ONTARIO

SUPERIOR COURT OF JUSTICE

Court File No.: 19073/14
Date: 2014-12-08

Parties

B E T W E E N:

LORENZO GIRONES

Gordon McGuire, for the Plaintiff

Plaintiff

• and -

MARSH CANADA LIMITED

Christopher J. Rae, for the Defendant

Defendant

Heard: October 9, 2014

Corrected Decision

January 12, 2015: On the cover page, counsel for the Defendant corrected to Christopher J. Rae.

Decision

WILCOX, J.

[1] The Plaintiff brought a motion on notice returnable October 9, 2014 and heard that day. The Notice of Motion sought an order requiring the Defendant Marsh Canada Limited (Marsh) to enter into and comply with a discovery plan in the form attached as Schedule A to the motion.

BACKGROUND

[2] The Plaintiff, Lorenzo Girones, was the owner of an aircraft which was destroyed in an accident on October 8, 2012. The aircraft was insured for $3,400,000. However, the insurers denied the insurance claim. The Plaintiff commenced an action against his insurers (the coverage action) in November, 2012 for breach of the policies of insurance. That action was scheduled to be tried early in 2014, but the trial was adjourned in order for the Plaintiff to commence the present action against his insurance broker, Marsh Canada Limited. The Statement of Claim in the Marsh matter was issued in April 2014 and served on May 13, 2014. It seeks damages for Marsh’s failure to advise the Plaintiff of the risks that were or were not covered by the insurance policies. Marsh delivered a Statement of Defence on June 25, 2014 and pleadings closed thereafter. Although the rules require a discovery plan to be agreed to within a limited time, none is in place yet in this action.

[3] The motion was supported by the affidavit, sworn on April 26, 2014, of Geoffrey D. E. Adair, Q.C., a partner in the law firm representing the Plaintiff. He deposes that, from the outset of this action, his office advised defence counsel that the Plaintiff was under pressure to and intended to move the matter along expeditiously. His office had provided a proposed discovery plan on July 22, 2014 and requested “prompt feedback”, also proposing the scheduling of examinations for discovery. This had been followed up in the subsequent weeks. When the Defendant’s counsel failed to provide a response to the proposed discovery plan or discovery dates, Plaintiff’s counsel booked this motion.

[4] The affidavit sworn October 2, 2014 by David C. Rosenbaum, a partner with the lawyers for the Defendant, was filed in response. In summary, he deposes with examples as to how the Plaintiff’s counsel, despite the purported need to move the matter forward quickly, did not always do so. Uncertainty remained as to whether the Plaintiff would seek to consolidate the actions or have the Marsh action tried together with or immediately after the coverage action. There had been ongoing communications about the discovery plan. However, Plaintiff’s counsel wrote on September 12, 2014 to advise that the Plaintiff intended to bring a motion for an order compelling entry into a discovery plan and inquiring about defence counsel’s availability for a motion on October 9, October 23 or November 13, 2014. November 13 was apparently agreed upon, but the motion documents when received had a return date of October 9. In the meantime, defence counsel had informed Plaintiff’s counsel that it had received instructions to move to stay the Plaintiff’s action against Marsh pending resolution of the coverage action. Further correspondence did not resolve the matter of the discovery plan. Defence counsel indicated by letter of September 30, 2014 to Plaintiff’s counsel that it would agree to a “slightly modified discovery plan”, on the condition that it was without prejudice to the Defendant’s stay motion. Another condition was that the defence would not agree to proceed with examinations for discovery while the Defendant’s stay motion was outstanding, but they would agree to proceeding with examinations for discovery within 45 days of the court making a final decision on that motion, including appeals. This was not accepted. The Defendant acknowledged that the Plaintiff had provided an unsworn Affidavit of Documents, but added that its Schedule B had shortcomings.

[5] The court received a letter of November 6, 2014 from the Plaintiff’s counsel, stating that it was written with the consent of the other counsel. It noted that this decision on the Plaintiff’s motion heard October 9, 2014 was under reserve and that the court had been advised on October 9 that the Plaintiff’s stay motion had as of then been scheduled for November 27, 2014, but that it had had to be re-scheduled on consent to January 7, 2015 due to judicial availability.

POSITION OF THE PLAINTIFF

[6] Plaintiff’s counsel reviewed the background. Notably, he confirmed that the Plaintiff had decided that it would not move to consolidate the two actions but would seek to have them tried together. Also, he acknowledged receipt of the Defendant’s Affidavit of Documents. He submitted that the sole issue on this motion is whether the Defendant ought to be compelled to enter into the discovery plan proposed by the Plaintiff. The crux of the matter was said to be the date by which the Defendant produced its representative for examinations.

[7] He identified the sole basis for the Defendant’s resistance to the Plaintiff’s motion was its intention to bring its stay motion, and opposed that for the following reasons, in brief:

• the balance of convenience favoured the Plaintiff, a private individual who is out of pocket $3,400,000;
• the Defendant’s stay motion lacked legal merit;
• the Defendant had delayed in raising the idea of a stay motion;
• there is a prospect of additional indefinite delay if the Plaintiff’s motion is not allowed.

POSITION OF THE DEFENDANT

[8] Defence counsel submitted that it does not object to a discovery plan in principle, only to it prejudicing the Defendant’s position on its stay motion, and to examinations proceeding while its stay motion is outstanding. He referred to the modified version of the Plaintiff’s discovery plan that is found in the Defendant’s materials, noting that most of the highlighted changes had been agreed to. The major exception was the provision for scheduling the discoveries of the Defendant’s representative. Defence counsel responded to the reasons given for the Plaintiff’s position as follows, in summary:

1- The submission that the balance of convenience favours the Plaintiff is really a matter of the prejudice of the Plaintiff who is out of pocket $3,400,000. That submission is hollow because the coverage action was ready to proceed to trial in May, 2014, but was adjourned. On the other hand, the Defendant would be prejudiced by being forced to deal with the action because it would incur expenses such as the use of the time of its employees directed to dealing with the action, which would not be compensable in costs. Also, if the Plaintiff moves the Marsh case along pending the stay motion, it will affect the decision of a court on the stay motion to the Defendant’s prejudice.
2- The Plaintiff’s submission that the legal basis for the Defendant’s stay motion is dubious is without foundation, based on the case law. Be that as it may, it is irrelevant to the decision in this motion. The Defendant’s motion will be decided on a full record, and it would be hard for this court to decide the point without that.
3- There had been no lengthy or unexplained delay, any delays by the Defendant had been modest and should be seen in the context of the Plaintiff’s own delays. Also, the Defendant is now proceeding expeditiously with its stay motion.
4- As for there being the prospect of additional, indefinite delay if the Plaintiff’s motion is not granted, the defence argued that this is not so. That motion has been served. He agreed that there might be appeals if appropriate, but noted that the stay motion might be successful as there is authority to support it. The Defendant would undertake to move the stay motion along with dispatch.

DISCUSSION

[9] Under rule 29.1, agreement to a discovery plan is long overdue. The case of TELUS Communications Co. v. Sharp, [2010] O.J. No. 2095 (S.C.J.) provides authority to impose one.

[10] The parties agree to a discovery plan in principle. Their major difference is whether examinations for discovery should proceed while the Defendant’s stay motion is outstanding.

[11] With respect to the points that the Plaintiff raised in favour of its position and which Defence counsel responded to, I would make the following observations.

[12] A decision either way will occasion some prejudice. Prejudice to the Defendant of proceeding without waiting for its stay motion to run its course can be compensated in part by costs. The non-compensable cost to the Defendant, being the application to this matter of some company resources, has to be balanced against the Plaintiff being an individual who is out of pocket $3,400,000 and has been for about two years already. I find that balance favours the Plaintiff.

[13] I will not in effect pre-judge the merits of the Defendant’s stay motion.

[14] The delays in the matter up to and including the bringing of this motion do not seem to me to be excessive. Both sides might have had opportunities to move the case along somewhat faster but, no doubt, there were legitimate competing demands for their time. It is far from clear on the evidence that either can be faulted greatly. Therefore, I find that this alleged delay is a non-factor.

[15] On the other hand, the prospect of additional, indefinite delay if the Plaintiff’s motion to implement a discovery plan is not allowed is the greatest concern. As noted above, counsel’s letter to the court says that the stay motion has been re-scheduled from November 27, 2014 to January 7, 2015. As I understood it, it had previously been returnable on an even earlier date, November 13, 2014. What might happen to the stay motion’s schedule is unpredictable. Once it is heard, a decision might be weeks or months away. Then, either side could appeal, requiring further time.

[16] In light of this, my view is that it is important to move the case along, without prejudice to the stay motion. If that motion is ultimately successful, the Marsh case is only stayed, not terminated. Depending on the outcome of the coverage case, the fruits of the labours in the Marsh case in the interim could still have value. In the event that the Plaintiff succeeds in the coverage action and the Marsh case becomes unnecessary, an appropriate award of costs could be made. Costs have already been touched on in dealing with prejudice.

[17] The question, then, is what discovery plan to put into place. The drafts included in the parties’ materials are out of date, but the one found in the Responding Motion Record of Marsh Canada Limited at Tab W is a good starting point because of the parties’ agreement to most of its contents. Therefore, the discovery plan shall be that one, with the following changes:

1. In paragraph 11, the parties shall prepare and deliver to each other affidavits of documents by January 9, 2015.
2. In paragraph 13, the examinations for discovery by the Plaintiff of the Defendant’s representative, Peter Roker, and the examination for discovery by the Defendant of the Plaintiff shall take place by February 15, 2015.

[18] If the parties are unable to agree as to the costs of this matter, the Plaintiff has 15 days to serve and file costs submissions limited to three double-spaced pages plus a bill of costs. The Defendant shall have 10 further days to reply with its costs submissions, also limited to three double-spaced pages plus a bill of costs.

Justice J.A. S. Wilcox

Released: Monday December 8, 2014