Court File and Parties
COURT FILE NO.: 16-205 DATE: 2018/07/06 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Jarrod Seth Van Every by his Litigation Guardian, Andrew Stastny Plaintiff – and – D. Robert Findlay and Findlay Personal Injury Lawyers Defendant
COUNSEL: David E. Preszler, for the Plaintiff Diana A. Romano Reid, for the Defendants
HEARD: June 15, 2018
Harper J.
Issues
[1] The Defendants, D. Robert Findlay and Findlay Personal Injury Lawyers, (Findlay) seek an order varying the order of Justice Maddalena dated April 27, 2016 allowing for the unsealing of the file and producing the file contents for the purposes of this litigation.
[2] Alternatively to allow the file to be unsealed for the court to inspect and that any materials deemed relevant by the court to be produced to Findlay.
Background
[3] The Plaintiff, (Van Every), was a minor when he was involved in motor vehicle accident on May 28, 2004.
[4] Van Every retained Findlay to represent him with respect to his statutory benefits claim with respect to the above noted accident.
[5] Van Every subsequently retained Jeffery Preszler to represent him with respect to his statutory benefits related to the same accident and with respect to a tort claim arising from this accident.
[6] The accident benefit file was settled on or about February 3, 2016. Preszler Law Offices were still Van Every’s lawyer at the time.
[7] On April 27, 2016, counsel for Van Every brought an application to the court seeking approval of the settlement of the accident benefits claim and for judgment in accordance with the minutes of settlement.
[8] As part of the application for approval Jeffery Preszler submitted an affidavit along with an affidavit of the litigation guardian, Andrew Stastny. Mr. Stastny was required to set out in his affidavit the material facts and reasons supporting the proposed settlement as well as his position with respect to the settlement. Mr. Preszler was also required to set out in his affidavit his position with respect to the settlement.
[9] On June 24, 2016 Van Every commenced this action against the Defendants alleging that the Defendants provided negligent representation with respect to their handling of his accident benefits claim.
[10] Van Every subsequently settled his tort claim for $100,000.00.
[11] Mr. Preszler refused to produce a copy of the application materials filed in support of the settlement of Van Every’s accident benefit claim on the grounds that the file is sealed by the order of the court.
Moving Party (Findlay’s) Position
[12] Findlay denies all allegations of negligence.
[13] Findlay submits that the supporting affidavit material to the court approval application are relevant to the central allegations made in the action, namely the alleged improper handling of Van Every’s accident benefit case by Findlay.
Responding Party (Van Every’s) Position
[14] Van Every submits that Findlay lacks standing under Rule 38.11(1) of the Rules of Civil Procedure.
[15] The rule grants standing to a party or “other person affected by a judgment” to move to set aside or vary the judgment. Van Every submits that Findlay is neither a party nor a person affected by the judgment.
The Law
[16] In order to be successful the moving party must prove that:
(1) that they are persons affected by the judgment; and (2) that the judgment was obtained on an application made without notice.
[17] In this case, Findlay had no notice of the application to approve the judgment in accordance with the settlement. Findlay also had no notice of any request to seal the file.
[18] It has been established that for a person to be considered to be: “affected by the order”, they must establish that the order sought to be varied affected the moving party’s “proprietary or economic interests”.
[19] In the case of Ivandaeva Total Image Salon Inc. v Hlembizky, [2003] OJ No. 949, the Ontario Court of Appeal reviewed the law relative to Rule 38.11(1). The Ontario Court of Appeal stated that a person must be affected by an order in respect to the proprietary or economic interests.
[20] In the Ivandaeva case, the issue was whether financial information about Mr. Ivandaeva or his companies that were contained in a matrimonial file might have assisted the appellants in their defence of the commercial litigation. The court in that case found that the information was far removed from the direct effects on the proprietary or economic interest of a non-party. Put another way, the materials in the divorce file were unrelated to the issues in the commercial litigation.
[21] The moving party submits that Ivandaeva is distinguishable from this case. Findlay submits that the case at bar seeks production of materials that pertain to an application for approval of a settlement of the Plaintiff’s accident benefit claim. The material sought is at the centre of this litigation as the present action alleges that Findlay acted in a negligent manner in the handling of the very issue that was settled and then sealed.
[22] I agree with the moving party. An additional significant fact in this case is that the material sought to be produced has a direct impact on Findlay’s counter claim in this action claiming that the plaintiff would not be entitled to claim damages if his losses were caused by the improvident settlement of his claims by Preszler Law Offices.
[23] In the case of Paterson v. Lafleche 2004 CarswellOnt 1972 [2004] O.J No. 2029, Justice Wilton-Siegel was faced with a similar issue. In that case, the plaintiff had terminated the retainer of her former lawyer, Mr. Sacks. She then retained Mr. Caprani, a paralegal. Mr. Caprani discovered that a statement of claim had never served and filed. The Plaintiff in that case then retained a lawyer, Mr. Blott who brought a motion to extend the time to file her statement of claim.
[24] Justice Nordheimer granted an order extending the time for service. It was that order that the moving party was attempting to set aside.
[25] The Defendant in that case did not have notice of the motion to extend the time. The Defendant notified his insurer’s legal counsel that he was not aware that a statement of claim had been issued in that action.
[26] Although the motion under consideration in the Paterson case was pursuant to rule 37.14(1) and (2) the wording under consideration is the same. In order to be successful in such a motion the person must also establish that they had no notice and that the person is a person affected by to order.
[27] In the Paterson case, the lawyer Sacks was the subject in a companion action brought against him by the Plaintiff alleging negligence in his handling of her claims arising out of the two motor vehicle accidents. At para. 38, Justice Wilton-Siegal stated:
[38] There is a real possibility that the two actions may be tried together in some manner. In any event, there is a subset of facts which is common and material to each action.
[39] While the relationship of Mr. Sacks to the action is more remote, I have concluded for the following reasons that he is entitled to participate in this motion. The standard for a determination of this issue is addressed by Borins J.A. in Ivandaeva at para. 27 as follows:
[39] … a review of the cases in which a successful motion has been brought under rule 37.14(1) and rule 38.11(1), which applies to the applications, or their predecessors, to set aside of vary an order suggest that the order must be one that directly affects the rights of a moving party in respect to the proprietary or economic interests of the party. (emphasis added)
[40] In the event this Court grants the relief requested by Wawanesa, there is a real possibility that the plaintiff’s action against Mr. Sacks will proceed: if the relief is denied and the relief requested by the plaintiff is granted, the action would appear likely to be discontinued for want of damages. In these circumstances. I believe that Mr. Sachs has demonstrated that the order of Jr. Justice Nordheimer directly affects his economic inters. I would add that, from a practical perspective, by allowing Mr. Sacks to intervene in this motion, he becomes unable to argue in the plaintiff’s action against him that any damages suffered by the plaintiff are attributable to any action or inaction of the plaintiffs in connection with this motion.
[28] Like in Paterson, I find that the settlement that led to the order of Justice Maddalena is central to the material issues in both the case by the Plaintiff against Findlay for negligence and Findlay’s counter claim that there are no damages as a result of the Plaintiff’s lawyer entering into an improvident settlement. Under the circumstances of this case there is a direct link to the economic interests of Findlay.
[29] In my view it would be ludicrous to suggest that evidence submitted to Justice Maddalena by both the litigation guardian and Mr. Preszler that tells the court why the settlement should be approved should not be produced to the lawyer who the Plaintiff and Mr. Preszler are claiming is negligent.
Conclusion
[30] There shall be an order to allow for the unsealing of the court file sealed by Justice Maddalena to allow for the production of the affidavit material used on the application to approve the settlement and any other evidence submitted for that purpose.
[31] If costs cannot be agreed to, counsel may set a time with the trial coordinator to make submissions to me with respect to costs within 30 days.