NWT Financial Services LTD. et al v Sundberg, 2019 NWTSC 24
S-1-CV-2016-000117

IN THE SUPREME COURT OF THE NORTHWEST TERRITORIES

BETWEEN

NWT FINANCIAL SERVICES LTD., and BARRY TALBOT
Plaintiffs

- and -

COROL SUNDBERG
Defendant
_________________________________________________________ Transcript of the Reasons for Decision delivered by The Honourable Justice S.H. Smallwood, sitting in Yellowknife, in the Northwest Territories, on the 30th day of November, 2018.
_________________________________________________________

APPEARANCES:

Ms. M. Leduc:	Counsel for the Plaintiffs
Mr. D. McNiven:	Counsel for the Defendant

1	THE COURT:	There are two applications
2	before the Court.	The first is a Notice of
3	Motion filed by the Plaintiffs seeking that the
4	Defendant provide answers to the requested
5	undertakings pursuant to Rule 261.	And Rule 261
6	of the Rules of the Supreme Court of the
7	Northwest Territories states that:
8	Where a party undertakes at an examination for discovery to obtain
9	information needed to answer a question, the answer shall be
10	provided in a timely manner.
11	The second application is a Notice of Motion
12	filed by the Defendant seeking that the Plaintiff
13	be compelled to answer certain questions from the
14	examination for discovery and directing that the
15	Plaintiff provide further or better responses to
16	certain undertakings.
17	Dealing first with the application of the
18	Plaintiffs, the Plaintiff says that the
19	Defendant, Corol Sundberg, was examined for
20	discovery on October 24th, 2017, and
21	13 undertakings were requested.
22	Counsel for the Plaintiffs wrote counsel for
23	the Defendant on January 15th, 2018; February
24	21st, 2018; May 11, 2018; June 18, 2018; June 28,
25	2018; and October 2nd, 2018, requesting that the
26	Defendant provide answers to the undertakings.
27	In the last letter, the counsel advised that an
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1	application would be brought if the answers to
2	the undertakings remained outstanding on
3	October 5th.	According to the Affidavit of
4	Mr. Talbot, as of October 10th, the answers to
5	the undertakings were still outstanding.
6	The Defendant filed an affidavit in
7	response, which states that she provided a
8	detailed list of answers on a flash drive, which
9	was provided to the Plaintiffs on October 3rd,
10	2018.
11	At the date of the hearing, the Plaintiff
12	advised that the answers to undertakings were
13	responded to on October 10th and were incomplete
14	with Undertaking 11 and 13 being missing.
15	Undertaking 11 was to provide handwritten notes
16	of telephone calls with clients who had switched
17	to CAM Financial.	The Affidavit of the Defendant
18	addresses this issue and states that she forgot
19	to include this answer, the answer being that she
20	had searched and did not have any such notes.
21	Undertaking 13 was to produce all income tax
22	returns with attachments and slips for the period
23	2006 to current.	At the hearing, counsel for the
24	Defendant advised that Ms. Sundberg would produce
25	the tax information as soon as possible, but that
26	she did not -- he was not sure that she had
27	records going back to 2006.	And I am advised
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1	that that has occurred.	So I am not certain if
2	an order is necessary; but, if it is, there will
3	be an order that the Defendant produce any
4	outstanding answers to undertakings within
5	60 days.
6	Turning now to the Defendant's application,
7	the Defendant's application seeks that Mr. Talbot
8	produce a business valuation for the business,
9	NWT Financial Services; Mr. Talbot's tax return
10	information from 2010 to 2016; and the Manulife
11	financial contract.
12	With respect to the business valuation, the
13	Defendant has produced correspondence from
14	Mr. Talbot's lawyer showing that the lawyer had
15	written to Mr. Talbot's ex-wife on two occasions
16	to request a copy of the valuation, she
17	apparently, having a copy and Mr. Talbot not
18	having a copy.	The Defendant argues that
19	Mr. Talbot should make further efforts to obtain
20	the business valuation.
21	With respect to the tax returns, the
22	Defendant says that Mr. Talbot was asked at his
23	discovery for the tax return information and this
24	was refused.
25	And, as for the Manulife financial contract,
26	this had been requested during the examination
27	for discovery but had not been produced.	There
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1	is also a reference in the Notice of Motion to
2	producing diary notes.
3	At the hearing, counsel advised that the
4	Manulife contract had been produced and the diary
5	notes issue had been dealt with.
6	With respect to the business valuation, it
7	appears that this valuation was commissioned
8	during Mr. Talbot's divorce as it was an asset
9	that had to be determined as part of the divorce
10	settlement.	It may have been commissioned by
11	Mr. Talbot's ex-spouse, and he apparently does
12	not have or did not retain a copy of the
13	valuation.	It is not clear, from the record,
14	whether other individuals, like the creator of
15	the valuation or Mr. Talbot's divorce lawyer,
16	might have a copy of it.	There is also a
17	reference in the materials to an undertaking that
18	Mr. Talbot may have entered into during his
19	divorce with respect to the business valuation.
20	The circumstances surrounding the creation
21	and the retention of the business valuation are
22	murky and unclear, and I have very little
23	information about it.	Clearly, Mr. Talbot can
24	only produce what is in his possession or what he
25	is legally able to obtain.
26	It appears that Mr. Talbot's counsel wrote
27	to Mr. Talbot's ex-spouse on two occasions
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1	requesting a copy of the valuation, and she did
2	not respond.
3	The last letter that has been provided is
4	dated February 21st, 2018, written by
5	Mr. Talbot's counsel to the ex-spouse.	It is not
6	clear what other efforts may have been made by
7	counsel or Mr. Talbot himself to obtain the
8	business valuation.
9	In the circumstances, I am going to order
10	that the Plaintiffs provide the Defendant with an
11	explanation of the efforts made to obtain the
12	business valuation, the explanation to include
13	efforts by counsel for Mr. Talbot, and Mr. Talbot
14	personally to obtain the business valuation.
15	With respect to the tax returns, this was
16	addressed at examination for discovery.	Counsel
17	for the Defendant sought income tax returns from
18	2010 to 2016.	Counsel for Mr. Talbot refused to
19	produce them claiming that they were not
20	relevant.	So this is not a situation where
21	Mr. Talbot has failed to comply with an
22	undertaking arising from examination for
23	discovery.
24	Compelling a party to provide documents that
25	they have objected to providing is governed by
26	Rule 226 of the Rules of Court, and a Court may
27	order that a party make production of documents
1	

1	where the party has neglected or refused to make
2	discovery or production of the document.	The
3	objection made by the Plaintiffs to the
4	production of these documents is that the income
5	tax returns are not relevant.
6	As stated in the FDA Engineering Ltd. and
7	Aboriginal Engineering Ltd. case, 2014 NWTSC 27,
8	at paragraphs 23, 24:
9	There are, of course, limits to the scope of questions that can be asked
10	in an examination for discovery. When a question is objected to,
11	inevitably, the Court, in deciding on the validity of the objection, must
12	consider the issue from the point of view of relevance, in the context of
13	the pleadings.	If the information sought is clearly irrelevant to the
14	action, there is no reason to compel a party to produce it.	At the same
15	time, the Court’s task is not, at that stage, to decide ultimate
16	relevancy or the weight that the evidence will carry in the
17	determination of the issues.
18	This Court has recognized the broad scope to the issue of relevance in
19	the context of discovery processes.
20
21	In that decision, the Court cited with approval
22	the proposition that great latitude should be
23	allowed in the examination for discovery process
24	so that the fullest inquiry can be made into all
25	matters which can possibly affect the issues
26	between the parties.
27	The issue of relevance is to be considered
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1	broadly at this stage and in the context of the
2	pleadings.	I have reviewed the pleadings in this
3	matter as well as the affidavits that have been
4	filed on the applications.
5	The Statement of Claim of the Plaintiffs
6	claims that the actions of the Defendant have
7	resulted in ongoing damages to revenues and
8	losses of commissions, and the Plaintiffs are
9	seeking damages for loss of business opportunity.
10	The ultimate relevance of the income tax
11	returns that are sought is not an issue that is
12	for me to decide, but there is a possibility that
13	the income tax returns could be relevant in
14	determining those issues referred to in the
15	Statement of Claim.	As such, I am ordering that
16	the Plaintiffs produce the income tax returns for
17	the years 2010 to 2016 inclusive, and that will
18	be within 60 days.
19	With respect to costs, as each party was
20	successful on their application, success was
21	divided; therefore, I am not going to make an
22	order for costs.
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1	CERTIFICATE OF TRANSCRIPT
2
3	I, the undersigned, hereby certify that the
4	foregoing transcribed pages are a complete and
5	accurate transcript of the digitally recorded
6	proceedings taken herein to the best of my skill and
7	ability.
8	Dated at the City of Edmonton, Province of
9	Alberta, this 27th day of June, 2019.
10
11	Certified Pursuant to Rule 723
12	of the Rules of Court
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14	__________________________
15	Janet Belma, CSR(A), B.Ed.
16	Court Reporter
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