SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 11-52912

DATE: December 10th, 2013

RE: Olive Heasley et. al., plaintiffs

AND:
Robert Labelle, et. al., defendants

BEFORE: MASTER MACLEOD

COUNSEL:
Thomas P. Connolly, for the plaintiffs

David Tompkins for the defendants

HEARD: December 3rd, 2013

ENDORSEMENT

[1] This action is a tort claim arising out of a motor vehicle accident. The action is currently scheduled for trial with a jury on January 20th, 2014. The issue before the court on this motion is to determine whether privilege attaches to a particular document. For the reasons that follow I have determined that it does not. The document is to be produced.

The document and the circumstances of its creation

[2] The document in question was inadvertently disclosed to counsel for the defendants. It was mistakenly included with the accident benefits file although it is now apparent it was never submitted to Intact (the A.B. insurer) and would not have been part of that file. The document is a draft “Form 1” which is the form necessary to apply to the accident benefits insurer for “attendant care benefits”. The form and accompanying report dated March 28, 2013 was prepared by Darlene Matheis who at the time was the Occupational Therapist retained by the plaintiff to assess her for the purpose of applying for attendant care benefits under the Statutory Accident Benefits Schedule (SABS).

[3] An application for attendant care benefits is governed by s. 42 of the SABS. In general terms, the way in which this operates is as follows. An insured person injured in a motor vehicle accident and wishing to claim attendant care benefits must be assessed by a qualified Occupational Therapist or Registered Nurse. This service is generally paid for by the insurer and the OT or RN must first submit a form “OCF 18” to obtain authorization for the cost of the assessment. The health professional then assesses the needs of the injured person and completes the “Form 1” which is an “Assessment of Attendant Care Needs”. Upon submission of the Form 1 the insurer is obligated to pay the requested attendant care benefits unless the insurer takes steps to dispute the entitlement which may include an independent assessment under s. 44 of the SABS.

[4] In the case of the plaintiff an assessment had been completed by Ms. Mathies in February of 2011. This had resulted in payment of attendant care benefits just short of 50% of the maximum monthly benefit. In February of 2013 Ms. Mathies was asked to conduct a reassessment and to prepare a new Form 1. This was triggered by the belief that Ms. Heasley now requires 24 hour per day attendant care. This is apparently the view of the plaintiff’s own independent expert retained for purposes of the tort litigation and as subsequent events have shown is an assessment now confirmed by the accident benefits insurers own s. 44 assessment. To the plaintiff’s surprise however it was not the assessment of Ms. Mathies. The draft Form 1 suggested that the plaintiff required less attendant care than she was currently receiving.

[5] Immediately upon receiving the draft Form 1, the plaintiff took the following steps. Firstly plaintiff’s counsel instructed Ms. Mathies not to submit the Form 1 to Intact. Secondly the plaintiff revoked her retainer and her authority. Thirdly Ms. Mathies was instructed to bill the plaintiff’s lawyer for the report and not to submit a bill to Intact. Fourthly the plaintiff asserted privilege over the report. I am advised that subsequently a Form 1 was submitted by a different Occupational Therapist, that Intact had its own s. 44 independent assessment conducted and that ultimately an attendant care benefit of $6,000 per month has been approved. This is the maximum available under the SABS.

Inadvertent Disclosure & the Course of the Litigation

[6] A series of unfortunate events took place which have marked the recent conduct of the litigation. Firstly a law clerk in Mr. Connolly’s office who was responsible for compiling a list of undertakings and answers inadvertently included the disputed document with the accident benefits file. It is now clear from the evidence that it never formed part of the file. It was sent to counsel for the defendant with the A.B. file on May 21, 2013. This error was noticed on May 24, 2013 and a letter was immediately sent to defence counsel claiming privilege and asking for the return of the document.

[7] At that point the correct thing to have done would be to segregate the disputed document and either return it or at least seal it in an envelope. This is not what occurred. One reason for this may have been that there was a copy of the OPF 18 in respect of the draft report which was in the accident benefits file. This form had been sent in to Intact by Ms. Mathies but it was not the version of the form signed by the client which was still in Mr. Connolly’s office and was never submitted. In any event because the OPF 18 was in the accident benefits file it appears that defence counsel took the position that the plaintiff was trying to improperly edit the disclosure. Additionally defence counsel appeared to be under the mistaken belief that the Form 1 had been the subject of an undertaking to produce.

[8] I need not go into this dispute in depth because it is not pertinent to the question of privilege. I will simply note that when privilege is asserted and a document is inadvertently disclosed, even if the receiving party wishes to dispute the claim for privilege, it is not appropriate to simply treat the claim as if it is illegitimate. Counsel who know they have inadvertently received documents over which privilege is claimed and who fail to take immediate steps to return the documents or obtain a court ruling may risk being removed from the record in appropriate circumstances.[^1] It is the court that is the ultimate arbiter of privilege.

Analysis

[9] The only privilege that could apply to this document is litigation privilege. There is nothing in the evidence that would support a finding that the document was prepared for the purpose of the tort litigation. It was clearly a document prepared for the purpose of applying for enhanced accident benefits.

[10] The leading case on litigation privilege is Blank v. Canada.[^2] In that decision the Supreme Court of Canada has further developed the law of litigation privilege as enunciated by the Ontario Court of Appeal in General Accident Assurance Co. v. Chrusz.[^3] It is now clear that litigation privilege exists completely independently of solicitor client privilege. It is a privilege that exists solely to create a “zone of privacy” in relation to pending or apprehended litigation. It comes to an end when that litigation is over but it may continue to apply when related litigation is pending or anticipated.[^4] The documents which are protected are only those documents prepared for the dominant purpose of litigation. That is documents which satisfy the “need for a protected area to facilitate investigation and preparation of a case for trial by the adversarial advocate”.[^5]

[11] On the authority of Blank and the cases and articles cited in that decision, it is clear that a document which was prepared for the purpose of litigating with the accident benefits insurer could retain its privileged character in the related tort litigation. In the case at bar there has never been litigation with the accident benefits insurer. Indeed, there has been no denial of benefits. But the privilege protects documents prepared in contemplation of litigation and I accept that a document clearly prepared for potential litigation with Intact could be a document that attracted privilege vis a vis the accident benefits insurer and could retain that purpose in the tort litigation.

[12] I am not persuaded however that this draft Form 1 was such a document. Accepting the evidence in the Knapton affidavit that the possibility of a dispute with Intact leading to possible litigation was present when the assessment was done, this is not sufficient. It may well have been good strategy for the plaintiff to decide not to submit the disappointing and perhaps erroneous assessment to Intact and instead to commission another occupational therapist. At that point the plaintiff may well have feared she would have to litigate with the A.B. insurer but the document was not originally generated for the purpose of preparing for litigation. The purpose of the assessment was to generate a Form 1 in order to request enhanced attendant care benefits and was a statutory precondition to submitting an application. It is analogous to a proof of claim or a body shop estimate in a property damage case. The dominant purpose of the assessment was to apply for benefits and not to prepare for litigation.

[13] In my view the draft Form 1 fails the dominant purpose test and it is not subject to litigation privilege. The plaintiff cannot change the purpose for which the assessment was commissioned after the fact. To hold that this document is privileged though there has never been a denial of benefits or litigation with Intact would be to presume that an insured is always in a potential state of litigation with his or her insurer and that all documents assembled to submit a claim would be covered by litigation privilege. In first party claims under an insurance contract, the courts do not allow insurers to shelter the adjuster’s file from disclosure just because litigation is possible. There is a mutual duty of good faith between insured and insurer and the mere submission of a claim does not cast the parties in an adversarial role.[^6] Quite simply even if the plaintiff contemplated the possibility of having to litigate against Intact the purpose of this document was not to prepare for that litigation but to comply with the statutory pre-condition for submitting a claim.

[14] The claim for privilege in the tort action is dependent on a finding that the document would have been privileged in an accident benefits action and that the privilege will also apply in the tort action. I conclude that the claim for privilege fails and the document must be produced.

Use of the document

[15] In some ways this motion has been much ado about nothing. The plaintiff does not intend to call Ms. Mathies as a witness. The defendant has indicated he will do so and will be issuing a summons to witness. He may do so of course and with or without the report, he can presumably elicit from the witness the fact that she conducted an assessment, that she made certain recommendations, that those recommendations were not submitted to Intact and her services were terminated. In other words she may be called as a fact witness but assuming the trial judge applies the Westerhof v. Gee Estate decision[^7] she cannot be qualified as an expert because neither party has served an expert report under Rule 53.03. In that case her assessment of the need for attendant care may not be admissible as opinion evidence. By contrast the plaintiff has an expert report stating the expert’s opinion that the plaintiff now requires 24 hour attendant care.

[16] Obviously a ruling that the document is not privileged and is subject to production does not render it admissible or probative. The use of the document at trial will be in the discretion of the trial judge and subject to the normal rules of evidence.

Conclusion and Decision

[17] The motion that the document must be produced and is not privileged is granted. It remains to deal with costs.

[18] The parties exchanged and submitted costs outlines but asked to make submissions before costs were awarded. This is reasonable. The parties may either agree on costs, agree to reserve those costs to the trial judge or they may ask me to award costs. If the latter is adopted then counsel should agree on a timetable for written submissions and I will deal with the question of costs in writing. I may be spoken to for further direction if necessary.

Master MacLeod

[^1]: See for example 2054476 Ontario Inc. v. 514052 Ontario Ltd. [2006] O.J. No. 4383 (S.C.J.) and cases referred to therein

[^2]: 2006 SCC 39, [2006] 2 S.C.R. 319

[^3]: (1999) 1999 7320 (ON CA), 45 O.R. (3d) 321 (C.A.)

[^4]: Blank, supra, paras. 33 - 39

[^5]: Blank, supra, para. 40

[^6]: See for example Paneta v. Retrocom, 2013 ONSC 2386 (S.C.J.) @ paras. 40 & 41

[^7]: 2013 ONSC 2093 (Div. Ct.)