Fehr v. Sun Life Assurance Company of Canada, 2015 ONSC 2908
COURT FILE NO.: 10-CV-411183CP
DATE: 20150504
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ELDON FEHR, ANGELA WATTERS, GAETAN LAURIER, LESLIE MICHAEL LUCAS, JAMES PATRICK O’HARA, REBECCA JEAN CLARK, AND LLOYD SHAUN CLARK
Plaintiffs
– and –
SUN LIFE ASSURANCE COMPANY OF CANADA
Defendant
Michael C. Spencer for the Plaintiffs
F. Paul Morrison, Glynnis P. Burt and Jacqueline L. Cole for the Defendant
Proceeding under the Class Proceedings Act, 1992
HEARD: April 30, 2015
PERELL, J.
CORRECTION NOTICE
The text of the original decision was corrected on May 11, 2015 as follows:
Paragraph [4]: “a five-day hearing” has been changed to “an eight-day hearing”.
Paragraph [45]: “In 2000” has been changed to “In October 2006”.
Paragraph [54]: “September 10, 2010” has been changed to “September 24, 2010”.
Paragraph [63]: “My direction was not appealed…” has been changed to “The Plaintiffs sought leave to appeal my direction, but leave was not granted.”
Paragraph [81], 2nd sentence: “The circumstances that Sun Life is not satisfied…” has been changed to “The circumstances that the Plaintiffs are not satisfied…”
REASONS FOR DECISION
A. INTRODUCTION
[1] In September 2010, the seven Plaintiffs, Eldon Fehr, Angela Watters, Gaetan Laurier, Leslie Lucas, James O’Hara, Rebecca Clark, and Lloyd Clark, commenced a proposed $2 billion class action under the Class Proceedings Act, 1992, S.O. 1992, c. 6 against Sun Life Assurance Company of Canada (“Sun Life”).
[2] It is, to oversimplify, the essential theory of the Plaintiffs’ proposed class action, that between 1983 and 1998, Metropolitan Life Insurance Company’s (“MetLife”) sales force negligently, recklessly, and fraudulently misrepresented the operation of the terms of four product lines of insurance policies. On behalf of the policy holders, the seven Plaintiffs sue for breach of contract and for misrepresentation.
[3] Sun Life purchased MetLife’s Canadian insurance business, and so it is Sun Life and not MetLife that is sued. There is no issue that Sun Life is the successor of MetLife.
[4] The Plaintiffs’ certification motion is scheduled for an eight-day hearing beginning on September 28, 2015.
[5] At the same time as the certification motion, Sun Life has brought a summary judgment cross-motion to have the individual claims of the seven Plaintiffs dismissed as statute-barred under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. Once again, to oversimplify, recalling that the alleged misrepresentations occurred between 1983 and 1998 and that the proposed class action was commenced in 2010, Sun Life submits that each Plaintiff’s action is statute-barred. Sun Life submits that the Plaintiffs, and other putative Class Members, each received disclosures from the insurer that triggered the running and the expiry of the applicable limitation period before 2010, when the proposed class action was commenced. For the summary judgment motion, Sun Life submits that the seven Plaintiffs knew or ought to have known that they had claims against Sun Life and those claims are now statute-barred.
[6] The Plaintiffs’ response to the limitation period defence is that the doctrine of fraudulent concealment applies and thus, their claims are timely and not statute-barred.
[7] Over the last year or so, the parties exchanged affidavits for the pending certification motion and the summary judgment cross-motion. Sun Life delivered affidavits from Kathy Sauvé, who is Sun Life’s Director of Customer Relations, and from 16 witnesses all of whom formerly sold the MetLife insurance policies and some of whom are currently associated with Sun Life.
[8] Sun Life’s affiants were cross-examined on their affidavits, and the Plaintiffs now bring a refusals motion to compel answers to the questions refused on the cross-examinations.
[9] For the reasons that follow, I dismiss the Plaintiffs’ refusals motion. The refused questions, which can be grouped, are some combination of: already answered, unanswerable, not material, not relevant, contrary to the proportionality principle, vague, argumentative, or protected by privilege.
B. FACTUAL BACKGROUND
1. The Factual Background to the Proposed Class Action
(a) The Plaintiffs’ Claim
[10] The Plaintiffs bring this action on behalf of a proposed class of all persons who purchased and owned universal life insurance policies sold by MetLife in Canada between 1983 and 1998. Between 1983 and 1998, MetLife sold four types of universal life insurance policies; namely: (1) Flexiplus; (2) Interest Plus; (3) Universal Plus; and (4) OptiMet.
[11] In 1997, MetLife decided to sell its life insurance in Canada. By agreements dated March 12, 1998 and June 25, 1998 (the “Master Agreement”), MetLife sold its Canadian life insurance business to Mutual Life for $2.2 billion. Mutual Life had successor liability for claims arising from the MetLife policies. On July 21, 1999, Mutual Life changed its name to Clarica Life Insurance Company, and on December 31, 2002, Clarica and Sun Life were amalgamated and continued as one company under the name Sun Life.
[12] In December 1987, Mr. Laurier, who resides in Centreville, Ontario, replaced a prior life insurance policy with a Universal Plus policy.
[13] In October 1988, Mrs. Clark, who resides in Nanaimo, British Columbia, purchased an Interest Plus policy.
[14] In March 1989, Ms. Watters, who resides in Nepean, Ontario, purchased an Interest Plus policy.
[15] In May 1990, Mr. Fehr, who resides in Chilliwack, British Columbia, purchased a Universal Plus policy, and in March 1995, he abandoned that policy and purchased a Flexiplus policy as a replacement.
[16] In October 1994, Mrs. Clark purchased a Flexiplus policy.
[17] In September 1994, Mr. Clark, who is the husband of Mrs. Clark, purchased a Flexiplus policy.
[18] In August 1995, Mr. Lucas, who resides in Windsor, Ontario purchased a Flexiplus policy.
[19] In February 1998, Mr. O’Hara, who resides in Woodstock, Ontario, purchased an OptiMet policy.
[20] The Plaintiffs allege that MetLife provided its sales agents with uniform marketing materials and trained its agents at training sessions. The Plaintiffs allege that the promotional materials used illustrations that reflected the high interest rates that prevailed between 1983 and 1998. As a result of the training sessions and marketing materials, the Plaintiffs plead that the agents told customers that, based on certain circumstances, the necessity to pay premiums would vanish at some point in the future, allowing them to retain life insurance coverage for free.
[21] The Plaintiffs allege that based on the marketing materials and training, MetLife sales agents told purchasers of Flexiplus policies that: (a) their premiums and cost of insurance would always remain level; or (b) the cost of insurance would be “level” for the first seven years of the policy, there would be no cost of insurance for the eighth year, and there could be a new cost of insurance in the ninth year, but the cost would remain level thereafter.
[22] The Plaintiffs allege that the Interest Plus marketing manual stated that the policy provided “lifetime” and “permanent” insurance, and “guaranteed permanent life insurance coverage” as long as the specified fixed premiums were paid by the policyholder. The marketing brochure stated that “after a minimum premium-paying period, you can select the vanishing premium option.” The Plaintiffs plead that prospective purchasers were given illustrations indicating that once they entered the program, their policies would remain in force without premium payments; the insurers, however, did not disclose that under some circumstances program participants could be required to resume paying premiums and to make up missed premium payments, and that if the participants did not make these payments, their life insurance coverage and accumulation funds could be lost.
[23] The Plaintiffs allege that purchasers of Universal Plus policies were told by the MetLife sales agents that if they continuously paid the “Planned Premiums,” their policies would be sufficiently funded and would not lapse and that the “Maximum Premium” amount was the most they would have to pay was a guaranteed maximum amount. The policies were marketed on a “vanishing premium” basis, that under certain interest rate scenarios, the premiums could remain stable, decline, or vanish and the policies would remain in force at their face amount.
[24] The Plaintiffs allege that prospective purchasers of OptiMet policies were told by the MetLife sales agents that the cost of insurance was fixed in the initial years of the policy, and that their accumulation funds would grow and eventually allow the premiums to vanish because the cost of insurance was lower than the premium.
[25] The Plaintiffs allege that the descriptions and illustrations used by MetLife sales agents in selling the policies, based on the marketing manuals and brochures and on their training, differed from the actual terms of the insurance policies, and did not accurately depict the policies’ terms and how they would operate in practice.
[26] The Plaintiffs plead that MetLife and its agents fraudulently and negligently misrepresented the policies when selling them, including misrepresentations with respect to the cost of insurance, premium charges, lifetime coverage, and vanishing premiums.
[27] The Plaintiffs allege that Sun Life (including its predecessors) knew that those denials, statements, and actions falsely depicted the policies as they had been represented but deliberately undertook them anyway with the intention of deceiving the policyholders and with the intention that the policyholders would continue to pay the policy premiums or other charges or that the policies would lapse on terms beneficial to Sun Life.
[28] The Plaintiffs plead that Sun Life is liable for breach of contract with respect to the policies.
[29] The Plaintiffs plead that insurers owe their customers and policyholders a duty of good faith and fair dealing in administering life insurance policies, and that Sun Life and its predecessors breached their duties of good faith and fair dealing in administering the policies.
[30] The Plaintiffs plead that despite knowledge of the misrepresentations by MetLife and its agents during the sales process, Sun Life (including its predecessors) denied the misrepresentations had occurred, told the insureds that the policies were not defective, and engaged in a systematic program of denying the insured’s claims and complaints.
[31] The Plaintiffs allege that although MetLife, Mutual Life, Clarica, and Sun Life knew that they were administering policies that had been sold by fraudulent and negligent misrepresentations, they nevertheless systematically denied policyholders’ complaints and claims.
[32] The Plaintiffs allege that during its administration of the policies, Sun Life (including its predecessors) imposed and collected increases in premiums and increases in cost of insurance, levied charges against accumulation funds, caused decreases in policy values, imposed lapses and terminations in policies, and otherwise administered the policies contrary to the representations made during the sales process and in breach of the policy terms.
[33] Under the heading “Fraudulent Concealment” in their Fresh as Amended Statement of Claim, the Plaintiffs plead that Sun Life (including its predecessors) concealed from policyholders the facts underlying the misrepresentations, including the basis, and significance of the actual terms of the insurance policies at issue. The Plaintiffs plead that the insurer concealed the misrepresentations and the fact, nature, and extent of the insurers’ breaches of the policies and the fraud and deceit committed by the insurers. Further, the Plaintiffs plead that Sun Life (including its predecessors) also diverted Class Members from seeking judicial remedies by denying that such problems existed and by undertaking to provide sufficient remedies and failing to do so.
(b) Sun Life’s Defence
[34] Sun Life pleads that by accepting the written life insurance policies, the Plaintiffs each accepted the insurer’s offer and agreed to purchase the applicable life insurance policy on the terms set out therein.
[35] Sun Life pleads that the sales advisers who sold life insurance policies were independently contracted agents who could not bind Sun Life and for whom Sun Life has no vicarious liability.
[36] Sun Life denies that there was a uniform methodology for the sale of insurance policies or that policies were sold utilizing standardized marketing manuals and brochures. Sun Life denies that in the sale of the policies MetLife or any adviser made any misrepresentations regarding the terms of the policies to the Plaintiffs.
[37] For each policy, Sun Life denies that there was any breach of contract. It denies any breach of contract in the administration of the policies and pleads that it administered the Plaintiffs’ life insurance policies in accordance with their terms.
[38] With respect to the Flexiplus policy, Sun Life pleads, among other things, that: (a) the policy provided the policyholder with a 10-day right to return the policy if policy terms differed from what the policyholder expected; (b) in the fall of 2000, certain Flexiplus policyholders received a letter from Sun Life advising them of an increase to their monthly insurance charges pursuant to the terms of their policy; (c) in the fall of 2006, certain Flexiplus policyholders received a letter from Sun Life advising them that their monthly insurance charges were increasing; and (d) policyholders received an annual policyholder statement that showed, among other things, the then-current monthly pre-authorized payment, the current amount in the Accumulation Fund, the payments made during the statement period, and the insurance charges or cost of insurance for the period making apparent any changes in insurance charges.
[39] With respect to the Universal Plus policy, Sun Life pleads, among other things, that: (a) the policy does not provide that premiums would not exceed the “Maximum Premium” stipulated in the policy; and (b) the policy provided the policyholder with a 10-day right to return the policy if policy terms differed from what the policyholder expected.
[40] With respect to the Interest Plus policy, Sun Life pleads, among other things that: (a) the policy has an entire agreement clause and states that an adviser does not have authority to change the policy; and (b) the policy provided the policyholder with a 10-day right to return the policy if policy terms differed from what the policyholder expected.
[41] With respect to the OptiMet policy, Sun Life pleads, among other things that: (a) the contract is in writing and the advisor does not have authority to change the contract; and (b) the policy provided the policyholder with a 10-day right to return the policy if policy terms differed from what the policyholder expected.
[42] Under the heading “Alleged Fraudulent Concealment,” in its Fresh as Amended Statement of Defence, Sun Life pleads:
Alleged Fraudulent Concealment
Sun Life denies concealing any facts or information from policyholders, and denies diverting class members from seeking judicial remedies in any manner whatsoever.
Rather, policyholders knew or ought to have known at the time of delivery of their policies in or before 1998 that any alleged misrepresentations (which are denied) were false. As such, the equitable doctrine of fraudulent concealment is not available to the Plaintiffs.
[43] Under the heading “Limitations,” in its Fresh as Amended Statement of Defence, Sun Life pleads:
Limitations
The Plaintiffs’ claims are statute-barred. All claims not commenced within the time prescribed by the applicable provincial and/or territorial statutes and/or common law covering limitation periods in the jurisdiction in which the injury is alleged to have taken place are statute-barred.
Sun Life pleads and relies upon the following statutes:
(a) Limitations Act, 2002, S.O. 2002, c. 24, as amended, ss. 4, 15 and 24 thereof;
(b) Limitations Act, R.S.O. 1990, c. L-15, as amended, ss. 45(1)(g);
(c) Limitations Act, R.S.A. 2000, c. L-12, as amended, ss. 2, 3 and 11;
(d) Limitations Act, R.S.B.C. 1996, c. 266, as amended, ss. 3, 8 and 14;
(e) Limitation of Actions Act, C.C.S.M., c. L-150, as amended, ss. 2, 7, 14, 17 and 19;
(f) Limitation of Actions Act, S.N.B. 2009, c. L-8.5, as amended, s. 5;
(g) Limitations Act, S.N.L. 1995, c. L-16.1, as amended, ss. 5, 6, 14, 22 and 24;
(h) Limitation of Actions Act, R.S.N.W.T. 1988, c. L-8, as amended, s. 2;
(i) Limitation of Actions Act, R.S.N.S. 1989, c. 258, as amended, s. 2;
(j) Limitation of Actions Act, R.S.N.W.T. (Nu) 1988, c. L-8, as amended, s. 2;
(k) Statute of Limitations, R.S.P.E.I. 1988, c. S-7, as amended, s. 2;
(l) Civil Code of Quebec, S.Q. 1991, c. 64, as amended, A.R.T.S. 2921 and 2925;
(m) Limitations Act, S.S. 2004, c. L-16.1, as amended, ss. 5 and 6; and
(n) Limitation of Actions Act, R.S.Y. 2002, c. 139, as amended, s. 2.
Mr. Fehr, Mr. Lucas, and Mr. and Ms. Clark knew or ought reasonably to have known from the date on which each of their policies were delivered that the premiums each would be required to pay could change (including increase) subject to the maximum values on the table entitled “Table of Maximum Monthly Cost of Insurance” in their policies.
Mr. Fehr, Mr. Lucas, and Mr. and Ms. Clark also knew or ought reasonably to have known from the date on which their respective policies were delivered or, in any event by the dates of the letters and policyholder statements described above, that their premiums would need to increase to cover increasing costs of insurance, failing which their policies were projected to lapse.
Ms. Watters and Ms. Clark knew or ought reasonably to have known from the date on which their policies were delivered that their policies terminated on the first policy anniversary after they turned age 90.
Ms. Watters and Ms. Clark have no claim as they have not turned age 90. Ms. Watters and Ms. Clark have received lifetime coverage from the date they purchased their policies.
Ms. Watters and Ms. Clark knew or ought reasonably to have known from the date on which their policies were delivered that they would be required to pay premiums as set out in their policies. These Plaintiffs have known for years that their policies were not eligible for APA. Indeed, Ms. Watters corresponded with Sun Life about this as early as 1999, if not earlier.
Mr. Laurier and Mr. Fehr knew or ought reasonably to have known from the date on which their policies were delivered that they could be required to pay increased premiums, if necessary to keep the Accumulation Fund large enough to keep their policies in force.
Mr. Laurier and Mr. Fehr have no claim as they have not been required to pay, nor have they in fact paid, a premium in excess of $1,674.00 and $73.90, respectively.
Mr. O’Hara knew or ought reasonably to have known from the date on which his policy was delivered that he would be required to pay a monthly cost of insurance based on one cost of insurance rate for the first eight years of the policy, and a monthly cost of insurance based on a second cost of insurance rate for years nine and following of the policy, calculated in accordance with the policy provisions.
In the further alternative, Sun Life pleads and relies upon the doctrine of laches.
(c) The Plaintiffs’ Reply
[44] In their Reply to Fresh as Amended Statement of Claim, the Plaintiffs respond to Sun Life’s limitation period defence in paragraphs 11-14 as follows:
Statutory Limitation Periods and Laches Defences
In addition to Sun Life’s fraudulent concealment as previously pleaded at paragraph 74 of the Claim, the Plaintiffs plead and rely on the doctrine of discoverability in reply to Sun Life’s statutory limitation period and common law laches defences.
The Plaintiffs could not have discovered the actual terms and practical operation of their policies in the absence of disclosure by Sun Life and its predecessors of the fact that the policies were sold on the basis of misrepresentations.
The Plaintiffs could not have discovered the wrongful acts and omissions of Sun Life in administering the policies in the absence of disclosure by Sun Life of the inconsistent positions it was taking in the Indemnity [Litigation] and of the fact that the basis for its increases in cost of insurance rates and administrative fees was not permitted by the policies.
The applicable limitation periods have not expired for the Plaintiffs’ contingent claims in tort and breach of contract.
2. The Sun Life v. MetLife Litigation
[45] In its purchase of MetLife’s insurance portfolio, Sun Life obtained an indemnity from the vendor, MetLife. In October 2006, Sun Life sued the vendor to enforce the indemnity. The indemnification provisions Sun Life was seeking to enforce included a threshold condition that the value of certain market conduct claims exceeded $1 million by a certain date.
[46] In the Indemnity Action, Sun Life presented valuation evidence, including a report from the Tillinghast consulting practice of Towers Perrin, which was retained to determine, using actuarial methods, the value of the contingent liabilities facing Sun Life with respect to policyholder claims.
[47] There were two copies of the Tillinghast Report. In one copy, the numbers were redacted. The unredacted copy, which noted an indemnity value to each of the claims, was never filed in court. The valuations in the Tillinghast Report were prepared by calculating the difference between the present value of cash flows relating to the policies assuming the policyholder claims are valid, compared to assuming the claims are not valid. The calculations assuming valid claims used cash flows based on administration of the policies in accordance with how they were represented by MetLife advisers to the customers.
[48] In the Indemnity Action, Sun Life alleged that MetLife had engaged in a pattern and repeated practice of misrepresentations in selling the policies.
[49] In its factum submitted in the Indemnity Action, Sun Life contended that the “only contingency that remains [for maturation of the policyholders’ breach of contract and misrepresentation claims] is whether the policyholder will discover the misrepresentation or breach of contract and bring an action.”
[50] The Plaintiffs in the case at bar contend that Sun Life’s position in the Indemnity Action is relevant to its limitation period defence in the case at bar.
[51] The Plaintiffs further contend that Sun Life and its predecessors directed their written notices and statements to the insureds while concealing the positions Sun Life and its predecessors were taking in the Indemnity Action, which was that the MetLife agents systemically misrepresented the policies they were selling.
[52] In their Reply to Fresh as Amended Statement of Defence, the Plaintiffs plead in paragraph 9:
The Plaintiffs plead and rely on the doctrines of judicial estoppel and abuse of process in reply to the Defence. Sun Life is estopped from taking positions in these proceedings that are inconsistent with positions it took in prior court proceedings, including Sun Life Assurance Company of Canada v. Metropolitan Life Insurance Company, Court File No. 06-CL-6697 (the “Indemnity Action”). The solicitors representing Sun Life in the Indemnity Action also represent Sun Life in this action. It is an abuse of process for Sun Life to assert facts and defences that are inconsistent with its prior pleadings, affidavits, and written submissions in the Indemnity Action.
C. PROCEDURAL AND EVIDENTIARY BACKGROUND
[53] For present purposes, it is necessary to highlight only some of the procedural and evidentiary steps in this vigorously contested litigation, which has included pleadings and production motions and an appeal to the Court of Appeal, all prior to the yet to be heard certification motion.
[54] On September 24, 2010, the Plaintiffs commenced a proposed class action.
[55] In May 2013, after a pleadings motion had made its way to the Court of Appeal, the Plaintiffs delivered a Fresh as Amended Statement of Claim.
[56] On July 10, 2013, Sun Life delivered a Fresh as Amended Statement of Defence.
[57] On October 31, 2013, the Plaintiffs delivered a Reply to Fresh as Amended Statement of Defence.
[58] In the fall of 2013, Sun Life decided to bring a summary judgment motion.
[59] On March 28, 2014, at a case conference, I cancelled the scheduled hearing of the certification motion and Sun Life’s cross-motion for a summary judgment, and I directed that a new timetable be established. I reserved judgment on several procedural and production issues that were on the agenda of the case conference, including whether Sun Life, which had voluntarily delivered an affidavit of documents, should deliver a further and better affidavit of documents.
[60] On April 8, 2014, I released Reasons for Decision providing directions for the certification motion and for the summary judgment motion, which was subsequently scheduled for September 2015. See Fehr v. Sun Life Assurance Company of Canada, 2014 ONSC 2183.
[61] Among other matters, I directed that: (a) neither party is required to deliver an affidavit of documents; (b) if a party voluntarily delivers an affidavit of documents, there shall be no motion for a further and better affidavit of documents and the production of documents shall be an aspect of the cross-examinations of deponents or witnesses for the certification and summary judgment motions; (c) after 180 days, either party may convene a case conference for the purpose of establishing a timetable for the completion of cross-examinations, refusals motions, the exchange of factums, and the date for the hearing of the certification motion and of the summary judgment motion; and (d) any examinations for the certification motion and for the summary judgment motion shall be restricted to the issues to be determined at the certification motion and the summary judgment motion respectively.
[62] I denied the Plaintiffs’ request that Sun Life deliver a further and better affidavit of documents. I stated that the Plaintiffs had the recourse of appropriate questioning at the cross-examinations of Sun Life’s affiants for the certification and summary judgment motions. Thus, I stated at paragraph 29 of my Reasons for Decision:
- In the case at bar, unlike the situation in Bank of Montreal v. Negin, there is no entitlement under the Rules of Civil Procedure at this juncture of the action for an affidavit of documents, but, like the situation in Bank of Montreal v. Negin, in the case at bar, given the precise focus of the Defendant’s motion that targets only Messrs. Fehr, Laurier, Lucas, O’Hara, Clark and Mesdames Watters and Clark, it seems that the Plaintiffs have all the documents on which Sun Life bases its case. If there is anything relevant missing for the summary judgment motion, the Plaintiffs have the recourse of appropriate questioning by cross-examining the Defendant’s deponents or witnesses for the certification motion or for the summary judgment motion. There is no reason to think that the Plaintiffs will be deprived of the documents they need to put their best foot forward in resisting the Defendant’s summary judgment motion.
[63] The Plaintiffs sought leave to appeal my direction, but leave was not granted, and in support of its summary judgment motion and to respond to the Plaintiffs’ certification motion, Sun Life delivered an affidavit from Ms. Sauvé.
[64] Sun Life delivered affidavits from 16 former MetLife agents; namely: Perry Badham, Stephen Beatty, Dennis Boudreault, Serge Faucher, Philip G. Hacock, Norman Carl Janzen, Tony T. Kwan, John C. Lambrechts, Hanry Chung-Shing Lee, Jean Paquet, Robert Popazzi, Lina So, Todd D. Soper and Jeffrey C.H. Wilson.
[65] Three of the 16 agent affiants sold universal life policies to three of the seven Plaintiffs. Mr. Pappas sold an Interest Plus policy to Ms. Watters. Mr. Hacock sold an OptiMet policy to Mr. O’Hara, and Mr. Janzen sold a Universal Plus policy to Mr. Fehr.
[66] The Plaintiffs served a notice of examination on Ms. Sauvé. The notice of examination stated:
YOU ARE REQUIRED TO BRING WITH YOU and produce at the examination the following documents and things:
The policyholder files, accounting records, Client Data System and Customer Service Workbench ("CSW”) records for each of the Plaintiffs, as described in paragraph 4 of your affidavit dated December 4, 2013 (hereinafter references to paragraphs are to your affidavit dated December 4, 2013).
The form of Interest Plus policy introduced by MetLife in 1985, as described in paragraph 382, and any subsequent forms.
3.For Interest Plus policies: any sales brochures, typical illustrations, and manuals and any agent or other servicing guides or training materials, not already attached to your affidavit.
The form of Universal Plus policy introduced by MetLife in 1987, as described in paragraph 385, and any subsequent forms.
For Universal Plus policies: any sales brochures, typical illustrations, and manuals and any agent or other servicing guides or training materials, not already attached to your affidavit.
The form of Universal Flexiplus ("Flexiplus") policy introduced by MetLife in 1992, as described in paragraph 390, and any subsequent forms.
For Flexiplus policies: any sales brochures, typical illustrations, and manuals and any agent or other servicing guides or training materials, not already attached to your affidavit.
The form of Universal Optimet ("Optimet") policy introduced by MetLife in 1998, described in paragraph 393 and any subsequent forms.
For Optimet policies: any sales brochures, typical illustrations, and manuals and any agent or other servicing guides or training materials, not already attached to your affidavit.
All reports performed by Tillinghast in connection with Sun Life's indemnity claims against MetLife.
The report by Mike Lombardi of Tillinghast dated July 16, 2007.
The report by Mr. Pressey of Tillinghast dated December 12, 2008.
The Tillinghast parallel report expressing the actual pre-tax indemnity value of each of the three claims which Sun Life settled against MetLife in Sun Life Assurance Co. of Canada v. Metropolitan Life Insurance Company, Court File No. 06-CL-6697 (the "Indemnity Action”,).
Documents sufficient to specify fully the criteria used in preparing any of the Tillinghast reports, including without limitation: the criteria for expressing assumptions that claims are, or are not, valid obligations of Sun Life; and the criteria for expressing how the policies worked based on the terms thereof and how the policies were represented by MetLife advisers to the customers.
Any other reports analyzing the value of potential or actual Market Conduct Claims or breach of contract claims by past or present holders of the Policies.
Documents relating to any accounting provision or reserve established by Sun Life for customer allegations reflected in the Tillinghast reports.
The pleadings, affidavit evidence, transcripts of cross examinations, facta, admissions, and any other papers filed in the Indemnity [Action] including on appeal.
Any communications or agreements between Sun Life and MetLife regarding the end or suspension of the Indemnity [Action].
The standstill agreement between Sun Life and MetLife, entered into shortly after the issuance of this claim and the removal of Sun Life's appeal from the hearing list at the Court of Appeal in the Indemnity [Action].
Any communications with Sun Life agents or customer service staff members with respect to the Indemnity [Action] and/or the present litigation.
Any communications in which Sun Life disclosed to any holders of the Interest Plus, Ut1iversal Plus, Flexiplus and/or Optimet policies (the "Policies") its position that the evidence in the Indemnity [Action] established at MetLife, through its agents and employees, engaged in and condoned a pattern and repeated practice of misrepresenting and failing to accurately describe to its policyholders the nature, provisions, financial elements and benefits of the Interest Plus, Universal Plus, and/or Flexiplus policies.
Numbers of in-force policies, updating the information in paragraph 19 of your affidavit.
Documents sufficient to describe by category the reasons for reductions in numbers of in-force policies between 1998 and currently (for example, policyholder decease, policy surrender, lapse, etc.).
The actuarial assessments, as described at paragraph 22, for the Policies, and any related communications.
All calculations, assessments and internal communications related to Sun Life's decision to make or refuse offers, proposals, or remedial measures that are described in paragraphs 49, 53, 54, 58, 60, 65, 71, 171, 173, 175, 177, 264, 278, 280, 321, 325, 330, 418 and 427.
All documents, calculations, assessments and internal communications regarding the 2001 and 2006 Flexiplus cost of insurance repricing increases described in paragraph 25.
All documents, calculations, assessments and internal communications regarding the ''Year 9 re-pricing" for Mr. Fehr's Flexiplus policy in 2004, as set forth in the chart in paragraph 160; and similar changes for Flexiplus policies in general.
All documents, calculations, assessments and internal communications regarding the changes in the Annual Insurance Charge for Ms. Watters's Interest Plus policy in 1999-2013, as set forth in the chart in paragraph 78; and similar changes for Interest Plus policies in general.
All documents, calculations, assessments and internal communications regarding the changes in the Annual Insurance Charge for Mr. Laurier's Universal Plus policy in 1988-2010, as set forth in the chart in paragraph 97; and similar changes for Universal Plus policies in general.
All documents, calculations, assessments and internal communications regarding the changes in the Annual Insurance Charge for Mr. O'Hara's Optimet policy in 2004-2012, as set forth in the chart in paragraph 207 and similar changes for Optimet policies in general.
Copies of the letter described in paragraphs 249 and 298.
Any internal bulletins, memos, guidelines, and/or directions to staff on the interpretation of the Policies.
Any internal documents relating to the decision to insert language titled ''projections on the length of time your insurance coverage will stay in effect" into annual policyholder statements for the Policies.
Any internal documents, calculations or assessn1ents relating to the decision to amend the annual policyholder statements for the Policies.
Policies of insurance and reinsurance with respect to the Policies and claims at issue in this action.
Documents relating to the reasons provisions for indemnification for Market Conduct Claims were included in the original and the amended and restated Master Agreement between MetLife and Tl1e Mutual Life Assurance Company of Canada ("Master Agreement").
Documents concerning the Policies contained in files of Jack Garramone, Jim McInnis, Kevin Morrissey, and Louise Heaney.
Documents concerning the Policies contained in files of persons identified in Schedule 1 of your affidavit.
[67] For the purposes of the refusals motion, it is important to note that Sun Life produced some of the documents requested by the Plaintiffs in the notice of examination; namely: (a) the policyholder files, accounting records, and Customer Service Workbench records; (b) samples of the Interest Plus policies in the form of wording from 1985 and samples of the sales brochures, typical illustrations, manuals, servicing guides or training materials for the Interest Plus policies; (c) samples of the Universal Plus policies in the form of wording from 1987 and samples of the sales brochures, typical illustrations, manuals, servicing guides or training materials for the Universal Plus policies; (d) samples of the Flexiplus policies in the form of wording from 1992 and samples of the sales brochures, typical illustrations, manuals, servicing guides or training materials for the Universal Plus policies; (e) samples of the OptiMet policies in the form of wording from 1998 and samples of the sales brochures, typical illustrations, manuals, servicing guides or training materials for the OptiMet policies; and (f) all of Sun Life’s evidence from the Indemnity Action.
[68] For reasons that will become apparent below, I emphasize that Sun Life has produced all of their evidence and the court file with respect to the Indemnity Action. It has also acknowledged that the Plaintiffs’ unsigned copy of the factum in the Indemnity Action is a true copy of the factum.
[69] As explained by Ms. Sauvé in her affidavit, a copy of the template letter referenced at paragraphs 249 and 298 of her affidavit cannot be produced because a copy was not retained by Sun Life.
[70] During Ms. Sauvé’s cross-examination, she was asked to produce others documents listed in the notice of examination that she had not produced. Her counsel requested Plaintiffs’ counsel to explain the relevance of these document requests. When Plaintiffs’ counsel stated that the relevance of the documents was apparent or plain, at the direction of counsel, Ms. Sauvé refused to answer any questions about the documents.
[71] For their part, the 16 former MetLife Agents deposed that: (a) life insurance policies are sold in diverse circumstances; and (b) they personally did not make any misrepresentations when selling MetLife policies.
[72] On the advice of counsel, the 16 former MetLife Agents refused questions about: (a) whether they knew how they had been selected to be a witness; (b) their discussions and meetings with counsel in preparing their affidavits; (c) information as to the contents of their discussions and meetings with counsel in advance of their cross-examinations; and (d) information as to their acquaintance and conversations with other former MetLife advisors.
[73] The 16 sales agents’ testimony is different from the testimony of the 12 agents who provided evidence in the Indemnity Action. The Plaintiffs, therefore, assert that the credibility of the 16 agents is “squarely at issue.” In their factum, the Plaintiffs state that they wish to know whether Sun Life’s lawyer suggested the preferred conclusions and what knowledge and information was provided to the affiants in conversations with counsel for Sun Life.
D. DISCUSSION AND ANALYSIS
1. Introduction
[74] Sun Life submits that the Plaintiffs’ questions and request for disclosure of the long list of documents described in the notice of examination that was served on Ms. Sauvé are barred or precluded by res judicata or as an abuse of process or as a collateral attack on the directions I gave after the March 2014 case conference.
[75] Without deciding the point, the court has discretion with respect to employing the doctrines of res judicata and abuse of process, and for the purposes of deciding this refusals motion, I shall proceed to decide the refusals on their merits and not based on any technical abuse of process arguments about what was decided last year and the meaning of my Reasons for Decision.
[76] By way of methodology in deciding a refusals motion, there are a variety of grounds upon which it is proper to refuse to answer a question at a cross-examination. In several cases, I have identified and categorized eight grounds or reasons for properly refusing to answer a question in a class proceeding. See: CIBC v. Deloitte & Touche, 2013 ONSC 917; 2038724 Ontario Ltd. v. Quizno's Canada Restaurant Corp., 2012 ONSC 6549; Axiom Plastics Inc. v. E.O. Dupont Canada, 2011 ONSC 4510; Ontario v. Rothmans Inc., 2010 ONSC 2504.
[77] I propose to use that categorization scheme for the current refusals motion. Thus, the categorical justifications for refusals in a class action are:
(1) unanswerable - the question is not capable of being answered, which is to say that the question is vague, unclear, inconsistent, unintelligible, redundant, superfluous, repetitious, overreaching, beyond the scope of the examination, speculative, unfair, oppressive, or a matter of rhetoric or argument;
(2) immaterial - the question is not material, which is to say that the question falls outside the parameters of the action and does not address a fact in issue;
(3) irrelevant - the question is not relevant, which is to say that the question does not have probative value; it does not adequately contribute to determining the truth or falsity of a material fact;
(4) untimely - the question is not relevant to the class period because it concerns events or matters outside of the class period, or more generally, it concerns events temporally unconnected to a cause of action or defence;
(5) idiosyncratic or uncommon - the question is not relevant to the common issues because it concerns an individual inquiry that was not certified for the common issues trial;
(6) answered – the question or the documents relevant to the question have already been provided by the party being examined;
(7) disproportionate - the question is disproportionate, which is to say that the question may be relevant but providing an answer offends the proportionality principle; and
(8) privileged – the answer to the question is subject to a privilege, including lawyer and client privilege, litigation privilege, or the privilege for communications in furtherance of settlement.
[78] In the case at bar, the Plaintiffs grouped the refusals into four groups; namely: (1) questions about the Tillinghast Report; (2) questions about fraudulent concealment; (3) questions about the Indemnity Action; and (4) questions about how the 16 former MetLife agents were chosen as witnesses and about their communications with Sun Life’s lawyers.
[79] I shall analyze the merits of Sun Life’s refusals having regard to these four groups of refused questions, but before doing so, speaking generally, there are categorical reasons that apply to three of the four groups of refused questions. In my opinion, speaking generally, for three of the four groups, Sun Life was justified in refusing to answer because: (1) the questions were unanswerable in the sense of being vague or argumentative or speculative; (2) the questions had already been answered; and (3) the documents relevant to the question had already been provided, or sufficient documents had been provided so that it was disproportionate to require the production of more documents.
[80] To be more specific, apart from the fact that there are some relevancy and materiality concerns about some of the Plaintiffs’ documentary requests, which, if relevant, go more to the merits of the Plaintiffs’ action than to the certification motion or the summary judgment motion, the fact that Sun Life has produced all of the evidence and the complete court record in the Indemnity Action makes it disproportionate and indeed unnecessary to demand more information about: (1) the Indemnity Action; (2) the Tillinghast Report from that litigation; and (3) more documents about the alleged fraudulent concealment that the Plaintiffs allege is based on Sun Life’s position and evidence in the Indemnity Action.
[81] Further, the Plaintiffs’ questions about the connection between the Indemnity Action and the doctrine of fraudulent concealment are more a matter of argument than of procuring relevant evidence. The circumstances that the Plaintiffs are not satisfied by the fulsome production of information from the Indemnity Action and the other information listed above suggests that the Plaintiffs are on a fishing expedition for evidence to support the merits of their case and that the Plaintiffs do not genuinely require the information for the certification motion or for the summary judgment motion.
[82] As I will explain below, with respect to the fourth group of refusals about how the 16 former MetLife agents were chosen as witnesses and about their communications with Sun Life’s lawyers, the questions may or may not be relevant but they are, in any event, privileged communications.
2. Questions about the Tillinghast Report
[83] As noted above, in the Indemnity Action two different copies of the Tillinghast Report were prepared. One copy, which was delivered in the Indemnity Action, redacted the numbers found in the other copy. The Plaintiffs have received the redacted copy, and they wish a copy of the Tillinghast Report with the numbers.
[84] The Plaintiffs submit that the relevance of the unredacted copy of the Report is that it is relevant to the common issue of aggregated damages.
[85] In my opinion, having produced the redacted version of the Report, Sun Life was justified in refusing to produce the unredacted version of the Report. The unredacted version of the Report may be relevant - if the action is certified - but for the purposes of the certification motion, all that is required is the redacted version of the Tillinghast Report.
[86] For the purposes of a certification motion, the issue is whether damages are amenable to being calculated in the aggregate. The certification motion is not the time to calculate damages in the aggregate but rather it is a time when it may be determined that there is a methodology by which damages have the potential of being aggregated.
[87] The Plaintiffs already have the redacted Tillinghast Report, which is all they need to make submissions about whether aggregate damages is a common issue.
3. Questions about Fraudulent Concealment
[88] At paragraph 28 of their factum, the Plaintiffs state: “[I]t suffices that fraudulent concealment has been pled and is a valid contention on its face, and that the requested documents have a semblance of relevance to that issue.” At paragraph 34 of their factum, the Plaintiffs state: “The plaintiffs are entitled to discover what the insurer knew at the time that it alleges the claims were discovered or discoverable by the plaintiffs, as fraudulent concealment is a live issue.” At paragraph 36 of their factum, the Plaintiffs state: “Sun Life’s assertion of limitation bar based on communications by the insurer to the plaintiffs that omitted any mention of the indemnification claims makes the issue of fraudulent concealment relevant, and the plaintiffs are entitled to obtain the requested evidence from Sun Life.” In short, the Plaintiffs simply assert, without explanation, that their questions about fraudulent concealment are relevant.
[89] In a submission with which I agree, Sun Life submits that: (a) simply asserting that a document or question is relevant to an issue does not establish relevance; and (b) the Plaintiffs have not laid the foundation for asking questions about or obtaining production of the long list of documents found in the notice of examination served on Ms. Sauvé.
[90] Recently, in Brown v. Janssen Inc., 2015 ONSC 1434, Justice Belobaba explained that when there is a question about relevance, the examining party must provide some explanation why the question or document request is relevant. At para. 12 of his judgment, Justice Belobaba stated:
- The second submission – that this additional evidence may be relevant to an assessment of the relationship between “individual and proposed common issues” or “whether there are in fact common issues” – is valid but much too vague. If the defendant wants this court to order the production of additional medical record evidence because it “may be relevant to a certification issue”, it has to explain how. It cannot simply rely on the bald assertion that the additional evidence “may be relevant”. The same criticism can be levelled at the third submission that the additional evidence would be “relevant to the preferability analysis.” Maybe so. But some measure of explanation is needed.
[91] In the law of evidence and of civil production, the production of documents and the propriety of questions on an examination are determined by the idea of relevance. Materiality and relevance are key determinants in determining the propriety of a question on an examination for discovery because a deponent may justifiably refuse to answer a question if it is not material or relevant.
[92] What facts are in issue, which is to say, what facts are contested or disputed, is explained by the idea of materiality. Evidence that does not address any issue arising from the pleadings or the indictment (a fact in issue) or the credibility of a witness (perception, memory, narration, or sincerity) is immaterial, and it is inadmissible: Sopkina, Lederman, Bryan, The Law of Evidence in Canada (2nd ed.), paras. 2.36, 2.50.
[93] To be relevant, evidence must increase or decrease the probability of the truth of the facts in issue: R. v. Morris, [1983] 2 S.C.R. No. 190; Cloutier v. The Queen, [1979] 2 S.C.R. No. 709. Relevance is about the tendency of the evidence to support inferences. In R. v. Arp, [1998] 3 S.C.R No. 339 at para. 38 the Supreme Court of Canada stated:
To be logically relevant, an item of evidence does not have to firmly establish, on any standard, the truth or falsity of a fact in issue. The evidence must simply tend to "increase or diminish the probability of the existence of the fact in issue."
[94] In R. v. Pilon, 2009 ONCA 248, [2009] O.J. No. 1172 (C.A.) at para. 33, Justice Doherty stated:
Evidence is relevant if, as a matter of common sense and human experience, it makes the existence of a fact in issue more or less likely. 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 positions of the parties.
[95] In determining relevance, it is very helpful to ask how or in what way the evidence would contribute to showing the existence or non-existence of the material fact. In their text, Evidence - Principles and Problems (9th ed.) (Toronto: Carswell, 2011) at pp. 158-9, Professors Delisle, Stuart, and Tanovich, explain the value of this approach:
The next time someone says to you that the evidence is clearly relevant ask the proponent of the evidence to articulate for you what premise she is relying on. If she has no premise the evidence is irrelevant. If she has a premise you can debate with her the validity of the premise. What experience does she base it on? Is there contrary experience? Is the premise based on myth? Is the premise always true, sometimes or only rarely? These latter parameters do not affect relevance since relevance has a very low threshold but may affect the probative worth which may cause rejection of the evidence if the probative value is outweighed by competing considerations. Approaching discussions in this way may yield a more intelligent discussion than the oftentimes typical exchange of conclusory opinions.
[96] In some instances, the relevance of a line of questioning will be, to use the language of the Plaintiffs, “apparent or plain,” but in other instances, the relevance of a line of questioning will require a foundation and an explanation. By way of illustration, in an automobile negligence claim about running a red light at a stoplight, the relevance of questions about what a witness to the accident observed about the traffic signals is apparent or plain, but questioning that witness about what he knows about the history of traffic lights would require some explanation. If the witness, however, was an expert witness testifying about the engineering of traffic lights, the relevance of the questioning about the history of stoplights might be apparent. (A Google search reveals that in 1868, the first traffic lights were developed by the railway engineer J. P. Knight, constructed by the railway signal engineers Saxby & Farmer, and installed in London, England outside Parliament.)
[97] In the case at bar, it is not apparent or plain what relevance, if any, the documents other than the documents that the Plaintiffs already have, which include the evidence and the court record from the Indemnity Action, have to the issue of fraudulent concealment.
[98] The Plaintiffs allege that their individual claims about misrepresentation by MetLife agents were fraudulently concealed because Sun Life did not tell them about the Indemnity Action, in which Action Sun Life made a claim on an indemnity triggered by misrepresentation claims. The Plaintiffs, however, already have all the documents from the Indemnity Action, and it is not apparent or plain what relevance, if any, the other documents might have to the issue of fraudulent concealment.
[99] The Plaintiffs submit, in effect, that on this refusals motion, the court cannot test their assertion that these other documents and the questions about them are relevant to the issue of fraudulent concealment without ruling on whether there has been fraudulent concealment, which is not proper or possible on a refusals motion about the relevance of the questions and the documents. I agree that I cannot decide the issue of fraudulent concealment on this motion, but the Plaintiffs still have to show how the documents and the questions they would ask about the documents would make the existence of fraudulent concealment more or less likely. Their simple assertion of relevance is insufficient.
[100] Where there has been a fraudulent concealment of the existence of a cause of action, the limitation period will not start to run until the plaintiff discovers the fraud, or until the time when, with reasonable diligence, the plaintiff ought to have discovered it: Guerin v. Canada, 1984 25 (SCC), [1984] 2 S.C.R. 335 at para. 115; M(K) v. M(H), 1992 31 (SCC), [1992] 3 S.C.R. 6 at para. 61.
[101] Three elements must be established to make out the doctrine of fraudulent concealment: (1) the defendant and plaintiff have a special relationship with one another; (2) given the special or confidential relationship, the defendant's conduct to the plaintiff is unconscionable; and (3) the defendant conceals the plaintiff's right of action: Giroux Estate v. Trillium Health Centre (2005), 2005 1488 (ON CA), 74 O.R. (3d) 341 (C.A.), aff'g (2004), 2004 18056 (ON SC), 69 O.R. (3d) 689 (S.C.J.); Rajmohan v. Norman H. Solomon Family Trust, 2014 ONCA 352 at para. 3.
[102] Concealment may involve active concealment of a right of action after the action has arisen or, it may arise from the manner in which the Act that gives rise to the right of action is performed: M(K) v. M(H), supra at para. 64; Giroux Estate v. Trillium Health Centre, supra; Rajmohan v. Norman H. Solomon Family Trust, supra.
[103] There is a causative element to the doctrine of fraudulent concealment because the legal policy behind fraudulent concealment is that if the plaintiff was unaware of his or her cause of action because of the wrong of the defendant, the court will refuse to allow a limitation defence; i.e., the plaintiff must be ignorant of the cause of action because of the misconduct of the defendant: M(K) v. M(H), supra at paras. 57-58.
[104] In the case at bar, it is not apparent or plain that the documents not already produced will make the proof of the elements of fraudulent concealment more or less likely. I, therefore, conclude that Sun Life’s refusal was justified on the grounds of irrelevance. I also conclude that the refusal was justified on the grounds of proportionality and for the reasons noted in the Introduction to the Analysis above.
4. Questions about the Indemnity Action
[105] The Plaintiffs submit that, in fairness and of necessity, questions about what Sun Life knew about the Indemnity Action and about why Sun Life took the positions it did in the Indemnity Action should be answered. I disagree.
[106] For the reasons described in the last section, I do not see how questions about how the communications to the insureds were developed and questions about why positions were being taken by Sun Life in the Indemnity Action make the proof of fraudulent concealment more or less likely.
[107] I also do not see how questions about the Indemnity Action contribute to the showing of a basis-in-fact for the certification criteria. The answers to further questions about the indemnity action would not assist the court in determining the class definition, the preferability of the class action, or the qualification of the Representative Plaintiff. On the matter of the commonality criterion, the evidence of the positions taken by Sun Life in the Indemnity Action are already on the evidentiary record for the certification motion, and it is just argument and a fishing expedition to ask questions about why Sun Life took the positions it did. It is disproportionate to extend the line of inquiry about the Indemnity Action further.
[108] I conclude that Sun Life was correct in refusing to answer any more questions about the Indemnity Action.
5. Questions about How the 16 Former MetLife Agents Were Chosen as Witnesses
[109] As noted above, on the advice of counsel, the 16 former MetLife Agents refused questions about: (a) whether they knew how they had been selected to be a witness; (b) their discussions and meetings with counsel in preparing their affidavits; (c) information as to the contents of their discussions and meetings with counsel in advance of their cross-examinations; and (d) information as to their acquaintance and conversations with other former MetLife advisers.
[110] As noted above, this time, the Plaintiffs did provide an explanation as to why their line of questioning was relevant. The explanation was that the line of questioning was relevant because the credibility of the 16 agents was squarely at issue because their testimony for Sun Life was different from the testimony of the 12 different agents who provided evidence for Sun Life in the Indemnity Action.
[111] Sun Life submits that the agents’ refusals were justified because the questions sought irrelevant information and because the information was protected by litigation privilege.
[112] For the purposes of deciding this refusals motion, without deciding the matter of relevancy, I shall simply assume that the questions are relevant to credibility and then consider whether the answers are protected by litigation privilege.
[113] Oral or written communication between a lawyer and a client or between a lawyer and a third party made exclusively or for the dominant purpose of the client’s contemplated or pending litigation are privileged: Blank v. Canada (Minister of Justice), 2006 SCC 39; General Accident Assurance Company v. Chrusz (1999), 1999 7320 (ON CA), 45 O.R. (3d) 321 (C.A.); Susan Hosiery Ltd. v. Minister of National Revenue, 1969 1540 (CA EXC), [1969] 2 Ex. C.R. 27 (Ex. Ct.); Wheeler v. Le Marchant (1881), 17 Ch. D. 675 at 681 (C.A.).
[114] For the litigation privilege, the modern rationale is that the exclusion of the evidence is necessary to facilitate the adversarial system of dispute resolution. Since the fact-finding process is adversarial, the combatants need a “zone of privacy” to prepare for the hearing and resolution of their dispute. In Blank v. Canada (Minister of Justice), supra at para. 27, Justice Fish stated:
- Litigation privilege, on the other hand, is not directed at, still less, restricted to, communications between solicitor and client. It contemplates, as well, communications between a solicitor and third parties or, in the case of an unrepresented litigant, between the litigant and third parties. Its object is to ensure the efficacy of the adversarial process and not to promote the solicitor-client relationship. And to achieve this purpose, parties to litigation, represented or not, must be left to prepare their contending positions in private, without adversarial interference and without fear of premature disclosure.
[115] As noted by Justice Fish, the litigation privilege recognizes that the parties must be left to prepare their contending positions in private without adversarial interference. B. Finlay, and T.A. Cromwell (now Justice Cromwell of the Supreme Court), in Witness Preparation Manual (2nd ed.) (Aurora: Canada Law Book, 1999) discuss that nature of witness preparation (which is the matter that the Plaintiffs apparently seek to probe in the case at bar on the basis that the cross-examination is relevant to the credibility of the witnesses). The authors state at pp. 101-103:
Witness preparation is concerned with the heart of the judicial fact-finding process. Thorough preparation is essential for the proper presentation of the client’s case and for the smooth operation of the trial court. However, preparation of witnesses gives rise to some serious ethical questions mainly concerning tension between the obligations to the client and the dangers of improperly distorting the fact-finding process. ….
The beginning point is that there is no property in a witness. It is perfectly proper for counsel to approach and interview any potential witness. Professional conduct guidelines impose three caveats to this general rule. First, the lawyer should disclose his or her true position in the matter. Second, care must be taken to avoid tampering with the evidence or any suggestion that the witness would be unavailable for trial. Third, where a person is represented by counsel, your approach must be through counsel and to the person directly.
Not only is it important to interview witnesses, but failure to do so may constitute negligence and/or professional misconduct. A lawyer is to offer advice “based on sufficient knowledge of the relevant facts.” ….
The conventional wisdom is that proper preparation of witnesses for testifying may include: (a) advising the witness which things to emphasize and which to address only if specifically asked; (b) cautioning a witness not to say more than necessary or urging a witness to be less reticent; and (c) pointing out to the witness the difference between knowledge and surmise.
In general, the conventional wisdom places the line between making the evidence relevance and effective which is permissible, and tampering with the evidence which is not. As a matter of practice, the distinction is not an easy one to draw or to enforce. ….
[116] In my opinion, there is not much doubt that the preparation of witnesses, which is so important to the judicial fact-finding process and to the efficacy of the adversarial process, is protected by litigation privilege and thus, subject to one possible exception, Sun Life’s counsel was on sound ground in instructing the witnesses to not answer questions about how the 16 sales agents were selected and prepared as witnesses.
[117] No privilege is absolute, and there are exceptions to lawyer-and-client privilege and the other privileges: Smith v. Jones, 1999 674 (SCC), [1999] 1 S.C.R. 455. In the case at bar, the only possible exception that might apply to the litigation privilege is the fraud or illegal conduct exception. If a client seeks guidance from a lawyer to facilitate committing a crime or a fraud, the communication will not be privileged: R. v. Cox and Railton (1884), 14 Q.B.D. 153. In Blank v. Canada (Minister of Justice), supra at para. 44, Justice Fish stated:
The litigation privilege would not in any event protect from disclosure evidence of the claimant party's abuse of process or similar blameworthy conduct. It is not a black hole from which evidence of one's own misconduct can never be exposed to the light of day.
[118] The Plaintiffs are not alleging that the communications between Sun Life’s lawyers and the witnesses were fraudulent or witnesses tampering and, therefore, the litigation privilege remains intact and, therefore, the refusal of the 16 sales agents to answer questions about their communications with Sun Life’s lawyers was justified.
[119] I should add that even if the Plaintiffs were alleging that the communications were in furtherance of some wrongful conduct in the civil proceedings, the mere allegation of fraud would not negate the litigation privilege. The authorities establish that a mere allegation of fraud will not negate a privilege; a prima facie case of fraud must be made out in fact: Goodman & Carr v. Minister of National Revenue, 1968 340 (ON SC), [1968] 2 O.R. 814 (H.C.J.); Canbook Distribution Corp. v. Borins, [1999] O.J. No. 492 (S.C.J.) at para. 17; Bullivant et al. v. A.-G. Victoria, [1901] A.C. 196 at pp. 200-1.
[120] Finally, I should note that the law about the waiver of litigation privilege with respect to expert witnesses is not pertinent to the present analysis. The treatment of the testimony of expert witnesses is a matter expressly dealt with and codified by the Rules of Civil Procedure. The Rules have the capability of statutorily overriding the common law of privilege. The Rules of Civil Procedure statutorily negate the litigation privilege with respect to expert witnesses who testify, but it does not interfere with and recognizes the litigation privilege associated with expert witnesses who do not testify.
E. CONCLUSION
[121] For the above reasons, I dismiss the Plaintiffs’ refusals motion.
[122] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with Sun Life’s submissions within 20 days of the release of these Reasons for Decision followed by the Plaintiffs’ submissions within a further 20 days.
Perell, J.
Released: May 4, 2015
Fehr v. Sun Life Assurance Company of Canada, 2015 ONSC 2908
COURT FILE NO.: 10-CV-411183CP
DATE: 20150504
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ELDON FEHR, ANGELA WATTERS, GAETAN LAURIER, LESLIE MICHAEL LUCAS, JAMES PATRICK O’HARA, REBECCA JEAN CLARK, AND LLOYD SHAUN CLARK
Plaintiffs
‑ and ‑
SUN LIFE ASSURANCE COMPANY OF CANADA
Defendant
REASONS FOR DECISION
Perell, J.
Released: May 4, 2015