to or based upon the 1994 decision will not assist HMQ in knowing the case it has to meet, will not define or narrow the issues nor promote settlement: Kissoon v. Aviva Insurance Company of Canada, 2018 ONSC 2167, at para.18.
Specific Refusals and Under Advisements
a. Refusal No. 1, Question 415, Refusal No. 2, Question 416
[23] Questions 415 and 416 are beyond the scope of discovery and need not be answered.
b. Under Advisement, No. 1 & No. 2, Question 97
[24] The Q’s 97, at items 5 and 6 also relate to the 1994 litigation. The questions arose from the issue of the amount of contingency and then addressed the Plaintiffs’ response to an undertaking: “No, 10% allowance for overbreak is not reasonable with advancements over the past 20 years to current blasting procedures and techniques”. The Plaintiffs now refuse to answer the follow-up questions from the undertaking (#11) to identify those advancements and to inquire of Castonguay the sub-contractor if the advanced drilling techniques were used on the job.
[25] The Plaintiffs argue that the answer identifies an issue that the Plaintiffs will raise at trial, when HMQ seeks to rely on their 10% contingency as the reasonable contingency. The Plaintiffs have identified the multiple factors it takes into account for bidding on blasting and overbreak. I understand from the submissions that the expert reports have been exchanged and this question of advanced techniques is not addressed. In my view, the relevance of follow up questions is founded on the same reasoning that underlies the attempt to make an issue of the reasonableness of the Plaintiffs’ approach to estimating. However, as I noted above, that definition of “reasonable” is based on the 1994 trial finding and is an assertion not accepted by the Plaintiffs.
[26] I find that this question goes beyond the scope of the examination. The answers to these questions will not provide any admission, nor will facilitate settlement, or narrow the issues. As the Plaintiffs argued, it will either be able to support this assertion at trial or not, but it is a sufficient answer and no further answer is required.
[27] As for the Q 97 regarding a question directed to Castonguay, whether they used “advanced blasting techniques”, I am not satisfied that the Plaintiffs should be required to put that question to them. This question, as with the above, arises from the HMQ position that a 10% contingency is reasonable. Castonguay is not a party but will be a witness at trial.
Undertakings: Whether they are complete or Not?
[28] The undertakings at issue relate to items # 3, and 4 above.
[29] In Q 39 the Plaintiffs were asked to inquire of the blasting sub-contractor, Castonguay, whether the measurement unit error between imperial and metric was used in calculations and relied upon to generate both volume and required blast force.
[30] In Q 139 the Plaintiffs were asked to advise whether blasting concerns were raised with Castonguay.
[31] The Plaintiffs take the position that the undertakings have been fulfilled.
[32] HMQ says that the answers supplied by the Plaintiffs were incomplete. In reference to the Chart of Undertakings and Refusals (Chart) produced by the moving party on this Motion, HMQ sets out the basis of its position.
[33] The Plaintiffs put the question to Castonguay and relayed the following answer to HMQ: “the blaster did not use the volume calculations to determine blast decisions, that those reports are irrelevant.” HMQ submits, that the Plaintiffs must still answer what Castonguay did use to determine blasting design decisions if they did not use the calculations in the Blast Reports. The Plaintiffs submit that it is not obliged to ask further questions of its sub-contractor Castonguay, that those questions are disproportionate and that HMQ is free to deal directly with Castonguay.
[34] In Q 139, the Plaintiffs undertook to advise whether there were blasting concerns communicated to Castonguay. The Plaintiffs’ brief response was that generally it was content with appropriate conduct of the blasting program, with “modest exceptions” and that there were no “abnormal concerns raised that weren’t dealt with in the typical fashion” in the field. HMQ submits that the undertaking remains outstanding to the extent that follow up questions that flow directly and logically from an answer to an undertaking must be answered. HMQ says that proper follow-up questions requires the Plaintiffs to be more complete and articulate the meaning of the terms “modest” and “abnormal”, and to indicate what type of concerns were discussed in the field from time to time.
[35] HMQ relies on Saskatchewan Government Insurance v. Treen, [1988] A.J. No. 717 (Q.B.) to assert that an undertaking is “nothing more or less than an acknowledgement that a question is a proper one”. Follow up questions that flow directly and logically from an answer to an undertaking must be answered: Defendant Factum, at para. 20.
[36] In my view, this case can be distinguished from both Ramdath and Warman on the basis that proportionality is now the guiding theme. Since Treen, the jurisprudence and the Rules of Civil Procedure have evolved significantly to include this proportionality analysis when assessing the limits and scope of discovery.
[37] I agree that the Plaintiffs’ response is sufficient and does not give a right to these follow-up questions. The answers from Castonguay are clear. The Plaintiffs do not have the answers or Castonguay’s calculations at hand. The Plaintiffs are not required to go back to Castonguay and ask them further questions or to cross examine them on what they mean by modest or abnormal.
[38] Q 139 was framed as a general question about “concerns”, and in my view should have anticipated a general answer. No sub-questions were put to the Plaintiffs at the time. In my view, it becomes disproportionate to require the Plaintiffs to return to Castonguay. I am of the view that the answer is sufficiently responsive and gives HMQ what it sought.
Under Advisement Questions related to Bidding
[39] HMQ advised that Q 103, relating to best efforts to find to original bid from Castonguay, has now been answered.
[40] With respect to No. 7 Q 182, the Plaintiffs respond by saying that it will answer this question when its expert analysis is completed. HMQ submits that Q 182 seeks to elicit an answer that will ultimately go to damages, and that the question of how the Plaintiffs would have bid the job differently cannot turn on advice that it will receive years later. HMQ submits that it is entitled to know how it would have bid the job at the time, if the alleged design errors had not been made.
[41] The Plaintiffs submit that the reason it seeks to rely on expert opinion, is in order to know what the material information was before it was manipulated by Aecon. They distinguish this task from a simple re-calculation. The Plaintiffs assert that it cannot demonstrate how it would have bid the job until it knows “what material information should have been in the tender”.
[42] HMQ says that the Plaintiffs have now delivered their reports and the answer is not in the report.
[43] The Plaintiffs are now required to advise whether their expert report provided them with the information/data required for them to answer the question. There is no need to re-attend, they can provide this answer in writing. If the report did provide them with sufficient information/data to answer how they would have bid but for the design error, they must also answer that question. If they do not have the data/ information to respond, they are not required to do so, because that would impose an undue burden of work.
Costs
[44] The Plaintiffs were substantially successful on this motion. I understand that if successful, the parties were prepared to ask for a fixed amount of costs. In the event the parties cannot agree, they may make brief written submissions to me, along with their Bill of Costs. Submissions should be made by the Plaintiffs within 20 days of the release of this decision, and HMQ within 30 days of the release of this decision.
The Honourable Madam Justice Patricia C. Hennessy
Released: May 31, 2021
COURT FILE NO.: C-6034-16OT
DATE: 2021-05-31
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Bot Construction Limited, Bot Holdings Limited, Bot Construction (Canada) Limited, Clarkson Construction (Ontario) Limited, Bot Management Services Ltd.
Plaintiffs/Responding Party
– and –
Her Majesty the Queen in Right of Ontario as represented by the Minister of Transportation and Aecom Canada Ltd.
Defendants/Moving Party
DECISION ON MOTION
Hennessy, J.
Released: May 31, 2021