COURT FILE NO.: CV-21-669174

DATE: 2022 05 12

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MARY KATHLEEN YOUNG in her capacity as Trustee and Executor of the ESTATE OF BRUCE MALCOLM YOUNG, Applicant

• and –

IAMGOLD CORPORATION, Respondent

BEFORE: Associate Justice Todd Robinson

COUNSEL: D. Ionis, for the applicant

C. Pilkington and Z. Levy, for the respondent

HEARD: April 12, 2022 (by videoconference)

REASONS FOR DECISION

[1] The applicant and the respondent each bring motions to compel answers to refused questions asked during cross-examinations on affidavits for the pending application.

[2] The underlying dispute involves a mining royalty for mineral claims in the Côté Gold Project. The royalty was previously owned by Superior Corporate Services Limited (“Superior”), having been granted by Young Shannon Gold Mines, Limited (“Young Shannon”). Bruce Young, now deceased, was the owner and controlling mind of Young Shannon. He incorporated Superior to provide mineral exploration management services to Young Shannon. A 3% net smelter return royalty in Young Shannon’s mineral claims was granted to Superior in 1987, with 1.5% of that royalty thereafter assigned to others. The balance of the royalty, namely 1.5%, is the subject matter of the current dispute.

[3] Superior was administratively dissolved in 1989, apparently during a period in which Bruce Young was in poor health. At the time, Mr. Young was the sole director, officer, and shareholder of Superior. Mr. Young passed away in 2003. In the prior year, Young Shannon had signed a deal to put the subject mine into production. Mary Young is Bruce Young’s surviving spouse and the co-estate trustee and beneficiary of his estate.

[4] In June 2021, IAMGOLD Corporation (“IAMGOLD”) acquired the mining royalty from the Public Guardian and Trustee (the “PGT”) in a purchase transaction made under the Escheats Act, 2015, SO 2015, c 38, Sched 4. That agreement was entered on the basis that the royalty had not been disposed of or transferred prior to Superior’s dissolution, so was forfeited to the Crown.

[5] Ms. Young’s current application is unique. She seeks an interim preservation order over the mining royalty to prevent it from being sold or otherwise dealt with in a manner harmful to her interests pending a challenge to validity of the sale of the royalty by the PGT to IAMGOLD. However, relief challenging the purchase transaction is not sought on this application. This application was brought in response to IAMGOLD’s refusal to preserve the royalty pending the resolution of Ms. Young’s claim. Ms. Young is taking steps to revive Superior and bring a further application to challenge the purchase transaction, which will be brought by either Superior or, if it cannot be revived, the estate of Bruce Young. However, the nature and scope of that future application is not yet known.

[6] During cross-examination of IAMGOLD’s affiant, Stephen Eddy, Ms. Young asked for copies of unredacted written communications between IAMGOLD and the PGT between April 2021 and July 2021, and further requested unredacted copies of a royalty valuation report obtained by IAMGOLD and the final purchase agreement between IAMGOLD and the PGT. Prior to the cross-examination, a request to inspect was served for the same documents. In response, IAMGOLD agreed to make redacted copies available for inspection, but without prejudice to its position that they were not properly requested. When formally asked to produce them on cross-examination, IAMGOLD initially took two of the three production requests under advisement, but all three requests were ultimately refused as irrelevant.

[7] During cross-examination of Ms. Young, IAMGOLD asked various questions about Bruce Young’s will and Mary Young’s relationship with Metalla Royalty & Streaming Ltd (“Metalla”), which now owns a portion of the original 3% royalty and whose counsel appears to have alerted Ms. Young to IAMGOLD’s acquisition of Superior’s 1.5% royalty. Those questions were all refused as irrelevant.

[8] Given the uniqueness of this application, which seeks an interim preservation order in isolation from the ultimate proceeding for which that preservation is intended, the positions of the parties on relevance were nuanced. A fair resolution of the disputed matters was accordingly not straightforward or quickly reached. Nevertheless, I have determined that IAMGOLD refusals should be upheld, as well as Ms. Young’s refusals regarding the questions on Bruce Young’s will. Since I am not ordering production of the documents sought by Ms. Young, I need not address IAMGOLD’s alternative relief compelling answers to the refused Metalla-related questions. I am accordingly dismissing both motions.

Analysis

[9] All of the refusals have been maintained on the basis of relevance. There is no dispute on the scope of relevance for cross-examination on an application. The proper scope of cross-examination will vary depending on the nature of the application, but questions must be relevant to: (i) the issues on the particular application; (ii) the matters raised in the affidavit by the deponent, even if those issues are irrelevant to the application; or (iii) the credibility and reliability of the deponent’s evidence: Ontario v. Rothmans Inc., 2011 ONSC 2504, at para. 143.

[10] A key factor in determining if a question asked is relevant is whether an answer could be relied on by a trier of fact to determine an issue on the application: Sanctuary Ministries of Toronto v. Toronto (City), 2020 ONSC 4708 at para. 19.

[11] Because the underlying application seeks an interim preservation order under Rule 45.01 of the Rules of Civil Procedure, RRO 1990, Reg 194, the applicable criteria for deciding the application bear on my assessment of relevance. The criteria are not in dispute. A party seeking an interim preservation order must establish (i) the asset sought to be preserved constitutes the subject matter of the dispute; (ii) there is a serious issue to be tried regarding the applicant’s claim to that asset; and (iii) the balance of convenience favours granting the relief sought: Taribo Holdings Ltd. v. Storage Access Technologies, [2002] OJ No 3886 (SCJ) at para. 5; BMW Canada Inc. v. Autoport Limited, 2021 ONCA 42 at para. 42.

Mary Young’s Refusals Motion

[12] Ms. Young submits that the communications, valuation report, and final purchase agreement are probative to the issue of the PGT’s lack of authority to sell the royalty. She argues that they will reflect the understanding of the parties on the PGT’s statutory authority and may contain IAMGOLD’s representations to the PGT on its authority. On the pending application, Ms. Young’s position is that the royalty was not subject to the Escheats Act, 2015, but rather was subject to the Forfeited Corporate Property Act, 2015, SO 2015, c 38, Sched 7. The documents are thereby argued to be relevant to the issues to be decided on this application, specifically whether there is a serious issue to be tried.

[13] I am not convinced by Ms. Young’s arguments that the refused documents are relevant in deciding if there is a serious issue to be tried. I agree with IAMGOLD that whether the royalty was subject to the Escheats Act, 2015 or the Forfeited Corporate Property Act, 2015 is a legal issue that does not depend on the parties understanding. I was directed to no provision of either act that supports relevance of the knowledge or understanding of parties to the validity of a purchase transaction under the Escheats Act, 2015.

[14] I also agree with IAMGOLD that whether or not IAMGOLD made any representations to the PGT about its statutory authority is also irrelevant. I have been directed to no provision of the Escheats Act, 2015 or case law supporting that reliance on a representation bears on whether or not the purchase transaction is valid.

[15] However, that is not an end to the matter. As already noted, proper scope of cross-examination includes matters raised in the affidavit of a deponent, even if those issues are irrelevant to the application. Ms. Young argues that the communications, valuation report, and purchase agreement are specifically referenced and discussed in Stephen Eddy’s responding affidavit in the underlying application, which makes them producible.

[16] With respect to communications between IAMGOLD and the PGT, I am not convinced that Mr. Eddy’s general references to communications with the PGT in April and May 2021 support a production order for all non-privileged, written communications between IAMGOLD and the PGT concerning the royalty.

[17] I have been directed to paras. 22-23 of Mr. Eddy’s affidavit for his evidence on communications with the PGT. However, Mr. Eddy states only that IAMGOLD contacted the PGT in April 2021 “to begin the process of acquiring the Superior Royalty” and that corporate, bankruptcy, execution, and real estate searches performed by IAMGOLD were provided to the PGT. He subsequently refers, at para. 25, to exchanging the final agreement by email. Nothing in Mr. Eddy’s statements suggest any representations made by IAMGOLD that were or may have been relied upon by the PGT. His statements are contextual facts about when IAMGOLD began the acquisition process, what searches it provided to the PGT, and when the agreement was finalized.

[18] I have been directed to nothing else in Mr. Eddy’s affidavit supporting a proper cross-examination on all communications with the PGT. I accordingly cannot view the refused question as being within the proper scope of cross-examination on Mr. Eddy’s affidavit.

[19] With respect to the royalty valuation and final purchase agreement, Ms. Young similarly argues that they are referenced in Stephen Eddy’s affidavit at paras. 24-27, so should be produced. I disagree. Mr. Eddy refers to completing the valuation and states that it was provided to the PGT. He further generally discusses the agreement, payment to the PGT, and registration of notice. I do not dispute that Ms. Young was entitled to cross-examine on those statements, but that does not mean she is entitled to production of the valuation and final purchase agreement in unredacted form.

[20] Ms. Young argues that explicit reference to a document in an affidavit makes it relevant and producible. However, I have been directed to no decision holding that mere reference to a document in an affidavit entitles an adverse party to its production. None of the cases filed by the parties appear to make any such holding.

[21] IAMGOLD was asked to produce the purchase agreement near the beginning of the cross-examination, which was refused. The cross-examination preceding the refusal on the valuation report was about the royalty purchase price. Ms. Young’s cross-examination focused on the financial terms between IAMGOLD and the PGT. I do not agree that the financial terms of the purchase transaction, or how the purchase price was negotiated or informed, are relevant to the underlying preservation application. It is thereby not probative to the issues for determination. I find no basis to order production of the valuation or final purchase agreement simply because Mr. Eddy refers to them.

[22] Ms. Young also argues that the requested communications, valuation report, and purchase agreement are relevant to the deciding the balance of convenience criterion. She submits that any representations by IAMGOLD on future plans for the royalty are relevant to assessing the relative prejudice to the parties of a preservation order. I do not entirely disagree that IAMGOLD’s intentions for the royalty may be probative on the pending application. However, the refusals before me are not about IAMGOLD’s intentions. They are about production of documents from which Ms. Young hopes to find or infer statements of intention.

[23] I have been directed to nothing in the cross-examination dealing with questions put to Mr. Eddy on IAMGOLD’s intentions for the royalty. Similarly, I have been directed to no question posed to Mr. Eddy on what representations, if any, IAMGOLD made to the PGT about Superior’s royalty or the PGT’s authority. The questions leading up to and following the refused production requests do not address those matters.

[24] In my view, it would have been appropriate to ask IAMGOLD questions on its intentions for the royalty and what the PGT may have been told about its plans. Had those questions been asked and refused, and a motion brought on those refusals, then the arguments advanced before me may have been stronger. In the context of production of written communications, the valuation, and the purchase agreement, they are purely speculative. Mere speculation on what the documents might contain is not a sufficient basis to assess if the documents will be probative in deciding the preservation application. I thereby cannot agree with Ms. Young that the documents are relevant to the balance of convenience factor.

[25] For these reasons, I am not satisfied that any of the requested communications, valuation report, or purchase agreement are relevant or probative to the pending preservation application.

IAMGOLD’s Refusals Motion

[26] IAMGOLD submits that Bruce Young’s will is relevant to the underlying application and that, if the commercial dealings between IAMGOLD and the PGT are relevant, then so too is the nature of Ms. Young’s relationship with Metalla.

[27] With respect to Bruce Young’s will, I agree with Ms. Young’s argument that the extent of its relevance to the preservation application is whether it includes any bequest dealing with the royalty, directly or indirectly. Ms. Young’s affidavit confirms that the will leaves the entirety of the estate to Ms. Young, other than a limited bequest of shares in Young Shannon to Bruce Young’s daughter from his first marriage. Ms. Young’s evidence on cross-examination and in answer to an undertaking is that the will does not specifically reference the royalty.

[28] Although IAMGOLD asserts that the terms of the will are required to determine Bruce Young’s actual intentions, in my view, that submission amounts to a suggestion that Ms. Young is misrepresenting the contents of the will. If that is IAMGOLD’s position, then it ought properly to have been put to Ms. Young during her cross-examination. It was not. Ms. Young’s evidence is clearly that the will does not specifically address the royalty and that she is the beneficiary of Bruce Young’s estate (other than the above-noted Young Shannon shares). IAMGOLD does not argue that Ms. Young is being untruthful and I find no basis to question her reliability. In these circumstances, a copy of the actual will is not relevant to deciding if there is a serious issue to be tried on Ms. Young’s claim to the royalty. Ms. Young’s evidence is that she inherited the residual of Bruce Young’s estate. Either there is a serious issue to be tried on whether the estate included the royalty or there is not.

[29] The nature of the underlying application has been significant in my determination on relevance. The application judge is not deciding whether the royalty is, in fact, part of the estate and, if so, whether Ms. Young inherited the royalty. That will be the subject matter of a future application in which Bruce Young’s actual will may be directly relevant and probative, if not necessary, to establish Mary Young’s legal standing as beneficiary. This is an application for a preservation order. In my view, on the facts of this case, the scope of relevance to decide what is a “serious issue to be tried” in the underlying application is not the same as deciding the issue itself, which will be the subject matter of a future proceeding.

[30] With respect to the questions about Metalla, IAMGOLD only seeks answers in the alternative if the documents sought by Ms. Young are held to be relevant and producible. IAMGOLD argues that, if some of the circumstances surrounding the royalty are relevant, then the entire commercial matrix concerning the sale, and potential resale, of the royalty are all relevant. However, IAMGOLD’s primary position is that neither the documents sought by Ms. Young nor the Metalla-related questions are relevant to this preservation application.

[31] Since answers to the refused Metalla-related questions are only sought in the alternative, and I have found that the documents requested by Ms. Young are not relevant to this application, I need not address relevance of the Metalla-related questions.

Disposition

[32] For these reasons, I am dismissing both Ms. Young’s and IAMGOLD’s motions. The documents sought and questions asked may yet be relevant in the contemplated future application to challenge the sale transaction. However, in my view, they are not relevant in this one.

Costs

[33] Since I have dismissed both motions, I am inclined to award no costs to either party. However, I do not wish to deny the parties an opportunity to make submissions on costs.

[34] If either party seeks costs, and the parties cannot agree, then an oral hearing may be arranged through my Assistant Trial Coordinator, Christine Meditskos, for submissions as to costs. Each party will be entitled to a maximum of fifteen (15) minutes of submissions. Costs outlines, any offers to settle, and case law relied upon shall be exchanged and submitted by email directly to my Assistant Trial Coordinator at least five (5) days prior to the hearing.

[35] Unless a hearing for costs submissions has been booked (although not necessarily heard) within the next thirty (30) days, the parties shall be deemed to have agreed on costs.

ASSOCIATE JUSTICE TODD ROBINSON

DATE: May 12, 2022