Court File and Parties

COURT FILE NO.: CV-15-269

DATE: 20210204

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Maurice Byrne and Siobhan Dempsey, Plaintiffs

AND:

Patrick B. Coulter & Associates Inc., Defendant

AND:

724246 Ontario Inc., Van Dolder Enterprises Limited, Van Dolder’s Home Team Inc., Sierra Pacific Industries, Hurd Windows and Doors Inc., and The Corporation of the Town of Blue Mountains, Third Parties

BEFORE: Justice J.R. Sproat

COUNSEL: C. Fotiadis for the moving party Patrick B. Coulter & Associates Inc.

S. Schreiber, for the Responding Parties Sierra Pacific Industries and Hurd Windows and Doors Inc.

E. Treslan, for the Plaintiffs

A. Verrilli, for the Third Party 724246 Ontario Inc.

HEARD: January 28, 2021

MAURICE BYRNE and SIOBHAN DEMPSEY Plaintiffs and PATRICK B. COULTER & ASSOCIATES INC. Defendant and 724246 ONTARIO INC., VAN DOLDER ENTERPRISES LIMITED, VAN DOLDER'S HOME TEAM INC., SIERRA PACIFIC INDUSTRIES, HURD WINDOWS AND DOORS INC., and THE CORPORATION OF THE TOWN OF BLUE MOUNTAINS Third Parties

ENDORSEMENT

INTRODUCTION

[1] The moving party, who I will simply refer to as Coulter, was the general contractor and designer of a custom-built home for the plaintiffs. The plaintiffs’ claim $550,000 in damages on account of windows that were allegedly negligently manufactured or installed which resulted in water damage. In the third-party action Coulter claims that the defendants Sierra Pacific Industries (“Sierra”) and Hurd Windows and Doors Inc. (“Hurd”) are responsible for the negligent manufacture of the windows.

[2] This motion is concerned with certain questions taken under advisement or objected to by counsel on behalf of Sierra and Hurd. Mr. Treslan and Mr. Verrilli did not make any submissions.

[3] The two questions taken under advisement, and not answered so deemed to be objections, relate to the corporate relationship between Hurd and Sierra.

[4] In its statement of defence Sierra pleaded that it had not assumed any liabilities of Hurd or H.W.D. Acquisitions. Coulter requested production of transaction documents to allow it to assess whether or not Sierra had assumed liability. Coulter then followed up by asking for documents relating to the “transition of ownership” from Hurd to Sierra.

[5] By letter dated August 6, 2020 Mr. Schein, counsel for Sierra and Hurd, advised as follows:

I can advise you that Hurd Windows and Doors Inc. became bankrupt in 2008.

We understand that assets of Hurd Windows and Doors Inc. were then purchased from the trustee by HWD Acquisition Inc., which was the entity that manufactured the windows in issue in this case.

In 2014, the shares of HWD Acquisition Inc. were acquired by Sierra Pacific. Sierra Pacific then arranged for the liquidation of HWD Acquisition Inc. A number of assets of HWD Acquisition Inc. were then transferred to Sierra Pacific. We understand that by operation of the relevant US law, Sierra Pacific then became responsible as indemnifier for any proven liabilities of HWD Acquisition Inc. up to the value of those assets. It appears that the value of those assets exceeds the damages claimed herein, based on the material produced to date.

[6] I asked Ms. Schreiber whether Mr. Schein’s letter should be understood as an admission that Sierra was responsible for any damages that otherwise could have been awarded against H.W.D. Acquisition Inc. which manufactured the windows. (based upon Mr. Schein’s letter, Sierra’s obligation to indemnity would also depend on whether and to what amount Sierra had already indemnified others, given that the indemnity obligation is capped at the value of the assets acquired). Ms. Schreiber did not agree with my interpretation of the letter.

[7] The explanation by Mr. Schein is prefaced, “We understand…”. I take if from this that he is probably relating what he was told by counsel or an executive of Sierra. I do not think Coulter should be kept in the dark as to whether it has a viable claim against Sierra. Since I apparently do not understand Mr. Schein’s letter, it is only fair and reasonable that Coulter be able to see the relevant documents.

[8] Absent an admission that Sierra has a duty to indemnity, I find that Coulter is entitled to production of transaction documents that will make clear when transactions occurred, the parties to the transactions, the general nature of the transactions and any and all provisions related to whether and to what extent Sierra is responsible for the liabilities of H.W.D. Acquisition Inc. and Hurd. This would include the value of the assets transferred and the indemnity amount, if any, Sierra has already paid.

[9] I will deal together with the following three questions objected to which are, for the period for the period 2009 – 2018;

a) to produce the service files for this type, brand or line of windows;

b) to produce a summary or listing of the complaints that were made regarding this brand of windows;

c) to produce any information regarding prior claims or complaints made about leakage involving this brand of windows.

[10] The Statement of Claim alleges that the windows are defective in that they allow water to leak around the window causing heat loss and physical damage. All three questions should be narrowed so that the request relates to service files, complaints or claims that involve water leakage and/or heat loss.

[11] Such documents are clearly relevant. I do not accept the argument that such documentation would not meet the test for admissibility at trial. If, for example, the documentation revealed a long list of water leakage complaints, involving various unrelated installers, this might go a long way toward demonstrating if this was a manufacturing defect or improper installation.

[12] As to proportionality, Sierra–Hurd have not filed any evidence to suggest that producing the requested material would be unduly onerous. Material of this nature can ordinarily be obtained from an electronic search.

[13] I, therefore, order that the three questions be answered, subject to the water leakage limitation I mentioned.

[14] Finally, counsel for Sierra and Hurd refused to produce a list of all dealers, in addition to the defendant Van Dolder’s, who sold Hurd–Sierra windows in Ontario as of January 2009.

[15] This is relevant under Rule 31.06(2) as such dealers may have knowledge of complaints similar to those of the plaintiffs.

[16] It certainly would not be onerous to supply a list of Ontario dealers. This is the type of material customarily available on the website of a manufacturer.

[17] As such Sierra–Hurd shall also answer this question.

[18] Coulter was generally successful on the motion. Coulter claimed fees of $5,702 on a substantial indemnity basis which equates to approximately $3,800 on a partial indemnity basis. Sierra-Hurd’s cost outline claimed $2,981 on a partial indemnity basis. Coulter’s, claim is, compared to Sierra-Hurd’s outline, reasonable and proportionate given that the moving party typically has greater work to do than the responding party. While Coulter claimed substantial indemnity costs, I do not see any basis for that. Sierra-Hurd simply advanced certain arguments that were not accepted.

[19] As such, I award Coulter costs as follows:

a) Fees $3,800.00

b) HST on fees $494.00

c) Disbursements $476.79 (including applicable HST)

$4,770.79

SPROAT, J.

Date: February 4, 2021