Court File and Parties

COURT FILE NO.: CV-20-900 DATE: 2023/09/20 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

MARTINO DENTE, RICCARDO DENTE, THE MARTINO PETER DENTE FAMILY TRUST, THE RICCARDO MARTINO DENTE FAMILY TRUST and OVERLOOK CAPITAL INC. Plaintiffs – and – DELTA PLUS GROUP, ONTARIO GLOVE & SAFETY INC. and DEGIL SAFETY PRODUCTS (1989) INC. Defendants

AND BETWEEN:

DELTA PLUS GROUP, ONTARIO GLOVE & SAFETY INC. and DEGIL SAFETY PRODUCTS (1989) INC. Plaintiffs by Counterclaim – and – NOVEMBER RIDGE CAPITAL INC., MPDEN CONSULTING INC. and OVERLOOK HOLDINGS INC. Defendants to the Counterclaim

The Honourable Justice C.D. Braid

Counsel: Jamie Spotswood, Jordan Dunlop and Camille Beaudoin, Counsel for the Plaintiffs/Defendants by Counterclaim Sean Sullivan, Jeramie Gallichan and Erica Johnston, Counsel for the Defendants/Plaintiffs by Counterclaim

HEARD: By written submissions

ADDENDUM TO REASONS ON UNDERTAKINGS AND REFUSALS MOTIONS

I. OVERVIEW

[1] Martino Dente and his son, Riccardo Dente (“the Dentes”), are the former directors of Degil Safety Products (1989) Inc. (“Degil”) and Ontario Glove & Safety Inc. (“OGS”). The Dentes sold their shares in Degil and OGS, which they owned through several companies and trusts, to Delta Plus Group through a Share Purchase Agreement that closed on November 2, 2018.

[2] The Dentes entered into consulting agreements to continue working with the businesses after the transaction closed in order to assist with the transition of the new ownership. Before the consulting agreements came to an end, the Dentes were terminated or resigned. There were various disputes regarding their services, how the companies were being run, and the earnout owed to the Dentes under the consulting agreements.

[3] Two years after the sale, the Dentes sued Delta, Degil and OGS (collectively referred to in these reasons as “Delta”). Delta counterclaimed. The action involves eleven parties in a complex commercial dispute regarding the Share Purchase Agreement, the consulting agreements and events related to those agreements.

[4] The Dentes and Delta brought competing motions to compel answers to undertakings and refusals. My reasons on those motions are reported at Dente et al. v. Delta Plus Group et al., 2023 ONSC 3642. I rely on the analysis in those reasons and will not repeat it here.

[5] In my reasons, I granted leave to Delta to serve and file affidavit evidence in support of the litigation privilege being claimed for Refusal No. 10. In response, Delta filed an affidavit. I subsequently granted leave to the parties to file further written submissions regarding the affidavit.

[6] For the reasons set out below, I find that Delta has not established, on a balance of probabilities, that the answer to Refusal No. 10 is protected by litigation privilege. I therefore order that Delta answer the question.

II. BACKGROUND

[7] The Dentes moved to compel answers to refusals and undertakings arising from the examination for discovery of Thibauld de Chantamele, the managing director at Degil (and representative of Delta), on February 1 and 2, 2022. Refusal No. 10 arose out of question 582, which asked whether certain financial statements were ever provided to MNP Corporate Finance Inc.

[8] At discovery, Delta refused to answer question 582 because of “expert privilege”. In their factum on the undertakings motions, Delta asserted “litigation privilege” because MNP was retained by Gowling WLG (Canada) LLP (“Gowling”) after the Dentes served their Earnout Dispute Notice and Notice of Indemnity Claim in April 2020.

[9] In my reasons on the undertakings and refusals motions, I noted that no evidence had been provided to support the claim of litigation privilege. Since a privilege was being asserted, I granted Delta “15 days to provide firsthand evidence from the creator of the document in question in support of the privilege.”

[10] In response, Delta filed a sworn affidavit of Tracy Salmon, Law Clerk at Gowling, lawyers for the defendants. In that affidavit, Ms. Salmon states: “I am advised by [counsel] Tom Hunter that MNP was retained by Gowling, on behalf of the Defendants, on or about June 10, 2020, to provide litigation support services in relation to the Earnout Dispute Notice received from the Plaintiffs on April 30, 2020.”

[11] Thibauld de Chantamele and Tom Hunter have previously provided sworn affidavit evidence and been cross-examined on their affidavits. For reasons that are unclear, neither of these individuals swore an affidavit that could have provided firsthand evidence regarding Refusal No. 10. Instead, Ms. Salmon provided an affidavit based on information and belief.

III. ANALYSIS

[12] A party seeking litigation privilege has the onus to establish, on a balance of probabilities, that litigation was contemplated when the document was created and that the documents for which privilege is sought were created for the dominant purpose of litigation: Sky Solar (Canada) Ltd. v. Economical Mutual Insurance Company, 2015 ONSC 4714, at para. 80.

[13] The party asserting litigation privilege must provide firsthand evidence of a dominant litigation purpose from the creator of the documents in question: Walsh Construction Company Canada v. Toronto Transit Commission, 2020 ONSC 3688, at para. 23.

[14] Ms. Salmon’s affidavit states that she was advised by counsel Tom Hunter that Gowling retained MNP, on behalf of the defendants, on or about June 10, 2020, to provide litigation support services in relation to the Earnout Dispute Notice from the Dentes.

[15] The question that led to Refusal No. 10 was phrased as follows: ““Were the financial statements [referred to in an email exchange of January 30-31, 2020 between Mr. de Chantamele and a representative of MNP Corporate Finance Inc.]…provided to MNP?” Delta’s submissions interpret this question to ask whether the documents were ever provided to MNP. Even though the question is not limited to any specific time period, it calls for a simple yes or no answer. Ms. Salmon’s affidavit does not provide any evidence to establish how requiring Delta to answer this question would disclose litigation strategy, disclose a communication made for the dominant purpose of litigation or otherwise breach litigation privilege.

[16] Delta has not established, on a balance of probabilities, that litigation privilege applies to Refusal No. 10.

IV. CONCLUSION

[17] For all of these reasons, the court makes the following orders:

1. Delta shall answer Question 582 (Refusal No. 10) from the examination for discovery of Thibauld de Chantamele on February 1 and 2, 2022, by October 20, 2023.
2. I previously ordered that each party shall bear their own costs of the undertakings and refusals motions. I decline to make any order as to costs on the supplementary issue of Refusal No. 10.

Braid, J. Released: September 20, 2023