Beliveau v. The Government of the People’s Republic of China, 2024 ONSC 4816

Court File and Parties

COURT FILE NO.: CV-18-589448 DATE: August 30, 2024

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Martin Beliveau v. The Government of the People’s Republic of China, PCL Contractors Inc., PCL Constructors Canada Inc., and City of Ottawa;

BEFORE: ASSOCIATE JUSTICE C. WIEBE

COUNSEL: Wendy Ngai for Martin Beliveau; Dakota Forster for PCL Contractors Inc. and PCL Constructors Canada Inc.; Louis-Pierre Gregoire for the Government of the People’s Republic of China; Stuart Huxley for the City of Ottawa; Eli Feldman for Tomlinson Group Inc. (third party).

HEARD: August 29, 2024.

ENDORSEMENT

1This endorsement reflects the oral ruling I made on August 29, 2024.

2The plaintiff brought this motion for a status hearing and a timetable order with a new deadline for setting this action down for trial. PCL Constructors Inc and PCL Constructors Canada Inc. (together “PCL”) opposed this motion. They want the action dismissed for delay. The other defendants attended. One third party, Tomlinson Group Inc. (“Tomlinson”), also attended. They all supported PCL.

3The underlying action is a subrogated claim in the name of Mr. Beliveau by TD Insurance, Mr. Beliveau’s home insurer. Mr. Beliveau owns a home in Ottawa that is a three-minute walk away across a road from the embassy of the Government of the People’s Republic of China (“PRC”). In the spring of 2015 there was a renovation at the embassy that involved the construction of an addition. PCL was the general contractor. Mr. Beliveau claims that in January, 2016 he discovered that the foundation of his house had been “compromised.” He made a claim on his policy and TD eventually resolved the claim.

4On January 9, 2018 the plaintiff commenced this action claiming damages in nuisance and negligence against PCL, PRC and the City of Ottawa. The claim alleges that the project at the embassy caused the foundation issues in the Beliveau house. No particulars were pleaded. The City defended on January 16, 2019. PCL defended on February 25, 2019. PRC did not attorn to the jurisdiction of Ontario and did not defend. On January 31, 2020 PCL commenced a third party claim against five consultants and subcontractors on the project, claiming contribution and indemnity. PCL gave the third parties an indefinite waiver of defence given the stagnation of the action. Nevertheless, Tomlinson defended the third party claim on January 10, 2022, four years after the main action started. No other steps have been taken.

5On a motion for a status hearing under Rule 48.14(7) of the Rules of Civil Procedure the plaintiff must show cause why the action should not be dismissed for delay. The plaintiff must prove two things: that there is an acceptable explanation for the delay; and that the defendant will not suffer any non-compensable prejudice if the action is allowed to proceed; see Beshay v. Labib, 2024 ONCA 186 at paragraph 11. This test is conjunctive. The first part of the test must be contextualized by considering whether the plaintiff always intended to prosecute the action, failing only due to inadvertence, and by considering whether the plaintiff moved expeditiously with respect to the relief sought; see Henderson v. Kenora-Rainy River Districts Child & Family Services, 2022 ONCA 387 at paragraph 10.

6I found that plaintiff failed to meet its onus on both parts of the test. Concerning the plaintiff’s explanation for the delay, this is what I found:

• The plaintiff was not transparent. It did not disclose the theory behind its case and its expert evidence in support. Instead, it continued probing the defendants for production no doubt to flesh out its own claim. It was only during argument on this motion that Ms. Ngai finally disclosed orally (not in the evidence) that TD Insurance obtained a geotechnical engineering report from Golder in 2016 that described soil compaction issues adversely affecting the Beliveau house foundation, which soil compaction issues the report apparently attributed to projects in the vicinity. The report apparently did not identify the embassy project as a culprit. This all gave the claim the earmarks of a “fishing expedition” and not a serious claim.
• Ms. Ngai attributed much of the delay to the failure of the parties to reach an agreement on a confidentiality order concerning production. As the subject of the litigation was a project concerning the PRC embassy, it is understandable that the PRC would have security concerns about documentary disclosure. It was undisputed that confidentiality clauses were in all the construction contracts. As early 2020 the PRC insisted on a confidentiality order before the defendants and third parties embarked on production. The parties could never reach an agreement on the terms of such an order. When I asked Ms. Ngai as to why, given this impasse, the plaintiff never undertook a motion to obtain a confidentiality order, she had no answer.
• Then there was the issue of the venue. For some reason, the plaintiff commenced this action in Toronto. It was only when the parties started discussing case management in 2023, over five years after the action started, that the inappropriateness of the venue was acted upon. Justice Wilson was approached to be case manager and her first response in October, 2023 was a terse letter questioning why the action was not in Ottawa. The plaintiff then began the effort of transferring the action to Ottawa. That is still not done. Ms. Ngai had no explanation as to why this was not done much sooner, if not at the beginning. This further underscored the lack of proper care and attention the plaintiff gave to this case.
• The plaintiff never made production of its documents, never served a discovery plan and never moved to have a discovery plan imposed. Again, this all made the claim look like a fishing expedition and not a serious claim.

7Concerning the issue of prejudice, this is what I found:

• The plaintiff provided no evidence that remediation work was not done on the Beliveau house foundation. On the contrary, since the insurance claim was resolved before the action was commenced in 2018, it is reasonable to infer that TD Insurance remedied the alleged foundation problems before starting the action in 2018. There was no evidence from the plaintiff in this motion that the plaintiff put the defendants and third parties on notice of this remediation work with an opportunity to investigate the foundation problems with their experts before the remediation was done. What this means is that it will be very difficult, if not impossible, for the experts of the defendants and the third parties now to investigate the alleged foundation damages. This is hugely prejudicial to the defendants and third parties.
• The plaintiff provided no evidence that the soil conditions allegedly described in the Golder report have not changed in the last nine years. Indeed, much could have happened to the soil around the house in the last nine years, and much could have influenced those conditions. To give the experts of the defendants and third parties a fair opportunity to investigate these soil conditions now would involve at minimum a lengthy investigation of all the events over the last nine years that could have affected the soil. This will probably be fruitless and needlessly costly. As a result, the action will boil down to what is in the plaintiff’s paper and digital record, which probably favours the plaintiff. This again is hugely prejudicial to the defendants and third parties.
• If TD Insurance was serious about its claim, it should have disclosed the Golder report in 2016 and given the PRC and PCL an immediate opportunity to investigate the alleged foundation damages and soil conditions before remediation was done. It did not do so. Instead, it settled the insurance claim and went on a fishing expedition to retrieve its losses.

8I, therefore, dismissed the action.

9Concerning costs, the only party that served and filed a bill of costs was PCL. The bill showed exceedingly modest cost totals for the motion and the action. The PCL partial indemnity costs were shown as $8,903.73; the substantial indemnity costs were $12,997.83; and the actual costs were $14,362.53. PCL wanted its substantial indemnity costs of $12,997.83 given the conduct of TD Insurance. PRC, the City and Tomlinson each wanted $1,000 for the appearance at the argument of the motion. Ms. Ngai wanted an order of not costs, arguing that the plaintiff acted reasonably. Otherwise, she had little to say.

10I granted PCL its substantial indemnity costs of $12,997.83. I granted each of PRC, the City and Tomlinson $1,000 in costs. This order is fair and reasonable. The defendants were entirely successful. The conduct of TD Insurance in starting and pursuing this action as a fishing expedition without proper transparency and care merits a substantial indemnity costs award in favour of PCL. The claimed substantial indemnity costs are also very modest and well within what TD Insurance could reasonably expect to pay in the event of a loss, even for partial indemnity costs. The claims of $1,000 for each of PRC, the City and Tomlinson were reasonable as they each spent between three and four hours attending on the motion.

11I, therefore, ordered that the plaintiff pay costs to PCL in the amount of $12,997.83, PRC in the amount of $1,000, the City in the amount of $1,000 and Tomlinson in the amount of $1,000. This totals $15,997.83 in costs. These costs must be paid on or before thirty (30) days from August 29, 2024.