COURT FILE NO.: CV-16-1766 (Brampton)
DATE: 20210430
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LUCIA DERENZIS
Plaintiff
-and-
CORY SCOBURGH and LATOYA MCLEAN
Defendants
Ashu Ismail, for the Plaintiff
D. Keith Smockum, for the Defendants
Emma Gardiner and Lonny Rosen for the non-party, Gore Mutual Insurance Company
Heard: December 15, 2020 by video conference; additional written submissions received April 7, 2021 and April 12, 2021
Before: Chown J.
REASONS FOR DECISION
[1] This is a motion brought by the non-party Gore Mutual Insurance Company to quash four summonses issued under subrule 39.03(5). The plaintiff seeks to examine four witnesses in connection with the underlying motion, which is a motion brought by Gore to vary an order made under rule 30.10. The order requires Gore to produce certain records, some of which it does not want to produce.
[2] For the reasons that follow, I grant the motion and quash the summonses.
Background
[3] This motion is brought in a tort action commenced by the plaintiff Lucia Derenzis arising from a November 24, 2015 car accident.
[4] Ms. Derenzis’s accident benefits (AB) insurer is Gore. Her AB claims have been the subject of LAT proceedings.
[5] Ms. Derenzis and her son-in-law have also commenced an action against Gore, several of its employees and others (“the insurer misconduct claim”). In that action she is claiming multi-millions in damages including $50,000,000 against Gore “for the systemic predatory practice of staging insurer examinations.”
[6] A health assessment company and a private investigation company are also named as defendants in the insurer misconduct claim.
[7] In this action (the tort action), the defendants brought a 30.10 motion against Gore seeking a detailed order for production of records from Gore. Gore failed to respond to the motion. The 30.10 order was granted by Justice Doi on June 14, 2019.
[8] After receiving Justice Doi’s order, Gore brought a motion to vary it. The motion to vary has not been heard yet. The parties have been calling that motion “the primary motion” but I prefer the term, “the underlying motion” as that is a term commonly used in similar cases.
[9] The summonses in issue were served in connection with the underlying motion. The intended witnesses are all employees of Gore: Ms. Sevcik, the now former CEO and President; Mr. Ferrito, the now former Claims Transformation Manager; Ms. Beecraft, a claims supervisor; and Ms. Bethune, a senior claims advisor. These four individuals are also personally named as defendants in the insurer misconduct claim.
[10] This motion (the motion before me) was brought by Gore to quash those summonses. The parties have called this motion the secondary motion. I will just call it “this motion.”
[11] Ms. Derenzis then served summonses seeking to question witnesses in connection with this motion. Those summonses required the attendance of Mr. Rosen (counsel for Gore) and Mr. Jones, another Gore adjuster who was the affiant for Gore on the underlying motion.
[12] Gore then sought to amend its motion record in this motion to include the summonses issued to Mr. Rosen and Mr. Jones in the list of summonses to be quashed. After discussion with plaintiff’s counsel, Gore agreed that instead of amending its motion record in this motion, it would prepare a separate motion to quash the additional summonses. That motion has been referred to as the tertiary motion.
[13] Justice Mandhane heard the tertiary motion on September 17, 2020 and allowed the motion, quashing the summonses against Mr. Rosen and Mr. Jones.
Gore’s Position
[14] Gore argues that the plaintiff has not established a reasonable evidentiary basis to show that the witnesses it seeks to examine are in a position to provide relevant evidence. Gore says that in the underlying motion the issues are whether its failure to appear on the 30.10 motion occurred due to accident, mistake or insufficient notice; whether it moved forthwith after the order came to its attention; and whether the plaintiff will be prejudiced if the order is set aside or varied. Then, if these conditions are met, and if the court is willing to vary the order, the test for production of records under rule 30.10 will have to be revisited by the court. This will include consideration of the specific terms of the order.
[15] Gore says in its factum that the only documents which are at issue and which it does not want to produce are its internal correspondence and reports, its contracts with assessment companies, and its “text management notes,” which I understand are the claims handler’s notes as to the handling of the plaintiff’s AB claim. Gore says it will produce its text management notes, redacted for privilege and reserves, until December 4, 2018 and after that date if they pertain to certain issues in the LAT hearing.
[16] Gore asked for the opportunity to provide additional written submissions based on two recently released decisions: Yang v. Co-operators General Insurance Company, 2021 ONSC 1540 and Cura v. Aviva Insurance Canada, 2021 ONSC 2290. I do not find these cases relevant or helpful to the issues in this motion.
The Plaintiff’s Position
[17] Because I am granting the motion, I will set out the plaintiff’s position in detail.
[18] It is how the order will be varied that was the focus of the submissions on behalf of the plaintiff in oral argument. Ms. Ismail emphasized that Gore is seeking very specific changes to the language of Justice Doi’s order. She argued that without examination of the witnesses, the plaintiff is unable to understand the significance of the sought-after changes.
[19] By way of example, the plaintiff wants production of the communications between Gore and the assessors who examined her at the request of Gore. The existing 30.10 order of Justice Doi requires Gore to produce:
All instructions (directly or imposed by contract), information and documentation that have been provided to intermediaries, related to assessments/reports to be conducted or generated by regulated health professionals, but not the reports that are generated.
[20] Gore proposes to change this part of the order to read as follows:
All records of communication between Gore Mutual and regulated health professionals or assessment companies retained by Gore Mutual to conduct examinations under section 44 of the Statutory Accident Benefits Schedule ("SABS”), and all information regarding billing and payment to these health professionals and assessment companies, but not the contracts between Gore Mutual and the assessment companies.
[21] One difference is that under Gore’s proposed order, it would not have to produce any instructions “imposed by contract” as required by the current order. This means Gore would not have to provide its contracts with assessment providers (or any part of those contracts), assuming such contracts exist, whereas under the existing order, Gore would have to provide these contracts, to the extent they include instructions.
[22] For surveillance, the current 30.10 order requires Gore to produce:
All surveillance reports, billings, instructions to private investigation companies (Rapid Loss Control and Whitehall Bureau of Canada Ltd.), copies of the full raw video footage from the recording source, clear indications of whether footage has been deleted or otherwise permanently destroyed.
[23] Under the varied order proposed by Gore, Gore would be obliged to produce:
All surveillance reports from private investigation companies (Rapid Loss Control and White Hall Bureau of Canada Ltd.), copies of all video footage provided to Gore Mutual Insurance Company by the private investigation companies, invoices submitted by private investigation companies, and a copy of any record of communications between Gore Mutual and the private investigation companies.
[24] One difference is that the existing order requires Gore to produce “the full raw video footage from the recording source,” whereas Gore’s proposed varied order would only require them to produce what was submitted to Gore by the investigation companies. The plaintiff did not argue that cross examination was needed to better understand this difference.
[25] Also, instead of producing “instructions” to the private investigator, Gore wants to produce “a copy of any record of communications between Gore Mutual and the private investigation companies.” The latter appears broader than the former. That is, at first blush anyway, it appears that Gore is prepared to produce more than just its instructions. However, if there are contracts between Gore and its private investigators which contain standing instructions, those would not be captured by Gore’s proposed varied order.
[26] The plaintiff’s factum and motion record contain other examples of areas they want to ask the Gore representatives about. These include questions relating to whether certain documents exist. The plaintiff has received production of some documents from Gore which are not in dispute. However, the materials contain examples of documents which may exist and which the plaintiff claims have not been produced.
[27] The plaintiff also wants to ask about Gore’s procedures which in theory may reveal additional sources of documentation.
[28] For instance, the plaintiff seeks to examine Ms. Bethune and Ms. Beecraft on how private investigators were instructed, directly or indirectly, and the records that would exist. How did private investigators submit invoices? What invoices from private investigators were paid? Who within the company could or would request that surveillance be conducted? How were surveillance requests documented?
[29] The plaintiff also seeks to examine Ms. Bethune and Ms. Beecraft on how information was communicated to assessment agencies and regulated health professionals that conducted section 44 examinations in this matter? There is evidence that medical records were uploaded via portals. The plaintiff’s factum asserts that there is “lack of existence of invoices from regulated health professionals being received by Ms. Bethune during her time as an adjuster.” It appears the plaintiff seeks to ask why certain invoices have not been produced.
[30] Another area of examination in the intended examinations is an attendant care examination assessment report in which it was stated that the “purpose” of the assessment was to determine “whether the insured person sustained an impairment as a result of the accident (other than a WAD I or WAD II impairment) that necessitates the services of an aide or attendant to assist with personal care activities.” Mr. Winkworth argues in his affidavit that “Based on the lack of production by Gore Mutual of any specific instructions to Ms. Singh, it is reasonable to believe that her instructions on what she was to assess are contained within the terms of her contract.”
[31] The plaintiff argues that it is significant that the phrase “other than a WAD I or WAD II impairment” appears in the “purpose” section of the report. The plaintiff submits that it is inappropriate to exclude such impairments from consideration, and plaintiff’s counsel has found no documentary evidence to explain the inclusion of this phrase in the assessor’s instructions.
[32] The summons to witness for Ms. Sevcik (the now former President and CEO of Gore) requires that she bring, among other things, copies of the attestations that she was required to sign on behalf of Gore Mutual annually and submit to FSCO. In her factum, the plaintiff says that Ms. Sevcik is “positioned to offer best evidence as to the meaning and intent” of the contracts the plaintiff believes exist between Gore and the assessment companies it uses. The plaintiff asserts that, having signed these attestations, Ms. Sevcik was required to understand Gore’s obligations under the Insurance Act as well as be informed of instances where Gore has or may have failed to comply with its obligations under the Act, including instances where Gore failed to comply with the requirements set out by the SABS under section 44. Section 44 permits an insurer to require an insured person to be examined by regulated health professionals or assessors with expertise in vocational rehabilitation, “to determine if an insured person is or continues to be entitled to a benefit.” The plaintiff’s factum also says that, having signed the attestations annually, Ms. Sevcik should know whether Gore has “sought the modification of their assessor's reports” and whether Gore has “asked third parties to withhold their insured's personal information from them despite their obligations under legislation to provide same.”
[33] The summons to Ms. Sevcik also requires her to bring copies of contracts that Gore may have with assessment companies. (That is, the same contracts which Gore objects to producing and which it seeks to have excluded from the ambit of Justice Doi’s order.)
[34] Ms. Ismail acknowledged in argument that Ms. Sevcik is not necessarily needed as a witness. The plaintiff will be content to examine another witness who has familiarity with the contracts between Gore and its assessment companies.
[35] The thrust of the plaintiff’s position is that the precise wording of the variations to Justice Doi’s order that Gore seeks are or may be significant, and prior to the hearing of the primary motion, she wants to better understand what is motivating the requested changes, and what the practical difference will be between the existing wording of the order and the proposed wording of the varied order. In other words, she wants to understand what records they would have received under the existing order that they will not receive under the proposed varied order. She says the information will be relevant to the motion judge who may be faced with picking between the current wording and the proposed varied wording without being able to understand the practical consequences of each. The plaintiff says that the only way, or at least the best way, to obtain this information is through cross examination.
Legal Framework
[36] Counsel for the parties have referred me to Schreiber v. Mulroney (2007), 87 O.R. (3d) 643, 2007 CanLII 82797 (ON SC) as a leading case on the test to be considered in a motion to quash a summons issued under subrule 39.03(5). Counsel for Gore also referred me to Elmaati v. Canada (Attorney General), 2013 ONSC 3176 and Clarke v. Madill, 2001 CanLII 28089 (ON SC). I have reviewed these decisions and many other cases which deal with whether a summons should be quashed.
[37] A chronological list of leading cases which have been decided by or heavily relied on by the Court of Appeal or the Divisional Court sitting in appeal would include:
• Rene v. Carling Export Brewing & Malting Co., 1927 CanLII 382 (ON SC).
• Re Canada Metal Co. Ltd. and Heap (1975) 1975 CanLII 675 (ON CA), 7 O.R. (2d) 185 (C.A.).
• Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1995), 1995 CanLII 7258 (ON SC), 27 O.R. (3d) 291 (Gen. Div.).
• Payne v. Ontario Human Rights Commission, 2000 CanLII 5731 (ON CA).
• Ontario Federation of Anglers & Hunters v. Ontario (Ministry of Natural Resources), 2002 CanLII 41606 (ON CA) (“OFAH”).
• Elmaati v. Canada (Attorney General), 2013 ONSC 3176.
• PowerServe Inc. v. Ontario College of Trades, 2015 ONSC 857.
[38] The most authoritative statement of the test to be applied is the statement of the Court of Appeal in OFAH:
[A]n examination under rule 39.03 is appropriate when the evidence sought is relevant to any issue raised on the main application. 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. [Citations omitted.]
[39] To this must be added the proviso that the examination must not be used for an ulterior or improper purpose and must not constitute an abuse of process (OFAH, supra, at para. 57; Payne, supra, at para. 162).
[40] In Elmaati, supra, at paras. 61 to 68, Justice Perell provided a comprehensive summary of the principles governing a motion to quash a rule 39.03 summons. This summary was adopted verbatim by a three-member panel of the Divisional Court in Powerserve, supra, at para. 15. With citations omitted, those principles are:
• The case law establishes that where a party serves a summons to examine a witness for a pending motion or application, an opposing party may move to quash the summons for the examination of the witness on the ground that the evidence sought is not relevant to the application or motion or that the examination or the underlying proceeding would amount to an abuse of process…
• If the summons to the witness is challenged, the party seeking the examination should be prepared to show that the evidence is relevant to the pending application or motion and that the party to be examined is in a position to provide the evidence…
• If the party seeking the examination cannot satisfy the relevancy and evidentiary screening, then the summons is regarded as a fishing expedition and an abuse of process…Similarly, if the examination is being used for an ulterior or improper purpose, or if the process is itself an abuse, it will be set aside on that ground…
• An examination is improper if the purpose of the examination is to prematurely inquire into a party's defences or otherwise commence the discovery process…
• In considering whether to strike a summons to a witness, the court will consider the nature and grounds for the application to determine what are the issues for which the examination is in aid…
• Once the party seeking to conduct the examination shows that the proposed examination is about an issue relevant to the pending application and that the party to be examined is in a position to offer possibly relevant evidence, it is not necessary for the party to go further and show that the proposed examination will provide evidence helpful to that party’s cause…
• If the evidence would be possibly relevant to the issues, the burden is on the party challenging the summons to show that the examination or the underlying application is an abuse of process…
• In considering whether to quash a summons, the court may consider the merits of the underlying proceeding…
[41] Justice Kiteley in Ramos and Kharbar v. The Independent Police Review Director, 2012 ONSC 7347 at para. 14 described the test as follows:
A summons may be quashed when (a) the proposed witness has no relevant or admissible evidence; (b) the proposed evidence is not necessary, or is extrinsic to the main evidence; or (c) the summons is an abuse of process, such as for an ulterior or improper or tactical purpose.
Reasonable Evidentiary Basis that the Witness has Relevant Evidence
[42] Courts have generally set the bar low for what constitutes a “reasonable evidentiary basis” that the examination would be conducted on issues relevant to the underlying motion or application. In Payne, the majority decision opposed the minority view that there should be a “heavy onus.” The majority said at para. 170 that this kind of language was “inconsistent with Canada Metal, supra, and a long line of cases that have followed.”
[43] Examples showing how low the threshold can be include:
a. Heslin v. Verbeeten, [2001] O.J. No. 1602 at para. 7, where Justice Cullity merely required that the evidence sought to be adduced by the examination was “potentially relevant”;
b. Manulife Securities International Ltd. v. Société Générale (2008), 90 O.R. (3d) 376, 2008 CanLII 13367 (ON SC) (Sup. Ct.) at para. 7, leave refused 2008 CanLII 19790 (ON SCDC), where Justice C. Campbell found it enough that there is “a reasonable possibility that some of the evidence may have some relevance”; and
c. Khan v. Lee, 2012 ONSC 4363, where an assertion in the defendant’s factum that the way the statement of claim was drafted failed to permit the defendant to respond to the allegations was a sufficient evidentiary basis to permit the plaintiff to examine the plaintiff on that assertion.
[44] In this motion, the plaintiff has demonstrated on a reasonable evidentiary basis that parts of her intended examinations would be conducted on issues that are relevant to the pending application. The “possibly relevant” or “potentially relevant” standard is met for questions directed towards understanding the difference between the order as its currently stands and Gore’s proposed wording for the order.
Nature and Grounds of the Underlying Motion
[45] One of Justice Perell’s principles reviewed above is that the “nature and grounds” of the underlying motion are considered “to determine what are the issues for which the examination is in aid.” In referring to the “nature” of the underlying motion, I do not think Justice Perell was referring to the importance of, or the stakes in the underlying motion. Rather, he is referring to the issues in it, so that the relevance of the intended examination can be assessed with reference to those issues.
[46] With that said, there is a weak trend among the cases that where the stakes in the underlying motion or application are high, such as in a summary judgment motion or dispositive application, the courts are more likely to uphold a rule 39.03(5) summons, whereas in a pleadings or discovery motion, the courts are somewhat more likely to quash it. This makes sense, bearing rule 1.04(1) and 1.04(1.1) in mind. However, this may be a result of the application of the law and is not a rule that Justice Perell implied.
Necessity
[47] In Transamerica, supra, Justice Sharpe held that the party seeking the examination is not required to show “that the proposed examination will yield evidence helpful to that party’s cause.” This runs counter the suggestion that there is any requirement that the examination be “necessary.”
[48] However, Ramos, supra, is one of many cases where the court has quashed a summons at least in part on the basis that the examination was unnecessary.
[49] In Lauzon v. Axa Insurance (Canada), 2012 ONSC 6730, Justice Glithero concluded that the examination was “unlikely to produce evidence relevant to the main motion, and that it is unnecessary.” He said, “The evidentiary base must demonstrate that the examination is likely to produce evidence which enhances the record to be considered on the return of the motion.” He went on to hold at para. 35 that the evidence of the proposed witness was “unnecessary as the plaintiff can get that information from its own appraiser.” The Court of Appeal upheld Justice Glithero, although the decision to quash the summons was not appealed: Lauzon v. AXA Insurance (Canada).
[50] Master Haberman in Coburn v. Barber, 2010 ONSC 3342, at para. 97 said the wording of the test under rule 39.03 “was intended to ensure that examinations of this kind are reserved only for those cases where they will likely have the effect of enhancing the record that comes before the court when the underlying motion is heard.”
[51] In fact, it appears that necessity has always been a factor the courts have weighed. The outcome of the 1927 decision in Rene, supra, a pleadings motion, was that the summons was quashed. Justice Orde said that the power to summons for a motion should not be used “as an instrument to harass or annoy others unnecessarily.” [Emphasis added.]
[52] The other end of the spectrum on the question of “necessity” is exemplified in Seelster Farms Inc. v. Ontario, 2017 ONSC 4756. There, the underlying motion was a motion for summary judgment brought by the defendant. One of Justice Emery’s observations, at para. 21, was that the nature of the underlying motion is relevant. He went on to observe, at para. 89:
When Ontario brought its motion for summary judgment, it unleashed a set of rights, including the right to examine a non-party for relevant information on a pending motion into play. The plaintiffs are exercising rights they are entitled to exercise in responding to Ontario’s motion for summary judgment. It is not an abuse of process to do so. Now that Ontario and OLG have brought motions to drive the plaintiffs from the judgment seat, it is not only open, but necessary for the plaintiffs as responding parties to put their best foot forward and to produce all evidence that could or should be available at trial.
[53] Justice Emery declined to quash 9 of the 11 summonses that had been issued.
[54] I conclude that the “nature and grounds” of the underlying motion or application in a broad sense is an important consideration that is weighed when deciding whether a rule 39.03 summons should be quashed. Where the evidence will be irrelevant, that determines the issue, but there can be degrees of relevance. Where the examination is unnecessary, or not useful, or where it will not enhance the record in the underlying motion, bearing in mind the issues in the underlying motion, this will weigh in favour of quashing the summons.
[55] In this case, the plaintiff claims her main concern in the underlying motion is what exactly does Gore have in its records that it does not want to produce and that it will not need to produce if the order is varied. This is more relevant in the insurer misconduct claim than in the motion.
[56] Gore has explicitly provided its answer to this concern in its factum in this motion (see paragraph [15] above). Of course, the plaintiff is not required to accept Gore’s factum as accurate. However, there is little prospect that the four witnesses the plaintiff proposes to examine will have more information than Mr. Jones who can be examined under rule 39.02 on his affidavit filed in the underlying motion.
[57] In addition, the underlying motion is a motion to vary a production order and will not be dispositive of the tort action. Proportionality concerns do not assist the plaintiff’s position.
[58] Further, the relevance of the documents in issue is limited. To take the example of the contracts that Gore may have with assessment companies, these contracts are only relevant in the tort action to the extent that the AB assessments are relied on in the tort action, and then only on the issue of the credibility of the AB assessments.
[59] Finally, it does not appear that the intended examinations will enhance the record for the underlying motion. The intended examinations appear unnecessary. For example, whether records were transmitted through a portal or by some other method is perhaps going to help assess whether production has been comprehensive, but the question is of trifling relevance to the motion judge. The same is true of questions about how investigators were paid or who within Gore requested the surveillance. These details will not enhance the record before the motion judge.
Abuse of Process
[60] A summons which permits a party to compel an examination in a motion or application can be used in ways that are an abuse of the court’s process. Justice Perell noted in Elmaati that the examination may not be a fishing expedition or used to prematurely inquire into a party's defences or otherwise commence the discovery process. The examination cannot be used for an ulterior, improper or tactical purpose or to conduct a general discovery (Payne, supra, at para. 165) or discovery of a non-party for matters not connected to the underlying motion or application: Transamerica, supra; Schreiber, supra, at para. 13.
[61] An examination which will involve the very information or documents that are a live issue in the underlying motion will tilt towards an abuse of process: Clarke v. Madill(2001), 2001 CanLII 28089 (ON SC), 57 O.R. (3d) 730; Curtis International Ltd. v. Stripp, [2003] O.J. No. 516.
[62] Courts have held that it is for the examining party to select the witnesses, and it is not an abuse of process if the witness selected will have relevant knowledge even if others might have better knowledge. However, it may become an abuse of process if a party subsequently summonses other witnesses that it should have summonsed in preference: Iona Corp. v. Aurora (Town) (1991), 1991 CanLII 7278 (ON SC), 3 O.R. (3d) 579 (Gen. Div.) And in Elmaati, to prevent the abuse that can arise from duplicative examinations, Justice Perell ordered that a proper ground for objecting to questions would be that the question was already answered on the examination of a previous witness.
[63] In this case, the intended examinations appear to be aimed at the insurer misconduct claim as opposed to at the tort action. Indeed, the plaintiff’s position in the underlying motion appears to be aimed at the insurer misconduct claim and not the tort action. The summonsed individuals are all named individual defendants in the insurer misconduct claim. The intended examinations appear to be an attempt at examination of a non-party in this action (the tort action) or an attempt at advance discovery in the insurer misconduct claim.
[64] The plaintiff is entitled to examine Mr. Jones pursuant to rule 39.02. The witnesses who have been summonsed will not be in a better position to provide answers to the relevant questions the plaintiff intends to ask. Mr. Jones is an adjuster with Gore. He has had carriage of the plaintiff’s AB claim since May of 2018. He is among the individual defendants who have been named in the insurer misconduct claim. It is not the case that Gore has cherry picked a litigation mouthpiece who is disconnected from the events as its deponent for the affidavit in the underlying motion.
[65] In general, the examining party gets to select its witness in a rule 39.03 examination, and I recognize that that right is not available in a rule 39.02 cross examination, but that does not change character of the intended examinations. The ground that plaintiff’s counsel wants to cover in the intended examinations is relevant to the insurer misconduct claim, but not very relevant to the underlying motion.
[66] The intended examinations also appear to be duplicative in that multiple witness will have similar information.
[67] Finally, the intended examinations will to some extent involve the very information or documents that are a live issue in the underlying motion (see paragraphs [15] and [33] above).
[68] For these reasons, the examinations appear to be an attempt to abuse the court’s processes.
Disposition
[69] This motion is granted. The summonses are quashed.
[70] If the parties cannot resolve the issue of the costs of this motion and the motion before Justice Mandhane, they may arrange a 20 minute 9:00 AM videoconference through my judicial assistant. My assistant is to be contacted within ten days about the arrangements for the hearing or there shall be no order as to costs. Any supporting materials (such as costs outlines or dockets) that any party wishes to rely on for the hearing shall be exchanged and delivered by email to my assistant five days before the hearing, and reply materials two days before the hearing.
“Justice R. Chown”
Released: April 30, 2021