2019 NLSC 49, 2019 NLSC 49

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Hynes v. Professional Diving Contractors Limited , 2019 NLSC 49 Date : February 22, 2019 Docket : 201201G3477 Between: JAMES HYNES First Plaintiff And: BARRY HYNES Second Plaintiff And: SEAFORCE TECHNOLOGIES INC. Third Plaintiff And: SEAFORCE DIVING LIMITED Fourth Plaintiff And: Professional Diving Contractors Limited First Defendant And: DAVID SQUIRES Second Defendant Before: Justice Deborah J. Paquette Place of Hearing: St. John’s, Newfoundland and Labrador

Date(

s) of Hearing: February 16, 2018; June 15, 2018; October 2, 2018. Appearances: M. John Mate Appearing on behalf of the Plaintiffs Kevin F. Stamp, Q.C. Appearing on behalf of the Defendants Authorities Cited: CASES CONSIDERED: Carter v. Municipal Construction Ltd. (2001), (NL SC), 204 Nfld. & P.E.I.R. 112, 107A.C.W.S. (3d) 750 (Nfld. S.C.(T.D.)); Szeto v. Dwyer, 2010 NLCA 36; Ultramar Ltd. v. A.M.P. Fisheries Limited, 2004 NLSCTD 48;English v. House, 2017 NLTD(G) 93; Hynes v. Suncor Energy Inc., 2015 NLTD(G) 58; Ring v.

Canada (Attorney General), 2009 NLTD39, aff’d 2009 NLCA 45; Doucette (Litigation Guardian of) v. Wee Watch Day Care Systems Inc., 2008 SCC 8; Merck & Co. v. ApotexInc., 2004 FC 567; Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41; Apotex Inc. v. Wellcome Foundation Ltd.(1993), 44 A.C.W.S. (3d) 453, 51 C.P.R. (3d) 305 (F. Ct. (T.D.)); Prudential Consulting Inc. v. Correia (2008), 170 A.C.W.S. (3d) 298,2008 CarswellOnt 4819 (Sup. Ct.); Canadian Financial Wellness Group v. Resolve Business Outsourcing, 2014 NSCA 98. RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D.

REASONS FOR JUDGMENT Paquette, J.: INTRODUCTION [1] The defendants seek an order for the production of documents. The plaintiffs oppose the scope of the application and, in turn,make application for a protection and confidentiality order. [2] The statement of claim dated 22 June 2012 initiated this defamation and intentional interference with economic relations’litigation, involving offshore commercial diving enterprises. It is the plaintiffs’ position that David Squires is personally liable and thatProfessional Diving Contractors Limited (“Professional Diving”) is vicariously liable for his actions.

There have been severalinterlocutory applications over the years since the claim was initiated, resulting in amendments to the pleadings. A case managementorder was made on 17 July 2017. The hearing of the application was adjourned on 15 June 2018 to facilitate cross-examination of JamesHynes and Barry Hynes.

Counsel subsequently agreed on 2 October 2018 that their submissions on the applications were concluded,subject to seeking leave to later seek cross-examination of the issue of costs. [3] At the commencement of this application, a further amended statement of claim dated 11 October 2017 was operative. [4] The further amended statement of claim dated 26 February 2018 alleges that by way of a “series of communications by theDefendants … over a period of years”, the plaintiffs were defamed through communications questioning their integrity and advancingillegitimate concerns about their relationship with Technip Canada Inc. (“Technip”).

It is alleged that the defamatory statements weremade to Technip, the Canada Newfoundland Offshore Petroleum Board (CNLOPB), Husky Energy and Suncor Energy. The timeframeis stated to be March 2006 to July 2007; May and December 2008; November and December 2010; and in 2011, 2012 and 2013. [5] The plaintiffs allege that the defendants’ actions have intentionally interfered with James Hynes’ economic relationship withTechnip in the supply of project management services, a business which started in 2003 and ended in 2013.

Specifically, it is stated thatTechnip decided not to renew the first plaintiff’s contract because of the alleged ongoing defamatory communications of conflict ofinterest. James Hynes estimates that the damages relating to this work would be just over $1,100,000. It is also alleged that thereputations of the other plaintiffs have been injured. [6] The further amended statement of defence of the first defendant and second defendant dated 9 March 2018 denies thatdefamatory statements were made.

It incorporates specific communications from the defendants which they submit are not actionable. [7] The defendants seek an order that the plaintiffs file a supplementary list of documents “containing disclosure relating to everymatter in question in the proceeding” including:

i. All documentation relating to contracts, agreements and other arrangements between all the plaintiffs and Technip; ii. All documentation relating to the ownership and control of Seaforce Diving Limited (“Seaforce Diving”) and Seaforce Technologies Inc. (“Seaforce Technologies”), including shareholding of the two companies, both before and after the issuance of the statement of claim of the within matter; iii. All documentation relating to the scope of the business activities of Seaforce Technologies; iv. All documentation relating to bidding by Seaforce Diving on Technip Canada Limited contracts; v.

All documentation relating to contract arrangements between Seaforce Diving and Technip during the period of time governed by the statement of claim, which starts at least as early as March 2006; vi. All documentation relating to contractual arrangements between James Hynes and Seaforce Technologies and Technip; vii. Documentation to support the claims for special damages for James Hynes, Barry Hynes, Seaforce Technologies and Seaforce Diving, including, but not limited to: 1. Tax information for James Hynes relating to the full period of time governed by the statement of claim; 2.

Tax information for Barry Hynes relating to the full period of time governed by the statement of claim; and 3. Financial statements for the corporate plaintiffs for the full period of time governed by the statement of claim; viii. True copies of documents referred to in the plaintiff’s list of documents,

Part I, Tabs 9-82; ix. All other documents relating to any matter in question in this proceeding that are or have been in the possession, custody or control of the plaintiffs. [ 8 ] The defendants seek, alternatively, an order that the action be dismissed pursuant to Rule 32.10 of the Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sch.

D . (“ Rules ”). [ 9 ] The defendants assert that they have no knowledge of the factual basis for a majority of the claims which are being advanced and submit that this documentation is necessary because the plaintiffs have put forth many claims and seek substantial economic loss and damages. [ 10 ] The plaintiffs’ application seeks a protection and confidentiality order regarding personal and/or commercially confidential and sensitive material that already has been disclosed in this matter or may be disclosed later in this matter prior to trial.

The order requested would prohibit certain uses and require notice prior to certain documents designated as confidential or commercially sensitive being filed publically with the Court without further order or the consent of the plaintiffs. ANALYSIS Production of Documents [ 11 ] Rule 32 of the Rules governs production of documents: 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 the list with the Court without a copy of any document being attached thereto. …

(3) A claim that any document is privileged from production shall be made in the list of documents with a sufficient statement of the grounds of the privilege. … 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 thedocuments 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 theapplication; 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 inquestion in a proceeding at such time, place and manner as it thinks just.

(2) Where a document is in the possession, custody or control of a person who is not a party, and the production of the documentmight be compelled at a trial or hearing, the Court may, on notice to the person and any opposing party, order the production andinspection thereof or the preparation of a certified copy that may be used in lieu of the original.

(3) An order for the production of any document for inspection by a party or the Court shall not be made unless the Court is ofthe opinion that the order is necessary for disposing fairly of the proceeding or for saving costs and is not injurious to the public interest. [12] Carter v. Municipal Construction Ltd. (2001), (NL SC), 204 Nfld. & P.E.I.R. 112, 107 A.C.W.S. (3d) 750(Nfld. S.C.(T.D.))[1], at paragraph 15 explains the disclosure requirement: 15 It is axiomatic that Rule 32 is to be interpreted liberally in order to effect full disclosure.

Having said that, the outer parameters ofthe obligation to effect full disclosure and to produce a document for inspection are determined by the requirement that the document inquestion "relate" to a matter in issue in the proceeding. [Emphasis added.] [13] Carter explains that whether a document “relates” to the pre-trial proceedings encompasses a broader consideration than beinglegally “relevant” (at paragraph 19): 19 This notion of "relating", which is broader than the concept of relevance discussed earlier, would entitle a party to production ofdocuments 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 ofhis 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.

Thisconcept was picked up and applied by Russell, J. in yet another United Food and Commercial Workerscase which is unreported:U.F.C.W., Local 1252, Fishermen's Union v. Cashin, [(1987), (NL SC), 66 Nfld. & P.E.I.R. 181 (Nfld. T.D.)] [1987]St. J. No. 1453 (NFSC, TD, filed March 17, 1993) [leave to appeal to the Newfoundland Court of Appeal refused [20 C.P.C. (3d) 81(Nfld. C.A.)] [1993] No. 65 (unreported); filed June 23, 1993)]. There, Russell, J. adopted the formulation in the Cie Financière duPacifique v. Peruvian Guano Co. [(1882), 11 Q.B.D. 55 (Eng.

Q.B.)] case referred to by the Supreme Court in Frenette. [14] Green, C.J. (as he then was), addressed whether a document “relates” at paragraph 21 of Carter: 21 I would therefore state the rule as to what constitutes a document relating to a matter in question in the proceeding as follows: Adocument 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 thecase in the sense that it contains information which may either directly or indirectly enable the party receiving or seeking the informationto 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 inquirywhich may do so.

With all due respect to those who have expressed a contrary view, I do not believe that the test for determiningproduction of documents prior to trial should be tied to the concept of relevance at trial. [15] In Szeto v.

Dwyer, 2010 NLCA 36, at paragraphs 53-54, Green, C.J. addresses the principle of proportionality in documentdisclosure: 53 For rules involving discretion, in this case the rules regarding pre-trial discovery and disclosure, this includes application of anunderlying principle of proportionality which means taking account of the appropriateness of the procedure, its cost and impact on thelitigation, and its timeliness, given the nature and complexity of the litigation. 54 Proportionality in this sense can be described as follows: The rules of court should be interpreted and used, by the lawyers andparties invoking them and the judges interpreting and applying them in situations involving the exercise of judicial discretion, in

accordance with a principle of proportionality. That involves invoking a rule and conducting a procedure only in a manner that willpromote, not frustrate, the underlying purposes and objectives of the rules as a whole. In other words, in the exercise of discretionrelating to the application of the rules, a judge ought always to consider proportionality to ensure that a party invokes and applies therules in a sensible and reasonable manner.

This means dealing with a proceeding in ways such that the time and the types of processesinvolved as well as the expense and convenience of the parties are proportionate to factors such as: the nature of the issues engaged; theamount of money involved; the time reasonably necessary to resolve the issue; the complexity of the issues and the overall cost of thelitigation that can be reasonably expected. [16] Szeto addresses the application of the proportionality principle to pre-trial disclosure options available to parties and costimplications which may be associated thereto.

This is further explained at paragraphs 63 to 67: 63 In short, the notion of interpreting the rules regarding discovery and disclosure "liberally" so as to effect "full disclosure" asemphasized in Bradbury v. Cabot Insurance Co. (1988), (NL SC), 70 Nfld. & P.E.I.R. 310 (Nfld. T.D.) at p. 314 mustnot be read as meaning "complete disclosure of every document or piece of information" relating to the dispute in every case.

"Fulldisclosure" must be understood and applied by the court in a case-specific manner as meaning full disclosure necessary to ensure anexpeditious, cost effective and fair determination of the merits of the particular case. 64 The underlying principle of proportionality must also inform the manner in which the parties and counsel proceed. This means thatbefore executing a step, making a demand or application, or taking a position in response, they should consider the question ofproportionality.

That is, whether the manner of execution of each step in the litigation process, and whether a particular demand orprocedural application or response, is proportional given its cost, impact on the litigation, timeliness, and the nature and complexity ofthe litigation.

The question is, will the step, application, demand or position in response contribute to an expeditious and cost effectivedetermination on the merits in a manner that is fair to all sides? 65 Rather than forcing a party to make an expensive, time consuming and possibly unnecessary application, attempts should be madeto have matters dealt with by discussion between, or agreement by, counsel.

Adverse costs consequences may result where, on anapplication, it appears that the actions of, or positions taken by, one party are materially counterproductive to the expeditious, costeffective and fair determination on the merits. 66 As in this case, where the matter involves a claim for damages for personal injuries but the nature of the claim is not properlydefined, and a better statement of the claim or particulars are being sought, the plaintiff's counsel must turn his or her mind to thequestion of what aspects of the claim are then ascertained and can be given.

The pleadings should either be amended to better state theclaim or particulars should be given, or counsel should be prepared to stipulate, on a with-prejudice basis, what the parameters of theclaim will be.

If an application for particulars is necessitated because of failure of the plaintiff to reasonably respond to a request, it couldbe expected that the plaintiff would be penalized in costs. 67 By the same token, where the defendant unreasonably seeks interrogatories, trying to use them as a substitute for seekingparticulars or without first seeking to define the scope of the dispute, either by means of the pleadings or otherwise, and seeksinformation that involves an intrusion into the plaintiff's private affairs when it may not be reasonably necessary to resolve the true issuesin dispute, thereby offending the proportionality principle, he or she should also expect to suffer costs consequences. [17] In Ultramar Ltd. v.

A.M.P. Fisheries Limited, 2004 NLSCTD 48, Orsborn, J. addressed the requirement for specificity inrequests for document production at paragraphs 28 to 30: 28 To summarize, it seems to me that where a party seeks to compel an opposing party to produce additional documents which falloutside that party's reasonable assessment of its initial obligation to produce, the request must be sufficiently specific so as to enable theresponding party to readily identify what is being requested.

Such a degree of identification will also allow the Court, if called upon, tomake a reasoned assessment of the appropriateness of any request for an order for additional production. 29 Any such request should be directed to actual documents and not just ‘information’.

While a party may not be able to identify aparticular document, the request should at least clearly identify the particular class or nature of the document(s), and thus allow theresponding party to identify the documents in question, if any, and whether there are legitimate grounds on which to either resistproduction or seek conditions. 30 The request for further production should be focused; it should not be broader than is reasonably necessary to encompass thosematters fairly considered to be in issue.

[ 18 ] Ultramar , a breach of contract case, involved a request for “Information on all Ultramar clients who purchased diesel fuel from Ultramar from St. John’s in August and September 2002 including the quantity of fuel purchased.” The court characterized the request as vague at paragraph 22: 22 That having been said, the application before the Court lacks definition and specificity. A.M.P. seeks "information" on Ultramar's clients. Although narrowed somewhat in argument, the request as formally presented is vague.

It would be all but impossible to know how to comply with an order granted in the terms of the relief sought in the application. Rule 32 deals with the obligation to produce documents. This obligation is one that rests at first instance on each party to the litigation. Each party must disclose and produce — without an order — all non-privileged documents which relate to every matter in question in the proceeding.

This obligation extends only to documents, documents which can be identified and examined, and a determination made as to their 'relatedness' to a matter in the proceeding. [ 19 ] The difference between interrogatories and document production is explained at paragraphs 25 and 26, noting that the requesting party must sufficiently identify the document(

s) it is seeking: 25 The request for production of documents stands on a different footing than an effort to elicit information by way of interrogatories pursuant to Rule 31. A properly framed interrogatory may be directed to questions of fact within the knowledge of the deponent or within the deponent's reach through reasonable inquiry. Unless to do so would be unduly burdensome or harsh, the responding party can be required to assemble and organize considerable data in order to provide a response to the interrogatory. See, generally Plumrose Inc. v.

A & A Foods Ltd. 5 26 That is not the case with the production of documents. While the requesting party is obviously — at least in most cases — interested in the information in the documents, what is requested is an actual document. And where a party has complied with its obligation under r. 32.01 to disclose all documents "relating to every matter in question", a request for additional production, under either r. 32.01(

b) or r. 32.07(1), to satisfy what the opposing party considers to be its requirements, must specify the document or at least the particular class of document being sought. Only then will the responding party know clearly what is being sought and will the Court, if called upon, be able to decide whether production should be ordered. [Footnote omitted.] [ 20 ] In dismissing the application, Orsborn, J. noted that examinations for discovery or the issuance of interrogatories may assist with the proper articulation of a request for additional document production (at paragraph 32). [ 21 ] English v.

House , 2017 NLTD(G) 93, also refers to discoveries in the process of delineating documentary requests. Orsborn, J. at paragraph 24 stated: 24 However, it may be that as this matter progresses and the claim becomes more delineated, the defendant may wish to seek further information on the plaintiff's psychiatric condition and the effect, if any, of that condition on her claim. Nothing in these reasons precludes the defendant from bringing any such application. [ 22 ] In Hynes v.

Suncor Energy Inc ., 2015 NLTD(G) 58, the statement of claim seeks damages for defamation, conspiracy, intimidation and intentional interference with economic relations. The plaintiff sought an order compelling disclosure of electronic records, satisfactions of undertakings and an amended list of documents. At issue was whether pre-trial disclosure should be dealt with before the statement of claim was amended in accordance with a previous order of the court and whether the plaintiff was entitled to an order directing the defendant to comply with disclosure obligations.

The document production ordered by Butler, J. related to a discrete event and was not framed broadly, e.g. “records of all communication that led to a meeting between Larry Breen and Stewart Strong of Suncor on June 14 or 15, 2012, at which meeting the plaintiff’s fitness for the position was discussed; and all communication subsequent to the meeting of June 14 or 15, 2012 that touches in any way on the plaintiff’s vision and/or suitability for the position.” (at paragraph 51). This wording defines a meeting and a discrete issue.

This is far different than the request of the defendants here for all documentation relating to contracts, agreements and other arrangements between all the plaintiffs and Technip. Document Confidentiality in Civil Proceeding [ 23 ] The defendants assert that any concerns which the plaintiffs may have about the confidentiality of documentation ordered pursuant to their application is alleviated by the implied undertaking rule explained by Adams, J. in Ring v.

Canada (Attorney General) , 2009 NLTD 39 , at paragraph 3 , aff’d 2009 NLCA 45 : The implied undertaking rule is a part of the law of Newfoundland and Labrador.

It states that where a party to litigation obtains documents from an opposing party through the court-sanctioned compulsory processes of documentary production and examination for discovery, the receiving party impliedly undertakes to the court not to use the information for a purpose outside of or collateral to the litigation in which it was produced without leave of the court or the consent of the opposing party. … [Emphasis in original.] [ 24 ] In Doucette (Litigation Guardian of) v.

Wee Watch Day Care Systems Inc. , 2008 SCC 8 , the Supreme Court of Canada considered the scope of the “implied undertaking rule” whereby evidence compelled during pre-trial discovery from a party to civil

litigation is restricted to use by the parties for the purpose of the litigation in which it was obtained. The issue arose in the context oflitigation involving alleged child abuse. Binnie, J. wrote at paragraph 4: 4 Thus the rule is that both documentary and oral information obtained on discovery, including information thought by one of theparties to disclose some sort of criminal conduct, is subject to the implied undertaking.

It is not to be used by the other parties except for the purpose of that litigation, unless and until the scope of the undertaking is varied by a court order or otherjudicial order or a situation of immediate and serious danger emerges. [Emphasis in original.] [25] The court discusses the rationale for the implied undertaking rule at paragraphs 24 and 25: 24 In the first place, pre-trial discovery is an invasion of a private right to be left alone with your thoughts and papers, howeverembarrassing, defamatory or scandalous. At least one side in every lawsuit is a reluctant participant.

Yet a proper pre-trial discovery isessential to prevent surprise or "litigation by ambush", to encourage settlement once the facts are known, and to narrow issues evenwhere settlement proves unachievable. Thus, rule 27(22) of the B.C. Rules of Court compels a litigant to answer all relevant questionsposed on an examination for discovery. Failure to do so can result in punishment by way of imprisonment or fine pursuant to rules 56(1),56(4) and 2(5).

In some provinces, the rules of practice provide that individuals who are not even parties can be ordered to submit toexamination for discovery on issues relevant to a dispute in which they may have no direct interest. It is not uncommon for plaintiff'scounsel aggressively to "sue everyone in sight" not with any realistic hope of recovery but to "get discovery".

Thus, for the out-of-pocketcost of issuing a statement of claim or other process, the gate is swung open to investigate the private information and perhaps highlyconfidential documents of the examinee in pursuit of allegations that might in the end be found to be without any merit at all. 25 The public interest in getting at the truth in a civil action outweighs the examinee's privacy interest, but the latter is neverthelessentitled to a measure of protection.

The answers and documents are compelled by statute solely for the purpose of the civil action and thelaw thus requires that the invasion of privacy should generally be limited to the level of disclosure necessary to satisfy that purpose andthat purpose alone. Although the present case involves the issue of self-incrimination of the appellant, that element is not a necessaryrequirement for protection. Indeed, the disclosed information need not even satisfy the legal requirements of confidentiality set out inSlavutych v. Baker (1975), (SCC), [1976] 1 S.C.R. 254 (S.C.C.).

The general idea, metaphorically speaking, is thatwhatever is disclosed in the discovery room stays in the discovery room unless eventually revealed in the courtroom or disclosed byjudicial order. [26] The Attorney General for British Columbia’s request to make the discovery transcript available to the police was denied on afinding that, “The authorities should not be able to obtain indirectly a transcript which they are unable to obtain directly through a searchwarrant in the ordinary way because they lack the grounds to justify it.” (at paragraph 58). [27] In Merck & Co. v.

Apotex Inc., 2004 FC 567, Harrington, J. declined to uphold a “counsel’s eyes only” order granted by orderof the prothonotary. In this case, litigation between pharmaceutical companies raised concerns that the release of confidentialinformation would be disadvantageous in the highly competitive marketplace. The court referred to the Supreme Court of Canadadecision Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, which restricted public access, but not access to theparties.

Harrington, J. in Merck & Co. at paragraph 12 stated: 12 In Sierra Club, supra, the Supreme Court was dealing with a confidentiality order which only restricted the public distribution ofthe documents in issue. There was no question of denying the other parties access thereto, or putting undue restrictions upon experts. Assaid by Iacobucci J. at paragraph 78: However, in the hands of the parties and their respective experts, the documents may be of great assistance in probing the truth ofthe Chinese environmental assessment process, which would in turn assist the Court in reaching accurate factual conclusions.

The same holds true here. [28] In Apotex Inc. v. Wellcome Foundation Ltd. (1993), 44 A.C.W.S. (3d) 453, 51 C.P.R. (3d) 305 (F. Ct. (T.D.)), a protectiveorder was sought in connection with patent documentation for a patent for pharmaceutical formulations of a chemical compound used inthe treatment for HIV/AIDS. The court remarked at paragraph 10: 10 The general principle of the Court and its process being open to public scrutiny, including access for the public to Courtdocuments, is fundamental to our system of justice.

Striking a balance between that principle and the interests of justice between theparties, including the bona fide commercial and proprietary interests of parties to litigation has led to the practice in this and other Courtsof providing by protective or confidentiality orders that information obtained in preparation for trial may, in appropriate cases, bemaintained in confidence, not accessible to the general public, in the Court's processes. (See generally, Kyuquot Logging Ltd. v. BritishColumbia Forest Products Ltd. et al. (1986), (BC CA), 12 C.P.R. (3d) 347 per McLachlin J.A. at 361-372 (B.C.C.A.)).

[29] Protection was accorded to this documentation, with the court taking into consideration that similar protective orders were inplace in U.S. litigation involving the same parties. [30] A “counsel’s eyes only” order was refused in Prudential Consulting Inc. v. Correia (2008), 170 A.C.W.S. (3d) 298, 2008CarswellOnt 4819 (Sup.

Ct.), where it was stated that this would erode legal counsel’s ability to receive instructions: “An orderpreventing counsel from showing relevant evidence to his client to get instructions should only be granted ‘in very unusualcircumstances’.” (at paragraph 11). [31] The Nova Scotia Court of Appeal considered the open courts principle enunciated in the Sierra Club test in Canadian FinancialWellness Group v. Resolve Business Outsourcing, 2014 NSCA 98.

It considered a request for a confidentiality order to preventdisclosure in open court of documents that would be produced by the defendants at the discovery stage of their civil litigation. Inparticular, there was a concern that the documents would be attached to an affidavit in an interlocutory application. [32] The defendants advanced that the documents contained intellectual property which was to be used in an imminent tender bid.

The tender call was issued by the Government of Canada for a “publicly funded, several hundred million dollar contract for agovernment-sponsored program governing loans to thousands of students across the country.” The court noted at paragraphs 32 to 35: 32 This is a tender call, issued by the Government of Canada, for a publicly funded, several hundred million dollar contract for agovernment-sponsored program governing loans to thousands of students across the country.

The Government's Rules of Engagementstate that "the utmost of fairness and equity between all parties" is an "overriding principle", and that the Government "will not discloseproprietary or commercially-sensitive information concerning a Participant to other Participants or third parties, except and only to theextent required by law". Clearly the integrity of the tendering process for a new CSLP Contract is a matter of public interest. 33 In Martel Building Ltd. v.

R., 2000 SCC 60 , [2000] 2 S.C.R. 860 (S.C.C.), para 88, Justices Iacobucci and Major, for theCourt, said that the implication of a term of fair and equal treatment in a tender process "has a certain degree of obviousness to it" and "isconsistent with the goal of protecting and promoting the integrity of the bidding process, and benefits all participants involved". See alsoDouble N Earthmovers Ltd. v. Edmonton (City), 2005 ABCA 104 (Alta.

C.A.), paras 23, 52, affirmed 2007 SCC 3 , [2007] 1S.C.R. 116 (S.C.C.), para 32. 34 The motions judge said that public interest did not apply here because the RFP "has yet to be issued" (by the decision date ofDecember 4, 2013), and "will be issued in late 2013 with the valuation of the confidential bids set for the spring of 2014". 35 With respect, I don't follow the judge's reasoning. The motions judge acknowledged that an RFP was expected within weeks, andan evaluation of tenders within several months.

If D+H/Resolve's confidential material were made available to its competitors, thecompetitors could tailor their imminent tenders to that material, while D+H/Resolve would not have those competitors' equivalentconfidential information. This would contravene the Government's Rules of Engagement and the judicially endorsed principles offairness and equality that should govern the tender process. That the RFP had not yet issued, but was anticipated in the immediate future,has no bearing on the public's interest in the integrity of the upcoming tender process.

The risk may well peak immediately before theexpected RFP, when prospective tenderers gather information to prepare their bids.

The motions judge's qualification to the legalcharacteristics that define the public interest, in my view, errs in principle. [33] The court was satisfied that the first branch of the Sierra Club test was met because there was a real and substantial risk to animportant commercial interest that related to public interest in confidentiality, without a reasonable alternative short of confidentiality thatwould preserve that interest. [34] The court considered the second branch of the Sierra Club test at paragraphs 37 to 41: 37 Sierra Club's second branch asks whether the salutary effects of the confidentiality order outweigh its deleterious effects, includingthe right to freedom of expression and the public interest in open and accessible court proceedings. 38 Despite notice, no representative of the media appeared in either the Supreme Court or this Court to object.

There is littlediscernable public appetite for access to D+H/Resolve's operational manuals and scripts. 39 At the chambers hearing in the Supreme Court, counsel for D+H/Resolve said "the confidential information, which we're seekingto protect here, would be available to the parties and to the Court, and the order wouldn't do anything which would impair public accessto any hearings related to this matter". Similarly, D+H/Resolve's factum to the Court of Appeal said "the Appellants did not ask that thepublic be restricted from any hearings, nor that the media be restricted from any reporting".

In Sierra Club, para 79, Justice Iacobuccinoted that such a restricted confidentiality order "represents a fairly minimal intrusion into the open court rule, and thus would not havesignificant deleterious effects on this principle".

40 In my view, Sierra Club 's second branch is satisfied. Conclusion 41 I would grant leave to appeal and allow the appeal.

I would order that, if the confidential information from D+H or Resolve's training and systems manuals and scripts is to be included in an affidavit for a chambers motion, then that confidential information be sealed from the public, but be available for the unrestricted use of counsel and the court in a hearing to which the public would have the normal access. [ 35 ] It is the position of the defendants that the plaintiffs must know their own contractual dealings, agreements and arrangements with Technip, their own corporate structure and tax information, the financial statements of the third and fourth plaintiffs and assert that their request conforms to the principles enunciated in Carter . [ 36 ] As to the proportionality rule explained in Szeto , the defendants submit that the plaintiffs base their cause of action on an alleged defamatory campaign and intentional interference with contractual and economic relations spanning over a decade and must be taken to know that it must be based on facts in each time period.

The defendants say that they cannot defend the claims because they have no knowledge of the factual basis for a majority of the claims advanced. In particular, they seek information as to the work which was alleged to have been lost as a result of the defendants’ actions. They assert that James Hynes claims that he suffered economic loss in his relationship with Technip, yet has only produced six tax returns, while the statement of claim purports to seek damages for a longer timeframe. [ 37 ] The plaintiffs counter that there is no lost income claim for the corporate plaintiffs.

The corporate plaintiffs only seek general damages. Barry Hynes states that only one contract was lost by him in the amount of $250,000 and that this is set out in the reply to demand for particulars which explains what contracts were lost. [ 38 ] The defendants state that the reason they seek the corporate ownership documentation is because James Hynes asserts that he is completely separate from the second and fourth plaintiffs, a position which the defendants reject as it is their submission that the plaintiffs act as a unified group.

In particular, they state that they seek to determine the status of James Hynes’ control and involvement with Seaforce Diving which is a direct competitor of Professional Diving. To this end, the defendants query whether he has provided the corporate plaintiffs with any promissory notes or guarantees; whether he has participated in any applications for funding for the corporate plaintiffs; and whether he has provided an accurate statement of the share ownership for the plaintiff companies.

As to the plaintiff’s corporate governance claim, the defendants say that it is simply not acceptable for the plaintiffs to say that they do not have that information anymore because ownership matters will have been recorded. [ 39 ] The defendants further submit that they do not know what engagement Seaforce Technologies has with Technip and seek documentation to address this relationship. [ 40 ] It is acknowledged that the plaintiffs have responded to the reply to their demand to particulars, but counsel indicated that they still require the production requested in the defendants’ application to prepare for the litigation. [ 41 ] The plaintiffs indicate that they do not object to the request for the corporate governance documentation but state that they have made numerous efforts to locate these records, without success, and have communicated this difficulty to counsel for the defendants.

Efforts were made to retrieve these from the then corporate legal counsel who is no longer practising and the corporate accountant, but the records have not been located. The plaintiffs submit that the information could be sought by the defendants through discovery proceedings, including the company accountant. [ 42 ] James Hynes states in his affidavit (26 February 2018) that he is a director of Seaforce Technologies and that the company provides services to the offshore oil and gas industry and is owned by James Hynes and Barry Hynes.

The statement of claim states that Barry Hynes is the sole director and owner of Seaforce Diving which provides commercial diving services largely to the offshore oil and gas industry in Newfoundland and Labrador. [ 43 ] James Hynes further states in his affidavit that he has more than 30 years’ experience in the business of commercial diving.

He states that his expertise was sought out after he became legally blind in 2011 up until 2013 when Technip did not renew his contract: I was advised at the time that my contract [with Technip] was not renewed because of the difficulty they were having dealing with David Squires’ repeated and varied complaints about me being involved with them and although they viewed the complaints as baseless, it was taking considerable time and energy to constantly deal with his false allegations since they were obligated to investigate and he insisted they do so. (at paragraph 2). [ 44 ] James Hynes questions in this affidavit why documents relating to the profits and cost structure of Seaforce Diving Limited are important because the company is not claiming any special damages and the claim by Barry Hynes for special damages is limited to one contract.

It is advanced that the demand for production of “all financial statements, tax returns from Seaforce Diving, Seaforce Technologies and Barry Hynes is an attempt to gain commercially sensitive information by a competitor when it is not reasonably necessary in this litigation and when it could reasonably be used to unfair advantage by that party.” He states that if production is ordered, Seaforce Diving, Seaforce Technologies and Barry Hynes will withdraw their claims entirely, even though all they seek is general damages for defamation.

These companies assert that they have no special damages that are ascertainable and, as such, a demand for documents pertaining to a claim by them for special damages is unreasonable.

[ 45 ] James Hynes further submits that while he has filed his personal tax statements, he does not wish to have them filed with the Court and unnecessarily made public. [ 46 ] James Hynes states that when a contractor such as Technip pays either Seaforce Diving or Professional Diving, following a successful tender, it is likely that the same divers who are independent contractors, will be used. It is advanced that the disclosure of divers’ salaries “could destroy the business if it is made public or made available to their competition”.

It is submitted that the unique costs, overhead and profits are “trade secrets” that each competitor could use against the other in the commercial tender process if they were no longer confidential or secret. [ 47 ] James Hynes also states that information on costs, overhead and profit is proprietary information which is “incredibly sensitive” and would cause an unfair advantage if revealed.

He states that he had “very limited” involvement with Technip’s business, and in his capacity had “no possible access to sensitive information”. [ 48 ] Attached to James Hynes’ amended affidavit are supplementary answers to interrogatories to the defendants.

At paragraph 8 of this document, Technip states that “James Hynes provided logistic services and shorebase support working under the direction of Technip Canada on various projects between 2003 and 2013 … ”, and “Technip Canada considers any further disclosure of the contracts and information sought to be irrelevant to the subject matter involved in this proceeding and confidential business information, so it objects to providing same.” The plaintiffs also submit that documentation provided by Technip in interrogatories be protected. [ 49 ] In

summary, the plaintiffs assert that the defendants’ requests are overly broad and a disclosure of such broad categories of documents would reveal confidential information of a sensitive nature which should be protected in the same manner as trade secrets.

They maintain that they have disclosed all documents related to the pertinent contracts and that the defendants are basing their application for production on speculation that additional documents exist. [ 50 ] The plaintiffs ask that the defendants’ overly broad request be denied and that documents designated confidential are to be kept strictly confidential by the parties and are only to be used in this matter. The plaintiffs seek to be able to designate certain documents “confidential - counsel eyes only”, which will not be filed with the Court, except with 30 days’ written and prior notice.

The 30 days’ notice period would permit the party to apply to Court to prevent or modify the proposed disclosure. The plaintiffs do not claim that the documents in question are privileged.

summary & disposition Application to Produce [ 51 ] The Rules ordain that the plaintiffs file a list of all documents in their possession relating to their claim. Failure to do so carries serious adverse inferences to their litigation and significant cost implications.

The plaintiffs assert that they have complied with the Rules governing documentation disclosure with the exception of the corporate governance records which they cannot locate. [ 52 ] Having considered the pleadings, the affidavits in support of the applications and submissions of counsel, I grant the defendants’ application in part only, as set out below. For those portions denied, I have concluded that portions of the defendants’ application fail to provide sufficient specificity in the context of the pre-trial disclosure facilitated by these Rules .

By their nature, the overly broad requests do not meet the proportionality principle. This finding is not fatal to further requests because as noted in English , refinement of document production requests to satisfy the requirements of Rule 32 is possible through the effective use of other pre-trial disclosure provisions afforded by the Rules , such as discovery. The defendants have failed to avail of these procedures, to date. This is particularly pertinent where broadly worded disclosure of confidential information is sought, which may ultimately be unnecessary to the litigation.

The defendants make assumptions that documents exist without explanation for this position other than the apparent mistrust of the other parties’ list of documents. I conclude that such speculation is not an appropriate basis upon which to order document production. [ 53 ] The defendants’ request for document production of (

i) All documentation relating to contracts, agreements and other arrangements between all the plaintiffs and Technip, is denied as lacking specificity and proportionality.

This wording fails to explain its relation to the causes of action set out in the pleadings and impacts upon not only the plaintiffs but also a third party. [ 54 ] The defendants’ request for (ii) All documentation relating to the ownership and control of Seaforce Diving and Seaforce Technologies Inc., including shareholdings of the two companies, both before and after the issuance of the statement of claim of the within matter is a valid request, and the plaintiffs must provide documentation in their possession which addresses this issue.

It has been explained that these records cannot be located because they were housed with former legal counsel and/or the corporate accountant. The plaintiffs suggest that the defendants’ discover the third parties to ascertain this information. It is not the responsibility of the defendants to do so. If discovery is necessary, then the plaintiffs should initiate this step within the 30 days of the filing of the Order herein.

Further, the plaintiffs are to identify and provide such documentation in the plaintiffs’ possession which records or otherwise addresses this request. [ 55 ] The defendants’ request for (iii) All documentation relating to the scope of the business activities of Seaforce Technologies is denied. The defendants have leave to reframe this request.

It is unclear what is meant by “scope of business activities” as the definition of “scope” is not easily understood in the context of the demand. [ 56 ] The defendants’ request for (iv) All documentation relating to bidding by Seaforce Diving on Technip contracts as currently worded is overly broad. Paragraph 32 of the statement of claim adopts the special damages for James Hynes and Barry Hynes as set out in the further amended reply to demand for particulars.

In particular, Barry Hynes claims special damages in the amount of $250,000 for the period of 2013-2014 through Seaforce Hyperbaric Inc. and loss of profit of at least $500,000 in relation to a Suncor arrangement. The evidence at the hearing established the protocol in the offshore oil and gas industry is procurement by tender. As such, a request which relates to the pleadings and which seeks tender bids would be an appropriate document production request. The defendants, however, have not established the basis for the request for Seaforce Diving bids to Technip.

[ 57 ] The defendants’ request for (

v) All documentation relating to contract arrangements between Seaforce Diving and Technip during the period of time governed by the statement of claim, which starts at least as early as March 2006, is dismissed for the reasons provided in relation to the request set out in paragraph 53 above. The defendants’ requests for documents appear to be focused on the company with which they compete, Professional Diving, which does not claim special damages herein.

As worded, and the extensive time frame captured, fails to satisfy the relationship to the pleadings and the proportionality of the requests. [ 58 ] The defendants’ request as set out in (vi) All documentation relating to contractual arrangements between James Hynes and Seaforce Technologies and Technip is granted with the exception of “other arrangements” as this term is not sufficiently specific.

I am satisfied that the documents requested relate to the claim for defamation and interference with contractual relations as between James Hynes and Technip. [ 59 ] The defendants’ request for documentation to support the claims for special damages for James Hynes, Barry Hynes, Seaforce Technologies and Seaforce Diving is granted but only to the extent that these plaintiffs claim special damages. The further amended statement of claim sets out the special damages claims. Tax information for James Hynes for the full period of time governed by the statement of claim is ordered.

The request for tax information for Barry Hynes for the full period of time governed by the statement of claim and the financial statements for the corporate plaintiffs for the period of time governed by the statement of claim have not been established to relate to the causes of action set out in the statement of claim.

Once the plaintiffs provide the defendants with all documentation pertaining to the amended claim for special damages by Barry Hynes, Seaforce Technologies and Seaforce Diving, any related tax information or financial statements for the corporate plaintiffs not provided may be requested. [ 60 ] The parties advised the Court that copies of documents referred to in the plaintiff’s list of documents,

Part I, Tabs 9-82, have been forwarded to the defendants. [ 61 ] The defendants sought, alternatively, an Order that the action be dismissed pursuant to Rule 32.10 of the Rules . This is denied. [ 62 ] At issue in the plaintiffs’ application for protections and confidentiality orders is the appropriate balance between open court and protection of documents considered proprietary, personal and/or confidential during the pre-trial stage of litigation. The implied undertaking rule does not prevent documents from being filed with the Court.

I reject the plaintiffs’ request that documents which it considers confidential or akin to “trade secrets” be provided on the basis of confidential –counsel’s eyes only. The affidavits filed in these proceedings fail to justify this request which usurps counsel’s role to obtain instructions. [ 63 ] Documents provided to the defendants shall be retained at the offices of the defendants’ legal counsel for the purposes of obtaining instructions, but the defendants are not to be provided copies of these documents.

There shall be no disclosure or discussion of the documents or their contents with any other person, with the exception of professional advisors retained for purposes of the litigation, who shall undertake to legal counsel for the defendants to use the records solely for the purposes of preparing a report in relation to the litigation. [ 64 ] If it is necessary to append or directly quote the documents in interlocutory applications filed with the Court, notice of such application shall be provided to the plaintiffs and a case management meeting convened.

Any ensuing application to seek a sealing order of particular documents must take into consideration the Court’s protocol respecting notice of applications to restrict public access to court proceedings and records. [ 65 ] As requested, leave is granted to the parties to make arguments for leave to cross-examine the individual plaintiffs and David Squires on the issue of costs. _____________________________ Deborah J. Paquette Justice