Babakar et al. v. Brown et al.

Babakar et al. v. Brown et al. [Indexed as: Babakar v. Brown]

100 O.R. (3d) 191

2010 ONSC 255

Ontario Superior Court of Justice,

Divisional Court,

Ferrier, Swinton and Sachs JJ.

January 29, 2010

Civil procedure -- Discovery -- Examination for discovery -- Rule 31.06(3) of Rules of Civil Procedure applying to experts retained by insurer pursuant to s. 42 of Statutory Accident Benefits Schedule -- Motion judge erring in holding that experts retained by insurer were not "experts" within meaning of rule 31.06(3) and that prohibition against cross-examination did not apply -- Statutory Accident Benefits Schedule -- Accidents on or after November 1, 1996, O. Reg. 403/96, s. 42 -- Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 31.06(3).

The defendant insurer had the plaintiffs assessed by health care professionals pursuant to s. 42 of the Statutory Accident Benefits Schedule ("SABS") for the purpose of assisting the defendant in determining whether the plaintiffs continued to be entitled to benefits under SABS. Based on the reports of those health care professionals, the defendant terminated the payment of benefits. The plaintiffs commenced an action against the defendant. During his examination for discovery, the defendant's claim examiner refused to answer certain questions about the reports on the basis that the questions constituted cross-examination of expert witnesses and as such exceeded the limits of permissible discovery of experts provided for under rule 31.06(3) of the Rules of Civil Procedure. A motion by the plaintiffs to compel the defendant's representative to answer the disputed questions was granted. On appeal from the master's decision, the appeal judge held that the experts retained by the defendant were not "experts" within the meaning of rule 31.06(3) and that the prohibition against cross-examination did not apply. The defendant appealed.

Held, the appeal should be granted.

The motion judge erred in holding that experts retained by an insurer pursuant to s. 42 of SABS are not covered by the provisions of rule 31.06(3). The clear wording of rule 31.06(3) indicates that it covers the opinions of experts who were engaged by or on behalf of a party for a purpose other than litigation.

APPEAL from the decision of the motion judge affirming the decision of the master requiring answers to questions on examination for discovery.

Cases referred to Allen v. Oulahen (1992), 1992 7620 (ON SC), 10 O.R. (3d) 613, [1992] O.J. No. 1661, 34 A.C.W.S. (3d) 909 (Gen. Div.); Babakar v. Brown (2009), 2009 13622 (ON SC), 95 O.R. (3d) 206, [2009] O.J. No. 1270, 70 C.P.C. (6th) 189, 71 C.C.L.I. (4th) 258, [2009] I.L.R. I-4815, 83 M.V.R. (5th) 154 (S.C.J.) [Leave to appeal granted (2009) 2009 33024 (ON SCDC), 96 O.R. (3d) 317, [2009] O.J. No. 2613, 75 C.C.L.I. (4th) 235, [2009] I.L.R. I-4862 (Div. Ct.)]; [page192] Lecocq Logging Inc. v. Hood Logging Equipment Canada Inc., [2005] O.J. No. 2338, 14 C.P.C. (6th) 287, 139 A.C.W.S. (3d) 995 (S.C.J.) Statutes referred to Insurance Act, R.S.O. 1990, c. I.8 [as am.] Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 31.06(3), 31.10 Statutory Accident Benefits Schedule -- Accidents on or after November 1, 1996, O. Reg. 403/96, s. 42, (1), (10) Authorities referred to Watson, Garry D., Holmested and Watson: Ontario Civil Procedure, looseleaf, (Toronto: Carswell, 2003)

Wendy Sokoloff and D. Wright, for plaintiffs/respondents. S. Wayne Morris and David Raposo, for appellant State Farm Mutual Automobile Insurance Company.

The judgment of the court was delivered by

SACHS J.: --

Overview

[1] This appeal raises the question of whether rule 31.06(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, a rule that deals with the discoverability of experts' opinions, applies to experts retained by an insurer pursuant to s. 42 of the Statutory Accident Benefits Schedule -- Accidents on or after November 1, 1996, O. Reg. 403/96 ("SABS").

[2] Pursuant to s. 42 of SABS, the appellant insurer had the respondents assessed by several health care professionals for the purpose of assisting the appellant in determining whether the respondents continued to be entitled to benefits under SABS. The appellant delivered the reports of these professionals to the respondents. Based on these reports, the appellant insurer terminated the payment of benefits to the respondents. The respondents then commenced this proceeding against the appellant insurer.

[3] During his examination for discovery, the claims examiner for the insurer refused to answer certain questions about the reports delivered by the health care professionals on the basis that these questions constituted cross-examination of expert [page193] witnesses and as such exceeded the limits of permissable discovery of experts provided for under rule 31.06(3).

[4] The respondents brought a motion before Master Hawkins to compel the appellant insurer's representative to answer the disputed questions. The master held that the appellant had to answer the questions because they did come within the limits of discovery permitted by rule 31.06(3).

[5] On appeal, the motion judge, Lederer J. [(2009), 2009 13622 (ON SC), 95 O.R. (3d) 206, [2009] O.J. 1270 (S.C.J.)], upheld the decision of the master but on a different basis. The motion judge found that the master erred when he concluded that the questions came within the limits of questioning permitted by rule 31.06(3). In his opinion, most of the questions amounted to cross- examination of experts and, as such, were not permitted under rule 31.06(3). However, he found that the experts retained by the appellant insurer were not "experts" within the meaning of rule 31.06(3) and hence the prohibition against cross-examination did not apply.

[6] Karakatsanis J. [(2000), 2009 33024 (ON SCDC), 96 O.R. (3d) 317, [2009] O.J. No. 2613 (Div. Ct.)] granted the appellant insurer leave to appeal the motion judge's decision on the issue of whether rule 31.06(3) applies to experts under s. 42 of SABS.

[7] For the reasons that follow, I would set aside the decision of the motion judge and I would order that to the extent that the questions constitute cross-examination, they do not have to be answered. I do so on the basis that the motion judge committed an error in law when he held that experts retained by an insurer pursuant to s. 42 of SABS are not covered by the provisions of rule 36.01(3).

The Facts

[8] This action arises out of a motor vehicle accident that occurred on February 15, 2004. The appellant insurer is a company licensed to underwrite automobile insurance in Ontario, pursuant to the Insurance Act, R.S.O. 1990, c. I.8. In their Statement of Claim, the respondents claim as against the appellant insurer for the payment of benefits that they say they are entitled to pursuant to SABS. They also seek a declaration as to their continuing entitlement to these benefits and to interest and costs. In the Statement of Claim, the respondents allege that the appellant insurer denied and terminated their benefits without regard to all the medical information that it had, and that the appellant ignored the medical information that it was given and ignored the respondents' "chronic pain and psychological condition as a result of the accident". [page194]

[9] The Statement of Claim in its current form does not make a claim for bad faith, although the possibility of amending the claim to include such an allegation was discussed at the examination for discovery of the appellant insurer's claims representative. I point this out because the motion judge hearing the appeal found that "the three insured plaintiffs are alleging bad faith on the part of State Farm, that State Farm breached the duty it owed them as parties it insured and did not adjust their claims fairly" (Babakar v. Brown (2009), 2009 13622 (ON SC), 95 O.R. (3d) 206, [2009] O.J. No. 1270 (S.C.J.), at para. 9). On the current state of the pleadings, this statement is inaccurate.

[10] The rights and responsibilities of the parties with respect to the benefits in question are set out in SABS. Section 42(1) of SABS provides:

42(1) For the purposes of assisting an insurer to determine if an insured person is or continues to be entitled to a benefit under this Regulation for which an application is made, an insurer, may, as often as is reasonably necessary, require an insured person to be examined under this section by one or more persons chosen by the insurer who are members of a health profession or are social workers who have expertise in vocational rehabilitation.

[11] Under s. 42(10) of SABS, the insurer is obligated to provide the assessor with "all reasonably available information and documents that are relevant or necessary for the review of the insured person's medical condition".

[12] Pursuant to s. 42(1), one or more of the respondents were examined by four health care professionals: Dr. Hoath (psychologist), Dr. Kadish (orthopaedist), Mr. Diaz (physiotherapist) and Dr. Dorman (chiropractor). The appellant insurer received reports from each of these professionals and then determined to terminate the benefits of the respondents Farzana, Yalda and Vida Babakar. A mediation was conducted, the dispute was not resolved and this litigation was commenced.

[13] The appellant insurer produced its claims examiner for discovery. The respondents examined her over a period of two days. During the discovery, the respondents asked her to make certain inquiries of the health care professionals who had examined the respondents. The appellant insurer objected to the questions on the grounds that they were an "indirect attempt to cross-examine the Defendant's expert". The respondents' questions of the claims examiner also included a request to make inquiries of an expert that the appellant insurer had retained after the litigation was commenced, Dr. Lloyd. Prior to the hearing before the motion judge, the respondents conceded that this latter set of questions was inappropriate. Thus, the questions that remained to be [page195] considered, as set out by the motion judge, were as follows [at para. 39]:

1. To ask Dr. Hoath whether pre-accident or other historical records were needed and if he ever made a request to State Farm for the records.

2. If pre-accident records were information Dr. Hoath thought he needed, why didn't he request it? To ask Mr. McCready, when he had the report, if he ever considered sending such information to Dr. Hoath?

3. To ask Dr. Kadish what use he made of or what possible benefit to him Mr. Diaz's Functional Ability Evaluation Report was given that Mr. Diaz says in his report he can't tell you anything without the Functional Demands Analysis.

4. With respect to Farzana, ask Dr. Hoath why he didn't have the pre-accident records of Dr. Sheikh, whether he thought they were necessary, did he ever ask for them? Did the adjuster, after having reviewed the report, think to send the records to Dr. Hoath or ask Dr. Hoath if the pre-accident reports were important?

5. Ask Dr. Dorman to confirm at page 3 (Tab 127) that his notation about the bruising of her legs at the hospital was information that he received from Mrs. Babakar as opposed to otherwise.

6. Refusal -- To ask Dr. Dorman if his answer to question no. 2 on page 8 of 9 of his report, if he is referencing Farzana's right knee problem.

7. To ask Dr. Dorman why he was answering questions that he was not asked by the insurer to address.

[14] The individual questions were not the focus of the appeal before us. In this regard, however, I note that the appellant insurer conceded that questions 5 and 6 do not exceed the limits provided by rule 31.6(3). The appellant insurer also conceded that if there was a bad faith claim made, the second part of question 2 should be answered.

Rule 31.06(3)

[15] Rule 31.06(3) is the central provision in the Rules of Civil Procedure governing the discovery of expert opinions. It provides:

31.06(3) A party may on an examination for discovery obtain disclosure of the findings, opinions and conclusions of an expert engaged by or on behalf of the party being examined that relate to a matter in issue in the action and of the expert's name and address, but the party being examined need not disclose the information or the name and address of the expert where, (a) the findings, opinions and conclusions of the expert relating to any matter in issue in the action were made or formed in preparation for contemplated or pending litigation and for no other purpose; and (b) the party being examined undertakes not to call the expert as a witness at the trial. [page196]

[16] In Holmested and Watson: Ontario Civil Procedure, looseleaf (Toronto: Carswell, 2003), the authors give a useful summary of the background and policy considerations that drove the enactment of rule 31.06(3) (v. 3, at p. 31-105). Before the rule was passed, where an expert prepared a report for the purpose of litigation, the report itself was protected from production. The case law was divided on the question of whether the opinion (as opposed to the report) of an expert retained for the purpose of litigation had to be disclosed on discovery. At issue was the tension between accomplishing the goals of discovery (promoting settlement, narrowing the issues and eliminating surprise) and enabling parties to thoroughly prepare their case for trial. Parties might be afraid to retain experts to assist them in understanding their case for fear that those opinions, if negative, would have to be produced to the other party. Rule 31.06(3) resolved this debate. If the opinion was sought in contemplation of litigation and for no other purpose and if the expert is not going to be called as a witness, the opinion does not have to be disclosed. Otherwise, the findings, opinions and conclusions of any expert retained by or on behalf of a party are discoverable.

The Issue

[17] The motion judge accepted that the discovery of experts permitted under rule 31.06(3) does not permit posing questions on discovery that require the party produced to cross-examine an expert the party has engaged. The authorities that the motion judge cited in support of this proposition were Lecocq Logging Inc. v. Hood Logging Equipment Canada Inc., [2005] O.J. No. 2338, 14 C.P.C. (6th) 287 (S.C.J.) and Allen v. Oulahen (1992), 1992 7620 (ON SC), 10 O.R. (3d) 613, [1992] O.J. No. 1661 (Gen. Div.). No issue was taken with this proposition on the appeal before us. Thus, the sole issue we were asked to determine is the issue for which leave was granted, that is, whether the motion judge made an error of law when he found that experts who give opinions pursuant to s. 42 of SABS were not experts within the meaning of rule 31.06(3).

The Decision of the Motion Judge

[18] The motion judge found that the experts retained by the appellant insurer pursuant to s. 42 of SABS fell into a "middle class" of experts that was not covered by the provisions of rule 31.06(3). This class fell somewhere between an expert who was a "fact" witness (e.g., a doctor who witnessed an accident) and experts who are retained to assist the trier of fact to understand [page197] and interpret the facts. It is only this latter class of experts who are covered by rule 31.06(3).

[19] According to the motion judge, the experts at issue were experts whose expertise addressed the proximate cause of the damage, akin to an engineer who is sued when a bridge that he has designed falls down or a doctor who is sued for medical malpractice. As such, they were "not experts as that term is used in rule 31.06(3) and, it follows, the limits placed on what may be asked with respect to what they may say is not limited by the provisions of the rule" (Babakar, at paras. 46 and 54).

Analysis

[20] In his reasons, the motion judge found that there were three classes of experts. One is the expert who is retained and gives opinion evidence to help the judge or the jury understand and interpret the facts. According to the motion judge, the most common example of this type of expert is the medical practitioner "who is retained after the accident to assess the injury and provide an opinion as to the pain and suffering of the injured party" (paras. 48 and 49). The motion judge concluded that this type of expert was covered by the limitations on discovery provided in rule 31.06(3). In delineating this class of expert, the motion judge's description was consistent with the description of an expert who is retained by a party in contemplation of or for the purpose of litigation. This first class of experts was clearly the subject of litigation privilege in the way that other experts were not.

[21] The second class of expert that the motion judge delineated is the expert who is purely a "fact" witness. The example he used is a doctor who witnesses an accident while standing on a street corner. The motion judge correctly concluded that the evidence of that doctor would be discoverable in the same way as the evidence of any other witness. A doctor who witnesses an accident is not giving opinion evidence and, as such, is not testifying in his capacity as an expert. Thus, rule 31.06(3) would have no application.

[22] The "middle" class of experts that the motion judge identified are those experts "where the expertise of the witness is relevant to the evidence, but that evidence, like that of the doctor on the street corner, addresses the proximate cause of the damage" (Babakar, at para. 51). The examples he used were an engineer who is sued for designing a bridge that then falls down or a doctor who is sued for medical malpractice.

[23] The motion judge was correct when he found that rule 31.06(3) would have no application to the experts cited in his examples for the "middle" class as he defined it. These experts [page198] are parties, not experts as described in rule 31.06(3) that are "engaged by or on behalf of the party being examined". Where he erred was in analogizing the experts in question on this appeal to the examples that he used. The experts in question are not parties being sued because of the opinions that they gave or the assessments that they performed. The party who is being sued is the insurer. The appellant insurer may have relied on these expert opinions, but it was the insurer's responsibility to make the decision after assessing and critically examining these opinions.

[24] It is also problematic to define a class of experts that is exempt from rule 31.06(3) according to whether the evidence of the expert "addresses the proximate cause of the damage". Experts who are retained after an accident in contemplation of litigation may also have evidence to give "that addresses the proximate cause of the damage". An example would be an accident reconstruction expert. As the motion judge recognized, that expert would clearly be an expert within the meaning of rule 31.06(3).

[25] What distinguishes the experts in question from the expert whom the respondents conceded they could not cross- examine is that these experts were not engaged for the purpose of or in contemplation of litigation. As such, their evidence would not ever have been the subject of litigation privilege and would have been discoverable. The respondents argue that since the purpose of rule 31.06(3) was to deal with evidence that was formerly the subject of a litigation privilege claim, it was never intended to and should not be interpreted as covering experts whose evidence would never have been the subject of a legitimate privilege claim.

[26] There is some support for the respondents' position in Holmested and Watson in that the authors confirm that the "primary concern" of rule 31.06(3) is "to regulate the discovery of opinions formerly privileged". They further note that "the United States Federal Rule dealing with the discovery of expert opinions-which influenced the drafting of rule 31.06(3) . . . similarly does not deal with experts whose opinion was not acquired in preparation for trial" (v. 3, at p. 31-109).

[27] I accept that the primary concern of the rule in question was to deal with expert opinions that were formerly the subject of litigation privilege claims. However, I do not accept that rule 31.06(3) does not cover the opinions of experts who were engaged by or on behalf of a party for a purpose other than litigation. I reach this conclusion because of the clear wording of rule 31.06(3). [page199]

[28] Rule 31.06(3) provides that a party may, on discovery, obtain disclosure of the findings, opinions and conclusions of an expert engaged by or on behalf of a party that relate to a matter in issue in the action. It does not state that a party may, on discovery, obtain disclosure of the findings, opinions and conclusions of an expert engaged by or on behalf of a party in preparation for contemplated or pending litigation. Furthermore, there is no reason to assume that there is an ambiguity in the language of the rule requiring a purposive construction by the courts of the rule's intent. In rule 31.06(3) itself, and elsewhere in the Rules of Civil Procedure (e.g., rule 31.10), the words "in preparation for contemplated or pending litigation" do appear. Thus, it is reasonable to assume that if these words were meant to appear in the part of rule 31.06(3) that is at issue in this appeal, the legislature would have inserted them.

[29] The experts in question were chosen by the appellant insurer to assist them in making the determination that it has to make under SABS. As such, they were engaged by or on behalf of the party being examined in the action in relation to a matter in issue in the action. Therefore, the discoverability of the appellant insurer's evidence is governed by rule 31.06(3).

[30] The effect of this decision is that the respondents will not be permitted to ask the appellant's insurer's representative to make inquiries that require them to cross- examine the experts that they engaged about their opinions. This result is not an offensive result. Discoveries are meant to prevent trials that are essentially "litigation by ambush". They are also meant to give the parties the information they need to realistically consider settlement options and to narrow the issues. They are not meant to replace trials and they must be controlled if litigation is not to become an exercise that has lost its legitimacy because of delay and expense.

Conclusion

[31] For these reasons, the appeal is allowed, the decision of the motion judge is set aside and the respondents' motion requiring the appellant to answer the questions in dispute is dismissed, except with respect to questions 5 and 6. The respondents are ordered to pay the appellant insurer its costs of this appeal and the costs of the proceedings below, which the parties have agreed should be fixed in the total amount of $11,250.

Appeal allowed.