Master MacLeod Discusses Appropriate Procedure In Undertakings Motions

Kariouk v. Pombo was a motion by the plaintiff to compel plaintiffs to answer undertakings given in the course of examinations for discovery. A commonplace type of motion, to be sure. But it is because such motions occur so frequently that Master MacLeod’s comments about the correct procedure to follow are valuable to practitioners. In particular, the Master’s reasons on the issue of costs in this context are instructive. Typically, by the time an undertakings motion is actually heard, the dilatory party has answered the undertakings and the motion has become largely academic. But time has been spent by that point; what should be done about those costs?

The plaintiff was a designer who worked on the renovation of the defendants’ home. He sued under Rule 76 for unpaid fees of $40,000. The defendants responded with a counterclaim of $750,000, alleging cost overruns.

Although the parties had not agreed on a discovery plan, counsel for the plaintiff had proposed one. Counsel for the defendants indicated that he would be withholding his agreement to the plan until the parties had exchanged lists of documents.

At the defendants’ examinations for discovery, thirty three undertakings were given. There were also some refusals that were later converted into undertakings. At the time that the plaintiff’s motion was brought, none of the undertakings had been answered. However, by the time the motion was argued, only a few of the undertakings remained outstanding.

In his reasons, the Master dealt with the various unanswered undertakings and established a timetable for the completion of the discovery process.

He then turned to the issue of costs. He noted that the moving party (the plaintiff) had spent 11.8 hours in preparation for the motion and had incurred actual costs of $5,519.81. The defendants’ preparation time was three hours, resulting in an actual costs of $2,957.78. Based on this information, the Master fixed partial indemnity costs at $2,900 plus disbursements. However, he then had to go one step further, to review the conduct of each party, leading up to the motion. This was because the plaintiff was arguing for costs on a substantial indemnity basis and the defendants contended that the plaintiff should be deprived of costs altogether. This led the Master to “the somewhat unsavory exercise of reviewing correspondence and e-mail passing between counsel”.

A rather painstaking analysis followed. The Master’s description of the communications between counsel on both sides will probably be, to many litigation lawyers, reminiscent of many of their own files, with a certain amount of posturing and threats.

The defendants argued that the plaintiff should be deprived of costs because:

  1. there was no discovery plan in place and specifically no deadline had been agreed upon for answering undertakings;
  2. it was precipitous and unreasonable to bring the motion when there had been a commitment to answer the undertakings; and
  3. insisting on unreasonably strict adherence with the Rules of Civil Procedure is a breach of principles of civility particularly when the defendants had cooperated in moving the action forwards with rapidity and were prepared to set a pre-trial and trial date.

The Master rejected the defendants’ argument. He found that counsel for the plaintiff had been courteous (albeit firm) throughout and that he could not be faulted “for giving notice in advance of what he intended to do and then doing what he said he would do” (i.e., move to compel compliance with the undertakings).

Master MacLeod also refused to penalize the plaintiff for the fact that no discovery plan had been finalized. He said that “the rule requiring a discovery plan and requiring consideration of the Sedona Canada guidelines is not designed to impede the progress of actions nor to provide a new weapon to resist production or discovery motions”.

The Master questioned why litigants do not routinely set deadlines for undertakings to be answered:

I have never understood why parties at discovery do not include a time for answering undertakings in the undertaking itself. The party giving the undertaking should know how long or how difficult or how expensive it will be to seek the requested information. The parties know if there is merit in holding off on answers to undertakings while settlement discussions unfold or if the answers are critical to either a negotiated or an adjudicated resolution. In fact just such an approach was proposed by an OBA working group following the report of the Ontario Discovery Task Force:

“Before agreeing to an undertaking, be clear on the feasibility of fulfilling it, and set out agreed timelines for fulfilling the undertaking. Phrase undertakings carefully to correctly reflect what information will be provided.”

In the end, the Master declined either to deprive the plaintiff of costs or to penalize the defendants with an award of costs on a substantial indemnity scale.

The decision does make it clear though, that a party who gives fair warning of an intention to move to compel compliance with undertakings and then follows through can expect to receive an award of costs, even if the undertakings are answered by the time the motion is heard.

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