CITATION: Van Every v. Findlay, 2019 ONSC 6854
DIVISIONAL COURT FILE NO.: DC 19-992
DATE: 20191127
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Kiteley, Pomerance, and Myers, JJ
BETWEEN:
Jarrod Seth Van Every by his Litigation Guardian, Andrew Stastny
Appellant
– and –
D. Robert Findlay and Findlay Personal Injury Lawyers
Respondents
Aron Zaltz, for the Appellant
Alan L. Rachlin, for the Respondents
HEARD: October 11, 2019
REASONS FOR DECISION
POMERANCE J.:
[1] The appellant was the subject of an infant settlement, presented to the court for approval. The settlement purported to resolve the appellant’s claims for statutory accident benefits following a motor vehicle accident. The court approved the settlement and sealed the file in order to protect privacy and preserve privilege.
[2] The appellant then launched an action against his former solicitor for negligent representation on the Statutory Accidents Benefit claim. The former solicitor wanted the documents in the infant settlement file. The appellant said that he could not provide them because they were sealed. The former solicitor applied for standing to vary the sealing order. The motions judge granted standing to the former solicitor and varied the order to allow him access to the documents. That order has been appealed to this court with leave.
[3] For reasons set out below, I would allow the appeal. The path to production did not lie in challenging the sealing order. It lies in the production regime set out in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The sealing order did not affect the former solicitor’s entitlement to relevant documents. Nor did it absolve the appellant of his obligation to produce that which is relevant to the action. By focussing on the sealing order, counsel asked the motions judge the wrong questions. In the result, the answers given were wrong in law.
[4] I will elaborate on this conclusion below.
THE SETTLEMENT AND SEALING ORDER
[5] The Appellant, Jarrod Seth Van Every (“Van Every”), appeals from a decision of Harper J., dated June 15, 2018.
[6] Van Every was a minor when he was involved in a motor vehicle accident in 2004. The Respondent, Robert Findlay and Findlay Injury Lawyers (“Findlay”), initially represented Van Every in his claim for statutory accident benefits (“SABS claim”).
[7] In 2014, Van Every retained new counsel, Preszler Law Firm LLP, to represent him in the SABS claim. On February 3, 2016, Van Every obtained a proposed settlement for $1.15 million. Van Every then commenced an application, by his litigation guardian, Andrew Stastny, for Judgment granting court approval to the proposed settlement and a Sealing Order. The application proceeded on notice to the respondent, Pilot Insurance Company.
[8] Maddalena J. granted the application approving the settlement and the Sealing Order on April 27, 2016. She directed as part of the order “that the materials placed before this honourable court for the herein application shall be treated as confidential, sealed and shall not form a part of the public record”.
[9] On June 24, 2016, Van Every commenced an action against Findlay for negligent representation on the SABS claim, and Van Every settled the tort claim for $100,000. Van Every alleges that, as of 2006, Findlay obtained care, medical and rehabilitation benefits totalling $12,981, but that Findlay took no further steps to advance the SABS claim.
[10] On January 18, 2018, Findlay’s counsel wrote to Van Every’s new counsel Preszler by e‑mail, requesting a copy of the settlement materials filed with the court. Preszler wrote back that same day, stating: “I am unable to provide you with any of the materials placed before the Court as they have been sealed by Court Order”.
[11] Findlay brought a motion under Rule 38.11(1) to vary Maddalena J.’s Sealing Order so that he could access the materials placed before the court in support of the application for judgment. Rule 38.11(1) provides:
38.11(1) A party or other person who is affected by a judgment on an application made without notice or who fails to appear at the hearing of an application through accident, mistake or insufficient notice may move to set aside or vary the judgment…
THE DECISION OF THE MOTIONS JUDGE
[12] The motions judge granted Findlay’s motion, for reasons reported at 2018 ONSC 4213. The motions judge found that Findlay had no notice of the Application approving Van Every’s settlement and was a person “affected by” the Judgment within the meaning of Rule 38.11(1). In so ruling, the motions judge accepted that the documents in the sealed file pertain to the “centre of this litigation as the present action alleges that Findlay acted in a negligent manner in the handling of the very issue that was settled and then sealed” [at para 21].
[13] The motions judge further observed that: “[a]n additional significant fact in this case is that the material sought to be produced has a direct impact on Findlay’s counter claim in this action claiming that the plaintiff would not be entitled to claim damages if his losses were caused by the improvident settlement of his claims by Preszler Law Offices” [at para 22].
[14] The motions judge concluded there was a “direct link” between Maddalena J.’s Sealing Order and Findlay’s economic interests in the action [at para. 28]. He observed that “it would be ludicrous to suggest that evidence submitted to Maddalena J. by both the litigation guardian and Mr. Preszler that tells the Court why the settlement should be approved should not be produced to the lawyer who the Plaintiff and Mr. Preszler are claiming is negligent” [at para. 29].
ISSUES TO BE DETERMINED
[15] On January 11, 2019, a panel of the Divisional Court consisting of Swinton and Hackland J.J. and Thorburn J. (as she then was) granted leave to appeal the order of the motions judge on the following questions:
Did the motions judge err in law by granting standing to the Respondent under Rule 38.11(1)?; and
Did the motions judge err in law by varying the Sealing Order of Maddalena J.?
[16] As the issues to be determined involve questions of law, the standard of review is correctness.
ANALYSIS
[17] The motions judge erred in law by granting standing to the Respondent and by varying the Sealing Order of Maddalena J. I say this for two reasons:
The Respondent has the right under Rule 30 of the Rules of Civil Procedure to seek access to the documents filed in support of the application for judgment. The Sealing Order did not supplant the Rules and, therefore, did not affect the Respondent’s interests. There was, accordingly, no basis on which to grant the Respondent standing to challenge the Sealing Order.
The order granting the Respondent access to the sealed documents failed to account for the claim of privilege asserted by the Appellant. Rule 30 provides a clear mechanism for addressing privilege claims, another reason why it is the route to be followed in this case.
[18] The Sealing Order shielded the documents from scrutiny by the public. However, it did not limit or otherwise speak to the independent rights of litigants to documentary discovery. It did not relieve the plaintiff of his documentary disclosure obligations under the Rules of Civil Procedure. Nor did it bar discovery by the defendant of documents relevant to the negligence claim against him.
[19] Various cases have recognized that a Sealing Order issued under s.137(2) of the Courts of Justice Act, R.S.O. 1990, c. C. 43 does not impose a blanket confidentiality on documents filed in civil matters. As Myers J. put it in Konstan v. Berkovits, 2016 ONSC 7958 at para. 8:
It is important to distinguish between a sealing order and a publication ban or other injunctive relief. A sealing order simply prevents the public from obtaining access to documents contained in a court file to which they would otherwise have access upon paying the prescribed fee. The order was not made on notice to the press. It does not prohibit dissemination of information about the lawsuit. It does not impose confidentiality obligations on any person. A sealing order is just what it says – a sealing of the court file.
[20] This is consistent with comments of the Court of Appeal for Ontario in Ivandaeva Total Image Salon Inc. v. Hlembizky (2003), 2003 43168 (ON CA), 63 O.R. (3d) 769 ON CA at para 46:
I am satisfied that the possibility that financial information about Mr. Ivandaeva, or his companies, contained in the matrimonial court file might have assisted the appellants in their defence of the commercial litigation, thus requiring service of the notice of motion on the appellants, is far removed from the direct effects on the proprietary or economic interests of a non-party considered in the cases that I have reviewed that have been found sufficient to constitute the non-party a person affected by an order or judgment within the meaning of rules 37.07(1), 37.14(1) and 38.11(1). Although I acknowledge that "affected" is capable of a very large meaning, and it may be said that the information which the appellants' counsel obtained from the sealed file may be of assistance to the appellants in their defence of the commercial litigation, that is not the effect contemplated by the rule. Moreover, it is to be remembered that the broad discovery and production mechanism of the Rules of Civil Procedure is available to the appellants to enable them to obtain from Mr. Ivandaeva information relevant to the commercial litigation.
[21] Significantly, while the court in Ivandaeva denied access to the sealed matrimonial file, it found that the information was nonetheless potentially available through “the broad discovery and production mechanism of the Rules of Civil Procedure”.
[22] In this case, Findlay argued that, while he could seek access to the documents under Rule 30, Rule 38.11 provided an alternate means of production, legitimately available to the defendant. I do not agree. First, resort to 38.11 distorts the core issue. The issue of interest to Findlay was not standing; it was production. By granting standing to Findlay, the motions judge effectively found that Findlay had been entitled to notice of the application to seal the documents. Yet, it is anomalous to suggest that the plaintiff was obliged to notify a future defendant of his intention to seek court approval of an infant settlement and the sealing of related documents.
[23] Second, as a matter of law, the test in Rule 38.11 cannot be met in this case. If the defendant has the right to seek access under the Rules of Civil Procedure, and that right is unaffected by the Sealing Order, it follows that the Sealing Order does not affect the defendant’s interests.
[24] Finally, the focus on the Sealing Order distracted from the issue of privilege claimed by Van Every in relation to the settlement documents. Neither the notice of motion filed by Findlay, nor the order of the court provided any mechanism for the assertion and evaluation of claims of privilege. Van Every does claim privilege. This point was made by his counsel in submissions before the motions judge, albeit in passing. It was not addressed by the motions judge, who ordered that the documents be unsealed and produced without restriction. Rule 30 provides a clear mechanism for addressing privilege claims, yet another reason why it is the correct path to be taken in pursuit of production.
[25] Therefore, I would answer the questions identified by the leave panel as follows:
- Did the motions judge err in law by granting standing to the Respondent under Rule 38.11(1)?
Yes.
- Did the motions judge err in law by varying the Sealing Order of Maddalena J.?
Yes.
[26] The appeal is allowed. The order of the motions judge is set aside. The sealing order is reinstated.
COSTS
[27] The Divisional Court Panel that granted leave to appeal fixed costs in the amount of $5,000, to be awarded in the discretion of the hearing panel.
[28] The appellant seeks costs, on a partial indemnity basis, in the amount of $27,000. The respondent’s bill of costs reflects partial indemnity costs in the amount of $6,709.44.
[29] We decline to award costs to the appellant, despite his apparent success on appeal. The appellant was the proverbial author of the misfortune in this case. It was the appellant who initially tethered the production issue to the Sealing Order, by claiming that the Sealing Order prevented disclosure of the documents. This position, which was wrong in law, served as the catalyst for the respondent’s motion and ultimately, the decision of the court. The respondent was also complicit in the error. He moved for standing under Rule 38.11, instead of pursuing documentary discovery under Rule 30. We have determined that no costs should be awarded for, or against, either party.
Pomerance J.
I agree
Kiteley J.
I agree
Myers J.
Date of Release: November 27, 2019
CITATION: Van Every v. Findlay, 2019 ONSC 6854
DIVISIONAL COURT FILE NO.: DC 19-992
DATE: 20191127
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Kiteley, Pomerance, and Myers JJ.
BETWEEN:
Jarrod Seth Van Every by his Litigation Guardian, Andrew Stastny
- and –
D. Robert Findlay and Findlay Personal Injury Lawyers
REASONS FOR DECISION
POMERANCE J.
Released: November 27, 2019