COBOURG COURT FILE NO.: CV-18-00082-00

DATE: 20190809

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Rose Oliva and Letterio Oliva

Plaintiffs

– and –

Cindy Dickson and Russell Dickson

Defendants

Marc Whiteley, for the Plaintiffs

Jason Schmidt, for the Defendants

HEARD: In writing

ENDORSEMENT

DE SA J.

Amendments to Statement of Defence (Subrogation)

[1] The Plaintiffs, Rose Oliva and Letterio Oliva, seek that certain portions of the Amended Statement of Defence be struck.

[2] The Defendants, Russell Dickson and Cindy Dickson, both made several amendments to their respective Statements of Defence concerning mitigation, duty of honest contractual performance, standard of care, etc., (R. Dickson: amended clauses 18 to 22; C. Dickson: amended clauses 17 to 20.2) that do not appear to be in contention.

[3] Clauses, 34 and 21.1 that were added by the Defendants are the clauses in contention.

[4] At amended clause 34, R. Dickson added the clause,

Mr. Dickson pleads and relies on the principle of unclean hands on the basis that this claim is a subrogated claim by a title insurer, the subject matter of which was an insurance claim by the plaintiffs based on false and/or misleading information provided to the insurer by the plaintiffs.

[5] At amended clause 21.1, C. Dickson added,

The Defendant pleading relies on the doctrine of unclean hands, this claim being a subrogated claim by a title insurer, as the result of an insurance claim by the Plaintiffs which claim was based on false or misleading information provided to the insurer by the Plaintiffs.

[6] The Plaintiffs argue that the fact the claim is subrogated, and the fact that the Plaintiffs may have had discussions with the insurer, should not be included as part of the pleadings. The allegations referenced in clauses 34 and 21.1 are completely unrelated to the renovations and real estate transaction which, as alleged throughout the Amended Statement of Claim, took place in 2007. To include these assertions in the pleadings improperly broadens the scope for discovery and unnecessarily complicates the issues for trial.

[7] I agree with the Plaintiffs. Whether the Plaintiffs have provided false or misleading information to the insurer is not what is in dispute in the action. Nor should the pleadings be used to expand the potential scope of production to include the discussions between the Plaintiffs and their insurer.

[8] It may be that there is information that is included in the insurance file that is relevant to the issues at trial. Relevant information that is not privileged should be produced.

[9] That said, what is at issue here is the question of damages sustained by the Plaintiffs as a result of the Defendants’ actions/omissions in relation to the subject property. This should be the focus of the defence and its pleadings.

[10] It is fine for the Defendants to allege that the Plaintiffs have misstated or overstated the nature of the damages sustained as they have done. Any documents which bear on the issue of damages that are contained in the insurance file should be produced.

[11] However, beyond this, there is no need to reference discussions between the insurer and the Plaintiffs directly. As explained in Poplawski v. McGrimmon, 2009 CanLII 14796 (ON SC) at paras 14 to 18:

I have concluded that the subrogated nature of the claim cannot expand the ambit of relevance. The defendant does not gain greater rights of discovery because the claim is subrogated and relevance will be based on the issues framed by the pleadings. This is a case about misrepresentation, breach of contract, negligence and latent defects and not about title insurance or subrogation.

I have only this caveat. Subrogation does not alter the question of relevance. It may lead to a conclusion about possession, power or control of documents or information. There can be no question that the subrogated plaintiff is in power, possession or control over the documents in the insurer’s file. If they are relevant and not privileged they must be produced. If they are relevant and subject to a claim of privilege they should be listed in Schedule B to the affidavit of documents. [Emphasis added]

[12] Accordingly, the impugned portions of paragraphs 34 and 21.1 will be struck.

Calculation of Damages

[13] As I have stated in my prior ruling (Oliva et al v. Dickson et al, 2019 ONSC 173), the Defendants are entitled to know with some clarity how the specific damages have been calculated.

[14] How damages are determined is an issue that has obvious importance to defendants. In the normal course, any defendant asked to make good the damages of a plaintiff, is entitled to know, with some precision and reasonably before trial, what those damages are.

[15] Accordingly, any documentation that bears on the issue of damages or its calculation should be produced as part of the ordinary productions. To the extent such documentation exists, it should be produced.

[16] Again, if there is information/documentation in the insurer’s file which is relevant to the issue of damages, those documents are also to be produced.

[17] I will not require that the Plaintiffs identify with precision the exact way in which they have quantified their damages.

[18] Obviously, if the Plaintiffs wish to establish damages, they have the onus to establish their damages at trial and produce any documentation they intend to rely upon in this regard. To the extent that they fail to do so, this will only inure to the benefit of the Defendants.

Timetable

[19] The current status is that main discoveries have been completed and the undertakings, for the most part, are complete.

[20] In light of the above, the matter can be set down for trial immediately, without prejudice to the parties bringing a motion for completion of undertakings. If the matter can be set down for the November 2019 sittings, the parties should have sufficient time to resolve any outstanding issues and sort out anything else that needs to be completed in advance of trial.

[21] If there are any additional issues outstanding, I will consider them in writing, provided my schedule permits, to limit the costs on the parties and to expedite matters.

[22] I am also happy to case manage any outstanding issues by conference call if this will simplify matters for the parties.

Justice C.F. de Sa

Released: August 9, 2019