The Canadian Financial Wellness Group Inc. v. Resolve Business Outsourcing Income Fund, 2019 NSSC 179

SUPREME COURT OF Nova Scotia Citation: The Canadian Financial Wellness Group Inc. v. Resolve Business Outsourcing Income Fund , 2019 NSSC 179 Date: 2019-06-05 Docket: 354790 Registry: Halifax Between: The Canadian Financial Wellness Group Incorporated Plaintiff v.

Resolve Business Outsourcing Income Fund, a limited purpose trust, D & H Limited Partnership, a limited partnership, D&H Corporation, a body corporate, Misys Global Limited, a body corporate, Turaz Global Limited, a body corporate, Vista Equity Partners, a body corporate , Finastra Global Limited a body corporate Defendants Decision Judge: The Honourable Justice Peter P. Rosinski Heard: May 8, 2019, in Halifax, Nova Scotia Counsel: Peter L.

Coulthard Q.C., for the Plaintiff Chris Madill, for the Defendants By the Court: Introduction [ 1 ] This decision addresses a motion for disclosure of documents under Rules 15.01(2) and 15.07(1). [1] The pleadings [ 2 ] In its simplest terms, Canadian Financial Wellness Group Inc. [”CFW”] claims that it “had developed a program of confidential and proprietary material [”the CFW IP”] “designed to address the relationships between student loan and other consumer loan borrowers, and the service providers in those transactions, so as to reduce the rate of default on those loans through improved service provider/borrower communication”. [ 3 ] Between 2005 and June 2008 CFW had contacts with the Defendants or predecessor entities of the Defendants about the CFW IP, which it disclosed and provided to them. [ 4 ] As outlined in its Reply to the Demand for Particulars, CFW argues that the CFW IP “included many of the tools and services used by DH to develop the new service model specified in the 2007 government contract, inter alia , concepts such as changing the scoring models for student loan borrowers, expanding the categories by which student loan borrowers and their loans were classified, changing the approach to the treatment of student loan borrowers, creating better relationships with student loan borrowers, establishing software and interactive websites for use by students in the student loan program, focusing on understanding the individual borrower and their particular financial situation, treating student loan borrowers as ‘clients’, models for counselling those ‘clients’ and a repayment assistance program for student loan borrowers.

The topics listed above were included for the purpose of addressing the requirements of the Government of Canada’s new socially focused service model that was introduced with the 2007 Canada Student Loans Program is a wide-ranging array of tools and services which covered a variety of concepts for dealing with student loan and other types of borrowers”. [ 5 ] CFW says that the Defendants declined to continue to retain the services of CFW yet adopted CFW’s “concepts” and “tools” as integral and essential to the efficacy of their ongoing (student loans and other loan consumer business) default reduction business model. [ 6 ] Thus, CFW says the Defendants have profited from the CFW IP – and CFW is entitled to be paid on a quantum meruit basis for the CFW IP it provided to the Defendants on the basis of a promise by the Defendants for a future contract. [ 7 ] As Bob Zebeski, Director of Operations for D & H Limited Partnership stated in his affidavit September 23, 2013 at para. 50: “The Notice of Action alleges, among other things, that:..(

c) through an intentional and targeted process of progressive requests to CFWG to explain, refine, develop, and describe its methods and materials, Resolve and/or Resolve IF secured from CFWG all of the information it needed to adapt CFWG’s IP to its own uses; and (d) … to modify its collection activities and to lessen the default rate with respect to student loans and other consumer loans, from which it has gained a financial benefit.”;

[ 8 ] And at para. 58: “The pleadings in this action raise disputed issues concerning, among other things, the following:

a) the communications between Resolve and CFWG regarding possible projects CFWG might perform for Resolve, including in respect of the training of CSRs [customer service representatives] and scripting for their communications with student borrowers;

b) whether any CFWG IP was imparted to Resolve during the course of such communications;

c) if any CFWG IP was imparted to Resolve, whether any such IP was used by the Defendants in their student loan servicing business, and in particular with respect to the performance of the CSLP [Canada Student Loans Program] Contract; and

d) if any CFWG IP was used by the Defendants, whether the Defendants obtained any benefits therefrom including in particular with respect to the reduction in the student loan default rate and/or the achievement of performance incentive targets under the CSLP Contract.” [ 9 ] The Defendants deny having any specific knowledge of the CFW IP, and in their pleadings allege “the fact is that the Defendants were never given access to and never saw any such tool.

The Defendants further state, and the fact is, that they were never given any CFW ‘analysis’ with respect to borrower behaviour, impediments to repayment, borrowers response or communication tools or documents.

Nor did the Defendants receive or review any ‘prepared scripts’ for communications between service providers and borrowers”. [ 10 ] They do however acknowledge that: 1. they had involvement with the servicing of either the private institutions segment of the Canada Student Loan Program [“CSLP”] or public institutions segment of the program from the spring of 2006 onwards ; 2. in 2008 John LeBlanc and Ron Harder of CFW had discussions with one or more of the Defendants regarding “the matter of communications with student borrowers from the point of view that service agents should have communications with student borrowers on a variety of matters concerning their finances or debts which are not directly related to their student loans”.

However, they say that “such a broad ‘financial counselling’ is not part of the mandate of student loan service providers under the servicing contract for the CSLP and that as a result, CFW’s general perspective did not appear well-suited to the Defendants’ CSLP servicing business”; 3. in the summer of 2008 it was agreed that CFW would conduct a survey of managers and employees regarding the question of agent “bias” in communications with student loan consumers.

The results presented in August 2008 were determined by the Defendants to be not worthy of further investigation or implementation; 4. further discussions for other proposed projects took place thereafter (e.g. : CFW suggested, but did not conduct a discussed pilot project relating to a segmented group of “early withdrawal [from University]” student borrowers ) until September 2009 when the Defendants advised CFW that it did not intend to continue discussions with CFW .

They concluded and communicated to CFW that they “were not prepared to commit to any project which was not shown to have specific, quantifiable benefits and [was] supported by a business case showing the project would be cost effective.” The disclosure made to date by the Defendants [ 11 ] Initially, the Defendants disclosed their List of Documents as shown in Exhibit “H” of Bob Zebeski’s September 23, 2013 affidavit. The documents span the period from 2006 until on or about August 31, 2011.

The substance of his affidavit is consistent with Exhibit “A” of Douglas Gilhooly’s (Vice-President Student Lending DH Corporation) May 1, 2019 affidavit, which is an April 29, 2019 letter from the Defendant’s counsel to the Plaintiff’s counsel wherein they say [we] “are of the view that it would be in both parties’ best interests to resolve the motion by agreement”.

To that end the Defendants proposed providing voluntarily, having regard to the production of documents sought by the Plaintiff as detailed in Appendix “A” attached to their motion: [2] 1. training manuals (already provided for 2007 – 2011) for the period 2012 – 2018; 2. scripts (already produced for 2007 – 2011) for the period 2012 – 2018 (and similarly for portfolio management reports, and any additional “special” reports specifically addressed to the topic of communication with student borrowers that DH prepared for the Government of Canada or specific institutions); 3.

RAP [Repayment Assistance Program] (we note from the way that Appendix “A” is drafted, that your client appears to be under a misapprehension concerning the role of DH in the RAP. RAP was not conceived by DH… The portfolio committee reports that DH will agree to produce pursuant to (2) above, address the RAP as one of the Key Performance indicators of the student loan portfolio; 4. early withdrawal (information concerning an early withdrawal pilot project is contained in DH’s originals productions which covered the period up to 2011. No further early withdrawal pilot projects have been undertaken.

DH will agree to produce presentations to the Government of Canada or to specific institutions that are addressed to the impact of the early withdrawal borrow or “subset” on

portfolio performance during the period 2012 – 2018 (if those exist.); 5. Student Loan Borrower Satisfaction (“SLBS”) (this topic was specifically covered in the annual incentive claims reports that DH produced for the period 2007 – 10 in its initial productions. DH will agree to produce the subsequent annual incentive claim reports through 2018. With regard to SLBS surveys concerning the CSLP, DH does not itself prepare any [but] there is an annual borrower satisfaction survey prepared by a third-party research firm under contract with the Government of Canada.); 6.

CanLearn website (this website was conceived, developed, implemented and managed by the Government of Canada, not DH. There is no relevance to this request.); 7. Incentive Monies (monies received by DH in relation to the CSLP are covered by the annual incentive claim reports that DH has agreed to produce in (5) above. Those reports would also address any pilot projects during the period covered by the report.); 8. Ralph DeJong (Communications involving CFWG and Mr. DeJong are included in DH’s initial productions.

They are not aware of any further communications for subsequent periods and he is no longer employed by DH); 9. Standing Senate Committee – (Ms. Frith, on March 13, 2008, was referring to a series of enhancements to the CSLP to be announced in the then current Federal Budget including new grant programs. That is entirely beyond the purview of DH. Contemporaneous materials about establishing relationships with student borrowers are already covered in DH’s existing productions.); 10.

New D & H Student Loan Service Proposal (it is unclear what is requested – to the extent that it calls for production of the entire proposal made to or contract between DH and the Government of Canada, that goes beyond the proper scope of relevance to this proceeding); 11. Human Resources (we do not understand the relevance of “hiring strategy” to this dispute. With regard to “bias testing in the hiring process” during the period from January 1, 2008 to current, we can advise that DH does not conduct, and has not conducted such testing during this period); 12.

General correspondence a. of the persons identified in this request, only Bob Zebeski and Douglas Gilhooly are still employed by DH. Communications responses to this request are found in DH’s initial productions; b. this request on its face is vague and ambiguous and overly broad; c. Mr. Emerson has not been employed at DH for more than 10 years- any correspondence should already be in the Plaintiff’s possession; d. neither Mr. Gilhooly or Zebeski have, or are aware of, any such documents; e. the decision not to use Third Party Collection Agencies was made by the Government of Canada.

DH was not involved in those discussions. Mr. DeJong is no longer employed by DH; f. Mr. Gilhooly advises that, to the best of his knowledge, he has nothing responsive to this request; g. to the extent that this request seeks relevant information, it overlaps with prior requests and is sufficient to address in DH’s response to the requests above.

The evidence on the motion [ 12 ] No cross- examination took place in relation to any of the tendered affidavits. [3] Thus, being deprived of their cross- examination, I was not given an opportunity to ask them questions myself, and to the extent that might have been desirable, I am hard- pressed to make a meaningful credibility assessment regarding the deponents, although generally I note that there is a minimal amount of patent disagreement between their factual assertions. [ 13 ] The evidentiary and persuasive burden is upon the Plaintiff to establish that further disclosure is required. [4] The Plaintiff’s argument that further disclosure by the Defendants is warranted [ 14 ] As a general proposition, the Defendants say that the extra disclosure sought is a “fishing expedition”, and that they are being asked to prove a negative (i.e. that they don’t have the items in question by producing “everything” they do have). [ 15 ] In its brief the Plaintiff states: Prima facie this evidence [5] demonstrates that CFW did indeed have meetings with, and present materials to, the Defendants which included a number of the “concepts” and the “tools” identified in paragraphs 1 and 2 of the CFW Reply” to the Defendants’ Demand for Particulars. [ 16 ] I am satisfied the evidence generally establishes that:

Between 2005 and present day the following entities have been the service providers for the administration of the CSLP : [pre-2005: Canadian Imperial Bank of Commerce]; Edulinx Canada Corporation [” ECC ”]; Resolve Business Outsourcing Income Fund [” Resolve ”]; D&H Limited Partnership and DH Corporation [collectively “ DH ”] now controlled by Finastra Global Limited [”FGL”]- and that in March 2007 Resolve acquired ECC, although it was characterized as a “reverse takeover” (paras. 28-34 LeBlanc affidavit)- further Resolve was given the new CSLP contract starting with an operational date of March 17, 2008; in July 2009 DH acquired Resolve-FGL ultimately acquired what was Resolve on June 14, 2017; 2.

Senior ECC staff included Ralph DeJong, Allan Bennett, Doug Gilhooly and Doug Emerson. Mr. Emerson approached John LeBlanc of CFW in 2005 , (see the November 2, 2005 letter to ECC/Douglas Emerson outlining their contacts and concepts CFW promoted – and the December 13, 2005 letter being Exhibits “O” and “F” respectively LeBlanc affidavit); as well as described by Bob Zebeski that Douglas Gilhooly told him “he and others at [ECC] had conversations with Mr.

LeBlanc in 2006 concerning the possibility that [CFW] might do some work for [ECC]”(para 34 Zebeski affidavit); 3. “After Resolve acquired [ECC] , Resolve became the service provider for the CSLP, and Ron Harder and I, on behalf of CFW continued to interact in the same fashion as before with Ralph DeJong, and to a lesser extent with Messrs.

Bennett and Gilhooly, and with Robert Zebeski, during which we continued to impress upon them the benefits of the CFW Paradigm with regard to the servicing of student loan borrowers for the CSLP and the potential to utilize the CFW Group paradigm in other financial markets” (para.34 LeBlanc affidavit). In his May 1, 2019 affidavit Mr. Gilhooly states: “I am the Vice President, Student Lending, of DH Corporation, one of the Defendants in this proceeding.”; In his September 23, 2013 affidavit Bob Zebeski states that: “I am Director, Operations, in the student loan servicing business of D &H Limited Partnership.

I have worked in this business at D&H (or its predecessors) for more than 15 years… During the period between February and June 2008, I and others involved in what was then Resolve’s student loan servicing business (now D&H’

s) including Ralph DeJong, to whom I reported , had communications with Mr. LeBlanc and Ron Harder of [CFW]. I understood [CFW] to be a company engaged in providing financial counselling services to student borrowers which was based in the area of Halifax, Nova Scotia. (paras 35-36 Zebeski affidavit); 4.

John LeBlanc states: “ Between September 2005 and September 2009 , I along with Ron Harder, my business partner in the development of innovative and adaptable financial products, communicated extensively and had significant interaction on behalf of CFW with Ralph DeJong, Allan Bennett, Douglas Gilhooly, and Robert Zebeski, regarding the CFW paradigm and its possible permutations… During that period, in the course of conversations with Douglas Gilhooly and Allan Bennett, I was advised by them, and I do verily believe, that the same management team had worked for the service provider to the CSLP since the time it had been administered by the CIBC, and through its subsequent administration by Edulinx, Resolve and Resolve IF.

This management team included Allan Bennett, Douglas Gilhooly and Ralph DeJong. I later became aware that Bob Zebeski had also worked with CIBC, and Edulinx before it was purchased by Resolve. All of Messrs. Bennett, Gilhooly, DeJong and Zebeski also later worked at DH .”(paras. 28- 9); 5. In his September 23, 2013 affidavit Mr.

Zebeski states: “D&H currently provides management, administration and servicing for CSLP loans pursuant to a contract with the Government of Canada which had an operational start date of March 17, 2008… The CSLP contract, which had an initial term of five years, provided for an additional two-year option. And up to three subsequent one-year option periods exercisable by the Government of Canada. The Government of Canada has exercised the initial two-year option, which runs until March 2015 (para. 3); 6. In his September 23, 2013 affidavit Mr.

Zebeski states: “as described below, D&H and its predecessors in the student loan servicing business have invested heavily in the training and development of knowledgeable and capable CSRs [customer service representatives] with the skills necessary to communicate effectively would student borrowers at all stages of the student loan lifecycle and with respect to the various features of the CSLP.

D&H believes that its investment and experience in the area of student borrower communications, including the training of its CSRs, currently provides D&H with a competitive advantage over other service providers presently engaged in the re-procurement process for the next CSLP contract, and expects that its experience and expertise with student borrower communications and its communications strategy will be a central feature of D&H’s bid in response to the upcoming RFP.

Effective communications with student borrowers are essential to customer satisfaction and assist in reducing student loan defaults , both of which D&H expects will be evaluated by the Government of Canada in the RFP [Request For Proposal]. D&H’s competitive advantage in this area of borrower communications will be lost if the confidential documents which are the subject of this motion become publicly available to competitive bidders as a result of this litigation.” (para 23); 7. As noted, the Resolve CSLP contract had an operational start date of March 17, 2008.

The March 19, 2008 letter sent by CFW to Ralph DeJong and Douglas Gilhooly sets out in detail the “approach” CFW had been working on for some time, which was most recently presented to Resolve in February 2008 ; based on the limited evidence I have available to me, it is nevertheless clear to me that there is a realistic prospect of concluding that, although precisely when these concepts may have been accepted by, or integrated into the business model of ECC or Resolve is not clear, (eg.

See inter alia, paras. 67-70 LeBlanc affidavit), however it may have been before March 2008, since telltale signs that they had been integrated into the business model started becoming more and more obvious; 8.

Interestingly, on July 8, 2008 CFW and Resolve entered into a Non-Disclosure Agreement (Exhibit “D” Zebeski affidavit) which read in part: “Whereas in the course of participating in meetings, discussions, presentations, proposals and other exchanges relating to sharing of information to review possible business opportunities the [CFW] may receive from [Resolve] directly or indirectly… certain non-public, proprietary and confidential information… Now Therefore the parties agree as follows… the Information, and all rights to the Information, which may be disclosed by Resolve, shall remain the exclusive property of Resolve, and shall be held in trust by the [CFW] for the exclusive benefit of Resolve.

The [CFW] may use the Information for purposes of assessing the Project…”. The “Project” is not defined in the agreement, but it is likely the summer 2008 “bias” project. 9. A review of Mr.

LeBlanc’s affidavit sees him citing in compelling fashion: documented interactions between CFW and the Defendants between the summer of 2005 and September 2009; and demonstrating that the concepts and approaches touted by CFW and which were not previously accepted by management or integrated into their business models possibly as late as the spring of 2008, are correspondingly documented in a series of examples of apparent “adoption by the Defendants of CFW concepts” thereafter (paras.39-81 LeBlanc affidavit).

[ 17 ] The Plaintiff seeks to establish that the Defendants have unlawfully appropriated the CFW IP and are entitled to quantum meruit damages. They are seeking to show by “connecting the dots” that they have a good case regarding the adoption of their concepts and approaches by the Defendants. In such circumstances, where no direct evidence may be available to substantiate their claims, they will need to rely upon an aggregation of indirect or circumstantial evidence, to allow a trier of fact to infer that liability has been proven more likely than not.

The continued use of the CFW IP by the Defendants is relevant to liability, but more specifically to the issue of quantum of damages. [ 18 ] I am satisfied that this requires the court to take a more liberal approach to disclosure, than might be routine in other cases. Having said that I remain very aware of the need for me to keep in mind the proportionality principle.

The specifics of further disclosure to be ordered [ 19 ] The Plaintiff relies on the affidavits of John LeBlanc and Bob Zebeski- inter alia , specifically upon the following paragraphs in each of the deponents’ affidavit, as related to various portions of Appendix “A” of the draft Order (attached hereto as Appendix “D”): John LeBlanc – August 25, 2017 Paras. 21,22,25,27,37,41-81 and associated Exhibits; Bob Zebeski-September 23, 2013 Paras. 9, 10-13, 24-33, and 41-48 including Exhibit “H” (items 135-7; 213; 228), and 60. [ 20 ] As a general proposition, I accept, as the Plaintiff says, that in order to prove its case (as to both liability and quantum of damages) it needs to be able to provide the court with a comparison of the status of the Defendants’ handling of the CSLP before CFW’s involvement with it, in order to set a baseline, for their argument that during, and after, their involvement with the Defendant entities, the Defendants took CFW’s so-called CWF IP, and profited from it immensely.

In order to demonstrate that the Defendants adopted the CFW IP into their business model, it is necessary for the Plaintiff to have production of those significant items that would be expected to reflect, in a telltale fashion, the work that the Plaintiff did with the Defendants, resulting in the claimed CFW IP, made its way into the business model and practices of the Defendants. [ 21 ] The Plaintiff has enumerated 12 such suggested significant items in its draft Amended Order for Disclosure of Documents. The Defendants, in their April 29, 2019 letter to the Plaintiff, (Affidavit of and Exhibit “A” to Mr.

Gilhooly’s affidavit), have similarly structured their response to the present motion around those 12 items. [ 22 ] I will follow suit, bearing in mind that I need not concern myself with the items that the Defendants have voluntarily agreed to disclose within a reasonable time, (which I suggest should be within 90 days of the issuance of my order),which I will incorporate into an Order of the court, subject to an appropriate confidentiality provisions being in place. [ 23 ] The Plaintiff suggests that the court ask itself, given the pleadings in relation to each disputed production request: 1. is it reasonable to expect that the item(

s) could exist, and if so, are they in the custody of, or with diligence accessible by, the Defendants? 2. does the existence of the item(

s) tend to prove or render more probable the past, present or future existence or non-existence of a material fact? 3. would satisfying the otherwise valid request require an unreasonably disproportionate effort or cost? [ 24 ] The Defendants suggest that the Court ask itself: Would the category of items sought by the Plaintiff by itself or with other evidence tend to show or show, that the Defendants did act in a manner, as claimed at paragraph 25 of the Amended Statement of Claim, namely that: “the CFW IP has been used by Resolve and/or Resolve IF, its managers and staff, to modify its collection activities and to lessen the default rate with respect to student loans and other consumer loans, from which it has gained a financial benefit”? [ 25 ] I will examine the dispute using the Plaintiff’s formulation although I do not see them as being materially different. [ 26 ] Therefore, what remains for me to resolve is the production of the following 11 items. 1. (agent and management) training manuals- used by management and customer service representatives (“CSRs”) for the years January 2005 to sometime in 2007 (when such disclosures have already been made); and a. all changes or additions made to those manuals between 2005 and 2018;

b. all documents exchanged between all persons responsible for any changes made to those training manuals between January 1, 2005 to 2018 including any presentations made within D&H or to D &H clients involved in any aspect of Canadian student loans. [ 27 ] I agree with the Defendants that they are required to make disclosure only of the training manuals in use in each of the relevant years, which in my opinion include from January 1, 2005 onward to 2007(when such disclosures have already been made). Changes or additions can be ascertained by comparison of the manuals over time.

This may lead to further requests for disclosure, however at this time it is not appropriate (demonstrably relevant and proportionate) to order that the Defendants identify all changes or additions made to the manuals, or disclose all what is sought in item 1 (

d) Appendix “A” attached to the draft Order - however in relation to item (

d) I will order disclosure be made in relation to documents exchanged regarding changes made to the manuals between January 1, 2005 until January 1, 2011 given that CFW’s involvement ended in approximately September 2009; 2. scripts- for the years January 2005 to sometime in 2007 (when such disclosures have already been made), [6] a. used by management, and CSRs when speaking with student loan borrowers or other borrowers; and b. copies of all changes made to those scripts, including the material, and source of the material; c. all documents that passed between the Defendants, and the Government of Canada, Provinces, and any Banks participating in student lending, in the period between January 1, 2008 to current regarding communication with student loan borrowers and dialogue script with student loan borrowers. [ 28 ] I agree with the Defendants that they are required to make disclosure only of the scripts in use in each of the relevant years, which in my opinion include from January 1, 2005 onward to sometime in 2007(when such disclosures have already been made).

Changes or additions can be ascertained by comparison of the scripts over time. It is not appropriate to order that the Defendants identify all changes or additions made to the scripts, however in relation to item 2 (

c) Appendix “A” attached to the draft Order I will order disclosure be made only insofar as documents passed between the Defendants and the Government of Canada regarding the Defendants’ “standard operating procedure” communication with student loan borrowers, and dialogue script for the period January 1, 2005 until January 1, 2011. 3.

RAP (Repayment Assistance Program) 1. any presentations by D&H to the Government of Canada and to any Province or Banks between January 1, 2008 [January 1, 2005] to current, that participate in student lending and deal with a “repayment assistance program”; 2. all documents containing material as to how it (RAP) was conceived, assembled, tested, and introduced to the Government of Canada, and any Provinces or Banks in the period between January 1, 2008 [January 1, 2005] to current that participate in student lending and the documents showing the sources for all RAP materials; 3. all documents between D&H and the Government of Canada, and any Provinces or Banks between January 1, 2008 [January 1, 2005] to current that participate in student lending, involving the construction and implementation of RAP; 4. all correspondence between Ralph DeJong, Allan Bennett, Douglas Gilhooly and any other D&H management regarding RAP between January 1, 2008 [January 1, 2005] to current. [7] [ 29 ] While the Defendants argue that the CSLP-based RAP was not conceived of by them but rather the Federal and Provincial governments, they acknowledge that they did have a role “to implement technical systems and business processes to administer the program”-see Mr.

Gilhooly’s affidavit at para. 6(d). The only other evidence on this issue comes from Mr. LeBlanc’s affidavit (paras 71- 77).

He says that as early as November 2, 2005 CFW was presenting concepts on a repayment program for defaulting student loan borrowers, and demonstrates in concrete terms discussions that continued in a similar vein with the Defendants as late as September 6, 2007, with the consequence that the Defendants publicly spoke in terms of having “an enhanced assistance program… repayment assistance is a service extension D&H recently implemented as the administrator of student loan programs for the Canadian and Provincial governments” (para.76) which did not exist prior to 2007, but had come into existence by 2010. [ 30 ] What is most relevant here is to understand whether the Defendants had any significant hand in the creation of the RAP as a replacement for the Federal Government’s Interest Relief and Debt Reduction and Repayment programs.

The evidence of Mr. LeBlanc and the Defendant’s position suggest that there is some overlap between the Defendants’ provision of services regarding the CSLP and the RAP, which meets the relevancy threshold. As a matter of proportionality however, I conclude that the Plaintiff should have the opportunity to explore this by way of further production, but only in relation to item (

d) Appendix “A” to the draft Order, and only for the time interval January 1, 2005– January 1, 2011. 4. Early Withdrawal Projects 1. After a careful examination of the Plaintiff’s position, it is apparent to me that there is no compelling evidence and arguments that make it appropriate to order this sought-after disclosure. 5. Student Loan Borrower Satisfaction Projects 1. After a careful examination of the Plaintiff’s position, it is apparent to me that there is no compelling evidence and arguments that make it appropriate to order this sought-after disclosure.

6. Incentive Monies 1. After a careful examination of the Plaintiff’s position, it is apparent to me that there is no compelling evidence and arguments that make it appropriate to order this sought-after disclosure. 7. Ralph DeJong 1. The Plaintiff seeks “all emails, faxes, telecommunications between Mr. DeJong and CIBC, Royal Bank, and Scotia Bank employees concerning the CFW Group, in the period between January 1, 2008 [January 1, 2005] to current.

All emails, faxes, meeting notes, telephone calls between Ralph DeJong and Gerard Schmidt concerning the CFW Group in the period between January 1, 2008 [January 1, 2005] to current.” 2. The Defendants’ position is that” [we] included communications involving Mr. DeJong and CFW in [our] initial productions. We are not aware of any such further communications for subsequent periods.” 3. After a careful consideration of the Plaintiff’s position, it is apparent to me that there is no compelling evidence and arguments that make it appropriate to order this sought-after disclosure. 8. Standing Senate Committee [8] 1.

The Plaintiff requests inter alia , “all documents exchanged between [the office of] Ralph DeJong and Rosaline Frith, then Director General of the Canada Student Loans Program, and any members of her office, in the period from March 1 to April 30, 2008.” 2. The Plaintiff argues that the transcript of the Senate Banking Committee held March 13, 2008 is revealing. Ms. Rosaline Frith, Dir. Gen., Canada Student Loans Program, Human Resources and Social Development Canada spoke about: “two Budget 2008 initiatives that impact on the issue of bankruptcy.

Two measures that were announced will help student loan borrowers to better manage their financial situations. The Canada Student Grants program will invest an additional $350 million in nonrepayable assistance to students from low and middle-income families in 2009 – 10… That will help to keep the student debt levels down .

An additional $74 million over four years will be invested to make this Canada Student Loans Program more responsive to the economic circumstances of borrowers including those with disabilities by providing greater assistance for those experiencing difficulty repaying their loans … Resolve Corporation is under contract with the Government of Canada to administer the Canada Student Loans Program and integrated student loans with Ontario, Saskatchewan, New Brunswick and Newfoundland and Labrador.

The Federal government provides guidelines to Resolve Corporation for the delivery of the program, although Resolve Corporation has some latitude in using their financial market expertise to establish and maintain a relationship with borrowers in order to facilitate the management of their loans while they are in study and then while they are in repayment once they have completed school… Resolve Corporation contact borrowers by phone and in writing when a payment has been missed.

If the borrowers are not in school full-time Resolve Corporation explains the debt management tools available to them, including extending the repayment period and a six-month interest-free period. [ 31 ] Notably Ralph DeJong, Resolve VP, Student Loan Operations also spoke, pages 9 – 14 (Exhibit “G” 2017 LeBlanc affidavit), he stated that: “We are contracted to manage the National Student Loans Service Centre which is the program under the Canada Student Loans Program...

We administer the [CSLP] through the National Student Loan Service Centre, from disbursement of funds, to maintaining the loan in school status, to grace. And then repayment.… There are lots of questions about the delinquency side. We have a full delinquency management team or repayment counselling arm of our actual service that starts much earlier in the loan lifecycle than at the point when the loan goes into repayment. It is all about borrower awareness. It starts up front on the disbursement and on building the relationship … … We have a full, inbound Service Centre that takes all inbound calls.

We also have a multi-channel environment for our borrowers, whether through our website, by voicemail, by phone or in person. We have multiple channels. That is how we manage that key relationship through the ‘in study’ and grace periods. It is all about awareness and building relationships . We have a very active protocol and moving the borrower through the awareness cycle of their repayment … The payment in the contract is based on borrowers in a ‘status’.

If a student is ‘in study’ or ‘in repayment’ status, that loan being serviced garners a fee per month [for Resolve] … Just to be clear, in the service we provide, it is early stage delinquency and pre-emptive management… We have intensive [risk] scoring models… and then do a lot of pre-emptive counselling… to avoid a delinquency”. [ 32 ] Complementing that are Ms. Frith’s comments at page 10: “[How is Resolve Corporation paid by the Canadian government? Are there any special incentives regarding how you perform?] We have just entered into a new contract, which will come into effect on March 17.

It is a performance-based contract… The performance- based measure is client satisfaction; that is ensuring that… each and every student borrower is getting a good service and that the default rates are kept as low as possible. The two go hand-in-hand .” [ 33 ] Mr. DeJong adds a little later: “… I also need to maintain high quality and high customer satisfaction. We use a relationship-based model . We firmly believe that if we do not build the right relationship, that borrower will never call me back. I need to build; it is like anything.”

[ 34 ] If Resolve was successful in bidding on the new contract which had an operational date of March 17, 2008, it is clear that they must have had contacts with the relevant Government of Canada offices much beforehand. [ 35 ] If, as the Defendants say, they had nothing to do with the creation of the RAP, or similar CSLP activities, why does Ms. Frith appear to know so much about Resolve’s business model?

The Plaintiff suggests that Resolve was working with the Government to improve the system before March 2008, and that is why the March 2008 CSLP contract awarded to Resolve fit so neatly with what the Government wanted.

Furthermore, they say that the CWF IP was used by Resolve to successfully bid on that contract. [ 36 ] After a careful consideration of the Plaintiff’s position, it is apparent to me that there is sufficiently compelling evidence and arguments that make it appropriate to order this sought-after disclosure to the following extent: in relation to the time interval from January 1, 2007 to April 30, 2008. [9] 9. The new

(2014) D&H Student Loan Service Proposal (see para. 13 Zebeski affidavit). [ 37 ] The Plaintiff requests “a copy of the most recent proposal to the Government of Canada concerning the servicing of student loan accounts and borrowers”. [ 38 ] The Plaintiff suggests that the continued use by the Defendants of the CFW IP is relevant to the liability and quantum of damages issues, and that continued usage would be apparent in the Defendants’ Response to the most recent RFP, particularly since they were the successful candidates. [ 39 ] The Defendants argue that “to the extent it calls for production of the entire proposal made to, or contract between, DH and the Government of Canada, that goes beyond the proper scope of relevance to this proceeding”.

Mr. Zebeski noted that the awarding of the contract in issue was expected “in fall of 2014” (para. 13), and went on to state: “As described below, D&H and its predecessors in the student loan servicing businesses have invested heavily in the training and development of knowledgeable and capable CSRs with the skills necessary to communicate effectively with student borrowers at all stages of the student loan lifecycle and with respect to various features of the CSLP.

D&H believes that its investment and experience in the area of student borrower communications, including the training of its CSR’s, currently provides D&H with a competitive advantage over other service providers presently engaged in the re-procurement process for the next CSLP contract, and expects that its experience and expertise with student borrower communications and its communications strategy will be a central feature of D&H’s bid in response to the upcoming RFP.

Effective communications with student borrowers are essential to customer satisfaction and assist in reducing student loan defaults , both of which D&H expects will be evaluated by the Government of Canada in the RFP. D&H’s competitive advantage in this area of borrower communications will be lost if the confidential documents which are subject of this motion become publicly available to competitive betters as a result of this litigation.” [ 40 ] Subject to providing confidentiality protections for the Defendants, I conclude that the sought-after disclosure should be produced. 10.

D&H Human Resources [ 41 ] The Plaintiff seeks: 1. all documents regarding hiring strategy for D&H location in Ontario, Winnipeg and Ottawa, for employees who would be dealing with student loan borrower issues, in the period between January 1, 2008 [January 1, 2005] to current; 2. all documents which address any bias testing used by D&H in the hiring process during that period, or in the assessment of current employee performance and behaviour in the workplace.” [ 42 ] The Defendants state that they have not conducted any “bias testing” between January 1, 2008 in the present date.

Otherwise I conclude the request is questionably relevant, and certainly disproportionate. I therefore decline to order further disclosure. 11. General Correspondence [ 43 ] The details of these six different categories claimed to be relevant, may be found in the Appendix “A” attached to the draft Order. I conclude these categories are all either not relevant or disproportionate, except: (c)-all correspondence between January 1, 2005 and March 31, 2007 (when Edulinx was acquired by Resolve) exchanged between Douglas Emerson of Edulinx (who Mr. Gilhooly in his affidavit at para. 6(

m) stated has not been employed by the Defendants “for more than 10 years”) and John LeBlanc of CFW Group (if not already disclosed). Costs [ 44 ] In the event of no agreement, the parties may make brief written submissions by June 30, 2019. Rosinski, J.

APPENDIX “A”

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A screenshot of a cell phone Description automatically generated APPENDIX “D”

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A screenshot of a cell phone Description automatically generated APPENDIX “E”

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A screenshot of a cell phone Description automatically generated [1] Directly implicated are Civil Procedure Rules 1, 14,15 and 16. For convenience, I have attached hereto as Appendices “A”, “B” “C” “D” “E” and “F”: the Amended Notice of Action; the Plaintiff’s Reply to Demand for Particulars December 5, 2018; the Amended Notice of Defence; a

summary of the Plaintiff’s disclosure requests compiled as Appendix “A” attached to the draft Order presented by the Plaintiff; the Defendants’ April 29, 2019 letter in response, setting out voluntary disclosures they have undertaken to produce – confirmed in open court and also found at page 3 of their brief – “within a reasonable period of time, subject to an appropriate (extension of the confidentiality order)” – see the court’s reasons at 2014 NSCA 98 and Order issued October 28,2014; and the Non-Disclosure Agreement itself at Exhibit “I” to Bob Zebeski’s September 23,2013 affidavit.). [2] Which is a laudable approach and in the spirit of Rule 1.01 regarding the Object of our Civil Procedure Rules: “These rules are for the just, speedy, and inexpensive determination of every proceeding.” [4] The governing jurisprudence is found referenced in the following cases: Brown v Cape Breton (Regional Municipality) , 2011 NSCA 32 ; Lauschway v Messervey , 2014 NSCA 7 .

I recently canvassed the development of these principles (albeit in the context of a Rule 57 case) in Dillon v AMEC Foster Wheeler Americas Ltd. , 2017 NSSC 211 . [8] See Exhibit “G” to the 2017 LeBlanc affidavit. [9] I remain mindful that the Defendants have already produced a large amount of disclosure (the precise details of which I am not privy)

– see Exhibit “H” to Bob Zebeski’s September 2013 affidavit.