COURT FILE NO.: CV-14-501060

DATE: 2019 08 16

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: EDWARD CARTHY, Plaintiff

- and -

HER MAJESTY IN RIGHT OF CANADA, ATTORNEY GENERAL OF CANADA, Defendant

BEFORE: Master Todd Robinson

COUNSEL: A. Gilani, for the defendant/moving party

T. Kay, for the plaintiff

HEARD: July 25, 2019

REASONS FOR DECISION

[1] The defendant moves to compel answers to five refusals by the plaintiff from his examination for discovery.

[2] In this action, the plaintiff seeks damages for wrongful dismissal and/or breach of contract arising from an alleged termination of his contract without notice by the defendant. The plaintiff claims to have been either a long-term dependant contractor or employee of the defendant and sues for $167,000 plus HST for pay in lieu of termination notice, $100,000 in damages for misrepresentation, and a further $100,000 for bad faith and/or punitive damages. The defendant denies any bad faith dealings and maintains that the plaintiff was at all times an independent contractor not entitled to any notice of non-renewal of his contract.

[3] Although the specific refused questions vary, they all broadly relate to a motor vehicle accident (MVA) suffered by the plaintiff a few months before his termination. The plaintiff’s basis for refusing the questions during discovery is that the MVA and the subsequent litigation arising from it, including the settlement of that litigation, are not relevant to this proceeding. The defendant contends that the extent of injuries and the monetary resolution of the MVA litigation is relevant to the plaintiff’s damages, primarily mitigation by the plaintiff and guarding against double recovery to the extent that the plaintiff was compensated for lost wages in the settlement. The defendant also argues it is relevant to the plaintiff’s claim of financial hardship and claim for expenses incurred following termination.

[4] In determining this motion, I have applied the relevance test stated at both Rules 30.03 and 31.06 of the Rules of Civil Procedure, RRO 1990, Reg 194 and the principles of proportionality set out at Rule 29.2.03. I have further considered the scope of discovery as summarized by Justice Perell in Ontario v. Rothmans Inc., 2011 ONSC 2504 at para. 129.

[5] Only two of the cases put before me specifically deal with wrongful dismissal damages where the employee has been injured in an MVA. Goldberg v. Natural Footwear Co. (1986), 2 ACWS (3d) 130 is a trial decision of the Ontario District Court in a wrongful dismissal case where an employee had suffered an MVA after termination. In that case, the court held that the MVA was not relevant to determining damages owing by the employer for wrongful dismissal. The following determination in that case, at para. 8, is relevant on this motion:

The court does find, however, that for the purpose of allocation of damages to the plaintiff for wrongful dismissal, the motor vehicle accident in which the plaintiff Was [sic] involved on August 8th, 1984, is not a factor, and I do not accede to the argument that any award to the plaintiff should be reduced appropriately because if he had been an employee he would not have received salary for more than a week.

[6] The second case, Kennedy v. MTG Products Ltd., [1991] OJ No 293, was put forward by the plaintiff as an unsupportive case, but with a view to providing a fulsome picture of relevant case law since only two cases had been located dealing with MVAs in this context. Having reviewed the case, though, no determination regarding relevance of the MVA was made by Justice Mossop. Rather, it was conceded by plaintiff that wrongful dismissal damages should be reduced to account for damages received from settlement of separate litigation arising from an MVA: see para. 17.

[7] In my view, the factual circumstances regarding the MVA in Goldberg, supra, are not so different from this case to make that decision distinguishable. I also accept the plaintiff’s arguments that the payment obligation of a tortfeasor is distinct from the payment obligation of an unrelated employer that has terminated the tortuously injured employee. In McNamara v. Alexander Centre Industries Ltd., 2001 CanLII 3871 (ON CA), [2001] OJ No 1574, in the context of separate payment obligations of an employer and a disability benefits provider, the Court of Appeal held that an employer should not be entitled to deduct payments made to an employee under a separate entitlement to recovery from disability benefits. The following is stated at para. 22:

The concern [of double recovery] should be significantly diminished when the double recovery flows from clear entitlement to two different and legitimate recoveries (damages for wrongful dismissal and disability benefits) and neither payor would be responsible for paying even a penny more than it should pay pursuant to its individual obligation.

[8] In Portugal v. Car Park Management Services Ltd. (2004), 2004 CanLII 34308 (ON SC), 37 CCEL (3d) 68 at para. 36, Justice Ducharme expanded on the “clearly distinct rationales” for different payments, as follows:

Damages for wrongful dismissal are to compensate for the lack of reasonable notice and to give the dismissed employee an opportunity to find other employment. The disability payments serve the function of income replacement once the employee is unable to work. Finally, from a public policy perspective, it makes no sense to allow the existence of statutory disability benefits to immunize the employer from the consequences of their wrongful acts.

[9] Payment obligations of an employer for wrongful dismissal and an employment-related disability benefits plan for disability claims are proximate, in that they both arise from an employee’s employment. I see no principled basis to treat payment obligations of employers and unrelated tortfeasors, which are less proximate, in a different fashion. It would be inconsistent with the case law on disability benefits and inequitable to permit an employer to benefit from a pre-termination loss suffered by the employee in the absence of any performance issues and without any pleaded inability to mitigate in the ordinary course, as is the case here. Borrowing the language used in Portgual, an employer should not be immunized from consequences of their wrongful acts by another person having wronged the employee.

[10] In my view, if the plaintiff is successful in establishing a dependant contractor or employment relationship with the defendant, which was wrongfully terminated, then any liability of the defendant in this litigation will give rise to a separate payment obligation from the liability of the tortfeasor in the MVA litigation. The MVA litigation and its disposition is accordingly not relevant to quantification of damages in this action. If found liable at trial, the defendant will not be required to pay anything more than it would otherwise be required to pay pursuant to its individual obligation.

[11] Since all five refused questions arise from the MVA, that determination is sufficient to dispose of the defendant’s motion. However, in the event I am wrong in that broader relevance determination, I have reviewed the relevance of each specific question asked, and have reached the same determination that all five questions were properly refused. In doing so, I have considered that the court must deal with questions as asked during the examination, and not an aspect of the question or a variant question derived from argument at the motion hearing. Consistent with prior case law, it is not for the court to correct a deficient examination.

[12] The first refusal (Q661) was to identify the injuries sustained by the plaintiff in the MVA. The defendant argues that the extent of injuries suffered is relevant to assessing the plaintiff’s mitigation and quantification of the plaintiff’s damages. I do not agree. I was pointed to nothing in the pleadings to support relevance of the nature and extent of injuries suffered by the plaintiff. Neither the plaintiff nor the defendant have pleaded the MVA. Notably, there is no pleading that the plaintiff’s damages have been exacerbated by the injuries suffered in the MVA or that the plaintiff’s ability to mitigate has been impacted by the MVA. The defendant similarly does not plead any pre-existing physical conditions of the plaintiff at the time of termination.

[13] The defendant points to paragraphs 27-31 of the statement of claim, particularly financial hardship alleged at paragraph 27, in support of relevance. I do not agree these general pleadings support relevance of the injuries suffered from the MVA. They are fairly general allegations about impacts of the termination given the plaintiff’s age, experience, and specialization. The defendant’s general pleading that the plaintiff’s damages are excessive and remote at paragraph 30 of the statement of defence is also not sufficient to make the MVA relevant, particularly in circumstances where, as here, the defendant had not pleaded any failure to mitigate and the plaintiff does not plead any inability to mitigate in the ordinary course. Refusal of this question was proper.

[14] The next refusal (Q663) was to confirm when the MVA litigation was commenced. I am not satisfied that the date of commencement of the MVA litigation has any relevance in this action. The defendant put forward no specific argument on why the date of commencement is relevant. Refusal of this question was proper. The next refused question (Q664) seeking production of the pleadings in the MVA litigation is not moved on.

[15] The next refusals (Q665-666) were to confirm if examinations for discovery occurred in the MVA litigation and, if so, to produce a copy of the transcripts from the examinations for discovery. I view these refusals as one request, since the fact of examinations occurring is only material insofar as the transcripts of those examinations should then be available.

[16] The request for copies of all transcripts from any examinations for discovery in the MVA litigation is broad and general. It encompasses not only the discovery evidence of the plaintiff regarding his injuries, but also evidence of the defendant(s) in that proceeding. Given my determination that the plaintiff’s injuries are not relevant based on the pleadings, transcripts in the MVA-related litigation will certainly include information irrelevant to this proceeding. Refusal of the overly broad requested undertaking was proper. Narrower and more specific questions to hone in on potentially relevant aspects of discovery evidence in the MVA litigation could have been asked, but were not.

[17] The final refusal (Q667-668) was regarding production of minutes of settlement in the MVA-related litigation. In my view, the request was overly broad and properly refused. The defendant argues that the quantum of settlement is relevant to damages, since the defendant should be entitled to set-off for any compensation made in the MVA-litigation for lost wages. However, that was not the subject of the refused questions. Examining counsel did not ask if a settlement included compensation for specific heads of damages or, more particularly, if the plaintiff received any compensation specifically for lost wages. Examining counsel requested production of the minutes of settlement. Nothing in the pleadings supports general relevance of any settlement reached in the MVA litigation or of the terms in any minutes of settlement. Narrower questions were not asked.

[18] Given that determination, I need not consider settlement privilege of the other parties to the MVA litigation settlement, who are not on notice of this motion, which is a concern I raised during oral argument.

[19] For the foregoing reasons, the defendant’s motion is dismissed.

[20] Given his successful opposition of this motion, the plaintiff is entitled to his costs on a partial indemnity basis, subject to any offers to settle. If the parties cannot agree on costs of the motion, then the plaintiff shall deliver written costs submissions by August 30, 2019. The defendants shall deliver their responding submissions by September 13, 2019. There shall be no reply or oral costs submissions unless I direct otherwise. Costs submissions shall not exceed four pages, excluding costs outlines and any offers to settle or case law. They may be submitted directly to me by email.

MASTER TODD ROBINSON

DATE: August 16, 2019