Court File and Parties

COURT FILE NO.: CV-18-74

DATE: 2021/08/03

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Nicholas Skoblenick and Luba Skoblenick, Plaintiffs

AND:

Aviva General Insurance Company, Defendant

BEFORE: Justice D.A. Broad

COUNSEL: Cornelius A. Brennan, for the Plaintiffs

Brandon Cook, for the Defendant

HEARD: July 6, 2021

ENDORSEMENT

Background

[1] The plaintiffs are the owners of a residential property in Waterford, Ontario and were insured under a fire insurance policy issued by the defendant effective January 1, 2014 and renewed annually thereafter. On or about March 22, 2017 the plaintiff suffered fire damage to the property and made a claim for coverage under the policy in respect of the damage sustained by the residence.

[2] Following an investigation, the defendant took the position that the plaintiffs had knowingly and materially misrepresented the insured risk by not advising the defendant that the property had sustained a fire loss in August 2012 and denied coverage under the policy.

[3] The plaintiffs commenced the within action by Notice of Action issued March 21, 2018. They subsequently served and filed a Statement of Claim on April 19, 2018. The defendant served a Statement of Defence on October 1, 2018.

[4] Counsel for the parties scheduled examinations for discovery on June 10 and 11, 2020. The June 2020 discoveries were adjourned and were rescheduled to proceed on August 18 and 19, 2020. The parties disagree on the reason for the rescheduling of the June 2020 discoveries. Neither party seeks any relief arising from the adjournment of the June discoveries and it is therefore not necessary to make a finding on the reason for the adjournment of the June discoveries.

[5] On August 14, 2020, the plaintiffs’ counsel telephoned counsel for the defendant to advise that he would be unable to attend the discovery scheduled for August 18 and 19, 2020 for personal reasons. Counsel exchanged correspondence respecting the cancellation on August 14 and 17, 2020. Counsel for the defendant advised that the defendant had incurred costs resulting from the cancellation. Counsel for the plaintiffs apologized for the cancellation and advised that the discoveries should be rescheduled as soon as possible. By letter dated September 23, 2020 counsel for the defendant requested payment of costs thrown away in respect of the cancelled discoveries in the sum of $1,000, failing which a motion would be brought for that relief. Counsel for the plaintiffs did not respond to this correspondence.

[6] On September 8, 2020, discoveries were rescheduled for November 2 and 3, 2020, with the plaintiff Luba Skoblenick to be examined on November 2 and a representative of the defendant on November 3, 2020.

[7] After commencing the examination of Luba Skoblenick counsel for the defendant aborted the examination and cancelled the examination of the representative of the defendant scheduled for the next day.

[8] Counsel for the defendant put on the record his reasons for aborting the examinations for discovery as follows:

1. the plaintiff Luba Skoblenick was not prepared for the discovery as she had not reviewed the defendant’s documents referred to in its Affidavit of Documents; and

2. the plaintiffs had failed to provide any damages documents in support of their claim.

[9] Counsel for the defendant took the position that, without the plaintiff’s documents on damages, the defendant was unable to obtain the evidence necessary to defend the plaintiffs’ claim. Counsel for the defendant stated that he was adjourning the discoveries to move for directions of the court and to seek costs thrown away for the August and November 2020 discoveries.

The Motions

[10] On February 16, 2021, the defendant brought a motion seeking the following relief:

(a) an order for costs thrown away as result of the discoveries that were unilaterally cancelled by the plaintiff’s on August 18 and 19, 2020;

(b) an order for costs thrown away as result of the aborted discoveries on November 2, 2020;

(c) an order compelling the plaintiffs to re-attend at their examinations for discovery at their own expense;

(d) an order for directions with respect to the conduct of the examination of the plaintiffs; and

(e) an order for costs against the plaintiffs’ counsel, personally, for costs thrown away as result of the cancellation of the August 2020 discoveries.

[11] On March 12, 2021, the plaintiff’s brought a cross-motion seeking the following relief:

(a) an order that the defendant be produced for examination forthwith at its expense;

(b) an order that the defendant has completed its right to examination of the plaintiffs;

(c) striking the Statement of Defence as result of the defendant’s refusal to produce a representative on June 10 and 11, 2024 for discovery and further by refusing to produce a representative of the defendant on November 3, 2020.

[12] During submissions, counsel for the plaintiffs abandoned their claims that the defendant has completed its right to examination of the plaintiffs and to strike the Statement of Defence. The plaintiffs seek only an order that a representative of the defendant attend to be examined for discovery.

[13] The parties agree that examinations for discovery should be scheduled and that the plaintiffs and a representative of the defendant should be ordered to reattend to be examined.

[14] The remaining issues for determination are therefore the defendant’s claims for costs thrown away of the August and November discoveries and its request for directions respecting the conduct of examinations for discovery.

August Examinations for Discovery

[15] The defendant filed a Bill of Costs setting forth costs alleged to have been thrown away in respect of the adjourned August examinations for discovery on a partial indemnity basis in the sum of $864, on a substantial indemnity basis in the sum of $1,080 and on a full indemnity basis in the sum of $1,440, based on time expended of 4.5 hours.

[16] The Bill of Costs describes the attendances included in this amount as “discussions with client and counsel, including reports, telephone calls and meetings, review Affidavits of Documents and Schedule “A” productions of all parties; prepare for examinations for discovery.” The time expended to “prepare for examinations” is not broken out.

[17] Counsel for the defendant Mr. Lui, in his affidavit in support of the motion, did not particularize the basis upon which “costs thrown away” are claimed – in particular, what portion of the costs incurred to prepare for the examinations in August had to be duplicated for the November examinations for discovery.

[18] Subsection 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides that the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[19] In the case of Nelson v. Chadwick, 2019 ONSC 4544 (S.C.J.) Verbeem, J. at para. 27 provided a useful summary of the principles to be considered in relation to a claim for costs thrown away as follows:

Costs thrown away is a request for payment of a party’s costs for wasted trial preparation including preparation that will have to be redone as a result of the trial adjournment, and are generally payable on a full or substantial recovery basis: see Pittiglio v. Pittiglio, 2015 ONSC 3603, at para. 5. An award of “costs thrown away” is not designed to penalize a party who seeks, or is responsible for, an adjournment of the trial, but rather to indemnify a party for the wasted time incurred for trial preparation that was stripped of its value as a result of a subsequent adjournment or mistrial: see Graziano v. Ciccone, 2017 ONSC 362, at para. 8. The assessment of “costs thrown away” is an intuitive exercise that is not performed with exacting precision. The court is required to carefully review a party’s bill of costs to determine, intuitively, what portion of the trial preparation or work falls within the scope of “wasted time”: see Stadnyk v. Dreshaj, 2019 ONSC 1184, at para. 15.

[20] As indicated, the defendant has not particularized what portion of the work done in preparation for the August examinations for discovery had to be redone in preparation for the November examinations. It is evident from the Bill of Costs that not all of the 4.5 hours claimed related directly to preparation for the examinations. I may infer that some level of duplication resulted from the adjournment which I would intuitively set at 1.5 hours, recoverable on a substantial indemnity basis in the sum of $360 plus HST for a total of $406.80, rounded to $400.

[21] One might not ordinarily expect, in the exercise of professional courtesy between counsel, that a request for an adjournment of examinations to accommodate the personal schedule of one counsel would lead to a claim for costs thrown away. However, there was no obligation on the defendant to consent to the adjournment request. It was within the reasonable expectation of the plaintiffs’ counsel that, absent consent, the request for adjournment could possibly lead to a claim for costs thrown away.

[22] Given that the adjournment request was to accommodate Mr. Brennan’s personal schedule and not that of the plaintiffs, it is appropriate to order him to pay the costs thrown away pursuant to sub- rule 57.07(1)(c) of the Rules of Civil Procedure as claimed by the defendant.

November Discoveries

[23] The defendant relies upon Rule 34.14(1) to justify aborting the examination for discovery of Luba Skoblenick on November 3, 2020 and cancelling the examination for discovery of a representative of the defendant on the next day.

[24] The rule provides that an examination may be adjourned by the person being examined or a party present or represented at the examination for the purpose of moving for directions with respect to the continuation of the examination in four specific situations set forth at paragraphs (a) to (d) namely:

(a) the right to examine is being abused by an excess of improper questions or interfered with by an excess of improper interruptions or objections;

(b) the examination is being conducted in bad faith, or in an unreasonable manner so as to annoy, embarrass or oppress the person being examined;

(c) many of the answers to the questions are evasive, on responsive or unduly lengthy; or

(d) there has been a neglect or improper refusal to produce a relevant document on the examination.

[25] In my view the reasons given by counsel for the defendant for terminating the examination for discovery, namely the alleged failure of Ms. Skoblenick to have reviewed the defendant’s productions, and the absence of damage documentation in the plaintiffs’ productions do not fall within rule 34.14(1). The defendant was unable to point to any authority for the proposition that there is a positive duty on a party being examined for discovery to have familiarized herself with the opposing party’s documents. Moreover, in the event that the defendant was of the view that the plaintiffs’ Affidavit of Documents was incomplete, its remedy was not to terminate the examination for discovery but to move prior to the examination pursuant to rule 30.06 for an order requiring service of a further and better Affidavit of Documents. That step was not taken.

[26] In the case of Walsh v. 1124660 Ontario Ltd., [2002] O.J. No. 4069 (S.C.J.) Sutherland, J. adopted the following passage from the decision of Steele, J. in Kay v. Posluns, (1989) 1989 CanLII 4297 (ON SC), 71 O.R. (2d) 238 (Ont. S.C.) which respect to the proper conduct of examinations for discovery and the operation of rule 34.14:

To achieve a proper discovery there must be a spirit of co-operation between counsel. They can protect their respective clients while still conducting a proper discovery. The difficulties arise where they are not in agreement as to the issues or relevancy of matters thereto. Rule 34.14 provides for an adjournment to seek directions for the specific purposes therein set out. Otherwise, examinations should be continued to their conclusion. There may be necessary adjournments by consent for the convenience of counsel or for other reasons.

[27] In my view counsel for the defendant was not justified in cancelling the examinations of discovery on November 2 and 3, 2020 on the grounds relied upon.

[28] Although the defendant sought an order for directions with respect to the conduct of the examination for discovery, it did not specify the directions which it sought.

Disposition

[29] For the reasons set forth above it is ordered as follows:

(a) Counsel for the plaintiffs Cornelius A. Brennan shall pay to the defendant costs thrown away in respect of the cancelled examinations for discovery on August 18 and 19, 2020 in the sum of $400.00 inclusive within 30 days hereof;

(b) The plaintiffs shall reattend to be examined for discovery on a date to be arranged with counsel for the defendant;

(c) The balance of the defendant’s motion is dismissed;

(d) A representative of the defendant shall reattend to be examined for discovery on a date to be arranged with counsel for the plaintiffs; and

(e) The balance of the plaintiffs’ motion is dismissed.

Costs

[30] In my view the cost and delay associated with both motions could have been avoided had counsel for the parties adhered to the spirit of cooperation in reference to discovery urged in the passage from Kay v. Posluns set forth above.

[31] In light of the split decision, without having had the benefit of submissions, it would appear to be appropriate that each party bear their own costs. However, if any party seeks costs, they may deliver written submissions on costs within 21 days of the release of this Endorsement. The party from whom costs is sought has 14 days thereafter to respond. The written submissions shall not exceed three double-spaced pages and shall be delivered by email to the Trial Coordinator at Brantford at the email address utilized for the release of this Endorsement.

D. A. Broad, J.

Date: August 3, 2021