Decision Content
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
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
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
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
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 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
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
13
14 __________________________
15 Janet Belma, CSR(A), B.Ed.
16 Court Reporter
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