Executive Summary: Key Legal and Evidentiary Issues

• Certified class action focused on document disclosure obligations during discovery

• Dispute over who should bear the cost of third-party document production

• Defendant failed to preserve and disclose key documents post-sale of its business

• Plaintiff alleged misleading conduct and procedural delays caused by the defendant

• Court scrutinized potential abuse of process under the Class Proceedings Act

• Special costs denied, but ordinary costs awarded due to defendant’s noncompliance

Facts and outcome of the case

This case involves a certified class action brought by 676083 B.C. Ltd. against Good Guys Recycling Inc., formerly Revolution Resource Recovery Inc., in the Supreme Court of British Columbia. The dispute centers around the defendant’s failure to preserve and disclose documents relevant to the litigation after it sold its business to a third party, Waste Connections of Canada Inc.

The plaintiff sought a series of procedural orders to compel document production from the third party. Most of the production issues were resolved by agreement between the plaintiff and Waste Connections. However, the remaining conflict involved determining who should pay for the costs incurred by the third party in producing those documents. The plaintiff sought to have the defendant bear those costs.

A central issue in the hearing was the plaintiff’s request for special costs due to what it described as the defendant’s failure to comply with discovery obligations and an alleged pattern of misleading conduct regarding the whereabouts and fate of important documents. The defendant countered that the plaintiff's written submissions improperly criticized defense counsel personally, which the court found overstated but not sanctionable.

Justice Milman determined that while the circumstances were exceptional and deserving of rebuke, the conduct did not rise to the level required for an award of special costs. Instead, the court awarded the plaintiff its ordinary costs for both the May 5, 2025 hearing and a prior hearing in March 2024. Additionally, the defendant was ordered to pay the reasonable costs incurred by Waste Connections in producing the requested documents.

The court emphasized the defendant’s duty to preserve relevant documents and criticized the lack of transparency following the sale of its business. Although no damages were awarded at this stage, the outcome reflected procedural success for the plaintiff and a rebuke of the defendant’s litigation conduct.