Jay v. DHL Express (Canada) Ltd. et al., (2009) 283 Nfld. & P.E.I.R. 1 (PEICA)

• Judge: Jenkins, C.J.P.E.I., McQuaid and Murphy, JJ.A.
• Case Date: December 04, 2008
• Jurisdiction: Prince Edward Island
• Citations: (2009), 283 Nfld. & P.E.I.R. 1 (PEICA)

Jay v. DHL Express Ltd. (2009), 283 Nfld. & P.E.I.R. 1 (PEICA);

    873 A.P.R. 1

MLB headnote and full text

Temp. Cite: [2009] Nfld. & P.E.I.R. TBEd. FE.005

DHL Express (Canada), Ltd./DHL Express (Canada) Ltée., Successor to Mayne-Nickless Transport Inc., c/o/b/a Loomis Courier Service and Sandra Head (appellants) v. Patrick Jay (respondent)

(S1-AD-1151; 2009 PECA 2)

Indexed As: Jay v. DHL Express (Canada) Ltd. et al.

Prince Edward Island Court of Appeal

Jenkins, C.J.P.E.I., McQuaid and Murphy, JJ.A.

February 13, 2009.

Summary:

Jay was an independent contractor operating a delivery service for DHL in the Charlottetown area. After a new Moncton to Charlottetown line haul contract was awarded to a competitor, Jay's business eroded. He terminated the relationship and brought an action alleging, inter alia, breach of contract and negligent misrepresentation. The defendants moved for summary judgment to dismiss the action.

The Prince Edward Island Supreme Court, Trial Division, in a decision reported at (2007), 267 Nfld. & P.E.I.R. 50; 811 A.P.R. 50, denied the motion. Jay moved for an order striking the defendant DHL's statement of defence or finding it in contempt for failure to comply with a January 3, 2006, order requiring production of certain documents, including waybills and invoices.

The Prince Edward Island Supreme Court, Trial Division, in a decision reported at (2008) 277 Nfld. & P.E.I.R. 210; 850 A.P.R. 210, granted the motion to strike the statement of defence. DHL appealed.

The Prince Edward Island Court of Appeal allowed the appeal. The statement of defence was reinstated.

Practice - Topic 2232

Pleadings - Striking out pleadings - Grounds - Noncompliance with discovery rules - A motions judge granted a motion under rule 30.08(2) to strike a defendant's statement of defence for failure to comply with an order to produce certain documentation - The defendant appealed - The Prince Edward Island Court of Appeal allowed the appeal - The court discussed the principles of operation of rule 30.08(2) - The sanction of striking out a pleading without leave to deliver another had terminal effect - Before it was imposed, there had to be a reasoned judicial analysis of the circumstances surrounding the non-production of a document, the prejudice caused to the party affected by the non-production and the prejudice to the other party caused by dismissing its action or striking out its defence without adjudication on the case's merits - The motivation and conduct of the party who had failed to produce the documents was an important consideration - Striking out a party's pleading had been reserved to cases where the conduct of the offending party was found to be in contempt of the court, egregious, contumacious, wilfully disobedient, in cavalier disregard to the court, spoliation, or a flagrant violation of a previous order - The assessment of prejudice involved the extent to which the prejudice would inhibit the party denied the documents from mounting his case and the prejudice to the party who did not or could not produce the documents from being denied an opportunity to defend the case on its merits - Overall, the matters to be taken into account in arriving at an appropriate remedy for non-disclosure involved consideration of fairness to both parties - See paragraphs 28 to 38.

Practice - Topic 2232

Pleadings - Striking out pleadings - Grounds - Noncompliance with discovery rules - A motions judge granted a motion under rule 30.08(2) to strike a defendant's statement of defence for failure to comply with an order to produce certain documentation - The defendant appealed - The Prince Edward Island Court of Appeal allowed the appeal - The remedy of striking the statement of defence was an act of discretion exercised on a wrong principle - The motions judge did not take into account, or did not give sufficient weight, to, inter alia, the defendant's intention, especially in the absence of any finding of bad faith or contumacious or contemptuous conduct - The defendant had given an undertaking, which it partially fulfilled, then having found that it could not fulfill the rest, had sought relief by way of a motion for variation - That being denied, the defendant made further efforts, experienced a computer crash, and then made a very full explanation and put itself in the hands of the court - Although the motions judge was not satisfied with the defendant's efforts and had concluded that the defendant had no justifiable reason for not producing the documents, he did not characterize the defendant's conduct to be within any of the pejorative categories that might result in a pleading being struck - The statement of defence was reinstated - See paragraphs 27 and 46 to 59.

Practice - Topic 2232

Pleadings - Striking out pleadings - Grounds - Noncompliance with discovery rules - A motions judge granted a motion under rule 30.08(2) to strike a defendant's statement of defence for failure to comply with an order to produce certain documentation - The defendant appealed - The Prince Edward Island Court of Appeal allowed the appeal - The remedy of striking the statement of defence was an act of discretion exercised on a wrong principle - The motions judge did not take into account, or did not give sufficient weight, to, inter alia, the fact that the documents being sought were relevant to only one segment of the proceeding, namely the assessment of damages, and regarding only one of two claims for breach of contract - There were serious questions to be tried to which the documents did not relate, including the existence of liability under two separate contracts - Assessment of damages under one of the agreements would only come into issue on liability being proven - The relevant magnitude of the various discrete claims for liability was unknown when the motion was heard - The motions judge did not have sufficient information as to the ambit of the wrong in the context of the overall evidence to judge whether the remedy of striking the pleadings would yield a just result - The statement of defence was reinstated - See paragraphs 27 and 60 to 63.

Practice - Topic 2232

Pleadings - Striking out pleadings - Grounds - Noncompliance with discovery rules - A motions judge granted a motion under rule 30.08(2) to strike a defendant's statement of defence for failure to comply with an order to produce certain documentation - The defendant appealed - The Prince Edward Island Court of Appeal allowed the appeal - The remedy of striking the statement of defence was an act of discretion exercised on a wrong principle - The motions judge did not take into account, or did not give sufficient weight, to, inter alia, the relative prejudice to the plaintiff and to the defendants - This was a critical consideration given the dire prejudice that the defendant would experience - The consequence of the judgment was that the plaintiff could proceed to judgment - However, the default judgment process, here, was not just - This was not a case of non-disclosure or complete non-production - There was some disclosure - Regarding the documents not produced, the defendant had stated that it had tried its best and the motions judge had not accepted the explanation - There was no mention in the judgment of any potential prejudice to the defendant for being denied the opportunity to defend the action regarding liability and damages as a result of there being only partial fulfilment of the defendant's undertaking to produce documentation - The potential prejudice to the defendant was not considered and weighed in the balance - The statement of defence was reinstated - See paragraphs 27, 40 to 45 and 64.

Practice - Topic 2237

Pleadings - Striking out pleadings - Grounds - Failure to obey court order - [See all Practice - Topic 2232 ].

Practice - Topic 4562

Discovery - Production and inspection of documents - General - Remedy for failure to produce - [See first Practice - Topic 2232 ].

Practice - Topic 4562

Discovery - Production and inspection of documents - General - Remedy for failure to produce - A motions judge granted a motion under rule 30.08(2) to strike a defendant's statement of defence for failure to comply with an order to produce certain documentation - The defendant appealed - The Prince Edward Island Court of Appeal allowed the appeal - The court rejected the plaintiff's argument that rule 30.08 should be used as punishment, retribution or rough justice - The rule was remedial - The objective was to obtain and enforce disclosure of documents in the interests of access to justice for the other party and toward the just, most expeditious and least expensive determination of every civil proceeding on its merits - Measures needed only to be punitive where the situation called for that response and, then, measured only to the extent necessary to compel enforcement - See paragraph 66.

Practice - Topic 4562

Discovery - Production and inspection of documents - General - Remedy for failure to produce - A motions judge granted a motion under rule 30.08(2) to strike a defendant's statement of defence for failure to comply with an order to produce certain documentation - The defendant appealed - The Prince Edward Island Court of Appeal allowed the appeal - The court indicated that, when faced with a failure to produce documents, a motions judge had room to craft a suitable remedy - Here, those measures included (1) an order confirming the terms stipulated in rule 30.08(1)(a) that the non-producing party would not be allowed to refer to unproduced documentation that became available and was favourable to it, except with the court's leave; (2) an order confirming that the motions judge anticipated that the trial judge would be able to make an estimate of damages if some evidence were produced on which an assumption could be made, and, in that regard, it would be open to the plaintiff at trial to ask the court to make a presumption most favourable to the plaintiff; and (3) an order for costs on the motions seeking production to compensate the party seeking production and to charge the party who had failed to make production - Two additional measures that might be appropriate in other circumstances were, first, an order for costs and expenses thrown away in pursuing failed production and, second, a direction for an adverse inference, though this remedy called for caution - See paragraphs 67 to 72.

Practice - Topic 8804

Appeals - General principles - Duty of appellate court regarding discretionary orders - A motions judge granted a motion under rule 30.08(2) to strike a defendant's statement of defence for failure to comply with an order to produce certain documentation - The defendant appealed - The Prince Edward Island Court of Appeal allowed the appeal - The decision of the motions judge involved the exercise of discretion - Although it occurred within an interlocutory motion, it was an act of discretion that terminated the defendant's involvement in the proceeding - Where the decision was discretionary, the standard of review by an appellate court was reasonableness - The court was not at liberty to substitute its own exercise of discretion merely because it would have exercised the original discretion in a different way - However, an appellate court could reverse a judge when it reached a clear conclusion that there had been a wrongful exercise of discretion in that no weight, or insufficient weight, had been given to relevant considerations - See paragraphs 24 and 25.

Cases Noticed:

Friends of the Oldman River Society v. Canada (Minister of Transport and Minister of Fisheries and Oceans), [1992] 1 S.C.R. 3; 132 N.R. 321, refd to. [para. 25].

Osenton (Charles) & Co. v. Johnston, [1942] A.C. 130 (H.L.), refd to. [para. 25].

Sullivan, Re (2000), 193 Nfld. & P.E.I.R. 190; 582 A.P.R. 190; 2000 PESCAD 27, refd to. [para. 25].

Gallinger v. Kurylyk (1995), 129 Nfld. & P.E.I.R. 306; 402 A.P.R. 306 (P.E.I.C.A.), refd to. [para. 25].

Johnston v. Law Society of Prince Edward Island (1988), 69 Nfld. & P.E.I.R. 168; 211 A.P.R. 168 (P.E.I.C.A.), refd to. [para. 25].

Abegweit Potatoes Ltd. v. Read (J.B.) Marketing Inc. et al. (2003), 227 Nfld. & P.E.I.R. 151; 677 A.P.R. 151; 2003 PESCAD 24, refd to. [para. 25].

Harwood v. Wilkinson, [1932] 2 D.L.R. 199 (Ont. C.A.), affd. [1931] 2 D.L.R. 479 (S.C.C.), refd to. [para. 31].

Mader v. Hunter et al. (2004), 183 O.A.C. 294 (C.A.), refd to. [para. 33].

Newlove v. Moderco Inc., [2002] O.T.C. 861; 2002 CarswellOnt 3720 (Sup. Ct.), refd to. [para. 34].

Dreco Energy Services Ltd. et al. v. Wenzel et al. (2006), 399 A.R. 166; 2006 ABQB 356, appld. [para. 36].

McDougall v. Black & Decker Canada Inc. et al. (2008), 440 A.R. 253; 438 W.A.C. 253 (C.A.), refd to. [para. 37].

Dreco Energy Services Ltd. et al. v. Wenzel et al. (2005), 371 A.R. 11; 354 W.A.C. 11 (C.A.), refd to. [para. 72].

Rintoul v. St. Joseph's Health Care Centre - see Robb Estate et al. v. St. Joseph's Health Care Centre et al.

Farrow v. Canadian Red Cross Society - see Robb Estate et al. v. St. Joseph's Health Care Centre et al.

Robb Estate et al. v. St. Joseph's Health Care Centre et al. (1998), 87 O.T.C. 248 (Gen. Div.), refd to. [para. 72].

Statutes Noticed:

Rules of Civil Procedure (P.E.I.) - see Rules of Court (P.E.I.), Supreme Court Rules.

Rules of Court (P.E.I.), Supreme Court Rules, rule 30.08(2) [para. 28].

Counsel:

Kevin J. Kiley and D. Shannon Farrell, for the appellants;

Kenneth L. Godfrey and D.R. Brandon MacKenzie, for the respondent.

This appeal was heard at Charlottetown, Prince Edward Island, on December 4, 2008, by Jenkins, C.J.P.E.I., McQuaid and Murphy, JJ.A., of the Prince Edward Island Court of Appeal. On February 13, 2009, Jenkins, C.J.P.E.I., delivered the following reasons for judgment for the court.