Date: 20040126
Docket: T-261-00
Citation: 2004 FC 124
BETWEEN:
SEASPAN INTERNATIONAL LTD.
LAFARGE CANADA INC.
TILBURY MANAGEMENT #1 LTD.
WEST BAY SONSHIP LTD.
B.J. MARINE HOLDINGS LTD.
Plaintiffs
and
THE SHIP "EWA"
MATSON NAVIGATION CO. INC.
PETER MURRAY
Defendants
[1] By way of background, the action which underlies this motion for discovery answers, some of which bear on existence of documents, and re-attendance of witnesses, involves the Honolulu registered steam container ship Ewa, which is alleged to have proceeded up the Fraser River at an excessive speed in February of 1998. The result is said to have been the generation of unusual, heavy and excessive waves and wash which broke loose a number of barges, moored at various locations on the Fraser River, allowing them to drift down river. Several of those barges, some of which were owned by the first Plaintiff, Seaspan International Ltd. ("Seaspan") collided with docks and other shore side facilities, in the present instance facilities owned by the second through fifth Plaintiffs, causing damage. The Plaintiffs, all of whom sue in their own right, as opposed to actions by subrogation or assignment, have retained the same counsel.
THE PRESENT MOTION
[2] The Defendants now bring the present motion for re-attendance of the West Bay Sonship Ltd. ("West Bay") discovery witness, Mr. Vermeulen and re-attendance of Lafarge Canada Inc.'s discovery witness, Mr. Brule, to answer questions the answers to which were refused. This brings me to the general categories of questions which these two witnesses refuse to answer.
[3] The questions which the witnesses have refused to answer and upon which their re-attendance hinges may be conveniently grouped into three categories. The first category, Vermeulen question 2 and Brule questions 2, 6 and 7 seek to determine whether there were agreements between Seaspan on the one hand and West Bay and Lafarge on the other hand relating to the damage. While the basic question as to the existence of agreements is not elaborated upon, I take it, from the reference to B.C. Children's Hospital v. Air Products Canada Ltd. (2003) 11 B.C.L.R. (4th) 28 (B.C.C.A.) that the Defendants are looking for settlement agreements and in particular the portions of settlement agreements, constituting releases, covenants not to sue, or reservations of rights; provisions containing admissions; and provisions dealing with evidentiary arrangements. The Defendants here seem to be looking for various things, including admissions or compromises of rights of recovery: this might be, to a certain degree, a fishing expedition, to provide information which might further the general defence.
[4] The second category of questions deals with whether a claim has been made between West Bay and Lafarge on the one hand and Seaspan on the other hand. Here the questions are not necessarily similar. Vermeulen 1 deals with claims, as opposed to legal proceedings. Brule question 4 deals with the "formal" assertion of a claim, whereas Brule question 5 asks whether Lafarge ever commenced a lawsuit against Seaspan or the barge Seaspan 433.
[5] The third category of questions, questions Brule 3 and 8 relate to possible existence of correspondence between Seaspan and Lafarge, with Brule 1 being an indirect question as to whether someone other than Mr. Brule, at Lafarge, was responsible with dealing with Seaspan in relation to the damage caused by the Seaspan 433.
CONSIDERATION
Scope of Production of Documents
[6] The Defendants, who in the questions objected to are essentially looking for documents, begin with a general proposition from Everest & Jennings Canada Ltd. v. Invacare Corporation [1984] 1 F.C. 856 (F.C.A.), based upon Boxer and Boxer Holdings Ltd. v. Reesor (1983) 43 B.C.L.R. 352 (B.C.S.C.), at page 359, that the parties seeking discovery of documents may have broad discovery of any documents that "... may fairly lead them to a train of inquiry which may directly or indirectly advance their case or damage the ... case" of the other side.
[7] Everest & Jennings was decided under the Rules in force before the 1990 amendments, which were in turn followed by further amendments in 1998. To explore whether the test in Jennings is still current, given the current Rule, Rule 222(2), to the point that "... a document of a party is relevant if the party intends to rely on it or if the document tends to adversely affect the party's case or to support another party's case.", and Rule 223, which requires that all relevant documents be declare in the affidavit of documents, there being suggestion, from time to time, that the 1998 document discovery provisions are narrower than those applied under the various Rules which formerly prevailed, I have looked to Smithkline Beecham Animal Health Inc. v. The Queen [2002] 4 C.T.C. 93 (F.C.A.).
[8] The Smithkline case is based on the Tax Court of Canada Rules for documentary discovery. However, in the course of considering the area, Madam Justice of Appeal Sharlow referred to the usual cases, including Everest & Jennings, for the formulation and application of the train of inquiry test. The Court of Appeal concluded that the formulation of the test by Justice Bonner of the Tax Court of Canada, in the trial decision of Smithkline, [2001] 2 C.T.C. 2086 at 2095 was proper:
On discovery the examining party may seek information and admissions which will assist it not only to defeat its opponent's case but also to advance the case which it seeks to put forward.
(Page 2095)
This formulation is essentially that set out in Federal Court Rule 222(2) which defines relevancy so that one may know what to include in an affidavit of documents:
... a document of a party is relevant if the party intends to rely on it or if the document tends to adversely affect the party's case or to support another party's case.
The Court of Appeal, in Smithkline, at 107, neatly concluded that the concept of defeating an opponent's case or advancing one's own case was substantially the same as the train of inquiry test. Thus, despite the intervening changes in the wording of the rules for production of documents, the test set out in Everest & Jennings, remains applicable.
[9] Counsel for the Defendants submits that the scope of discovery of documents, described in Everest & Jennings, is broad. The Court of Appeal in Everest & Jennings does not comment on the general breadth of that test for discovery of documents, in their very brief reasons, relying almost entirely upon quotes from the B.C. Supreme Court decision in Boxer (supra). Thus the views of Chief Justice McEachern in Boxer are relevant.
[10] In Boxer Chief Justice McEachern referred to extensive searches made for documents and the nature of searches. He also considered the expansive approach to production of documents taken in The Peruvian Guano case (1882) 11 Q.B.D. 55 (C.A.) but then added the caveat that:
... every party has a right to properly prepare his case or his defence "but there must always be reasonable limits" ...
(Page 359).
He went on to say that in Boxer, the plaintiff would have had access to documents "... which may fairly lead them to a train of inquiry which may directly or indirectly advance their case or damage the defendant's case ...", but that in some instances in Boxer the plaintiffs had asked for too much. He then went on to look at each document requested as to whether it involved a reasonable train of inquiry.
[11] Counsel for the Defendants refers to two cases involving the sort of information the courts have required disclosed, and in some instance denied disclosure, in situations involving multiple parties.
[12] In Canadian Pacific Forest Products Ltd. v. Termar Navigation Co. (1994) 87 F.T.R. 1 (F.C.T.D.) the plaintiffs sought production from the defendant Termar of documents relating to previous or current arbitrations or disputes between Termar and the co-defendant, Forest Products Carriers. There Termar owned the carrying vessel, with Forest Products being the carrier and issuer of the bills of lading. At issue was shifting cargo and re-stowage costs, incurred by the defendants and claimed against the plaintiffs. Both defendants, represented by different counsel, had counterclaimed for the whole of the re-stowing costs, with the plaintiff responding to the effect that one or the other of the defendants must lack the legal interest to sue for the whole amount. Indeed, documents produced show that there had been an ongoing dispute between the defendants. Termar's discovery witness had refused to answer questions related to the existence of a dispute, or of any current arbitration and the status and result. The plaintiffs looked for that material because it might provide a valid defence against one or both counterclaims. Mr. Justice Dubé seemed to accept that the two defendants had been involved in an arbitration and in granting the motion for production wrote, at page 3:
In the case at bar, the arbitration proceedings between the two defendants/counter-claimants would be relevant in the sense that they could show whether or not any or both have an interest in this action as counter-claimants. Thus, in the absence of any claim that the documents are privileged, they ought to be produced. I am referring, of course, only to the documents and questions and answers related to the instant action and counter-claim and not to other disputes between the two defendants.
Of course, from a specific perspective, Termar Navigation involved a duplication of claim, which is not the situation here.
[13] The second case to which counsel for the Defendants refers is B.C. Children's Hospital v. Air Products Canada Ltd. (2003) 11 B.C.L.R. (4th) 28. In that instance various individuals and corporations had earlier pled guilty to charges of conspiracy to fix prices under the Competition Act. The B.C. Children's Hospital case followed, with various hospitals suing the suppliers who had fixed prices of gas products, claiming joint and several liability on the part of and damages, both common law and statutory, against the defendants. The plaintiffs and some defendants eventually settled, agreeing that settlement discussion would remain confidential. The result was a settlement agreement, again a confidential document, but one which the remaining defendants wished produced. The Chambers Judge denied wholesale production, but did require portions of the agreement dealing with releases, covenant not to sue, reservations of rights, admissions and provisions dealing with evidentiary arrangements to be produced. The Court of Appeal, while not unanimous, did determine that the settlement agreement, as a whole, ought not to be disclosed. The majority of the Court of Appeal then went on to consider the various related material which the Chambers Judge had ordered disclosed, being first, any release, covenant not to sue or reservation of rights; second, any admissions bearing on the pleadings, and third, provisions dealing with evidentiary arrangements. Justice of Appeal Hall, who wrote the majority decision in B.C. Children's Hospital, came to various conclusions.
[14] While Mr. Justice Hall had some concern as to the disclosure of a release, covenant not to sue or reservation of rights, particularly on the basis that he doubted " ... the vitality in this jurisdiction of the ancient rule about the release of joint tort feasors effecting a release of all may be doubted, ..." (page 50), he did allow disclosure of that information on the basis that the defendants might make such use of the information as they wished. However in the present instance I would observe that there is apparently no settlement agreement between or among the Plaintiffs.
[15] As to admissions, Mr. Justice Hall doubted that any admissions of those who had settled could have any relevance in the continuing litigation. Here there is apparently no settlement agreement in any event.
[16] Finally, as to evidentiary arrangements Mr. Justice Hall referred to a leading decision of Middelkamp v. Fraser Valley Real Estate Board (1992) 96 D.L.R. (4th) 227 (B.C.C.A.), which involved a five judge appellant panel:
Chief Justice McEachern noted in Middelkamp that evidentiary arrangements arrived at concurrently with a settlement agreement could be the proper subject of an order for disclosure. It seems to me that this is so because such arrangements could cast light on the quality of the evidence or the motivation of the witness giving the evidence. The nature of the arrangements could therefore affect the weight a court might give to the evidence. See Vancouver Community College v. Phillips, Barrat (1987), 20 B.C.L.R. (2d) 289 (B.C.S.C.). However, I think it would be premature to make any such order in these proceedings at this stage of the litigation. That sort of disclosure would appear to me more appropriately ordered either at trial or shortly before trial when the evidence is in immediate prospect. I would therefore not sustain the direction contained in subparagraph (c) of para. 44 of the reasons of Neilson J.
(Page 50).
What is important to observe here is that while Justice of Appeal Hall would require production of evidentiary arrangements, because it "... could cast light on the quality of the evidence or the motivation of the witness giving the evidence.", he did not require that information to be produced in the context of or for use in the discovery process. This observation flows quite naturally from the view of Justice of Appeal Hall that evidentiary arrangements would go to weight, a matter for the Trial Judge. It was therefore premature and denied.
[17] To sum up the B.C. Children's Hospital case, a confidential settlement agreement is privileged for the most part and went on to hold that possible admissions of defendants who had already settled was irrelevant, that evidentiary arrangements would more properly be disclosed either at or shortly before trial when evidence was an immediate prospect, but that provisions as to release or not to sue or to reserve rights were appropriate information for disclosure, even though he had some doubts and here I think the principle is that when in doubt, a document ought to be disclosed.
[18] In the present instance, while the Plaintiffs have produced a letter from Lafarge to Seaspan, which is in part the subject of this motion, there is apparently no settlement agreement between any of or among the Plaintiffs, each of whom has retained the same counsel. However during the motion I inquired as to whether counsel for the Defendants was moving to look into the brief of counsel for the Plaintiffs, the response being affirmative, at least as to those fairly narrow areas dealt with in the discovery questions.
Sanctity of Counsel's Brief
[19] The issue of the access to counsel's brief was a subject matter of The Queen of Alberni (1997) 132 F.T.R. 241 in which the cases bearing on the sanctity of counsel's brief are set out. There I concluded, at page 246, that the position in Canada is that counsel's brief is not protected as a matter of solicitor/client privilege, but rather it is an area to itself on which the other side is not permitted discovery. However this is tempered with a proviso, derived from Susan Hosiery Ltd. v. Minister of National Revenue [1969] C.T.C. 353 (Ex. Ct.) at page 360, President Jackett observing that the rules of Court did not "... afford a privilege against the discovery of facts which are or may be relevant to the determination of the facts at issue". Rather, exemption from discovery attaches to material created for a lawyer's brief and that "The facts or documents that happen to be reflected in such communications or materials are not privileged from discovery if, otherwise, the party would be bound to give discovery of them." (loc. cit.). In The Queen of Alberni the effect of this is set out at pages 244 and 245 to the end that if an examined witness learned, from a solicitor's brief, that something existed at a certain place and then the witness went to that place and looked and saw the thing itself, what the witness observed would not be privileged or exempt from discovery, even though the knowledge of the existence came from counsel's brief. However, a discovery question as to what is in a solicitor's brief or the belief formed by reading counsel's brief, is improper. I now turn to the application of some of this to the various questions which are outstanding.
Questions as to Agreements Among Plaintiffs
[20] In considering the questions at issue on this motion I have not numbered them as set out in the transcripts, but rather as numbered in the lists of questions to which answers were refused by the discovery witnesses, Messrs. Vermeulen and Brule.
[21] The first category of discovery questions deals with the existence of agreements between Seaspan and two of the Plaintiffs, West Bay and Lafarge.
[22] In question and objection number 2 of Vermeulen the witnesses were asked as to the existence of an agreement between West Bay and Seaspan relating to damage to West Bay's facility. As I understand it, no written agreement, including litigation or settlement agreements, in fact exists. Only if such an agreement exists, outside of the material in counsel's brief, could it be vulnerable and then, at this point, only to the extent of any release, covenant not to sue or reservation of rights, with the issue of any evidentiary arrangements to be disclosed nearer to trial. However, this does not mean that the bare question need not be answered, for the record or, again on the basis of the basic principle set out in B.C. Children's Hospital, the bare existence of such an agreement would be a proper question. Brule questions and objections 6 and 7 also fit within this analysis and are to be dealt with accordingly on discovery. Should these questions, despite my understanding of the material, turn up any documents outside of counsel's brief, access to what is in such documents would be governed by my earlier analysis of what is producible under B.C. Children's Hospital.
[23] Brule question and objection 2, while also placed in this category, asks whether anyone from Seaspan and that does not include counsel who acts for both Seaspan and Lafarge, ever said that Seaspan would cover Lafarge's costs and damages. I do not see that inquiry as relevant, given that each Plaintiff sues in its own right and the question is not one within the principles in B.C. Children's Hospital, the case relied upon by the Defendants in this instance. It may be that counsel for the Defendants can approach this area from the contributory negligence aspect as set out in the pleadings, but that is not the thrust of this question.
Questions as to Claims by Co-plaintiffs Against Seaspan
[24] The second category of questions, Vermeulen number 1 and Brule numbers 4 and 5, deals with whether claims have been made by West Bay or Lafarge against Seaspan. Counsel for the Defendants, in either the brief written material or in the lengthy oral argument has been unable to convince me that the bare suggestion of the existence of claims between Plaintiffs, suing in their own right and utilizing common counsel, is relevant and deserving of an answer, notwithstanding the Termar Navigation decision.
[25] To elaborate, in Termar both defendants, with very different interests and status, sued for recovery of the identical head and amount of damages: one or the other defendant, so argued the plaintiffs, must lack an interest to sue. In Termar there was in fact an arbitration between the two defendants resulting in documents which the judge believed could show whether or not either or both of the defendants had an actionable interest as a counterclaim: this was certainly relevant. In contrast, in the present interest, there is no evidence of any claim or action between the Plaintiffs, each of whom sue for their own damages through common counsel. There is no indication of any relevant evidence. The line of question is an irrelevant fishing expedition all within the category of documents going beyond a reasonable limit. Here I refer to the full passage from Boxer (supra) at page 359, a portion of which I have already quoted:
While the Peruvian Guano case, supra, states the law which is applicable in this case, I may be excused if I also refer to what I said in Allarco Broadcasting Ltd. v. Duke (1981), 34 B.C.L.R. 7 at 10-11, 26 C.P.C. 13 (S.C.), about examinations for discovery but which applies equally to production of documents, namely, that every party has a right properly to prepare his case or his defence "but there must always be reasonable limits" and further, at p. 12:
In the ultimate analysis, it is impossible definitively to furnish guidelines on what is permissible on discovery. It is, as I have said, a professional matter.
It seems to me that the clear right of the plaintiffs to have access to documents which may fairly lead them to a train of inquiry which may directly or indirectly advance their case or damage the defendant's case particularly on the crucial question of one party's version of the agreement being more probably correct than the other, entitles the plaintiffs to succeed on some parts of this application. Other parts seem to me, with respect, to be asking too much.
[26] In the present instance questions about claims between the Plaintiff, the possible existence of which was not even hinted at in either the pleadings, or the documents or any other evidence, are not only irrelevant, but are beyond reasonable limits and are asking too much. The questions dealing with claims by the Co-plaintiffs against Seaspan need not be answered.
Correspondence Between Seaspan and Lafarge and Claims Handling at Lafarge
[27] The third group of questions and objections, Brule 1 and Brule 3 and 8 relate first to whether anyone other than Mr. Brule or Lafarge had dealt with Seaspan in relation to the damage caused by Seaspan's barge and to the existence of correspondence between Seaspan and Lafarge.
[28] The first Brule question and objection are as follows:
Is there somebody else at Lafarge Canada Inc. that would have been responsible for dealing with Seaspan in relation to the damage caused by their barge?
I object to that question. It's irrelevant with respect to the pleadings that have been filed in this claim. I instruct the witness not to answer this line of questioning.
Examining counsel responded:
... I plead in the defence that the damage was caused by Seaspan's failure to maintain their barges, their facilities, and so on, so I'm entitled to explore the issues between Seaspan and anyone else.
Counsel for the Plaintiffs then went on to take issue with whether this question fell within the pleadings.
[29] The question is perfectly relevant and a straightforward proposition within the defence which deals with, among other things, the mooring and breaking away of various Seaspan barges and the resulting damage caused to Lafarge's facilities by Seaspan's barges. It is a question well within a liberal and reasonable latitude approach to examination for discovery. It is a question which clearly satisfies the requirements of a relevant and answerable discovery question, as set out in Reading & Bates Construction Co. v. Baker Energy Resources Corporation (1988) 25 F.T.R. 226 at 230. The first Brule question objected to is to be answered.
[30] Questions 3 and 8, asked of and objected to by Mr. Brule on discovery, inquire whether there was any correspondence between Lafarge and Seaspan and go on to deal with a letter from Lafarge to Seaspan, which has been produced.
[31] The question giving rise to objection number 3, "Was there any correspondence of any sort between Lafarge and Seaspan in relation to this incident?" is straightforward. It is a question of the sort which one would expect. It does not touch on counsel's brief. It does not fall within the ambit of agreements or settlement agreements between those parties. It would not seem to involve privilege, nor is any claim of privilege made. Indeed, there is only a bare objection to the question. There is nothing objectionable to the question as posed, which flows from the pleadings and which shall be answered.
[32] Question and objection number 8 on the Brule discovery concern a letter produced by the Plaintiffs, being one from Mr. Brule to Seaspan which deals with settlement. Mr. Brule writes:
Because of the cement plant expansion, some marine structures in the damaged area may require relocation or changes in design. Therefore, we cannot proceed with the repairs at this time and propose that a settlement be based upon the estimated repair cost. We would appreciate your response to this proposal.
Examining counsel was advised by the witness that he did not recall how Seaspan had responded, or whether anyone from Seaspan had telephoned in response.
[33] This question does not deal with a settlement agreement. Nor do I see the correspondence between the present Plaintiffs as being in contemplation of litigation. Indeed the affidavit material only establishes possible privilege or exemption from discovery as to negotiation by counsel for the Plaintiffs, leading to agreement, which may be documented in counsel's brief but, as I understand it, not to any formal agreement among the Plaintiffs.
[34] Questions and objection number 8 on the Brule discovery appear to relate to communication between Seaspan and Lafarge before the involvement of counsel, for the initial letter has been produced, apparently without any claim of privilege. It is a reasonable question, again coming within the criteria set out in Reading and Bates (supra) and ought to be answered. Indeed, if Mr. Brule cannot recall whether there was a response, he ought to make inquiries and searches, of course stopping short of counsel's brief, if that is where the letter from Lafarge to Seaspan immediately led.
Re-attendance of Witnesses
[35] There is no good reason for the re-attendance of Mr. Vermeulen to put to him one question as to the existence of a producible settlement agreement. That may be dealt with in writing, without prejudice to any re-attendance of Mr. Vermeulen, should he give an unexpected positive answer.
[36] As to re-attendance of Mr. Brule, the questions which he must answer are more complex. The answers could well give rise to further proper questions. Given that Mr. Brule is a local witness, counsel for the Defendants may require him to re-attend without payment of further conduct money, but all other costs of the re-attendance are to be costs in the cause.
[37] Success being mixed, costs of this motion will be in the cause.
(Sgd.) "John A. Hargrave"
Prothonotary
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-261-00
STYLE OF CAUSE: SEASPAN INTERNATIONAL LTD. ET AL
v. THE SHIP "EWA" ET AL
PLACE OF HEARING: Vancouver, B.C.
DATE OF HEARING: January 19, 2004
REASONS FOR ORDER : Mr. John A. Hargrave, Prothonotary
DATED: January 26, 2004
APPEARANCES:
Mr. Shane Nossal FOR PLAINTIFFS
Mr. David Jones FOR DEFENDANTS
SOLICITORS OF RECORD:
Bull, Housser & Tupper FOR PLAINTIFFS
Vancouver
Bernard & Partners FOR DEFENDANTS
Vancouver