SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 12-54674
DATE: July 11th, 2014

RE: Allianz Global Risks US Insurance Company et al., Plaintiffs

AND:
The Attorney General of Canada et. al., Defendants

BEFORE: MASTER MACLEOD

COUNSEL:
Timothy Tremblay, for the Plaintiffs and third parties
Robert Fenn, for the Defendant, Nav Canada
Darryl G. Pankratz, for the Defendant, Ottawa International Airport Authority
Alexander Gay, for the Attorney General

HEARD: July 10th, 2014

ENDORSEMENT

[1] There is a series of motions before the court in this action and in a subsequent action, 13-58703. Both actions claim reimbursement for damages sustained by Embrauer 145 aircraft owned by Trans States Airlines LLC. The plaintiffs in each case are the airline, the airline holding company, the lead insurer and a series of other insurance companies participating in the insurance and reinsurance pool. The defendants are the Attorney General on behalf of Transport Canada, Nav Canada (which provides air traffic control) and the Ottawa International Airport Authority.

[2] The incidents giving rise to both actions involve aircraft hydroplaning during landing on rain slicked runways and suffering damage after they either overran the runway or skidded off the tarmac. Though there are some differences in the makeup of the insurance pool in each case and the parties are not exactly the same, the main plaintiffs are the same and the defendants are identical. The first action was at the discovery stage but is currently stalled because of the issues giving rise to the motions.

[3] The motions include the following:

a. A motion that the actions proceed on a common timetable under joint case management with common discovery and production to be tried together or one after the other.

b. A motion for a further and better list of documents from the Attorney General

c. A motion for a further and better affidavit of documents from the plaintiff

d. A motion giving leave for extended discovery, for discovery of more than one witness and imposing a timetable for both actions; and

e. A motion to sanction the defendants for unilaterally cancelling discoveries of the plaintiff and refusing to produce their clients for discovery.

[4] These issues are intertwined to some degree but it was not possible to complete argument on all issues despite allocating a full day to the motions. It is essential to move forwards with discoveries particularly because one of the pilots is now working in Africa but is available in North America in August. Accordingly I advised counsel I would release rulings on the points that were argued and convene a case conference on Monday to give further direction. If it is necessary to hear the balance of the argument on the remaining motions I will allocate time for this but those issues should not prevent the parties from moving forward with discoveries. Because of the need to do this quickly I also indicated I would only provide brief reasons.

[5] Argument was completed on items a) and c) above and item b) has been resolved. Item d) can probably be resolved at the case conference. That essentially leaves item e) unresolved along with the question of costs of the motion.

Background

[6] Trans States Airlines operates certain United Express passenger flights by agreement with United Airlines. Between 2004 and 2011 the airline sustained three runway accidents at Ottawa McDonald-Cartier International Airport. The 2004 and 2010 incidents involved runway overruns in the rain on runway number 7. The 2011 incident was similar in that the aircraft left the runway while landing during a rain storm and many of the same factors were involved but it occurred on runway number 32. In each instance there was considerable damage to the aircraft fuselage and landing gear. There were no severe injuries to passengers or crew.

[7] Each incident was investigated by the Transportation Safety Board in Canada. The plaintiffs commenced this litigation concerning the 2010 accident seeking to recover the insured losses from the defendants who are the Canadian authorities responsible for airport construction and design, airport operations and air traffic control. Subsequently a similar action was commenced seeking to recover damages for the 2011 accident. As it happens the damages in both accidents were similar approximating $6 million. The main protagonists are the airline, Allianz as the lead insurer and the defendants.

[8] There were different flight crews in each incident. The defendants have third partied the pilot and co-pilot in each case. The third party claim in the second action has been issued but not yet served. This action was commenced on June 14, 2012 in relation to the incident of June 16, 2010. The second action was commenced on September 3, 2013 in relation to the incident of September 4th, 2011.

[9] In this action the parties had not concluded a formal discovery plan although a draft plan had been circulated by the plaintiffs. There had however been tentative agreement that the defendants would be able to examine more than one witness for the plaintiffs including the First Officer, a representative of the airline and a representative of the lead insurer. Dates for discovery to take place in South Carolina had been agreed upon. Those discoveries were cancelled however because the second action was commenced, because the parties could not agree on how much time was required for discovery and because the defendants had proceeded with third party claims. The circumstance of the cancellation and who was at fault is in dispute and has not yet been argued.

[10] This action has also been made subject to case management and a timetable had been ordered by my colleague Master Roger. The cancellation of the discoveries also constituted a breach of the court ordered timetable. I have not yet dealt with the question of whether or not sanctions are appropriate and against which party an order should be made if appropriate.

The motion for trial together

[11] Trial together may or may not be necessary and appropriate and it is premature to determine that until the parties are at the stage where they can commit to calling witnesses and the court can consider the overlap in evidence with more precision. Clearly there are significant overlaps between the actions and clearly the learning or lack of learning from each of the 2004 and 2010 incidents will be relevant in the 2011 incident. Issues such as the policies, training of pilots, weather reporting, state of the runways, construction of the runways, industry standards, airline safety standards and other issues are generally identical with the important distinction that they will have to be assessed at different points in time. On the other hand there were different flight crews, a different runway, different decisions and operational and other changes that distinguish the two cases. Of course the damages are distinct to each accident.

[12] It is likely there will be judicial economy if the same trial judge is assigned to both cases. It is probable there will be evidentiary overlap and there would be a benefit to certain witnesses if they do not have to testify on two different occasions. But it is also possible that combining the two trials will result in a long unwieldy trial and will delay adjudication of the first action. As the Supreme Court of Canada has recently stated in 2014 SCC 7 undue process with protracted trials with unnecessary expense and delay can prevent the fair and just resolution of disputes. The optimum answer will not always be to bundle up all issues into a single trial. Increasingly parties and courts are called upon to consider unbundling the issues and looking at mechanisms such as that set out in Rule 6.1 or Rule 20.05.[^2] All options for efficient, effective and just adjudication should remain available to the parties and to the court.

[13] The immediate issue therefore is not how the trial should be conducted but is to deal with the question of common case management, common discoveries and a timetable that will most likely accommodate a joint trial should it subsequently be determined that is necessary or desirable. Providing for common discovery and production on the common issues is entirely appropriate given that the same counsel are involved in both actions. It is completely inefficient to require the same questions to be asked of the same witnesses on separate occasions and to maintain the implied or deemed undertaking to artificially compartmentalize the information that pertains to both actions.

[14] It is also beneficial to have both actions case managed by the same judicial officer and to set a more aggressive timetable for the second action so that it will not unduly delay the first action if they must go to trial together at the end of the day. On the other hand the pilot and co-pilot who have been third partied in the second action have not yet been served and they no longer work for the plaintiff airline. It is probable as in the first action that Mr. Tremblay will be retained to represent the flight crew but he is not instructed at present. There are also other variables which suggest that the actions should move in parallel but it may not be fair and reasonable to force them into a rigid tandem schedule.

[15] In summary, the actions will both be case managed under Rule 77 and I will be seized of the matter. Should issues arise that are within the exclusive jurisdiction of a judge I will request the Regional Senior Justice to designate a case management judge as well. The actions will proceed on compatible timetables with a view to determining which issues are truly common and which unique and to accommodate trial together if appropriate. The timing and mode of trial will be deferred for the time being.

[16] There will be an order for common discoveries and common productions on overlapping issues. The deemed undertaking will not apply as between the two actions such that discovery and production in one action may be used in the other subject to further direction from the court as may be necessary.

[17] Counsel for the plaintiff is to seek immediate instructions on accepting service of the third party claim and whether he will be retained on behalf of the third parties. If he cannot obtain those instructions then the defendants are to ensure the third parties are served as soon as possible and the plaintiffs are to provide the contact information so that can be effected.

Timing of discovery

[18] I am advised there are two days set aside for discovery in August. During those days the pilot who was in charge of the flight in the first incident is available for discovery in the United States but he is otherwise living in Africa and flying for an airline in Congo. There was a dispute about whether the defendants should be limited to examining the pilot for 7 hours as presumptively capped by the discovery rule. Common sense would suggest that the witness should be fully discovered while he is available to limit the need to examine him later in Africa or to wait until the next time he is available. In any event, given the nature of the questions that are likely to be put to this witness and the numerous factors involved in the runway incident, I would be very surprised if three defence counsel could complete discovery in 7 hours.

[19] Counsel for the plaintiff and third parties is prepared to agree to 10 hours of discovery provided he can have 10 hours with each of the defendants when they produce their witnesses. This is acceptable to defence counsel. Accordingly leave is granted to examine the third party on his own behalf and as part of the discovery of the plaintiff during the two days currently scheduled in August. I need hardly add the admonition that counsel should not be focused rigidly on counting the hours. Rather their efforts should be directed to ensuring that discovery is completed and to minimize the need for the witness to be examined again in the future.

[20] Counsel are further directed to seek agreement for a timetable to complete the balance of the discoveries and this will be addressed further at the case conference on Monday, July 14th, 2014 at 2:00 p.m. The conference will take place by telephone. Counsel for Nav Can is to arrange the call and provide call in numbers to all participants and to the court.

Affidavit of Documents

[21] The Attorney General is not obligated to provide an affidavit of documents as such but must nevertheless deliver a list of documents that is in functional compliance with the rules and must certify that it is complete. The Attorney General has now provided a detailed Schedule B showing the documents over which he claims privilege. This is no longer an issue.

[22] I heard considerable argument about the sufficiency of the plaintiff’s affidavit of documents. There is sufficient evidence to demonstrate that there are some deficiencies in the affidavit and the probability that there are relevant documents that have not been listed.

[23] Having heard counsel for the Attorney General (supported by counsel for the other defendants) concerning the categories of missing documents, I am directing counsel for the plaintiff to review the matter with his clients and if necessary to prepare a supplementary affidavit of documents.

[24] Before producing large numbers of technically relevant but perhaps unimportant documents, however, counsel are required to confer with a view to narrowing the scope of production. When dealing with electronic documents such as e-mails and the request to have access to the original Flight Data Recorder (which is a document under our rules) the parties are required to consider proportionality and to have regard to the Sedona Canada principles.

[25] I may have more to say about this but I prefer to deal with it through the case management process before providing further direction.

[26] Counsel are therefore directed to consider what further documentary production is necessary before proceeding to discovery. This question may be addressed further at the case conference and I will otherwise reserve my decision on the motion.

Balance of the motion

[27] The remaining issues on the motions and the question of costs will be adjourned and subject to further agreement or direction will be heard on a date to be set by the court.

July 11, 2014

Master MacLeod

[^1]: 2014 SCC 7

[^2]: All of the powers in Rule 20.05 may also be exercised at a pre-trial under Rule 50.07 (3).