COURT FILE NO.: CV-20-00648176-0000
DATE: 2022-07-18
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
WATER MATRIX INC.
Jessica Hewlett, for the Plaintiff/Defendant by Counterclaim/Responding Party
Plaintiff/Defendant by Counterclaim/ Responding Party
- and -
COMPTEN MANAGEMENT INC.
Connor Marino, for the Defendant/Plaintiff by Counterclaim/Moving Party
Defendant/Plaintiff by Counterclaim/Moving Party
HEARD: February 9, 2022
ASSOCIATE JUSTICE: D. MICHAEL BROWN
REASONS
[1] The defendant and plaintiff by counterclaim, Compten Management Inc., (the “Defendant”) brings this motion seeking an order compelling the plaintiff and defendant by counterclaim, Water Matrix Inc. (the “Plaintiff”) to produce certain documents together with its affidavit of documents in advance of examinations for discovery.[^1]
[2] The Plaintiff is a plumbing services business that supplied plumbing services to the Defendant, a condominium management company, for condominium properties managed by the Defendant. The Plaintiff commenced this action on September 23, 2020 seeking damages in the amount of $45,527.53 in respect of unpaid invoices rendered to the Defendant over a 6-month period. In response, the Defendant delivered a Statement of Defence and Counterclaim alleging that the Plaintiff had overcharged the Defendant by charging the Defendant exaggerated amounts for time and materials, not only with respect to the invoices that were the subject of the Plaintiff’s claim, but for all invoices during the three years that the Plaintiff had been supplying such services. In its counterclaim the Defendant seeks damages in the amount of $50,000.00 for alleged overcharges paid back to 2017.
[3] This motion arose out of a disagreement between the parties over a discovery plan. The Plaintiff proposed in its discovery plan that its affidavit of documents would include back-up documentary support only for those unpaid invoices that were the subject of its claim in the main action. The Defendant took the position that the Plaintiff’s affidavit of documents should also include all source documentation to support all invoices previously delivered by the Plaintiff and paid by the Defendant, back to 2017. The Plaintiff objected the Defendant’s production request on the basis of scope and relevance and suggested instead that parties proceed to examinations for discovery on the discovery plan as proposed by the Plaintiff and that any dispute over scope or relevance could be resolved on a refusals motion if needed.
[4] The Defendant has refused to conduct examinations for discovery absent the requested supporting documentation which it says it needs to assess its counterclaim. The Defendant brings this motion seeking an order “requiring the Plaintiff to produce all backup documents to support the invoices delivered by the Plaintiff to the Defendant since 2017 including time sheets and payroll records for all labour costs and all invoices and cancelled cheques paid for materials and supplies” (the “Requested Documents”).
[5] The Requested Documents relate to approximately 160 invoices rendered by the Plaintiff to the Defendant over a 3-year period. The majority of the 160 invoices are for less than $500, and many are for less than $100. According to the uncontested evidence of the Plaintiff, the means by which the Defendant would retain the Plaintiff to undertake the work related to these 160 invoices took a number of different forms. In addition to charging on a time and materials basis, the Plaintiff also performed work for the Defendant where the total amount charged in the invoice was pre-approved in advance of the work being performed, including through fixed fee contracts and email quotations. The Defendant does not contest that some of the invoices relate to work done at a pre-approved price and not on a time and materials basis.
[6] The Defendant’s position is that Requested Documents should be produced for the following reasons:
a) the Requested Documents are highly relevant to the issues of the litigation;
b) the Plaintiff is the party with control of the Requested Documents;
c) the Defendant requires the Requested Documents to assess the amount of its counterclaim; and
d) the Defendant anticipates that the production of the Requested Documents will help facilitate a resolution of this Action.
[7] The Defendant relies on Rule 30.02 of the Rules of Civil Procedure, which requires a party to include in their affidavit of documents “every document relevant to any matter in issue in an action.” The Defendant argues (correctly) that relevance for the purpose of Rule 30.02 is determined by reference to the pleadings: Manufacturers Life Insurance Company v. ASG Technologies Group, Inc., 2020 ONSC 3286 (Master) at para 13. In support of the relevance of the Requested Documents, the Defendant points to pleadings in its Statement of Defence and Counterclaim wherein it asserts a belief that all of the invoices rendered by the Plaintiff have been exaggerated.[^2]
[8] The Plaintiff opposes this motion on the basis that:
a) the Requested Documents are irrelevant to the matters in issue; and,
b) production of Requested Documents would be unduly burdensome to the Plaintiff and entirely disproportionate.
[9] The Plaintiff submits that in circumstances where the invoices relate to work that was performed based on a pre-approved price, such as a flat rate contract or email quotation, the documents requested by the Defendant are entirely irrelevant to the matters at issue in the action. I agree. While the Defendant’s pleading includes bald assertions of the Defendant’s “belief” that all invoices were exaggerated, the specific allegations of exaggeration and overbilling in the Statement of Defence and Counterclaim relate to amounts charged for time and materials. Those allegations have no bearing on any invoice for work that was done at a pre-approved price without reference to time and materials.
[10] The Defendant has all of the invoices. In submissions before me, counsel for the Defendant conceded that the Defendant could, through its own review, identify which invoices were billed based on a pre-approved price and which were billed based on time and materials. Nevertheless, when the Plaintiff specifically asked the Defendant in advance of this motion to identify which invoices it suspected were overbilled, the Defendant refused and continued to seek back-up documents for all invoices. Accordingly, I find that the Defendant’s demand for the Requested Documents is overbroad and would dismiss the Defendant’s motion for that reason alone, notwithstanding that some of the documents in the Requested Documents may be relevant to the matters at issue. The Defendant has declined the opportunity to narrow it’s request to only those invoices based on time and materials and has not even proposed such narrower request in the alternative on this motion. The Defendant has chosen an all or nothing approach. As the defendant is not entitled to all, in my view it should get nothing.
[11] I would also dismiss the Defendant’s motion on the basis of the proportionality factors that I am required to consider in accordance with Rule 29.2.03:
29.2.03 (1) In making a determination as to whether a party or other person must answer a question or produce a document, the court shall consider whether,
a) the time required for the party or other person to answer the question or produce the document would be unreasonable;
b) the expense associated with answering the question or producing the document would be unjustified;
c) requiring the party or other person to answer the question or produce the document would cause him or her undue prejudice;
d) requiring the party or other person to answer the question or produce the document would unduly interfere with the orderly progress of the action; and,
e) the information or the document is readily available to the party requesting it from another source. O. Reg. 438/08, s. 25.
(2) In addition to the considerations listed in subrule (1), in determining whether to order a party or other person to produce one or more documents, the court shall consider whether such an order would result in an excessive volume of documents required to be produced by the party or other person. O. Reg. 438/08, s. 25.
[12] Proportionality has been described as the “default rule” for discovery. It recognizes that not all conceivably relevant facts are discoverable in every case. As Master Robinson (as he was then titled) put it: “ While relevance is a threshold requirement, satisfying relevance is not a licence to obtain discovery regardless of the burden or expense imposed on the opponent if the costs of discovery outweigh the likely benefit”: The Manufacturers Life Insurance Company v. ASG Technologies Group Inc., 2020 ONSC 3286 at para. 15; Meuwissen (Litigation Guardian of) v. Perkin, 2013 ONSC 2732 (Ont. S.C.J.) at para. 48; Warman v. National Post Co., 2010 ONSC 3670 (Ont. S.C.J.) (Master).
[13] According to the Plaintiff’s evidence, searching for source documentation for each of the 160 invoices would involve searching multiple electronic systems and hardcopy files stored in bulk in a warehouse. I accept the Plaintiff’s evidence that it would take one of its staff a minimum of 320 hours to search for and collect all of the Requested Documents.
[14] I find that the time and expense required of the Plaintiff to collect and produce the Requested Documents is unjustified and unreasonable in the context of this action. The burden on the Plaintiff would be disproportionate to the likely benefit of such production. The disproportionality is amplified in this case given the amounts at stake. The Defendant’s counterclaim, to which most of the Requested Documents would relate, is for $50,000 in total, which is well below the Simplified Rules limit and not significantly higher than the Small Claims Court threshold. For those invoices that are less than a few hundred dollars, the cost of production of the back-up documents could exceed the value of the Defendant’s counterclaim in relation to such invoices.
[15] While I have found that production of the Requested Documents in their entirety would not be proportional, I do not rule out the possibility that the production of back-up documents in relation to certain invoices might be proportional in the context of this litigation. However, in my view this motion is not the appropriate venue to seek such production. Indeed, the mere bringing of this motion for production in the circumstances of this case offends the proportionality rule: Mansfield v. Ottawa (City), 2012 ONSC 5208 (Master) at para. 2. Any request for such documents should be made on examination for discovery, as it would allow for a more efficient and surgical approach.
[16] The Defendant’s motion for the production of the Requested Documents is dismissed without prejudice to the Defendant’s ability to seek production of documents in relation to particular invoices on examinations for discovery, subject to relevance and proportionality.
[17] The Plaintiff filed a costs outline seeking partial indemnity costs of $3,559.45. The Defendant’s bill of costs estimates its partial indemnity costs as $3,557.45. Given the nearly identical amounts, the Plaintiff’s costs request is within the reasonable expectations of the parties. The Plaintiff shall have its costs of the motion in the amount of $3,559.45, inclusive of HST, payable by the Defendant within 30 days.
D. Michael Brown, Associate Judge
Released: July 18, 2022
COURT FILE NO.: CV-20-00648176-0000
DATE: 2022-07-18
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
WATER MATRIX INC.
Plaintiff/Responding Party
- and –
COMPTEN MANAGEMENT INC.
Defendant/Moving Party
REASONS
ASSOCIATE JUSTICE D. MICHAEL BROWN
Released: July 18, 2022
[^1] The Defendant’s motion also seeks the imposition of a litigation timetable. The timetable proposed was not provided to the Plaintiff in advance of bringing this motion and the Plaintiff has since advised that it would agree to the timetable. No submissions were made to me at the hearing on the appropriateness of the timetable and no request was made for its approval. Accordingly, I have not ruled on that issue.
[^2] Paragraph 22 of the Defendant’s factum refers specifically to a quote purportedly taken from paragraph 7 of the Statement of Defence and Counterclaim. However, the quoted excerpt does not appear anywhere in the Statement of Defence and Counterclaim that was included in the Defendant’s motion record. For the purpose of these reasons, I have interpreted the Defendant’s submission in paragraph 22 of its factum as a reference to paragraph 9 of the Statement of Defence and Counterclaim which appears to include language similar to the excerpted quote.