Superior Court of Justice - Ontario

RE: TD BANK, N.A., Plaintiff

AND:

"LLOYD'S UNDERWRITERS" THAT SUBSCRIBE TO POLICY NUMBER MMF/1710, PRIMARY LONDON REFERENCE NUMBER B0509QA025509 AND EXCESS LONDON REFERENCE NUMBERS QA025609, QA025709, QA025809, AND QA025909, ANT ARES UNDERWRITING LIMITED FOR ITSELF AND ON BEHALF OF ALL MEMBERS OF LLOYD'S SYNDICATE 1274 (AUL) FOR THE OPERATING YEAR OF 2009, CATLIN SYNDICATE LIMITED FOR ITSELF AND ON BEHALF OF ALL MEMBERS OF LLOYD'S SYNDICATE 2003 (SJC) FOR THE OPERATING YEAR OF 2009, NOVAE CORPORATE UNDERWRITING LIMITED AND/OR NOVAE SYNDICATES LIMITED FOR THEMSELVES AND ON BEHALF OF ALL MEMBERS OF LLOYD'S SYNDICA TE 2007 (NVA) FOR THE OPERATING YEAR OF 2009, ACE CAPIT AL LIMITED, ACE CAPITAL IV LIMITED, AND ACE CAPITAL V LIMITED FOR THEMSELVES AND ON BEHALF OF ALL MEMBERS OF LLOYD'S SYNDICATE 2488 (AGM) FOR THE OPERATING YEAR OF 2009, BRIT UW LIMITED FOR ITSELF AND ON BEHALF OF ALL MEMBERS OF LLOYD'S SYNDICATE 2987 (BRIT) FOR THE OPERATING YEAR OF 2009, CHAUCER CORPORATE CAPITAL (NO.3) LIMITED (FORMERLY KNOWN AS PEMBROKE 4000 LIMITED) AND/OR PEMBROKE 4000 LIMITED, CHAUCER CORPORATE CAPITAL (NO.2) LIMITED, AND/OR IRONSHORE CORPORATE CAPITAL LTD. FOR THEMSELVES AND ON BEHALF OF ALL MEMBERS OF LLOYD'S SYNDICATE 4000 (PEM) FOR THE OPERATING YEAR OF 2009, ASPEN INSURANCE UK LIMITED, GREAT LAKES REINSURANCE(UK)PLC, LEXINGTON INSURANCE COMPANY, AIG INSURANCE COMPANY OF CANADA (FORMERLY KNOWN AS AIG COMMERCIAL INSURANCE COMPANY OF CANADA) AND/OR AIG COMMERCIAL INSURANCE COMPANY OF CANADA, CHARTIS EXCESS LIMITED (FORMERLY KNOWN AS AIG EXCESS LIABILITY INSURANCE INTERNATIONAL LIMITED) AND/OR AIG EXCESS LIABILITY INSURANCE INTERNATIONAL LIMITED, ALLIED WORLD ASSURANCE COMPANY LTD., ARCH INSURANCE COMPANY AND/OR ARCH INSURANCE CANADA LTD., AXIS SPECIALTY INSURANCE COMPANY AND/OR AXIS SPECIALTY LIMITED, CHUBB INSURANCE COMPANY OF CANADA, ENDURANCE SPECIALTY INSURANCE LTD., HOUSTON CASUALTY COMPANY, LIBERTY MUTUAL INSURANCE COMPANY, MARKEL BERMUDA LIMITED (FORMERLY KNOWN AS MAX BERMUDA LTD.) AND/OR MAX BERMUDA LTD., AND XL INSURANCE COMPANY PLC (FORMERLY KNOWN AS XL INSURANCE COMPANY LIMITED) AND/OR XL INSURANCE COMPANY LIMITED, Defendants

BEFORE: A.A. SANFILIPPO J.

COUNSEL: W.G. Scott, H. Afarian, D. Thomas and B. Mattallo, for the Plaintiff, TD Bank, N.A. S. Sasso, for a group of nine Defendant Lloyd’s Underwriters and Axis Specialty Insurance Company and/or Axis Specialty Limited D. Vaillancourt, for the Defendants, Lexington Insurance Company and the AIG Group of Defendants G. Gill, for the Defendant Allied World Assurance Company Ltd. R. Tinney, for the Defendant ARCH Insurance Company A. Crawley, R. Brush and C. McKibbin, for the Defendants Chubb Insurance Company of Canada and Liberty Mutual Insurance Company T. Galligan, for the Defendants Endurance Specialty, Houston Casualty Company, Markel Bermuda Limited (formerly known as Max Bermuda Ltd.), and/or Max Bermuda Ltd. and XL Insurance Company PLC (formerly known as XL Insurance Company Limited) and/or XL Insurance Company Limited

HEARD (By Videoconference): February 12, 2021

Endorsement

Background

[1] On November 24, 2020, the parties brought three motions:

(a) The Defendants brought a motion to compel the Plaintiff to provide answers to questions refused, under Rule 31.07 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Defendants’ Refusals Motion”).

(b) The Plaintiff brought a motion to compel answers to questions refused by certain of the Defendants, also under Rule 31.07, and to compel a further and continued right of examination of these Defendants (the “Plaintiff’s Refusals Motion”).

(c) The Defendants Lexington Insurance Company and the AIG Group of Defendants brought a motion for an Order for leave to examine a second discovery representative of the TD Bank, under Rules 31.03(2)(b) and 34.15(1) (the “AIG Motion for Second Discovery Representative”).

[2] By endorsement rendered that day, I ordered that these motions be heard by a Master: TD Bank v. Lloyd’s Underwriters, 2020 ONSC 7241. I directed, further, in accordance with Rule 50.13(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, that the lawyers for the parties attend a case conference before me to address the issues pertaining to the orderly development of these Motions for hearing.

[3] On January 15, 2021, I conducted a case conference in this action to address the issues pertaining to the development of the three motions pending for hearing before the Master, now scheduled for three days on March 8, 9 and 10, 2021 (the “Pending Motions”), as well as trial management issues pertaining to the trial scheduled in this action for September 13, 2021. The focus of that case conference was to narrow and refine the scope of the Pending Motions to ensure that they were capable of being heard within the three days that were scheduled before the Master. The parties requested the scheduling of a further case conference to advance this initiative further and requested that I be appointed as a case management judge in this action.

[4] The further case conference was scheduled, and conducted, on February 12, 2021. On February 11, 2021, at the request of the parties, Justice F.L. Myers, as delegate of the Regional Senior Justice, assigned this action into case management, under Rule 77.05(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and, in accordance with Rule 77.06(1) but subject to Rule 77.06(2), I was appointed case management judge. Due to the timing of Justice Myers’ Order, the lawyers were not aware of my appointment as case management judge until the case conference session of February 12, 2021.

A. Issues Addressed at the Case Conference

[5] The parties filed detailed case conference briefs that set out the issues subsequently addressed at the case conference. Importantly, the parties agreed that their collaborative discussions resulted in the narrowing of the Pending Motions so that they can be heard within the three days scheduled before the Master on March 8, 9 and 10 2021.

[6] The plaintiff raised four issues for consideration at the case conference: (i) the plaintiff sought to expand the Pending Motions to allow the plaintiff to advance a motion to seek answers to undertakings and questions refused at examinations for discovery conducted recently; (ii) the plaintiff sought reciprocity in the parties’ approach to evidentiary admissions said to be required for adjudication of the issues raised; (iii) the plaintiff proposed a pretrial determination on a point of law that was said to allow for efficiency in the gathering of evidence prior to trial; (iv) the plaintiff suggested that there was further progress that could be made in defining the categories of issues placed before the Master in the Pending Motions.

[7] The defendants submitted that there has been considerable work in cooperation by all parties in reducing the scope of the Pending Master’s Motions such that they can be heard in the three days scheduled and may, indeed, be capable of completion in two days. The AIG Motion for Second Discovery Representative may not prove necessary. The defendants submitted that it would not be productive to spend more time in attempting to reduce or refine the categories or groups of questions to be addressed in the Defendants’ Refusals Motion as this has been considerably advanced. The defendants submitted that any delay in response to undertakings is solely attributable to diversion of resources to preparation for the Pending Master’s Motions and to coordinating efficiencies in attending to their responses. The defendants submitted that the plaintiffs ought not to be permitted to expand the scope of the Pending Master’s Motions, and that continued case management is essential to the orderly preparation of this action for trial.

[8] The plaintiff explained that examinations for discovery of the following defendants were recently conducted: Chubb Insurance Company of Canada (“Chubb Canada”) and Liberty Mutual Insurance Company (”Liberty”) on October 27, 2020; AIG Canada on November 13, 2020, and; AIG Group of Companies (“AIG”) on December 10, 2020. The plaintiff stated, confirmed by counsel for these defendants, that none of the undertakings or questions refused arising from these examinations have been answered.

[9] Additionally, the plaintiff delivered written interrogatories to Chubb, Liberty and AIG on December 23, 2020. No answers to these written interrogatories have been provided by these defendants. And last, the plaintiff has pending an examination for discovery of Allied World Assurance Company Ltd. on February 23, 2021 and of the defendant Arch Insurance Company on April 1, 2021.

[10] The plaintiff asked to bring an additional motion, or to supplement the current Plaintiff’s Refusals Motion to seek an order for the answering of undertakings and questions refused in relation to the examinations for discovery conducted in the period from October 27, 2022 February 23, 2021. I declined to schedule this additional motion or to grant leave to supplement the current Plaintiff’s Refusals Motion for the following reasons: first, now that the parties have worked to ensure that the Pending Motions can be accommodated within the three days scheduled, this ought not to be compromised by the addition of a further or supplementary motion; second, the rulings made on the current Defendants’ Refusals Motion should inform the parties’ approach to the remainder of the undertaking and refusals issues that arise from other examinations, on similar topics in a similar context; third, there is insufficient time for the defendants to respond to any such further motion prior to March 8, 2021, and; fourth, the plaintiff stated that it is likely that a further Master’s motion will be required after the completion of all examinations and, if so, any further undertakings and refusals issues requiring determination by the Master ought to be consolidated into that single, final hearing.

[11] The defendants submitted that a further timetable is required to coordinate the parties’ preparation for the Pending Master’s Motions. These Motions were fully prepared for hearing on November 24, 2020, with complete records and factums. However, they have been considerably refined. I will implement further deadlines for the updating and filing of all materials by the moving parties, and the responding parties, to ensure that the Pending Master’s Motions are ready for argument on March 8, 9 and 10, 2021.

[12] The plaintiff requested leave to withdraw the Plaintiff’s Refusals Motion, without prejudice to its subsequent reinstatement on the grounds that it has been considerably reduced in scope through collaborative discussions. Also, considering my ruling that the plaintiff may not supplement the Plaintiff’s Refusal Motion at present, the plaintiff would rather consolidate it with any subsequent, omnibus undertakings and refusals motion that might be necessary after the completion of all examinations. I will permit the withdrawal of the Plaintiff’s Refusal Motion, without prejudice to its reinstatement.

[13] The plaintiff submitted that the defendants are not reciprocating in the evidentiary issues necessary to frame this action for trial. The defendants disagreed. Issues pertaining to the authenticity of documents, the proof of documents, and generally admissions for the purposes of trial can continue to be addressed by the parties as they continue with the evidence gathering stage of this action. All parties acknowledge the importance of timely response to admissions sought to ensure efficiency in preparing this action for trial.

[14] The plaintiff proposed the consideration of a pre-trial determination of a point of law. I was not satisfied that a pre-trial determination of an issue of law is appropriate at this stage of this action, in that it would “slice” the issues raised by the action unnecessarily (Malik v. Attia, 2020 ONCA 787 (C.A.), at para. 68), or that the proposed pre-trial determination would be proper to the extent that it is proposed to bind the trial judge. The plaintiff can consider this issue further, and request scheduling at another case conference, if the plaintiff considers it necessary to do so.

[15] The parties discussed the remaining steps necessary to prepare this action for trial, and identified the following: (i) completion of remaining examinations for discovery, targeted for April 30, 2021; (ii) possible further plaintiff’s Master’s motion to address undertakings and refusals, currently projected for July, 2021, with possible re-attendance for further examinations; (iii) the delivery of expert reports on the expert opinion evidence expected to be tendered at trial; (iv) pre-trial conference. In projecting basic timelines for each of these steps, it became clear to all that the currently scheduled trial date of September 13, 2021 was simply not realistic. There was no manner of scheduling that would allow this action to be ready for trial on that date. The expert report timetable alone would take the parties months beyond September 13, 2021. The defendants submitted that the trial date should be vacated and the plaintiff reluctantly concurred that the action could not be made ready for adjudication by September 13, 2021.

[16] As this action will not be ready for trial in September 2021, the September 13, 2021 trial date in this action shall be vacated.

[17] The parties may speak to the scheduling of a new trial date at the next case management conference. In preparation therefore, I will direct the parties to confer on the timetable required to prepare this action for trial, including the expert report timetable, so that a realistic trial date may be discussed.

B. Specific Case Management Directions

[18] On the basis of the issues addressed at the case conference, and having provided the parties with notice under Rule 50.13(6), I direct as follows:

(a) The Plaintiff’s Refusal Motion is withdrawn, without prejudice to its reinstatement;

(b) No party shall supplement or bring any further Master’s Motion on March 8, 9 and 10, 2021 except those currently scheduled for hearing, being the Defendants’ Refusals Motion and the AIG Motion for Second Discovery Representative. These motions shall proceed as scheduled on March 8, 9 and 10, 2021, according to the following timetable:

a. The moving parties shall deliver their final moving party motion materials (Records and Factum) by February 19, 2021, following all Practice Directions;

b. The responding party shall deliver its final responding party motion materials (Record and Factum) by March 1, 2021, following all Practice Directions;

c. The moving party shall deliver their Motion Confirmation Forms by March 1, 2021, confirming the filing of all motion materials and indicating the on-line storage folder for use by the Master.

(c) By April 1, 2021:

a. the Defendants Chubb and Liberty shall answer the undertakings provided during the examinations for discovery conducted on October 27, 2020;

b. the Defendant AIG Canada shall answer the undertakings provided on November 13, 2020;

c. the Defendant AIG shall answer the undertakings provided during the examination conducted on December 10, 2020;

d. the Defendants Chubb and Liberty and AIG shall answer the written interrogatories served on December 23, 2020;

e. the Defendant Allied World Assurance Company Ltd. shall answer the undertakings provided during the examination for discovery scheduled for February 23, 2021.

f. the Defendant Arch Insurance Company shall use best efforts to comply with the undertakings provided during the examination for discovery scheduled for April 1, 2021.

(d) The Plaintiff shall, by April 30, 2021, complete the examinations for discovery of the Defendants Endurance Specialty, Houston Casualty Company, Markel Bermuda Limited (formerly known as Max Bermuda Ltd.), and/or Max Bermuda Ltd. and XL Insurance Company PLC (formerly known as XL Insurance Company Limited) and/or XL Insurance Company Limited.

(e) The trial date scheduling in this action of September 13, 2021 is vacated.

(f) The next case management conference shall be conducted on May 6, 2021 at 3:00 pm, a time convenient to the lawyers for the parties and made available by the Court.

(g) The parties shall, by 1:00 pm on May 4, 2021, deliver a Case Management Conference Memorandum, of no more than 4 pages in length, outlining the status of this action and the issues to be addressed at the case management conference. Should the parties, or certain of them, agree on the content of the Case Management Conference Memorandum, they may file a joint written submission.

(h) Together with their Case Management Conference Memorandums, the parties shall deliver in draft, after having conferred on areas of agreement, the following:

a. A draft “Timetable for Service of Expert Reports”, prepared in accordance with section 67 of the Consolidated Practice Direction for Civil Actions, Applications Motions and Procedural Matters in the Toronto Region (“Consolidated Practice Direction”).

b. A draft “Certification Form to Set Pre-Trial and Trial Dates”, in accordance with section 61 of the Consolidated Practice Direction.

(i) The parties may bring forward to the next case management conference their request to schedule a trial date.

C. General Case Management Directions

[19] The purpose of case management is to prepare a case for adjudication or, if the parties should so choose, resolution, as promptly, efficiently and cost-effectively as possible, always mindful of proportionality. The parties should always be working on a step or steps that move the action toward trial, and always have planned the next step required in the path toward trial. The parties do not need to move urgently, absent special circumstances, but must commit to proceeding consistently and efficiently in advancing the case toward trial.

[20] In my view, case management is not about layering motion upon motion. Case Management is not about slicing a case into pieces and determining the issues by instalment, sporadically over time. Case management is designed to ready a case for full adjudication, in a manner that allows for the just, most fair, cost-efficient, effective and expeditious process to obtain a determination of all the issues raised by the action on their merits.

[21] Case conferences are designed to “provide an opportunity for any or all of the issues in the proceeding to be settled without a hearing and, with respect to any issues that are not settled, to obtain form the court orders or directions to assist in the just, most expeditious and least expensive disposition of the proceeding”: Rule 50.01. Case management conferences provide a forum for the parties to raise and address issues that impact and impede the orderly progression of an action to trial and foster an environment where the parties’ may accomplish their common objective of steadfastly and purposefully advancing this action toward full adjudication or, if they so choose, resolution.

[22] The parties and their counsel are expected to cooperate on procedural and scheduling matters to ensure that there is a fair and just process for all, consistent with Rule 1.04 and with the principles of proportionality, fairness and efficiency set out in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 28: “The principal goal remains the same: a fair process that results in a just adjudication of disputes.”

[23] Any party who seeks to address an important issue identified in this action between now and the next scheduled case conference of May 6, 2021 at 3:00 p.m., and who considers that an urgent case conference would assist in expeditious and efficient handling of any such issue, may request the scheduling of an urgent case conference by letter to my judicial assistant, with copy to all counsel, using the following protocol: (i) the party requesting the further case conference shall canvas with all other counsel their availability for a video Case Management Conference at 3:00 pm; (ii) the requesting party shall provide my judicial assistant with a list of three such dates on which all counsel are available at 3:00 pm; (iii) the requesting party shall provide my judicial assistant with a written submission, of no more than 2 pages in length, copied to all parties, setting out the status of this proceeding and detail of the issue that requires the urgent scheduling of a Case Management Conference.

[24] Broad application of Rule 50.13 will be used to address and resolve matters raised at case conference, in circumstances where this is possible. Counsel ought to expect that procedural orders and directions will be made at case conferences, in accordance with Rule 50.13(6), on informal notice of the issue to be addressed.

[25] The requirement of preparation, issuance and entry of a formal order is hereby dispensed with, in accordance with Rule 77.07(6).

JUSTICE A.A. SANFILIPPO Date: February 16, 2021