Keedi et al v. The Wawanesa Mutual Insurance Company et al, 2021 ONSC 3650

COURT FILE NR. CV-18-78330

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: MATTHEW KEEDI and DANI KHOURY, Plaintiffs

AND:

THE WAWANESA MUTUAL INSURANCE COMPANY, CANADA BROKERLINK INC. and CANADA BROKERLINK (ONTARIO) INC., Defendants

BEFORE: Master Kaufman

COUNSEL: David Cutler, for the Plaintiffs

Douglas Treilhard, for the Defendants CANADA BROKERLINK INC. and CANADA BROKERLINK (ONTARIO) INC.

HEARD: May 18, 2021

REASONS FOR DECISION

1The defendants, Canada Brokerlink Inc. and Canada Brokerlink (Ontario) Inc. (“Brokerlink”) bring this motion to amend their statement of defence to include a counterclaim against the plaintiff Dani Keedi. The plaintiffs do not oppose the proposed amendments but ask that the defendants’ representative attend a further brief virtual examination for discovery to answer questions on the subject matter of the proposed counterclaim and newly produced documents.

2For the following reasons, the defendants’ motion to amend their defence to include a counterclaim is allowed and the plaintiff shall be entitled to conduct brief examinations, not exceeding 45 minutes.

Background

3This action is in negligence against an insurance broker. The plaintiffs argue that the defendants failed to ascertain their insurance needs, which resulted in the plaintiff Khoury not being covered for a theft of $60,434.91 worth of personal property.

4This is a simplified action. The parties agreed to a discovery plan which limited discoveries to 2 hours. The discovery plan also addressed the scope of documentary productions, which included “all documents respecting Brokerlink’s practices and standards […]”.

5The examinations for discovery were held on April 2, 2019. The defendants say that the plaintiffs exhausted their two hours, but the plaintiffs point out that a significant portion of the examinations were spent listening the telephone recordings the defendants produced.

6A mediation was held on June 2, 2020 and the action against the defendant Wawanesa was dismissed approximately one month later.

7Brokerlink provided answers to its undertakings between September 2020 and April 2021. Brokerlink produced 50 new documents, but took the position that most of them were not relevant. Among the newly produced documents was the Code of Conduct of the Registered Brokers of Ontario (the “Code of Conduct”).

Position of the parties

8The plaintiffs contend that they require a further 90 minutes of discovery to ask questions about the counterclaim and the newly produced documents. They have listed the areas of inquiry they wish to explore. The majority relate to the Code of Conduct.

9Brokerlink opposes the plaintiffs’ request for further discovery for three main reasons. First, they have exhausted their two hours of discovery under the simplified rules. Second, the discovery plan precludes further discovery. Thirdly, the proposed discoveries would be pointless as the undertakings and the counterclaim do not give rise to legitimate questions.

10Rule 76.04(2)¹ limits the parties’ oral examinations for discovery to three hours, regardless of the number of parties or other persons to be examined. When these parties held their examinations for discovery in April 2019, the limit then was only two hours.

11Unlike Rule 31.05.1 (which limits oral discoveries to 7 hours in regular actions), Rule 76.04(2) does not provide that the time limit may be extended on consent or with leave of the Court. The defendants concede that the Court has jurisdiction to extend the two-hour limit. Indeed, Rule 2.03 provides that the Court may, only and where necessary in the interest of justice, dispense with compliance with any rule at any time. Further, Rule 3.02 allows the Court to extend any time prescribed by these rules on such terms as are just. The defendants argue that Rule 76 aims to streamline claims of relatively modest value, to reduce legal costs and to maintain proportionality. The defendants contend that the Court should not undermine these important objectives by extending the time limit without legitimate reasons. I agree.

12The defendants argue that the proposed areas of questioning are neither legitimate nor necessary. They argue that the plaintiffs have already thoroughly covered these areas or could have asked questions on these topics when the discoveries were initially held. They add that Mr. Keedi’s alleged negligence has always been an issue (the Statement of Defence included allegations that Mr. Keedi was contributorily negligent) and that the facts supporting the proposed counterclaim derive solely from the plaintiffs’ evidence.

Disposition

13The defendants make cogent arguments; I agree with them that there do not appear to be good reasons to examine on the allegations contained in the counterclaim, which are based on the plaintiff’s own evidence. Notwithstanding Mr. Treilhard’s able submissions, the Court is not persuaded that a limited right for additional discoveries should be refused. The Code of Conduct should have been produced pursuant to the parties’ discovery plan, which required production of Brokerlink’s practices and standards. The defendants argue that the Code of Conduct was available online, albeit not the version that applied at the relevant time. Even if there were no material changes between these two versions, as the defendants allege, the plaintiffs could not have been aware of that when they conducted their examinations. Moreover, the parties’ documentary discovery obligations are to conduct a diligent search of their records and list all documents relevant to any matter in the action in their possession or control. Rule 30 does not require parties to scour the internet for publicly accessible documents the other party may have omitted.

14Mr. Cutler asked at the very outset of his examination for discovery if there was “a code of conduct that applies – or standards of practice that apply to registered insurance brokers in Ontario”. The defendants’ representative answered “yes” but could not tell “off the bat what they are”. The defendants gave an undertaking, and provided the Code of Conduct on September 25, 2020, over 17 months later.

15I am satisfied that, had the Code of Conduct been provided in advance, the plaintiffs would have asked questions about it and this motion could have been avoided. In my view, the defendants’ compliance with this Code of Conduct and any reasons for derogating from its requirements (if any) are relevant and legitimate areas of inquiry that the plaintiffs did not explore because they were not provided with this document in advance.

16I will grant the plaintiffs a further 45 minutes of examinations. This short additional time will allow the plaintiffs a reasonable opportunity to ask questions they did not ask relating to the Code of Conduct while respecting Rule 76’s objective of containing costs. I choose not to restrict the scope of the plaintiffs’ examination to questions on this document however. They may focus on the areas of enquiry they consider most relevant in the limited time allotted.

17Accordingly, the defendant’s motion to amend their defence to add a counterclaim is allowed and the plaintiffs are entitled to a further 45 minutes of examinations for discovery.

Costs

18The plaintiffs have incurred $5,830.80 in costs and disbursements, and the defendants $7,745.02 (actual rates). These sums represent a significant portion of this claim’s value. I agree with Mr. Cutler’s opening remarks at this motion, that it would have been more efficient and less costly to simply proceed with the plaintiffs’ requested additional discoveries rather than schedule and argue this motion. The parties have spent a combined $13,575 on this motion, which represents approximately 22% of the value of this simplified procedure claim.

19Rule 57.01 of the Rules of Civil Procedure sets out the factors a court may consider when deciding costs but the court’s authority under this rule remains discretionary. The modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants.² In 394 Lakeshore Oakville Holdings Inc. v. Misek,³ Perrell, J. identified two further purposes: (1) to facilitate access to justice, including access for impecunious litigants; and (2) to discourage frivolous claims and defences.

20This is a simplified action of relatively modest amount. The Court is of the view that both parties incurred fees on this motion that were disproportionate to the amount claimed in the proceeding. Recent amendments to Rule 76 caps costs awards at $50,000 after trial, regardless of what the parties incur. While there is no equivalent cap applying to motions within simplified rules, the Court should encourage a culture of proportionality and costs containment. Rule 76 aims to curb the crippling costs of litigating smaller claims, and thereby enhance access to justice. These objectives would be undermined if the court routinely sanctioned large costs awards relative to the amounts at issue in a claim. Moreover, Rule 57.01(a) requires the Court to consider the amount claimed in the proceeding and Rule 1.04(1.1) requires the Court to make orders that are proportionate to the importance and complexity of the issues and to the amount involved in the proceeding.

21Here, the plaintiffs were more successful than the defendants on the motion. I have also concluded that the motion could have been avoided had the Code of Conduct been produced before discoveries. The principle of indemnity requires me to compensate the plaintiffs for some of the legal expenses incurred.

22Based on the foregoing, I fix costs at $2,000, all-inclusive, payable by the defendants to the plaintiffs within 30 days.

Master Kaufman

Footnotes

1. 1Rules of Civil Procedure, RRO 1990, Reg. 194.
2. 2Fong v. Chan, 1999 2052 (O.C.A.) at para 22.
3. 32010 ONSC 7238, at para 10.