COURT FILE NO.: CV-15-2893-00 DATE: 2018 12 05
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Aviva Insurance Company of Canada C. Lui, Counsel for the Plaintiff Plaintiff (Defendant by Counterclaim)
- and -
Tracey Queeley a.k.a. Tracey Brown R. Levin, Counsel for the Defendant Defendant (Plaintiff by Counterclaim)
HEARD: November 13, 2018
REASONS FOR DECISION
LEMAY J
[1] I am the case management judge who has been appointed to manage these actions. These actions concern the termination of Ms. Tracey Brown’s employment in 2013 by her former employer, KMI Brokers, as well as a related action brought by Aviva. Both Aviva and KMI claim that Ms. Brown engaged in fraud in writing insurance policies.
[2] I had originally set aside November 13th, 2018 for a motion to address two issues. First, in the Action in Court File No. 14-231-00 (“the KMI Action”), the Defendants brought a motion to amend their Statement of Defence. That motion was settled by the parties, and not heard.
[3] The second motion, in Court File No. CV-15-2839 was brought to address the sufficiency of answers to undertakings, answers taken under advisement and refusals provided by Aviva. That motion was heard by me on November 13th, 2018.
[4] Both of these cases remain on the trial list for the May, 2019 blitz sittings. While hearing this motion, I was advised that the parties in the KMI action were close to resolving the entire action. I was also advised that the parties in the Aviva action were agreeable to an early pre-trial. One has been set for December 18th, 2018 at 10:00 am for the entire day. I will return to the procedural directions that I am making for that pre-trial at the end of these reasons.
[5] The undertakings motion deals with undertakings, under advisements and refusals. While some were answered in part, the bulk of these items were refused by Aviva. In terms of the arguments, I directed the parties to provide me with correspondence setting out their positions on the outstanding items. I have considered this correspondence, together with the motion records, in reaching my decision.
[6] In the sections that follow, I will briefly outline the nature of the claims made by the parties, address the items that were answered and then the items that were refused.
The Parties' Claims
[7] Tracey Brown, also known as Tracey Queeley, was employed as an insurance broker by KMI Brokers. She was originally hired in August of 2011. Her employment was terminated by KMI Brokers effective April 23rd, 2013. Ms. Brown commenced an action against KMI Brokers, and its principals alleging, inter alia, wrongful dismissal. It is this action that is almost settled.
[8] Approximately eight months after Ms. Brown was terminated, Aviva Insurance Company of Canada (“Aviva”) commenced an action against Ms. Brown. This action claimed, inter alia, damages for fraud, conspiracy, breach of fiduciary duty and breach of trust in the amount of $150,000.00 as well as costs for the investigation that Aviva had conducted into the conduct of Ms. Brown.
[9] Aviva sought, and obtained, an ex parte Mareva Injuncton from Lederer J. on October 28th, 2013, the same day that Aviva commenced its action. That injunction was granted based in part on an Affidavit sworn by Ms. Mavis Hawes, a Fraud Technical Specialist in Avivia’s Anti-Fraud Management Department.
[10] This injunction was dissolved by Perell J. on November 13th, 2013, but a Certificate of Pending Litigation (“CPL”) was registered against Ms. Brown’s home. Ms. Brown claims that the registration of this CPL caused her to be unable to refinance her home while she was unemployed, and led to the loss of her home.
[11] Ms. Brown brought a counter-claim against Aviva, seeking damages for libel and/or slander, intentional infliction of mental suffering, punitive and aggravated damages.
[12] Aviva defended this action. A portion of Aviva’s Reply and Defence to the Counterclaim reads as follows:
- Seventeen investigations from Aviva Canada’s Anti Fraud Management Unit were assigned to the investigation.
- The work of the investigators included: (a) conducting interviews of the insureds and representatives of KMI; (b) reviewing the insurance claims submitted; and (c) conducting verifications on information put forward in the applications for insurance on the policies issued.
- To the extent that the words set out in statements by Aviva Canada are statements of fact, they are true. To the extent that they are expressions of opinion, they are fair comments made in good faith and without malice on matters of public interest, namely the duty of a licensed insurance broker to carry out the duties honestly, with integrity and in good faith.
[13] Aviva also made a complaint to the Registered Insurance Brokers of Ontario (“RIBO”). RIBO is the organization that regulates insurance brokers. Ms. Brown was qualified as a Level 1 Broker, which meant that she had to work under the supervision of a Level 2 Broker.
[14] The Aviva action was transferred to Brampton, and both actions were assigned to me as a case management judge. As I have noted, the matters are set to be tried together during the civil blitz next year.
The Answered Items
[15] On consent, a letter dated November 9th, 2018 from Mr. Lui, counsel for Aviva, was marked as an exhibit on this motion. That letter details the responses to, and status of, a number of items that were already answered. The disposition of those matters was discussed in Court.
[16] There were two days of discovery. My list of dispositions deals with the May 8th, 2017 discovery first, and then the June 9th, 2017 discovery. I confirm the following dispositions of these matters:
a) Undertaking 1 - Aviva to amend the Statement of Claim to extend the period in which the fraud was alleged to have occurred. This may be ongoing, but the parties need to prepare for trial. As a result, Aviva is required to provide its amended Statement of Claim twenty-one (21) days after the pre-trial. b) Undertaking 5 - to advise as to whether Aviva is aware that a level one licensed RIBO broker must work under the supervision of a licensed level two broker. On reviewing the answers, Aviva has provided its best answer and no further answer is required. c) Undertaking No. 7 - there was a significant debate over this undertaking. However, as I understand it, the further response of Aviva is acceptable to Ms. Brown’s counsel, and no further answer is required. d) Under Advisement No. 2 - to provide copies of the C.V.’s of the investigators. In its further response, Aviva provided 7 C.V.’s out of a total of 18 investigators. After discussion, I am ordering that any further C.V.s are to be provided by December 24th, 2018, and that, subject to the discretion of the trial judge, Aviva will not be able to rely on any C.V.’s that are not produced within this time period. e) Under Advisement No. 5 - to produce any documents between Aviva and KMI during the audit conducted prior to Ms. Brown’s termination. Aviva has provided some very limited documentation, which is mostly (if not entirely) the audit. Aviva has until December 24th, 2018 to produce any additional document. Aviva will, subject to the discretion of the trial judge, not be able to rely on any documentation that is produced after December 24th, 2018. f) Undertaking No 2 - to advise as to whether Aviva provided any training to Ms. Brown. The answer to this question is that it was determined that training was likely provided, but that this fact could not be confirmed. After discussion, it was determined that Aviva would advise Ms. Brown’s counsel as to why it thought that training was likely provided, and why this fact could not be confirmed. g) Undertaking No. 6 - to advise whether there is direct evidence that Ms. Brown failed to ask a required question material to the risk that was being insured, and that such a failure led to a loss. Currently, Aviva’s answer includes the phrase “including but not limited to” and lists three examples. Aviva has until December 24th, 2018 to provide any additional examples. If no further examples are provided, then Aviva will, subject to the discretion of the trial judge, not be able to rely on any further examples identified after December 24th, 2018. h) Undertakings 7, 8 and 10 - I understand that the issues relating to these undertakings are resolved. i) Undertaking No. 11 - to provide additional details of paragraph 17 of Aviva’s Statement of Claim. Aviva is going to provide a cleaner answer to this question within thirty (30) days of the pre-trial. j) Undertaking No 12 - I understand that this matter is resolved. k) Undertaking No. 14 - To continue to advise as to whether there are any other files handled by Ms. Brown with which Aviva has no issue. Originally, Aviva alleged that thirty-six (36) cases demonstrated fraudulent conduct on the part of Ms. Brown. Twelve of these were abandoned at discovery. Aviva is to confirm its position on the remaining cases where it is alleging fraud by December 24th, 2018.
[17] In terms of the deadlines that I have imposed in this list, and elsewhere in this decision, I have taken the December holiday break into account in setting those deadlines. Given that this matter is on the trial list for the May, 2019 sittings, those deadlines cannot be changed, even on consent, without my leave. Further, I am not prepared to change those deadlines without good reason.
[18] I also note that counsel was advised of these deadlines and expectations during the course of the hearing before me. As a result, they have actually had a number of weeks to collect these documents, so the short time lines for completion should not be an issue.
[19] Finally, at the time that these motions were argued, I did not receive copies of the charts of undertakings, under advisements and refusals. I asked for copies of the refusals chart. However, in preparing these reasons, I came to the conclusion that it was possible that some of the undertakings and under advisements had not been dealt with by my discussions with the parties.
[20] As a result, I had my assistant e-mail counsel and ask them to identify which items taken under advisement had not been addressed in Court. Counsel had slightly different recollections. Therefore, although I had correspondence and submissions from the parties, I did not want to decide any issues without confirming the agreements of counsel.
[21] Therefore, Counsel are directed to discuss this issue between them and identify any items that require further adjudication on my part by December 11th, 2018, considering what has already been resolved in these reasons. They are to submit, if possible, a joint letter identifying any outstanding issues. I will then review those issues and provide a further endorsement if this matter does not resolve at the pre-trial.
The Refusals
The Parties' Arguments
[22] The refusals arise from the discovery of Aviva’s deponent, Mr. David Nolan, a Supervisor of Fraud Management. Discovery was held over two days, May 8th and June 9th, 2017. The discovery transcript takes up over 400 pages, and over 1300 questions were asked.
[23] A series of refusals were generated over the two days. Approximately 35 of those refusals remain to be adjudicated on this motion. I directed counsel to provide me with a chart outlining these refusals. In the reasons that follow, I will review the general principles that the parties argued relating to these refusals as well as addressing any specific arguments that need to be addressed. My decision, in brief, for each refusal is set out in the charts.
[24] The consideration of any questions refused at discovery begins with the basis for the refusal. In 2038724 Ontario Ltd. v. Quizno’s Canada Restaurant Corp. (2012 ONSC 6549), Perell J. lists the categories of justifications for refusals. The list, set out at paragraph 79 of the decision, reads as follows:
(1) unanswerable- the question is not capable of being answered, which is to say that the question is vague, unclear, inconsistent, unintelligible, redundant, overreaching, speculative, unfair, 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) disproportionate- the question is disproportionate, which is to say that the question may be relevant but providing an answer offends the proportionality principle; and (7) privilege- 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.
[25] I will consider whether Aviva’s refusals are justified using this framework. Each counsel also pointed to a number of other points that I should consider in assessing whether to order Aviva to answer these refusals.
[26] Counsel for Ms. Brown pointed to three separate principles that justified directing Aviva to answer the refusals, as follows:
a) The principle of proportionality should be applied sparingly to this litigation, as the allegations are very significant, and there have already been a significant number of documents that have been produced. b) This is a case where fraud and defamation are alleged, and punitive damages are sought. As a result, many of the answers that were refused are relevant and should be answered. c) Many of the issues where Aviva has refused to answer questions are issues that are in play in the litigation.
[27] In response to these arguments, counsel for Aviva raises three principal arguments as follows:
a) The principle of proportionality should not require Aviva to answer Ms. Brown’s requests for information. b) The other principles relating to when questions on discovery can be refused were properly applied by Aviva. In particular, many of the questions asked by Ms. Brown sought to elicit opinion evidence. c) The questions that were asked by counsel for Ms. Brown were vague, overbroad and otherwise confusing.
[28] Ms. Brown’s first argument is related to Aviva’s first argument. Ms. Brown’s second and third arguments are related to Aviva’s second argument. I will deal with each side’s arguments on these points together. I will then address the issue of whether the questions are vague or overbroad, together with any remaining questions about specific disclosure issues.
[29] In addition, counsel for Ms. Brown has asked that Aviva’s representative re-attend at discovery to answer further questions for two reasons. First, there were an inordinate number of objections and interjections on the record, which interfered with counsel’s ability to obtain a proper transcript. Second, the witness that was produced by Aviva was unprepared to answer questions. Aviva opposes this request. I will address that request at the end of this analysis.
[30] Finally, in the course of argument, counsel for Ms. Brown conceded that two of the Refusals, #11 and #12 on the June 9th, 2017 list, did not have to be answered. I have noted that concession in the attached chart.
The Principle of Proportionality
[31] At discovery, the Rules of Civil Procedure and the common law required the production of all documents that were arguably relevant. This was a low threshold. The principle of proportionality has been developed over at least the last twenty years. In essence, it is a principle designed to ensure that the burdens of discovery do not dwarf the issues in the litigation.
[32] It is, in the words of Perell J., a “parsimonious principle” (see Ontario v. Rothmans Inc. 2011 ONSC 2504), that is designed to ensure that the Court can fit the discovery procedure to the action before it. Applying the principle usually, but not always, results in a downsizing of the production obligations. In the Court’s analysis, arguable relevance is a starting point, but not the end point. In ensuring access to justice, the Court must ensure that the parties are not unduly burdened by discovery obligations, but the Court must also ensure that the parties are able to prepare their cases and respond to the other party’s case.
[33] In this case, I agree with counsel for Ms. Brown that the principle of proportionality should be applied more sparingly than Aviva argues for three reasons. First, there have been over 10,000 documents produced already in this litigation. This is already a document intensive case, and any application of proportionality must take this fact into consideration.
[34] Second, the allegations in this case are significant. Aviva is alleging fraud and misrepresentation on the part of Ms. Brown. Ms. Brown, in turn, is alleging defamation, intentional infliction of mental stress and other claims. These allegations are wide-ranging and the Court should provide each side with a full opportunity to respond to them.
[35] Finally, there are some of the specific requests that demonstrate that proportionality should be applied sparingly in this case. One is worth highlighting in order to demonstrate the problems with Aviva’s argument. Ms. Brown has requested all of the files where she wrote insurance policies for Aviva. Aviva opposes this request on the basis that the request could produce an inordinate amount of documentation.
[36] The problem with this request is Aviva’s press release announcing that it was commencing this action against Ms. Brown. In that press release, Aviva stated:
Aviva Canada, one of the country’s leading providers of home, auto, recreational vehicle, group and business insurance, today announced that it has commenced litigation against a former employee of KMI Brokers Inc. of Mississauga, Ontario. The owners of KMI Brokers are cooperating fully with Aviva Canada’s investigation and endorsed the submission of complaints about their former employee’s business practices to the Registered Insurance Brokers of Ontario (RIBO).
The investigations uncovered a scheme that involved the broker’s former employee conspiring with policyholders to misrepresent themselves to Aviva Canada in order to obtain cheaper premiums. The policyholders were coached to provide incorrect addresses and not disclose poor driving histories. The former employee also provided them with discounts they did not qualify for.
After investigating two questionable automobile claims submitted under policies written by the accused, Aviva Canada’s Anti-Fraud Management team detected a number of inconsistencies and anomalies in the applications for insurance. Together with KMI Brokers, Aviva Canada audited all polices written by the accused while employed at KMI. In total, 17 investigations from Aviva Canada conducted 40 investigations and uncovered 27 policies with misrepresented information.
[37] The problems with Aviva’s refusal are clear. First, it has already advised the public that it has audited “all policies written by [Mrs. Brown] while at KMI Brokers”. As a result, this documentation should be readily available to Aviva. Second, the more policies that Ms. Brown wrote through Aviva while she was at KMI Brokers, the more relevant this request is. If, for example, Ms. Brown only wrote 40 policies, then the fact that Aviva looked at 37 of them would not greatly assist Ms. Brown in her case, but it would also not be a particularly burdensome request for Aviva to deal with. However, if Ms. Brown wrote 500 policies through Aviva in the time that she was at KMI Brokers, this could lend credence to Ms. Brown’s argument that she was not engaged in any misconduct, and that Aviva had not considered alternative explanations for any concerns that they had with the way that she wrote policies.
[38] Although not directly related to the question of proportionality, this press release also addresses the issues of whether Aviva’s complaint to RIBO should be disclosed. I agree with counsel for Aviva that the question of whether the complaint was prepared with the assistance of counsel is privileged and properly refused. However, the rest of the questions about the RIBO complaint are clearly relevant. Given that Ms. Brown is alleging defamation, any statements to third parties that were made by Aviva are at least arguably relevant, and a complaint made to RIBO may also be interfering with Ms. Brown’s ability to obtain employment. The complaint and the related documentation not covered by solicitor-client privilege is to be produced by Aviva by January 15th, 2019.
The Nature of the Claims and Opinion Evidence
[39] This section deals with the second argument advanced by each party and Ms. Brown’s third argument as set out above. In a case where punitive damages and damages for defamation are sought, there is a tension between the view that lay witnesses, even on discovery, should not normally be offering opinions, the specific claims that the parties are advancing and the differences between discover and viva voce evidence at trial. In my view, that tension results in a broader right to ask questions about a witness’ view of the evidence, particularly when that witness is being deposed on behalf of the corporate party that reached conclusions based on an investigation, and allegedly engaged in defamation.
[40] In understanding the reasons for my analysis, two things must be kept in mind. First, Aviva has argued that defamation is not made out because its statements were “fair comment” even if they were not true. As a result, it is reasonable to ask whether particular statements were “fair comment” given the entirety of the investigation file.
[41] Second, both sides are advancing claims for punitive damages. In Whiten v. Pilot Insurance (2002 SCC 18, [2002] 1 S.C.R. 595), Binnie J. states (at 647-8):
The application standard of review for “rationality” was articulated by Cory J. in Hill, supra, at para. 197:
Unlike compensatory damages, punitive damages are not at large. Consequently, courts have a much greater scope and discretion on appeal. The appellate review should be based upon the court’s estimation as to whether the punitive damages serve a rational purpose. In other words, was the misconduct of the defendant so outrageous that punitive damages were rationally required to act as deterrence?
The “rationality” test applies both to the question of whether an award of punitive damages should be made at all, as well as the question of quantum.
The respondent claims that an insurer is entirely within its rights to thoroughly investigate a claim and exercise caution in evaluating the circumstances. It is not required accept the initial views of its investigators. It is perfectly entitled to pursue further inquiries. I agree with these points. The problem here is that Pilot embarked on a “train of thought” as early as February 25, 1994. (see para. 7 above) that led to the arson trial, with nothing to go on except the fact that its policy holder had money problems.
[42] In essence, whether Aviva considered other possibilities besides a fraud on the part of Ms. Brown could be relevant to whether punitive damages were awarded. Similarly, questions about the weight that the investigators gave to particular statements from people that they interviewed would also be relevant. Aviva made a decision to take action based on this evidence, including making comments to third parties and to the public. As a result, its views on whether this evidence was useful are relevant to the question of punitive damages.
[43] Indeed, Mr. Nolan himself acknowledged in his discovery (Question 618, page 190) that the assessments of credibility that the investigators made would have been of “some considerable importance”. In light of this acknowledgement, the views that the investigators formed of witness credibility are relevant to this litigation.
[44] I should also note that the questions of how the investigation was done, what weight was given to particular evidence in the course of the investigation and what was done with the evidence that Aviva gathered also inform the question of whether Aviva’s claim for reimbursement of the costs of the investigation from Ms. Brown should succeed.
[45] Finally, I note that my general observations on this issue do not apply to the questions that ask for legal opinions. In that case, the answer is somewhat different. Parties can be asked for their position on the legal issues in a particular case (see, on this point, Six Nations of the Grand River Band v. Canada (Attorney General) (2000), 48 O.R. (3d) 377 (Div. Ct.). However, legal questions as to what constitute evidence may be beyond the proper scope of questions at discovery (see Morguard Real Estate Investment Trust v. Hazeldean [2001] O.J. No. 5096 (S.C.J.)).
[46] In this case, a balancing of these factors requires some, but not all, of the questions refused on the basis that they were asking for opinions, a weighing of evidence and other facts to be answered. I have identified the specific questions in the attached Appendices. Generally, however, I have directed that Aviva answer questions that go to the weight given to, and use made of, of pre-claim evidence that was gathered during the investigation. Generally, I have not directed Aviva to answer questions that go directly to the ultimate issues that the trier of fact will have to determine.
Questions are Vague, Confusing and Overbroad
[47] This is an argument that Aviva raises with respect to a number of questions. Again, this requires a consideration of specific questions and I have addressed those in the chart of undertakings.
[48] I would make one general observation about language, however. There were some questions where subjective, and value laden language was used by counsel for Ms. Brown. For example, Mr. Nolan was asked if Ms. Brown engaged in “nefarious” conduct. “Nefarious” is a subjective and somewhat vague word. Had the question been whether Ms. Brown had engaged in “conduct that was contrary to policy”, then it would be a proper question. In this form, it is not a proper question.
Specific Issues
[49] The only specific issue that requires comment beyond what is in the chart, or elsewhere in these reasons, is the question of whether Aviva continues to insure Ready Honda. Counsel for Aviva argues that this question is properly refused on the basis that it is irrelevant. I disagree. In reviewing the discovery transcript, it is clear that many of the impugned insurance policies came from referrals from Ready Honda. The extent of the problems that Aviva found with Ready Honda’s approach to managing clients and referring insurance policies is arguably relevant to the issues in this litigation.
Is a Re-attendance Required?
[50] Counsel for Ms. Brown argued that the discovery transcript was replete with interruptions and clarifications from Aviva’s counsel. In that regard, he points to approximately 1,000 interjections from Aviva’s counsel over the course of 1300 questions.
[51] I have reviewed the discovery transcripts, and note that there were a significant number of interruptions, interjections and objections. I make two observations about them. First, some of them were attempts to assist Mr. Nolan with finding various documents. Second, some of them flowed from the dispute between counsel as to what questions were actually relevant.
[52] In addition, there were a number of occasions in which the deponent, Mr. Nolan, did not seem to have properly prepared for the discovery. One early example was when he was asked whether it was Aviva’s position that they had everything they needed to commence the litigation, and that no further investigation was required when they filed the claim. Mr. Nolan required a break to review Aviva’s Statement of Claim to confirm this fact. I find the need for a break on this question surprising, given the nature of the litigation.
[53] There are other examples of Mr. Nolan requiring a break to review documentation and consider Aviva’s position, when I would have expected him to have been better prepared for discovery.
[54] However, the questions were answered, and the fact that the discovery transcript is not “clean” as a result of the interruptions and the fact that Mr. Nolan had not completely prepared is not a reason for a re-attendance for a complete re-examination.
[55] However, I am of the view that given the number of refusals that I have directed Aviva to answer, that Mr. Nolan should be required to re-attend in person and on the record once the relevant documents are produced and the refusals answered. Reasonable follow up questions will also be permitted.
[56] For clarity, Aviva is to provide both written answers and be prepared to have Mr. Nolan re-attend for examination for discovery.
Case Management Directions
[57] I understood that the parties were interested in an early pre-trial in this case. Based on that understanding, I set out my directions for the pre-trial on December 18th, 2018 to the parties in court. Those directions are as follows:
a) The parties in the KMI action were to advise whether they had resolved their matter and, if not, if they were available for the pre-trial on December 18th, 2018. I was not advised of any availability problems, so we will proceed as if the pre-trial will cover both actions if the KMI action is not already settled by December 18th, 2018. b) The parties who were participating in the pre-trial are required to serve and file their pre-trial conference memoranda (with attachments) by December 13th, 2018 at noon. c) The parties participating in the pre-trial were to provide an electronic copy of their pre-trial memoranda (without attachments) to my judicial secretary either prior to or at the time that they were filed. d) Any further directions regarding this matter being ready for trial were to be addressed at the conclusion of the pre-trial, if the matter had not fully resolved. e) The matters remain on the trial list for the May, 2019 blitz. I advised counsel in Court on November 13th, 2018 that the blitz is now starting on May 13th, 2019 rather than May 6th, 2019. f) Parties participating in the pre-trial must attend with their clients. This is an in-person attendance, and a decision maker with full ability to resolve the case must be in attendance for corporate clients. If there is more than one person making the decisions, then all of the decision makers must attend.
[58] I confirm that those instructions continue to apply.
[59] During the appearance on November 13th, 2018, counsel for both sides confirmed that the only items remaining before this matter proceeded to trial were procedural issues relating to experts, and any issues that might flow from my decision in this motion. On that basis, once I decided this motion, both counsel were content to have me conduct the pre-trial in this matter.
Conclusion
[60] For the foregoing reasons, I am directing as follows:
a) That Aviva provide the further and better answers to undertakings and items taken under advisement as set out in paragraph 16 of these reasons by December 24th, 2018 unless otherwise noted. b) That Aviva provide the documents relating to answers to refusals set out in Schedules “A” and “B” to these reasons by January 15th, 2019 unless otherwise noted. c) That Mr. Nolan reattend on discovery at his own expense to answer the questions that were refused, as well as any related follow-up questions. This attendance is to take place by February 15th, 2019.
[61] In terms of the items that I have directed be answered by December 24th, 2018, I asked counsel for Aviva to try and provide a list of the fraud claims that Aviva was still proceeding with in advance of the pre-trial. That direction is not mandatory, but it would be of considerable assistance to me in addressing the factual issues at the pre-trial.
[62] Finally, there is the issue of costs. I have already received the costs outlines from both counsel. I am not expecting costs submissions to be completed prior to the pre-trial on December 18th, 2018. However, if we are unable to resolve this matter at that pre-trial, then costs submissions will be due from both sides twenty-one (21) calendar days later, being January 8th, 2019. They are to be no longer than two (2) single-spaced pages, exclusive of bills of costs and case-law.
[63] Reply submissions will be due seven (7) days thereafter, being January 15th, 2019. Those submissions are to be no longer than one (1) single-spaced page.
[64] In the event that costs submissions are not received in accordance with the time-line above, then no costs will be payable by either party on this motion.
LEMAY J Released: December 5, 2018
APPENDIX “A” to the Reasons of Mr. Justice LeMay dated December 4th, 2018 - Disposition on Questions Refused
Court File No. CV-15-2893-00 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
AVIVA INSURANCE COMPANY OF CANADA Plaintiff (Defendant to the Counterclaim)
and
STEPHEN K. TRACEY QUEELEY a.k.a. TRACEY BROWN Defendant (Plaintiff by Counterclaim)
Refusals
Question No.: 65 Page No.: 18 Specific Undertaking: To answer “how many cases would the fraud management department be managing from end of 2011 to present?” Aviva position: Refused. Irrelevant and overbroad Disposition By the Court: This question is to be answered. It is arguably relevant to the issues of defamation and the propriety of the investigation.
Question No.: 65 Page No.: 18 Specific Undertaking: To answer “how many active fraud investigations from 2012 to now?” Aviva position: Refused. Irrelevant and overbroad Disposition By the Court: Also to be answered on the same basis as Refusal #1.
Question No.: 84 Page No.: 22 Specific Undertaking: To answer “how many fraud investigations cases out of 1000 to 1500 in a year turned into lawsuits?” Aviva position: Refused. Irrelevant Disposition By the Court: Also to be answered on the same basis as Refusal #1.
Question No.: 95 Page No.: 25 Specific Undertaking: To answer “how many of those 1000 to 1500 fraud investigations (as a percentage) over the course of a year were relating to individual applicants or policy holders of automobile insurance.” Aviva position: Refused. Irrelevant Disposition By the Court: Also to be answered on the same basis as Refusal #1.
Question No.: 270 Page No.: 84 Specific Undertaking: To answer “what was the threshold that Aviva felt was passed in order to target Ms. Queeley as somebody who is deliberately attempting to defraud or otherwise breach her obligations, her fiduciary obligations?” Aviva position: Refused. Irrelevant Disposition By the Court: This question is to be answered as it relates to the judgments made by the investigative team in reaching their conclusions.
Question No.: 304 Page No.: 94 Specific Undertaking: To answer if the questions template allowed the investigators to make derogatory comments about Tracey Queeley. Aviva position: Refused. Improper question based on vague characterization. Already answered. Disposition By the Court: This question is properly refused as the comment “derogatory” is both vague and a question for argument.
Question No.: 316 Page No.: 101 Specific Undertaking: To answer if Aviva agrees with counsel that Tracey was slandered. Aviva position: Refused. Legal Question Disposition By the Court: This question is properly refused as it relates to the ultimate conclusion that the trier of fact will have to determine.
Question No.: 384 Page No.: 115 Specific Undertaking: To answer if Aviva was aware that there were many instances where discounts were being applied where the insured did not strictly qualify for them. Aviva position: Refused. Irrelevant and overbroad Disposition By the Court: This question is to be answered. The answer goes to the question of whether the investigators had a sound basis to determine whether Ms. Brown was improperly applying discounts, or just following general practice.
Question No.: 495 Page No.: 150 Specific Undertaking: To answer if Aviva thinks Tracey Queeley was involved in nefarious behavior. Aviva position: Refused. Improper characterization. Allegations are particularized in pleadings. Disposition By the Court: This question is properly refused, as “nefarious” behavior is both a subjective term, and one that is vague.
Question No.: 533 Page No.: 164 Specific Undertaking: To answer if the RIBO brief was put together by Martin French with or without the assistance of counsel. Aviva position: Refused. Solicitor-client privilege Disposition By the Court: This Refusal was Proper.
Question No.: 573 Page No.: 176 Specific Undertaking: To answer if Aviva continues to insure the dealership, Ready Honda. Aviva position: Refused. Irrelevant. Disposition By the Court: To be answered for the reasons given in the main decision.
Question No.: 574 Page No.: 178 Specific Undertaking: To answer if Aviva agrees that during the course of investigation, Mr. Shueyb was threatened with potential civil litigation and or criminal proceedings. Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: To be answered for the reasons given in the main decision.
Question No.: 575 Page No.: 178 Specific Undertaking: To answer if Aviva indicated to Mr. Shueyb that he may well be subject to either civil litigation or criminal investigation. Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: To be answered for the reasons given in the main decision.
Question No.: 597 Page No.: 184 Specific Undertaking: To answer “why would Aviva may not have pursued Mr. Shueyb?” Aviva position: Refused. Already answered. Disposition By the Court: To be answered, as it is an issue related to Ready Honda. Reasons explained in the main decision.
Question No.: 609 Page No.: 187 Specific Undertaking: To answer if there is any evidence of the total number of policies that Tracey Queeley wrote for Aviva during her tenure with KMI. Aviva position: Refused. Irrelevant and overbroad Disposition By the Court: This question is to be answered for reasons explained in the decision.
Question No.: 635 Page No.: 197 Specific Undertaking: To answer “how Aviva weighs the evidence of insureds who lie during an investigation?” Aviva position: Refused. Improper question based on a subjective characterization, concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: This question is to be answered for reasons given about non-legal opinions in the main decision. The weighing process that Aviva used is relevant to whether it was engaged in “fair comment” with respect to Ms. Brown.
Question No.: 645 Page No.: 199 Specific Undertaking: To answer “why Aviva would rely on information provided from an insured who already had a track record of lying to the investigator?” Aviva position: Refused. Improper question based on a position, concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: This question is to be answered for the same reasons as set out for Refusal #16.
Question No.: 647 Page No.: 201 Specific Undertaking: To answer if Aviva considered that the insureds had lied to Tracey before commencing this lawsuit. Aviva position: Refused. Improper question based on a subjective characterization. Disposition By the Court: This question is to be answered for the same reasons as set out for Refusal #16.
Question No.: 671 Page No.: 206 Specific Undertaking: To answer if Aviva’s reportage to autoplus of NSF or misrepresentation would have a serious impact upon an individual with respect to their attempts to secure insurance elsewhere. Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: This question is to be answered, as it concerns the conclusions that Aviva’s investigators would have reached in deciding whether to pursue particular issues.
Question No.: 689 Page No.: 213 Specific Undertaking: To answer if Aviva would agree that a finder’s fee is a euphemism for a payoff. Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on the words of the transcript, which is irrelevant. Disposition By the Court: This question is to be answered. It concerns the conclusions of Aviva’s investigators in how they were understanding the evidence they were gathering.
Question No.: 692 Page No.: 214 Specific Undertaking: To answer if the statement “Mr. French suggests to Mr. Shueyb that Ms. Queeley is taking a finder’s fee for writing policies” is slanderous? Aviva position: Refused. Legal question Disposition By the Court: This question is properly refused as it relates to the ultimate issue that the trier of fact will have to determine.
Question No.: 721 Page No.: 222 Specific Undertaking: To answer “the process that Aviva engaged in, if any, of weighing all of the available evidence before it made the ultimate decision to pull the trigger and launch a lawsuit sounding in fraud against Ms. Queeley. Did Aviva consider Mr. Shueyb’s evidence as a mitigating factor against such an action? And if so, why not….” Aviva position: Refused. Irrelevant Disposition By the Court: This question is to be answered for the same reasons as set out for Refusal #16.
Question No.: 721 Page No.: 223 Specific Undertaking: To answer “did Aviva consider that Sean Shueyb in fact highly recommended Tracey Queeley as a competent and professional broker as a mitigating factor against commencing a lawsuit sounding a fraud.” Aviva position: Refused. Irrelevant Disposition By the Court: This question is to be answered for the same reasons as set out for Refusal #16.
Under Advisement
Question No.: 117 Page No.: 32 Specific Undertaking: To provide a written job description of the investigators that were involved in this investigation. Date Answered or Reason for Not Doing So: ANSWERED 2018.07.31: See attached – Appendix 2 Disposition By the Court: Addressed in the decision.
Question No.: 117 Page No.: 33 Specific Undertaking: To provide copies of curriculum vitaes of the investigators. Date Answered or Reason for Not Doing So: ANSWERED 2018.07.31: ongoing. 2018.11.09: Challenge: Aviva has not provided the c.v.’s. Further Response: Attached and redacted. Disposition By the Court: Addressed in the Decision.
Question No.: 299 Page No.: 93 Specific Undertaking: To provide a written list of all questions for the investigators to ask to the insureds. Date Answered or Reason for Not Doing So: ANSWERED 2018.07.31: See attached – Appendix 3. Disposition By the Court: No Issues that the Court is aware of with respect to this Question.
Question No.: 523 Page No.: 159 Specific Undertaking: To provide a copy of any document that evidences a business relationship between KMI Brokers and Aviva. Date Answered or Reason for Not Doing So: ANSWERED 2018.07.31: See attached – Appendix 4 Disposition By the Court: To be discussed by the parties.
Question No.: 531 Page No.: 162 Specific Undertaking: To provide any documents between Aviva and KMI during the audit conducted prior to the defendant’s termination. Date Answered or Reason for Not Doing So: ANSWERED 2018.07.31: ongoing 2018.11.09: Challenge: Aviva has not produced any documents. Further Response: Attached. Disposition By the Court: Addressed in the decision.
Question No.: 533 Page No.: 165 Specific Undertaking: To produce the RIBO brief. Aviva position: Refused. Irrelevant. Litigation privilege Disposition By the Court: To be answered for the reasons set out in the decision about the RIBO Brief. In addition, no litigation privilege can attach to a document filed with a third party regulator.
Question No.: 558 Page No.: 171 Specific Undertaking: To produce a copy of any documents, not already produced, regarding Aviva’s concerns about the relationship between the defendant and Ready Honda. Date Answered or Reason for Not Doing So: ANSWERED 2018.07.31: Such documents have been produced Disposition By the Court: To be addressed by the parties.
Question No.: 561 Page No.: 172 Specific Undertaking: To determine whether Martin French maintained a separate file relating to Ready Honda, and to produce that file. Date Answered or Reason for Not Doing So: ANSWERED 2018.07.31: none of which Aviva is aware. Disposition By the Court: To be addressed by the parties.
Question No.: 682 Page No.: 209 Specific Undertaking: To advise of the Aviva panel members who determined to commence the RIBO investigation. Aviva position: Refused. Irrelevant. Litigation privilege Disposition By the Court: To be answered, on the basis of the reasons set out in the decision relating to the RIBO brief as well as the same reasons set out for Under Advisement #6, above.
Question No.: 683 Page No.: 209 Specific Undertaking: To provide a copy of the written record of the panel’s decision. Aviva position: Refused. Irrelevant. Litigation privilege Disposition By the Court: To be answered, on the basis of the reasons set out in the decision relating to the RIBO brief as well as the same reasons set out for Under Advisement #6, above.
Question No.: 712 Page No.: 218 Specific Undertaking: To identify the two producers at KIM who were receiving work from Ready Honda, and to provide any documentation or communication reduced to writing between Aviva and KMI with respect to an ongoing relationship with Ready Honda. Date Answered or Reason for Not Doing So: ANSWERED 2018.07.31: Narith Rin and Nikhil Parchure. Disposition By the Court: To be addressed by the parties.
APPENDIX “B” to the Reasons of Mr. Justice LeMay dated December 4th, 2018.
Court File No. CV-15-2893-00 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
AVIVA INSURANCE COMPANY OF CANADA Plaintiff (Defendant to the Counterclaim)
and
STEPHEN K. TRACEY QUEELEY a.k.a. TRACEY BROWN Defendant (Plaintiff by Counterclaim)
Refusals
Question No.: 887 Page No.: 278 Specific Undertaking: To answer if Aviva feels that Gilpin Pane is reliable, direct evidence that Tracey failed to properly inform the insured of their duty to provide honest answers. Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: To be answered. The reasons for requiring this question to be answered are set out in the main reasons. In addition, this is a question relating to whether the investigation was properly conducted and whether Aviva was engaged in “fair comment” about its conclusions.
Question No.: 888 Page No.: 279 Specific Undertaking: To answer if Aviva is presenting Gilpin Pane as reliable direct evidence of Tracey Queeley ever having failed to properly inform the insured of their duty to provide honest answers. Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: To be answered for the same reasons as Refusal #1.
Question No.: 958 Page No.: 296 Specific Undertaking: To answer “Does Aviva consider the evidence of Mr. Wilmot reliable?” Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: To be answered for the same reasons as Refusal #1.
Question No.: 959 Page No.: 297 Specific Undertaking: To answer “Does Aviva consider the subsequent evidence of a liar, having been caught in a lie, as suspect?”. Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: To be answered for the same reasons as Refusal #1.
Question No.: 978 Page No.: 303 Specific Undertaking: To answer “by being identified as a liar, which Mr. Wilmot was, and now being confronted with the truth which he acknowledges, and knowing that there’s going to be consequences for that and then being provided with an out; did Tracey Queeley put you up to it? Did the dealership put you up to it? Would you not expect him to say yes?” Aviva position: Refused. Improper question based on a supposition and concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: To be answered for the same reasons as Refusal #1.
Question No.: 1080 Page No.: 330 Specific Undertaking: To answer if Aviva believes that Mr. Wilmot’s evidence is credible direct evidence. Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Already answered Disposition By the Court: To be answered for the same reasons as Refusal #1.
Question No.: 1101 Page No.: 335 Specific Undertaking: To answer “Has Aviva considered that Aviva maintained a stubborn and inflexible attitude when it should have learned and it should’ve figured out that its allegations against Tracey Queeley were groundless?” Aviva position: Refused. Improper question based on a supposition that allegations are groundless, and concerning Mr. Nolan’s opinion, which is irrelevant. Disposition By the Court: This question is properly refused as it relates to the ultimate issue that the trier of fact will be required to determine.
Question No.: 1140 Page No.: 344 Specific Undertaking: To answer if Aviva wants to attribute something more to French Martin than the fact of his actual words saying “you knew it was wrong and he said I didn’t question it” in the transcript; and further, refusal to allow the witness to interpret portions of the investigation transcript as requested. Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on a transcript, which is irrelevant. Disposition By the Court: To be answered. This is a question that Mr. Nolan, or other Aviva personnel, would have considered in determining the weight to give to the statements of the insured that they were interviewing.
Question No.: 1153 Page No.: 347 Specific Undertaking: To answer “when Aviva takes a look at Lamaar Ashley’s evidence about how it’s the first time he’s seen Tracey and yet somehow or other he knows to bring $800 in cash with him; does that look or smell like garbage to Aviva?” Aviva position: Refused. Improper question based on a characterization, concerning Mr. Nolan’s opinion. Disposition By the Court: This question was accepted as a proper Refusal at the hearing of the motion.
Question No.: 1156 Page No.: 350 Specific Undertaking: To answer “on the face of it you’re telling me that what I presented to you just now, that Lamaar Ashley shows up with $800 in cash, when in fact this is his first meeting with Tracey Queeley, who hasn’t yet quoted the policy, because he hasn’t provided the information to her to put into the system to quote the policy, and yet somehow he magically shows up with $800 in cash; that on the face it appears unreliable. Is that not a fair comment, an accurate comment?” Aviva position: Refused. Improper question concerning Mr. Nolan’s opinion on evidence, which is irrelevant. Disposition By the Court: This question was accepted as a proper Refusal at the hearing of the motion.
Question No.: 1339 Page No.: 404 Specific Undertaking: To answer “do you have any direct evidence that Tracey Queeley failed to properly inform the insureds of their duty to provide honest answers to the questions asked, and that such failure led to a loss”, and “do you have any direct evidence that Tracey Queeley failed to ask a required question (to fill out an OAF1), and that such failure let to a loss?” Aviva position: Refused. Overbroad and already answered. Disposition By the Court: Based on my review of the transcript, this has been answered already.
Under Advisements
Question No.: 788 Page No.: 248 Specific Undertaking: To provide a list of each and every one of the insureds where Aviva has no evidence of the insured having lied in some way or another to the investigator. Aviva position: Refused. The documents have been provided. Disposition By the Court: To be discussed between the parties.
Question No.: 1348 Page No.: 413 Specific Undertaking: To amend or withdraw paragraph 15 “a breach of fiduciary duty to KMI”. Aviva position: Refused. The allegation is proper. Disposition By the Court: To be discussed between the parties.
COURT FILE NO.: CV-15-2893-00 DATE: 2018 12 05 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Aviva Insurance Company of Canada Plaintiff (Defendant by Counterclaim)
- and -
Tracey Queeley a.k.a. Tracey Brown Defendant (Plaintiff by Counterclaim)
REASONS FOR JUDGMENT LEMAY J
Released: December 5, 2018