Executive Summary: Key Legal and Evidentiary Issues

• Plaintiffs claimed they transferred farmland with the expectation it would be returned after years of underpaid labour.

• Defendants denied any such agreement, asserting the land was purchased outright and employment was unrelated.

• Court addressed motion to compel disclosure from Employment and Social Development Canada (ESDC) under privacy law.

• Minister refused to authorize further production or witness testimony, citing statutory discretion under DESDA.

• Plaintiffs sought and were granted leave to file a supplemental affidavit based on newly obtained ESDC records.

• Court resolved discovery disputes using proportionality principles, emphasizing fairness in production burdens.

Background and dispute over farmland and labour

The plaintiffs, I. Pearce Farms Ltd., Ian Pearce, and Michelle Pearce, brought a claim against T.S. Mullen Farms Ltd., Windfall Farms Corp., and the Mullen family, alleging that they had transferred farmland to the defendants during a time of financial difficulty based on an informal agreement. According to the plaintiffs, they were to provide years of low-wage labour on the defendants’ farms in exchange for eventually regaining ownership of the land.

The defendants denied the existence of such an agreement. They maintained that they purchased the land outright as an arm’s-length transaction and that the plaintiffs' work was standard farm employment, unrelated to any ownership arrangement. The dispute involves approximately 220 acres of farmland, with an estimated value of around $4 million. A motion for summary judgment by the defendants is scheduled for September 2025.

Motion to compel federal records and testimony

The plaintiffs attempted to obtain documents and potential testimony from Employment and Social Development Canada (ESDC) concerning a 2017 investigation into employment insurance benefits, which they believed could support their claim of a labour arrangement tied to the land transfer. These efforts involved navigating privacy protections under the Privacy Act and section 40 of the Department of Employment and Social Development Act (DESDA), which prevents compelled production unless the Minister consents or the legal proceeding directly relates to program enforcement.

The Attorney General of Canada, representing ESDC, refused to produce unredacted versions of a "mystery file" or permit three federal employees to be examined as witnesses. The Minister exercised discretion under DESDA and did not find it appropriate to authorize further disclosure or testimony. The court upheld the Minister’s authority and dismissed the plaintiffs' motion regarding ESDC, affirming that no court order could override the Minister’s statutory discretion in this context.

Supplemental affidavit based on new documents

After receiving partial disclosure of ESDC documents through Access to Information requests and a previous court order, the plaintiffs sought leave to file a supplemental affidavit in response to the upcoming summary judgment motion. The new evidence addressed statements made during cross-examinations and was relevant to the core issue of the alleged agreement between the parties.

Applying Rule 39.02(2) of the Rules of Civil Procedure, the court granted leave to file the supplemental affidavit. It held that the evidence was timely, relevant, and responded directly to issues raised during cross-examinations. To ensure fairness, the defendants were permitted to cross-examine the deponent and file a responding affidavit. The judge noted that the plaintiff’s delayed access to documents, though avoidable, was explainable due to the complexity of federal privacy laws.

Discovery disputes and proportionality principles

The court also addressed several outstanding undertakings and refusals from examinations. It adopted a practical and proportionate approach, balancing the burden of manual searches against the relevance of the requested records. The judge noted that the defendants’ records were maintained by hand, making retrospective searches time-consuming and potentially disproportionate to the claim.

Both parties had partial success in compelling or resisting document production. The judge recorded decisions for each item in a detailed undertakings/refusals chart appended to the ruling. Importantly, the court reaffirmed that documents disclosed during mediation but otherwise discoverable are not protected by settlement privilege.

Cost consequences and outcome

Costs were divided among the parties to reflect their relative success. The Attorney General of Canada, having prevailed on the motion to resist production and testimony, was awarded $10,000 in costs, two-thirds payable by the plaintiffs and one-third by the defendants. On the motion for leave to file the supplemental affidavit, the court found that both parties contributed to the delay but awarded the plaintiffs $1,750 from the defendants for that portion. The costs of the discovery disputes were offset entirely, with no further award between the parties.

In summary, the court allowed the plaintiffs to bolster their response to the pending summary judgment motion with new evidence, while upholding federal privacy protections that shielded government records and witnesses from further disclosure. The ruling emphasized procedural fairness, relevance, and proportionality in preparing for resolution of a high-stakes land and labour dispute. No single party fully prevailed. The Attorney General succeeded on privacy grounds, the plaintiffs advanced their case with new evidence, and the defendants avoided further disclosures but were ordered to cover some costs.