R. D. v. Wawanesa Insurance, 2019 CanLII 22203

Tribunal File Number: 18-004555/AABS

In the matter of an Application for Dispute Resolution pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

R. D.

Applicant

and

Wawanesa Insurance

Respondent

MOTION DECISION

ADJUDICATOR:

Amanda Fricot

APPEARANCES:

For the Applicant:

Janet Young, Counsel, on behalf of Kristy Kerwin, Counsel

For the Respondent:

Debbie Sawyer, Accident Benefits Adjuster J. Claude Blouin, Counsel

Interpreter:

Carmelina Lazzarino, Italian Interpreter

Case Conference Held on November 8, 2018 and Written Submissions dated November 16 and 30, 2018; December 7, 2018; January 18, 2019; and February 11, 13 and 14, 2019

OVERVIEW

1The applicant was involved in an automobile accident on May 1, 2013, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (the “Schedule”). The applicant submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”) following a denial of certain benefits by the respondent.

2The parties participated in a case conference on November 8, 2018. At the case conference, the applicant requested that the respondent advise her of the existence of any surveillance and provide her with the complete, unredacted tapes and reports of any such surveillance. The respondent agreed to provide this evidence only if it intends to rely on it at the hearing, but otherwise claimed that it was covered by litigation privilege. I heard submissions from both parties and, later, accepted their written submissions on this issue. Having reviewed those written submissions, this is my ruling on the applicant’s request.

ISSUES

3The issues before me that I must decide are:

(i) Is the respondent required to advise the applicant of the existence of surveillance, if any?

(ii) If the answer to (i) is yes, is the respondent required to provide the applicant with complete, unredacted surveillance tapes and records if the respondent does not intend to rely on that evidence at the hearing?

4To determine these issues, I must answer the following questions:

(i) If surveillance evidence exists, is it relevant to the issues in dispute in this application?

(ii) If surveillance evidence is relevant, is the applicant entitled to have the existence of the same disclosed and the surveillance evidence produced, or is some or all of what is sought protected from disclosure by litigation privilege?

RESULT

5Having considered the evidence and the parties’ submissions, my decision and reasons are as follows:

(i) Surveillance that is related to the issues in dispute, if any, is relevant to this application.

(ii) Litigation privilege arose in this case on September 4, 2014 when the applicant filed an application for arbitration to the Financial Services Commission of Ontario (FSCO) claiming accident benefits arising out of the May 1, 2013 accident (“2014 application”), and I find that:

a) the respondent must advise the applicant of the existence of all surveillance, if any, conducted prior to September 4, 2014 and provide the applicant with the date, time, place and reason for the surveillance; and

b) the respondent must provide copies of any surveillance conducted before September 4, 2014 that relates to the issues in dispute. The respondent shall be entitled to redact solicitor-client privileged communications, if any.

(iii) The respondent is not required to advise the applicant of the existence of any surveillance or provide copies of any surveillance evidence that relates to surveillance conducted after litigation privilege arose on September 4, 2014, unless the respondent intends to rely on it at the hearing.

(iv) The respondent shall comply with the Tribunal’s Common Rules of Practice & Procedure¹ (the “Tribunal Rules”) with respect to any surveillance evidence it intends to rely upon at the hearing.

ANALYSIS

If surveillance evidence exists, is it relevant to the issues in dispute in this application?

6The applicant claims that she sustained a catastrophic impairment. The respondent argues that she did not. The applicant submits that surveillance evidence is relevant to a determination of the applicant’s catastrophic status. The applicant relies on the Tribunal’s Unifund decision in support of the position that surveillance evidence is relevant. ² The respondent made no submissions regarding the relevance of surveillance evidence.

7In this case, unlike in the Unifund case, the applicant commenced an earlier application to FSCO arising out of claims related to the same May 1, 2013 accident. The respondent may, therefore, have surveillance evidence that was created in relation to this earlier application. It may be, however, that some or all of this same evidence, assuming it exists, is relevant to the issues in dispute in this application.

8I find that any surveillance evidence that relates to the issues in dispute in this application is relevant to a determination of those issues and may be of assistance to the adjudicator. I agree with the adjudicator in the Unifund case that the fact that the surveillance is not helpful to the respondent’s case does not mean that it is not relevant. Relevance, and not whether the respondent elects to rely on surveillance evidence, is the starting point in determining whether the surveillance evidence sought should be produced.

If surveillance evidence is relevant, is the applicant entitled to have the existence of the same disclosed and the surveillance evidence produced, or is some or all of what is sought protected from disclosure by litigation privilege?

9For the reasons noted below, I find that litigation privilege arose in this case on September 4, 2014 when the 2014 application was filed. I find that the existence of any surveillance conducted after that date is protected by litigation privilege, and that the respondent is not required to produce the same unless the respondent intends to rely upon it at the hearing.

Does the Tribunal have jurisdiction to order the production of surveillance evidence that is subject to litigation privilege?

10The applicant relies on Rules 3.1(b), 9.1 and 9.3(e) of the Tribunal Rules to support the applicant’s position that the Tribunal has the jurisdiction to, and should, order production of all of the surveillance evidence requested, including surveillance evidence the respondent does not intend to rely upon at the hearing.

11The respondent submits, and I agree, that the Tribunal Rules must be interpreted in a manner consistent with the Statutory Powers Procedures Act³ (“SPPA”). Section 5.4(2) of the SPPA clarifies that the SPPA provision authorizing the Tribunal to make disclosure orders⁴ does not authorize the Tribunal to make an order requiring disclosure of privileged information.

12Thus, I find that the Tribunal does not have authority to order production of surveillance evidence that is protected by litigation privilege.

When will litigation privilege arise?

13Litigation privilege is a limited exception to the general principle of full disclosure. The onus is on the respondent to establish that litigation privilege applies and when it arose.

14The Supreme Court of Canada in Blank,⁵ noted that “[l]itigation privilege is based upon the need for a protected area to facilitate investigation and preparation of a case for trial by the adversarial advocate,”⁶ as well as upon the need for parties to be able to prepare for litigation without the fear of premature disclosure.⁷

15A two-part test must be met by a party seeking to establish litigation privilege. This test was applied in the Mamaca decision⁸ discussed below. The test requires that the party claiming privilege show both (1) that there was a reasonable prospect of litigation at the time the surveillance evidence was created, and (2) that the dominant purpose for the creation of the surveillance was to assist in the contemplated litigation.

Does any litigation privilege that may have arisen in the 2014 application continue for the purposes of this application?

16I find that the litigation privilege that arose in the 2014 application continues for the purpose of this application and that litigation privilege attaches to surveillance evidence, if any, created after that date for the following reasons.

17The Court in Blank described the scope of litigation privilege as follows:

34…Once the litigation has ended, the privilege to which it gave rise has lost its specific and concrete purpose — and therefore its justification. But to borrow a phrase, the litigation is not over until it is over: It cannot be said to have “terminated”, in any meaningful sense of that term, where litigants or related parties remain locked in what is essentially the same legal combat. …

36 I therefore agree with the majority in the Federal Court of Appeal and others who share their view that the common law litigation privilege comes to an end, absent closely related proceedings, upon the termination of the litigation that gave rise to the privilege:…

38 As mentioned earlier, however, the privilege may retain its purpose — and, therefore, its effect — where the litigation that gave rise to the privilege has ended, but related litigation remains pending or may reasonably be apprehended…..

39 At a minimum, it seems to me, this enlarged definition of “litigation” includes separate proceedings that involve the same or related parties and arise from the same or a related cause of action (or “juridical source”). Proceedings that raise issues common to the initial action and share its essential purpose would in my view qualify as well.⁹ [emphasis added]

18The respondent relies on Blank and submits that:

“Both the 2014 application to FSCO and the current application stem from the same juridical source – a disagreement between the Applicant and Respondent as to the benefits owed by the Respondent to the Applicant as a result of the Applicant’s 2013 accident. Therefore, the current application for castastrophic impairment benefits has been reasonably foreseeable since at least September 9, 2014. Any surveillance evidence created after that date is protected by litigation privilege.”¹⁰

19The respondent’s position is based on the premise that the possibility, in 2014, that the applicant may, at some future date, apply for a catastrophic impairment determination (“CAT determination”) is sufficient to satisfy the test that there was a reasonable prospect in 2014 of litigation relating to the issues now in dispute. I disagree. The possibility of future disagreements as to other benefits owed to the applicant as a result of the 2013 accident and claims being filed and denied and giving rise to litigation, does not, in and of itself, constitute a reasonable prospect of litigation in 2014 with respect to all such claims. In each case, the nature of the claims advanced in the initial application must be compared to the nature of the claims advanced in any subsequent application to determine whether both relate to the same underlying facts and issues.

20In this case, the non-earner benefit claim (NEB) that was made in the 2014 application shares sufficient commonality with the CAT determination in dispute in this application to support a finding that the litigation privilege that arose in the 2014 application continues for the purpose of this application.

21To establish her 2014 claim for a NEB, the applicant needed to demonstrate that she suffered “a complete inability to carry on a normal life as a result of an accident”. That phrase is defined in the Schedule to mean that she sustained an impairment that “continuously prevents” her from “engaging in substantially all of the activities” she ordinarily engaged in before the accident.”¹¹

22In the current application challenging the CAT determination denial, the applicant alleges that she is catastrophically impaired as a result of the accident, both because she suffers from (1) an impairment or a combination of impairments that results in a 55 per cent or more impairment of the whole person; or (2) an impairment that results in a marked or extreme impairment due to mental or behavioural disorder.¹²

23Both of these determinations – entitlement to an NEB and whether the applicant suffered a catastrophic impairment – examine the same fundamental issue: the applicant’s level of impairment resulting from the accident. Although the specific test that must be satisfied is different for each determination, the underlying factual basis for the determination of both claims is very similar. In this sense, both the 2014 application and the current application are, in my view, closely related proceedings that raise sufficiently common issues to satisfy the test for continuing litigation privilege set out by the Supreme Court of Canada in Blank.

24The application for a CAT determination was filed on January 26, 2017 and was denied on July 20, 2017. The 2014 application was settled on December 11, 2017. As the applicant conceded in her Supplementary Submissions,¹³ surveillance conducted after July 20, 2017, the date of the denial of the CAT determination, would have been created for the dominant purpose of litigation and would have been privileged. Therefore, prior to the litigation privilege coming to an end at the conclusion of the 2014 application, the current application, which I find to be a closely related proceeding, was already contemplated.

25In her Supplementary Submissions,¹⁴ the applicant relies upon the decision in Chrusz¹⁵ in support of her position that, after the 2014 application settled, the “parties were essentially returned to their original positions as insurer and insured” and that at “that point, the previous litigation privilege over the surveillance came to an end”. The facts in Chrusz are distinguishable. In that case, litigation privilege was found to have come to an end when the factual basis for the claim that gave rise to litigation privilege, namely a belief that the insured had been involved in in arson, came to an end. In this case, as noted above, there are common factual issues underlying both the NEB claim and the CAT determination such that the litigation privilege that arose in the 2014 application has not yet come to an end.

26I find that the litigation privilege that arose in the 2014 application continues for the purpose of the current application and that surveillance evidence that was privileged in the 2014 application remains privileged and is not compellable in this application.

When did litigation privilege with respect to surveillance evidence arise in the 2014 application?

27The applicant submits that the respondent’s claim that litigation privilege attaches to all surveillance obtained after September 4, 2014 must fail as there is no evidence addressing the possibility that surveillance conducted after that date may have been conducted for the purpose of adjusting claims, rather than for the dominant purpose of litigation. The applicant submits that this evidence is necessary where an insurer has accepted and is paying a number of different types of ongoing claims, while rejecting and defending against only some of the applicant’s claims, which the applicant submits is the situation in this case. The applicant relies on the Mamaca¹⁶ decision in which the insurer claimed that litigation privilege protected non-surveillance related documents from production. In that case, the insurer had accepted and was paying a number of ongoing claims and was only defending against an income replacement benefit claim.

28I find that the respondent’s failure to establish that all surveillance, if any, was conducted for the dominant purpose of litigation and not for the purpose of adjusting claims or for some other purpose, does not automatically prevent litigation privilege from attaching to surveillance conducted after September 4, 2014 for the following reasons. In the case before me, unlike in Mamaca, there is no evidence regarding whether other benefits were being paid on an ongoing basis or whether any were subject to ongoing adjustment. I find that in the absence of that evidentiary foundation, there is no onus on the respondent to adduce evidence establishing that surveillance, if any, was not conducted for the purpose of adjusting claims but rather for the purpose of litigation. I find that the respondent’s failure to adduce such evidence does not automatically negate the existence of litigation privilege in this case.

29The Court in Mamaca noted that “in some cases it will be appropriate to infer, from the evidence in the case, that litigation privilege applies to documents prepared after litigation was reasonably contemplated.”¹⁷ I find, with respect to surveillance conducted after September 4, 2014, that this is such a case. In the absence of any evidence suggesting otherwise, it is reasonable to infer that the dominant purpose of all surveillance undertaken after the 2014 application was commenced was for the purpose of assisting with litigation.

Do allegations of misconduct on the part of the respondent bar the respondent’s claim to litigation privilege?

30In her Supplementary Submissions,¹⁸ the applicant, for the first time, also alleged that the respondent should not be entitled to claim litigation privilege as a result of the applicant’s allegations of misconduct by the respondent and her claim for an award under Section 10 of Ontario Regulation 664.

31As no evidentiary foundation has been laid for this argument, the applicant’s submissions on this issue have not been considered by me.

The respondent’s Reply Submissions and the applicant’s objection thereto

32In the respondent’s Reply Submissions,¹⁹ in response to the applicant’s submission that the “present litigation was not even contemplated at the time the surveillance was conducted,”²⁰ the respondent refers to communications with applicant’s counsel and attaches an email exchange dated May 15, 2016. In correspondence responding to those Reply Submissions,²¹ the applicant submits that the references and documents in the Reply Submissions are “without prejudice, privileged settlement communications,” which, in accordance with the SPPA,²² the Tribunal should not consider.

33I reviewed the Reply Submissions and the attached email exchange for the purpose of determining whether they should be considered. I find that I need not determine whether the same are without prejudice, privileged settlement communications for the following reason. As set out above, I have found that the litigation privilege that arose in the 2014 application continues for the purpose of the current application. The applicant has confirmed that the current application was contemplated prior to the settlement of the 2014 application and I need not determine precisely when the current application was first contemplated. Accordingly, I do not find these portions of the Reply Submissions relevant and I have not relied upon the same in reaching my decision.

CONCLUSION

34I find that:

(i) Surveillance that is related to the issues in dispute, if any, is relevant to this application.

(ii) Litigation privilege arose in this case on September 4, 2014 when the applicant filed an application for arbitration to FSCO claiming accident benefits arising out of the May 1, 2013 accident. I therefore order that, within 15 calendar days of the release of this Motion Decision:

a) the respondent shall advise the applicant of the existence of all surveillance, if any, conducted prior to September 4, 2014 and provide the applicant with the date, time, place and reason for the surveillance; and

b) the respondent shall provide copies of any surveillance conducted before September 4, 2014 that relates to the issues in dispute. The respondent shall be entitled to redact solicitor-client privileged communications, if any.

(iii) The respondent is not required to advise the applicant of the existence of any surveillance or provide copies of any surveillance evidence that relates to surveillance conducted after litigation privilege arose on September 4, 2014, unless the respondent intends to rely on it at the hearing.

(iv) The respondent shall comply with the Tribunal Rules with respect to any surveillance evidence it intends to rely upon at the hearing.

35In the event that the applicant believes that any of the surveillance disclosed pursuant to paragraph 34(a) is relevant but has not been provided by the respondent, the applicant shall request the same from the respondent and if production of the same is refused, the applicant shall have the option to file a Motion requesting the same.

Footnotes

1. 1Common Rules of Practice & Procedure, Licence Appeal Tribunal, Animal Care Review Board, Fire Safety Commission, October 2, 2017.
2. 217-008769 v. Unifund Assurance Company, 2018 CanLII 110942 (ON LAT).
3. 3R.S.O. 1990, c. S.22.
4. 4Supra, s. 5.4(1)(e).
5. 5Blank v. Canada (Minister of Justice), 2006 SCC 39.
6. 6Ibid, at paragraph 28.
7. 7Ibid, at paragraph 27.
8. 8Mamaca (Litigation Guardian of) v. Cosesco Insuranc Co., 2007 CanLII 54963 (ON SC), [2007] OJ No 4899 (Ont. S.C.J) at paragraphs 16-23.
9. 9Supra, footnote 5, at paragraphs 34, 36, 38 and 39.
10. 10Respondent’s Submissions: Disclosing the Existence of Surveillance, dated November 30, 2018, at paragraph 6.
11. 11Schedule, sections 12 and 3(7).
12. 12Schedule, sections 2(e) and 2(f).
13. 13Applicant’s Supplementary Submissions: Privilege and Surveillance, dated February 11, 2019, at paragraph 24.
14. 14Supra, footnote 3.
15. 15General Accident Assurance Co. v. Chrusz, (1999) 1999 CanLII 7320 (ON CA), 45 O.R.(3d) 321.
16. 16Supra, at footnote 8.
17. 17Supra, at paragraph 21.
18. 18Supra, at footnote 13.
19. 19Respondent’s Reply Submissions, dated February 13, 2019.
20. 20Supra, at footnote 13, paragraph 14.
21. 21Applicant Counsel’s letter to the Tribunal and to Resondent’s Counsel, dated February 14, 2019.
22. 22Supra, at footnote 3.```