COURT FILE NO.: 1542
DATE: 20070910
ONTARIO
SUPERIOR COURT OF JUSTICE
(DIVISIONAL COURT)
CUNNINGHAM A.C.J.S.C.
KENT J.
HACKLAND J.
B E T W E E N:
JANET WINIFRED KITCHENHAM
Appellant
Karl Arvai, for the Appellant (Plaintiff)
- and -
AXA INSURANCE CANADA
Respondent
Robert M. Ben, for the Respondent (Defendant)
HEARD: April 16, 2007 (London)
REASONS FOR JUDGMENT
BY THE COURT
Introduction
[1] This appeal concerns the application of Rule 30.1.01, the deemed undertaking rule, to the use which can be made in the present action of a defence medical report concerning the plaintiff and a surveillance video of the plaintiff, both prepared for a prior action. The prior action was a tort claim arising from a motor vehicle accident which occurred in January of 1993. The present action, pursued by the same plaintiff, is a claim against her accident benefits insurer, for benefits resulting from injuries suffered in the same accident.
[2] The motion judge, Heeney J. after a careful analysis, concluded that the medical report and the surveillance video from the prior tort action had to be disclosed by the plaintiff to the defendant in the present action. However, he ruled that the use to which this evidence could be put (if other than impeachment) would be for the trial judge to determine. The appellant appeals from the motion judge’s decision requiring disclosure of the defence medical report and the surveillance video. The respondent cross-appeals the order to the extent that it limits the use of such evidence to impeaching the evidence of a witness, unless leave of the trial judge is obtained.
[3] We are in respectful disagreement with certain of the conclusions of the motion judge and would allow the appeal for the reasons which follow.
The Facts
[4] The motion judge concisely and accurately summarized the facts as follows:
¶ 4 The facts can be quickly summarized. The motor vehicle accident occurred on January 12, 1993. A Statement of Claim in the tort action was issued on January 9, 1995. An IME was conducted at the request of defence counsel in that action, which generated a report by Dr. Clifford, a physiatrist, dated January 26, 1999. Surveillance videotapes were also made of the plaintiff during the course of that action. A settlement was ultimately arrived at in or about the year 2000.
¶ 5 In the meantime, the plaintiff issued a Statement of Claim in the present action against her insurer, the defendant Axa, on October 10, 1996, claiming weekly income benefits and medical and rehabilitation benefits. A Statement of Defence was filed February 13, 1997. The plaintiff's examination for discovery was completed in July, 2003. In the course of that examination, defence counsel demanded undertakings to produce a copy of Dr. Clifford's report, and to provide documentation relating to the settlement of the tort action. An undertaking was also demanded with respect to surveillance, and counsel have agreed to proceed with the present motion on the basis that the undertaking requested a copy of the surveillance video made by the defendant in the tort action and disclosed to the plaintiff. The refusal of the plaintiff to provide any of the requested undertakings has prompted the defendant's motion.
[5] The deemed undertaking rule reads:
30.1.01 (1) This Rule applies to,
(a) evidence obtained under,
(i) Rule 30 (documentary discovery),
(ii) Rule 31 (examination for discovery),
(iii) Rule 32 (inspection of property),
(iv) Rule 33 (medical examination),
(v) Rule 35 (examination for discovery by written questions); and
(b) information obtained from evidence referred to in clause (a).
(2) This Rule does not apply to evidence or information obtained otherwise than under the rules referred to in subrule (1).
Deemed Undertaking
(3) All parties and their counsel are deemed to undertake not to use evidence or information to which this Rule applies for any purposes other than those of the proceeding in which the evidence was obtained.
Exceptions
(4) Subrule (3) does not prohibit a use to which the person who disclosed the evidence consents.
(5) Subrule (3) does not prohibit the use, for any purpose, of,
(a) evidence that is filed with the court;
(b) evidence that is given or referred to during a hearing;
(c) information obtained from evidence referred to in clause (a) or (b).
(6) Subrule (3) does not prohibit the use of evidence obtained in one proceeding, or information obtained from such evidence, to impeach the testimony of a witness in another proceeding.
(7) Subrule (3) does not prohibit the use of evidence or information in accordance with subrule 31.11 (8) (subsequent action).
Order that Undertaking does not Apply
(8) If satisfied that the interest of justice outweighs any prejudice that would result to a party who disclosed evidence, the court may order that subrule (3) does not apply to the evidence or to information obtained from it, and may impose such terms and give such directions as are just.
[6] It will be observed that the medical report in issue was obtained pursuant to Rule 33 in the prior action and the video surveillance was disclosed to the plaintiff in the prior action, apparently pursuant to Rule 30, and therefore the deemed undertaking rule is engaged, see sub-rule 30.1.01(1)(a).
Analysis
[7] By way of background, it has been recognized that the purpose of the deemed undertaking rule as well as its common law predecessor, was to protect the privacy of litigants and thereby promote full disclosure in the original proceeding. The common law rule seeks to balance the public interest in discovering the truth so that justice could be done between the parties, against the public interest in preserving privacy and protecting confidential information. Lord Denning M.R. in Riddick v. Thames Board Mills Ltd., [1977] 3 All ER 677 at p. 687 stated the rationale for the common law rule:
… One the one hand discovery has been had in the first action. It enabled that action to be disposed of. The public interest there has served its purpose. Should it go further so as to enable the memorandum of 16th April 1969 to be used for this libel action? I think not. The memorandum was obtained by compulsion. Compulsion is an invasion of a private right to keep one’s documents to oneself. The public interest in privacy and confidence demands that this compulsion should not be pressed further than the course of justice requires. The courts should, therefore, not allow the other party, or anyone else, to use the documents for an ulterior or alien purpose. Otherwise the courts themselves would be doing injustice.
… In order to encourage openness and fairness, the public interest requires that documents disclosed on discovery are not to be made use of except for the purpose of the action in which they are disclosed. They are not to be made a ground for comments in the newspapers or for bringing a libel action, or for any other alien purpose.
[8] The Ontario Court of Appeal in Goodman v. Rossi (1995), 1995 1888 (ON CA), 24 O.R. (3d) 359 also recognized that the implied undertaking rule was based on a litigant’s general right of privacy with respect to his or her documents as well as the need to promote full and frank discovery. Morden A.C.J.O. stated at p. 367:
… I will deal with the rationale of the principle more fully later in these reasons but mention now, very briefly, that the principle is based on recognition of the general right of privacy which a person has with respect to his or her documents. The discovery process represents an intrusion on this right under the compulsory processes of the court. The necessary corollary is that this intrusion should not be allowed for any purpose other than that of securing justice in the proceeding in which the discovery takes place.
and at page 369:
The rationale for the implied undertaking rule is compendiously stated in Matthews and Malek’s Discovery (1992) at p. 253:
The primary rationale for the imposition of the implied undertaking is the protection of privacy. Discovery is an invasion of the right of the individual to keep his own documents to himself. It is a matter of public interest to safeguard that right. The purpose of the undertaking is to protect, so far as is consistent with the proper conduct of the action, the confidentiality of a party’s documents. It is in general wrong that one who is compelled by law to produce documents for the purpose of particular proceedings should be in peril of having those documents used by the other party for some purpose other than the purpose of the particular legal proceedings and, in particular, that they should be made available to third parties who might use them to the detriment of the party who has produced them on discovery. A further rationale is the promotion of full discovery, as without such an undertaking the fear of collateral use may in some cases operate as a disincentive to proper discovery. The interests of the proper administration of justice require that there should be no disincentive to full and frank discovery.
[9] The Ontario Court of Appeal reaffirmed this rationale in P.(D.) v. Wagg, [2004] 46, C.P.C. (5th) at paragraph 30:
In Goodman v. Rossi (1995), 24 O.R. (3d) (Ont. C.A.), this court held that there is a common law implied undertaking not to use materials disclosed in civil proceedings in any other proceedings. Morden A.C.J.O. at p. 367, explained that the principal rationale for the rule is “recognition of the general right of privacy which a person has with respect to his or her documents”. Since the civil discovery process is “an intrusion on this right under the compulsory processes of the court… this intrusion should not be allowed for any purpose other than that of securing justice in the proceeding in which the discovery takes place’.
[10] The Supreme Court of Canada also addressed the rationale for the implied undertaking rule in the Lac d’Amiante du Québec Ltée, 2001 SCC 51, [2001] 2 S.C.R. 743 at p. 771:
… It appears that the preferred approach is a far-reaching and liberal exploration that allows the parties to obtain as complete a picture of the case as possible. In return for this freedom to investigate, an implied obligation of confidentiality has emerged in the case law, even in cases where the communication is not the subject of a specific privilege... The aim is to avoid a situation where a party is reluctant to disclose information out of fear that it will be used for other purposes. The aim of this procedure is also to preserve the individual's right to privacy…
[11] The motion judge, while recognizing the privacy interests which inform the deemed undertaking rule, also referred to a number of statements in the case law concerning the common law implied undertaking rule which caution against invocation of the rule when the effect would be to exclude otherwise relevant and available evidence on the basis of the purported exercise of a privilege where none exists.
[12] In Tanner et al. v. Clark et al. (2003), 2003 41640 (ON CA), 63 O.R. (3d) 508 (Ont. C.A.) the plaintiffs were injured in motor vehicle accidents and commenced both tort actions for damages in the Courts and administrative proceedings before the Financial Services Commission of Ontario with respect to accident benefits. The plaintiffs were compelled to submit to medical examinations at the behest of their accident benefits insurer. Motions by the defendants in the civil actions for an order for production of the medical reports were dismissed at first instance on the basis of the implied undertaking rule. However the appeals were allowed and the reports ordered produced by the Divisional Court and by the Court of Appeal on the basis that the principle behind the common law rule is directed to protecting against use by the recipient of the information, not to protecting the information from all uses. Carthy J.A. for the Court, stated at paragraph 6:
[6] It is "used by the other party" and "use them to the detriment of the party who has produced them" that are the keynote phrases. Rule 30.1.01(1) speaks in the same voice -- it is "evidence obtained" on discovery that shall not be "used". These verbs describe the acts of receiving and disseminating information; they do not label the evidence as sealed or privileged. The applicants in the AB proceedings submitted to medical examinations knowing that the information they impart will not be used by the two insurance companies except in those proceedings, and will not be communicated to others for their use in other proceedings. That has not happened here. The insurers in the tort proceedings are different companies and the information is sought, not from the insurers in the AB proceedings, but from the source of that information, the respective plaintiffs in the tort actions. Those plaintiffs are not constrained in any way from the use of their medical information for any purpose. What they argue for is not enforcement of an undertaking, but a protective shield against production of very relevant evidence.
[13] In our view, however, the motion judge in the present case correctly emphasized that Tanner v. Clark is readily distinguishable because it dealt with a situation where an administrative proceeding was followed by an action, with the result that Rule 30.1.01 had no application. We further agree with the motion judge that Rule 30.1.01 is not a mere codification of the common law. The most important distinction for the purpose of the present appeal is that sub-rule 30.1.01(3) imposes an undertaking on “all parties and their counsel”, which is an obvious reference to the party disclosing the evidence and the party receiving it, as well as their respective counsel. We agree with the motion judge’s observations at paragraph 27 of his reasons:
¶ 27 In my view, the plain meaning as well as the structure of Rule 30.1.01 supports the interpretation offered by Leitch J. Rather than focusing on the recipient of information, and imposing an implied obligation on that recipient, the rule focuses on the nature of the evidence in question. If the evidence was obtained under one of the five enumerated procedures in sub-rule 1(a), then the use of that evidence is constrained by the rule. These constraints are imposed on all parties and their counsel. Clearly, the drafters of the rule intended that it should apply not only to the parties and counsel in the original proceeding, but also to the parties and counsel where the specified evidence is sought to be introduced. This can be seen by examining sub-rule 30.1.01(6), which creates an exception to the general rule and permits the use of evidence obtained in one proceeding to be used to impeach the testimony of a witness in another proceeding. If the parties and counsel in the subsequent proceeding were not intended to be constrained by the rule, this exception would have been unnecessary.
[14] Because of the clear wording of Rule 30.1.01(3) and in particular to the phrase “(3) All parties and their counsel are deemed to undertake…”, we are unable to accept the submission of the respondent that it is only the recipient of discovery documents or evidence that is constrained from disclosing or using them outside the proceeding and that the discovered party is not constrained by the deemed undertaking rule in any way. In addition to what we regard as the clear wording of the rule, it is obvious that in many instances the discovered party may have a privacy interest worthy of protection under the rule. It is for that reason that sub-rule (8) gives the Court the responsibility of identifying and weighing the privacy interests against the interests in full disclosure. This process will no doubt include a consideration of the policy concerns expressed by Carthy J.A. in Tanner v. Clark as to the need for production of very relevant evidence. Sub-rule 30.1.01(8) provides:
(8) If satisfied that the interest of justice outweighs any prejudice that would result to a party who disclosed evidence, the court may order that subrule (3) does not apply to the evidence or to information obtained from it, and may impose such terms and give such directions as are just.
[15] The point at which we are unable to agree with the motion judge pertains to his conclusion that “this rule constrains the use of evidence, it does not constrain the disclosure of evidence.” He therefore ordered disclosure of the medical report and the surveillance video with the proviso that the use to be made of it would be determined by the trial judge. His reasoning was that such evidence is relevant and not cloaked by any privilege, as pointed out by Carthy J. in Tanner, and that the structure of Rule 30.1.01 implies that disclosure must be made. In particular sub-rule 30.1.01(6) permits the use of such evidence to impeach the testimony of a witness in the present proceeding and in his view, it would be impossible to make use of such evidence for this purpose unless it had been disclosed in the first place.
[16] We would begin by recognizing that the routine disclosure of discovery evidence from a prior proceeding in a subsequent action would totally fail to give effect to the important privacy interests which form the basis of Rule 30.1.01, the deemed undertaking rule, and indeed its common law counterpart. There does not appear to be any authority for the distinction between disclosure and use which the motion judge suggests. The prohibited “use” in the Rule is a term sufficiently broad to include disclosure. Indeed the case law, both at common law and under the deemed undertaking rule seems to protect the privacy of litigants by protecting the confidentiality of documents and information produced on discovery against any further disclosure without leave of the Court.
[17] This Court in London Life Insurance Co. v. Konney (1988), 1998 18849 (ON SC), 41 O.R. (3d) 706 (Div. Ct.) prohibited collateral disclosure as well as collateral use of medical reports generated in a separate tort action, for the purpose of denying further disability benefits to the plaintiff. The Court stated at pp. 709-710:
The making of the order would enable the plaintiff to circumvent the protection given to the privacy interests of litigants by rule 30.1.01(3). These documents originated in the tort actions and their use by any party is prima facie confined to those actions. Their compulsory production in the bad faith action is a legitimate and principled extension of the invasion of the privacy interests of Mr. Konney in the tort actions because of the intimate and essential connection between the tort actions and the subsequent action founded on the alleged bad faith of Mr. Konney and his solicitor in settling the tort actions. These medical reports were the foundation for the settlement being attacked and are inescapably central to the bad faith action. They are admitted, for the most part, to be producible in that action. But their use in an action to terminate the disability benefits offends the policy principles upon which rule 30.1.01 depends: the protection of the privacy interest of litigants in their documents and information except within the confines of the proceeding in which the evidence was obtained. In particular it offends the principle that documents compulsorily produced in a litigation should not be allowed to be used to found a further action against the party bound to produce them: Carbone v. De La Rocha (1993), 1993 8568 (ON SC), 13 O.R. (3d) 355 (Gen. Div.); Goodman v. Rossi (1995), 1995 1888 (ON CA), 24 O.R. (3d) 359 at p. 378, 125 D.L.R. (4th) 613 (C.A.). That is the very thing that London Life wishes to do here.
It was submitted that if we allow the appeal we will be countenancing the concealment of relevant evidence. That may be so, but the principle is established that the privacy interests of litigants are to be protected and it is inherent in that principle that sometimes relevant evidence will not be available. London Life can bring their disability policy action and rely upon their contractual rights under that policy, whatever they may be, to obtain medical information from and about their insured. It is not unfair to London Life to leave it to the rights it contracted for in respect of re-assessing a claimant's right to payments.
[18] The motion judge was concerned that under sub-rule 30.1.01(6) one could not use evidence from another proceeding to impeach the testimony of a witness, unless such evidence had been disclosed and therefore, impliedly, the Rule cannot be read to prohibit disclosure, but merely to restrict the use of such evidence once disclosed. We are of the view that sub-rule (6) allowing evidence from another proceeding to be used for impeachment refers to evidence which is lawfully in the hands of the examining party. Sub-rule (6) refers to “evidence obtained in one proceeding …”. We agree with the appellant’s submission that sub-rule (6) does not provide for or require the disclosure of protected evidence for use in impeaching testimony. It merely provides for the limited use of such evidence, when it is lawfully available.
[19] We are also of the view that any application under sub-rule (8) may be made to a motions court judge. In the present situation, the motions court judge directed that the application must be made to the trial judge. As noted, this is the sub-rule which permits the Court to provide relief from the deemed undertaking if the interest of justice outweighs any prejudice to a party who has disclosed evidence in another proceeding. While a trial judge may indeed grant relief under this sub-rule, it will normally be preferable for such relief to be sought on a pre-trial motion so that the requesting party can know what use is to be permitted of the evidence in question and can prepare their case accordingly. For example, can this evidence form the basis for further discovery or can the medical report or the surveillance video be provided to the opposite party’s own medical experts for their review? It will normally be preferable to resolve these issues by way of pre-trial motion.
[20] In the present case, production of the medical report and of the surveillance video, (which are both documents as defined in Rule 30.01), was refused by the appellant on discovery. The respondent as the requesting party should therefore have requested relief from the motion judge under sub-rule (8). After hearing argument pertaining to the interest of justice in the disclosure of relevant evidence and the particular privacy interests involved in the evidence in question, the motion judge would then consider whether the interest of justice outweighs any prejudice that would result to a party who disclosed evidence and if satisfied that the interest of justice requires the use of some or all of such evidence, may impose appropriate terms or directions.
[21] The question arises as to whether this Court should entertain the respondent’s request under sub-rule (8) to exercise the discretion given by the provision to relieve against the undertaking in sub-rule (3) so as to make the defence medical report and surveillance video from the tort proceeding available for use in the present accident benefits claim. This issue was not dealt with by the motion judge as he considered that any such decision should be made by the trial judge. The medical report and surveillance video, their contents and the specific circumstances in which they were created are not before this Court with the result that it is difficult to assess the privacy interests which may be engaged or the degree of relevance of this potential evidence to the present proceeding. We would, therefore, direct that the issue of the application of sub-rule (8) be brought before a motions court judge to hear argument from the parties on a full record.
[22] The motion judge was also asked to order production of the documentation surrounding the settlement arrived at by the plaintiff with the defendant in the tort action. He refused to do so on the basis of a lack of relevance. We agree with the motion judge and would dismiss the respondent’s cross-appeal on this point.
[23] In the result, this appeal is allowed, paragraphs 1 and 2 of the motion judge’s order are set aside and the medical report and surveillance video from the tort proceeding are not to be used in the present action except in accordance with a motion judge’s ruling under sub-rule 30.1.01(8). The respondent’s cross-appeal is dismissed.
[24] If the appellant wishes to claim costs of this appeal and the motion before Heeney J., counsel should provide a brief written submission within 14 days of the release of these reasons and the respondent may reply within 14 days from receiving the appellant’s submission.
Cunningham A.C.J.S.C.
Kent J.
Hackland J.
Released: September 10, 2007
COURT FILE NO.: 1542
DATE: 20070910
ONTARIO
SUPERIOR COURT OF JUSTICE
(DIVISIONAL COURT)
B E T W E E N:
JANET WINIFRED KITCHENHAM
Appellant
– and –
AXA INSURANCE CANADA
Respondent
REASONS FOR JUDGMENT
CUNNINGHAM A.C.J.S.C.
KENT J.
HACKLAND J.