Frank Mizzi v. York Fire & Casualty Insurance Company, 2001 ONFSCDRS 160

FINANCIAL SERVICES COMMISSION OF ONTARIO

Neutral Citation: 2001 ONFSCDRS 160 FSCO A01-000176

BETWEEN:

FRANK MIZZI Applicant

and

YORK FIRE & CASUALTY INSURANCE COMPANY Insurer

DECISION ON PRODUCTION ISSUES

Before: Anne Sone Heard: October 15, 2001, by teleconference call. Final written submissions were received on October 26, 2001. Appearances: Robert W. Garcia for Mr. Mizzi Casey Van Moorlehem for York Fire & Casualty Insurance Company

Issues:

The Applicant, Frank Mizzi, was injured in a motor vehicle accident on November 6, 1998. He applied for and received statutory accident benefits from York Fire & Casualty Insurance Company ("York"), payable under the Schedule.¹ York terminated weekly income replacement benefits on June 21, 1999. The parties were unable to resolve their disputes through mediation, and Mr. Mizzi applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. Mr. Mizzi applied for interim benefits which were denied in a decision issued July 17, 2001 by Arbitrator Miller.

At the resumption of the pre-hearing discussion of this case held on October 15, 2001, Mr. Mizzi objected to York's production request for insurer's medical examinations pertaining to two previous accidents, which occurred on April 24, 1994 and on June 25, 1995. It was not clear whether these were independent medical examinations pursuant to a claim for statutory accident benefits or defence medical examinations.

Mr. Mizzi is also asking for a ruling on correspondence between the independent adjuster and York from November 17, 1998, onward, over which York is claiming privilege. He is not seeking production of letters dealing with reserves. He is only interested in what Mr. Mizzi told the independent adjuster. The application for mediation was dated September 7, 2000.

The issues are:

1. Is Mr. Mizzi required to produce insurer's medical examinations pertaining to two previous accidents, which occurred on April 24, 1994 and on June 25, 1995?

2. Is York required to produce correspondence between the adjuster and York from November 17, 1998 onward, over which it is claiming privilege?

Result:

1. Mr. Mizzi is required to produce insurer's medical examinations pertaining to two previous accidents, which occurred on April 24, 1994 and on June 25, 1995.

2. York is required to produce the correspondence between the independent adjuster and York from November 17, 1998 to September 7, 2000, which does not refer to reserves, and which is not solely adjusters' or related parties' accounts. This correspondence is dated February 25, March 3 and 28, April 5 and 20, May 4 and 9, June 12 and 27, 2000.

ANALYSIS:

Production of Insurer's Medical Examinations:

Prior to the accident on November 6, 1998, which is the subject of the upcoming arbitration, Mr. Mizzi was involved in motor vehicle accidents on April 24, 1994 and June 25, 1995. York seeks production of insurer's medical examinations pertaining to these accidents. Mr. Mizzi is objecting to their production. He has agreed to sign authorizations for all other documents arising out of these motor vehicle accidents.

York has raised the issue of causation with respect to Mr. Mizzi's claim for income replacement benefits. It states that there is no reference to tears in Mr. Mizzi's left rotator cuff on the initial Disability Certificate filed after the November 6, 1998 accident. York argues that it needs to see the insurer's medical examinations from the prior accidents to determine whether Mr. Mizzi's current difficulties are caused by those accidents.

Mr. Mizzi relies on the case of Reimer v. Christmas² to argue that the insurer's medical examinations are not producible. He also claims privilege over them.

In Reimer³ the defendant in a tort action sought the production of a report of Dr. Clifford who assessed the injured plaintiff, at the request of the plaintiff's accident benefits insurer. It is not clear whether this report arose out of a proceeding or out of the normal adjusting of the file. The plaintiff objected to producing this report. In resisting production, the plaintiff asserted (among other things) that the deemed undertaking rule now reflected in Rule 30.1.01(3) of the Rules of Civil Procedure prevented the production of Dr. Clifford's report.

Briefly put, the deemed undertaking rule states that the result of discovery in one action cannot be used by any party to that action in a subsequent action for any purposes other than those of the proceeding in which the evidence was obtained. I note that Reimer⁴ did not entail a subsequent action. In addition, there are certain limited exceptions to the implied undertaking rule, such as consent of the disclosing party, or a court order that the rule does not apply "if satisfied that the interests of justice outweigh any prejudice that would result to a party who disclosed evidence..."⁵

In Reimer⁶ Leitch, J. discusses the policy principles which are the foundation of the implied undertaking rule. He refers to the Ontario Court of Appeal decision in Goodman v. Rossi⁷, where Morden, A.C.J.O. recommended incorporating the law on implied undertakings into the Rules of Civil Procedure. The Appellate Chief Justice's rationale for the law was 1) the protection of privacy and 2) the promotion of full discovery.

Leitch, J. held that the policy principles which are the foundation for the implied undertaking rule ought to extend to the circumstances in Reimer⁸. In protecting the privacy interests of the plaintiff, evidence obtained in relation to her accident benefit claim need not be produced to the defendant in the tort action, arising out of the same motor vehicle accident. He found that the defendant was not in any way prejudiced from an inability to obtain Dr. Clifford's report. The defendant could and had availed itself of the right to have the plaintiff assessed independently by medical examiners had chosen.

It is unclear whether Leitch, J. has extended the scope of the implied undertaking rule to insurers' medical examinations, since it is unclear as to whether he is dealing with those or defence medicals. The implied undertaking rule refers to "the proceeding in which the evidence was obtained.." In my view, this requires a "proceeding."

Black's Law Dictionnary, 6th edition defines a "proceeding" as follows:

"Proceeding" means any action, hearing, investigation, inquest, or inquiry (whether conducted by a court, administrative agency, hearing officer, arbitrator, legislative body, or any other person authorized by law) in which, pursuant to law, testimony can be compelled to be given.

If, in Mr. Mizzi's case, there was no proceeding with respect to the prior accidents, but merely examinations conducted to adjust the claim, the implied undertaking rule would not apply.

In case the prior accidents were the subject of a proceeding, I will address the issue of what happens should the implied undertaking rule apply.

The relevant provisions of Rule 30.1 state:

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)

(b) information obtained from evidence referred to in clause (a).

(3) Deemed undertaking - 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.

(4) Exceptions - Subrule (3) does not prohibit a use to which the person who disclosed the evidence consents.

(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.

(8) Order that undertaking does not apply - If satisfied that the interests of justice outweigh 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.

A number of cases at the Commission have dealt with whether arbitrators have the discretion provided by Rule 30.1.01(8) to order that the deemed undertaking rule does not apply. In Reid and Royal & SunAlliance Insurance Company of Canada⁹, Royal wished to use defence medical reports generated in court actions. Ms. Reid objected and cited the deemed undertaking rule. The arbitrator, in finding that the deemed undertaking rule did not apply to these medical reports, stated at page 5:

Director's Delegate Makepeace recently agreed in Haripersaud and State Farm Mutual Automobile Insurance Company (FSCO P98-00018, January 6, 2000) with Director's Delegate Naylor's decision in Branchaud and Co-operators General Insurance Company (OIC P96-00048, May 2, 1997) that arbitrators "have the powers that are conferred on them either expressly by the legislation or by necessary implication." If the deemed undertaking rule is part of the general law of Ontario, then implicitly, the adjudicative discretion inherent in the common law rule is also accorded to this Commission.

Ms. Reid did not cite any specific prejudice to her resulting from the collateral use of the above-noted reports beyond the important primary rationale for the implied undertaking rule, being protection of privacy. On the other hand, I find these reports to be prima facie relevant, in that they address the injuries which Ms. Reid states that she sustained in the car accident which is the subject of this arbitration. They further speak, either directly or indirectly, to the need for treatment. More importantly, I note that there is no provision under this Schedule for insurers' or Designated Assessment Centre examinations for the medical issues in dispute, and hence, without the above-noted reports, Royal would be significantly prejudiced in responding to this application for arbitration.

In Hornick and State Farm Automobile Mutual Insurance Company,¹⁰ State Farm sought production of a transcript of Mr. Hornick's examination for discovery in a court action commenced as a result of the same accident which gave rise to the arbitration proceeding.

In contrast to the previous cases, the arbitrator found:

...it is a court and not this tribunal, which must determine whether, in particular cases, relief against the implied undertaking rule is in the interests of justice or whether it undermines full and frank disclosure at discovery.

He also found that subsection 15(1) of the Statutory Powers Procedure Act, ("SPPA")¹¹ which relates to a tribunal's ability to admit relevant evidence does not override the implied undertaking rule.

In Chin and Coseco Insurance Company,¹² Mr. Chin objected to producing the transcripts of an examination for discovery in a related tort action. Coseco argued, in line with the Reidd¹³ and Haripersaud and State Farm Mutual Automobile Insurance Company¹⁴ decisions, that arbitrators have the discretion provided by Rule 30.101.01(8) to order that the implied undertaking rule does not apply if the interests of justice outweigh any prejudice to a party if the evidence were produced. Coseco referred to the powers granted arbitrators by the Insurance Act¹⁵ under section 20 to decide all issues of fact and law, and under section 22, to, among other things, compel witnesses to produce documents, records and things. The relevant portion of section 20 states:

20.—(2) A person referred to in subsection (1) has exclusive jurisdiction to exercise the powers conferred upon him or her under this Act and to determine all questions of fact or law that arise in any proceeding before him or her and, unless an appeal is provided under this Act, his or her decision thereon is final and conclusive for all purposes.

The relevant portion of section 22 states:

22.—(1) For the purpose of exercising the powers and performing their duties under this Act the Director and every arbitrator has the same power to summon and enforce the attendance of witnesses and compel them to give evidence on oath or otherwise, and to produce documents, records and things, as is vested in the Ontario Court (General Division) for the trial of civil actions.

Coseco also referred to the powers granted to arbitrators under section 15 of the SPPA to admit relevant evidence.

In ordering production of the transcripts from the examination for discovery in the tort action related to the arbitration hearing, Arbitrator Allen stated as follows:

With respect, I disagree with the ruling in the Hornick arbitration decision. It did not consider the powers afforded arbitrators under the Act. I find that section 22 of the Act expressly v ests in arbitrators the same powers as the Ontario Court, General Division, to among other things, order the production of documents. Section 20 authorizes arbitrators to decide any question of fact or law brought before them. I find that by extension, arbitrators have the authority to grant the relief provided by the Rule 30.1.01(8) exception to the implied undertaking rule. In exercising this power, like the courts, arbitrators should be guided by considerations of relevance, the balance between competing access and privacy rights, fairness and any possible prejudice to a party.

I concur with the analysis of Arbitrator Allen that section 22 of the Act grants arbitrators the same powers to order production of documents as is vested in the Ontario Court for the trial of civil actions. Arbitrator Wacyk also concurred with this analysis in Sandhu and CAA Insurance Company (Ontario).¹⁶ I also concur with Arbitrator Wacyk's statement that:

This parallel authority avoids the inefficiency and delay which would otherwise result from having to deal with a single matter in two different forums.¹⁷

Given the factual circumstances, I find that the insurer's medical examinations pertaining to Mr. Mizzi's two prior motor vehicle accidents are relevant to the issues in dispute in the arbitration. Mr. Mizzi's pre-accident condition is relevant to the issue of causation.

The next question, pursuant to section 30.1.01(8) of the implied undertaking rule is whether the interests of justice outweigh any prejudice that would result to a party who disclosed evidence.

According to Goodman,¹⁸ the applicable test is:

...one tolerating some injustice to the discovered party if it is outweighed by a greater injustice to the discovering party if he or she could not make use of the discovered documents.

Mr. Mizzi did not provide any evidence of injustice or prejudice that would result to him if the insurer's medical examinations from the prior accidents were produced. However, the mere fact that he is resisting production of these documents suggests that their production would be prejudicial to his case. Their production would also infringe on his privacy. He did refer to privilege. Since these are insurer's medical examinations, I do not see how any privilege arises in them to Mr. Mizzi.

On the other hand, York submitted that preventing disclosure of any insurer's medical examinations generated in the two previous accident benefit claims would prejudice its ability to accurately define and determine the pre-accident medical condition of Mr. Mizzi. In addition, York has raised a significant issue regarding whether or not Mr. Mizzi's left shoulder rotator cuff injury has anything to do with the accident that is the subject of the upcoming arbitration hearing.

I distinguish this case from Reimer¹⁹ on the basis that in that case, it was open to the defendant to conduct its own examinations to determine the condition of the plaintiff, because in that case the production request arose out of the same motor vehicle accident.

I also distinguish this case from Sandhu,²⁰ which dealt with the production of the related tort file. In that case, CAA did not allege any special circumstances to support its request. In the arbitrator's view, that was not sufficient to demonstrate that the interests of justice would best be served by granting relief from the implied undertaking rule, so as to overcome the presumption against disclosure.

By contrast, in this case, production of the insurers' medical examinations may shed light on Mr. Mizzi's pre-accident condition that might not be available by other means. In fairness, these insurers' medical examinations should be produced.

In terms of the interests of justice on a more general level, the question is whether ordering production of the insurer's medical examinations in this case would offend the rationales for the implied undertaking rule. The rationales are the protection of privacy, and the promotion of full discovery. This case deals with production of insurer's medical examinations from prior motor vehicle accidents. It is not penalizing Mr. Mizzi for making full discovery in the prior case, since these were not his documents. In terms of privacy, one may expect some loss of privacy in putting forth a claim where there have been prior accidents which raise the issue of causation. Mr. Mizzi did not indicate that this evidence was available by other means.

Accordingly, I am satisfied, that, overall, the interests of justice outweigh any prejudice that would result to Mr. Mizzi if he discloses the insurer's medical examinations.

In addition, as discussed above, the implied undertaking rule may not even apply here, given that there is no indication that there was a prior proceeding.

I therefore order Mr. Mizzi to produce the insurer's medical examinations from the motor vehicle accidents dated April 24, 1994 and June 25, 1995.

Production of Correspondence between the Adjuster and York:

Mr. Mizzi is asking for a ruling on correspondence between the adjuster and York from November 17, 1998 onward, over which York is claiming privilege. Mr. Mizzi is not interested in letters dealing with reserves.

The application for mediation was dated September 7, 2000. As a general rule, litigation privilege in these cases does not attach until after this event occurs.York did not argue that litigation privilege arose on an earlier date. The correspondence I received goes up to August 3, 2000. Accordingly, no ligation privilege attaches to any of it. Mr. Mizzi has indicated that he is not interested in letters dealing with reserves. Several of these letters deal with this issue, and on the basis of Mr. Mizzi's position, I am not ordering production of them.

There are also a number of letters which deal solely with payment of accounts to the adjuster or related service providers. I find that these letters are not relevant to the issues in this case and therefore, do not order that they be produced. \

There are some letters which do not deal with reserves or solely with adjuster's or related parties accounts. Since these may be relevant to the issues in dispute, including Mr. Mizzi's claim for income replacement benefits and a special award, and are not privileged, I order that they be produced. This correspondence is dated February 25, March 3 and 28, April 5 and 20, May 4 and 9, June 12 and 27, 2000.

EXPENSES:

I did not receive any submissions regarding expenses from the parties. I leave the matter of the parties' arbitration expenses to the arbitrator who makes the final decision in this case.

November 9, 2001

Anne Sone Arbitrator

Date

Neutral Citation: 2001 ONFSCDRS 160 FSCO A01-000176

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

FRANK MIZZI Applicant

and

YORK FIRE & CASUALTY INSURANCE COMPANY Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. I order Mr. Mizzi to produce the insurer's medical examinations from the accidents dated April 24, 1994 and June 25, 1995.

2. I order York to produce the correspondence between the adjuster and York from November 17, 1998 to September 7, 2000, which does not refer to reserves, and which is not solely adjusters' or related parties' accounts. This correspondence is dated February 25, March 3 and 28, April 5 and 20, May 4 and 9, June 12 and 27, 2000.

November 9, 2001

Anne Sone Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96 and 303/98.
2. 2Ontario Superior Court of Justice, Court File No: 23898/96 dated February 6, 2001, leave to appeal has been granted.
3. 3Supra, note 2
4. 4Supra, note 2
5. 5Rule 30.1.01 (8)
6. 6Supra, note 2
7. 7(1995), 1995 CanLII 1888 (ON CA), 24 O.R. (3d) 359, 125 D.L.R. (4d) 613, 37 C.P.C. 181 (C.A.)
8. 8Supra, note 2
9. 9(FSCO A99-000959, January 19, 2000); heard on appeal on other issues by FSCO Appeal Order P00-00014, August 1, 2000)
10. 10(FSCO A00-000337, November 30, 2000)
11. 11R.S.O. 1990, c. S.22
12. 12(FSCO A00-001024, April 18, 2001)
13. 13Supra, note 9
14. 14(FSCO P98-00018, January 6, 2000)
15. 15R.S.O. 1990, c. I.8, as amended
16. 16(FSCO A99-001031, October 3, 2001)
17. 17Supra, note 15, p. 8
18. 18Supra, note 5
19. 19Supra, note 2
20. 20Supra, note 15