Court File and Parties

Citation: Halpern v. Morris, 2016 ONSC 7855 Divisional Court File No.: 353/16 Date: 2016-12-14

Ontario Superior Court of Justice Divisional Court

Between:

Ludwig Halpern Appellant (Plaintiff)

– and –

Raymond Morris Respondent (Defendant)

Counsel: M. Wine, for the appellant S. Virani, for the respondent

Heard at Toronto: December 6, 2016

Reasons for Judgment

NORDHEIMER J.:

[1] The plaintiff appeals from the order of Deputy Judge Ashby of the Small Claims Court, dated June 23, 2016, in which the Deputy Judge struck out the plaintiff’s claim, pursuant to r. 12.02 of the Small Claims Court Rules, O/Reg. 258/98, on the basis of expert witness immunity.

[2] The appellant and his wife were going through divorce proceedings. One of the issues to be resolved was custody of, and access to, the couple’s minor daughter. The appellant and his wife retained the services of the respondent, a psychologist, to carry out an assessment, and provide a report, pursuant to the provisions of s. 30 of the Children’s Law Reform Act, R.S.O. 1990, c. C.12. This agreement was incorporated into a consent order made by Czutrin J. dated October 30, 2012. The consent order also provided, among other things, that the appellant would pay for the costs of the assessment.

[3] The respondent issued his report on December 12th, 2013 (the “Report”). The respondent was never called as a witness as the appellant and his wife settled the divorce proceedings.

[4] The appellant was very displeased with the Report. He says that it contained a great number of “typos, errors and omissions”. The appellant says that the cumulative effect of these errors led him to doubt the reliability of the respondent’s conclusions. In addition, the appellant was upset that the Report also failed to deal with allegations of physical abuse to the child, allegedly at the hands of the appellant’s wife.

[5] On December 11, 2015, the appellant commenced this action in the Small Claims Court seeking return of the amount of $21,900 that the appellant had paid to the respondent for the Report.

[6] The respondent brought a motion under r. 12.02 of the Small Claims Court Rules to dismiss the appellant’s claim, arguing the Report was protected from legal action pursuant to the common law immunity afforded to expert witnesses in legal proceedings.

[7] By order dated June 23, 2016, the Deputy Judge allowed the motion, struck out the claim and dismissed the action. In reaching that conclusion, the Deputy Judge said, in his reasons at para. 9:

I have reviewed all the material placed before me. My difficulty with the plaintiff’s position lies with the fundamental submission that Dr. Morris was the plaintiff’s expert. This is clearly not the case. Dr. Morris was appointed pursuant to a court order. The retainer agreement was signed by all parties. Who paid for the services of Dr. Morris is irrelevant in my opinion.

The Deputy Judge then dismissed the claim based on expert witness immunity.

[8] The first problem that arises is that the Deputy Judge both raised the issue of the respondent being a court appointed expert, and then resolved it, all without hearing any submissions on the issue from the parties. The parties had proceeded before the Deputy Judge on the basis that the respondent had been jointly retained by the parties, pursuant to the retainer agreement, and had been paid by the appellant. No one addressed whether the respondent was, or was not, correctly characterized as a court appointed expert.

[9] To the degree that this raised a new theory that was determinative of the motion, the Deputy Judge ought not to have reached a conclusion on it without hearing from the parties. The summary nature of the proceedings before the Small Claims Court does not change that basic requirement. As Doherty J.A. said in Rodaro v. Royal Bank of Canada (2002), 2002 41834 (ON CA), 59 O.R. (3d) 74 (C.A.) at para. 62:

A theory of liability that emerges for the first time in the reasons for judgment is never tested in the crucible of the adversarial process.

[10] That error would not be sufficient reason to return the matter to the Small Claims Court, however. I say that because the fact that the respondent was appointed pursuant to a court order does not, in my view, change the conclusion as to whether the expert witness immunity principle is dispositive of the issue raised by this claim.

[11] The expert witness immunity principle is a long standing one. Its history is described in Jones v. Kaney, [2011] UKSC 13 where Lord Phillips said, at para. 11:

The immunity of expert witnesses, as propounded by the Court of Appeal in Stanton v. Callaghan, has a long history. This dates back over 400 years [citation omitted].

Lord Phillips goes on to detail how the immunity expanded from an absolute privilege against a claim for defamation, to immunity from claims for other forms of action in tort. Lord Phillips explains that the immunity arose to protect witnesses of all types from “unjustified and vexatious claims by disgruntled litigants”.

[12] It is of some interest to know that the ultimate conclusion, reached by the Supreme Court in Jones v. Kaney, was that the immunity, that expert witnesses enjoyed relating to their participation in legal proceedings, should be abolished, but for the absolute privilege against claims for defamation, which remains. In reaching that conclusion, the Supreme Court considered the two rationales advanced for the immunity. One was that, without immunity, expert witnesses would be reluctant to provide their services. The other was that, without immunity, expert witnesses might be reluctant to be forthright in their opinions, and change those opinions when they should and, thus, the expert witness’ overriding duty to the court might be compromised.

[13] The Supreme Court rejected both of these rationales for maintaining the immunity principle. They found that there was no evidence that experts would be reluctant to act as such without immunity. They pointed out that experts engage in many different roles where they face the possibility of being sued, outside of being an expert in litigation, and they are not dissuaded from doing so. The Supreme Court also found that there was no basis to believe that experts would compromise their integrity or their duty to the court, solely to avoid the prospect of being sued. In both respects, the Supreme Court noted that experts have access to professional insurance against any such claims.

[14] Of particular importance to the issue before me is that, in the course of their reasons, the Supreme Court addressed the obligations that an expert has to the person who retains them, and the right that that person has to hold an expert to account, if they breach their obligations. For example, Lord Brown, in his concurring reasons, said, at para. 67:

In stark contrast, not only do expert witnesses clearly owe the party retaining them a contractual duty to exercise reasonable skill and care but, I am persuaded, the gains to be derived from denying them immunity from suit for breach of that duty substantially exceed whatever loss might be thought likely to result from this.

[15] The result in the United Kingdom does not, of course, dictate the result here. If the immunity for expert witnesses is to be abolished in this country, it will have to be done at a different level.

[16] That does not mean, however, that the law in Canada is clear on the subject. In fact, there is confusion over whether the immunity accorded to experts extends only to adverse experts, that is, experts retained by the opposite party, or also extends to a party’s own expert. Even if the latter is the case, it is also unclear the extent of the immunity. Does the immunity extend to all aspects of the expert’s work, or is it only with respect to what the expert says in court, and any reports prepared for that purpose? A brief review of some of the existing authorities is required.

[17] In Fabian v. Margulies (1985), 1985 2063 (ON CA), 53 O.R. (2d) 380 (C.A.), the court dismissed an appeal from an order made by Labrosse J. that struck out a claim advanced as a result of a medical-legal psychiatric assessment that had been conducted by the defendant of the plaintiff. The defendant had been retained by the other side in a prior action. Labrosse J. concluded that the immunity, that the expert enjoyed as a witness, extended to the report that the expert had prepared and delivered. The Court of Appeal agreed with that conclusion and said, at p. :

However, in our opinion the reasons given by Labrosse J. correctly set forth the law, namely, that the absolute privilege accorded to the evidence given by the respondent in court is extended to the report prepared by the respondent which formed the basis of his evidence.

[18] In Carnahan v. Coates (1990), 1990 2299 (BC SC), 71 D.L.R. (4th) 464 (B.C.S.C.), a case similar to the one here, Huddart J. concluded that the expert psychologist enjoyed immunity from suit. However, in that case, the expert psychologist had been retained by the wife, but was being sued by the husband. Although it is distinguishable on that basis, the language used in the decision might suggest that a wider application was intended. In particular, Huddart J. said, at p. :

From my review I have concluded that the protection of the integrity of the judicial process requires at least that an expert witness be immune from suit by any person with whom his only relationship derives from the judicial proceeding.

[19] In Elliott v. Insurance Crime Prevention Bureau, 2005 NSCA 115, [2005] N.S.J. No. 323 (C.A.), Cromwell J.A. made reference to this issue. He expressed the view that the decision in Carnahan had been misread to some extent. As to whether the immunity extended to a party’s own expert, Cromwell J.A. found the issue to be an open one, and one that did not fall to be decided in the case that was before him. He said, at para. 142:

For these reasons, I do not accept that the fact that the parties’ relationship derives only from the proceedings is “the key” to whether witness immunity applies to out-of-court communications by investigators. Like Carnahan, no issue arises in this case about whether witness immunity applies to claims against a party’s own expert witness.

[20] This issue was directly addressed in Robinson v. Ottawa (City), [2009] O.J. No. 262 (S.C.J.). In that case, the court had to decide whether the City of Ottawa could sue its own expert witness for alleged negligence in the preparation of an expert witness report. The expert brought a motion to dismiss the claim on the basis that his report was protected by expert witness immunity. The court dismissed the motion on the basis that the issue was novel and ought to be decided at a trial. In so concluding, R. Smith J. said, at para. 53:

There are no decisions of the Court of Appeal for Ontario, or any other Canadian court which has decided the issue of whether witness immunity should be extended to prevent a party from suing his or her own expert witness in negligence or for breach of contract, based on the opinion evidence given in a Court proceeding. Given the absence of any Canadian authority directly on point, I conclude that the law is unsettled on this issue.

[21] Next I will mention Van de Vrande v. Butkowsky (2010), 2010 ONCA 230, 99 O.R. (3d) 641 (C.A.), a decision that also arose out of an appeal from the Small Claims Court and one that the Deputy Judge in this case placed express reliance on. The case also involved a claim of the type here, that is, a claim by one parent arising out of an assessment report under s. 30 of the Children’s Law Reform Act. While the Court of Appeal’s decision deals principally with the proper interpretation of, or standard to be applied to, motions brought under r. 12.02 of the Small Claims Court Rules, the Court of Appeal also commented on the expert witness immunity issue.

[22] The Deputy Judge in Van de Vrande concluded that the expert was immune from suit because, in preparing his report, he was acting as an expert witness. She also found that the applicable limitation period for the claim had expired. On both grounds, she dismissed the action. Those conclusions were upheld on appeal.

[23] Unfortunately, there is not a sufficient delineation of the facts in that case to determine the precise basis of the claim. It is clear that both parents jointly retained the expert, but it is unclear whether one, or the other, or both, paid the expert. It is also not clear if, as in this case, the parents agreed to the assessment, and then sought a consent order to implement it, or whether the court ordered the assessment, and then the parents agreed on the expert.

[24] In any event, the Deputy Judge in that case referred to only two authorities on the issue. One is Fabian that I referred to above. That case did not involve an action against a party’s own expert. The other is Boychyn v. Abbey, [2001] O.J. No. 4503 (S.C.J.). That case did involve a claim against a party’s own expert and, on a motion for summary judgment, the court concluded that the expert was immune from suit. However, in reaching that conclusion, the motions judge again refers only to Fabian and to Carnahan, neither of which involved claims against a party’s own expert. The basis upon which the motions judge in Boychyn extended the immunity to a party’s own expert is not, therefore, clear.

[25] The question that is raised by this case, that is, the legal question whether an expert is immune from suit at the instance of his/her client is not one that was directly addressed by the Court of Appeal in Van de Vrande. Rather, the Court of Appeal determined that the Deputy Judge was correct in concluding, on the facts of that case, that the plaintiff’s claim could not succeed. The Court of Appeal also upheld the finding that the limitation period had expired. The issue whether the immunity applied appears to have been assumed. It was certainly not decided. Given the complexity of the issue, and the lack of any clear authority, I am satisfied that the Court of Appeal would not have dealt with the issue in such a summary fashion.

[26] I will mention two other authorities. One is Sheehan v. Snell, [2016] O.J. No. 5301 (S.C.J.). In that case, the plaintiff sued the expert retained by his ex-wife in a family law proceeding. The expert moved for summary judgment dismissing the claim. Matheson J. granted the motion and dismissed the action relying on expert witness immunity. In the course of her reasons on the nature of the immunity, she said, at para. 45:

The protection is absolute.

[27] I make two observations regarding that statement. First, if it is restricted to the circumstance that was before her, that is, a claim by a party against an opposing party’s expert, it may be an accurate statement of the law. If, on the other hand, Matheson J. meant by that statement that expert witness immunity applies to all aspects of the dealings between an expert and her/his client, then, respectfully, I do not agree. In my view, none of the authorities would sustain such a conclusion. Indeed, some express the contrary. One of those is the next, and final, case to which I will refer.

[28] That final decision is one that the parties did not refer me to. It is Paul v. Sasso, 2016 ONSC 7488. In that case, the plaintiffs attempted to sue their own experts, who had provided expert evidence on the valuation of a business in another proceeding. The experts’ evidence had been negatively commented on by the trial judge in that proceeding. The experts moved for summary judgment to dismiss the claim, on the basis that they enjoyed expert witness immunity. They were successful. In the course of his reasons, Dunphy J. said, at para. 17:

I can see no principled reason why the privilege should be confined to adverse witnesses. The policy of the common law to ensure that all witnesses are able to give their evidence free of fear of retaliatory law suits is not diminished when considered from the perspective of a party’s own expert witness.

[29] Notwithstanding that conclusion, however, Dunphy J. went on to draw a distinction between a claim for damages against a party’s own expert, arising from their role as an expert, and a claim for breach of contract regarding the expert’s fees. He said, at para. 19:

This finding does not mean that the question of whether Mr. Lansink’s alleged breach of contract and of duty to be fully independent is not justiciable. As shall be seen below, I have concluded that the alleged breach of contract and duty may well sustain a defence to the counterclaim in this case. It does not follow that Mr. Lansink’s immunity from civil suit confers upon him a question-free right to be paid for his services in all circumstances.

[30] Unlike the case here, where the expert has been paid in full, in Paul the experts were still owed monies and had counterclaimed for their recovery. They sought summary judgment to recover those fees. That part of the motion was dismissed by Dunphy J. who said, at para. 4:

None of the public policy constraints that have led to the immunity of witnesses in a proceeding applies to permit those witnesses to enforce their own contractual claims for payment despite claimed breaches of duty. The public policy in favour of immunity is sufficiently vindicated by recognizing the inability to pursue witnesses for consequential damages and need not be extended to prohibit a defendant from pleading services were negligently rendered in response to a claim brought for payment of services by a witness.

[31] It follows that, if expert witness immunity does not preclude a claim of breach of contract or negligence in defence of a claim for the expert’s unpaid fees, it also ought not to preclude a claim for recovery of those fees, if paid, on the same basis.

[32] Based on the current state of the authorities in this country, I am prepared to accept that the weight of authority favours the conclusion that an expert witness enjoys immunity arising from his role as an expert witness, whether it is at the suit of the opposing party, or at the suit of his own client. That said, the extent of that immunity is far from clear. As Dunphy J. points out in Paul, it is one thing to hold that an expert witness cannot be sued for damages arising from her/his evidence and/or report. It is a different matter to conclude that an expert witness cannot be held to account for the basic performance of her/his contractual duties.

[33] If the conclusion, reached by the Deputy Judge in this case, is correct, its logical extension would be that an expert could not be sued by her/his client, even if the expert manifestly failed to properly perform their duties as an expert. Suppose, for example, an expert ignored a basic principle applicable to their expertise and thus rendered a report, and provided evidence, that was useless to the parties and to the court. Should the person who paid for that work be denied the right to recover the fees? Similarly, suppose it could be demonstrated that the expert fraudulently inflated the hours that they spent, and consequently their fees, for the work done. Should the person who paid for that work be denied the right to recover the fess, or at least the overpayment? It does not seem to me that any of the justifications offered in support of expert witness immunity would justify such a result. As Lord Kerr said, in his concurring reasons, in Jones v. Kaney, at para. 88:

It has not been disputed that an expert witness owes a duty to the client by whom he has been retained. Breach of that duty should, in the normal course, give rise to a remedy.

[34] It may well be that there will be few cases in which a client can mount a valid claim of breach of contract, or in negligence, against her/his expert of the type to which I have made reference, but the difficulty in doing so ought not to equate to a prohibition on the claim being advanced. In addition, the lack of clarity in the law surrounding this subject is not a matter that ought to be determined summarily, even in the Small Claims Court. On that latter point, some of the cases to which I have made reference above were decided, not on a motion to strike the claim as disclosing no reasonable cause of action, but on a motion for summary judgment. The test differs significantly between the two. The Small Claims Court, of course, does not have a summary judgment procedure.

[35] Allowing for the drafting deficiencies that are apparent in the claim, and which are to be expected to some degree when dealing with unrepresented litigants (the appellant did not have counsel when he filed his claim), the appellant has advanced a sufficient basis for a claim in breach of contract and/or in negligence, that it ought not to be determined on the technical procedural basis that led the Deputy Judge to dismiss it. There is a long standing principle that claims, that raise matters of law that are not fully settled in the jurisprudence, should not be disposed of at a preliminary stage: Hunt v. Carey Canada Inc., 1990 90 (SCC), [1990] 2 S.C.R. 959. As Blair J. A. said in Aronowicz v. Emtwo Properties Inc. (2010), 2010 ONCA 96, 98 O.R. (3d) 641 (C.A.), at para. 71:

Generally, courts are reluctant to determine unsettled matters of law at a pre-trial stage - including on motions for summary judgment - on the theory that new or important questions of law should not be determined on an incomplete factual record: [citations omitted}

[36] Accordingly, I would allow the appeal, set aside the order of the Deputy Judge, and reinstate the plaintiff’s claim.

[37] The appellant is entitled to his costs of the appeal and of the motion before the Deputy Judge. For the appeal, the appellant sought costs in the amount of approximately $10,500 and the respondent sought costs in the amount of approximately $6,500. The Deputy Judge fixed the costs of the motion before him at just over $3,000. I conclude that the respondent shall pay to the appellant the costs of the appeal, that I fix in the amount of $7,500, inclusive of disbursements and HST, and the costs of the motion before the Deputy Judge, which I fix at $3,000, inclusive of disbursements and HST.

NORDHEIMER J.

Date of Release: December 14, 2016