ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-08-357295

DATE: 20130905

ONTARIO

SUPERIOR COURT OF JUSTICE

Court File No. CV-08-00357295

BETWEEN:

JETPORT INC.

Appellant on the Appeal

– and –

GLOBAL AEROSPACE UNDERWRITING MANAGERS (CANADA) LIMITED, NATIONAL LIABILITY & FIRE INSURANCE COMPANY, TEMPLE INSURANCE COMPANY, LOMBARD GENERAL INSURANCE COMPANY OF CANADA AND MITSUI SUMITOMO INSURANCE COMPANY LIMITED

Defendants and on the Appeal

Earl A. Cherniak, Q.C. and
David P. Chernos, Co-Counsel for the Appellant

Robert J. Fenn, Robert B. Bell and
Patrick Floyd, Co-Counsel for all the Defendants

AND

Court File No. CV-10-412252

BETWEEN:

JETPORT INC.

Plaintiff

– and –

JONES BROWN INC.

Defendant

AND

Court File No. CV-11-438633-00A1

BETWEEN:

GLOBAL AEROSPACE UNDERWRITING MANAGERS (CANADA) LIMITED

Plaintiff

(Moving Parties)

– and –

JONES BROWN INC. and
GRANT ROBINSON

Defendants

– and –

JETPORT INC.

Third Party

) HEARD: JUNE 3, 2013

decision on appeal: greer j.:

[1] The Appellant, Jetport Inc. (“Jetport”) appeals from a portion of the Order of Master Graham made November 7, 2012 in this matter. The Master is the Case Management Master of 3 actions launched by Jetport and the Defendants Global Aerospace Underwriting Managers (Canada) Limited, National Liability & Fire Insurance Company, Temple Insurance Company, Lombard General Insurance Company of Canada and Mitsui Sumitomo Insurance Company Limited, collectively referred to as the Defendants or “Global”. Global Aerospace Underwriting Managers (Canada) Limited is the underwriting manager for all the Defendants under Jetport’s Broad Horizon Aviation Insurance Policy and Aviation General Liability Insurance Policy in effect from July 24, 2007.

[2] Jetport is an incorporated Alberta company, which carries on various businesses, including an executive aircraft charter operation based out of Hamilton International Airport. It has been in the executive aircraft charter business since 1998.

[3] One of Jetport’s charter aircraft was a new Bombardier Global 5000 business jet (“Global 5000”), bought in July 2005 and delivered to Jetport in October 2007. It was added to its insurance policy, with an insured value of U.S. $40,000,000. On November 11, 2007, the Global 5000 left the Hamilton International Airport bound for Fox Harb’r, Nova Scotia. Jetport says it was piloted by Roger Adair (“Adair”) with David Johnstone as second-in-command. There were eight passengers aboard. On landing at the Fox Harb’r airport, there was an accident when the aircraft veered off the runway. Several passengers plus the pilot and co-pilot were injured. The aircraft was damaged beyond repair.

[4] When Jetport made its claim against Global under its insurance policy, in letters dated February 15 and March 19, 2008, Global denied Jetport coverage. Jetport commenced an action against Global and the Defendants, insurers, on June 18, 2008, claiming $50,000,000 in damages. The other two actions, arising out of the accident, were commenced later, and all 3 actions were ordered by Mr. Justice Whitaker on October 3, 2011, to be tried one after the other, with the examinations in the earlier actions to be treated as examinations in the subsequent related accidents.

[5] This Appeal is the second Appeal from the Master’s decision. The first part of the Appeal involved the issue of privilege. That Appeal was heard by Mr. Justice Goldstein, whose decision was released on January 10, 2013. In that decision, Mr. Justice Goldstein sets out in paras. 4-10 inclusive, a detailed outline of how the insurance broker, Jones Brown Inc., became a litigant and how its representative, Grant & Robinson, became involved as a litigant.

[6] Master Graham has been seized with all discovery-related issues and is therefore very familiar with the facts of the three cases. The second part of the Motion before him was heard by him on November 6 and 7, 2012 respecting refusals and questions taken under advisement by Jetport on its discoveries. He released his decision in two parts. Firstly, he issued a hand-written Endorsement dated November 6, 2012, five pages in length. On November 7, 2012, the Master annotated a copy of an extensive Chart setting out his decision on each of the outstanding questions and refusals. That Endorsement has been transcribed by counsel and a copy is in the Record. The Master lists 25 questions and provides directions as to the answers. With respect to Q.71, Items 7 and 8, there are short answers. With respect to Items 9-18, the Master says:

The main issue is whether the plaintiff must answer questions as to the way the accident occurred. The defendants submit that because one of the issues in the action is whether all of the 100 hours required by the “Pilot clause” in the subject insurance policy must be actual flying time in the same make and model of aircraft, as opposed to “simulator time”, the defendants should be able to elicit disclosure to demonstrate why all 100 hours must be actual flying time. The plaintiff submits because there is no dispute in the pleadings that having a pilot with less than 100 logged flying hours is a breach of the insurance policy, the manner in which the accident occurred is irrelevant.

The conditions that existed at the time of the accident, and the manner in which the accident occurred, could reasonably influence the trial judge’s decision as to whether the required 100 hours does or does not include “simulator time”. Accordingly, questions relating to how the accident occurred are relevant and must be answered. This means that questions about what Mr. Adair told the TSB about how the accident occurred are relevant.

[7] The Master then says, that for those reasons, Q.78, 79, 103, 104, 112, 113 and 830 must be answered. As for the pilots’ experience asked in Q.786, the Master says, “The pilots’ experience is relevant. This question shall be answered.”

[8] He held that “questions relating to how the accident occurred are relevant and must be answered.” He also held that questions about what Adair told the Transport Safety Board (“the TSB”) are also relevant.

[9] It is Jetport’s position that none of these questions should be answered and that the Master erred in making the Orders he did about these 2 areas of evidence. It says its Appeal should be allowed and its Refusals to answer upheld.

[10] It is Global’s position that the Appeal must be dismissed in its entirety. It submits that the Decision of the Master was proper, appropriate and correct in fact and law. Global sees the two specific areas which Jetport says the Master erred in ordering them to be answered, namely questions about the conditions and circumstances surrounding the pilot training and the accident, and as well as information provided by Jetport to the TSB, are all relevant and proper in the circumstances.

[11] Global also says that Jetport has raised a new issue on Appeal that was never before the Master. Jetport now says that 13 questions at issue in this Appeal relate to the Report of the TSB on the accident. It says this information is “privileged” and prohibited from being used in this proceeding pursuant to the Canadian Transportation Investigation and Safety Board Act, S.C. 1989, c. 3 (“TSB Act”).

The Standard of Review

[12] The parties agree that the standard of review, on an Appeal from the Order of a Master, whether final or interlocutory, is subject to reversal if the Master made an error of law, exercised his or her discretion based on wrong principles, or misapprehended the evidence such that there is a palpable and overriding error. The standard of review on errors of law, is that of correctness. See: Zeitoun v. Economical Insurance Group, 2008 20996 (ON SCDC), [2008] O.J. No. 1771, 292 D.L.R. (4th) 313 (Div.Ct.), a decision of Madam Justice Low, in which she outlines how there has been competing lines of authority, concluding in paras. 37-41, that on errors of law, the standard of review is correctness.

Analysis

[13] For the reasons which follow, the Appeal must be dismissed. Applying the correctness test, I see no error of law in the decision made by the Master. As a Case Management Master of these actions for the past 2-3 years, the Master is more than familiar with the facts and circumstances surrounding this case He spent 3 days on this Motion, now in two parts. His Decision should be given deference.

[14] One part of the Appeal has already been dealt with by Mr. Justice Goldstein and Jetport’s Appeal of that part was dismissed. See: Jetport Inc. v. Global Aerospace et al., 2013 ONSC 235. It specifically dealt with litigation privilege in one of the other 2 actions to be tried with this one.

[15] I disagree with Jetport’s position that if all the 150 or so questions still unanswered, are upheld as proper questions in this litigation, it will lead to a “host of more questions” that have to be answered. I also disagree with its position that the case is a narrow one of mere contractual interpretation. The scope of the case, in my view, covers more than just that.

[16] Jetport says the Master did not direct his mind to the issues raised in the pleadings. The Court, at Trial, it says it will have to examine and interpret the meaning of the “Pilot Training Clause” in the contract and the Declarations Extension. It says that “how the accident occurred” is not relevant to the issue before the Trial Judge on the contractual interpretation. Jetport says the Trial Judge cannot look at post-contractual facts. For example, says Jetport, the weather in question at the time of the accident is not relevant to the contractual interpretation.

[17] Jetport sees the Master’s Decision as “completely wrong” and says he applied the wrong test when reaching his Decision. On the new issue of statutory privilege of the findings of the TSB, Jetport says there is a public policy basis for not allowing any of the TSB evidence to be used in this proceeding.

[18] Global says that the Master did not misapprehend or ignore any of the evidence. It says he had the benefit of reviewing voluminous documentation and carefully considered the relevance of all the questions before him on the Motion. Rule 31.06(1) of the Rules of Civil Procedure states:

A person examined for discovery shall answer, to the best of their knowledge, information and belief, any proper question relevant to any matter in issue in the action.

Rule 30.02(1) reads:

Every document relevant to any matter in issue in an action, shall be disclosed as provided in rules 30.03 and 30.10, whether or not privilege is claimed in respect of the document.

[19] In paras. 31 and 32 of Jetport’s Statement of Claim issued on June 18, 2008, five years ago, Jetport put the issue of the weather conditions on the date of the accident as relevant. Also in para. 32 it speaks to what happened when the aircraft landed and veered off the runaway. The Master therefore did not err in his finding that questions about those facts were relevant.

[20] In Global’s Amended Statement of Defence and Counterclaim, it says in para. 3 that it has no specific knowledge with respect to these two paragraphs in the Statement of Claim; and with respect to para. 29, which speaks to Transport Canada’s requirements and the Pilot Training Clause of the contract. In paras. 15a and 15b of the Amended Statement of Defence, Global responds to these two issues as follows:

15a. As part of preparation in defending the within action, Global Aerospace sought information from the Transportation Safety Board investigation of the November 11, 2007 accident. The information revealed, contrary to Jetport’s representations and assertions, that Jetport pilot Dwayne Johnstone had filed the flight plan with Air Traffic Control as pilot-in-command and Dwayne Johnstone was captain or pilot-in-command according to the aircraft journey log.

15b. Global Aerospace has sought production for review of the original log books for Roger Adair and for Dwayne Johnstone and all other original log books and training records. Jetport has not provided access for review and has taken the position that Global Aerospace must amend its pleading to be able to review the information and documentation.

[21] Global also took the position in para. 16 that the issue of who was actually piloting the plane at the time of the accident is an issue, and thus the TSB Report disclosure is necessary and relevant. Further in para. 19, Global denies that simulator time spent by the pilot and co-pilot in their training on the Global 5000, is “logged flying time” under the contract.

[22] Since the scope of discovery is defined by the pleadings, in my view, the questions asked and either not answered or refused to answer by Jetport, are relevant under the discoverability Rules, given what is set out in the pleadings, as noted.

[23] In CIBC v. Deloitte & Touche, 2013 ONSC 917, Mr. Justice Perell, examined in some detail how the scope of discovery has been broadened. In para. 68 he said that there is, “…no minimum probative value required for evidence to be relevant.”

[24] Mr. Justice Doherty, in R. v. Pilon, 2009 ONCA 248, [2009] O.J. No. 1172 (C.A.) at para. 33:

Relevance is assessed by reference to the material issues in a particular case and in the context of the entirety of the evidence and the position of the parties.

[25] In the case at bar, the entirety of the evidence will not be before the Court when the Trial finally begins, if all the issues are not before the Trial Judge, if all the facts surrounding these issues have been suppressed. Master Graham was alert to the principles of discovery and the need for full disclosure when he said in his Endorsement:

The conditions that existed at the time of the accident, and the manner in which the accident occurred, could reasonably influence the trial judge’s decision as to whether the required 100 hours does or does not include “simulator time”.

I agree with Master Graham that the cause and circumstances of the accident are related to the issues in dispute in this action.

[26] Global also points to the fact that some of the pleadings in the other two-related actions raise the issue of the level and scope of the experience and training of the Jetport pilots.

[27] The issue of statutory privilege raised by Jetport in respect of the draft TSB Draft Report does not appear to have been earlier raised in its Refusals. I have examined the Chart of Refusals attached to Master Graham’s second part of his Endorsement regarding the TSB Draft Report. Q. 974 says that Jetport received a copy of the Draft Report. He then ordered Jetport to answer Refusals 975, 977, 1260 all related to the TSB’s accident investigation. Statutory privilege is not pleaded by Jetport.

[28] In Ontario Energy Savings L.P. v. 767269 Ontario Ltd., 2008 ONCA 350, the Court of Appeal’s short Endorsement reviews the law on the test concerning receiving arguments for the first time on appeal. It refers to Ross v. Ross (1999), 1999 NSCA 162, 181 N.S.R. (2d) 22, where the Court of Appeal in Nova Scotia said that such an argument:

…should only be entertained if the Court of Appeal is persuaded that all of the facts necessary to address the point are before the Court as fully as if the issue had been raised at trial.

The Ontario Court then said the “rationale for the principle that it is unfair to permit a new argument on appeal” in relation to which evidence might have been led at Trial had it been known the issue would be raised.

[29] Global says these questions relating to the TSB Draft Report on the accident and factual information regarding the pilots are proper and ought to be answered since they are relevant as determined by Master Graham. It says Jetport should not now be allowed to raise the privilege issue. It relies on S.30(5) of the TSB Act, which says that any person claiming privilege has to comply with certain procedures under the Act. No claim was earlier made by Jetport that such privilege applied.

[30] In Société Air France et al. v. NAV Canada et al., 2010 ONCA 598, the Court, upheld the decision of Mr. Justice Strathy in Société Air France et al. v. Greater Toronto Airports Authority, [2009] O.J. No. 5337, (SCJ). In para. 85 of that decision, he refers to a motion to compel production of statements made in another TSB investigation. He points out to the fact that the statutory privilege raised applies unless the declarant authorizes the release of the statements or the Court determines, “…the public interest in the proper administration of justice outweighed the privilege attached to the documents.”

[31] In para. 110, Mr. Justice Strathy sets out how the statutory test under the TSB Act applies. The Court must first consider the circumstances of the case and whether in those circumstances of the case, the “public interest in the proper administration of justice outweighs the importance the privilege attached” to the TSB Draft Report. This, says Mr. Justice Strathy, involves the balancing of the two interests. In para. 123 he says the public interest primarily refers to “the public interest in the fairness of the trial process – a trial in which the party can fairly make out its case and can fairly meet the case of the other party.”

[32] In para. 126, Mr. Justice Strathy says that the public interest extends beyond the immediate interests of the parties, that is, one where it is ensured that the information available to the Court is as complete and reliable as possible. The Court, in that instance held that the test had been satisfied and it ordered the production of the CVR (cockpit voice recorder). The Court of Appeal upheld that decision.

[33] In the case at bar, the Master held that the Refusals, as earlier noted, must be answered in relation to the TSB Draft Report. The issue of privilege was not before him but even if it had been, in my view, he came to the proper conclusion in making the Orders he did. The public interest in the administration of justice outweighs the importance attached to the statutory privilege now claimed. The Draft Report is, in my view, a vital document in assisting the Court to know what position Jetport’s witnesses took on all matters relating to the accident. See: paras. 20-23 and 29 of the Court of Appeal decision in NAV Canada et al., supra.

[34] The Appeal is therefore dismissed. Order to go accordingly. The Appellant shall comply with all Orders of the Master in accordance with whatever timetable has been set by him.

Costs

[35] If the parties cannot otherwise agree on Costs, they shall provide me with their written submissions no longer than 3 pages in length plus time dockets, a Bill of Costs and any case law relied upon, within 30 days of this Order, with the Defendants, being successful on the Appeal, to serve its submissions first on the Plaintiff and the Plaintiff shall have 10 days thereafter to respond. If a Reply is necessary, the Defendants shall serve and file its Reply 10 days therefore. All written submissions shall be sent to me at Osgoode Hall.

Greer J.

Released: September 5, 2013

COURT FILE NO.: CV-08-357295

DATE: 20130905

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

JETPORT INC.,

Appellant on the Appeal

– and –

GLOBAL AEROSPACE UNDERWRITING MANAGERS (CANADA) LIMITED, NATIONAL LIABILITY & FIRE INSURANCE COMPANY, TEMPLE INSURANCE COMPANY, LOMBARD GENERAL INSURANCE COMPANY OF CANADA AND MITSUI SUMITOMO INSURANCE COMPANY LIMITED,

Defendants and on the Appeal

Court File No. CV-10-412252

BETWEEN:

JETPORT INC.

Plaintiff

– and –

JONES BROWN INC.

Defendant

..2/

AND

Court File No. CV-11-438633-00A1

BETWEEN:

GLOBAL AEROSPACE UNDERWRITING MANAGERS (CANADA) LIMITED

Plaintiff

(Moving Parties)

– and –

JONES BROWN INC. and
GRANT ROBINSON

Defendants

– and –

JETPORT INC.

Third Party

DECISION ON APPEAL

Greer J.

Released: September 5, 2013