GRI SIMULATIONS iNC. PLAINTIFF AND: OCEANEERING INTERNATIONAL INC. FIRST DEFENDANT AND: PRO-DIVE OCEANEERING CO. SECOND DEFENDANT AND: JOSEPH GRZETIC THIRD DEFENDANT AND: LILLY LEROY FOURTH DEFENDANT AND: DAN GRIFFITHS FIFTH DEFENDANT v. BETWEEN:, 2010 NLTD 85

IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR TRIAL DIVISION Citation : GRI Simulations Inc. v. Oceaneering International Inc. , 2010 NLTD 85 Date : 20100 426 Docket : 200401T1376 BETWEEN: GRI SIMULATIONS iNC. PLAINTIFF AND: OCEANEERING INTERNATIONAL INC. FIRST DEFENDANT AND: PRO-DIVE OCEANEERING CO. SECOND DEFENDANT AND: JOSEPH GRZETIC THIRD DEFENDANT AND: LILLY LEROY FOURTH DEFENDANT AND: DAN GRIFFITHS FIFTH DEFENDANT AND BETWEEN: OCEANEERING INTERNATIONAL FIRST PLAINTIFF INC. BY COUNTERCLAIM AND: GRI SIMULATIONS INC. FIRST DEFENDANT BY COUNTERCLAIM AND: STEPHEN G.

DODD SECOND DEFENDANT BY COUNTERCLAIM AND BETWEEN: JOSEPH GRZETIC SECOND PLAINTIFF BY COUNTERCLAIM AND: GRI SIMULATIONS INC. FIRST DEFENDANT BY COUNTERCLAIM

___________________________________________________________________ Before: The Honourable Madam Justice Lois R. Hoegg ___________________________________________________________________ Place of Hearing: St. John's , Newfoundland and Labrador Date of Hearing: February 15, 2010 Held: The Defendants’ application for relief from email document production is dismissed. They were unable to show that the cost, time and effort involved in producing email which relates to matters in issue is so onerous as to relieve them of their obligation to produce it in accordance with Rule 32.02.

Appearances: Michelle Davis Appearing on behalf of the Applicant, Oceaneering International Inc. and Joseph Grzetic. Andrew Fitzgerald Appearing on behalf of the Respondent, GRI Simulations Inc. Authorities Cited: CASES CONSIDERED: Carter v. Municipal Construction Ltd. 2001 NFCA 58 , [2001] N.J. No. 302; Carter v. Municipal Construction Ltd. , 2001 CanLII 37655 (NL SC) , [2001] N.J. No. 226 (S.C.(T.D.); Air Canada v. WestJet Airlines Ltd. , 2006 CanLII 14966 (ON SC) , [2006] O.J. No. 1798, 267 D.L.R. (4th) 483 (Sup. Ct.); Nova Scotia (Attorney General) v.

Royal and SunAlliance Insurance Co. of Canada 2003 NSSC 227 , [2003] N.S.J. No. 422; Ultramar Ltd. v. A.M.P. Fisheries Ltd . 2004 NLSCTD 48, [2004] N.J. No. 86 ; Hollett v. Hatfield [2006] N.J. No. 158 (U.F.C.) . RULES CONSIDERED: Rules of the Supreme Court , 1986 , S.N.L. 1986, c. 42, Sch. D, r. 32 , 38.01(1) (a). ALSO CONSIDERED: The Sedona Conference, The Sedona Canada Principles: Addressing Electronic Discovery (Phoenix: The Sedona Conference, 2008).

REASONS FOR JUDGMENT Hoegg, J.: INTRODUCTION [ 1 ] Oceaneering International Inc. and Joseph Grzetic (hereinafter Oceaneering), two of the five Defendants in this matter, apply to the court under Rule 38.01(1) (

a) of the Rules of the Supreme Court , 1986 , S.N.L. 1986, c. 42, Sch. D for relief from their obligation to produce email documents to the Plaintiff GRI Simulations Inc. (hereinafter GRI) in accordance with the terms of a Consent Order filed April 23, 2009. GRI filed an Application for email document production on October 8, 2008. The Consent Order was entered into by the parties following case management meetings which took place between October 8, 2008 and April 23, 2009. It reads as follows: BEFORE THE HONOURABLE JUSTICE HOEGG: UPON Application having been made by the Plaintiff, GRI Simulations Inc. seeking an Order pursuant to Rule 32.02 of the Rules of the

Supreme Court , 1986 for production of documents; AND UPON an agreement having been reached on the terms and conditions herein expressed, and with the consent of the parties as evidenced by the signatures of their respective Counsel; IT IS HEREBY ORDERED THAT: 1. The defendants will produce any and all email correspondence, including attachments thereto, relating to every matter in question in this proceeding, from the computers, and/or related backup or archival system used by the individuals in the performance of their employment of the following individuals: a. Richard Frisbee; b. Shil Srivastava; c.

Joseph Grzetic; d. Leroy Lilly; e. Anthony Harwin; f. T. Jay Collins; g. Stephen E. Bradshaw; h. Janet G. Charles i. David K. Lawrence; j. Scott A. Wagner; k. Tim Lawrence; l. Dan Griffiths; m. Greg Farris; 2. The Defendants will produce any and all email correspondence, including attachments thereto, relating to every matter in question in this proceeding from the computers and/or related backup or archival system of the forgoing individuals using, but not necessarily limited to, the following key words: a. Newfoundland; b. Geo-Resources Inc; c. GRI Simulations Inc.; d. Joseph Grzetic; e. Daniel Griffiths; f.

VROV (Virtual Remotely Operated Vehicle); g. VSIS (Virtual Subsea Intervention System); h. Pro-Dive Oceaneering Co.; i. Stephen Dodd; j. Shil Srivaastava; 4. [sic] The production of the emails referred to in paragraph one (1) hereof is to occur within 30 days from the date hereof.

5. The Defendants shall advise the Plaintiff if any of the individuals listed in paragraph one (1) do not have any such emails following a search of their computer. 6. The parties, shall have leave to apply to court to seek directions or to obtain relief should unforeseen difficulties arise in carrying out this order. oceaneering’s position [ 2 ] Oceaneering requests an order terminating its obligation to produce any email referred to in the Consent Order beyond that which has already been produced.

Alternatively, Oceaneering requests the court to limit its obligation to produce further email by requiring GRI to first provide evidence of its need for further email and/or requiring GRI to pay all or some of Oceaneering’s costs to produce it.

Oceaneering seeks such relief on the basis that its production of email in compliance with the Consent Order has been: 1) very time consuming; 2) expensive in time and disbursements; and 3) “unnecessarily and disproportionately expensive in relation to what benefit the Respondent/Plaintiff has obtained from same”. [ 3 ] In support of its application, Oceaneering tendered affidavit and viva voce evidence from Ms. Jennifer Welshons, Oceaneering’s in-house counsel located in Houston, Texas.

Oceaneering also filed a copy of The Sedona Conference, The Sedona Canada Principles: Addressing Electronic Discovery (Phoenix: The Sedona Conference, 2008) (hereinafter The Sedona Principles ). The Sedona Principles was published by a working group of Canadian judges, lawyers and technologists which was formed to grapple with litigation production issues associated with the ever-growing electronic storage of information.

The document identifies 12 principles which address electronic discovery. gri’s position [ 4 ] GRI’s position is that Oceaneering has a good faith obligation pursuant to Rule 32.02 to produce all documents relating to matters in question in this litigation. GRI says the email referenced in the Consent Order relates to the within litigation and should be produced. GRI argues that Rule 32 does not exclude email documents from its application.

GRI further argues that the evidence provided by Oceaneering in support of this Application is not sufficient to cause the court to exercise its discretion to relieve Oceaneering of its legal obligation to produce the email. [ 5 ] GRI maintains that it has cooperated with Oceaneering in an effort to manage the task of producing the email by providing key words, phrases and names to assist in electronic searching and retrieval of the email. GRI provided this search information to Oceaneering in December 2008.

Subsequently, in February 2009, GRI prioritized the search terms for Oceaneering so as to assist in moving the matter along. GRI says that it should not be required to justify the production of documents that touch on matters in issue for they are presumed by the rule to be producible. Additionally, GRI says that such a requirement would effectively result in GRI tipping its hand to its adversaries.

In response to Oceaneering’s proposition that GRI cover or share the expenses of further email document production, GRI says that Oceaneering has the financial means to provide full email document retrieval and production and the cost associated with doing so ought to be addressed by taxation in the usual course. GRI states that its position does not clash with The Sedona Principles , although it points out that The Sedona Principles have not been adopted by this or any other Canadian jurisdiction. [ 6 ] Russell Pelley, businessman and Director of GRI who lives in Mt.

Pearl, Newfoundland and Labrador, provided affidavits dated November 27, 2009 and January 22, 2010 in support of GRI’s position. issues [ 7 ] This court must decide whether to permit Oceaneering to cease production of all, part or none of the email referenced in the Consent Order.

If the Court is not prepared to permit Oceaneering to cease production of further email outright, then the Court has to consider whether Oceaneering should be required to produce further email only if GRI meets either or both of the following conditions: 1) that GRI establish a need for the further email; and 2) that GRI pay all or a portion of Oceaneering’s costs to produce the further email. background [ 8 ] The nature and magnitude of this case and its litigation history provide the context in which this application is decided.

Context is important in most cases and in my view it is especially important in this case for reasons which will become clear later in this judgment. [ 9 ] GRI issued its Statement of Claim on February 16, 2004. It alleges that the Defendants unlawfully took GRI’s intellectual property and misappropriated it to Oceaneering’s benefit. GRI says that while Defendants Joseph Grzetic, Leroy Lilly and Daniel Griffiths were employees of GRI in 2003, they accepted offers of employment from Oceaneering.

When they left GRI shortly thereafter, they took with them GRI’s copyright-protected software and computer architecture for piloting remotely operated vehicles (VROV Systems). GRI asserts that its former employees subsequently used GRI’s software and computer architecture in developing a marine tracking device (VSIS) for Oceaneering.

GRI alleges this use of its intellectual property was to its detriment and Oceaneering’s benefit and as a result, it seeks various declaratory and injunctive relief against Oceaneering as well as $8,000,000 in damages. [ 10 ] Oceaneering states that the software and computer architecture in question was not protected by GRI’s copyright and in any event was obsolete when Messers Grzetic, Lily and Griffiths joined its employ.

Oceaneering states that any similarities between the VROV and VSIS systems are attributable to either: 1) common information which originated with Oceaneering but was provided to GRI so that GRI could fulfill work contracts it had with Oceaneering; or 2) coincidental use of information which was available in the public

domain. [ 11 ] Oceaneering has also filed a Counterclaim against GRI. In it, Oceaneering alleges that GRI misused and misappropriated significant amounts of Oceaneering’s confidential trade secret information which it had provided to GRI so that GRI could perform work contracts for Oceaneering. Oceaneering counterclaims for injunctive relief, disgorgement of GRI’s profits and benefits as well as general and special damages. the law The Rule [ 12 ] Rule 32 of the Rules governs document production. The rules relevant to this application are: 32.01(1), 32.02 and 32.07(1). They read as follows: 32.01.

(1) Unless the Court otherwise orders, a party to a proceeding shall, within ten days after the close of the pleadings between an opposing party and the party, or within seven days after the service of the originating document where there are no pleadings, file and serve on the opposing party a list in Form 32.01A of the documents of which the party has knowledge at that time relating to every matter in question in the proceeding and file in the Registry the list without a copy of any document being attached thereto. 32.02. The Court may at any time (

a) order any party to file and serve on any opposing party to a proceeding a list of documents in Form 32.01A, as provided by rule 32.01; (

b) order any party to make discovery, limited to certain documents or classes of documents only, or of documents related to the matters specified in the order; (

c) where it appears that any issue or question in the proceeding should be determined before the discovery of all or any of the documents is made, order that the issue or question be determined; or (

d) where satisfied that discovery of all or any of the documents is not necessary at that time or later, dismiss or adjourn the application; or (

e) make such other order as is just. 32.07.

(1) The Court may order the production, for inspection by any party or the Court, of any document relating to any matter in question in a proceeding at such time, place and manner as it thinks just. [ 13 ] The wording of the above-noted sections, in particular the words “unless the Court otherwise orders” in Rule 32.01, clauses (

d) and (

e) of Rule 32.02 and the words “may” and “as it thinks just” in Rule 32.07(1), makes it clear that the court has a discretion to limit document production. It goes without saying that when such discretion is exercised it must be done judicially. The Case Law [ 14 ] The following cases have been considered by the court in this application: Carter v. Municipal Construction Ltd. 2001 NFCA 58 , [2001] N.J. No. 302 herein Carter (Appeal)); Carter v. Municipal Construction Ltd. , 2001 CanLII 37655 (NL SC) , [2001] N.J. No. 226 (S.C.(T.D.) (hereinafter Carter (Trial)); Air Canada v.

WestJet Airlines Ltd. , 2006 CanLII 14966 (ON SC) , [2006] O.J. No. 1798, 267 D.L.R. (4th) 483 (Sup. Ct.); Nova Scotia (Attorney General) v. Royal and Sun Alliance Insurance Co. of Canada 2003 NSSC 227 , [2003] N.S.J. No. 422; Ultramar Ltd. v. A.M.P. Fisheries Ltd. 2004 NLSCTD 48, [2004] N.J. No. 86 ; Hollett v. Hatfield , [2006] N.J. No. 158 (U.F.C.) . [ 15 ] There is no doubt that a litigating party is required to produce documents “relating” to matters in issue as stipulated in Rule 32.01. In Carter (Trial) G reen, J. (as he then was) interpreted this rule at paragraphs 8, 14, 19 and 21: 8.

In passing, it should also be noted that, in addition to the specific provisions of Rule 32 , the court has inherent jurisdiction to ensure that all relevant documents are before it in order to determine properly and fairly the issues between the parties. See Frenette v. Metropolitan Life Insurance Co. 1992 CanLII 85 (SCC) , [1992] 1 S.C.R. 647 at p. 689. …

15. It is axiomatic that Rule 32 is to be interpreted liberally in order to effect full disclosure. Having said that, the outer parameters of the obligation to effect full disclosure and to produce a document for inspection are determined by the requirement that the document in question "relate" to a matter in issue in the proceeding. … 19.

This notion of "relating", which is broader than the concept of relevance discussed earlier, would entitle a party to production of documents if he or she can satisfy the court that the production of the document might advance his or her own case or damage the case of his or her adversary even if the document may not in itself tend to prove or disprove a fact in issue or may not be admissible at trial. … 21.

I would therefore state the rule as to what constitutes a document relating to a matter in question in the proceeding as follows: A document will be said to "relate" to a matter in question in the proceeding where, it is reasonable to suppose it may throw any light on the case in the sense that it contains information which may either directly or indirectly enable the party receiving or seeking the information to advance his or her own case or to damage the case of his or her adversary on which may fairly lead him or her to a train of inquiry which may do so.

With all due respect to those who have expressed a contrary view, I do not believe that the test for determining production of documents prior to trial should be tied to the concept of relevance at trial. [ 16 ] The Newfoundland and Labrador Court of Appeal upheld this decision. Speaking for the court, Cameron, J.A. said the following at paragraph 10 of Carter (Appeal): 10. The equating of "relating to" to "relevant", in the sense that term is used to determine admissibility of evidence at trial, is rejected.

While recognizing the importance to corporations of keeping financial information private, there is no basis in law upon which to advance a claim of privilege which would prevent the disclosure of the information contained in the documents. Generally, the rules regarding disclosure are liberally interpreted.

The Sedona Principles [ 17 ] Although this court recognizes that The Sedona Principles do not override the Rules of Court , they have been considered in the same way as legal literature could be considered and because both parties referred to them in argument. discussion [ 18 ] The “elephant in the room” in this application is that email should be treated differently than other documentation. It is email which GRI wants Oceaneering to provide. Oceaneering is not arguing that the email referenced in the Consent Order does not relate to a matter in issue.

In fact, the Consent Order pertains only to email which relates to matters in issue. However, Oceaneering is suggesting that the email is of little to no value. [ 19 ] In this regard, and because it is fundamental to all document production, the meaning of the term “relates to” as found in Rule 32 bears repeating.

Justice Green interpreted it as follows in Carter (Trial): A document will be said to "relate" to a matter in question in the proceeding where, it is reasonable to suppose it may throw any light on the case in the sense that it contains information which may either directly or indirectly enable the party receiving or seeking the information to advance his or her own case or to damage the case of his or her adversary on which may fairly lead him or her to a train of inquiry which may do so. [ 20 ] Paragraph 1 of the Consent Order references production of email which relates to every matter in question in this proceeding from 13 individuals.

Paragraph 2 is similar although the email referenced is more particularized in that it contains certain key words. In my view it is obvious that, for example, email between Mr. Grzetic and Mr. Lilly in which the terms “VRON” or “VSIS” appear could throw light on this case and that its production could advance or damage the parties’ respective cases. For purposes of clarity, this is not a case of a party fishing for information or requesting documents which are irrelevant to the claims made.

The email referenced in the Consent Order is recognized by the parties and the court to relate to matters arising in this litigation. [ 21 ] The court is therefore left to consider whether there is something unique or different about email that would cause it to fall outside of the ambit of Rule 32.01. Or put another way, is the fact that the documents sought to be produced are email a factor which operates to relieve Oceaneering from producing them under the Rule? Email is electronically stored. Does the manner of storage of information cause that information to be treated differently?

Is electronically stored information different from information stored in hard copy and held in file cabinets for the purposes of Rule 32? [ 22 ] I observe that in some measure (or perhaps even in large measure) email has replaced paper correspondence and memoranda as a form of communication in many business settings.

[ 23 ] I also observe that communicating by email can be more convenient than communicating by way of hard copy correspondence or by personal contact. This convenience may cause people to correspond more frequently than they otherwise would, which in turn could result in an increase in the volume of documentation to be produced in litigation. This situation may result from people sending email when they previously would either not have communicated at all or would have communicated by telephone or in person.

This increase in volume may also occur because people often do not take the time to refine the content of email communication in the same way they do when communicating by letter or memo. Regardless of the reasons for its use, email communication is a reality. [ 24 ] Email communication creates a virtually permanent record, arguably more lasting than a hard copy of correspondence. Litigating parties are required to produce written records like correspondence, internal memos and notes that are not privileged. In this regard, parties know that information committed to writing is always at risk of being produced.

I do not see that information stored on email is any different in principle than information in traditional written correspondence. To the extent that searching through and culling irrelevant or idle email chatter makes the task of documentation production more onerous, it could be a factor for the court’s consideration in appropriate circumstances.

However, the fact that the documentation is voluminous does not automatically disengage the provisions of Rule 32 with respect to hard copy correspondence nor should it with respect to electronic communication. [ 25 ] The Sedona Principles recognizes that the ease with which email communication takes place can result in multiple copies of the same document, thereby increasing the volume of producible documents. The Sedona Principles identifies other features unique to the production and preservation of electronic documents (in contrast to hard copy stored documents).

These unique feactures include: 1) electronic documents are hard to dispose of; 2) electronic documents are attached to metadata which at a later date may give a false impression of when or by whom an electronic document was created; 3) electronic documents are often updated automatically without the user knowing; 4) computer programs may become obsolete which can result in the production of incomplete documents; and 5) the ease of transmission, routine modification and multi-user editing of electronic documents may cause the origin of a document to be obscured.

The Sedona Principles references many kinds of electronically stored information, however, I note at page 3 of the publication that email metadata is generally accurate and capturing it can save time and money. [ 26 ] The only concern Oceaneering raises about the electronic storage of information from those identified in The Sedona Principles relates to the volume of documents. [ 27 ] In my view, neither the fact that email is a convenient form of communication nor the fact that it is electronically stored relieve a litigant from his or her obligation to produce it in accordance with the provisions of Rule 32.

As with any documentation, if it relates to a matter in question in the litigation and is not privileged, it is producible. In fact, there may be good reason to guard against exempting email from the usual operation of Rule 32.01 for doing so could enable litigating parties to avoid producing otherwise producible documents precisely because they are email or are electronically stored. [ 28 ] Therefore, it seems to me that a “costs, time and effort” argument involving email is the same as when hard copy documents are in issue.

For example, the cost, time and effort to produce hard copy documents which are disorganized or stored in various places could also be considerable. Such an argument may or may not prevail in this or any other case because there is cost, time and effort associated with all document production. In any event, it does not appear to me that searching email archives for producible documents is inherently more onerous or expensive than conducting manual searches for hard copies of documents.

In fact, it could be easier and cheaper to search electronically for producible documents given that an electronic search may search and retrieve documents in a shorter period of time and more efficiently.

Accordingly, determination of the issue in this case, as in any case, depends on an analysis of the particular facts and evidence. [ 29 ] Again, the question for the court is whether the cost, time and effort of producing the email identified in the Consent Order are so onerous that the court should exercise its discretion in favor of: 1) relieving Oceaneering of its obligation to produce any further email; or 2) requiring GRI to establish a need for further email and/or to share the financial burden of further email production. [ 30 ] I have not been presented with any case law from this jurisdiction which describes the test to be applied to an application for relief from document production when the documents relate to matters in issue but are argued to be exempt from production for other reasons.

I do note the references in Rule 32 to the Court making orders “as is just” and “as it thinks just”. [ 31 ] In Nova Scotia (Attorney General) v.

Royal and Sun Alliance Insurance Co. of Canada , wherein the court was dealing with an application to limit interrogatories, Justice Moir of the Nova Scotia Supreme Court stated at paragraph 8 that “there is a discretion to limit discovery where it would be just to do so, such as where the burdens that would be placed upon the party making answer clearly outweigh the interests of the party questioning.” Justice Moir expressed this principle as one applying to discovery, disclosure and document production under the Nova Scotia Rules.

I note that there was no specific rule in Nova Scotia providing for the limitation of document production in circumstances where the documents have a “semblance of relevancy”. [ 32 ] All things considered, it is my view that a party applying to limit document production where the documents have been found to relate to matters in issue and are not privileged must establish that it is just to do so in the circumstances of the case.

Accordingly, in this case Oceaneering, as the Applicant, has the burden of satisfying the court, on a balance of probabilities, that it is just to relieve them of their duty to produce any further email in accordance with the Consent Order. Value of the Requested Email [ 33 ] Oceaneering argues that the email referenced in the Consent Order which has already been produced has not been very useful to GRI. By inference, Oceaneering is suggesting that further email will not be useful either. [ 34 ] It is not for Oceaneering to determine the value of any email already produced and that sought to be produced.

It is for the receiving party, in this case GRI, to do so. A receiving party knows its case and is in a better position to assess whether a document aids its position. In this regard, I rely on statements of Justice Cameron in Carter (Appeal) at paragraph 9: The appellants then referred to an affidavit filed by them, on the application, in which the accountant for the appellant Company opined that there is no information in the documents which would support the claim of the respondent. The answer to that is, of course, that it is

not for the Company nor the person who has possession of the documents to determine whether they relate to the matter, in the way described by Green C.J. Whether the material contained in the documents is of aid to the other party, must be determined by that party and his or her solicitor, upon reviewing the material. [ 35 ] I also note Mr. Pelley’s unchallenged evidence that GRI has received email which it believes is relevant to its case. As well, GRI’s counsel effectively used email which GRI received through document production when cross-examining Ms. Welshons.

Counsel also referenced receipt of “valuable” email during argument. [ 36 ] For these reasons I see no merit to Oceaneering’s argument that email production should be terminated because it is of little value. Analysis [ 37 ] At this point the evidence on the application must be carefully considered. The evidence in support of Oceaneering’s position comes from Ms. Jennifer Welshons, who has worked with Oceaneering since 2006. Ms. Welshons provided an affidavit in support of Oceaneering’s application. After a hearing, the court granted GRI leave to cross-examine her. Ms. Welshons traveled to St.

John’s from Houston, Texas, U.S.A. to attend court. [ 38 ] Ms. Welshons is in-house counsel with Oceaneering. Her affidavit evidence states that some of the active and archive email systems of some of the individuals listed in the Consent Order have been searched using the keywords identified by GRI, and that records from these searches have been produced to GRI. She said that the active electronic communication records of Mr. Grzetic, Mr. Lilly, Mr. Griffiths and Mr.

Shil Srivastava have been searched using most of the key search words referenced in paragraph 2 of the Consent Order and that documents retrieved from these searches have been produced to GRI. She said that the email archives of these individuals have not been searched. [ 39 ] Ms. Welshons said that preliminary investigation of Tim Lawrence’s email records using the search term “Newfoundland” (in accordance with the Consent Order) yielded 10,000 results but these results were not searched or examined due to the volume of material. Mr.

Lawrence is an employee of Oceaneering who is situate in Canada. [ 40 ] At paragraph 7 of Ms. Welshon’s affidavit, she references Exhibit “A” which is an untitled, one and one-half page document describing the Novell Group Wise System for electronic mail which Oceaneering uses in 38 post offices in various parts of the world. Ms. Welshons stated that this document is authored by Steve Shirt, the Director of Systems Infrastructure at Oceaneering and the technical person who handles electronic discovery for Oceaneering in Houston.

The document provides information under the headings: 1) configuration; 2) email storage; 3) email discovery; 4) other considerations; and 5) conclusions. The concluding paragraph of Exhibit “A” reads as follows: Conclusions Novell’s GroupWise is inherently difficult to conduct email searches within because of its built-in security. The manpower required will be extremely intensive to search for the requested data. [ 41 ] Mr. Shirt did not provide an affidavit on the application nor was he presented to the court. [ 42 ] Ms.

Welshons stated that in January 2009 she was asked to organize and implement email document production in this case and that she and other Oceaneering personnel held numerous planning meetings with Mr. Shirt regarding the capability and feasibility of complying with GRI’s document request. When questioned about Exhibit “A”, Ms. Welshons stated that Mr. Shirt prepared Exhibit “A” and that she was not comfortable answering any questions about it. Ms. Welshons testified that she is not aware of Mr. Shirt’s training. She also stated that she was unable to answer any technical questions. [ 43 ] Ms.

Welshons’ testimony clarified paragraph 14 of her affidavit and Exhibit “B”, a log of the dates and times Ms. Welshons spent on this matter between January 15, 2009 and July 1, 2009. Paragraph 14 of Ms. Welshons’ affidavit states: The amount of time spent on search and production of electronic records for Oceaneering, not including the time and cost of review and production by our Solicitors, exceeds 100 hours. A log of this time is attached to this my Affidavit as Exhibit “B”. The approximate cost of this endeavour to date is $23,600. This is based on an estimated billable rate of $217 for my time.

We have produced nine supplemental Lists of Documents to the Plaintiff totalling over 3200 pages of electronic records. [ 44 ] Ms. Welshons testified that she earns $97,000 per year. She said she does not keep actual records of the time she spends on particular tasks each day, so she is unable to quantify the actual cost to Oceaneering for her services. She explained the $23,600 figure is based on an estimate of what it would cost for a Houston lawyer to do the work that she has done on this file. Ms.

Welshons testified that when she was directing the email searches in this case she was in possession of the April 2009 Consent Order as well as a list of relevant search dates which had been given to her by Oceaneering’s Newfoundland counsel. [ 45 ] Ms. Welshons testified that she did a cursory review for privilege of email retrieved under her supervision before forwarding it to local counsel. She said she expected that email would be vetted again for privilege by Oceaneering’s solicitors in this province. [ 46 ] GRI’s counsel asked Ms.

Welsons why there had been little or no email documentation produced in relation to some of the individuals named in the Consent Order whose email was searched using specific terms during specific periods of time. She was unable to give a definitive answer, but offered that perhaps no email documentation existed respecting those particular people, search terms and

dates or that if email had been retrieved, it may have been vetted on the basis of relevance or privilege. [ 47 ] It was acknowledged by Ms. Welshons that there were persons listed in the Consent Order whose email had not yet been searched. She could not explain why email sent among some correspondents named in the Consent Order was produced in relation to one correspondent but not in relation to the others. [ 48 ] Ms. Welshons was unable to verify or contradict Mr. Russell Pelley’s affidavit evidence concerning Oceaneering’s financial position.

However, she did confirm that Oceaneering Inc. is a multi-million dollar company, and that the document appendixed to Mr. Pelley’s affidavit which purports to be an excerpt from Oceaneering’s 2008 annual report bears Oceaneering’s logo and otherwise appears to be a true copy of the original document. [ 49 ] Ms. Welshons’ affidavit evidence addressing GRI’s ability to contribute to the email production costs is found in the last paragraph of her affidavit.

It reads: “The Plaintiff’s financial statements demonstrate an ability to contribute toward the cost of document disclosure.” She did not elaborate on this evidence at the hearing. [ 50 ] Ms. Welshons’ Appendix “A” lists some peculiarities of Novell’s system which would make archive searching time consuming. They are 1) that the searches would have to be conducted at the sites where they are located; 2) that passwords may have to be changed; and 3) that it may be difficult to ensure all archives are searched. [ 51 ] Mr.

Pelley’s evidence is that GRI believes there is relevant material in Oceaneering’s email database which ought to be before the court. He says that GRI has already received relevant information as a result of the email produced to date. As an example, Mr. Pelley points to the email which reports on a search of Defendant Joe Grzetic’s email archives . This email indicates that Mr. Grzetic and counsel spent from 10:35 a.m. to 12:12 p.m. one day searching his archives for the years 2001 to 2003. The email lists the number of hits obtained when certain of the search terms listed in the Consent Order were used.

Suffice it to say that there were many hits, and the hits from four of the search terms were saved onto a disc. According to this email, the terms were searched but the resulting hits, again many, were not saved onto a disc. Counsel who authored the email noted that doing so would likely take longer than the almost one hour and forty minutes it took to save the four searches copied. Mr. Pelley states that this information is useful to GRI in that it shows that compliance with the Consent Order would not be inordinately time consuming or expensive. [ 52 ] Mr.

Pelley appended to his affidavit a true copy of part of Oceaneering’s 2008 Annual Report. The report states Oceaneering’s 2008 net income as $199,386,000. The report also states that Oceaneering reported record earnings for the fifth consecutive year, and that it “achieved record remotely operated vehicles, Subsea Products, and Inspection operating income performances.” Oceaneering did not seek to cross-examine Mr. Pelley on his affidavits. [ 53 ] It appears to me from the information contained in the email appended to Mr. Pelley’s affidavit which references the search of Mr.

Grezetic’s email archives that searching Mr. Grezetic’s email archives is not particularly onerous. There is no evidence respecting searching the email archives of the other individuals listed in the Consent Order. I am not unmindful that the retrieved email would have to be vetted and this could be time-consuming. However, vetting is to be expected, and there is no evidence as to the time it would be expected to take. Proportionality [ 54 ] Inherent in considering the evidence and argument on this application is appreciating what is at stake in this litigation. The Plaintiff’s claim is for $8,000,000.

The Defendants’ counterclaim is for various significant relief including disgorgement of profits. In my view, the fact that Oceaneering has made a counterclaim weighs against them in their attempt to limit their document production. [ 55 ] The principle of proportionality was addressed by both parties. In paragraph 9 of Hollett v.

Hatfield , it was recognized by Chief Justice Green, as he then was, as an important consideration in pre-trial matters: Implicit in the rules of court is the notion of proportionality: that a litigant is only entitled to avail of the rules relating to pre-trial applications to the extent that the nature, purpose and complexity of a particular procedure justifies it. Thus, a court could refuse to authorize proceedings that a party would otherwise be entitled, in principle, to take, because the object and nature of the dispute does not justify them. [ 56 ] Likewise, in Air Canada v.

Westjet Justice Nordheimer gave effect to the principle of proportionality in stating the following at paragraph 16: … It does not seem to me to lie with Air Canada to institute what it says is the largest corporate espionage case ever seen in Canada, couple it with a claim in the order of $200 million and then complain that the production process is going to take more than the usual amount of time and cost more than the usual amount of money. [ 57 ] While the Air Canada v.

Westjet case is obviously of a different order than this case, the same point could be made about Oceaneering’s position in this case given the nature of its counterclaim. [ 58 ] The Sedona Principles also recognizes proportionality as a relevant factor in document production. conclusion [ 59 ] When boiled down, the evidence in support of Oceaneering’s position is Ms. Welshons’ evidence of her efforts and costs to date and her tendering of Mr. Shirt’s statements in Exhibit “A”. Ms.

Welshons’ evidence of the time she has spent coordinating the production effort to date does not convince me that Oceaneering’s time commitment to comply with the Consent Order is too much in the circumstances of this case. Although I accept Ms. Welshons’ evidence of her time spent, and the sincerity of her evidence overall, I am unable to accept it as evidence of inordinate cost and effort to Oceaneering. Her cost estimate is based on her estimate of what a private lawyer in Houston would charge to do the same work. I am not suggesting in-house counsel work is free, but it is to be expected that in-

house counsel would engage in work such as overseeing document production in this case. It cannot be forgotten that GRI is also obliged to produce documents to Oceaneering, particularly given Oceaneering’s counterclaim, and has been doing so. GRI’s employees and officials are also logging hours searching, retrieving and vetting their documents for production to Oceaneering. [ 60 ] As for Appendix “A”, I make the following observations. The conducting of searches on site appears to me to be expected.

There was no evidence of the precise location of the persons whose email is to be searched, although the pleadings and other information imparted during the hearing indicates they are situated in Newfoundland or Texas, which does not appear to me to be a barrier to searching. Indeed, there was no evidence as to how and why on-site searching could be onerous. Neither was there any evidence about difficulties associated with changing passwords which would make searching and retrieval difficult.

Lastly, the fact that there may be difficulty in ensuring the completeness of a search is not a reason to not search at all. If the end result is that Oceaneering is unable to swear that all archives have been searched, or either party requests documents it believes exist but which have not been produced, the parties can address those issues then. Mr. Shirt’s final statements about the “inherent difficulty” and “extremely intensive manpower” involved in complying with the Consent Order are unexplained and bold.

The court simply cannot accept these sweeping conclusions from an interested party as evidence sufficient to discharge Oceaneering’s burden. [ 61 ] Ms. Welshons’ evidence, including Mr. Shirt’s comments in Exhibit “A”, does not establish that Oceaneering’s efforts to date and those anticipated in future are so onerous in time, effort and cost as to justify relieving Oceaneering of its production obligations. In my view, the costs, time and effort involved are not disproportionate to the nature of this dispute.

As indicated earlier in this judgment, GRI’s claim is not small and Oceaneering’s counterclaim is not small. The litigation is complex and appears to be document heavy. Considerable expenditure of resources is to be expected in such cases. [ 62 ] In the result, the evidence does not persuade me that the costs, time or effect involved for Oceaneering to comply with the Consent Order are so onerous that it would be just to relieve Oceaneering of its obligation to produce it, with one exception. The exception concerns Mr. Lawrence’s active email and the search term “Newfoundland”.

The word “Newfoundland” is likely to produce a hit on virtually all of Mr. Lawrence’s email and probably explains why there are 10,000 hits. I find this search term too broad to be useful, and that the results would not likely all have a good chance of relating to matters in issue. Accordingly, the search of Mr. Lawrence’s email in regards to paragraph 2 of the Consent Order must be narrowed. I am prepared to hear counsel on how this can be achieved or the matter can be addressed in case management.

No evidence of other instances involving an extraordinary number of hits (or documents) was adduced. [ 63 ] All of the other email referenced in the Consent Order is producible. Oceaneering’s Request that GRI Justify it’s Need for Further Email [ 64 ] As stated above, the email listed in the Consent Order relates to matters in issue in this litigation. It is well-established that parties are presumed to be entitled to documents relating to matters in issue without providing justification. The rationale is obvious. For this reason GRI will not be ordered to demonstrate a need for the email.

Oceaneering’s Request That GRI Bear Some Production Costs [ 65 ] The evidence is uncontroverted that Oceaneering is a multimillion dollar international company achieving “record income performance respecting remotely operated vehicles”. Oceaneering did not argue that the cost of document production presented financial hardship. [ 66 ] The cost of producing documents is usually borne by the producing party with the ultimate determination of the issue reserved for decisions on costs at the conclusion of the litigation. I see no reason to depart from this long-standing convention in this case.

As indicated, the evidence does not convince me that the production costs are undue or unreasonable in the circumstances. Neither am I convinced that the email sought is irrelevant to the issues or even of a speculative nature. Lastly, I am not persuaded that Oceaneering will be denied justice by the court’s failure to order GRI to share the cost. Oceaneering is far from impecunious or of such limited means that it cannot afford to bear the email production costs in the usual manner.

Accordingly, there will be no order that GRI bear any future costs of producing the email referenced in the Consent Order. disposition [ 67 ] Oceaneering’s application is dismissed. [ 68 ] GRI shall have its party and party costs on this application in any event of the cause. _____________________________ lois r. hoegg Justice