Court File and Parties

COURT FILE NO.: CV-10412884 DATE: 20190416 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MDS INC. and MDS (CANADA) INC. c.o.b. MDS NORDION, Plaintiffs AND: FACTORY MUTUAL INSURANCE COMPANY c.o.b. FM GLOBAL, Defendant

BEFORE: J. Wilson J.

COUNSEL: Brian Brock and Camille Walker, for the Plaintiffs David Liblong and James Kitts, for the Defendant

HEARD: March 14, 2019

Endorsement

Overview

[1] This trial concerns insurance coverage. Are the Plaintiffs’ economic losses flowing from the Chalk River nuclear facility shut down between May 2009 and August 2010 covered by the insurance policy issued by the Defendant, Factory Mutual Insurance Company, (the Insurer) or do exclusions in the insurance policy engage precluding coverage? The Insurer has denied coverage relying on the governing provisions in the insurance contract excluding coverage for corrosion and nuclear reaction.

[2] This case involves complex technical questions involving competing theories of causation for the shutdown in the expert evidence. I attach as “A” to this endorsement the preliminary draft of the disputed factual issues prepared by the defence.

[3] I am the assigned trial judge in this case. Unfortunately the mandatory trial management required to take place before a trial commenced had not taken place. I made it clear at the outset of this case, once made aware of the technical factual disputes relevant to causation that I will be asked to decide, that prior to the trial proceeding I wanted to appoint a court appointed expert pursuant to r. 52.03(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to assist with the theories of causation of the damage precipitating the shutdown. Counsel are cooperating with this request.

The Motion

[4] In this motion, and prior to the involvement of the court appointed expert, the Plaintiffs seek an order excluding the report and the viva voce evidence of Dr. Revie, the defence r. 53 expert. Alternatively, if Dr. Revie testifies, the Plaintiffs seek a ruling that his evidence be limited to the four corners of his report.

Background

[5] Atomic Energy of Canada Limited (AECL) entered into an agreement to supply radioisotopes produced at its Nuclear Research Facility located in Chalk River, Ontario to MDS. MDS processed the radioisotopes for various medical uses and then sold them to customers for a profit.

[6] It was anticipated originally that the shutdown would be a matter of days. However, the damage precipitating the shutdown required significant analysis and time to rectify. It is not disputed that MDS lost profits flowing from the shutdown that significantly exceed the $25,000,000 insurance policy limits.

[7] In September 2010, some sixteen months after the shutdown AECL finalized a complex 350 page report authored by Dr. Mancey outlining the factual findings, theories of causation, recommendations, and conclusions about the factors at play relevant to the shutdown (the Mancey Report).

[8] After the release of the Mancey Report, the Insurer denied coverage relying on exclusion provisions in the insurance contract related to corrosion and nuclear reaction.

[9] The pivotal issue in this proceeding is whether the Insurer can rely on these exclusions. Determining these issues depends upon the expert evidence. The parties have confirmed that there are apparently no disputed factual issues amongst the lay witnesses, and have agreed to prepare affidavits to largely be their evidence in chief to streamline this trial. If there are contested factual issues, they will be dealt with in viva voce evidence.

[10] The Plaintiffs served a rule 53.03(2.1) expert report by Dr. Kirk in April 2013 raising subtle points of difference about the type and cause of the corrosion and the various factors at play that, if accepted, may have an impact upon whether the corrosion exclusion clause relied upon by the Insurer engages.

[11] Dr. Revie, a rule 53.03(2.1) expert retained by the Insurer, filed a Report dated November 30, 2017 relying upon the findings of fact in the Mancey Report and confirming its conclusions. Dr. Revie disagrees with the theories and conclusions contained in the Kirk Report.

The Issues

[12] The Plaintiffs argue that the Report of Dr. Revie should not be admitted and that he should not be allowed to testify. Counsel raises the following arguments:

• That the Revie Report is oath helping purporting to make findings of credibility between the Mancey and Kirk reports, which is not the role of the expert witness.
• That the Revie report is merely a critique of the Kirk and Mancey Reports that endorses, without additional analysis or opinion, the lengthy and comprehensive Mancey Report prepared in September 2010.
• That the Revie Report fails to comply with the mandatory requirements of r. 53.02(2.1) of the Rules of Civil Procedure.
• That in these circumstances, the Revie Report does not meet the common law test for the admissibility of expert evidence.

Oath helping

[13] The Plaintiffs argue that Dr. Revie’s Report is oath helping as it purports to opine on credibility and truth with respect to the Mancey and Kirk Reports, rather than providing an independent expert opinion as to the likely cause of the shutdown.

[14] The wording complained about by the Plaintiffs in the Revie Report appears to track from the retainer letter from Defendant’s counsel to Dr. Revie, dated June 2, 2017, outlining the scope of the retainer. In that letter, defence counsel states:

This letter will confirm that LDPC is retaining you in this matter to review the two reports, and the annotations made by Dr. Kirk to Dr. Mancey's report, with a view to providing LDPC with your assessment of the relative strengths and weakness of the two reports and, if possible, your opinion on which of the two experts is correct/closer to correct. Unless and until we have discussed your findings, LDPC will not require, and would ask that you not, prepare any written or formal report. If you are subsequently requested to prepare a formal “rebuttal” report and, if this case proceeds to trial, you could be called to testify as a “rebuttal” expert witness.

[15] Defence counsel then appropriately confirms in the retainer letter the duties of an expert and necessity for independence in the opinions rendered:

You will perform those tasks requested that are within your area of expertise, always keeping in mind that, to the extent asked to reach conclusions or form opinions, you are obligated to do so without regard to the impact that such conclusions may have upon the commercial or other interests of FM or MDS. No part of your fee is contingent upon the impact of any ultimate opinions or conclusions you reach in connection with your analysis on the commercial or other interests of FM or MDS - such analysis and resulting conclusions are entirely independent of such considerations.

[16] Dr. Revie in his report tracks the unfortunate wording from counsel’s letter of what is closer to correct/ correct in the preamble to his report and in his conclusions:

You retained me to review the two reports listed below and the annotations made by Dr. Kirk on the report by Dr. Mancey, with a view to providing you with my assessment of the relative strengths and weaknesses of the two reports and, if possible, my opinion on which of the two experts is correct/closer to correct

[17] In the conclusions, Dr. Revie states:

Conclusions

1. The report, “Corrosion in the J-Rod Annulus of the NRU Reactor”, AECL R&D Report number 153-150200-440-001 Revision 0, September 2010, by D. S. Mancey, provides a thorough and comprehensive review of the corrosion characteristics of aluminum, the history of the NRU reactor and reactor vessels, descriptions of inspections and resulting findings, discussion of possible mechanisms of the corrosion that was observed, and conclusions that are as close to the truth as is possible with the information available …..

2. Several possible mechanisms by which the calandria wall penetration occurred near JR-41 are presented in the Mancey report. The corrosion mechanism considered most likely, identified and described in Section 11.6.1, pages 312-313, and Section 11.6.3, page 314, is based on the increased concentration of nitric acid within a narrow axial range as a result of evaporation of water. This mechanism can be used to explain the corrosion observed around the circumference of the calandria within a narrow axial range. This mechanism is entirely plausible and is as close to the truth as possible with the information that is available. This corrosion can be described as general corrosion localized in the axial region in which nitric acid concentrated.

[18] Counsel for the Plaintiffs argues that these statements about what is closer to correct/ correct are clear illustrations that Dr. Revie has inappropriately engaged in oath helping by opining on the credibility and truthfulness of the Mancey and Kirk Reports, encroaching on the responsibility of the trier of fact. Counsel argues that admitting this evidence is likely to confuse the trier of fact and usurp the role of the trial judge. Counsel relies upon the R. v. Llorenz (2000), 132 O.A.C. 201 (C.A.); R. v. Marquard, [1993] 4 S.C.R. 223; and Imeson v. Maryvale (Maryvale Adolescent and Family Services), 2018 ONCA 888, 143 O.R. (3d) 241, decisions in support of this argument.

Conclusions on the Oath helping Argument

[19] The Plaintiffs have not attacked the credentials of Dr. Revie. Clearly by his resume Dr. Revie is a qualified expert to give opinion evidence on the theories of the causation and the type of corrosion that caused the leak of heavy water in the nuclear reactor, considering the Mancey Report, as well as the alternative theories advanced by Dr. Kirk in his report.

[20] Dr. Revie tracks the language used by defence counsel in the retainer letter for an opinion about which theory is “closer to correct/ correct/truth”. Counsel for the Plaintiffs object to this aspect of the Revie Report.

[21] If the retainer letter had asked for Dr. Revie’s opinion and reasons for his opinion as to the probable cause of the heavy water leak comparing and contrasting the opinions expressed in the Mancey and Kirk Reports, there would be no issue with respect to oath helping and opinion evidence straying into the domain of the trier of fact.

[22] I find that the cases relied upon by the Plaintiffs: R. v. Llorenz (2000), 132 O.A.C. 201 (C.A.); Imeson v. Maryvale (Maryvale Adolescent and Family Services), 2018 ONCA 888, 143 O.R. (3d) 241; and R. v. Marquard, [1993] 4 S.C.R. 223, are clearly distinguishable and have no application in this case.

[23] In Llorenz, a criminal jury trial, the Crown called an expert psychiatrist who stated that he accepted the complainant’s allegations of sexual abuse based on a list of symptoms which the complainant displayed which were consistent with sexual abuse (at para. 37). The Court of Appeal held that the “disclaimers” the trial judge made about the expert evidence did not address the prejudicial effect on the jury and the oath helping nature of the evidence (at para. 43). The oath helping portions of the expert’s evidence should not have been admitted. Due to this error, the Court of Appeal ordered a new trial (at para. 56).

[24] In Marquard, another criminal jury trial, the Court of Appeal concluded that an expert witness’ oath helping evidence was inappropriately admitted. The accused was alleged to have burnt the child-complainant with a lighter. A defence expert stated during cross examination that she believed the complainant was lying when the complainant initially told hospital staff that she had not been abused (at para. 47). The Court of Appeal found that the expert engaged in oath helping, and that the trial judge erred by not instructing the jury to decide the complainant’s credibility without being unduly influenced by the oath helping evidence (at para. 53). This error, considered with others, warranted a new trial.

[25] In Imeson, a civil jury trial involving sexual assault issues, the plaintiff called an expert psychologist who gave oath helping evidence of his belief that the plaintiff truthfully reported that he had been assaulted. For example, one of the expert’s reports stated that he believed that the plaintiff had “committed himself to honesty” (at para. 97). The Court of Appeal stated that in a jury trial there is significant prejudicial risk in admitting evidence which is oath helping, even if it is tendered for another purpose (at paras. 98-99). The trial judge’s caution to the jury was insufficient to mitigate the prejudicial effect of the admitted oath helping evidence. The Court of Appeal ordered a new trial as a result of the oath helping evidence admission combined with other errors.

[26] Llorenz, Marquard, and Imeson involve issues of sexual assault and physical abuse in the context of a jury trial. The experts in these cases opined either that the complainants exhibited features of abuse victims, or that the experts believed they were or were not truthful. The Court of Appeal concluded in these circumstances that opinion evidence discussing credibility not only exceeded the scope of proper opinion to be offered by an expert, but also failed to satisfy the Mohan/White Burgess common law admissibility test.

[27] I conclude that although some of the wording in the Revie Report is unfortunate, the Revie Report, considered as a whole does not stray into the dangerous territory described in the case law of oath helping, where the expert accepts that what a witness says is the truth, and not fabrication or a lie, effectively usurping the function of the trier of fact. Dr. Revie is opining on the theories and opinions of two experts looking at the objective evidence. This case does not require me to determine whether an expert is lying, but rather which of the various theories of causation is more likely based upon the facts as I find them to be.

[28] I conclude that the arguments raised by the Plaintiffs as to oath helping are not persuasive in the context of this case. I am well able to disregard the statements as to “closer to correct/ correct” and can determine when the trial takes place what weight should be attached to the Revie Report and Dr. Revie’s evidence.

[29] I will separately consider the application of the common law test.

The Revie Report is a critique

[30] Counsel also argues that Dr. Revie in essence merely critiques the Mancey Report and the Kirk Report, adding no new independent expert opinion. Counsel cites M. v. F., 2015 ONCA 277, 334 O.A.C. 352, in support of his concerns.

[31] Benotto J.A stated in M. v. F, at para. 34, that “critique evidence is rarely appropriate. It generally – as here – has little probative value, adds expense and risks elevating the animosity between the parties.”

[32] M. v. F. was a family law case. The critique report in M. v. F. came from an expert who had little familiarity with the family dynamic at issue. He reviewed the report of the psychologist who had worked with the family for a long period of time. The critiquing psychologist had not met with the family, and limited his role to “raising concerns” with the psychologist’s expert report (at para. 12). The Court of Appeal commented that it was understandable that the trial judge gave the report little weight (at para. 35), but did not conclude it was an error to admit this evidence.

[33] Again, Dr. Revie’s report can be distinguished from the expert report in M. v. F.

[34] Dr. Revie does provide a summary and overview of the lengthy Mancey Report, as well as an overview of the Kirk Report, prior to outlining his opinions and conclusions. Obviously the Mancey and Kirk reports speak for themselves, and if there is any dispute about the accuracy in the overviews prepared in the Revie Report, it will be brought to my attention by counsel during the trial. Given the daunting length and complexity of the Mancey Report, and the nuanced complexity of the issues, a summary, if accurate, may be helpful for me to understand the disputed factual issues and the differences between the expert opinions expressed.

[35] The Revie Report goes beyond mere critiques of the other two reports and includes conclusions about the likely causes of the shutdown. Again, the issue of a critique may relate to the weight to be attributed to the report, rather than its admissibility.

Failure to comply with mandatory requirements of Rule 53.03(2.1)

[36] Further, counsel for the Plaintiffs argues that Dr. Revie’s report does not comply with the mandatory requirements of an expert witness report stipulated in r. 53.03(2.1) as follows:

(2.1) A report provided for the purposes of subrule (1) or (2) shall contain the following information:

1. The expert’s name, address and area of expertise.
2. The expert’s qualifications and employment and educational experiences in his or her area of expertise.
3. The instructions provided to the expert in relation to the proceeding.
4. The nature of the opinion being sought and each issue in the proceeding to which the opinion relates.
5. The expert’s opinion respecting each issue and, where there is a range of opinions given, a summary of the range and the reasons for the expert’s own opinion within that range.
6. The expert’s reasons for his or her opinion, including, i. a description of the factual assumptions on which the opinion is based, ii. a description of any research conducted by the expert that led him or her to form the opinion, and iii. a list of every document, if any, relied on by the expert in forming the opinion.
7. An acknowledgement of expert’s duty (Form 53) signed by the expert.

[37] Admittedly, the format and flow of the Revie Report does not track the strict requirements of the rule. I conclude however that Dr. Revie is a qualified expert. His qualifications have not been challenged. His report is admissible. It may or may not be of assistance to me in determining the contested factual issues. This is a matter for determination at trial.

Consideration of the Common Law Test

[38] Finally, counsel argues that considering all of the arguments raised cumulatively, the balancing common law test for admissibility of expert evidence has not been met. Therefore the Plaintiffs argue that the Revie Report should not be admitted, and that he should not be entitled to testify.

[39] The common law test for admissibility of expert evidence is outlined in R. v. Mohan, [1994] 2 S.C.R. 9, as modified in White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, [2015] 2 S.C.R. 182, at paras. 52-54.

[40] White Burgess affirmed Mohan but refined the test by adding a secondary step after the threshold admissibility requirements at paras. 19, 23-24, 32 and 54:

Expert evidence is admissible when

1. it meets the threshold requirements of admissibility, which are that a. the evidence must be logically relevant; b. the evidence must be necessary to assist the trier of fact; c. there must be no other exclusionary rule; d. the expert must be properly qualified, which includes the requirement that the expert be willing and able to fulfil the duty to the court to provide evidence that is i. impartial, ii. independent and iii. unbiased; and e. for opinions based on novel or contested science or science used for a novel purpose, the underlying science must be reliable for that purpose; and

2. it passes scrutiny at the gatekeeper stage, and the trial judge determines that the benefits of admitting the evidence outweigh its potential risks, considering such factors as a. relevance, b. necessity, c. reliability, and d. absence of bias

[41] Dr. Mancey is testifying at this trial as an expert fact witness. He was retained by AECL, not by the Insurer. When Dr. Kirk filed a report disagreeing with some of the theories and conclusions reached in the Mancey Report, counsel for the defence wished to retain a rule 53.03(2.1) expert to potentially respond to the Kirk Report. Hence Dr. Revie’s retainer.

[42] I conclude in these circumstances that the Mohan and White Burgess requirements at the preliminary gatekeeper stage for the admission of evidence are met. Further, I conclude that the benefits of admitting the evidence outweigh the potential risks, as stipulated by the criteria in the test. Therefore the requirements of the common law test have been met.

[43] For these reasons the Plaintiffs’ motion to exclude the Report of Dr. Revie is dismissed.

Request to limit Dr. Revie’s evidence to the four corners of his report

[44] In the alternative, the Plaintiffs seek a ruling before the trial proper begins that the evidence of Dr. Revie by limited to the four corners of his report.

[45] Clearly the usual rule, without leave of the trial judge, is to limit all experts to the contents of their expert report (r. 53.03(3) Rules of Civil Procedure).

[46] I decline to make a limiting ruling in advance of hearing the evidence as it unfolds. If the issue arises during the trial, Counsel will make submissions, and I will make the ruling at that time.

[47] I thank counsel for their submissions.

J. Wilson J Date: April 16, 2019

Schedule A- FACTUAL ISSUES TO BE DETERMINED BY THE COURT

1. Did irradiation of air in the J-rod annulus create nitrogen oxide which dissolved in water inside the J-rod annulus to create nitric acid?
2. Did nitric acid in the J-rod annulus cause or contribute to the damage to the calandria wall (be it “pitting” corrosion or “localized” corrosion) that resulted in the through wall penetration and leak of heavy water on or about May 14/15, 2009?
3. How long had the “pitting” or “localized” corrosion been occurring prior to May 14/15, 2009?
4. Was the light water in the light water reflector chlorinated?
5. Did the water in the J-rod annulus contain corrodant ions such as chloride, bicarbonate, iron and copper?
6. Did the heavy water discharged into the J-rod annulus as a result of the through wall penetration of the calandria cause any deleterious change to any physical property inside the J-rod annulus?
7. Was the decision to keep the NRU shutdown after the leak was discovered on May 14/15, 2009 due to the presence of heavy water in the J-rod annulus?
8. Was the decision to maintain the shutdown of the NRU after the leak was discovered on May 14/15, 2009 due to the level of Tritium emissions from the J-rod annulus?
9. Did the time required to drain the calandria extend the length of time the NRU was shutdown (May 14, 2009 to August 17, 2010) beyond the time that was/would otherwise have been required to inspect for and repair the damage to the calandria without draining the calandria?
10. If the time required to drain the calandria did extend the length of time the NRU was shutdown (May 14, 2009 to August 17, 2010) beyond the time that was/would otherwise have been required to inspect for and repair the damage to the calandria without draining the calandria, by how many days was the shutdown extended?