COURT FILE NO.: 98-CV-147813CM

DIVISIONAL COURT FILE NO.: 210/01

DATE: 20021018

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BLAIR R.S.J., KRUZICK J. and LINHARES de SOUSA J.

B E T W E E N:

EDWARD DAVIES

Terrence J. Collier, for the Plaintiff (Respondent)

Plaintiff (Respondent)

• and -

AMERICAN HOME ASSURANCE COMPANY

Elliott A. Zeitz, for the Defendant (Appellant)

Defendant (Appellant)

COSTS ENDORSEMENT

Background

1On July 9, 2002, the Court released Reasons in this matter allowing the appeal and,

a) setting aside paragraph 3 of the order of the Motions Judge dated February 27, 2001 (requiring production of Mr. Regan’s opinion letters);

b) setting aside paragraphs 2 and 3 of the order of the Motions Judge dated March 19, 2001 (requiring production of the claims file and all documents relating to the investigation details, as set out therein); and,

c) directing that the defendant insurer deliver a further and better affidavit of documents, in which all relevant documents are properly listed and any claims for privilege, and the grounds therefore, appropriately asserted with requisite particularity.

2The Defendant was also required to deliver proper supplementary affidavits of documents in the course of its continuing obligations for disclosure, raising therein any appropriate claims for privilege as it may be advised to do, and in a proper fashion.

3At the same time, the Court directed that if the parties were unable to agree with respect to costs, they were to submit brief written submissions in that regard. They have not been able to agree, and we have now reviewed the written submissions filed.

4We are all agreed that in the circumstances of this case there should be no order as to costs. This order applies to the costs of the appeal, of the application for leave to appeal before Hill J., and of the motion to quash before Chapnik J. Our brief reasons for arriving at this conclusion follow.

Reasons

5The appeal raised important issues involving solicitor-client privilege and litigation privilege, and the Defendant was substantially successful in having its position upheld on those issues. The appeal was pursued, however, because the Defendant insurer felt that the questions raised needed to be determined for reasons broader than the case at hand. It did not need to be pursued for reasons relating to the actual production ordered by the Motions Judge because the Plaintiff abandoned its request for production of the documents in question following the Defendant’s successful motion for leave to appeal in June 2001.

6Moreover, although the Defendant was substantially successful on the issues raised in the appeal, the end result was that the Court ordered the Defendant to produce a further and better affidavit of documents – which was the alternative relief sought by the Plaintiff when the saga relating to this production issue began in the Fall of 2000. In the portion of our Reasons dealing with litigation privilege, we noted that “there was certainly some justification for the Motion Judge’s concern about the frailties in the evidentiary basis for the litigation privilege claim” (at para. 36). In short, had the Defendant prepared its affidavit of documents with the particularity required by the Rules of Civil Procedure in the first place, it may be that these lengthy production proceedings could have been avoided, or at least narrowed. To put it another way, the Defendant was to a significant extent the author of its own misfortune in the proceedings.

7Proper compliance with the Rules requires a particularized Schedule B to an affidavit of documents and not mere boilerplate entries with respect to claims for solicitor-client privilege and/or litigation privilege. Although there was sufficient evidence before the Court in the combination of Schedule B and the affidavit materials to save the day for the Defendant on the production issue, the Defendant’s affidavit of documents did not truly meet the requirements of the Rules.

8Accordingly, for these reasons, there will be no order as to costs on the appeal or on the motion for leave to appeal or on the motion to quash.

R.A. Blair, R.S.J.

M.T. Linhares de Sousa J.

E.R. Kruzick J.

M.T. Linhares de Sousa J.

M.T. Linhares de Sousa J.