BC Court Considers Striking Out Claims And Defences Of Cooperating Parties Who Delayed In Disclosing Existence Of Cooperation Agreement

Article by Melanie J. Harmer, Jamieson D. Virgin, Sasa Pudar, Student-at-Law

In complex commercial disputes, it is not uncommon for co-defendants to enter into cooperation agreements in order to help facilitate a unified defence. In the recent companion cases of Bilfinger Berger (Canada) Inc. et al. v. Greater Vancouver Water District et al.; The Greater Vancouver Water District v. Bilfinger Berger AG et al.1, the British Columbia Supreme Court clarified when disclosure of such agreements between cooperating parties is required.

The Court explained that determining whether an agreement must be disclosed, and when, requires balancing the public interest promoted by confidentiality of such agreements - namely, the adequate preparation of a party's case - and the public interest promoted by the disclosure of any matter that could affect the fairness of the court process.

Facts

A joint venture, Bilfinger Berger/Fru-Con ("Bilfinger"), was contracted by Metro Vancouver to construct two underground tunnels, each over seven kilometres in length, as part of a new water filtration project to provide municipal drinking water to Vancouver and surrounding communities. The project was known as the Seymour-Capilano Twin Tunnels Project.

Once tunneling began, a dispute arose amongst the parties regarding the safety of the design because of unexpected rock conditions. The work stopped, Metro Vancouver cancelled Bilfinger's contract, and sued Bilfinger for breach of contract. Bilfinger, in turn, started its own action against Metro Vancouver and Hatch Mott MacDonald Ltd. ("HMM"), the...