Date: 20030303
Docket: T-1049-95
Neutral citation: 2003 FCT 255
Vancouver, British Columbia, this 3rd day of March, 2003
PRESENT: THE HONOURABLE MR. JUSTICE JOHN A. O'KEEFE
BETWEEN:
TREVOR NICHOLAS CONSTRUCTION CO. LIMITED
Plaintiff
- and -
HER MAJESTY THE QUEEN AS REPRESENTED BY
THE MINISTER FOR PUBLIC WORKS CANADA
Defendant
REASONS FOR ORDER AND ORDER
O'KEEFE J.
[1] This is a motion by the plaintiff, Trevor Nicholas Construction Co. Limited, pursuant to Rule 51.(1) of the Federal Court Rules, 1998, S.O.R./98-106 to set aside or vary the order of the Prothonotary dated July 23, 2002.
[2] The plaintiff's motion before the Prothonotary was for:
1. An order granting leave to amend the statement of claim;
2. An order striking the defendant's statement of defence;
3. In the alternative, an order requiring the defendant to fulfill its undertakings given at discovery, and to answer questions refused at discovery, including questions in respect to answers given on undertakings;
4. Costs of the motion.
[3] The Prothonotary ordered that:
1. The plaintiff"s request for leave to amend the statement of claim is dismissed.
2. The defendant's representative on discovery shall answer the following question[s], in the context provided:
(i) Question 59 - as it relates to the plaintiff.
(ii) Question 142 - as restricted to the dredging bids submitted before the tenders submitting in this case.
(iii) Question 272 - answered if possible after a search is conducted.
(iv) Question 296 - to provide the answer to the question set out at Q. 295.
(v) Questions 477, 41 and 42 - to be answered.
(vi) Question 661 - to provide an answer to Q. 660 and an enquiry is to be made.
(vii) Question 1109 - to be answered.
(viii) The plaintiff may pose relevant questions about the Belle River project.
3. The motion is otherwise dismissed.
4. Costs of the motion shall be in the cause.
[4] The plaintiff claims that the Prothonotary erred in not allowing the amendments to the statement of claim and by not requiring the defendant to answer all of the questions relating to discovery plus three follow-up questions with respect to undertakings.
Issue
[5] Should an appeal of the Prothonotary's decision be allowed?
Standard of Review
[6] The law to be applied by this Court when reviewing or deciding an appeal from a discretionary decision of a Prothonotary has been clearly set out by MacGuigan J.A. in Canada v. Aqua-Gem Investments Ltd. [1993] 2 F.C. 425 (C.A.) at pages 462 to 463:
I also agree with the Chief Justice in part as to the standard of review to be applied by a motions judge to a discretionary decision of a prothonotary. Following in particular Lord Wright in Evans v. Bartlam, [1937] A.C. 473 (H.L.) at page 484, and Lacourciere J.A. in Stoicevski v. Casement (1983), 43 O.R. (2d) 436 (Div. Ct.), discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless:
(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or
(b) they raise questions vital to the final issue of the case.
Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo.
And at pages 464 - 465:
In Canada v. "Jala Godavari" (The) (1991), 40 C.P.R. (3d) 127 (F.C.A.), this Court in an obiter dictum stated the rule the other way around, seeking to emphasize the necessity for the exercise of the Judge's discretion de novo, in contradistinction to the view that was at that time gaining acceptance in the Trial Division that the prothonotary's discretion should be followed unless he had committed error of law. Jala Godavari should not, I think, be read as meaning that the prothonotary's discretion should never be respected, but rather that it is subject to an overriding discretion by a judge where the question involved is vital to the final issue of the case. (Error of law is, of course, always a reason for intervention by a judge, and is not in any way in controversy).
Now, in the case at bar, what kind of interlocutory order was in question? The appellant urged this Court to follow Stoicevski, but was unable to explain in argument why the prothonotary's decision here was not on a question vital to the final issue of the case. The formulations both of Lord Wright and Lacourcière J.A. underline the contrast between "routine matters of pleading" (Lord Wright) and "a routine amendment to a pleading" (Lacourciere J.A.) [italics added] and questions vital to the final issue of the case, i.e., to its final resolution.
The question before the prothonotary in the case at bar can be considered interlocutory only because the prothonotary decided it in favour of the appellant. If he had decided it for the respondent, it would itself have been a final decision of the case: A-G of Canada v. S.F. Enterprises Inc. et al. (1990), 90 DTC 6195 (F.C.A.) at pages 6197-6198; Ainsworth v. Bickersteth et al., [1947] O.R. 525 (C.A.). It seems to me that a decision which can thus be either interlocutory or final depending on how it is decided, even if interlocutory because of the result, must nevertheless be considered vital to the final resolution of the case. Another way of putting the matter would be to say that for the test as to relevance to the final issue of the case, the issue to be decided should be looked to [page 465] before the question is answered by the prothonotary, whereas that as to whether it is interlocutory or final (which is purely a pro forma matter) should be put after the prothonotary's decision. Any other approach, it seems to me, would reduce the more substantial question of "vital to the issue of the case" to the merely procedural issue of interlocutory or final, and preserve all interlocutory rulings from attack (except in relation to errors of law).
[7] In the present case, the Prothonotary's decision with respect to the amendment of the statement of claim is a question vital to the final issue of the case. It should be noted that only some types of amendments to a statement of claim are considered to be vital to the final issue of a case. A decision on the proposed amendment could have the result of preventing the plaintiff from advancing additional claims or causes of action against the defendant (see Stoicevski v. Casement (1983) 43 O.R. (2d) 436 (C.A.)). On the issue of amendment of the statement of claim, I must exercise my discretion de novo. In relation to the decision with respect to answering questions at discovery, this part of the decision does not raise questions vital to the final issue of the case. Hence, I should not disturb the decision of the Prothonotary, unless he was "clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, . . .".
[8] In regard to the Prothonotary's order as it relates to the proposed amendment of the statement of claim, on May 16, 2001, MacKay J. of this Court ordered in part as follows:
1. Insofar as paragraph 13 of the plaintiff's statement of claim may raise a claim to damages under the contracts for construction of the works here concerned, that claim is dismissed, and the allegation in paragraph 13 is dismissed.
2. This matter shall proceed to trial on the following issues:
(i) In light of the claim of the Plaintiff that it was treated unfairly, was there an implied obligation on the part of the Defendant that the Plaintiff be treated fairly?
(ii) If there was such an obligation, was that obligation breached?
(iii) If that obligation was breached, what if any damages are recoverable as a result of the breach?
Therefore, it would appear that the matter would proceed to trial on the issue of whether there was an obligation to treat the plaintiff fairly in the evaluation of its tenders, whether this obligation was breached, and if there was a breach, what, if any, damages are recoverable as a result of the breach?
[9] As I read the plaintiff's proposed amendments, it is saying that its submitted tenders on each project, created contract "A" between it and the defendant and that the defendant's conduct breached each contract "A". In Martel Building Ltd. v. Canada [2000] 2 S.C.R. 860, the Supreme Court of Canada held that when a person submitted a compliant tender in response to an invitation to tender, contract "A" was formed between that person and the owner. Contract "B" would be the contract between the owner and the successful bidder of the construction contract. The Court also stated that there was an implied contractual term in contract "A" to treat all bidders fairly and equally.
[10] The plaintiff has already raised this allegation in paragraph 11 of the statement of claim and it is also the very issue on which MacKay J. ordered the trial to proceed.
[11] The Prothonotary stated in his decision, in part:
Amendments to pleadings should be allowed unless they would cause prejudice that cannot be compensated by an award of costs. Given the procedural history of this action, I am not satisfied that leave to amend should be granted. If the Plaintiff's amendments were allowed, further lengthy and unacceptable delay would result. First, since the allegation of negligence is not supported by any material facts, the Defendant will no doubt be required to seek particulars from the Plaintiff before amending her Statement of Defence. Secondly, examinations for discovery, which are essentially completed, would have to be re-opened to inquire into a new allegation that potentially goes well beyond the issue of fairness. In the circumstances, leave to amend is denied.
[12] I therefore exercise my own discretion de novo and am of the view that the Prothonotary was correct in refusing to allow the proposed amendments to the statement of claim. The statement of claim already allows for the plaintiff's claims with respect to being treated fairly and equally under contract "A". The reference in paragraph 13 must refer to a contract such as contract "A", if contract "A" exists in this case, since no other contract could exist between the plaintiff and the defendant as the plaintiff was not the successful bidder. Since it is unnecessary to amend the statement of claim to allow the plaintiff to argue that he was not treated fairly and equally in the evaluation of his submitted tenders, I agree with the Prothonotary that further, unacceptable delay would occur if the proposed amendments were allowed. The same reasoning applies to the proposed amendment contained in paragraph 15. The relief sought by the plaintiff here is obtainable under the obligation of the defendant to treat all compliant tenders fairly and equally. As the Prothonotary stated, it would unduly delay the trial of this matter. I also note that no material facts or details of the alleged negligence or breach of duty of care are specified in the proposed pleading. If allowed, there would likely be a requirement to obtain particulars of this allegation, which would again delay the trial of the matter.
[13] In conclusion, I am of the view that the Prothonotary was correct in refusing to allow the proposed amendments.
Refusal to Order Discovery Questions to be Answered
[14] The Prothonotary's decision with respect to answering discovery questions is discretionary and does not go to the final issue of the case. Accordingly, this decision should not be disturbed unless I am of the opinion that the Prothonotary was "clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, . . .". I have reviewed questions 51, 102, 110, 145, 146, 147, 176, 177, 178, 201, 208, 257, 258, 358, 412, 487, 496, 497, 619, 692, 696, 699 and 1108 and I do not come to the conclusion that the Prothonotary was clearly wrong. In fact, I am of the view that he was correct in not ordering these questions to be answered.
Follow-up Questions to Undertakings
[15] I am of the view that the Prothonotary was correct in relation to his order with respect to the follow-up questions on undertakings given in relation to questions 202 and 203.
[16] I am of the view that with respect to the follow-up request in relation to the undertakings for question 386, the Prothonotary was in error, in the sense of the test outlined in Canada v. Aqua-Gem Investments Ltd., supra for review of discretionary decisions of the Prothonotary not going to the final issue of the case. The evidence given by Mr. Grossi on discovery states that the ability of the contractor to carry out a successful project was a factor in picking the successful tender and that all bidders were assessed in the same manner. Consequently, the ability of the successful bidder to successfully carry out the project would be in issue. I am of the view that:
1. Question 1 of the August 7th letter from John Susin to Chris Parke should be answered.
2. In regard to question 2, only those portions of the minutes of site meetings that relate to delay or lack of production on both projects and any correspondence (not privileged) relating to delay or lack of production on both projects need be produced, if available.
3. The information in question 3 is to be provided, if available.
Terms of Release
[17] Lutfy J. (as he then was), has already dealt with the issue of the "terms of release" or the settlement of another action. He ruled on May 3, 2001 that:
1. Paragraph 7 of the plaintiff's reply, filed on April 23, 2001, is struck.
2. Exhibit 2 to the examination of Joseph Grossi is struck.
Paragraph 7 of the plaintiff's reply relates to the settlement of the other action and Exhibit 2 is the minutes of settlement. Firstly, I cannot find where Prothonotary Lafrenière made any reference to the minutes of settlement. However, Lutfy J. (as he then was) has already disposed of the issue surrounding the minutes of settlement. I might add that John Sopinka, Signey M. Lederman and Alan W. Bryant, The Law of Evidence in Canada, 2d ed. (Toronto and Vancouver: Butterworths, 1999) at page 817 states:
However, the better view is that the privilege applies not only to failed negotiations, but also to the content of successful negotiations, so long as the existence or interpretation of the agreement itself is not in issue in the subsequent proceedings and none of the exceptions are applicable. The rationale behind the privilege supports this position. If parties to settlement negotiations believed that their statements might be used by a third party in subsequent proceedings, whether or not they reached agreement, they might be less frank in those discussions.
Accordingly, the minutes of settlement have been dealt with by the court.
[18] In summary, the plaintiff's appeal of the Prothonotary's decision is allowed only in that:
1. Question 1 of the August 7th letter from John Susin to Chris Parke should be answered.
2. In regard to question 2, only those portions of the minutes of site meetings that relate to delay or lack of production on both projects and any correspondence (not privileged) relating to delay or lack of production on both projects need be produced, if available.
3. The information requested in question 3 is to be provided if available.
[19] All other aspects of the plaintiff's motion or appeal are dismissed.
[20] As the defendant was successful in all but one small aspect of the appeal, I would allow the defendant its costs of the motion or appeal.
ORDER
[21] IT IS ORDERED that:
1. The motion or appeal of the plaintiff is allowed only in that:
(i) Question 1 of the August 7, 2001 letter from John Susin to Chris Parke should be answered.
(ii) In regard to question 2 of the same letter, only those portions of the minutes of site meetings that relate to delay or lack of production on both projects and only correspondence (not privileged) relating to delay or lack of production on both projects need be produced if available.
(iii) The information requested in question 3 is to be provided if available.
2. The motion or appeal of the plaintiff is otherwise dismissed.
3. The defendant is allowed its costs of the motion or appeal.
(Sgd.) "John A. O'Keefe"
J.F.C.C.
Vancouver, B.C.
March 3, 2003
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1049-95
STYLE OF CAUSE: TREVOR NICHOLAS CONSTRUCTION CO. LIMITED
- and -
HER MAJESTY THE QUEEN AS REPRESENTED BY
THE MINISTER FOR PUBLIC WORKS CANADA
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: Monday, September 9, 2002
REASONS FOR ORDER AND ORDER: O'KEEFE J.
DATED: Monday, March 3, 2003
APPEARANCES:
John Susin FOR PLAINTIFF
Christopher Parke FOR DEFENDANT
SOLICITORS OF RECORD:
John Susin
4971 Stanley Avenue
Niagara Falls, ON
L2E 5A1 FOR PLAINTIFF
Department of Justice
Suite 3400, Exchange Tower, Box 36
130 King Street West
Toronto, ON M5X 1K6 FOR DEFENDANT
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