BARRIE COURT FILE NO.: 15-0583-SR DATE: 20160819 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Roger Hall, Plaintiff AND: Peel Mutual Insurance Company, Defendant

BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN

COUNSEL: R. Truax, Counsel for the Plaintiff J. Forester, Counsel for the Defendant

HEARD: July 26, 2016

Endorsement

[1] This is a motion by the plaintiff, Roger Hall (Hall), seeking the production of further documents from the defendant, Peel Mutual Insurance Company (Peel Mutual). As a consequence, the plaintiff also seeks a further and better Affidavit of Documents.

Background

[2] Before reviewing the merits of the plaintiff’s request, the following background information will provide context. The plaintiff was a homeowner and suffered a fire loss. He was insured by Wawanesa. The home was occupied by his tenant, Patrick Doherty, who was insured through Peel Mutual Insurance Company, the defendant in this action.

[3] Pursuant to the provisions of the plaintiff’s policy, Peel Mutual retained a law firm, Dutton Brock, who filed a defence with respect to an action between Hall and Doherty. However, the law firm eventually got off the record due to a lack of cooperation by Doherty. The plaintiff then struck Mr. Doherty’s defence in that action and obtained default judgment against him for $121,554.02. Collection efforts were unsuccessful and Mr. Doherty filed for bankruptcy on November 26, 2014.

[4] The plaintiff then commenced this action against Mr. Doherty’s insurance company, Peel Mutual, pursuant to the provisions of the Insurance Act, R.S.O. 1990, c.I.8, s. 132(1). That section provides:

132(1) Where a person incurs a liability for injury or damage to the person or property of another, and is insured against such liability, and fails to satisfy a judgment awarding damages against the person in respect of the person’s liability, and an execution against the person in respect thereof is returned unsatisfied, the person entitled to the damages may recover by action against the insurer, the amount of the judgment up to the face value of the policy, but subject to the same equities as the insurer would have if the judgment had been satisfied.

[5] The parties have agreed that this action between Hall and Peel Mutual will proceed under the Simplified Rules. By way of this motion, the plaintiff specifically seeks the following:

(a) an order that the defendant produce to the plaintiff within 30 days, the complete independent claims adjuster’s file from Georgian Claims and Services Inc. pertaining to the plaintiff’s fire loss claim [against Doherty]; (b) an order that the defendant produce to the plaintiff within 30 days, the complete Peel Mutual Insurance Company file pertaining to the plaintiff’s fire loss claim [against Doherty] subject to solicitor-client privilege; (c) an order that the defendant produce to the plaintiff within 30 days, the complete Dutton Brock LLP file pertaining to the plaintiff’s fire loss claim in court file [Doherty] subject to solicitor-client privilege; and (d) a further and better Affidavit of Documents.

[6] The defendant submits that it has delivered an Amended Affidavit of Documents providing 147 items as set out in Schedule “A” of that document and has listed 86 items on Schedule “B” of that document. Full particulars of the items listed on Schedule “B” were not provided because the defendant claims either solicitor-client privilege or litigation privilege with respect to those items listed thereon.

Georgian Claims Services Inc.

[7] It appears from submissions by both counsel that those items listed as 7 to 20 on Schedule “B” related to Georgian Claims Services Inc. have now been provided to the plaintiff.

The Dutton Brock LLP File

[8] Dutton Brock was the law firm acting for the defendant, Doherty, at the request of his insurer, Peel Mutual. The issue before the court requires some discussion about solicitor-client privilege and litigation privilege. The issue was explored in some detail by the Supreme Court of Canada in Blank v. Canada (Minister of Justice), 2006 SCC 39, 2006 S.C.J. 39. As Fish J. noted at para. 8, “The former [litigation privilege] unlike the later, is of temporary duration. It expires with the litigation of which it was born.”

[9] In speaking to the issue of the importance of solicitor-client privilege, Fish J. set out at para. 26:

The solicitor-client privilege has been firmly entrenched for centuries. It recognizes that the justice system depends for its vitality on full, free and frank communication between those who need legal advice and those who are best able to provide it. …The resulting confidential relationship between solicitor and client is a necessary and essential condition of the effective administration of justice.

[10] In defining litigation privilege, Fish J. quoted with authority R.J. Sharpe (now Sharpe J.A.) from a paper entitled Claiming Privilege in the Discovery Process, in Law in Transition: Evidence, [1984] Special Lect. L.S.U.C. 163 at pp.164-65 at para. 28:

Litigation privilege applies to communications of a non-confidential nature between the solicitor and third parties, and even includes material of a non-communicative nature… Litigation privilege, on the other hand, applies only in the context of the litigation itself. …Litigation privilege is based upon the need for a protected area to facilitate investigation and preparation of a case for trial by the adversarial advocate.

When Does Litigation Privilege End?

[11] It is understood that litigation privilege will end when the underlying litigation itself ends. But the Supreme Court of Canada in Blank provided the following caveat. As Fish J. stated at paras. 34 and 39:

[34] It cannot be said to have been “terminated” in any meaningful sense of that term, where litigants or related parties remain locked in what is essentially the same legal combat. [39] At a minimum, it seems to me this enlarged definition of “litigation” includes separate proceedings that involve the same or related parties and arises from the same or a related cause of action (or “juridical source”). Proceedings that raise issues common to the initial action and share its essential purpose would in my view qualify as well.

[12] The plaintiff relies on the decision of Gordon J. in White v. Halifax Insurance Company (2010), I.L.R. I-4916 under the circumstances said to be similar to this case. That case involved the plaintiff seeking to get information from the defendant insurance company with respect to a prior action involving that defendant’s negligent insured. With respect to some of the relief sought, Gordon J. stated at para. 15:

Litigation privilege would no longer apply to the contents of that file. Solicitor and client privilege, however, would continue to apply to documents within that file which amount to confidential communications between the client and the solicitor.

However, Gordon J. noted the Supreme Court of Canada’s ruling in Blank and continued at para. 14:

I might add to this, however, the caveat confirmed by the Supreme Court of Canada in Blank that litigation privilege may continue notwithstanding the conclusion of the litigation for which it may initially have been claimed where litigants or related parties remain locked in what is essentially the same legal combat.

[13] Gordon J. went on to state, with respect to some aspects of the documents requested, at para. 16:

Within that file, solicitor and client privilege would continue to apply to documents which amount to confidential communications between ING and the solicitor. With respect to other documents to which litigation privilege would have then applied, I am of the view that the proceedings contemplated by the issues alive in that file are common to the issues which are before the court now, and that the parties are closely enough related that litigation privilege should continue to apply.

[14] A list of the items contained within the Dutton Brock file is set out on Schedule “B” of the Affidavit of Documents, items 21 to 85. The headings would appear to indicate that they are e-mails from or to the law firm and its client Peel Mutual, internal memos by lawyers, notes by lawyers within the firm, and memos to file. In my view, these items are covered by solicitor and client privilege. In my view, they represent communications between solicitor and client or work product enabling the firm to properly advise its client and ought not to be disclosed.

Litigation Privilege

Peel Mutual Insurance Company File

[15] Schedule “B” of the Affidavit of Documents at Item 26 lists “Peel Mutual Claims Notes” and claims litigation privilege.

[16] Peel Mutual Claims Notes were originally prepared in connection with the Hall v. Doherty matter. Clearly, that action ended by way of a judgment against Mr. Doherty. The issue now is Peel Mutual’s liability to this plaintiff pursuant to the provisions of s. 132 of the Insurance Act. As the Supreme Court of Canada noted in Blank, litigation privilege creates a zone of privacy. But that zone of privacy is not terminated where litigants or related parties remain locked in what is essentially the same legal combat: Blank at para. 34.

[17] In my view, the case at bar requires the application of the enlarged definition of “litigation privilege” as set out in Blank at para. 39.

[18] In this case, we have the same or related parties, Hall and Doherty’s insurer. The proceedings raise issues common to the initial action, the fire loss.

[19] Under the circumstances, I am satisfied that the defendant is not required to produce its complete Peel Mutual Insurance Company file relating to the Hall v. Doherty action.

[20] The motion by the plaintiff is dismissed.

Costs

[21] At the conclusion of the hearing, both parties agreed that the successful party would receive a costs award of $1,500, all inclusive. Costs awarded to the defendant in the amount of $1,500, all inclusive, payable by the plaintiff with 30 days of the release of this endorsement.

MULLIGAN J. Date: August 19, 2016