Sky Solar (Canada) Ltd. v Economical Mutual Insurance Company, 2016 ONSC 3265

HEARD: MAY 11, 2016

Superior Court of Justice - Ontario

Re: Sky Solar (Canada) Ltd. v. Economical Mutual Insurance Company and Firstbrook, Cassie & Anderson Limited

Before: Master R.A. Muir

Counsel: S. Kamayah for the moving parties/defendants R. Huang for the responding party/plaintiff

Reasons for Decision

1The defendants bring this motion pursuant to Rules 30, 31 and 34 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) for an order requiring the plaintiff to produce certain documents in connection with the plaintiff’s relationship with its property and liability insurer and its insurance broker. The documents the defendants are seeking are described as all correspondence between the plaintiff and its insurer and broker in respect of the incidents of loss described in the statement of claim.

2The defendants also seek production of all property and liability insurance policies under which the plaintiff is an insured for the time period relevant to the matters in issue in this action. It appears that all such policies have now been produced. In any event, the plaintiff does not oppose an order requiring production of the subject policies of insurance.

3The plaintiff is opposed to the production of the remaining documents requested by the defendants.

4The plaintiff claims the defendant Economical Mutual Insurance Company (“Economical”) owes it indemnity coverage in connection with losses arising from two fires. The fires occurred at solar power projects undertaken by the plaintiff in Caledon and Brampton, Ontario. The plaintiff had retained Marnoch Electrical Services Inc. (“Marnoch”) to install rooftop solar systems at the two locations. In accordance with the requirements of the tender documents and at the request of Marnoch, Economical issued insurance certificates naming the plaintiff as an additional insured under a commercial general liability policy issued by Economical to Marnoch. Economical has denied the plaintiff’s claim chiefly on the basis that the alleged losses occurred after Marnoch completed its operations on the projects and the losses did not arise from Marnoch’s operations on the projects.

5The plaintiff has also claimed against Marnoch’s insurance broker, the defendant Firstbrook, Cassie & Anderson Limited (“FCA”). The plaintiff takes the position that in the event there is no coverage under the Economical policy, FCA owes the plaintiff a duty of care and was negligent in issuing the certificates of insurance.

6For the purposes of this motion, it is important to note that FCA has brought a summary judgment motion seeking a declaration that it owed no duty of care to the plaintiff in the circumstances of this action, or that it has satisfied any duty it may have owed to the plaintiff. FCA therefore seeks a dismissal of this action. Affidavits have been exchanged and cross-examinations have taken place. The summary judgment motion is scheduled to proceed in July or September 2016.

7The principles applicable to the scope of cross-examination and discovery are summarized in the decision of Justice Perell in Ontario v. Rothmans Inc., 2011 ONSC 2504 at paragraphs 129 and 143.

8Of particular importance on this motion is the proposition that the scope of discovery is defined by the pleadings. A document is relevant for the purpose of a party’s discovery obligations if it is logically connected to and tending to prove or disprove a matter in issue as defined by the pleadings. See Sky Solar (Canada) Ltd. v. Economical Mutual Insurance Co., 2015 ONSC 4714 at paragraph 25.

9Relevance in terms of cross-examinations is somewhat different. Questions on a cross-examination must be relevant to the issues on the motion, matters raised by the deponent in his or her affidavit even if not relevant to the issues on the motion or to the credibility and reliability of the deponent’s evidence. See Ontario v. Rothmans Inc. at paragraph 143.

10These are the factors and principles I have considered and applied in determining the issues on this motion. In my view, the documents requested, other than the insurance policies, need not be produced.

11In terms of discovery, I see nothing in the pleadings establishing the relevance of the requested production. The defendants quite properly note in their factum that one of the central issues in the action and on the summary judgment motion is whether FCA owed and breached any duty of care to the plaintiff in issuing the certificates of insurance. The determination of this issue will depend, in part, on whether the plaintiff relied on FCA in issuing the certificates of insurance.

12The issue of reliance must have been obvious from the outset and certainly at the time the defendants delivered their statement of defence. However, the statement of defence does not include any specific allegations that the plaintiff did not rely on FCA or that the plaintiff was instead relying on its own insurer and insurance broker for insurance coverage advice. The statement of defence simply alleges in broad and general terms that no duty was owed by FCA and if a duty was owed such a duty was fully discharged by FCA. The defendants’ lack of any specific pleading regarding the role of the plaintiff’s own insurer and broker is especially noteworthy given that is obvious from their own pleading that the defendants were aware of the involvement of the plaintiff’s insurer with at least one of the losses at a very early stage. Paragraph 13 of the statement of defence indicates that Marnoch advised FCA that the plaintiff’s insurer would be covering the losses from one of the fires. The defendants knew the plaintiff’s own insurer was at least partly in the picture but nothing specific was pleaded. In these circumstances, it is my view that the defendants’ request simply amounts to a fishing expedition.

13The same conclusions are applicable to the various cross-examinations and the issues raised by the summary judgment motion. From the materials filed on this motion, the involvement of the plaintiff’s own insurer and broker does not appear to be an issue raised by the defendants on the motion. There do not appear to be any specific references to the issue in the notice of motion or in the defendants’ affidavits. The plaintiff’s deponent on the summary judgment motion, Mr. Ruffolo, expressly states that the plaintiff relied on the Economical certificates. However, the defendants do not specifically take issue with this statement or suggest that the plaintiff was relying on its own insurer and broker. In fact, one of the defendants’ deponents, Mr. Purkis, appears to acknowledge in cross-examination that he would expect the plaintiff to rely on the Economical certificates. It appears that additional evidence may be delivered on the summary judgment motion in the form of an expert report. However, it is improper for me to speculate on whether that additional evidence will result in the plaintiff’s dealings with its own insurer and broker becoming an issue on the motion. The role of the plaintiff’s insurer and broker are simply not raised as an issue by the summary judgment notice of motion or the affidavit evidence. It seems to have arisen for the first time as an aside during the course of the cross-examination of Mr. Ruffolo. As a result, I do not view the requested documents as being relevant to the issues raised on the summary judgment motion or in the plaintiff’s responding affidavit evidence.

14I also see no basis for ordering the requested production as being relevant to Mr. Ruffolo’s credibility or the reliability of his evidence. Mr. Ruffolo’s evidence is that the plaintiff relied on the Economical certificates and they were not reviewed by the plaintiff’s insurance broker. Mr. Purkis’ evidence is that he understood that the plaintiff would rely on the Economical certificates. In these circumstances, it is difficult to see how the requested production would assist the court in terms of the plaintiff’s credibility.

15I am therefore granting the relief requested by the defendants at paragraph (a)(i) of their notice of motion, without prejudice to the plaintiff’s right to contest the relevance of the insurance policies in this action or on the motion for summary judgment. The balance of the relief requested by the defendants is dismissed.

16If the parties are unable to agree on the issue of the costs of this motion, they shall provide the court with brief submissions in writing by June 17, 2016.