IN THE SUPREME COURT OF BRITISH COLUMBIA
Citation: | Cantlie v. Canadian Heating Products Inc., |
| 2014 BCSC 228 |
Date: 20140204
Docket: S129053
Registry:
Vancouver
Between:
Craig Cantlie and
Charity Cantlie
Plaintiffs
And
Canadian Heating
Products Inc. d.b.a. Montigo Canada,
Miles Industries Ltd., Monessen Hearth Canada, Inc.,
Lennox Industries (Canada) Ltd., and John/Jane Does #1
through 99, subsidiary
Defendants
Before:
The Honourable Madam Justice Sharma
Oral Reasons for Judgment
Counsel for the Plaintiffs: | R.S. Anderson, QC M.J. Wagner |
Counsel for the Defendant, Canadian Heating Products Inc.: | D.T. McKnight M.T. Hoogstraten |
Counsel for the Defendant, Miles Industries Ltd. | G. Tucker P. Sheppard |
Counsel for the Defendant, Monessen Canada: | M. Maniago |
Counsel for the Defendant, Lennox Canada: | J. Cabott |
Place and Date of Hearing: | Vancouver, B.C. January 27 – 29, 2014 |
Place and Date of Judgment: | Vancouver, B.C. February 4, 2014 |
Table of Contents
II. A Preliminary Evidentiary
Issue
Should Ms. Shamims second affidavit
be admitted?
A. Disclosure
from all defendants
B. Disclosure
from specific defendants
B. The
test for pre-certification document production
B. Documents
of the Association
C. Documents
identifying potential class members
D. Documents
about glass temperature
The order cannot be granted against
Monessen and Lennox
The documents sought are under
protection orders
I. Introduction
[1]
The plaintiffs apply for the production of documents by the defendants. This
action has been brought pursuant to the Class Proceedings Act, R.S.B.C.
1996, c. 50 [CPA] though it has not yet been certified. The
plaintiffs seek both damages for injuries suffered and the recovery of fees
paid for healthcare services. This application relates only to the first of
those two claims.
[2]
The notice of civil claim was filed on December 21, 2012. In it, the
plaintiffs state their one year old son suffered severe burns to his hands when
he touched the glass front of a gas fireplace. The plaintiffs allege the
fireplace was defective and dangerous. They make several claims of liability
against the defendants who have designed, manufactured, marketed, and/or sold glass-fronted
gas fireplaces in British Columbia since the 1980s.
[3]
The application for certification was filed on June 19, 2013. Each
defendant has provided a response to the application for certification with
supporting affidavits.
[4]
This application is dated December 3, 2013, and is supported by Leticia Shamims
affidavit of the same date. Each defendant opposes the relief sought and has
filed a supporting affidavit.
II. A Preliminary Evidentiary Issue
Should Ms. Shamims second affidavit be admitted?
[5]
The plaintiffs seek to further rely on a second affidavit that Ms.
Shamim swore on December 23, 2013. The defendants assert that this affidavit is
inadmissible. I reserved my decision on this issue until today.
[6]
Like Ms. Shamims first affidavit, the second one attaches various
documents from the PACER database. That database provides public access to a
number of US court documents. The exhibits in the second affidavit are generally
very similar in type and content to those attached to the first affidavit.
[7]
The defendants object to the affidavit saying it does not constitute
proper reply. They say no good reason was given for why the exhibits were not
attached to Ms. Shamims first affidavit since they were available when it was
sworn.
[8]
During the hearing, plaintiffs counsel accepted that better
organization and more diligent preparation may have made the second affidavit
unnecessary. I appreciate counsels candour on that point and, in the
circumstances, I am not prepared to take a strict approach to what constitutes
proper reply. I admit the affidavit into evidence.
III. The Orders Sought
A. Disclosure from all defendants
[9]
As I understand this application, the plaintiffs seek production of the
following documents from all defendants:
1. All documents that
relate to or purport to relate to the warnings about the use of any of [the
defendants] fireplaces whether affixed to the fireplace or not.
2. All documents of
the Hearth, Patio and Barbeque Association (the Association) that relate
directly or indirectly to issues of safety, and in particular, all minutes of
any meeting at which Dr. Cynthia Verchere either attended or was referred to.
3. All documents that
would assist in identifying and notifying all members of the proposed class.
4. All documents relating to the surface temperature of the glass on
the fireplaces and specifically any documents that would disclose if any of the
fireplaces do not reach a temperature of at least 158 degrees Fahrenheit (the
temperature at which the plaintiffs say contact with skin for one second will
lead to third degree burns).
[10]
The plaintiffs also seek specific documents from each defendant. It is helpful
at this point to briefly describe each defendant and the particular documents the
plaintiffs seek.
B. Disclosure from specific defendants
(i) Montigo
[11]
Canadian Heating Products Inc. d.b.a. Montigo Canada (Montigo)
manufactures and sells a wide range of gas fireplaces throughout Canada and the
United States. It only sells residential fireplaces through a number of
distributors and dealers across Canada. Montigo relies on Dan Binzers affidavit
of October 3, 2013, in response to the application for certification, and Dan
Binzers affidavit of January 17, 2014, in response to this application.
[12]
The plaintiffs seek the production of all documents relating to a form Montigo
asks customers to sign if they purchase a fireplace with only a single pane of
glass and without a cool pack, which I understand to be two panes of glass
separated by passive air.
(ii) Miles Industries
[13]
Miles Industries Ltd. (Miles Industries) is a family owned business
that operates out of North Vancouver, BC. Miles Industries has been involved in
the distribution of gas burning fireplaces since 1984 and their manufacture
since about 2002. The chief executive officer and product director, Martin
Miles, filed an affidavit supporting its opposition to the application for
certification. In it, Mr. Miles describes the type of fireplaces produced, the
various warnings, and the fact that Miles Industries is in the process of
undertaking a retrofit program to provide all past Canadian customers with a protective
screen at cost. The affidavit also mentions two actions filed against Miles
Industries in California, USA, one of which has settled.
[14]
In response to this application, Miles Industries filed a supporting
affidavit from its US counsel, Gregory Dyer, in which he explains certain
protective orders in place for the litigation documents in the two California
cases involving Miles Industries.
[15]
The plaintiffs seek from Miles Industries all documents and depositions
produced in that US litigation, as well as all documents that relate to the
number and costs of barriers that appear to have been provided or made available
as part of the settlement reached in that litigation.
[16]
During the course of the hearing, Miles Industries agreed to provide the
plaintiffs with six redacted deposition transcripts. As such, that part of this
application is abandoned.
(iii) Monessen Canada
[17]
Monessen Hearth Canada Inc. (Monessen Canada) is a sales organization
only. It does not research, develop, design, test, or manufacture any
fireplaces. Monessen Canada is a wholly owned subsidiary of its parent company,
Monessen Hearth Systems Company (Monessen Systems).
[18]
Monessen Canada filed an affidavit opposing certification from the
senior vice president of sales and customer service of Monessen Systems, Jesse
Willard Baldwin. Mr. Baldwin has served on various committees of the
Association and currently serves as secretary of the executive committee for
the Associations board of directors. Mr. Baldwins evidence is that Monessen
Canada has not been named in any litigation other than this action, and that it
has not received any complaints from its Canadian customers.
[19]
Monessen Canada also relies on David Iveys affidavit of January 14,
2014, in response to this application. Mr. Ivey is Monessen Canadas Regional
Sales Manager for Canada. He too stated that Monessen Canada has not been
involved in any litigation in either Canada or the USA.
[20]
The plaintiffs seek that Monessen Canada produce all documents and
depositions produced for a California case and any other US litigation
pertaining to the danger of fireplaces distributed by Monessen Canada.
(iv) Lennox Canada
[21]
Lennox Industries (Canada) Ltd. (Lennox Canada) filed Thomas G. Krebs
affidavit in support of its opposition to the certification application. He summarized
the corporate history of Lennox Canada, which is a wholly owned subsidiary of the
Delaware corporation Lennox Industries Inc. (Lennox Industries). Lennox
Industries provides climate control solutions for heating, air conditioning,
and refrigeration markets around the world.
[22]
Lennox Canada relies on Donald Crafts affidavit of January 17, 2014 to
oppose this application. Mr. Craft is employed by Lennox Hearth Products d.b.a.
Innovative Hearth Products. At one time, Lennox Hearth Products was a
subsidiary of Lennox Industries. In April 2012 Lennox Industries sold off all
its interest in Lennox Hearth Products and other related companies, thus taking
it completely out of the fireplace industry. As of April 2012, neither Lennox
Canada nor Lennox Industries manufacture, design or distribute fireplaces in
Canada or the USA. Mr. Craft gives information about litigation in
California against Lennox Industries and other companies, including evidence
about protection and sealing orders that are in place over the litigation
documents. The issue in that US litigation related to gas fireplaces
manufactured and distributed in the US between 2004 and 2011. Lennox Canada was
not involved in manufacturing or distributing gas fireplaces in the USA either prior
to or throughout that litigation.
[23]
The plaintiffs seek from Lennox Canada all documents and depositions
produced in the US litigation as well as details about barriers they say were
required to be provided to fireplace owners by the settlement agreement in that
litigation.
[24]
I understand the plaintiffs to have abandoned the relief sought against
Lennox Canada because it did not manufacture or distribute gas fireplaces in
Canada during the relevant time period. If I am wrong about that abandonment, I
would apply the discussion below about similar orders sought against Monessen Canada
to the orders sought against Lennox Canada.
C. Other Orders
[25]
The plaintiffs seek three additional orders.
[26]
First, they seek an order that each defendant preserve the documents
relevant to the proposed class proceeding pending resolution of this litigation.
I decline to grant this order for the following reason.
[27]
The plaintiffs provided no basis in law or the evidence as to why this
order is necessary. To the contrary, each defendant confirmed in court that it
understood and would abide by the undertakings with regard to documents produced
for litigation, which includes not destroying potential evidence once a lawsuit
has started. There is nothing in the record and nothing was said during the
hearing that casts any doubt on the defendants statements in this regard.
[28]
The plaintiffs also seek orders regarding (a) the delivery of responses
to the civil claim, and (b) the timetable for the certification hearing. These
orders are adjourned by consent as all parties agree that they ought to be
heard by the trial management judge.
IV. The Parties Positions
[29]
The plaintiffs argue the nature and volume of material contained in the defendants
affidavits filed in response to the certification application entitle them to
an order for the production of documents. The plaintiffs claim they will be
prejudiced at the certification hearing without this order because they cannot
adequately respond to new issues and facts raised in the defendants affidavits.
[30]
The defendants oppose all the orders sought in this application,
primarily on the basis that the plaintiffs have not met the burden to justify
an order for production of documents prior to a certification hearing. They
also say the requests are too broad and would place an onerous burden on them that
is not proportional to the legal issues to be determined at the certification
hearing.
V. Disposition
[31]
I decline to grant all but one of the disclosure orders sought by the
plaintiffs for the following reasons.
VI. Law
A. Legislation
[32]
Sections 4 and 5 of the CPA stipulate the issues relevant to a
certification hearing:
Class certification
4 (1) The court must certify a proceeding as a class
proceeding on an application under section 2 or 3 if all of the following
requirements are met:
(a) the pleadings disclose a cause
of action;
(b) there is an identifiable class
of 2 or more persons;
(c) the claims of the class members
raise common issues, whether or not those common issues predominate over issues
affecting only individual members;
(d) a class proceeding would be the
preferable procedure for the fair and efficient resolution of the common
issues;
(e) there is a representative
plaintiff who
(i) would fairly and adequately
represent the interests of the class,
(ii) has produced a plan for the
proceeding that sets out a workable method of advancing the proceeding on
behalf of the class and of notifying class members of the proceeding, and
(iii) does not have, on the common
issues, an interest that is in conflict with the interests of other class
members.
(2) In determining whether a class proceeding would be the
preferable procedure for the fair and efficient resolution of the common
issues, the court must consider all relevant matters including the following:
(a) whether questions of fact or
law common to the members of the class predominate over any questions affecting
only individual members;
(b) whether a significant number of
the members of the class have a valid interest in individually controlling the
prosecution of separate actions;
(c) whether the class proceeding
would involve claims that are or have been the subject of any other
proceedings;
(d) whether other means of
resolving the claims are less practical or less efficient;
(e) whether the administration of the class proceeding would
create greater difficulties than those likely to be experienced if relief were
sought by other means.
Certification application
5 (1) An application
for a certification order under section 2 (2) or 3 must be supported by an
affidavit of the applicant.
(4) Unless otherwise ordered, a person to whom a notice of
application and affidavit is served under this section must, not less than 5
days or such other period as the court may order before the date of the hearing
of the application, file an affidavit and serve a copy of the filed affidavit
by ordinary service on all persons by whom or on whose behalf a pleading has
been filed in the proceeding.
(5) A person filing an affidavit under subsection (2) or (4)
must
(a) set out in the affidavit the
material facts on which the person intends to rely at the hearing of the
application,
(b) swear that the person knows of
no fact material to the application that has not been disclosed in the person’s
affidavit or in any affidavits previously filed in the proceeding, and
(c) provide the person’s best
information on the number of members in the proposed class.
(6) The court may adjourn the application for certification
to permit the parties to amend their materials or pleadings or to permit
further evidence.
(7) An order certifying a proceeding as a class proceeding is
not a determination of the merits of the proceeding.
B. The test for pre-certification document
production
[33]
There is no common law or statutory right to the production of documents
in a class action prior to certification. The cases discussing this issue are
consistent; only in exceptional cases will such an order be granted and only
where the documents are necessary to inform the court about the issues on
certification.
[34]
At certification, the burden is on the proposed class representative to
show some basis in fact for each of the statutory requirements, other than
the requirement that the pleadings disclose a cause of action: Hollick v.
Toronto (City), 2001 SCC 68 at para. 25. The Supreme Court of Canada
elaborated on how this standard is met in Pro-Sys Consultants Ltd. v.
Microsoft Corporation, 2013 SCC 57 at para. 102.
[102]
The some basis in
fact standard does not require that the Court resolve conflicting facts and
evidence at the certification stage. Rather, it reflects the fact that at the
certification stage the court is ill equipped to resolve conflicts in the
evidence or to engage in the finely calibrated assessments of evidentiary
weight [cites omitted]. The certification stage does not involve an assessment
of the merits of the claim and is not intended to be a pronouncement on the
viability or strength of the action; rather, [it] focuses on the form of the
action in order to determine whether the action can appropriately go forward as
a class proceeding [cites omitted].
[35]
In Charlton v. Abbott Laboratories, Ltd., 2013 BCSC 21, Johnston J.
reviews the case law discussing pre-certification document production. He analyzes
many of the cases put before me in this application at paras. 24-41, including:
Bartram v. Glaxosmithkline Inc., 2011 BCSC 1174; Matthews v. Servier
Canada Inc. (1999), 65 B.C.L.R. (3d) 348, 1999 CanLII 5900 (S.C.); Pro-Sys
Consultants Ltd. v. Microsoft Corporation, 2007 BCSC 1663; Samos
Investments v. Pattison et al., 2001 BCSC 440; and Stanway v. Wyeth
Canada Inc., 2010 BCSC 1497. After reviewing the cases, Johnston J. states
at paras. 42-44:
[42] Two principles emerge from the
British Columbia authorities: first, that the burden of showing that records
should be disclosed before the certification hearing is on the party applying
for it; second, the standard to be met on such an application is to show that
the records sought are necessary to inform the certification process.
[43] In Pro-Sys, Myers J. left
open the question of where to set the threshold that must be met to warrant
pre-certification document disclosure.
[44] I
conclude that necessity under the second principle must mean more than merely
helpful or informative. I say that because of the clear separation between the
procedural aspects of class proceedings, and the certification application is
purely procedural, and the consideration of the merits of the claims, which
comes after certification, if it is granted. So wherever the threshold is
set, it must be high enough to protect the procedural certification process
from becoming bogged down by evidence that goes to the merits. [emphasis
added]
[36]
The same point was made in Miller v. Merck Frosst Canada Ltd.,
2011 BCSC 1759 at paras. 39-40:
[39] While the basis in fact is more than simply
disclosing a cause of action, the assertion of facts is still restricted to
facts and not the evidence needed to prove them.
[40] The Supreme Court of
Canada in Hollick did not state some basis in evidence. It stated
some basis in fact. The difference is important. One goes to the merits of
the claim, the other to whether the assertions made are sufficient to allow the
court to determine if the proceeding is of the type that is suitable for
certification.
[37]
The Supreme Court of Canada recently commented on the importance of understanding
the difference between the legal issues relevant pre-and post- certification: Vivendi
Canada Inc. v. DellAniello, 2014 SCC 1. The Court notes that a judge
considering whether to grant certification provides a screening function (para.
70). In that case, the trial judge took the wrong approach by asking whether
there were common answers to the questions raised in the motion for certification.
This is too high a test. The Court states at para. 72:
[72]
At the [certification]
stage, the judge must simply determine whether one or more questions exist that
are common to the claims of all members of the proposed group. As we mentioned
above, at this stage, the threshold that must be met to find that there are
common questions is a low one.
[38]
It is important that I keep in mind the low burden on the plaintiffs at
certification to identify common issues because it impacts whether, and if so
which, documents are necessary for the certification hearing.
[39]
I understand the plaintiffs to suggest that an exceptional case
standard for pre-certification document production is different, and higher,
than the necessary to inform the court standard, and only the latter standard
applies to this application. The plaintiffs submit that, applied correctly, the
necessary test means all documents relating to any facts in the
defendants evidence must be produced. They suggest the defendants
cherry-picked only the most helpful evidence. The plaintiffs state at
paragraph 81 of their written submission:
Having put issues and evidence
before the [C]ourt that they say goes to certification, it falls badly from the
mouths of the defendants to say that documents in their possession that relate
to these issues or evidence should not be produced.
[40]
There are two problems with the plaintiffs submission in this regard.
[41]
First, the defendants affidavits do not contain facts put in issue by
the defendants. Rather the defendants are responding to the plaintiffs proposed
common issues.
[42]
Second, s. 5(5) of the CPA requires an affiant to swear they know
of no material fact that has not been disclosed. Each of the defendants
affiants provided that required sworn testimony. There is nothing in the record
that casts any doubt on the veracity of their evidence. While the plaintiffs may
disagree with what is relevant to the issues at the certification hearing,
there is no evidence of any untoward conduct by the defendants or their
affiants.
[43]
The plaintiffs have blurred the line between the legal test at
certification and the test justifying a pre-certification order for document
production. The task before me is to decide if the plaintiffs are seeking
documents that are necessary to inform the court at the certification hearing.
In this context, necessary means something more than informative or helpful. When
the test is applied correctly and issues relevant at certification are
distinguished from the merits of the claim, it will only be the
exceptional case where such production is warranted. There is no different
standard as the plaintiffs seem to assert.
[44]
The burden on the plaintiffs is to demonstrate that all of the documents
sought are necessary for the certification hearing, and I am mindful that this
burden will be met only in extraordinary cases. The certification judge must
decide whether the requirements of s. 4 of the CPA are met. The parties
submissions in this application focussed on just two of those requirements:
common issues [s. 4(1)(c)] and preferable procedure [s. 4(1)(d)]. I now turn
to the categories of documents the plaintiffs seek.
VII. Analysis
A. Documents about warnings
[45]
The plaintiffs anticipate they will argue at trial, among other things,
that product warnings are ineffective because young children cannot read. The
plaintiffs say unless the defendants are compelled to produce any and all documents
about warnings, as requested, they will be prejudiced because they may not be
able to adduce admissible evidence to answer the defendants assertion that the
variety of warnings means it is better to try cases individually instead of as
a class proceeding.
[46]
The difficulty with the plaintiffs position is that they overstate the
test they must meet and what a certification judge can properly decide. The
defendants cannot ask the certification judge to find that the warnings are
sufficient or insufficient. Equally, the plaintiffs cannot ask the judge to find
that all warnings are immaterial to the negligence claim. The defendants have
adduced evidence about the variety of warnings to establish that variations
exist and that fact, in the defendants submission, is material to whether
common issues exist or whether the common issues are overwhelmed by individual
issues.
[47]
The certification judge will assess the facts and submissions about
warnings to determine if the plaintiffs have established some basis in fact
that there are common issues and that a class action is the preferable
procedure for resolving them. The existence of a variety of warnings is relevant
to the procedural questions on certification, but the efficacy of warnings is
not. It may, however, be material to the merits of the negligence claim. The
existence and efficacy of warnings are distinct issues. The plaintiffs have
ignored this key difference and assumed the certification judge needs evidence on
both issues.
[48]
For these reasons, I find that the plaintiffs are not entitled to the order
sought at paras. 2(a)(iv)-(v) of the application.
B. Documents of the Association
[49]
Miles Industries is the only defendant that is a member of the
Association. All other defendants provided either sworn evidence or statements
of counsel to the effect that they do not have in their possession or control
any Association documents. On this basis I decline to grant against Montigo,
Monessen Canada, and Lennox Canada, the order sought at para. 2(a)(iii) of the
application.
[50]
Miles Industries objects to this request for disclosure on the basis
that the plaintiffs have not approached the Association for production of its confidential
documents. I see no evidence about the confidentiality of the Association or
its documents. Nor is it clear to me how the confidentiality of any documents
would be relevant to whether they are needed for certification, although
confidentiality may be relevant to whether restrictions should be placed on the
method of production.
[51]
As to the plaintiffs failure to seek out the documents from the
Association itself, I disagree that that constitutes a basis to refuse the order.
In the plaintiffs submission, the Association documents are necessary to
better inform the certification judge as to whether there are common issues. In
that regard, the plaintiffs say it is not only the document contents that may
assist the court, but also who was privy to Association discussions relating to
the proposed common issues. From whom the plaintiffs get the documents matters
to the question of who was privy to Association discussions. I also note that
forcing the plaintiffs to seek documents from another party that Miles
Industries possesses itself would add unnecessary expense and delay to the
proceedings, which is inconsistent with the object of the Supreme Court
Civil Rules, B.C. Reg. 168/2009, Rule 1-3.
[52]
Miles Industries also claims I should refuse to order production of Association
documents because they are only relevant to the merits of the case and not the certification
issues.
[53]
I do not agree. It may be that Association documents are material to
issues at trial, but I find the plaintiffs have met the burden to justify
production of these documents prior to certification. The plaintiffs want to
argue at the certification hearing that the variations in screens and warnings
put into evidence by the defendants ought not to detract from the commonality
of the issues to be tried. The plaintiffs require some basis in fact to make and
potentially succeed with that argument.
[54]
The Association documents could illustrate what issues were being
considered by whom in the industry. In my view the certification judge will
need these facts in order to properly assess the plaintiffs claim that the
variety of warnings and screens does not adversely affect the commonality of
issues or preferability of the class proceeding.
[55]
For those reasons, I find the plaintiffs are entitled to the production
of some Association documents from Miles Industries.
[56]
The wording of the order sought, however, is too broad. It states Miles
Industries must produce all documents in its possession or control that are
documents of the [Association] that relate directly or indirectly to issues of
safety including copies of all minutes of the meetings of the [Association] that
directly or indirectly relate to issues of safety, including all minutes of
meeting at which Dr. Cynthia Verchere either attended or was referred to.
That being said, I am reluctant to re-word the order as I did not raise this
issue with counsel at the hearing. As such I would prefer that counsel for the
plaintiffs and Miles Industries agree on wording for a narrower request. I
offer the following guidelines to assist in reaching agreement.
[57]
I see no reason why anything other than minutes of Association meetings would
be necessary for the certification hearing. The safety issues raised thus far
are restricted to the effectiveness of warnings and barriers, so there appears
to be no reason to seek anything beyond minutes related directly to those two
issues and restricted to an appropriate time period. I also think the plaintiffs
are entitled to the minutes from any meeting that Dr. Cynthia Verchere presented
at, but not any meeting at which she is merely mentioned.
C. Documents identifying potential class members
[58]
The plaintiffs seek all documents that identify, or assist to identify
or notify, members of the proposed class. As I noted earlier, the affiants supporting
a response to the certification application are required to provide their best
evidence as to the numbers of members in the class and each affiant did. There
is no basis to question that evidence, and I find it to be sufficient for the certification
hearing. Moreover, as pointed out by the defendants, the identification and
notification of members is premature until a class is certified. I decline to
grant the disclosure sought at paras. 2(a)(i)-(ii) of the application on this
basis.
D. Documents about glass temperature
[59]
The plaintiffs seek documents relating to the specifics of fireplace
temperature, based on an assertion about the glass temperature at which human
skin will suffer third degree burns after touching it for one second. The
plaintiffs say these documents are necessary to determining the commonality of
issues and will offer answer to the defendants evidence about variations in
fireplace design.
[60]
I do not agree. First, the temperature at which contact for one second
would result in third degree burns could be a contested fact at trial. It would
be improper to use the plaintiffs assertion of that fact to guide document production.
The court does not resolve evidentiary disputes at certification so it
certainly cannot accept one parties assertion of a fact as determinative of
what documents are relevant to certification issues. Second, as pointed out by
the defendants, documents on this issue relate primarily to the merits of the
plaintiffs claim. I do not see how they are necessary for the procedural issues
at the certification hearing. For these reasons, I decline to grant the order
sought at paras. 2(a)(vi)-(vii) of the application.
E. US litigation documents
[61]
The plaintiffs seek from some defendants all documents and depositions
produced in US litigation involving fire places to which they are a party. Some
of this litigation has settled. The plaintiffs claim the US litigation has many
similarities with the proposed class proceeding so the documents would inform
the certification hearing. They also claim that two of the US cases have
settled on similar terms so measures taken for those settlements are material
to this case. They insist the defendants will not be unduly burdened by
producing these documents.
[62]
Lennox Canada and Monessen Canada both say the order is improperly
sought as they were not and are not parties to any US litigation. Both they and
Miles Industries also say (1) the plaintiffs have not established how this material
is necessary at the certification hearing, and (2) the disclosure requests are
too broad. I will address the latter of these two arguments first.
The order sought is too broad
[63]
I agree the requests are too broad. The order sought is for all
documents in the litigation and all documents that relate to other specified
matters (generally regarding steps taken after settlement). The plaintiffs
approach is reminiscent of the more expansive scope of discovery under the
former Court Rules, which derived from the Peruvian Guano case. However,
that test no longer applies and document discovery is now based on the documents
that either a party intends to rely on at trial or could be used to prove or
disprove a material fact at trial. Proportionality is a fundamental and guiding
principle for the current scope of discovery.
[64]
In class actions the obligations for document production do not accrete
until after a class is certified (but for the exceptional case as I have
already discussed). This makes sense because the facts material to the claim are
unknown until the court decides what common issues are suitable for
certification, if any. Even if the plaintiffs could establish a right to
pre-certification document disclosure, the unlimited scope of the request is
inappropriate, and I decline to grant the order sought on that basis alone.
[65]
I also find the plaintiffs wrongly suggest there are sufficient
similarities between the US litigation and this action justifying such an order.
I am not in a position to come to a conclusion on that issue without evidence
of the asserted similarities. The only evidence before me does not support the plaintiffs
submission. Mr. Dyers affidavit states that US federal rules of civil
procedure draw no difference between pre- and post- certification document production.
This difference alone suggests I must be cautious in finding US litigation documents
to be material to a certification hearing in BC.
The order cannot be granted against Monessen and
Lennox
[66]
I also agree with both Monessen Canada and Lennox Canadas argument that
the orders cannot be granted against them. Neither is party to any US
litigation and both have sworn they do not have any such documents in their
possession or control.
[67]
The plaintiffs say I should order Monessen Canada to seek out and
produce documents from its US parent company, Monessen Systems. The plaintiffs
claim it is within Monessen Canadas power to get these documents from Monessen
Systems notwithstanding that it does not have possession or control of the documents.
To support this assertion, the plaintiff argues that control in Rule 7-1(1)
includes the power to obtain.
[68]
The plaintiffs provided me with no case authority supporting this novel
argument. Other than inconvenience and cost, which I do not suggest are
irrelevant, the plaintiffs provided no explanation as to why they should not be
required to apply under Rule 7-1(18) to seek the documents directly from the
parent companies. Rather, the plaintiffs suggest that under Rule 7-1(1) I can order
Monessen Canada to seek out those documents. They say that only if Monessen
Canada returned to say the parent company would not provide the documents would
an application under Rule 7-1(18) be necessary.
[69]
The plaintiffs are wrong. Rule 7-1(1) obligates parties to prepare a
list of all documents that have been or are in a partys possession or
control and that could be used at trial to prove or disprove a material
fact, or upon which a party intends to rely. This test is narrower than under
the previous Court Rules and it would be inconsistent with the object of the current
Rules to essentially broaden the meaning of control through inference.
[70]
Moreover, Rule 7-1(11) to (14) set out specific procedures to be used if
a party believes that the list of documents should include additional documents
that are within the listing partys possession, power or control. Rules
7-1(11) – (14) do not apply to this application; it can only be invoked after the
list of documents is delivered. If Rule 7-1(1) was meant to obligate parties to
produce documents in their power to obtain, I think the Rule would have said
so.
[71]
More importantly, this is an application for pre-certification document
production and the obligation in Rule 7-1(1) has not yet even been triggered. In
sum, I see nothing to support the plaintiffs assertion and I decline to grant
the orders in paras. 2(c)(i) and 2(d)(i) and if not abandoned, 2(e)(i).
The documents sought are under protection orders
[72]
Even if I concluded the US litigation documents might be necessary to
certification issues, I would not grant the orders sought because of the protective
orders in place.
[73]
The impact of US litigation protective orders on BC courts was discussed
in Bryar Law Corporation v. Samsung Electronics Co. Ltd., 2010 BCSC 1661
[Bryar], a class action dealing with static random access memory
devices. One of the plaintiffs experts for certification wanted to refer to
and to rely on specific expert reports filed in US litigation. The expert said
the reports would assist his opinion about the potential commonality of issues.
On that basis the plaintiffs sought unredacted versions of the expert reports
as well as all declarations and reply declarations filed in the US
litigation.
[74]
Justice Masuhara found the request for all declarations and reply
declarations too broad and rejected it on that ground alone: Bryar at
para. 31. I note that that request is narrower than what the plaintiffs seek
here.
[75]
Justice Masuhara did find the request for specific expert reports to be
narrow enough that it would not unduly burden the defendants, and he distinguishes
Pro-Sys, Matthews and Samos on that basis: Bryar at para.
32. He also found that the expert reports might be relevant to the
certification hearing: Bryar at paras. 33-37.
[76]
Despite these findings, Masuhara J. declined to order disclosure of the
expert reports because of a protective order in place. Rather, he finds four
reasons why an application for the disclosure of documents covered by the
protective order should be brought before the California court where the
litigation is based: Bryar at paras. 38-51.
[77]
First, the exact nature of the evidence would be unknown to anyone but
the California court and the parties to that litigation. The California court
is best placed to weigh the risk of disclosure against the needs of the
Canadian litigation.
[78]
Second, Masuhara J. did not agree with the plaintiffs asserted
interpretation of a particular article in the protective order which the
plaintiff said only operates in circumstances where a party seeking disclosure
was unaware of the protective order. He states in Bryar at para. 40:
[40]
I am uncertain as to
the scope and operation of this Article. Also, I am not in a position to
resolve the meaning of this Article and would exercise caution in this regard
given the interests being protected and further discussed below. The operation
of this provision is best understood by the court in California. In my opinion,
this weighs in favour of the applicants seeking disclosure in an application
before the California court.
[79]
Third, an order for disclosure could affect numerous third parties who
ought to receive notice that their interests are engaged and afforded the
opportunity to reply. This is best achieved by making the disclosure
application before the California court.
[80]
Fourth, the spirit of judicial comity means that courts should refrain
as far as possible from interfering with court orders from other jurisdictions.
[81]
I find the first, third, and fourth of Masuhara J.s reasons apply to
this case and I note that the defendants have filed unchallenged evidence
substantiating the third reason.
[82]
I find the second reason persuasive but the plaintiffs in this case did raise
a slightly different argument about a protective order clause than was
considered in Bryar. The plaintiffs submit that clause 7.1 is
unambiguous and means that the protective order is only effective against a
person who receives materials from another party; in other words, it does not
preclude the producing party from disclosing the document. Clause 7.1 states:
ACCESS TO AND USE OF PROTECTED MATERIAL
7.1 Basic Principles A Receiving Party may use
protected material that is disclosed or produced by another Party or by a
non-party in connection with this case only for prosecuting, defending, or
attempting to settle this litigation. Such Protected Material may be disclosed
only to the categories of persons and under the conditions described in this Order.
When the litigation has been terminated, a Receiving Party must comply with the
provisions of section 11, below (Final disposition).
[83]
In my view, the plaintiffs interpretation ignores the reasons why companies
seek protective orders and the purposes they serve. The defendants affidavits
address these matters.
[84]
A protection order is sought and granted to protect confidential and
proprietary information from reaching the public domain and, in some instances,
from being seen by other parties to the litigation who could be competitors. In
such cases, the court may issue an order that some documents cannot be shown to
the parties but are for attorneys eyes only. Such an order would be based on
evidence about why confidentiality is important.
[85]
The plaintiffs say, based on their asserted interpretation of clause 7.1,
a producing party is free to disclose protected material in any manner or any
forum, perhaps with some consequence.
[86]
If the plaintiffs are right then no court order could be interpreted as
final and effective against any party to that order. Of course, a party to an
order can always disobey it and risk being found in contempt of court, but it
is unreasonable to suggest that this is relevant to the interpretation of the
words of clause 7.1.
[87]
For all these reasons I find Masuhara J.s reasoning in Bryar to
apply here and had I not found the orders sought to be unnecessary for the
certification hearing, I would have declined to grant the orders sought at paras.
2(c)(i), 2(d)(i) and, if not abandoned, 2(e)(i) because the application for
product should be sought from the California court.
[88]
I decline to grant the orders sought at paras. 2(c)(ii), d(ii) and
e(ii) regarding the costs and number of barriers produced pursuant to
settlement of the US litigation on the same bases that I decline to order
production of all litigation documents. I also agree with Miles Industries that
the settlement terms are likely privileged and the plaintiffs provide no
justification for compelling a party to waive that privilege.
[89]
The only order not yet dealt with is sought at para. 2(b)(i)-(ii) against
Montigo. The plaintiffs suggest it would argue that these documents support its
assertion that the industry knew, or ought to have known, the danger of its
products. I decline to grant these orders as I do not see how any more documents
beyond what is already produced at Exhibit B of Dan Binzers affidavit of September
26, 2013, are necessary for the court to assess the plaintiffs position in
this regard at the certification hearing.
VIII. Summary
[90]
I summarize my findings in this application as follows:
a)
The parties agree that the order sought in para. 1 is unnecessary as it
has been complied with.
b)
I decline to grant the orders sought at paras. 2(a)(i)-(ii),
(iv)-(viii), 2(b)(i)-(ii) and 2(c)(i)-(ii). However that part of the order
sought at para. 2(c)(i), seeking all depositions produced in the Whelan
action, was abandoned by the plaintiffs because Miles Industries agreed to
provide the deposition transcripts.
c)
I grant an order for some of the documents sought at para. 2(a)(iii) but
I ask counsel to agree on appropriate wording to narrow the request according
to the guidelines I outlined above.
d)
I dismiss the orders sought at paras. 2(d)(i)-(ii) as they are not properly
brought. I would dismiss the orders sought at paras. 2(e)(i)-(ii) on the same
basis if they are not abandoned, as I understand the plaintiffs to have done.
e)
I dismiss the order sought at para. 3.
The parties agree to adjourn the orders sought at paras.
4-5.
Sharma
J.