Hoang v. The Personal Insurance Company of Canada, 2015 ONSC 7168

CITATION: Hoang v. The Personal Insurance Company of Canada, 2015 ONSC 7168

COURT FILE NO.: CV-13-00475810

MOTION HEARD: 20151102

REASONS RELEASED: 20151118

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

CHRISTOPHER HOANG, a Minor by his Litigation Guardian, San Trieu, and SAN TRIEU, personally

Plaintiffs

• and-

THE PERSONAL INSURANCE COMPANY OF CANADA

Defendant

BEFORE: MASTER D. E. SHORT

COUNSEL: Gord McGuire Fax: 647.689-2059 -for the Plaintiffs

S. Wayne Morris Fax: 416.593-5922 -for the Defendant

REASONS RELEASED: November 18, 2015

Reasons for Decision

I. Overview

[1] This motion requires an analysis of the rights and obligations of an insured driver, his insurer, and an injured infant plaintiff who seeks to recover from his father’s insurer the amount of a judgment awarded against his father. That insurer takes the position that the damages awarded, following a lengthy jury trial, are not insured under the terms of the father’s automobile insurance policy.

[2] This action is brought, after the conclusion of a jury trial, by counsel for the plaintiff seeking a declaration “that the defendant is responsible to indemnify its insured” for damages arising from an August 6, 2004 motor vehicle accident, that have been awarded against him by way of judgment dated March 9, 2012. As well they seek an order that the defendant pay the plaintiffs, and thereby satisfy the judgment in a sum in excess of $800,000.

[3] The defendant The Personal Insurance Company of Canada ("The Personal") asserts that under the circumstances of this case, their policy is not one for which indemnity is provided with respect to the claims of the plaintiffs. As a consequence, the defendant company submits that the action should be dismissed with costs.

II. Underlying Action

[4] The Plaintiff Christopher Hoang (“Christopher”) was 6 years old in 2004 when he was struck as a pedestrian by a motor vehicle in Toronto.

[5] It is asserted that his father participated in the retaining of an experienced personal injury firm to represent his son’s interests. The boy’s mother acted as his litigation guardian and also asserted a claim under the provisions of the Family Law Act with respect to claims that might be asserted under that statute.

[6] The accident occurred shortly after Christopher and his older cousin were dropped off onto a city sidewalk from a vehicle operated by his father, Can Hoang.

[7] As a consequence of the accident the driver of the moving vehicle that struck Christopher was sued. As well, a claim was asserted against his father as the operator of the vehicle from which Christopher had recently disembarked.

[8] Apparently there was not one, but two, aborted jury trials commenced before the matter finally proceeded through a full trial with an ultimate a decision by the trial jury being delivered.

[9] That decision found no liability for the accident on the part of the driver that struck Christopher. The only monetary judgment awarded was against the boy’s father.

[10] This case thus addresses the possibility that Christopher will have no meaningful recovery on account of the very real injuries he suffered.

[11] However, the trial decision has been appealed to the Court of Appeal. That pending appeal seeks, amongst other relief, the directing of a new trial.

[12] Against that background I turn to the motion before me.

III. Relief Sought on Motion

[13] The very recently issued Notice of Motion, dated October 21, 2015 sought (with my emphasis):

(a) An Order requiring the defendant to deliver a sworn Affidavit of Documents on or before November 9, 2015;

(b) An Order that the said Affidavit of Documents include in Schedule “A” thereof the defendant's entire file relating to the conduct of the defence of Can Hoang in an action in the Ontario Superior Court of Justice bearing Court File No. 06-CV-3 l 5832PD3;

(c) An Order that the Examination for Discovery of a representative of the defendant having the most knowledge regarding the conduct of the defence of Can Hoang in action No. 06-CV-315832PD3, take place on November 16, 2015 … and,

(d) Such further and other relief as to this Honourable Court may seem just.

[14] While those specific dates have passed the plaintiff seeks relief at the earliest opportunity.

[15] The grounds asserted in support are:

“(a) Rule 30.03(1) and Rule 31.03(1);

(b) Pleadings were completed in the within action on or about May 14, 2013. The plaintiffs delivered their Affidavit of Documents on or about February 14, 2014;

(c) The plaintiffs have made reasonable efforts to agree to a Discovery Plan, have the defendant The Personal Insurance Company of Canada deliver an Affidavit of Documents and submit to Examination for Discovery. The defendant has consistently ignored these efforts;

(d) Such further and other grounds as the lawyers may advise.”

[16] Before examining the asserted basis for this proposed very accelerated timetable, a further analysis of the parties’ positions in the action is appropriate.

IV. Father’s Insurance Policy

[17] It is acknowledged that the Defendant, The Personal issued an automobile liability insurance policy to Can Hoang which was in full force and effect at all material times.

[18] On August 6, 2004, Can Hoang was in the course of operating the insured motor vehicle when he brought it to a stop on the north side of Queen's Quay just east of its intersection with Yonge Street in the City of Toronto.

[19] The statement of claim in the present action alleges in part:

“8. Can Hoang discharged his passenger, Christopher Hoang, then six years old, from the motor vehicle. Christopher was thereafter struck by a motor vehicle … suffering serious personal injuries, including a frontal lobe brain injury as a result.

9. By Statement of Claim issued on July 27, 2006, in the Ontario

Superior Court of Justice at Toronto and bearing Court File No. 06-CV- 315832PD3, Christopher, along with his mother and sister, commenced an action against Can Hoang, Vicentini and Ford Credit, for damages arising out of the personal injuries suffered by Christopher in the motor vehicle accident (the "Tort Action").

[20] The action brought on behalf of the son endeavoured to include all potential including his father. This post-trial action’s pleading notes:

“10. In the Statement of Claim in the Tort Action it was alleged that Can Hoang caused or contributed to the motor vehicle accident by his negligence, the particulars of which included that:

a) He dropped off his passenger in an unreasonable and dangerous manner;

b) He placed his passenger is a situation of danger when he dropped him off at that particular location near the intersection; and,

c) He negligently used and/or operated his motor vehicle in a manner that caused and/or contributed to his injuries.”

[21] The Tort Action was tried before a jury which, on March 9, 2012, found Can Hoang liable for the motor vehicle accident and awarded the Plaintiffs therein damages totalling $804,228.22, plus of pre-judgment interest, post- judgment interest and costs.

[22] The jury verdict included no finding of any liability against the driver of the moving vehicle. Thus the only liability found was ascribed to the father. In particular it is plead:

“12. The jury specifically found Can Hoang negligent in, among other

things, discharging Christopher from his vehicle in an "unsuitable choice of unloading area."

13. Judgment was granted in the Tort Action in accordance with the jury's verdict”

[23] The son now seeks to recover the awarded damages against his father’s policy of insurance.

[24] The asserted grounds for that claim include the following:

“14. The Plaintiffs herein plead that Can Hoang's liability to them in the Tort Action arose as a result of the direct or indirect use or operation of the insured motor vehicle.

15. The Plaintiffs herein plead that, pursuant to the terms of the

insurance policy issued to Can Hoang, The Personal owes a duty and is obliged to fully indemnify Can Hoang from and for all damages, costs and any other awards arising as a result of the claims advanced against him in the Tort Action.

16. The Plaintiffs herein plead and rely upon section 258(1) of the Insurance Act. R.S.0 1990, c. 1.8; specifically, that the Plaintiffs having recovered the Judgment in the Tort Action against Can Hoang, are entitled to have the insurance money payable under the policy applied in or towards satisfaction of the Judgment against Can Hoang.”

V. Personal Insurance Position

[25] The Statement of Defence filed by The Personal asserts:

8. Contrary to the plaintiffs' allegation at paragraph 13 of Statement of Claim, judgment has not been granted in the Tort Action. Further, the plaintiffs have filed a Notice of Appeal in the Tort Action. Accordingly, the plaintiffs have not recovered a final judgment against Can Hoang. This action is premature.

9. The plaintiff Christopher Hoang was struck and injured on August 6, 2004 by a motor vehicle operated by one Adriano Vicentini and owned by Ford Credit Canada Leasing Company.

Under the circumstances of this case, the Policy is not one for which indemnity is provided to Can Hoang with respect to the claims of the plaintiffs.

[26] The key portion of the pleading sets out a number of arguments against there being any liability to the plaintiff:

“10. The Personal states that the material facts with respect to the issue relating to the obligation to indemnify are as follows:

(a) At the time of the accident, Christopher Hoang was not an occupant of the insured vehicle;

(b) Prior to the accident, Christopher Hoang had been safely discharged from the insured vehicle onto the sidewalk on the north side of Queens Quay, well east of its intersection with Yonge Street;

c) Christopher Hoang was placed in the custody of his older cousin, and was no longer under the care or supervision of Can Hoang;

d) Christopher Hoang, accompanied by his older cousin and another child, safely walked in a westerly direction on the sidewalk, until they came to the intersection of Queens Quay and Yonge Street, which was governed by a traffic light;

(e) Christopher Hoang, his cousin and his other relative waited safely (with other pedestrians) for the light to change from red to green, so that pedestrians could cross Yonge Street, in an easterly direction;

(f) Christopher Hoang, his cousin and his other relative safely stepped into the intersection, fully within the pedestrian crosswalk, crossing the street on a green light, along with other pedestrians;

(g) Suddenly, when Christopher Hoang was roughly halfway across the intersection, the wind blew his cap off into the westbound lanes of Queens Quay;

(h) Christopher Hoang then darted into the westbound lane, apparently in chase of his hat, where he was struck by the motor vehicle being operated by Adriano Vicentini, and owned by Ford Credit Canada Leasing Company; and

(i) At the time of the happening of the accident, the Plaintiff was sitting in his motor vehicle some distance away from the accident.”

[27] The argued consequences of these events result in these assertions by the defendant’s pleading:

11. Accordingly, the injuries sustained by Christopher Wong did not arise by virtue of the use or operation of a motor vehicle by Can Hoang, either directly or indirectly.

12. Prior to the happening of the accident, Christopher Hoang had been safely landed on the sidewalk, safe and secure in the company of his older relatives.

13. The Personal states and fact is that, in the circumstances of this accident, there was no unbroken chain of causation linking the conduct of Can Hoang as a motorist, to the injuries sustained by Christopher Hoang.

14. The use or operation of a motor vehicle by Can Hoang was not a cause of any injuries sustained by Christopher Hoang.

15. Further, subsequent to any use or operation by Can Hoang of his vehicle, there were intervening acts which resulted in the injuries sustained by Christopher Hoang. These intervening acts, which included the wind blowing Christopher's cap off, and Christopher suddenly darting into traffic, were not in the ordinary course of things.

16. The Personal states that, under the circumstances of the accident, there is no negligent conduct on the part of Can Hoang in his capacity as a motorist, and notwithstanding the jury's finding that Can Hoang had made an "unsuitable choice of unloading area", there was no finding in the tort action that Can Hoang was negligent in his capacity as a motorist. [my emphasis]

[28] The pleading concludes with this assertion:

17. The Personal states and the fact is that any liability that may eventually be imposed upon Can Hoang in the Tort Action is in his capacity as the father to and/ or custodian of Christopher Hoang. No liability was imposed by the court in the Tort Action upon Can Hoang in his capacity as a driver of a motor vehicle. Accordingly, no obligation to indemnify Can Hoang arises, pursuant to the provisions of the Policy.

VI. Section 258 of the Insurance Act

[29] Addressing these issues requires consideration of a specific provision of the Insurance Act, R.S.0. 1990, c. I. 8 .

[30] In this action the plaintiffs seek an order determining their entitlement to rely upon this section to obtain payment of the amount of the jury award made against Christopher’s father.

[31] The jury apparently found that the driver of the vehicle that struck Christopher was not responsible, in any way, for his injuries. The jury however did find against the father for an amount in excess of $800,000. Is indemnity for that claim provided for by the subject insurance contract?

[32] At what point does a plaintiff “recover” a judgment in the manner contemplated by Section 258? What degree of discovery is appropriate in the present action, prior to a final determination being made of the issues raised in the 2006 action?

[33] Section 258(1) of the Insurance Act reads:

Application of insurance money under motor vehicle liability policy

(1) Any person who has a claim against an insured for which indemnity is provided by a contract evidenced by a motor vehicle liability policy, notwithstanding that such person is not a party to the contract, may, upon recovering a judgment therefor … against the insured, have the insurance money payable under the contract applied in or towards satisfaction of the person's judgment and of any other judgments or claims against the insured covered by the contract and may, on behalf of all persons having such judgments or claims, maintain an action against the insurer to have the insurance money so applied.

[34] This provision needs to be read together with subsection 3 (with my emphasis):

258(3) Other creditors excluded

A creditor of the insured is not entitled to share in the insurance money payable under any contract unless the creditor's claim is one for which indemnity is provided for by that contract.

[35] In its defence, in the present action The Personal pleads that the plaintiffs have no cause of action pursuant to the provisions of section 258(1) as:

(a) No final judgment in the Tort Action has been recovered against Can Hoang;

(b) Any judgment which may ultimately be rendered against Can Hoang in the Tort Action is not based on any negligence on the part of Can Hoang in his capacity as a motorist;

(c) The claims which the plaintiffs have against Can Hoang are not claims for which any indemnity is provided by The Personal pursuant to the provisions of any contract evidenced by a motor vehicle liability policy. [my emphasis]

[36] My analysis in that regard is in part directed by a decision made earlier this year by Justice Douglas Rutherford in which he addressed the interpretation of these sections in Parker v, Dirar, 2015 ONSC 4723, 2015 CarswellOnt 11282 2015 ONSC 4 723, 2015 CarswellOnt 11282, 256 A.C.W.S. (3d) 60

[37] There a Rule 21 motion was brought by the plaintiff before trial for a determination as to whether an insurer had an obligation to respond to the plaintiff’s claim. Justice Rutherford held that such a determination at that stage was premature. In part his reasons read:

14 Third, and most important, the plaintiff does not have the standing to seek the relief sought in this motion. I accept the submission on behalf of State Farm found at paragraphs 33-44 of its factum, including the authorities cited, that at this stage, the plaintiff in this action has no cause of action against State Farm, and no contractual relationship with State Farm that would justify granting the relief sought in this motion. In Williams v. Pintar, 2014 ONSC 1606 (Ont. S.C.J.), Master (now Mr. Justice) Pierre Roger refused the plaintiff's request to grant declaratory relief against the defendant's insurer and describes the proper role of ss. 258( 1) of the Insurance Act as among the parties to an accident and their insurers (see particularly paragraphs 20, 21, and 32).

15 The Insurance Act provision in s.258, …makes it clear that a cause of action by a plaintiff against a defendant's insurer arises only once the plaintiff has secured judgment against the insured. Interesting as the question whether the circumstances in which the accident occurred fall within the exclusionary clause … may be, and whether a pure question of law or not, it may fall to be answered only following the plaintiff obtaining judgment against Mr. Dirar, and in the event that policy limits otherwise in play under Mr. Mahmoud's policies will not satisfy the judgment. There may well be issues of priority then at play as well. [my emphasis]

[38] In my view similar concerns are present in the case before me, and it would be premature to take irrevocable steps until it is clear that rights under section 258 have been triggered. However, a stay of the action is not sought by the defendant at this time. Rather, counse lfor The Personal asserts that document production and examinations for discovery at this stage would be premature.

VII. Plaintiffs’ Position

[39] The present counsel for the Christopher takes the position that the defence of the father, by counsel retained by the insurer, may have been conducted in such a way as to minimize the exposure of the insurer.

[40] The Personal, not surprisingly, disputes this assertion and instead has previously sought to question whether the fact that Christopher had counsel that may well have been working with the father to maximize his son’s recovery while at the same time, the father had a duty to his insurer to assist in the defence of the claims against him.

[41] That duty it is asserted, at least included advising The Personal of his involvement at a point in time well in advance of costs submissions being made before the trial judge, at the end of the trial.

[42] The motion before me sought discovery on an urgent basis of a representative of The Personal. The delay in bringing the motion is explained by virtue of the fact that prior to the summer of 2015 a motion seeking to amend the defence to raise the issues mentioned above was pending. Counsel for the plaintiff indicates that they anticipated obtaining access to the file by virtue of a cross examination on the affidavit in support of the proposed motion.

[43] Subsequent to the adjournment of The Personal’s amendment motion on June 12, 2015, the defendant agreed to withdraw its opposition to an examination of a representative of the Personal and agreed to produce a representative of the Personal for examination on August 11, 2015.

[44] The affidavit of lead counsel for the plaintiffs deposes:

“ The defendant then reversed course once again on August 5, 2015, withdrawing its motion to amend its Statement of Defence in order to avoid an examination of a representative of the Personal. “

[45] The plaintiff’s counsel explains that:

“ It was unnecessary for the plaintiff to seek production or discovery in the usual way prior to the withdrawal of the defendant's motion to amend because the expected examination of a representative of the Personal as a witness on the motion would have served to supplant the need for formal production and discovery. Following the defendant's refusal to allow its representative to be examined, however, the plaintiffs began to pursue the matter of delivery by the defendant of an Affidavit of Documents including the defendant's full "defence file" and an Examination for Discovery of the defendant.”

[46] Such requests were made to counsel for the defendant on September 23, September 28, and October 5, 2015. The latter request by letter included a draft Discovery Plan for the approval of counsel for the defendant and a Notice of Appointment for the Examination for Discovery of a representative of the defendant on November 3, 2015. Apparently no reply was received to any of the communications, save and except for an automatic reply email from counsel indicating that his ability to reply to email would be constrained by his trial commitments.

[47] This motion was heard on November 2. The affidavit in support of the motion from Plaintiff’s new lead counsel further asserts:

“11. It is a matter of considerable importance that the defendant be compelled forthwith to deliver an Affidavit of Documents containing inter alia the complete "defence file" in respect of the defence of Can Hoang in action No. 06-CV-315832PD3 (the "underlying action") and to submit to Examination for Discovery. The plaintiffs have been delayed long enough by the defendant's tactics in moving to amend its Statement of Defence and then withdrawing the motion and subsequently refusing to co-operate in the process of production and discovery. Both Wilson J. in the underlying action and Laskin J.A. upon the appeal of the underlying action have queried why the coverage action has not proceeded with dispatch long before now. There is no prospect of recovery by the infant plaintiff of the substantial judgment in his favour until the issue of indemnification is resolved.

12. There is a further reason for compelling production and discovery forthwith. The plaintiffs have appealed certain aspects of the Judgment in the underlying action and Can Hoang has cross-appealed. The appeal is scheduled to be heard on January 11, 2016. The Personal has agreed to be added to the appeal as a Respondent to respond to the Appellants' position that it be required to pay the costs of the trial and the appeal by virtue of the manner in which the Personal conducted the defence of Can Hoang at trial. Production of the Personal' s "defence file" and an Examination for Discovery of the Personal on the conduct of the defence of Can Hoang in the underlying action is at issue both in respect of indemnification and on the appeal. Production and discovery of the Personal may very well reveal "fresh evidence" of the conduct of the Personal which may be considered relevant and admissible by the Court of Appeal.”

VIII. Pending Appeal of Trial Decision

[48] All these matters I have described give rise to issues dependant on the decision of the Court of Appeal.

[49] That appeal was originally scheduled to be heard in October 2015 but is now scheduled for January 2016 . In the interim Justice Laskin dealt with a motion brought on behalf of the plaintiff at the Court of Appeal to have the firm appointed by the Personal to represent C at trial disqualified from representing him at the Court of Appeal, and for the appointment of Independent counsel to address issues arising from the various roles of the Personal in these actions. As well, an order was sought, requiring the Personal to fund such an independent counsel.

[50] In his decision in Hoang v. Vincentini, 2015 ONCA 780, which was released earlier this week, Justin Laskin provided the following “Discussion”:

[12] The moving parties contend that by challenging the jury's finding of "unsuitable choice of unloading area" the insurer has put itself in a conflict of interest with its insured Can Hoang or, at least, has created a reasonable apprehension of a conflict. If that challenge is successful and the other particulars of negligence found by the jury are not set aside, Can Hoang will lose any chance of being indemnified by his insurer for the judgment against him.

[13] Counsel appointed by the insurer to act for Can Hoang contends that the notice of cross-appeal filed on Can Hoang's behalf does not create a reasonable apprehension of a conflict of interest. Instead, counsel says that he is acting only in the best interest of the insured, Can Hoang. At trial, counsel for Hoang's mandate was to defend the action, to attempt to avoid liability, and to minimize damages. Those objectives have governed the conduct of the defence and will govern the conduct of the appeal.

[14] In his oral argument, Mr. Adair, counsel for the appellants, set out three principles which he says, and I accept, are relevant on these motions. They are:

(1) Where a lawyer is appointed by an insurer to defend its insured, the lawyer's primary duty is to the insured. That is so even though the lawyer is paid by the insurer and the insurer may eventually have to pay the claim against its insured. Deschenes J.A. discussed this principle in Pembridge Insurance Company v. Parlee, 2005 NBCA 49, 253 D.L.R. (4th) 182, at para. 17:

It is now beyond dispute that a lawyer appointed and paid for by an insurer to defend its insured in compliance with the insurer's contractual duty to defend owes a duty to fully represent and protect the interest of the insured. By doing so, the lawyer, of course, is also acting in the insurer's interest in the sense that the plaintiff's claim (a claim that the insurer may eventually have to pay) is being challenged. But, first and foremost, once appointed, the lawyer must represent and act on behalf of the defendant insured with the utmost loyalty and only in the latter's best interest. No one seriously contends that the lawyer is or should be allowed to take a position contrary to the interests of the insured defendant which he has been appointed to represent. [Citations omitted].

See also Mallory v. Werkmann Estate, 2015 ONCA 71, 330 O.A.C. 337, at para. 29.

(2) An insurer may be required to relinquish control of the defence and pay for independent counsel retained by its insured only if there is "in the circumstances of the particular case, a reasonable apprehension of conflict of interest on the part of counsel appointed by the insurer": Brockton (Municipality) v. Frank Cowan Co., (2002), 2002 CanLII 7392 (ON CA), 57 O.R. (3d) 447 (C.A.), at para. 43.

(3) Where the insurer has insisted on a reservation of rights or its insured has signed a non-waiver agreement, then a conflict of interest may arise if coverage under the policy turns on the insured's conduct in the accident giving rise to the litigation. Goudge J.A. discussed this principle in Brockton, at para. 42:

If the reservation of rights arises because of coverage questions which depend upon an aspect of the insured's own conduct that is in issue in the underlying litigation, a conflict exists. On the other hand, where the reservation of rights is based on coverage disputes which have nothing to do with the issues being litigated in the underlying action, there is no conflict of interest requiring independent counsel paid for by the insurer.

[15] I now apply these principles to the two motions. The potential for conflict between the interests of an insurer and its insured invariably exists because of the insurer's separate obligations to defend and to indemnify. That potential for conflict is exacerbated when the insurer insists on a reservation of rights or when its insured signs a non-waiver agreement, putting in question coverage under the policy. The potential for conflict is especially acute in this case because Can Hoang signed a non-waiver agreement, because coverage under his insurance policy may depend on this court's view of his conduct at the time of the accident, and because he is the father of the appellant, Christopher Hoang. Indeed, Can Hoang does not want to appeal the jury's finding of "unsuitable choice of unloading area."

[16] Not every potential conflict between the interests of the insurer and its insured requires the insurer to yield the right to control the defence, a right it contracted for in the policy of insurance. To require the insurer to yield control, the insured must meet the reasonable apprehension of conflict of interest test.

[17] Here, that reasonable apprehension is readily apparent. The apprehension arises because a reasonable bystander might think counsel appointed by the insurer would focus on overturning the one finding for which the insurer could be liable to indemnify the insured and downplay or focus less on the jury's findings of negligent parental supervision for which the insurer has no obligation to indemnify. In saying this, I do not impugn the integrity of counsel chosen by the insurer. But appearances count. The test is not actual conflict of interest, but a reasonable apprehension of a conflict of interest. [my emphasis]

[18] For Can Hoang personally, an appellate decision overturning the finding of "unsuitable choice of unloading area", yet leaving in place the findings of negligent parental supervision, would be disastrous. Can Hoang would be left without any prospect of indemnification and his son Christopher Hoang would be left without any hope of recovery. I thus conclude that the test of reasonable apprehension of conflict of interest has been made out. The moving parties are entitled to the three orders I itemized at the beginning of these reasons.

IX. Disposition

[51] In accordance with the order of Lauwers J .A. the appeal and cross-appeal in the original action are scheduled for hearing on January 11, 2016.

[52] In the expectation that the appeal will proceed on that date, it seems reasonable from my point of view to maintain the status quo with respect to access by counsel for the plaintiff to the entire file of counsel appointed by The Personal to defend the action against Can Hoang.

[53] In its factum the insurer’s counsel makes this terse submission:

“It is submitted that it would be an abuse of process to allow the plaintiffs and their counsel to rummage through the files, including Privilege material, of the insurer of a defendant in an action that remains extent.”

[54] While the independent counsel now appointed by Justice Laskin’s Order may have additional reasons to seek access to the entire file, that motion was not before me, and in my view, is presently premature, in any event.

[55] In my view, compared to any further delay in resolving the coverage issue, there is significantly more potential for irreversible harm which could flow from access to the entire trial file of the father’s counsel. If a new trial is ordered, it seems disingenuous to me to have allowed the party opposite to see the entirety of their opponent’s files. I see no sufficient reason to permit premature disclosure prior to “the recovery” of a judgment, which I view as not yet being the reality, by virtue of the stay activated by the appeal of the trial decision in this case.

[56] The defendant insurance company also relies upon Justice Perell’s decision Ontario v . Rothmans lnc., 2011 ONSC 2504, 2011 CarswellOnt 2916, [2011] O.J. No. 1896, 201 A.C.WS. (3d) 341.

[57] In that complex decision he addressed and summarized the law surrounding examinations for discovery:

“129 The case law has developed the following principles about the scope of the questioning on an examination for discovery:

• The scope of the discovery is defined by the pleadings; discovery questions must be relevant to the issues as defined by the pleadings: Playfair v, Cormack ( 1913), 1913 CanLII 599 (ON SC), 4 O.W.N. 817 (Ont. S.C.).

• The examining party may not go beyond the pleadings in an effort to find a claim or defence that has not been pleaded. Overbroad or speculative discovery is known colloquially as a "fishing expedition" and it is not permitted. See Cominco Ltd v. Westinghouse Canada Ltd. (1979), 1979 CanLII 489 (BC CA), 11 B.C.L.R. 142 (B.C. C.A.); Allarco Broadcasting Ltd. v. Duke (1981), 26 C.P.C:. 13 (B.C. S.C.).

• Under the former case law, where the rules provided for questions "relating to any matter in issue," the scope of discovery was defined with wide latitude and a question would be proper if there is a semblance of relevancy: Kay v. Posluns ( 1989), 1989 CanLII 4297 (ON SC), 71 O.R. (2d) 238 (Ont. H.C.); Air Canada v. McDonnell Douglas Corp. (1995), 1995 CanLII 7147 (ON SC), 22 O. R. (3d) 140 (Ont. Master), aff'd (1995), 1995 CanLII 7189 (ON SC), 23 O.R. (3d) 156 (Ont. Gen. Div.). The recently amended rule changes "relating to any matter in issue" to "relevant to any matter in issue," which suggests a modest narrowing of the scope of examinations for discovery.

• The extent of discovery is not unlimited, and in controlling its process and to avoid discovery from being oppressive and uncontrollable, the court may keep discovery within reasonable and efficient bounds: Graydon v. Graydon ( 1921 ), 1921 CanLII 444 (ON SC), 67 D.L.R. 116 (Ont. S.C.), at pp. 118 and 119 per Justice Middleton ("Discovery is intended to be an engine to be prudently used for the extraction of truth, but it must not be made an instrument of torture ... "); Kay v. Posluns ( 1989). 71 0. R. (2d) 238 (Ont. I-LC.) at p. 246; Ontario (Attorney General) v, Ballard Estate ( 1995), 1995 CanLII 3509 (ON CA), 26 O. R. (3d) 39 (Ont. C.A.) at p. 48 ("The discovery process must also be kept within reasonable bounds."); 671122 Ontario Ltd. v. Canadian Tire Corp., [1996] OJ. No. 2539 (Ont. Gen. Div.) at paras. 8-9; Caputo v. Imperial Tobacco Ltd.. [2003] O.J. No. 2269 (Ont. S.C.J.). The court has the power to restrict an examination for discovery that is onerous or abusive: Andersen v. St. Jude Medical Inc., [2007] OJ. No. 5383 (Ont. Master).

• The witness on an examination for discovery may be questioned for hearsay evidence because an examination for discovery requires the witness to give not only his or her knowledge but his or her information and belief about the matters in issue: Van Horn v. Verrell (1911). 3 O.W.N. 439 (Ont. C.A.); Rubinoff v. Newton (1966), [1967] I O.R. 402 (Ont. 1--I.C.); Kay v. Posluns (1989), 1989 CanLII 4297 (ON SC), 71 O.R. (2d) 238 (Ont. H.C.).

• The witness on an examination for discovery may be questioned about the party's position on questions of law: Six Nations of the Grand River Rand v. Canada (Attorney General) (2000), 2000 CanLII 26988 (ON SCDC), 48 O.R. (3d) 377 (Ont. Div. Ct.).

[58] Taking these guidelines into account I am not satisfied that, in any event, based upon the claim as it presently stands, that the Plaintiffs are entitled to the degree of production they seek.

[59] In the present pleadings there is not one iota of an allegation of bad faith by the insurer. All that is sought is a declaration that the insurer is “responsible to indemnify its insured…” and recovery under Section 258(1)

[60] While Justice Laskin has determined that there is a reasonable apprehension of a conflict of interest in this case, he has not found any actual indication of a breach of duty by The Personal.

[61] What we have in my view is discovery being sought an issue is not relevant to the issues “the defined by the pleadings” as they presently stand.

[62] The examining party may not go beyond the pleadings in an effort to find a claim or defence that has not been pleaded. Overbroad or speculative discovery is known colloquially as a "fishing expedition" and it is not permitted.

[63] Here there has been a trial, and there is at least for the time being, a finding which has resulted in the judgment. However that judgment has been stayed by virtue of an appeal that is currently pending.

[64] Does that amount to a judgment that has been “recovered”?

[65] I do not believe so. In to put my view the intention reflected in the section is that it is only once there is a final and binding judgment obtained, and only then that the provisions of Section 258(1) are trigged.

[66] Moreover now independent counsel will arguably have access to the file of trial counsel for the father. This seems to me to provide asufficient check on the contents of file without giving rise to issues flowing from the giving full access to a potential opponent prior to possible retrial.

[67] In the result, the motion of the plaintiffs is dismissed but without prejudice to a future motion seeking similar relief after the Court of Appeal has dealt with the primary matter.

X. Costs

[68] The delay in finally bringing this matter to a conclusion has meant that the plaintiff has waited more than 10 years to find out whether or not he will be entitled to any recovery from any available insurance. In this case. I asked the parties to provide cost submissions at the conclusion of the argument. It appears that an amount of $3500 plus HST is an appropriate quantum. Having regard to all the circumstances, as they exist at this time, I have determined to award this sum to be payable by the plaintiff to the defendant in the cause of this action.

Released: November 18, 2015

Master D. E. Short

DS/ R121