Court File and Parties

COURT FILE NO.: CV-17-569637 RELEASED: 2019/04/10 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Aviva Canada Inc. v. Hubio Solutions Inc. (formerly known as Quindell Solutions Inc.) and Ingenie (Canada) Inc.

BEFORE: Master Graham HEARD: March 18 and 20, 2019

COUNSEL: A. Hamilton and J. Blackburn for the plaintiff I. Ishai and M. Bennett for the defendants

Reasons for Decision

(Plaintiff’s motion for directions with respect to its answers to undertakings)

[1] The plaintiff, Aviva Canada Inc., a property and casualty insurance company, entered into an agreement with the defendant Hubio Solutions Inc. whereby Hubio was to provide it with telematics technology, which monitors the location, movement, status, and behaviour of motor vehicles. Aviva alleges that Hubio represented that it could provide a complete telematics solution, but failed to do so, or that it provided a solution with numerous deficiencies. Aviva claims damages based on the amount of its investment in Hubio’s solution, its costs to remediate the deficiencies, and lost profits. Hubio denies Aviva’s allegations and has commenced its own action ( Hubio Solutions Inc. v. Aviva Canada Inc, action no. CV-17-569736) to recover unpaid charges for providing the solution.

[2] Following the exchange of pleadings and productions, the actions proceeded to common examinations for discovery. On March 18, 2019, I heard Hubio Solutions’ motion to compel answers to questions refused at the examination for discovery of Aviva. On March 18 and 20, 2019, I heard the motion of Aviva Canada to compel answers to questions refused at Hubio Solutions’ examination for discovery. During those refusals motions, I made rulings or noted the parties’ agreement with respect to the questions that were the subject of the motions, as reflected in my handwritten endorsements of March 18 and 20, 2019.

[3] There are two outstanding issues on these motions:

1. The timing of Aviva’s delivery to Hubio of its answers to its undertakings.
2. The timing of further steps in the action, including the delivery by Hubio of its answers to questions ordered answered and the attendance of Hubio’s representative Glen Piller for the completion of his examination for discovery.

1. The timing of Aviva’s delivery to Hubio of its answers to undertakings

[4] Aviva’s representative Paul Fletcher was examined on August 2 and 3, 2018 at which time Aviva’s counsel gave various undertakings. Hubio’s representative Glen Piller was examined on August 15 and 16, 2018 at which time Hubio’s counsel gave no undertakings, took some questions under advisement and refused to answer some questions. When the parties formulated their Discovery Plan, Aviva and Hubio agreed to provide their answers to undertakings, questions taken under advisement, and refusals conceded, by December 1, 2018.

[5] Although Hubio gave no undertakings at its examination for discovery, after proposing an extension to the deadline for providing answers to December 14, 2018, its counsel ultimately did provide answers to approximately 240 questions by that date. Hubio’s counsel submits that the answers that were provided to questions refused or taken under advisement on December 14, 2018 put Aviva in the same position as though they were answers to undertakings. Aviva has compiled all of the answers to its undertakings but, as set out below, has not provided those answers to Hubio.

[6] A fundamental issue in the action is whether the products supplied by Hubio to Aviva pursuant to their Subscription Service Solution Agreement dated October 20, 2014 (“the Solution Agreement”) were in compliance with s. 14.2.1 of that Agreement, which required that Hubio’s products and services “include the functionalities substantially as described in Quindell’s [Hubio’s] promotional materials or represented in live demonstrations given by Quindell [Hubio] to the Customer [Aviva]”. The examinations for discovery of the representatives of both Hubio and Aviva included questions about various meetings at which the products were demonstrated, the dates of such meetings, who was present from both sides, and what representations were made about the Hubio products.

[7] Aviva submits that Hubio failed properly to comply with its discovery obligations by taking a “wait and see” approach in which it sought to obtain Aviva’s evidence as to Hubio’s representations regarding its product before providing its own evidence in that regard. Aviva submits that if its answers with respect to Hubio’s representations are provided before it has all of Hubio’s answers, then it will be prejudiced by the risk that Hubio’s representatives will “tailor” their answers to Aviva’s answers.

[8] Aviva provides as examples the following questions and answers from Hubio’s examination:

Q. 339. MR. HAMILTON [for Aviva]: So I would like Hubio’s best information and fullest listing possible of what they say were all the meetings or all the discussions between Aviva and Hubio with respect to the Solution, or things tangentially connected to the Solution, in that time frame, please?

MR. AGARWAL [for Hubio]: Well, why don’t you give me a list and I’ll confirm if that is true?

Q. 340. MR. HAMILTON: No, I’m entitled to their information and I would like that listing, please.

MR. AGARWAL: I’m refusing that. I mean, either you know it or you don’t but I am not sure you need to get it from my client.

Q. 341. MR. HAMILTON: It’s called a discovery. I’m entitled to the defendant’s information from its human actors. This witness did not go to the human actors to inform himself, which the Rules require him to do. I’m trying to be benevolent about it, Counsel, and say fine, by way undertaking, go back, recreate that listing, but I want their best information on every meeting and every discussion that they would say occurred with respect to the telematics [sic] solution in that period of time. That is a fair question on discovery.

MR. AGARWAL: You have my position. . . .

Q. 362. MR. HAMILTON: And then for purposes of the record, I would ask a sequence of questions asking for the next meeting after the second meeting, and further on and further on, with the same requests for undertakings so that every meeting or that every discussion in the period between June 1, 2013 and October 19, 2014 is expressly and exhaustively described to the best of Hubio’s ability.

MR. AGARWAL: I will take that under advisement.

[9] Hubio maintained its position on these questions at Aviva’s refusals motion and I ordered that these questions and others be answered.

[10] The issue of the timing of Aviva’s answers to its undertakings was raised by Aviva’s counsel in a letter dated January 11, 2019 submitted to the court for a telephone conference held January 16, 2019. Aviva’s position on the motion is as follows:

1. Hubio’s representative Mr. Piller had little to no involvement with respect to the material issues in the action prior to October, 2015 (Q. 63 of Piller examination). He did not speak to the people who were involved on behalf of Hubio prior to his examination (the main Hubio representatives at the meetings included Robert Terry and Tim Scurry), because they were no longer employed by Hubio, but he did review documents (Q. 66). Accordingly, Mr. Piller did not prepare sufficiently to answer questions at his examination about what transpired between Hubio’s representatives and Aviva at various meetings prior to execution of the Solution Agreement.
2. Hubio attempted to obtain Aviva’s information about what transpired at their meetings without providing its own information. Given the significant overlap between the questions to be answered by Aviva and by Hubio, if Aviva provides its answers as to what representations Hubio made regarding the Solution before Hubio does, there is a substantial risk that Hubio will tailor its own answers to Aviva’s answers, which would be prejudicial to Aviva.

Re: Mr. Piller’s obligation to inform himself

[11] Hubio submits that Mr. Piller was not required to speak with anyone outside his company to prepare for his examination. Hubio relies on the following passage from Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2013 ONSC 917 (S.C.J.), in which Perell J. stated (at para. 65):

65. . . . However, a party’s duty to inform himself or herself does not go so far as to require the party to inform himself about the information from third parties, strangers or outside sources who might be witnesses in the proceeding: Star Electric Fixtures Ltd. v. Sussex Fire Insurance Co., [1936] O.J. No. 106 (Ont. H.C.) at para. 9; Concept 80 Ltd. v. W-A Construction Co., [1975] O.J. No. 1503 (Ont. H.C.).

[12] Aviva submits that a discovery witness for a corporation is required to take reasonable steps to obtain information from former employees, and relies on Gravlev v. Venturetek International Limited et al., [1979] O.J. 1242 (H.C.J.), followed in Air Canada v. McDonnell Douglas Corp., , [1995] O.J. No. 195 (Master) and HSBC Securities v. Davies, Ward & Beck, [2004] O.J. No. 2546 (Master). In considering the appeal of a Master’s decision on questions refused at an examination for discovery, Steele J. in Gravlev stated (at para. 9):

9. Merely because a person [of whom the discovery witness was being asked to make enquiries] becomes a former employee does not excuse the plaintiff from attempting to obtain information from him. The test really is that the plaintiff is bound to obtain the information from such former agents or servants unless he can show that it would be unreasonable to require him to do so. The test is not whether such employee is still within the control of the plaintiff but whether it is unreasonable to require him to inform himself. It may be that if the plaintiff cannot obtain information from a former employee no longer under his control he will be excused from answering the question, but that is a secondary matter and not the primary matter. [emphasis added]

[13] Counsel for Hubio submits that the passage quoted from CIBC v. Deloitte & Touche, supra, relieved Mr. Piller, in preparing for his examination for discovery, from the obligation to consult former employees of his corporation (in this case Mr. Terry and Mr. Scurry), on the basis that he was not required to inform himself “from third parties, strangers or outside sources”. Counsel for Hubio submits that this statement of the law applies to the witness’s pre-examination obligations and that the test in Gravlev applies to a witness’s obligations to answer undertakings following his examination.

[14] I disagree with Hubio’s submission. There is no reason that corporate witnesses attending examinations for discovery should be required to make reasonable efforts to consult former employees after their examinations but not before. Parties are required to provide complete production of relevant documents before examinations in order to facilitate thorough examinations; witnesses preparing to be examined should be as fully prepared as possible for the same reason. Although a discovery witness cannot anticipate every line of questioning, the main issues in dispute in the action will be identified in the parties’ Discovery Plan and should be obvious regardless.

[15] Further, Perell J.’s statement from CIBC v. Deloitte & Touche, supra that witnesses’ obligations in preparing for an examination do not extend to consulting “third parties, strangers or outside sources” does not address the possibility of witnesses informing themselves from former colleagues whose information might be readily available. Steele J. in Gravlev considered this point directly in relation to obtaining answers to undertakings and as stated, there is no basis on which to differentiate between the scope of pre-examination and post-examination enquiries.

[16] In this case, the legal issues identified in the Discovery Plan include Aviva’s claim for damages for misrepresentation and the documents to be produced include “all documents relating to the negotiation and discussion of the terms of the Solution Agreement” and “all documents relating to Hubio’s dealings with Aviva regarding the existing capabilities of the Hubio telematics solution and the anticipated capabilities of the Hubio telematics solution.” Accordingly, the representations made by Hubio’s representatives at meetings with Aviva prior to October 20, 2014 are clearly relevant to the central issue of whether Hubio’s telematics products were in keeping with “the functionalities substantially as described in … promotional materials or represented in live demonstrations”.

[17] Also, even Hubio acknowledges that, based on Gravlev, supra, regardless of whether Mr. Piller was required to speak with Mr. Terry and Mr. Scurry to prepare himself for his examination, he was certainly required to take reasonable steps to contact them following his examination to obtain their information. The evidence from Hubio is that the first occasion on which they attempted to obtain any information from Mr. Terry and Mr. Scurry was when counsel wrote to them on February 27, 2019, more than six months following Mr. Piller’s examination. This delay is not consistent with a party’s obligation to exercise good faith in answering undertakings.

[18] Mr. Terry’s response, dated March 1, 2019, was that he left Watchstone Group PLC, the parent company of Hubio, in November, 2014, and as he is involved in a number of sets of proceedings with Watchstone, he is unwilling to provide any information for the purposes of these proceedings with Aviva. Mr. Scurry’s response, dated March 4, 2019, was that the dispute between Hubio and Aviva commenced after his departure from Watchstone. Further, “Hubio previously declined to take up my offer of potential assistance to it in relation to this dispute” and he is unwilling to provide any information in response to the information sought by Aviva’s counsel.

Re: The risk of Hubio tailoring evidence

[19] The main issue on this motion is whether Aviva should be permitted to defer providing its answers to undertakings until Hubio has provided its answers. Aviva submits that the court has discretion pursuant to rule 34.15(1) of the Rules of Civil Procedure, regarding the timing of the delivery of its answers to undertakings. I accept that although rule 34.15(1) is typically used as the basis for orders compelling attendance at examinations or answers to undertakings and refusals, it provides that the court may “make such other order as is just”, and thus confers a broad discretion that includes a possible order with respect to the timing of answers to undertakings.

[20] There is very little case law on the issue of whether one party may delay its disclosure in the normal course of an action to avoid the possibility of an opposing party tailoring its evidence. The more common circumstances are where one party seeks to exclude opposing parties from each other’s examinations for discovery. In this regard, Aviva relies on Lazar v. TD General Insurance Co., 2017 ONSC 1242 (Div. Ct.), in which the court considered the motion of a defendant for an order that the plaintiffs, a husband and wife, be excluded from each other’s examinations for discovery in an action against their insurer for indemnity for damaged or destroyed contents following a house fire.

[21] Although there was no direct evidence in Lazar “regarding the likelihood of the plaintiffs tailoring or parroting their evidence at discovery” (para. 16), the Court ordered that the plaintiffs be examined separately “outside the presence of each other”. In reaching this decision, the court stated (at para. 48):

48. In my view, where the credibility of co-parties with the same interest will be the central issue at the trial, an exclusion order will attenuate the risk of a co-party unconsciously tailoring his or her evidence in a desire to achieve consistency.

[22] Aviva argues by analogy to this statement that in this case, where there will be issues of credibility between itself and Hubio as to what representations Hubio made regarding its products at various meetings, the risk of Hubio tailoring its evidence to Aviva’s evidence will be attenuated by the two parties providing their evidence in that regard separately and independently.

[23] The intent of the case law that allows for the exclusion of a witness from an examination for discovery is to prevent prejudice to one party that would arise from an opposing party being able to tailor their evidence to that of an opposing party. The discretion granted to the court to prevent such an injustice also enables the court to make orders with respect to the timing of the disclosure of documents. This is precisely what the court did in O’Halloran v. Clements, 2009 CarswellOnt 9726 (S.C.J.) when it permitted the defendants, whom the plaintiff alleged were the owners of a dog that bit him, to defer producing photographs of their dog until after the plaintiff provided a description of the dog in question, at his own examination.

[24] Although on December 14, 2018, Hubio provided numerous answers to questions taken under advisement and refused, it still maintained various refusals that were the subject of rulings on this motion. In order to address the issue of whether there is a significant risk of Hubio tailoring its answers to Aviva’s it is necessary to consider the extent of any overlap between the questions that each party is required to answer.

[25] The substance of the information that Hubio ultimately refused to provide is set out at Qs 339-341 and 362 of Mr. Piller’s examination, as set out above. The information requested was essentially the meetings and the content of discussions between Hubio and Aviva regarding the telematics solution that ultimately became the subject of the Solution Agreement.

[26] Hubio’s chart for its motion against Aviva sets out 45 undertakings from Aviva’s examination for discovery. Some, but not all of these undertakings were given in answer to questions about the various meetings and discussions involving Hubio and Aviva representatives prior to the execution of the Solution Agreement of October 20, 2014. Some representative examples are:

Q. 67: To advise when the first meeting between Aviva and Quindell [subsequently Hubio] was regarding the possibility of a telematics device and solution partnership.

Q. 95: To produce any information provided by Quindell to Aviva regarding its telematics capabilities at the meetings listed in paragraph 10 of the statement of claim (which lists four meetings between September 17, 2013 and June 6, 2014).

Q. 157: To provide a full list of meetings in which Hubio made representations to Aviva.

Q. 169: To advise if anyone other than Rob Terry and Tim Scurry from Quindell attended the meetings referenced at paragraph 10 of the statement of claim.

Q. 634: To advise of any differences between the interface seen in presentations and the actual portal that was provided during production.

Q. 737: To advise of the significant gaps between Hubio’s prior representations about the solution and its actual status and functionality.

[27] These questions by Hubio’s counsel were directed to exactly the same information that Hubio refused to provide when questioned by Aviva’s counsel. Accordingly, I accept the submission of Aviva’s counsel that there is a significant overlap between the information that Aviva undertook to provide and that which Hubio refused to provide.

Analysis and decision

[28] The issue is whether there is sufficient risk that Hubio may tailor its evidence regarding communications at various meetings to that of Aviva that the court should order that the parties’ evidence in that regard be disclosed simultaneously. I am satisfied, based on my review of the discovery questions that Aviva has undertaken to answer and Hubio has been required to answer, that there is a significant overlap in the information that both parties will be providing with respect to their meetings and discussions prior to the execution of the Solution Agreement. I also accept that it is plausible that, given the position taken by Hubio, any answers that Hubio gives to questions regarding what transpired at its meetings with Aviva could be tailored to the answers that it gets from Aviva.

[29] I therefore accept Aviva’s submission that they should be able to defer providing their answers to undertakings relating to the meetings and discussions that took place prior to the Solution Agreement until Hubio provides their answers to the questions ordered answered on this motion.

[30] Aside from the risk of Hubio tailoring answers, my conclusion in this regard is influenced by two other factors. First, Mr. Agarwal’s position at Hubio’s examination for discovery, that Hubio was not required to provide its own information regarding what transpired at its meetings with Aviva but rather would simply advise whether it agreed with Aviva’s information, was obstructionist. What representations Hubio made about its proposed solution is a central issue in the action, and the parties were clearly entitled to each other’s information as to when their meetings took place, and what representations were or were not made on those occasions. There was no merit whatsoever to Mr. Agarwal’s suggestion that Hubio was only required to state whether or not it agreed with Aviva’s evidence in that regard.

[31] Second, Hubio did not see fit to contact Mr. Terry and Mr. Scurry until more than six months after Mr. Piller’s examination. It may well be that inquiries of Mr. Terry at any time would have been fruitless, given his statement that he is involved in various proceedings with Watchstone, Hubio’s parent company. However, the fact that Mr. Scurry states that “Hubio previously declined to take up my offer of potential assistance to it in relation to this dispute”, in the absence of any explanation from Hubio, gives rise to an adverse inference that Hubio was actively indifferent to any information that Mr. Scurry might provide, despite its likely importance.

[32] If Mr. Agarwal had given the undertakings that he should have given at Mr. Piller’s examination, instead of responding with refusals that were maintained at the motion, and if Hubio had attempted to contact Mr. Terry and Mr. Scurry sooner, then they may have been able to provide their information about what transpired at the meetings in December, 2018. Hubio’s failure to do so certainly contributed to and possibly created the risk of tailoring that my order is intended to alleviate.

[33] Aviva’s position on the motion, which I accept, is that there is a risk that Hubio will tailor its answers to questions regarding the meetings and discussions leading to the Solution Agreement. However, as indicated above, there are other undertakings given by Aviva that do not relate to these meetings and discussions and which do not give rise to the risk of tailoring that Aviva seeks to address on this motion. It is therefore necessary to distinguish between Aviva’s undertakings that give rise to the possibility of Hubio tailoring answers and those that do not.

[34] Aviva’s undertakings and refusals that it has conceded should be answered, that do not give rise to the possibility of Hubio tailoring answers, should be answered forthwith. Hubio’s chart on its motion, from which I excerpted the Aviva undertakings listed in paragraph [26] above, also includes 15 refusals. I ruled on the refusals at items 7 and 11 on this motion, but do not know which of the balance of the refusals were conceded by Aviva and which may have been abandoned by Hubio. I will specify which items should be answered now and which items should be deferred owing to concerns about tailoring of answers by Hubio, subject to Hubio having possibly abandoned some of the refusals.

[35] Subject to Hubio having abandoned any of the questions, the questions in Hubio’s refusals chart at items 1-5 relate to the meetings and discussions prior to the Solution Agreement and Aviva may defer its answers as set out in paragraph [38] below.

[36] The balance of the refusals (other than item 7, which I upheld on the motion) do not give rise to the possibility of Hubio tailoring its evidence and shall be answered within 20 days.

[37] The undertakings at items 1, 8, 23, 24, 28, 36, 37, and 41-45 do not relate to meetings or discussions prior to the execution of the Solution Agreement and shall be answered within 20 days. The balance of the undertakings shall be answered as set out in paragraph [38].

[38] For these reasons, Hubio shall provide its answers to those questions that were the subject of this motion, and Aviva shall provide those answers that I have ruled it may defer, by exchanging those answers on a day to be agreed between counsel no earlier than May 21, 2019, being two months following the conclusion of this motion.

2. The timing of further steps in the action

[39] The parties agree that Aviva may conclude its examination for discovery of Hubio’s representative Mr. Piller by way of a continued examination, not to exceed two hours. This is in addition to any examination arising from the answers provided by Hubio to questions taken under advisement and refusals, to be arranged after those answers are provided. Hubio shall make Mr. Piller available to be examined for discovery for two hours by May 31, 2019. This deadline may be extended on consent of the parties.

[40] In addition, there is an outstanding issue relating to the inadvertent production by Hubio of 34 documents over which it claimed privilege. Hubio subsequently produced 6 of these documents in their entirety and 15 of them with the privileged content redacted. Hubio maintains privilege over the entirety of the remaining 13 documents. In response to Aviva’s motion, Hubio has provided Aviva’s counsel with copies of the privileged documents showing the identity of the sender and recipients, the date of the document and the subject line. If Aviva wishes to challenge Hubio’s claims of privilege over these documents, counsel may arrange a telephone conference with me to schedule a motion.

Costs

[41] If the parties cannot agree to the disposition of the costs of the motion, they may make brief written submissions, of no more than three pages (not including the costs outlines already filed), Aviva within 20 days of the release of these Reasons and Hubio within 20 days following receipt of Aviva’s submission.

MASTER GRAHAM April 10, 2019