CITATION: Ozerdinc Family Trust v. Gowlings, 2015 ONSC 2366
COURT FILE NO.: 13-57421
DATE: April 13th, 2015
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: OZERDINC FAMILY TRUST, et. al.
AND:
GOWLING LAFLEUR HENDERSON LLP, et. al.
BEFORE: MASTER MACLEOD
COUNSEL: Allan R. O’Brien, for the defendants
Ronald F. Caza & C. Katie Black, for the plaintiffs
Sally Gomery & Alexa Biscaro, for the third party
HEARD: February 24th, 2015
ENDORSEMENT
[1] This motion raises an important practice issue. It pits the procedural rights of the plaintiffs against the right of the defendant to security of his person and health. The moving party and his health practitioners depose that he is far too ill to undergo an oral interrogation and he seeks to compel the plaintiff to examine him by written interrogatories.
[2] This is an action for solicitor’s negligence in relation to a substantial tax burden inflicted on the plaintiffs. The defendants in this action are a law firm and three individual lawyers. One of those lawyers seeks the order in question. It is his evidence that he suffers from a health condition which renders oral discovery onerous and impractical. In the circumstances he argues that oral discovery is unnecessary and unjust.
[3] The plaintiffs and the third party strongly oppose this relief. They argue that the lawyer in question is not a peripheral defendant. It is his advice that is in issue. In a very real sense he is the target of the litigation. In addition, the plaintiffs’ allegations against him go beyond professional negligence. They include allegations of breach of fiduciary duty and dishonesty. It is alleged that the defendant attempted to persuade the plaintiffs to misstate the facts to CRA in order to cover up his negligence. Punitive damages are sought.
[4] Of course these are unproven allegations which may ultimately turn out to exaggerated or without substance. Unlike a plaintiff, a defendant is an unwilling participant in litigation and no doubt he feels that the additional claims of intentional wrongdoing and punitive damages are vindictive. It is clear however that there is evidence that only this defendant can provide. The plaintiffs should not be lightly deprived of a right given to litigants by the rules of civil procedure.
[5] Is it sufficient that discovery would have to take place in degrading and humiliating circumstances and that it could pose a physical and psychological risk to the defendant? In any event is the evidence on this point persuasive? Are there acceptable alternatives which would minimize these risks while providing the plaintiff with the benefits of appropriate discovery? It is necessary to answer these questions in order to decide the motion.
Background
[6] The defendant was a tax lawyer at the defendant Gowlings and he is now retired on long term disability. He has a progressive, debilitating medical condition which causes chronic pelvic pain, skeletal muscle spasm and loss of control. It is his evidence that under stress he must absent himself for painful bathroom breaks at 10 or 15 minute intervals and is required to spend up to half an hour in the bathroom. There is also evidence that he is severely depressed and has suffered potentially life threatening weight loss. These are the grounds for the submission that he cannot tolerate an oral examination for discovery.
[7] The action itself is for professional negligence in relation to the Ozerdinc Family Trusts. The moving defendant was the principal lawyer involved in providing advice to the plaintiffs. The trusts have allegedly been subject to significant and unanticipated tax burdens because of a deemed disposition of the assets of the trusts. There is an outstanding appeal of that CRA decision before the Tax Court of Canada and it is possible the outcome of that proceeding will reduce the damages. As it stands the plaintiffs are seeking over $2 million in general damages plus unquantified aggravated and punitive damages.
[8] Many of the most critical pieces of information sought by the plaintiffs are within the personal knowledge of this defendant. Some of them are apparently matters only he can answer. Indeed the plaintiff served a comprehensive Request to Admit on January 30th, 2015. The defendants admitted certain facts and denied others but in respect of at least 30 paragraphs they refused to admit the truth “as they are within the knowledge of the Defendant ….” He “is unable to provide a response within the 20 day timeline due to his medical condition.”[^1]
[9] The plaintiffs insist on the right to conduct an oral examination for discovery as they assert the advantages of oral discovery in a case that may hinge on credibility. They argue that written interrogatories are a poor substitute because written answers are not spontaneous. Moreover as it cannot be readily anticipated what answers will be forthcoming and what follow up questions will be necessary, successive exchange of written questions and affidavits will take longer and be far less efficient[^2].
[10] The plaintiffs are prepared to agree to any reasonable terms to protect the health and psychological well-being of the defendant but they will not agree to conduct discovery in writing. They also challenge the sufficiency of the evidence and the opinions of the physicians. In fact the physicians were cross examined on their affidavits.
The Right to Discovery
[11] Before turning to an analysis of the evidence it is necessary to deal briefly with the jurisdiction of the court to make the requested order and to consider the governing jurisprudence.
[12] The rule providing for oral discovery does not of course stand in isolation but it is the basis for litigants to initiate discovery as of right and without leave of the court. Rule 31.02 is the applicable rule under the Ontario Rules of Civil Procedure and it reads as follows:
31.02 (1) Subject to subrule (2), an examination for discovery may take the form of an oral examination or, at the option of the examining party, an examination by written questions and answers, but the examining party is not entitled to subject a person to both forms of examination except with leave of the court.
(2) Where more than one party is entitled to examine a person, the examination for discovery shall take the form of an oral examination, unless all the parties entitled to examine the person agree otherwise.
[13] The right to obtain information from the opposing party under oath is an important procedural right. As drafted, Rule 31.02 permits the examining party to proceed with either an oral examination or a written examination but not both. The election as to whether to exercise those rights and what form of discovery to initiate is the right of the examining party and not the party being examined.
[14] These forms of examination out of court are in effect the pre-authorized party initiated default discovery rights. The rule does not contemplate any court involvement at this stage and unlike many other rules, Rule 31.02 does not contain any limiting words such as “unless otherwise ordered”. To limit the right provided by this rule requires the party who is the target of the examination to persuade the court it is appropriate to do so. The jurisdiction to do so must be found elsewhere than in the rule itself.
[15] Although discovery takes place privately and out of court and can be initiated automatically, it is a mistake to view discovery as a procedure that is not ultimately subject to court supervision. Several specific rules permit the court to modify discovery rights or impose consequences for discovery abuse.[^3] It is also clear that the court has a general power to limit (or expand) discovery rights in appropriate cases.[^4] The court has inherent jurisdiction to control its own processes, and the several specific rules demonstrate the superintending function. In applying any of the rules the court is to have regard to the general directive in Rule 1.04 and there is a general power to override any of the rules under Rule 2.02 if it is necessary to do so in the interests of justice.
1.04 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.
2.03 The court may, only where and as necessary in the interest of justice, dispense with compliance with any rule at any time.
[16] Overriding Rule 31.02 requires recourse to these general powers. The circumstances must justify extraordinary intervention because it is necessary “in the interests of justice”.
[17] Of course discovery is neither a free standing right nor an end in itself. It is a procedural right which exists primarily for reasons of efficiency and fairness in our adversarial system of adjudication. As frequently cited in jurisprudence, the purposes of discovery include enabling the examiner to know the case to be met, obtaining admissions, defining and narrowing the issues and promoting settlement.[^5]
[18] In Morden & Perrell, The Law of Civil Procedure in Ontario [^6] the authors cite various benefits of discovery which may be summarized as follows:
a. Allowing examining parties to know the case they have to meet, minimizing surprise at trial and improving the ability of the parties to prepare for trial.
b. Providing an opportunity to assess the credibility and reliability of the opposing party and to form an impression of the way in which the principal witnesses will perform at trial.
c. Facilitating more accurate fact finding, promoting the search for truth and encouraging decisions based on the substantive merits of a claim or defence.
d. Providing an effective and efficient means for the parties to marshal the evidence for trial, to obtain admissions and to narrow the issues.
e. Facilitating fairer settlements through informed decisions about the strengths and weaknesses of each party’s case.
[19] Discovery in this context is not necessarily limited to oral examination and many of these objectives are achievable by other forms of discovery. But it is certain that oral discovery will usually be superior to written discovery in achieving some of these objectives. In particular the objective of assessing credibility and how the witness will perform at trial are only really achievable in this manner. This, along with the ability to tie the witness to a particular narrative in his or her own words obtained spontaneously in answer to questions, is the main reason for preferring oral discovery. It is quite understandable that the plaintiffs wish to proceed in this manner but it does not follow that it will be unjust to compel them to use other methods if the circumstances require it.
[20] As Mr. O’Brien argues, there are other common law justice systems in which oral discovery is not the norm. Most significantly for a legal system built upon the foundation of English law and evidence [^7], English civil procedure has never provided for routine oral discovery. Similarly oral discovery is not ordinarily available in civil litigation in Australia, New Zealand or many other commonwealth countries. Though all Canadian jurisdictions permit oral discovery, specific discovery rights differ from province to province even in Canada.
[21] Oral discovery of parties has been a feature of civil procedure in Ontario since the late 19th Century. The current wording of Rule 31.02 has been in effect since 1985.[^8] It is fair to say that for most of that time and at least the first two decades of the “new” rules, the trend was generally in favour of expanded discovery. For all of its benefits, however, discovery also comes at a cost and abuse and overuse of discovery has been recognized as a major impediment to access to justice. Discovery as of right is no longer available in family law proceedings or in proceedings under the Construction Lien Act.[^9] Discovery was abolished for Small Claims Court and for Rule 76 proceedings and though in the latter case limited discovery is now available, the Civil Rules Committee has curtailed the right to open ended discovery in larger civil cases as well.[^10]
[22] Oral discovery then is neither an absolute right nor a precondition to fairness and justice. In fact if it is used inappropriately discovery may be an engine of abuse and an impediment to resolution of cases on their merits. If the justice of the case requires it there can be no doubt that the court has the jurisdiction to curtail or modify the discovery rights of the parties or to give direction as to how those rights are to be exercised.[^11]
The test for an order restricting rights of oral discovery
[23] Notwithstanding the existence of systems which eschew such discovery, Rule 31.02 remains the governing rule. It provides a presumptive right to each party to conduct oral discovery and it will require compelling evidence to move the court to restrict that right.
[24] In Ferrara v. Roman Catholic Episcopal Corp. for the Diocese of Toronto in Canada [^12] this court held that it was insufficient that discovery was upsetting or stressful. The court ruled that, in the absence of discovery abuse, the onus was on the party resisting oral discovery to establish by persuasive medical evidence the party was unable to attend for discovery. That case may be regarded as a particularly strong endorsement of the right to oral discovery because there had already been such a discovery and the proposal by the moving party was simply that the follow up discovery be in writing. The motion judge was also of the view that an affidavit sworn by counsel containing hearsay evidence was insufficient notwithstanding that such evidence may be tendered under Rule 39.01 (4)[^13].
[25] It is hard to quarrel with the need for cogent medical evidence. Where such evidence is persuasive, “unable to attend” should be interpreted to include “unable to attend without risk of serious harm”. I was referred to the decision of the Alberta Court of Queen’s Bench in Ms. R. v. W.A. [^14] In that decision at paragraph 23 & 24 the court adopts the view that “if the plaintiff is able to demonstrate a likelihood of serious injury if she submits to the examination for discovery, then she is able to avoid the examination”. This is consistent with the view of Aitken J. in Kidd v. Lake. At paragraph 19 of that decision she cites earlier decisions of this court in which the court had adopted the view that competent children should not be subject to discovery if there was a significant risk of harm. Aitken J. stated that she did not take this “as meaning this is the only situation in which it would be appropriate for the court to exercise its discretion and deny an order for an examination.”[^15]
[26] I adopt the view of Master Muir in Mohanadh v. Thillainathan where he concludes that the court may excuse a party from oral discovery where the medical evidence clearly shows a real potential that the party to be examined will suffer harm as a result of the procedure and where there is a reasonable alternative available.[^16] In fact this was not seriously contested. Both the plaintiff and the third party which supports the plaintiff in opposition to the motion accept that the court may excuse a party from oral examination if it is persuaded of the risk of serious harm.[^17] The motion was argued primarily on the sufficiency of the evidence.
The evidence
[27] The defendant did not swear an affidavit himself. This is understandable since we would then have had the very same argument about the right to cross examine on his affidavit. The motion was supported by an affidavit of Lauren Rakowski, an associate lawyer at Nelligans, an affidavit of Dr. Meridith Foot, a clinical psychologist who is treating the defendant, and an affidavit of Dr. J.S. Oake, a urologist who is one of the defendant’s treating physicians. Each of the deponents was cross examined at some length.
[28] Technical arguments were raised concerning the admissibility of the expert evidence and the failure to comply with Rule 53.03. I agree that independent neutral expert evidence might carry more weight but on a procedural motion the court need not be satisfied with scientific precision nor absolute certainty that discoveries will result in harm. It is sufficient that the evidence persuades the court that the risk is real, that the party to be examined is not simply attempting to avoid the discovery and in weighing the importance of the witness’s evidence, it is not unjust to utilize an alternative.
[29] Again I agree with Master Muir in Mohanadh that it is not necessary on a motion to invoke the full forensic machinery that might be necessary for a trial. The court is not being asked to decide between competing scientific theories and to determine which is correct or to make final determinations of fact based on expert evidence. Rather the court is involved in risk analysis and weighing a procedural right against a substantive right. Moreover as the Court of Appeal has now made clear, the evidence and opinions of “participant experts” such as treating physicians is admissible and need not be Rule 53.03 compliant. The question of treating physician bias goes to weight.[^18]
[30] Each of the witnesses was cross examined. Under cross examination the health practitioners conceded that they did not know what was involved in discovery other than described to them by counsel. It was also clear that Ms. Rakowski requested amendments to the reports and shaped the affidavits to meet the test for the motion. While that is not improper[^19], it is again a matter that goes to the weight to be given to these affidavits.
[31] Further admissions were obtained on the cross examinations. The main concern of the doctors is for the effect of stress on the defendant’s physical and psychological wellbeing. There is no question he is capable of answering detailed questions. He is able to attend at his physician’s office and with adequate breaks to endure questioning and discussion for periods of 30 to 70 minutes. He drives, takes exercise and otherwise is able to function albeit with considerable difficulty as a result of his unfortunate condition.
Decision
[32] I do not agree with the plaintiff that the evidence shows the defendant is improperly trying to evade discovery. I do not doubt that the advice he is receiving from his physicians is that it would be preferable to avoid the stress of oral discovery and to answer questions in writing. But the evidence does not persuade me that oral discovery properly managed would likely produce physical or psychological harm.
[33] In Kong Wah Holdings,(supra @ note 17) Mesbur J. ordered oral examinations under minimally stressful conditions. That is a case dealing with enforcement of a letter of request governed by the Canada Evidence Act but the court applied the same analysis as under the discovery rules. In that case the judge permitted the examination to take place by video conference in the defendant’s home with his physician present.
[34] I am of the view that similar safeguards may be appropriate in this case. The evidence is that the defendant may need to take frequent lengthy breaks and that he is stressed by worrying about when he will have to take such breaks, keeping people waiting, and that he can be distracted by pain and involuntary muscle contractions. The discovery should therefore take place in an environment in which the plaintiff is comfortable, either at his home or at his lawyer’s office. The discovery is also to be conducted in several short sessions with provision for breaks as necessary. The defendant may have his physician or psychologist present if he wishes.
[35] As I did not hear argument on the point, I will not order that the discovery take place by videoconference but I direct the parties to discuss that possibility. Indeed there may be great benefit to having the defendant’s evidence videotaped for possible use at trial.
The Request to Admit
[36] The defendant sought additional time to respond to the request to admit. Strictly speaking that relief is unnecessary. The defendant has admitted certain facts and denied others. It is certainly open to the defendant to subsequently admit facts that were initially denied. I encourage him to do so particularly with respect to the paragraphs which were identified as paragraphs that are within his exclusive knowledge. I direct that he turn his mind to this and if appropriate provide further admissions prior to discovery.
Summary, Conclusion & Costs
[37] In summary, the motion to require the defendant to resort to written discovery is dismissed. The defendant shall make himself available for oral discovery but that discovery shall be in a comfortable and familiar location for short durations with provision for breaks as necessary. At the defendant’s option he may have his physician or psychologist present during the discovery. The parties are also to explore the possibility of conducting the discovery by video link and to consider recording that evidence for use at trial.
[38] The additional costs attendant upon the discovery precautions shall be borne equally by the parties in the first instance but those costs shall be recoverable in the cause. I will remain seized of this matter should the parties be unable to finalize acceptable conditions for the discovery.
[39] I may be spoken to for further direction and I may be spoken to regarding the costs of the motion itself.
Master MacLeod
[^1]: Response to Request to Admit, February 18th, 2015.
[^2]: The procedure for discovery by written questions is set out in Rule 35.
[^3]: Rules 31.03 (1), (2) & (9), 31.05 (2), 31.05, 31.05.1, 31.06 (6) & 31.10, and Rules 34.14, 34.15 and 34.19 as examples.
[^4]: See Senechal v. Muskoka 2005 11575 (ON SC), [2005] O.J. No. 1406; 2005 11575 (Master) and Mohanadh v. Thillainathan 2010 ONSC 2678; (2010) 97 C.P.C. (6th) 83 (Master) as examples
[^5]: Ramadath v. George Brown College of Applied Arts and Technology 2012 ONSC 2747, [2012] O.J. No. 2475 (S.C.J.)
[^6]: The Law of Civil Procedure in Ontario, 2d Edition 2014 LexisNesis Canada Inc, @ paras. 7.18 – 7.23
[^7]: Property and Civil Rights Act, R.S.O. 1990, c. P.29
[^8]: The Law of Civil Procedure in Ontario, ibid, @ pp. 562 – 563 See also Holmstead & Watson, Ontario Civil Procedure, “Introduction to Rule 31”, Garry D. Watson and Derek McKay, R. 31§6
[^9]: See Rule 20, Family Law Rules, s. 67 (2) Construction Lien Act
[^10]: The Law of Civil Procedure in Ontario, ibid, @ para. 7.12
[^11]: Kidd v. Lake, (1998) 1998 14714 (ON SC), 42 O.R. (3d) 312 (Gen. Div.) @ para. 17
[^12]: [1996] O.J. No. 2164; 1996 CarswellOnt 2056; (1996) 2 C.P.C. (4th) 64 (Gen. Div.)
[^13]: See also Kidd v. Lake, supra @ para. 28
[^14]: 2001 ABQB 853
[^15]: @ para 19, commenting on Bennett v. Hartemink (1983) 42 C.P.C. 33 (H.C.J.) which in turn was following Wellesley v. Duke of Beaufort (1827) 38 E.R. 236 (Eng. Ch. Div.)
[^16]: 2010 ONSC 2678 (Master) @ para 8 - 9
[^17]: The plaintiff referred to Kong Wah Holdings Ltd. v. Yong 2006 32056 (Ont. S.C.J.), Michriky v. Hack 2005 CarswellOnt 962 (Ont. Master) and Ferrara, supra @ note 12 The third party referred to Lalousis v. Roberts 2013 ONSC 5897 (Master) and Attorney General of Ontario v. Condominium Units 1210 and 1310 et. al. 2012 ONSC 5485 (S.C.J.) all of which accept this principle providing the “very high” threshold is met for persuading the court to depart from the prima facie rule.