Fresh Guidance on Undertakings and Refusals in Construction Lien Actions: Praxy Cladding Corp. v. Stone Lamina Inc.
In construction lien actions where leave has been granted for examinations for discoveries, motions for undertakings and refusals can be expensive and time-consuming. It is crucial for counsel to have a good understanding of the principles that apply so that they can properly advise their client and not advance positions that are destinated to lose, or result in further examinations.
To that end, Associate Justice Todd Robinson’s recent decision in Praxy Cladding Corp. v. Stone Lamina Inc., 2024 ONSC 727 provides helpful guidance for parties answering undertakings, making “best efforts” or bringing motions to compel answers. By applying by these principles, parties may be able to avoid these motions altogether.
Background
The plaintiff Praxy Cladding Corp. sought to compel answers to undertakings and refusals from Stone Lamina Inc. following examinations for discovery. A majority of the answers were resolved prior to the motion. The remaining questions in issue were grouped into eleven categories, including deficiency rectification costs, delivery dates, approval of extras, identifying the contracting parties, delays and damages.
Key Takeaways
First, the court re-affirmed that the general principles concerning undertakings and refusals that apply to all actions apply equally in construction lien actions. These principles were helpfully summarized in Praxy at paragraph 5.[1]
Second, proportionality is particularly important in lien actions.[2] As far as possible, lien actions are “statutorily prescribed to be” of summary character. But proportionality is not assessed in a vacuum. When refusing questions on the basis that the request is disproportionate, the refusing party must explain why the request is disproportionate due to logistically difficulties in accessing he information, overall volume, or other reasons.
Third, undertaking to provide an answer on a “best efforts” basis is “significant”, and there must be a “genuine and substantial search for the requested information and/or documents.”[3] The standard is the “steps that a reasonable person in the same circumstances and of the same nature as the party who gave the undertaking would take.”[4] In the absence of a complete answer, the party who gave the undertaking must outline a description of “what unsuccessful ‘best efforts’ were performed to satisfy the undertaking.”[5]
Fourth, unless the parties agree otherwise, follow-up questions to answers to undertakings must proceed by way of further examinations for discovery in accordance with the Rules of Civil Procedure. Parties cannot ordinarily be compelled to answer follow up questions in writing during a motion for undertakings. Agreement to exchange follow-up answers in writing should be sought in advance if the parties wish to avoid having further oral discoveries on answers to undertakings.[6]
Fifth, to establish that there has been a failure to produce relevant internal communications by the other side, parties ought to ask questions about the communications that do exist and delve into the substance of those communications to establish relevance.[7] Even if only a handful of internal communications have been produced (here, five emails), orders to produce further internal communications will not be granted on speculation alone.
[1] Citing Métis National Council Secretariat Inc. v. Chartier, 2023 ONSC 5469 at paras. 8-12.
[2] Praxy Cladding Corp. v. Stone Lamina Inc., 2024 ONSC 727 at Para 6.
[3] Praxy Cladding Corp. v. Stone Lamina Inc., 2024 ONSC 727 at para 9.
[4] Praxy Cladding Corp. v. Stone Lamina Inc., 2024 ONSC 727 at para 9 citing Linamar Transportation Ltd. v. Johnson, 2014 ONSC 4415 (Div Ct) at paras. 14-15.
[5] Praxy Cladding Corp. v. Stone Lamina Inc., 2024 ONSC 727 at para 10.
[6] Praxy Cladding Corp. v. Stone Lamina Inc., 2024 ONSC 727 at para 17.
[7] Praxy Cladding Corp. v. Stone Lamina Inc., 2024 ONSC 727 at para 70-71.