Court File and Parties

COURT FILE NO.: CV-19-622897 RELEASED: 2020/08/17 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Kamalavannan Kumarasamy v. Western Life Assurance Company and Morris National Inc.

BEFORE: Master Graham HEARD: August 12, 2020

COUNSEL: Adam Kuciej for the plaintiff (moving party) Heather Gastle for the defendant Western Life Assurance Company

Reasons for Decision

(Plaintiff’s motion to strike Rule 39.03 summons to witness)

[1] The plaintiff claims recovery of Long Term Disability (“LTD”) benefits under a policy of disability insurance with the defendant Western Life Assurance Company provided through his employer, the defendant Morris National Inc. He alleges a disability arising from injuries sustained in a motor vehicle accident that occurred on August 25, 2014. Western Life has brought a summary judgment motion to dismiss the plaintiff’s action on the basis that he failed to apply for the benefits in accordance with the time limit in the policy and that he commenced his action after the expiry of the applicable limitation period. In response to the summary judgment motion, the plaintiff served an affidavit sworn May 29, 2020 in which he refers to the involvement on his behalf of his sister Poorany Sornabala, who is a legal assistant at the law firm that has represented him since August 26, 2014. Western Life then served a summons to witness to examine Ms. Sornabala for its summary judgment motion pursuant to Rule 39.03(1): “39.03(1) Subject to subrule 39.02(2), a person may be examined as a witness before the hearing of a pending motion or application for the purpose of having a transcript of his or her evidence available for use at the hearing.”

[2] The plaintiff now moves to strike the summons. For these reasons, the summons is hereby struck.

The plaintiff’s affidavit

[3] The plaintiff states in paragraph 3 of his affidavit:

“3. My English reading writing and speaking skills are very limited. My first language is Tamil and my affidavit is made with the assistance of Poorany Sornabala, who works as a Tamil-speaking legal assistant at Levy & Associates, the office of my lawyer, David J. Levy. Mrs. Sornabala is also my sister.”

[4] The plaintiff’s affidavit also refers to Ms. Sornabala in the following paragraphs:

15. On September 8, 2014, Ms. Sornabala wrote to Morris National to request that a form be completed for the plaintiff’s accident benefits claim.

22 and 23. On October 8, 2014, Ms. Sornabala wrote to Morris National to request a statement from the short-term disability benefits carrier to enable the accident benefits insurer to calculate the plaintiff’s income replacement benefit. Morris National replied on the same day that their group insurance plan provided LTD benefits only.

28 and 29. On December 15, 2014, Ms. Sornabala requested the LTD benefits application form from Morris National Inc. and on December 18, 2014, Morris National delivered the notice of disability claim form to Ms. Sornabala by email.

30. On March 9, 2015, Ms. Sornabala delivered a completed Notice of LTD Claim Form to Western Life on behalf of plaintiff’s counsel.

31. The plaintiff makes a general statement, with no specific dates, that Ms. Sornabala inquired of his employer (Morris National) about whether short term and long term disability benefits were available and his employer in turn made inquiries with Western Life.

[5] In its factum filed in response to the motion, Western Life refers to paragraphs 22 and 23 of the plaintiff’s affidavit, summarized above, and to the following paragraphs (quoted verbatim):

“24. The email [of October 8, 2014 from Morris National] does not mention when long term disability benefits would be available to me. It also does not request any information about my disability or indicate that I should give notice and when such notice should be given. At the time, I was not aware of when benefits would arise or that I was even required to give notice.

31. On May 28, 2015, Mr. Wescott Holdford [of Benecaid, an agent for Western Life] emailed Ms. Ilacqua [of Morris National] indicating that the two had an email discussion, of which neither I nor my counsel were aware at the time. The email indicated that Western had allegedly sent letters to me stating I had not responded and had not provided the Employee’s and Attending Physician’s Statements and it was intending to close my file if a response was not received by the end of the week of May 28, 2015. The letter went on to state that should Western receive both statements in its office it “will be able to proceed with the handling of the claim.”

32. My counsel advises that he was unaware of this email until 2020, when counsel for Morris National Inc. provided it to him.

33. I have always presumed that Western knew about my injuries because I notified my employer about my injuries.

34. I have always thought that my case was open and ongoing until the letter of June 28, 2017 when Western indicated it was denying my claim. At no point in time before June 28, 2017, did I have any idea Western had denied my claim. [emphasis added by Western Life throughout]

Case law

[6] The law applicable to the issue of the striking of a summons under Rule 39.03 was thoroughly reviewed by Master Dash in Marton v. Wood Gundy Inc., 2013 ONSC 1246. Although the motion in that case was to compel the attendance of a witness under Rule 39.03, as opposed to a motion to strike a summons to compel attendance under that rule, both motions require a consideration of identical issues so the same principles apply. Master Dash summarized the law as follows (at paras. 9, 10, 16 and 19):

9 The test to be satisfied in order to conduct a Rule 39.03 examination has been stated by the Court of Appeal as follows:

The onus is on the party seeking to conduct the examination to show on a reasonable evidentiary basis that the examination would be conducted on issues relevant to the pending application and that the proposed witness was in a position to offer relevant evidence.

10 The onus on the party seeking the examination is not a heavy one. He need not show that the proposed examination will provide helpful evidence. If he can show that the examination will be conducted on issues relevant to the pending motion and the proposed witness is in a position to offer relevant evidence then he has a prima facie right to conduct an examination under Rule 39.03. The onus then shifts to the objecting party to demonstrate that to permit the Rule 39.03 examination would be an abuse of process. . . .

16 As noted, even if the proposed witnesses could provide evidence relevant to the motion to dismiss for delay, the right to conduct the Rule 39.03 examinations will be refused if it amounts to an abuse of process. There will be such abuse if the process “while ostensibly for the purpose of eliciting relevant evidence, is in fact being used for an ulterior or improper purpose, or if the process itself is being used in such a way as to be in itself an abuse”. A Rule 39.03 examination also cannot be used “to conduct a general discovery” or “so as to authorize what amounts to a fishing expedition.”

19 The proposed examinations could also be refused as over-reaching if their purpose is to elicit information protected by solicitor-client privilege. [citations omitted throughout]

[7] In Marton, the defendants sought to examine five of the plaintiffs’ former lawyers in support of a motion to dismiss the action for delay. After concluding that the former lawyers could give evidence relevant to the reasons for a 20 year delay in prosecuting the action, and that the plaintiffs’ reliance on their lawyers to prosecute the action put their communications with those lawyers in issue, Master Dash commented (at para. 24):

24 Finally I must take into account that even when being examined as to non privileged facts or on communications over which privilege has been waived, “there is a general policy against the practice of calling counsel for the opposing party to testify against his or her client. This should be avoided wherever possible. It should only be permitted in extraordinary circumstances which require a showing of high materiality and necessity. One of the factors is whether there is availability of other witnesses to give evidence or there are other means by which the fact can be proven.” [emphasis added]

[8] Although Ms. Sornabala is a legal assistant and not a lawyer, she was working for the law firm that has represented the plaintiff since August 26, 2014, the day after the motor vehicle accident that precipitated his accident benefits claim, his tort claim, and this claim against Western Life. The authors of Sopinka, Lederman & Bryant: The Law of Evidence in Canada, 4th Ed. by Bryant, Lederman, Fuerst, state at c. 14, II.C.3.(a), s. 14.60:

“[A] lawyer’s client is entitled to have all communications made with a view to obtaining legal advice kept confidential. Whether communications are made to the lawyer himself [sic] or to employees, and whether they deal with matters of an administrative nature such as financial means or with the actual nature of the legal problem, all information which a person must provide in order to obtain legal advice and which is given in confidence for that purpose enjoys the privileges attached to confidentiality. This confidentiality attaches to all communications made within the framework of the solicitor-client relationship, which arises as soon as the potential client takes the first steps, and consequently even before the formal retainer is established.” (Descoteaux v. Mierwinski, 1982 SCC 22, [1982] S.C.J. No. 43; Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008 SCC 44, [2008] S.C.J. No. 45 at para. 10) [emphasis added]

[9] Based on this statement of the law, communications to and from Ms. Sornabala, all of which were made and received in her capacity as an employee of the plaintiff’s lawyers, are protected by solicitor-client privilege. Further, it is inevitable that her understanding of the plaintiff’s legal position would be informed by her interactions with those lawyers. Protection of the plaintiff’s solicitor-client privilege in all communications with the law firm representing him therefore requires that Western Life’s attempt to examine Ms. Sornabala be subject to the same standard of “high materiality and necessity” (see Marton, para. 24, supra) as would apply to an examination of a lawyer at the same firm.

[10] Western Life submits that the plaintiff has waived his solicitor-client privilege in communications involving Ms. Sornabala by putting in issue her knowledge of the state of his claim for disability insurance which, as an employee of the law firm representing him, is imputed to him. It is therefore necessary to review the law in relation to solicitor-client privilege and the circumstances in which a court may conclude that that privilege has been waived.

[11] In Kearns v. Canadian Tire Corporation, Limited, 2019 ONSC 4235, Master Jolley stated (at para. 22):

22 Solicitor client privilege is fundamental to the justice system and the integrity of the administration of justice depends on the unique role of the solicitor who provides legal advice to clients within the legal system. At the heart of this privilege lies the concept that people must be able to speak candidly with their lawyers and so enable their interests to be fully represented. The occasions when solicitor client privilege yields are rare and the test to be met is a stringent one. Solicitor client privilege must be as close to absolute as possible to ensure public confidence and retain relevance. As such it will only yield in certain clearly defined circumstances, and does not involve a balancing of interests on a case by case basis (see R. v. McClure, 2001 SCC 14 at paragraphs 2, 5 and 35). [emphasis added]

[12] In Creative Career Systems Inc. v. Ontario, 2012 ONSC 649, Perell J. made the following comments about the circumstances in which a court could conclude that solicitor-client privilege had been waived:

25 A party will be deemed to have waived privilege on grounds of fairness and consistency when he or she makes their communication with a lawyer an issue in the proceeding: Bank Leu AG v. Gaming Lottery Corp. (1999), 43 C.P.C. (4th) 73 (Ont. S.C.J.) at p. 77, affd. (2000), 132 O.A.C. 127 (Div. Ct.); Leadbeater v. Ontario at para. 32; Guelph (City) v. Super Blue Box Recycling Corp., 2004 ONSC 34954, [2004] O.J. No. 4468 (S.C.J.) at paras. 77-100.

26 Thus, if a party places its state of mind in issue with respect to its claim or defence and has received legal advice to help form the state of mind, privilege will be deemed to be waived with respect to such legal advice: Bank of Leu AG v. Gaming Lottery Corp. [1999] O.J. No. 3949 (S.C.J.) at paras. 5-11; Toronto Dominion Bank v. Leigh Instruments Ltd. (1997), 32 O.R. (3d) 575 (Gen. Div.); Woodglen & Co. v. Owens (1995), 24 O.R. (3rd) 261 (Gen. Div.); Lloyd’s Bank of Canada v. Canada Life Assurance Co. (1991), 47 C.P.C. (2d) 157 (Ont. Gen. Div.).

27 There is, however, a subtle and profound point here about when a party must answer questions about the occurrence of legal advice in the factual narrative of a case. The subtle and profound point is that there is no waiver of the privilege associated with lawyer and client communications from the mere fact that during the events giving rise to the claim or defence, the party received legal advice, even if the party relied on the legal advice during the events giving rise to the claim or defence. For a party to have to disclose the legal advice more is required.

28 In Doman Forest Products Ltd. v. GMAC Commercial Credit Corp., 2004 BCCA 512, a case about whether privilege associated with legal advice had been waived, Justice Smith points out at para. 28 that it is not enough to constitute waiver that a pleading puts a party’s state of mind in issue and that its state of mind might have been influenced by legal advice, there must be the further element that the state of mind involves the party understanding its legal position in a way that is material to the lawsuit. In other words, the presence or absence of legal advice itself must be material to the claims or defence to the lawsuit. The materiality of the legal advice to the claims or defences in the law suit makes questions about it relevant.

29 But the materiality of the legal advice, while necessary to make questions about it relevant, is still not sufficient to justify the compelled disclosure of the legal advice. To justify a party being required to answer questions about the content of privileged communications, the party must utilize the presence or absence of legal advice as a material element of his or her claim or defence. The waiver of the privilege occurs when the party uses the receipt of legal advice as a material fact in his or her claim or defence. While the waiver is a deemed waiver, it requires the intentional act that the party makes legal advice an aspect of his or her case. In Simcoff v. Simcoff, 2009 MBCA 80, Justice Steel made the point neatly at para. 27, where he stated:

27. However, a mere reference to the receipt of legal advice does not constitute waiver. Waiver must involve something more. It requires not simply disclosing that legal advice was obtained, but pleading reliance on that advice for the resolution of an issue.

30 Thus, a deemed waiver and an obligation to disclose a privileged communication requires two elements; namely: (1) the presence or absence of legal advice is relevant to the existence or non-existence of a claim or defence; which is to say that the presence or absence of legal advice is material to the lawsuit; and (2) the party who received the legal advice must make the receipt of it an issue in the claim or defence. [emphasis added throughout]

Issues on the motion

[13] Based on this review of the law, the issues on the motion are:

1. Has Western Life demonstrated that the proposed examination of Ms. Sornabala would be conducted on issues relevant to the summary judgment motion and that Ms. Sornabala is in a position to offer relevant evidence? (See para. 9 of Marton, supra)
2. If Western Life meets its onus on the first issue, can the plaintiff demonstrate that the proposed examination is an abuse of process, either to authorize what would be a “fishing expedition” or to elicit information protected by solicitor-client privilege? (See paras. 16 and 19 of Marton)
3. If the information that Western Life would obtain on an examination of Ms. Sornabala is protected by solicitor-client privilege, has Western Life demonstrated that the plaintiff has waived the privilege by using the receipt of legal advice as a material fact in his response to the summary judgment motion. (See para. 29 of Creative Career Systems Inc., supra)
4. Even if Western Life has demonstrated that Ms. Sornabala has relevant evidence to give and that the plaintiff has waived solicitor-client privilege, has Western Life demonstrated the “extraordinary circumstances which require a showing of high materiality and necessity” to warrant a Rule 39.03 examination of Ms. Sornabala as an employee of the law firm representing the plaintiff? (See para. 24 of Marton)

Analysis of the issues

1. Has Western Life demonstrated that the proposed examination of Ms. Sornabala would be conducted on issues relevant to the summary judgment motion and that Ms. Sornabala is in a position to offer relevant evidence?

[14] The issues on the summary judgment motion are, with respect to the “late application issue”, whether the plaintiff should be entitled to relief from forfeiture under s. 98 of the Courts of Justice Act and/or s. 129 of the Insurance Act on the basis that he acted reasonably, and, with respect to the “limitation period issue”, when the plaintiff knew that he had sustained a loss and that a proceeding was an appropriate remedy. Western Life submits that, owing to Ms. Sornabala’s involvement in requesting the LTD application on December 15, 2014 and receiving it three days later, and then submitting the Notice of LTD Claim form on March 9, 2015, Ms. Sornabala can offer relevant evidence as to the plaintiff’s knowledge of his obligations with respect to the timing of his application for benefits and the commencement of his action.

[15] A review of the plaintiff’s entire affidavit reveals that there is no evidence of any further action taken by Ms. Sornabala on any of the plaintiff’s claims after she sent the notice of LTD claim to Western Life on March 9, 2015. The plaintiff’s affidavit refers to the subsequent involvement of other employees of plaintiff’s counsel, a Ms. Zou (“a clerk”) in October and November, 2016, and a Mr. Vu (“an insurance specialist and clerk”) between February and June, 2017, but no further involvement of Ms. Sornabala. The reference in paragraph 59 of the affidavit to Ms. Sornabala inquiring of the plaintiff’s employer about the availability of short term disability and LTD benefits is simply consistent with the specific enquiry that she made as described in paragraphs 22 and 23.

[16] The issue of time limits to apply for benefits or to commence an action could not have been of significant concern at the time Ms. Sornabala last worked on the matter, less than seven months after the onset of the plaintiff’s alleged disability. Any evidence that Ms. Sornabala might be able to obtain through enquiries of Ms. Zou, Mr. Vu, or any other employee of plaintiff’s counsel could as easily be requested from the plaintiff himself at his cross-examination on his affidavit. Given Ms. Sornabala’s relatively brief involvement in the matter at the earliest stage of the plaintiff’s LTD claim, any evidence that she could offer in relation to the issues on the summary judgment motion would therefore be of minimal relevance.

2. If Western Life meets its onus on the first issue, can the plaintiff demonstrate that the proposed examination is an abuse of process, either to authorize what would be a “fishing expedition” or to elicit information protected by solicitor-client privilege?

[17] Western Life submits that, based on the scope of documents requested from Ms. Sornabala in the summons to witness, which is limited to “documents . . . as they relate to your involvement” with respect to the plaintiff’s disability benefit coverage, the examination would not constitute a fishing expedition and is therefore not an abuse of process. I accept that the breadth of the questioning of Ms. Sornabala could be reasonably limited so as not to constitute a fishing expedition.

[18] The real problem is that, as stated at paragraph [9] above, communications with Ms. Sornabala, as an employee of the plaintiff’s lawyer, are protected by solicitor-client privilege. Further, even though the plaintiff’s affidavit includes the statement that he did not retain his counsel with respect to the LTD claim until February 10, 2017, all communications with his counsel’s office in relation to that claim prior to that date are still subject to the privilege (See Sopinka, Lederman & Bryant at para. [8] above). The plaintiff has therefore met his onus to demonstrate that an examination of Ms. Sornabala would infringe upon solicitor-client privilege.

3. If the information that Western Life would obtain on an examination of Ms. Sornabala is protected by solicitor-client privilege, has Western Life demonstrated that the plaintiff has waived the privilege by using the receipt of legal advice as a material fact in his response to the summary judgment motion?

[19] Western Life submits that the plaintiff has put his state of mind and his counsel’s state of mind in issue in paragraphs 22-24, 31, 32, 57 and 58 of his affidavit, referred to and quoted in paragraph [6] above. However, as stated by Perell J. in paragraph 28 of Creative Career Systems Inc., supra, “it is not enough to constitute waiver that a pleading [or in this case a responding affidavit on a summary judgment motion] puts a party’s state of mind in issue and that its state of mind might have been influenced by legal advice, there must be the further element that the state of mind involves the party understanding its legal position in a way that is material to the lawsuit. Continuing in paragraph 29, Perell J. states that “the waiver of the privilege occurs when the party uses the receipt of legal advice as a material fact in his or her claim or defence.”

[20] In paragraph 24 of his affidavit, the plaintiff deposes that at as of October 8, 2014, when his employer Morris National informed Ms. Sornabala that he was only entitled to LTD benefits, “I was not aware of when benefits would arise or that I was even required to give notice.” This statement does reflect the plaintiff’s state of mind at that time with respect to the requirement to give notice to Western Life. However, the statement in no way suggests that the plaintiff’s state of mind was informed or influenced by legal advice; to the contrary, it suggests that he had no advice of any kind on the issue.

[21] Paragraph 31 of the affidavit refers to an email communication of May 28, 2015 from Mr. Holdford of Benecaid to Morris National referring to unanswered letters from Western Life to the plaintiff and stating that if a response was not received by the end of the week, Western Life would close the file. In paragraph 32, the plaintiff states that “my counsel advises that he was unaware of this email until 2020.” This is a statement of when plaintiff’s counsel and by extension the plaintiff was aware of the May 28, 2015 email communication but in no way relates to any legal advice that might have informed or influenced the plaintiff’s state of mind as to his obligations in relation to his LTD claim.

[22] In paragraph 57 of the affidavit, the plaintiff states “I have always presumed that Western knew about my injuries because I notified my employer about my injuries.” This statement reflects the plaintiff’s state of mind based on what he “presumed” that Western might have known about his injuries, but does not suggest that his state of mind was informed or influenced by any legal advice.

[23] In paragraph 58, the plaintiff deposes that prior to a letter from Western Life dated June 28, 2017 stating that it was denying his claim, “I always thought that my case was open and ongoing” and “did [not] have any idea that Western had denied my claim.” This paragraph does reflect the plaintiff’s state of mind with respect to the status of his LTD claim. Although the plaintiff makes no reference to any legal advice on the issue, given the ongoing involvement of his counsel in the matter, his state of mind plausibly “might have been influenced by legal advice”. Further, the plaintiff is describing his state of mind in relation to his “understanding [of his] legal position in a way that is material to the lawsuit”, because his understanding of when his LTD claim was denied is material to when he ought to have known that he had sustained a loss and that a proceeding was an appropriate remedy.

[24] Paragraph 58 of the plaintiff’s affidavit could therefore be evidence of the use by the plaintiff of legal advice as a material fact in response to the summary judgment motion, which could constitute an implied waiver of lawyer-client privilege. I will consider under issue 4 whether an implied waiver of privilege on this point meets the further requirement of “high materiality and necessity” in relation to an examination of Ms. Sornabala.

4. Even if Western Life has demonstrated that Ms. Sornabala has relevant evidence to give and that the plaintiff has waived solicitor-client privilege, has Western Life demonstrated the “extraordinary circumstances which require a showing of high materiality and necessity” to warrant a [Rule 39.03](https://www.ontario.ca/laws/regulation/900194) examination of Ms. Sornabala as an employee of the law firm representing the plaintiff?

[25] In addressing the first issue, I concluded that, owing to her relatively brief and limited involvement in the matter, any evidence that Ms. Sornabala could give in relation to the summary judgment motion would be of minimal relevance. Even absent considerations of solicitor-client privilege, the limited relevance of any evidence that Ms. Sornabala might give is insufficient to meet the standard of “high materiality and necessity” applicable on this motion.

[26] In my analysis of issue 3 above, I concluded that the only evidence in the plaintiff’s affidavit that would give rise to a waiver of solicitor-client privilege is in paragraph 58, in relation to his understanding of the status of his LTD claim before Western Life’s letter of June 28, 2017. Once again, however, that June 28, 2017 letter was sent long after Ms. Sornabala’s last involvement in the matter on March 9, 2015. The plaintiff’s state of mind during that period of two years and three months is therefore too far removed from Ms. Sornabala’s involvement to support the “high materiality and necessity” required to allow a Rule 39.03 examination of Ms. Sornabala.

[27] With respect to the requirement of “high necessity”, a factor identified in paragraph 24 of Marton, supra, is whether other witnesses are available to give evidence on the issues. The most important witness with respect to the plaintiff’s knowledge and conduct regarding his application for LTD benefits, and when his cause of action against Western Life arose, is the plaintiff himself, whose affidavit evidence can be challenged by cross-examination.

[28] Finally, the possible necessity of any examination of Sornabala is outweighed by the resulting prejudice to the plaintiff, who, as a result of his lawyer’s employee being compelled to testify, might well be deprived of his choice of counsel in the middle of the pending summary judgment motion.

Summary and conclusion

[29] For these reasons, I conclude that the evidence sought from Ms. Sornabala pursuant to the impugned Rule 39.03 summons does not meet the standard of “high materiality and necessity” required to allow her to be examined. Accordingly, the summons to witness to Ms. Sornabala dated June 23, 2020 is hereby struck.

[30] Costs. At the conclusion of the hearing, counsel for Western Life filed a costs outline. Counsel for the plaintiff then filed a costs outline two days later, before I released these Reasons, and without the benefit of having seen Western Life’s outline. The plaintiff’s outline sets out total partial indemnity costs including disbursements of $7,732.15 and the defendant’s outline sets out slightly higher partial indemnity costs of $8,451.30. To assist the parties, I suggest that they agree that the plaintiff, as the successful party on the motion, recover total costs fixed at $7,500.00. However, if the parties cannot agree on the disposition of the costs of the motion, they may make written submissions, not to exceed 3 pages (excluding their costs outlines), the plaintiff within 20 days and the defendants within 20 days thereafter.

MASTER GRAHAM August 17, 2020