Court File and Parties

Court File No.: CV-20-639601-00CL Date: 2023-11-17 Superior Court of Justice – Ontario (Commercial List)

Re: Zurich Insurance Company Ltd., Plaintiff And: 2442931 Ontario Inc., Bondfield Construction Company Limited, John Aquino, Vasos Georgiou and Unity Health Toronto, Defendants

Before: Kimmel J.

Counsel: Brian Kolenda and Jonathan McDaniel, for the Plaintiff Eric Wagner and Jacob Eidinger, for Ministry of the Attorney General (third party respondent) Leslie Dizgun and Marcela Ahumada, for Vasos Georgiou Alan D. Gold and Elen C. Williams, for John Aquino Natalie Kolos, Unity Health Toronto

Heard: October 23, 2023

Endorsement (plaintiff’s motion for production of crown disclosure brief)

The Procedural Backdrop to this Motion

[1] Zurich Insurance Company Ltd. (“Zurich”) commenced this action by Statement of Claim issued on April 16, 2020 (the “Recission Action”). The Rescission Action arises out of the ongoing redevelopment project for St. Michael’s Hospital in Toronto (the “SMH Project”). The Recission Action is one of approximately 28 ongoing related civil proceedings all pertaining to the SMH Project (collectively, the “SMH Proceedings”) that are being case managed together and are subject to a common discovery process.

[2] In the Statement of Claim, Zurich alleges that it issued a Performance Bond and a Labour and Material Payment Bond with the combined face value of over $300 million to secure the work of Bondfield Construction Company Limited (“BCCL” or “Bondfield”) in connection with its construction contract for the SMH Project (the “Bonds”). Zurich issued these Bonds following what it believed was a lawful bidding process for the SMH Project contract, through which BCCL was selected. Zurich alleges that it has since been revealed that the selection of BCCL was the product of fraud and collusion between the BCCL representative John Aquino (“Aquino”), the SMH representative Vasos Georgiou (“Georgiou”), and others. Zurich seeks rescission of the Bonds (and other relief) as a result of the alleged fraud and collusion.

[3] On or about March 9, 2023, the Ontario Provincial Police (“OPP”) laid charges against Aquino and Georgiou (together, the “Defendants”), for criminal conduct in connection with the procurement process for the SMH Project and the award of the construction contract for this project to BCCL, as follows:

a. Aquino has been charged with two counts of fraud over $5,000 contrary to s. 380(1)(a) of the Criminal Code, R.S.C., 1985, c. C-46, as well as one count of giving or receiving secret commissions contrary to s. 426(1)(a) of the Criminal Code.

b. Georgiou has been charged with two counts of fraud over $5,000 contrary to s. 380(1)(a) of the Criminal Code, one count of giving or receiving secret commissions contrary to s. 426(1)(a) of the Criminal Code, as well as one count of fraud on the government contrary to s. 121(1)(d) of the Criminal Code.

[4] These defendants have been committed to stand trial on a preferred indictment with an expedited 8-week trial set to commence in November of 2024 (the “Criminal Proceedings”).

[5] The substance of the charges against the Defendants in the Criminal Proceedings overlaps with the events at issue in the Rescission Action and the related SMH Proceedings. The Criminal Proceedings concern the same factual allegations of fraud at the center of Zurich’s Rescission Action: namely, that Georgiou and Aquino unlawfully colluded to orchestrate the selection of BCCL in the procurement process for the SMH Project.

[6] Zurich seeks an order compelling the Defendants to disclose and produce in this Rescission Action a subset of documents from the brief of Crown disclosure (the “Crown Brief”) provided to the Defendants as part of the mandatory disclosure in the Criminal Proceedings provided by the crown attorneys (the “Crown”) prosecuting the case (the “Crown Brief Documents”).

[7] The Crown Brief is made up of documents obtained or created by the investigating police officers and the crown attorneys with carriage of the prosecution of the Criminal Proceedings. The potential relevance of the Crown Brief Documents to Zurich’s Rescission Action (and other SMH Proceedings) is conceded. The authority governing their production for use in the civil SMH Proceedings originates from the decision of the Ontario Court of Appeal in D.P. v. Wagg (2004), 2004 CanLII 39048 (ON CA), 71 O.R. (3d) 229 (C.A.).

[8] Counsel for the Defendants in the Criminal Proceedings gave an undertaking as lawyers and as officers of the court to keep the Crown Disclosure Brief strictly confidential, and not to copy, publish, transmit, post or otherwise share or distribute the disclosure materials except for the purpose of making full answer and defence in the Criminal Proceedings (the “Undertaking”). The Defendants have different lawyers representing them in the SMH Proceedings and the Criminal Proceedings.

[9] The Undertaking makes it clear that the Crown Disclosure Brief has been provided to counsel and that counsel has taken custody of the Crown Disclosure Brief on this basis and upon the stated restrictions concerning the use and dissemination of the Crown Disclosure Documents, including to the Defendants themselves. The restrictions include that:

a. Criminal defence counsel may not leave the disclosure with their clients unsupervised and must maintain custody and control over the disclosure materials so that copies of such materials are not improperly disseminated.

b. Criminal defence counsel can only access the disclosure electronically through a Relativity database. The Defendants themselves can only access the disclosure at their criminal counsel’s offices under supervision of their counsel. Certain multimedia materials, including video, audio, and photographs, are subject to an additional “Sensitive Disclosure Undertaking”.

c. Criminal defence counsel have signed special undertakings that prohibit the Defendants from personally accessing this disclosure unless under the direct supervision of their lawyers.

d. Criminal defence counsel agree to immediately (within 15 days) return (if practicable) the disclosure to the Crown upon ceasing to act for the accused, or to confirm in writing within that same timeframe that the disclosed materials have been destroyed. If the Crown Disclosure Brief is retained by counsel for any reason, it remains subject to the Undertaking.

Summary of Outcome

[10] The court accepts the position of the Attorney General for Ontario on behalf of the Crown (the “AG”) on this motion, and its undertaking that a Wagg review will be completed and production of the Crown Brief Documents will be made (or the reason for any documents withheld will be provided) by the Crown within eight weeks of a verdict in the Criminal Proceedings being rendered in respect of the Defendants (which may include a decision on the merits or a plea being entered by the Defendants such that a trial is no longer necessary, either such event being hereinafter referred to as a “verdict”). This assumes that the criminal trial of the Defendants commences by the end of 2024 and that a verdict is rendered within a reasonable time thereafter.

[11] On this basis, Zurich’s motion is adjourned sine die. Further directions arising out of this outcome are provided at the end of this endorsement.

The Positions of the Parties on this Motion

Zurich’s Position

[12] According to Zurich:

There is one issue on this motion: whether the Defendants to the Rescission Action, Mr. Georgiou and Mr. Aquino, should be ordered to produce the Crown Brief Documents. These documents should be produced for three reasons: (1) the documents are relevant, not privileged documents to which the Defendants have access. Fairness dictates that they be provided to Zurich; (2) the Responding Parties have not proven a public interest concern that would justify refusing or deferring production of those documents; and, (3) there will be substantial unfairness and prejudice to Zurich should the Defendants continue to have access to these documents while Zurich does not.

[13] Zurich has, based on a preliminary review of an index of the Crown Brief Documents and some information about the categories of documents contained therein, narrowed its production requests since this motion was brought. The narrower scope of production sought by Zurich is reflected in Schedule “A” to its Amended Notice of Motion, said to represent a considered list of specific documents that have been selected based on the information provided by the AG regarding the contents of the Crown Brief to date.

[14] Zurich’s requests were further refined in Appendix “B” to its Reply factum. This is a listing of the documents Zurich seeks by category, based on the index to the Crown Brief provided by the AG. Appendix B removes documents Zurich has not previously sought, and the 6563 documents which the AG takes the position are available from other parties to the Rescission Action. The categories of remaining documents (totalling 2,794) for which production is sought at this time[^1] are summarized at a high level in Appendix A to Zurich’s reply factum as follows:

a. Witness Statements/Interviews and Related Documents (1106 documents)

b. Police Notes and Reports / Investigative Documents (484 documents)

c. Forensic Reports and Related Documents (64 documents)

d. Surveillance and Recorded Conversations (168 documents)

e. Emails, Text Messages and Related Documents (366 documents)

f. Bank and Financial Records (43 documents)

g. Procurement Process and Construction Documents (113 documents)

h. Phone Records and Related Documents (201 documents)

i. Property and Company Documents (63 documents)

j. Other Documents (186 documents)

[15] The first four categories are Crown or police work product. The remaining categories are primarily comprised of documents obtained from third parties (not party to the SMH Proceedings).

[16] This motion is primarily framed as a motion for production from the Defendants under Rule 30 of the Rules of Civil Procedure. Zurich contends that once relevance has been established (in this case, conceded), specific prejudice either due to an identified privilege, public interest immunity or a public interest concern must be demonstrated in order for the parties opposing the motion to resist production. Zurich argues that they cannot rely upon generalized prejudice (such as a concern about witness tainting) said to apply to all criminal cases as a justification for opposing the requested disclosure in this case. Zurich argues that, if that was found to be sufficient, it would put an end to all production of Crown disclosure briefs in civil proceedings since that could be raised as a theoretical concern in every case.

[17] Zurich has suggested that terms can be imposed to ameliorate any generic risks identified, such as witness tainting or the need to protect witness privacy and confidentiality. Zurich has offered, for instance, that the court could: prohibit any party in the SMH Proceedings putting witness statements or interview transcripts from the Crown Brief to a witness on discovery (without consent of the Crown or leave of the court); limiting the number of instructing principals for each party who are entitled to see the Crown Brief; and/or, if the court is satisfied, imposing publication bans (such as might have been put in place automatically at the request of the accused if there had been a preliminary inquiry in the Criminal Proceedings). These are collectively referred to as the “proposed terms for production”.

[18] Rules 30.02, 30.03, 30.04 and 30.10 are all cited in the grounds of Zurich’s Amended Notice of Motion, and they also rely on “such further and other grounds” as counsel may advise. Zurich’s position is that the delay to the civil case in having to wait for production of relevant documents, without which it fears the Defendants will have an unfair advantage in the SMH Proceedings (resulting in an “inequality of arms”), outweighs any theoretical prejudice about witness tainting in the criminal case.

[19] Pursuant to a scheduling endorsement dated July 31, 2023 that approved a process for the management of the SMH Proceedings (the “Scheduling Endorsement”), every party to the SMH Proceedings was required to deliver one affidavit of documents with their Schedule A documents produced in electronic format, for use in all of the SMH Proceedings. The parties to the SMH Proceedings anticipate that further sworn Affidavits of Documents will be delivered and further examinations for discovery (of all parties to the SMH Proceedings) will be held in May 2024.

[20] Zurich’s concern is that the discovery timetable will need to be paused for a year (assuming the criminal proceedings actually do go to trial on schedule and a verdict is rendered relatively quickly thereafter) if all parties are to have equal access to and use of the Crown Disclosure Brief. Or, there will, at the very least, need to be a further round of discoveries (the third) in the SMH Proceedings if the current discovery schedule is adhered to but the Crown Disclosure Brief is not available to the other parties to the SMH Proceedings ahead of time.

[21] Zurich distinguishes motions for production of third party records, which require an assessment of multiple additional factors that do not arise on Rule 30.04 motions. The additional factors include: the importance of documents in the litigation, whether production is “necessary” (in that the moving party cannot obtain the records elsewhere), and whether it would be unfair to require the moving party to proceed to trial in the absence of the records. These factors were considered by the court in Joseph v. Debs, 2022 ONSC 837, 79 C.P.C. (8th) 205, at paras. 32–33 in its determination that a motion for production of Crown disclosure should be adjourned until a criminal prosecution was completed. Zurich contends that such factors do not arise and need not be considered in circumstances where production of the Crown Brief is sought directly from the Defendants, as was the case in Wagg and as is the case here.

[22] Zurich further contends in its Reply factum that:

The source of the Court’s jurisdiction to address requests for production of the Crown Brief in civil matters was never statutory, but instead based on its “inherent power to control its process and to protect that process from being abused or obstructed”, the same source as that power to regulate Crown disclosure generally in criminal matters. [Wagg 27]. The Crown’s only role here is to control the Wagg screening process and to protect any public interest weighing against production. The CLPA, enacted in 2019 to replace the Proceedings Against the Crown Act, [Proceedings Against the Crown Act, RSO 1990, c P.27, s. 8] cannot “change [these] existing common law rules in the absence of a clear provision to that effect”, which it does not contain. [Lizotte v. Aviva Insurance Company of Canada, 2016 SCC 52 at para 56: Ruth Sullivan, The Construction of Statutes, 71h ed. (Toronto, ON: LexisNexis Canada Inc.) Ch. 17, Part 1[^2] (QL).]

The Crown’s Position

[23] The AG opposes the requested relief on the basis that it is premature. The AG asks the court to adjourn Zurich’s production motion sine die while the criminal proceedings against the Defendants are ongoing.

[24] It asserts that the Crown Brief Documents are not in the possession, control or power of the Defendants and not compellable from them (having regard to the Undertaking given by each of the Defendants’ criminal defence counsel and the restrictions therein), and that Crown immunity at common law, reinforced by the Crown Liability and Proceedings Act, 2019, S.O. 2019, c. 7. Sched. 17 (“CLPA”), s. 19, protects against compelled production of those documents from the Crown.

[25] At the hearing, the AG’s position was moderated and was presented to be strictly a question of the timing for production of the Crown Brief. The AG contends that the Crown should not have to undertake its review of the Crown Brief Documents and produce the appropriate documents from it in accordance with the principles enunciated in Wagg, until after the verdict has been rendered in the Criminal Proceedings. It has undertaken that the Crown will complete this review within eight weeks following the verdict in the Defendants’ criminal trial. At that time, the Crown will also identify any Crown Brief Documents whose production it maintains would be deleterious to the public interest and it will provide the appropriate explanations.

[26] The AG has also undertaken to Zurich and to the court that the Crown will not rely upon the CLPA as a basis for resisting the production that is sought by Zurich after the verdict in the Criminal Proceedings. With these assurances, the AG asks the court to adjourn this motion until after that and until after the Wagg review has been completed, at which point it may not be required but can be brought back on if deemed necessary.

[27] The AG argues that the court has the inherent jurisdiction to control its process and to make this order, without necessarily having to rely on rr. 30.02 or 30.06 or 30.10. That said, it maintains that all cases dealing with compelling disclosure in civil cases of Crown disclosure documents from criminal cases, aside from the Wagg case itself, have been decided under r. 30.10 and require a balancing of relative prejudice as between the moving party in the civil proceeding and the Crown’s and the public’s interests in the criminal proceeding while it is ongoing.

[28] The AG’s position is that the balance favours the adjournment, or dismissal, of the motion given the stage at which the Criminal Proceedings are at (set down for trial in 2024) relative to the stage of the SMH Proceedings (expected to be engaged in discoveries during 2024).

The Defendants’ Position

[29] The Defendants contend that the Crown Brief Documents are not in their legal possession, control or power within the meaning of r. 30 and that they cannot be compelled to produce these documents. This is tied to the conditions upon which their criminal defence counsel have received these documents (pursuant to the Undertaking) and the restrictions upon who can access the Crown Brief Documents and upon their use, which is for purposes of the defence of the criminal proceedings only.

[30] The Defendants have separate defence counsel in the criminal proceedings than in the civil proceedings. The Defendants maintain that their civil defence counsel do not and will not have access to the Crown Brief Documents. The Defendants have indicated that they cannot and will not be using the Crown Brief Documents in connection with the civil proceedings (including Zurich’s Rescission Action and the broader SMH Proceedings).

[31] The Defendants maintain that they cannot be compelled to produce documents that they do not have the legal possession of. They argue that since this motion was constituted as a motion to compel them to produce the documents, that is the end of the analysis and the court should not consider the test under r. 30.10 that applies to compelled production from a third party or undertake any balancing of interests under that rule or at common law.

[32] However, even if analyzed on those other grounds, the Defendants support the AG’s position that the motion is premature and that it will not cause prejudice to Zurich (due to delay of the SMH Proceedings) if the Crown Brief Documents are produced later (after the examinations for discoveries in the SMH Proceedings) because the parties are not entitled to these third-party documents for purposes of examining each other for discovery and none of the parties will be able to use them for that purpose. According to the Defendants, what is important is that the Crown Disclosure Documents be available to all the parties for use at the trial of the civil proceedings, to cross-examine party and non-party witnesses.

[33] The Defendants maintain that, at the very least, the Crown Brief Documents should not be ordered to be disclosed before their criminal trial, because of the potential for prejudice to their defence of the Criminal Proceedings if witnesses are tainted by what they learn about what other witnesses have said, or might say, through the broad production and disclosure of the Crown Brief in the SMH Proceedings. In that regard, the Defendants join the AG in their request that this motion be adjourned sine die pending the determination of the Criminal Proceedings.

Analysis

The Applicable Rules

[34] Rules 30.02, 30.03, 30.04(5) and 30.06 deal with the requirement of parties to civil litigation to produce for inspection all non-privileged documents in their possession, control or power and with the court’s ability to compel disclosure for inspection of such documents. Rule 30.10 deals with the court’s ability to compel disclosure for inspection of non-privileged documents in the possession, control or power of a person who is not a party to a civil action.

[35] Whether or not an accused has possession of the Crown Brief such that he can be ordered to make production has not been squarely considered, as Wagg motions generally seek production from the Crown under Rule 30.10, or in some cases an individual accused already in possession of the Brief requests permission to use it for the purposes of civil litigation. The Wagg case is the only reported case identified by the parties dealing with the production of a Crown disclosure brief that was decided under rr. 30.02/30.06.

[36] The Wagg case involved the compelled production from the defendant in the civil action of the defendant’s police interview transcripts already in his possession following the conclusion of the criminal proceeding in which those transcripts had been provided to him as part of the Crown disclosure.

[37] A motion under r. 30.02/30.06 is focused on relevance (conceded in this case) with a heavy onus on the party resisting disclosure to demonstrate prejudice or some other basis to avoid disclosure. Conversely, a motion under r. 30.10 places the onus on the moving party to demonstrate relevance (conceded in this case), necessity, and that it would be unfair to require the moving party to go to trial without the requested documents; and then, if demonstrated, those considerations are balanced against the position of the non-party (Crown), including any public interest concerns.

The Wagg Analysis and Principles Applied to the Production of Crown Briefs in Civil Proceedings

[38] The cases decided under both party and third-party discovery rules in the civil context apply the analysis adopted by the Court of Appeal in Wagg to decide whether, and if so on what terms, production will be ordered.

[39] The Court of Appeal articulated the following principles and expectations relevant to the determination of Wagg motions:

a. A party is in possession of the Crown brief where it has “access to the materials”. Where a party has such access, “fairness will generally dictate that they be produced to the other side”. It is inherently unfair for a defendant to have access to relevant material in the Crown Brief while it is denied to the other parties (at para. 51).

b. The Crown brief is not the property of the state agents. The brief belongs to the public for the purpose of ensuring that justice is done both in the civil and in the criminal contexts (at para. 53).

c. Criminal proceedings do not take precedence over civil proceedings. As the Court expressly noted (at para. 53), “[s]ociety has an interest in seeing that justice is done in civil cases as well as criminal cases and, generally speaking that will occur when the parties have the opportunity to put all relevant evidence before the court. The Crown disclosure may be helpful to the parties in ensuring that they secure all relevant evidence.”

d. As a result, the Court expects that most motions for production of Crown Brief documents are resolved on consent, without the need for court intervention (at para. 51).

e. Where the parties and the Attorney General consent, there may be a desire to add additional protections to safeguard certain interests; however, the deemed undertaking rule in Rule 31.1.01(3) will suffice in most circumstances to protect against improper use of the material (at para. 81).

[40] To facilitate balancing of the competing interests, the Court requires the procedure laid out at paragraph 17 of Wagg, namely that:

• the party in possession or control of the Crown brief must disclose its existence in the party’s affidavit of documents and describe in general terms the nature of its contents;

• the party should object to produce the documents in the Crown brief until the appropriate state authorities have been notified, namely, the Attorney General and the relevant police service, and either those agencies and the parties have consented to production, or on notice to the Attorney General and the police service and the parties, the Superior Court of Justice has determined whether any or all of the contents should be produced; and

• the judge hearing the motion for production will consider whether some of the documents are subject to privilege or public interest immunity and generally whether “there is a prevailing social value and public interest in non-disclosure in the particular case that overrides the public interest in promoting the administration of justice through full access of litigants to relevant information”. [Citation omitted.]

[41] The source of the court’s jurisdiction to address requests for production of the Crown Brief in civil matters originates from its “inherent power to control its process and to protect that process from being abused or obstructed”, the same source as that power to regulate Crown disclosure generally in criminal matters (see Wagg, at para. 27).

[42] The balancing of interests is predicated on a concern about one side having the ability to make use of documents in the conduct of a civil action that the other side does not have access to.

The Questions to be Considered

[43] The questions that the court must consider according to Zurich (at para. 38 of its factum) to determine the one issue on this motion, framed by Zurich to be whether the Defendants should be ordered to produce the Crown Brief Documents, are as follows:

a. Whether they are documents that are relevant, not privileged and to which the Defendants have access.

b. Whether the responding parties have proven a public interest concern that would justify refusing or deferring production of those documents; and

c. Whether there will be substantial unfairness and prejudice to Zurich should the Defendants continue to have access to these documents while Zurich does not.

[44] After addressing each of these questions, the court needs to balance the interests and concerns raised.

[45] The submissions of all of the parties were directed to these questions, albeit with emphasis on different aspects for each.

a. Zurich contends that it readily satisfies the first requirement and that the responding parties have failed to satisfy the second, which means the court does not even get to the third, although it contends it has satisfied that as well.

b. The Defendants contend that Zurich cannot satisfy the first requirement because they do not have possession, control or power over the Crown Brief, which puts an end to the analysis without the necessity of the court deciding the second and third questions. But they support the AG’s position in the alternative.

c. While the AG supports the Defendants’ position that this motion for production from the Defendants cannot succeed, its primary position is that there is a general public interest concern that is heightened in this case because none of the witnesses have yet testified in the Criminal Proceedings. The AG says that this concern overrides the alleged prejudice to Zurich, which is primarily delay oriented and has not reached a critical point given where the SMH Proceedings are currently in the pre-trial process.

The Possession and Control of or Power Over the Crown Brief

[46] This motion seeks to compel the Defendants to produce the Crown Brief Documents. Relevance is conceded. The only privilege that has been raised is a qualified privilege that is discussed in the next section dealing with public interest concerns raised.

[47] The responding parties argue that a threshold question arises in this case as to whether the Defendants have legal possession or control over the Crown Brief. That question has not been directly considered in previous Wagg motions (as these motions for production of Crown disclosure in civil cases have become commonly referred to).

[48] In Wagg, the defendant himself had physical possession of the Crown disclosure (including the police interview transcripts of interest to the plaintiff). There was no evidence that any restrictions having been expressly imposed by the Crown upon his ability to access or use of that material received in the criminal proceeding. The Court of Appeal determined that it did not have to decide whether restrictions on the use of Crown disclosure existed at common law (although it did consider the rationale for imposing such a rule as informative to the development of the screening process to be employed and to the conditions that a court might impose if production is to be ordered). See Wagg, at paras. 34, 37 and 80.

[49] In Lang v. Crowe (2000), 131 O.A.C. 26 (Div. Ct.), at para. 11 (relied upon by the Court of Appeal in Wagg), the court accepted that:

… there are serious policy and public interest issues which must be considered where counsel in subsequent civil proceedings seek production of Crown briefs prepared in related criminal proceedings. In this case, however, where one party has had and continues to enjoy access to certain documents which it has intimated it intends to use in its defence of the civil proceedings brought against it, documents still in the possession of its counsel of record, we are of the view that in these peculiar and particular circumstances, the overriding consideration should be fairness to all the parties. It seems to us to be inherently unfair for Goodyear [a defendant] to have the Crown Brief while it is denied to the other parties.

[50] The question of “access” was analyzed by the Court of Appeal in Wagg based on the fact that the defendant had actual possession of the documents sought and that there was no indication that his access to them had been restricted (expressly or by implication).

[51] Since Wagg there have been significant developments in the law as well as Crown practice with respect to undertakings and restrictions on the use of Crown disclosure made in criminal proceedings. The Undertaking given by criminal counsel for the Defendants in this case being one such example. However, the Wagg motions have all been decided under r. 30.10 (motions seeking to compel production directly from the Crown[^3])so they do not raise the question of the defendant’s possession, control or power over the Crown disclosure at issue.

[52] In this case, the responding parties contend that the documents were delivered to counsel for the Defendants, not to the Defendants themselves, upon the express Undertaking given by criminal defence counsel under which the Defendants’ access to the Crown Brief Documents was subject to specific restrictions and their ability to use them was limited to be only for the purpose of making full answer in defence of the criminal charges against them. This, they say, means that the Defendants do not have legal possession over any of these documents within the meaning of r. 30.02 and they cannot be compelled to produce them for inspection under r. 30.04(5). See Ivey v. Canada Trust Co., [1962] O.W.N. 62 (H.C.), at paras. 6–8. See also Taberner Investments Ltd. v. Price Waterhouse (2000), 11 C.P.C. (5th) 111 (Ont. S.C.), at para. 39; Continental Can Co. of Canada Ltd. v. Bank of Montreal (1974), 1974 CanLII 795 (ON SC), 3 O.R. (2d) 167 (H.C.).

[53] This court has held that: “For a document or a copy of it to be in a party’s power requires that party to be entitled to obtain the document or a copy but the other party requesting its production is not so entitled.” See Zurich Insurance Company v. Paveco Road Builders Corp. (2007), 60 C.P.C. (6th) 354 (Ont. S.C.), at para. 23. This tracks the language of r. 30.01(1)(b) which deems a document to be in a party’s power if that party is entitled to obtain the original document or a copy of it and the party seeking it is not so entitled. In the particular circumstances of this case, the Defendants can obtain copies of the Crown Brief Documents, whereas the other parties to the SMH Proceedings do not have that same access.

[54] The AG concedes that the Defendants were required to list the existence of the Crown Brief in their affidavits of documents in the civil SMH Proceedings. Documents listed in an affidavit of documents by definition (under r. 30.03(1)) are or were within the possession, control or power of the party who lists them. Here, the Undertaking does not restrict the Defendants from asking for, and being provided with, printed copies of the Crown Brief Documents from and under the supervision of their criminal defence counsel, it just restricts who they can share those documents with and what they can do with or use them for. The Defendants do have some measure of power over the Crown Brief Documents, albeit restricted.

[55] To accept the position of the responding parties that the Undertaking (in this case expressly given and said to now be the standard practice in all Crown disclosure) restricts the Defendants in such a way that they cannot be said to have any power over the Crown Brief Documents would mean that they would not have to disclose even the existence of such documents in their affidavits of documents in a civil proceeding. That would be a step backwards in the Wagg procedures that require such disclosure. The onus should be, as the Wagg procedures prescribe, on the defendant in the civil proceeding to disclose in an affidavit of documents the existence of the Wagg disclosure brief and the restrictions that attach to the defendant’s access to and use of those documents outside of the criminal proceeding in which they were disclosed.

[56] For these reasons, and insofar as the Defendants have raised this as a threshold issue that could be determinative of this motion, I do not accept their assertion that they do not have any power over the Crown Brief Documents within the meaning of r. 30.02.

[57] However, this does not mean that this simply devolves into a r. 30.04(5) motion in which the only consideration is whether the Crown Brief Documents are relevant (which is often conceded and is conceded in this case). Irrespective of whether the Wagg disclosure is sought from the Defendants or the Crown, the Wagg procedures contemplate the involvement of the third party Crown in the review and determination of what can or will be disclosed in the civil proceeding. There is a balancing of interests in that context that is not dependent upon which Rule the motion for production is brought under (or perhaps does not require that the motion be brought under any Rule at all).

[58] In this case, both Rules 30.04(5) and 30.10 were cited by Zurich in its notice of motion. While it seeks to compel the Defendants to produce the Crown Brief Documents, it sought such further and other relief upon such further and other grounds as the lawyers may advise. The AG was on notice of the motion and has taken the lead in responding to it. In my view, it does not matter whether the production motion is brought under r. 30.04(5) for production from a defendant in the civil proceeding or under r. 30.10 for production from the third-party Crown, or simply as a motion for production to ensure fairness of the civil SMH Proceedings. The specific rule(s) cited in the grounds of Zurich’s motion will not determine its outcome. The court’s hands are not tied, as the Defendants suggest, by the fact that Zurich seeks to compel production from the Defendants rather than from the Crown.

[59] As was noted by the Court of Appeal in Wagg, in many cases it is expected that the Crown will agree to the production of the documents at the appropriate time and subject to the appropriate conditions. The issue that the court needs to become involved in is the balancing of interests under the Wagg analysis that is engaged, irrespective of the premise upon which production is sought. This is especially so when the parties do not agree about the timing and conditions to be associated with production, or, when the time comes, they do not agree about any particular documents or parts thereof that the Crown seeks to withhold from production.

[60] The lis on a Wagg motion is typically about the balancing of interests, special circumstances if they exist, the timing of production and who has the onus at which stage. These considerations are more conducive to the court taking a broader approach of controlling its process to ensure fairness to all parties, rather than getting caught up in technical arguments about whether the production is being sought from the Defendants or from the Crown. Equality of “access” is the driving consideration behind the Wagg analysis. As noted earlier in this endorsement, the balancing of interests in the Wagg analysis is predicated on a concern about one side having the ability to make use of documents in the conduct of a civil action that the other side does not have access to.

[61] Limitations on the party with “access” and their ability to use the documents may attenuate the concerns of fairness (discussed below). The Defendants may, strictly speaking, have access to the Crown Brief Documents, but the nature and extent of their rights have to be considered in the context of the Undertaking. They do not have a Relativity login and can only view the documents while in the presence of criminal defence counsel and are not permitted to use those documents in their defence of the civil action unless the court relieves their criminal defence counsel of the Undertaking that was given when the Crown Brief was provided.

[62] Zurich argues that this Undertaking does not preclude the sharing of the Crown Brief by the Defendants’ criminal defence counsel with their civil defence counsel. Zurich relies upon the decision of the court in S.C. v. N.S., 2017 ONSC 5566 at paras. 40–41, which held that it would interfere with a client's fundamental and constitutionally guaranteed right to obtain legal advice to restrict “use” of material for the purpose of the deemed undertaking under the Rules of Civil Procedure in the way that would preclude the party from using discovery evidence from a civil proceeding to assist in the defence of a criminal proceeding. Zurich argues that “there is no reason to think that the implied or express undertakings given in the context of criminal disclosure are any different.”

[63] That is not the understanding of criminal counsel for Georgiou who testified on behalf of the Defendants on this motion. What Zurich argues would be a dangerous position indeed for counsel to adopt in the face of the AG’s very clear and direct assertion to the contrary. The Defendants and the AG argue that the same reasoning as was adopted in S.C., which is very specific to the criminal defence lawyer and not to the party, cannot be applied to the Undertaking in this case. The situation might be different if the same lawyer was representing the accused in both the criminal and civil proceedings. However, each case must be assessed on its own facts, and those are not the facts of this case.

[64] As Zurich contends, the court “has authority to relieve a solicitor from an undertaking if the interests of justice require such relief”. See R. v. Young, 2015 ABQB 784, at para. 17. This was conceded by counsel for the Defendant Georgiou during his cross-examination and is consistent with decided cases in which the existence of an implied or express undertaking has not been found to be an impediment to the court ordering disclosure of a Crown brief in civil proceedings when found to be justified.

[65] However, the court must be satisfied that there is justification for doing so, and that requires a balancing of the interests at play in the determination of whether “there is a prevailing social value and public interest in non-disclosure in the particular case that overrides the public interest in promoting the administration of justice through full access of litigants to relevant information”. See Wagg, at para. 17.

The Prevailing Social Value and Public Interest in Non-Disclosure

[66] Courts recognize that the integrity of a criminal prosecution is a “serious policy and public interest consideration”. Dixon v. Gibbs, 2003 CanLII 1921 (ON SC), [2003] O.T.C. 8 (S.C.), at para. 27.

[67] Out of respect for not compromising an ongoing investigation and prosecution, and to protect the repute of the administration of justice, the common law holds that materials within an ongoing criminal investigation are protected from production by a qualified public interest privilege, which can be pierced only in a narrow set of circumstances. Joseph, at paras. 23 and 29; R. v. Burns, 2006 ONCJ 289, at paras. 9–11.

[68] The AG has not yet undertaken the Wagg analysis of the Crown Brief in this case because it initially maintained that it would be premature to do so prior to the conclusion of the Criminal Proceedings; and the AG has since modified that to say it would be premature to do so before the verdict. At this stage of the Criminal Proceedings, before any witnesses have testified, it contends that the qualified public interest privilege and the need to protect the integrity of the ongoing criminal investigation and prosecution are enough to discharge the onus on the responding parties who oppose the production of the Crown Brief Documents to the other parties in the civil SMH Proceedings at this time.

[69] Its position is that it is only in exceptional circumstances that the public interest in promoting full access of civil litigants to information relevant to their case will override the prevailing social value and public interest in not disclosing the Crown Brief prior to the witnesses testifying in the criminal case. Examples of exceptional circumstances in which production of Crown disclosure documents was ordered in a civil case when a criminal prosecution was still ongoing and none of the witnesses had yet testified in those criminal proceedings (whether at a preliminary inquiry or at the trial) are where:

a. the civil trial was imminent (see N.G. v. Upper Canada College (2004), 2004 CanLII 60016 (ON CA), 70 O.R. (3d) 312 (C.A.) and Wong v. Antunes, 2009 BCCA 278, 95 B.C.L.R. (4th) 73);

b. a child’s safety was at risk (see Children’s Aid Society of Ottawa v. KF et al, 2022 ONSC 7269, 83 R.F.L. (8th) 147, Children’s Aid Society of Algoma v. B. (S.), 2008 ONCJ 358, and Children’s Aid Society of Thunder Bay (District) v. D. (S.), 2011 ONCJ 100);

c. there was a risk that evidence would be lost if production was not immediate (see Durling v. Sunrise Propane Energy Group Inc., 2008 CanLII 65591 (Ont. S.C.)); and/or

d. the Crown was a party defendant to the civil proceeding (see Aylmer Meat Packers Inc. v. Ontario (2006), 29 C.P.C. (6th) 395 (Ont. S.C.), at para. 3), in which the plaintiff was suing the Crown over the conduct of the criminal proceeding and both parties already had access to the Crown disclosure, so the only issue was whether the court should provide relief from the undertaking regarding the use of those materials so that they could be used in the civil action as well).

[70] Absent the existence of special circumstances (which have not been shown to exist in this case at this time), while the Criminal Proceedings are pending and until the witnesses have testified, the court can and should consider concerns that could impact the integrity of the criminal prosecution, such as witness tainting, witness co-operation and witness privacy.

a) Witness Tainting

[71] This court has held that revealing a Crown disclosure brief to a witness could colour their memory and create an opportunity for tailoring evidence. This has been established in earlier cases, relying upon the evidence from a Crown attorney who was in charge of public interest screening, similar to the role played by the Crown witness in this case, Mr. Entecott. See for example, G.L.K. v. C.L.K., 2021 ONSC 5843, at paras. 134. 136-137. See also Joseph, at para. 30. Even where deliberate tailoring is not an issue, this court has recognized that the reliability of the witness’s account can be undermined by hearing other people's stories. See R. v. F.(J.) (2003), 2003 CanLII 52166 (ON CA), 16 C.R. (6th) 317 (Ont. C.A.), at para. 77.

[72] The AG anticipates that the Criminal Proceedings, like other fraud prosecutions, will turn on witness credibility, especially in circumstances such as in this case where the allegations of fraud do not largely depend on documentary evidence but depend on establishing a series of conversations between the accused (Defendants) and various individuals, none of whom has a full picture of what occurred.

[73] Many of the witnesses anticipated at the criminal trial are employees of the parties to both this action and the other actions being case managed with it in the context of the SMH Proceedings. Many parties to the civil SMH Proceedings are corporations. The AG does not know the identities of all of the instructing clients at these corporations, or how many individuals at each corporation will have access to Crown Brief documents if they are ordered disclosed.

[74] In a nutshell, the concern (according to the evidence of Mr. Entecott, the AG’s witness) is that: “Once any of the witnesses reviews or hears about the contents of these records, their independent recollection and knowledge of the events leading up, and subsequent to, the alleged frauds would no longer be wholly independent.” By giving individual witnesses whose knowledge is limited to particular piece(s) of the fraud a “fuller picture” through access to the Crown Disclosure Documents, the concern is that their own independent recollection will be tainted.

[75] The AG maintains that it would be impossible to explain what the concerns are with respect to each document in the Crown Brief at this time, not only due to the large volume of documents contained in it, but also because of how difficult it is to predict exactly how prejudice may flow if the documents are released and used in the civil litigation. The AG cannot know which documents will be shown to which witnesses in discoveries or as a result of their role in instructing counsel conducting the discoveries, nor can it know exactly what effect this will have on these witnesses’ recollection.

[76] Zurich’s criticism of the AG’s position is twofold:

a. First, that the Crown has not done the document specific review and analysis to reduce the number of documents to be withheld from the production of the Crown Brief pending the witness testimony, without which the theoretical and speculative concern about witness tainting should not serve as a justification to withhold the entirety of the Crown Brief as that would mean that the Wagg review and production of Crown disclosure will be automatically deferred in every civil case until after the criminal trial.

b. Second, while there is no preliminary inquiry in this case and the first time witnesses will testify in the Criminal Proceedings will not be until the trial scheduled to commence in November 2024, many of them have already given evidence under oath in the first round of civil discoveries, or will be doing so in the upcoming round of civil discoveries scheduled to be completed in May 2024, so the witness “tainting” has already occurred.

[77] Zurich complains that the Crown has not even commenced the Wagg review and neither the witness for the Crown nor the witness for the Defendants on this motion could directly correlate any examples of documents within the Crown Brief that could result in the tainting of any particular witnesses who may testify at the criminal trial (see, for example, NG and Aylmer Meats). Zurich objects to the attempt by the AG to try to improve its evidence after the cross-examinations through a (non) answer to an undertaking on the cross-examination of its witness, which resulted in an attempt to correlate the witness tainting and privacy and other concerns to the identified categories of documents in the Crown Brief. Zurich maintains that this evidence is still too general (categories rather than specific documents) but also that it has not had the opportunity to test it and that it should be therefore given no weight, such that the witness tainting can only be dealt with on a theoretical level.

[78] The weight to be given to the theoretical (rather than document specific) concerns about witness tainting will be different in each case. Here, the concerns, albeit theoretical, cannot be ignored by the court. The sheer volume of documents contained in the Crown Brief and the number of parties subject to the joint discovery protocol in the SMH Proceedings is a compounding factor in this case. This is not a situation of two parties, one of which already has possession of the Brief (like the Wagg case itself). Rather, as noted earlier in this endorsement, if production is ordered in this case, the documents will be produced to at least thirteen corporate parties, and an even larger number of instructing clients and prospective witnesses for use in the ongoing discoveries (and beyond) in the SMH Proceedings.

[79] The proposed terms for production that Zurich has suggested could be put in place to mitigate the risks of disclosure to prospective witnesses do not address the breadth of concerns about disclosure in this case. For example, Zurich suggests that the deemed undertaking rule be supplemented by additional procedural/confidentiality safeguards that Zurich has offered to accept, such as undertakings to be given by counsel, restrictions on any dissemination of certain documents beyond counsel (e.g. “counsel eyes only”), limiting the instructing client personnel who can see the Crown Brief Documents, restrictions on putting statements to witnesses on discovery and/or prohibitions on filing certain documents, but:

a. This could become unwieldy, inevitably open to some interpretation and difficult to police given the number of parties involved and that the Crown Brief is comprised of many thousands of documents. It leaves open the risk for error or slippage in this multi-party case. The more hands and eyes on the Crown Brief Documents the more difficult it is to develop confidentiality restrictions that serve the intended purpose of protecting private, confidential and personal information and protecting potential witnesses from being tainted by information and documents outside of their personal knowledge and experiences.

b. Zurich acknowledges that the other parties to the SMH Proceedings would either have to agree to these restrictions or be ordered by the court to abide by them as a condition of them receiving the Crown Brief Documents as part of the discovery, yet those parties were not present at this motion and have not had the opportunity to make submissions on this point.

[80] Zurich observes that, while the Crown contends that there is a pool of unknown persons amongst the corporate parties to the civil litigation who the Crown is concerned may learn of the contents of the documents sought from the Crown Brief, and so be “tainted” as potential witnesses, there are some who are known. These include Steven Aquino (of Bondfield), Michael Keen (of SMH), Adrian Braganza (of Zurich) and Mr. Aquino and Mr. Georgiou themselves, and that these individuals will already have been able to gain access to detailed information about events that they were not directly involved in, from sworn discovery evidence of each of those other persons examined for discovery in the civil SMH Proceedings. Each of those potential Crown (or Defence) witnesses are already entitled (as parties to the civil litigation) to gain access to the evidence of other such witnesses and so, the argument goes, there cannot be any prejudice from any incremental knowledge they acquire about another statement of the same witnesses revealed in the Crown Brief.

[81] In essence, what Zurich contends is that, since the witnesses have already been (or will be) tainted before the trial of the Criminal Proceedings begins through the civil discovery process and as a result of what has already been disclosed in the SMH Proceedings and the media coverage about them, the theoretical and speculative concern about further witness tainting resulting from disclosure of the Crown Brief in the civil SMH Proceedings is diminished or eliminated. I do not accept this premise. First, the piecemeal discovery evidence in the civil SMH Proceedings of some potential Crown witnesses cannot be expected to have the same alleviating effects on future witness tainting concerns as their eventual testimony in the Criminal Proceedings is expected to have. Further, just because there may have already been witness tainting does not mean that the court should not be concerned about further witness tainting in the context of the Criminal Proceedings.

[82] The balance shifts after the witnesses have testified in the criminal trial, as concerns about witness tainting are then alleviated. In Dixon v. Gibbs, at para. 29, production of the crown brief was ordered to take place after the witnesses had testified at the preliminary inquiry. Other cases that ordered production after witnesses had testified in criminal trials include: G.L.K. v. C.L.K. and Joseph.

[83] The AG and Defendants point to a trend (absent special circumstance) in favor of declining to order production of a Crown disclosure brief until witnesses can testify under oath either at a preliminary inquiry or at the criminal trial. They argue that this approach is consistent with recommendations of advocacy groups since the Wagg decision was published.

[84] In a report presented at the Uniform Law Conference of Canada Joint Civil and Criminal Sections, the Working Group on the Collateral Use of Crown Brief Disclosure recommended (for purposes of the consideration of a legislative codification of the Wagg principles) a presumption that production of Crown Brief materials be delayed until the related criminal proceeding is complete unless there are special circumstances. See Denise Dwyer, “Progress Report of the Working Group on The Collateral Use of Crown Brief Disclosure” (August 2008), online: https://www.ulcc-chlc.ca/ULCC/media/Criminal-Section/Collateral-Use-Crown-Brief-Progress-Report.pdf.

[85] The AG argues that this approach also allows a streamlining of the Wagg notice to third parties who have privacy interests to protect, depending on whether they testify at the criminal trial and whether there was a publication ban if they did testify. Before completion of the criminal trial, all persons interviewed will require notice. After the criminal trial, it is likely that only some will.

[86] In each of G.L.K. (at paras. 139–40) and Dixon (at paras. 28–31), the court expressly recognized that any concerns regarding witness tainting would likely vanish after evidence was provided under oath — which may happen either at the preliminary inquiry or the trial in a given case. Zurich points out that in both of those cases, the court did not order that production of the Crown brief be entirely deferred pending the conclusion of the criminal proceedings, but instead deferred production of particular documents about which concerns had been raised following the Wagg review until the conclusion of the preliminary inquiry.

[87] The Crown says it is not possible to do in a timely review of the Crown Brief before the trial of the Criminal Proceedings given the breadth of documents and potential witnesses involved; whereas, after the trial that review will be significantly more manageable. This is a unique situation where the concerns about witness tainting persist and the not insignificant work that would be involved on the part of the Crown to narrow the documents about which there may be specific concerns is not warranted at this time, given the expectation that many of those concerns will vanish or be alleviated once the witnesses have testified in the Criminal Proceedings.

[88] I do not agree with Zurich’s contention that not requiring the Crown to undertake the Wagg review now, prior to the trial of the Criminal Proceedings, and instead accepting the theoretical concerns about witness tainting (and witness co-operation discussed in the next section of this endorsement) will mean that the Wagg review and production of Crown disclosure will be effectively deferred in every civil case until after the criminal trial.

[89] Each case has to be analyzed on its own facts. I am satisfied in this case (for the reasons detailed above) that the qualified public interest privilege and the need to protect the integrity of the ongoing criminal investigation and prosecution are enough to discharge the initial onus on the responding parties who seek to oppose or defer the production of the Crown Brief Documents to the parties in the civil SMH Proceedings at this time, in the absence of any special circumstances. That does not mean that it will be sufficient in the next case (or even at a later point in this case, after the trial of the Criminal Proceedings) to raise these concerns without tying them to specific documents in the Crown Brief based on a proper Wagg review.

b) Witness Co-operation and Privacy

[90] Given the court’s findings about the witness tainting concerns (above) significant time need not be devoted to these other concerns raised by the AG. They were not the focus of the parties’ written or oral submissions.

[91] There was also a concern raised that disclosure of the Crown Brief before the witnesses testify in the Criminal Proceedings could have a chilling effect on witness co-operation with the Crown and the police in the lead up to that trial, and more generally. This can undermine the integrity of an ongoing prosecution.

[92] The Court of Appeal in R. v. Papageorgiou (2003), 2003 CanLII 52155 (ON CA), 65 O.R. (3d) 1 (C.A.), at para. 14, recognized that harmful consequences can flow from the dissemination of Crown disclosure, even to an accused person. The consequences include jeopardizing the safety, security, and privacy interests of witnesses and third parties. The willingness of civilians and third parties to participate in police investigations is of critical importance to the administration of justice. This informs the ways in which disclosure is to be treated by all actors in the criminal justice including police, the Crown, and the criminal defence counsel. Some of these concerns may also be alleviated once the witnesses have testified in the Criminal Proceedings and can be analyzed in a similar way.

[93] A Wagg review of Crown Brief materials is done for several reasons, including to protect privilege, safety, and third-party privacy interests. College of Physicians and Surgeons of Ontario v. Peel Regional Police (2009), 2009 CanLII 55315 (ON SCDC), 98 OR (3d) 301, (Div. Ct.), at paras. 52–53. No one is suggesting that this review not be undertaken before disclosure of any of the Crown Brief Documents is made. It is just being proposed that the review be deferred until after the witnesses have testified and/or there is a verdict, after which the evidentiary record in the Criminal Proceedings will be closed.

[94] These considerations do not add to or detract from the analysis and conclusions of the court in this case.

The Unfairness to Zurich

[95] Zurich maintains that if the Crown Brief Documents are not produced prior to the completion of the upcoming round of discoveries in the civil SMH Proceedings that will result in substantial unfairness to Zurich. Zurich points to Wagg for support of its contention of theoretical prejudice:

a. “Society has an interest in seeing that justice is done in civil cases as well as criminal cases and, generally speaking, that will occur when the parties have the opportunity to put all relevant evidence before the court. The Crown disclosure may be helpful to the parties in ensuring that they secure all relevant evidence.” (Wagg, at para. 53)

b. Society has an interest in promoting the administration of justice through full access of litigants to relevant information. (Wagg, at para. 17)

[96] Zurich contends, more specifically albeit through a law clerk’s affidavit, that knowing what those witnesses will say in advance of discoveries will allow Zurich to develop other potentially important evidence and lines of questioning for use on examination for discovery. Zurich maintains that it is unfair that the Defendants will otherwise be the only parties entitled to so benefit from the foreknowledge of prior statements of witnesses who they will be entitled to examine for discovery.

[97] Zurich summarizes the prejudice or unfairness to it to be as follows (at para. 56 of its factum):

Here, Mr. Aquino and Mr. Georgiou have access to the documents in the Crown Brief and so can instruct their civil counsel in the civil proceedings based on their knowledge of the contents of those documents. The Defendants will know which witnesses’ testimony will be helpful (or harmful) to their case, can themselves tailor evidence based on the contents of the brief, can formulate questions of witnesses on examination for discovery with the benefit of the knowledge of their prior statements, and ultimately can determine who they choose to call as a witness at trial based on their knowledge of the contents of the Crown Brief. In this context, the principle of equality of arms underpinning the civil litigation process requires that Zurich be given the same relevant information.

[98] However, Zurich’s position fails to give full meaning and effect to the Undertaking given by criminal counsel for the Defendants in connection with the Crown Brief, the restrictions on the Defendants’ access to and use of any of the disclosure contained therein, and the fact that the civil defence counsel for the Defendants will not themselves have access to the Crown Brief.

[99] When all of this is taken into account, what is left of this concern is that the Defendants may nonetheless take information that they learn from sitting with their criminal Defence counsel reviewing the Crown Brief in preparation for their trial in the Criminal Proceedings, memorize it and orally pass it along to their civil defence counsel (without telling them where the information came from) so that it can be factored into the discovery strategy and questioning in the discoveries in the civil case.

[100] The concern that the Defendants will tailor their own evidence given during the discoveries with the benefit of knowing what others have disclosed to the Crown presumes that they would do this without discussing it with their counsel which could be very dangerous for them indeed and may not be helpful at all, but in any event, this is not the focus of the concerns. Ultimately, the Defendants’ experienced civil defence counsel are going to drive the discovery strategy in the civil proceedings and it is overly simplistic to think that they will be unfairly aided by clients feeding them undisclosed information sourced from other witnesses or documents their clients saw in the Crown Brief.

[101] It is not disputed that there may be other relevant evidence (that did not originate from the parties to the SMH Proceedings) and work product of the Crown and the police in the criminal investigation contained in the Crown Brief. Nor is it disputed that this other relevant evidence and work product, if not produced now or soon, will not be available to any of the parties for use during the next round of discoveries to be conducted in the civil SMH Proceedings. However, the prospect that such evidence may come to light later does not mean that there will necessarily have to be another round of discoveries or that the trial of the SMH Proceedings will necessarily be delayed once the disclosure of the Crown Brief Documents is made. Zurich was rightly concerned when under the impression that this disclosure would be delayed pending all sentencing and appeals in the criminal proceeding, but the Crown has agreed not to delay beyond the verdict in the trial at first instance.

[102] It is not uncommon for the parties to have to look outside of their own discovery processes for the totality of the evidence relevant to the trial of their case. Zurich itself submits (at para. 51(c) of its factum) that:

The publicly available undertakings executed by Mr. Georgiou and Mr. Aquino already disclose the identities of witnesses which they are precluded from contacting. There is nothing to prevent Zurich (or any other party to the civil proceedings) from contacting these individuals or seeking leave to examine them as non-parties with relevant evidence pursuant to Rule 31.10.

[103] Rule 31.10 discoveries should, in the normal course, be conducted after efforts have been made to obtain the desired information and documents from the parties directly. Despite the efforts to streamline the discovery process and make use of prior examinations in anticipation of an efficient round of discoveries targeted to take place in May 2024 in the SMH Proceedings, it is not unrealistic to expect that there will be follow up arising from those discoveries. The court’s expectation, based on current timelines, is that the Crown Brief Documents will have been produced and will be available for purposes of such follow up, if and only as appropriate.

[104] I do not consider it to be detrimental to the just and efficient prosecution of the civil proceedings for the parties to the SMH Proceedings not to have the benefit of documents obtained by the Crown and/or the police from third parties and the work product of the Crown and/or the police in the criminal proceedings for this next round of discoveries, with the expectation that they will eventually have these Crown Brown Documents for use in those proceedings (subject to the Wagg review to be undertaken after the verdict in the criminal trial).

[105] In these circumstances, I do not find there to be, as Zurich alleges, a substantial unfairness and prejudice to Zurich in not having access to the Crown Brief Documents for the next round of discoveries. There is no “inequality of arms” that creates any unfairness to Zurich in the conduct of the discoveries in the SMH Proceedings. It is, at best, an inconvenience because of the delayed disclosure with the potential that there may be a need for some further follow up discovery. That does not rise to any unfairness. It is equally inconvenient to all parties to the civil SMH Proceedings.

[106] There is one further theoretical prejudice to Zurich that was raised, although it does not need to be resolved in this case because of the positions ultimately adopted by the AG.

[107] Taking the arguments (made most forcefully by the Defendants) to their logical conclusion could have resulted in prejudice to Zurich by depriving it entirely of the benefit and use of the Crown Brief Documents in the SMH Proceedings. The contentions that i) production of a Crown Brief cannot be sought directly from the Defendants where an Undertaking such as in this case has been given and the documents have been produced only to their criminal defence counsel; and ii) and the Crown is immune from compelled production in civil cases[^3], might prevent the court from ever ordering Wagg production in a civil proceeding if the Crown is not prepared to waive immunity and/or remove the restrictions that it imposed upon the delivery of its disclosure. The potential outcome of there being no ability to seek production directly from the Defendants in the face of the now standard express Undertaking required to be given by criminal counsel before receipt of the Crown’s disclosure and the prospect of there being no ability to seek third party production and discovery directly from the Crown could effectively eviscerate the recognized interest of civil litigants in the Crown Brief and the process mandated by the Court of Appeal in Wagg.

[108] That would have required the court to consider the matter of potential prejudice to Zurich in a different light as it would represent a significant step backwards in the development of the law and the recognition by the Court of Appeal in Wagg (at paras. 51 and 53–54) that society has as much of an interest in seeing justice done in civil cases as in criminal cases, and that production in the civil litigation is necessary to ensure a level playing field and to enhance the search for truth and the interests of justice, which are at the heart of both the criminal and civil proceedings.

[109] However, the undertakings given by the AG are such that there is no need to further analyze this point in the arena of the extremes, as Zurich will not suffer any significant prejudice in the circumstances of this case.

[110] The AG has given an undertaking that the Crown will conduct the Wagg review of the Crown Brief and disclose the producible documents within eight weeks of the verdict in the criminal fraud trial. The current expectation is that the criminal trial will have concluded well before the civil trial will start (assuming the criminal trial proceeds as scheduled). If those premises change, the analysis may change and the AG acknowledged in its submissions that the parties may be back before the court in that eventuality, seeking a different order if they are unable to reach an agreement.

[111] The AG has also undertaken that the Crown will not rely upon the CLPA or any associated Crown immunity from compelled discovery from it in proceedings to which it is not a party, as a ground for resisting production of the Crown Brief Documents if this motion were to be approached as a motion for third party discovery under r. 30.10.

The Balancing of Interests Leading to the Court’s Decision

[112] To recap, and as previously noted, Zurich argues that the theoretical or speculative risks of witness tainting are not sufficient to override the interests of disclosure in the civil litigation, citing two of the exceptional circumstances cases: N.G., at para. 16 [in which the deemed undertaking rule was considered as a theoretical answer to the theoretical concern of witness tainting, but that was a one document (videotape) situation where the strict confidentiality restrictions were found to meet those concerns] and C.A.S. of Ottawa, para. 36 [in which the theoretical concerns about witness tainting in the criminal trial were found to have been addressed through the strict confidentiality and other protections that are in place in a child protection proceeding, which was the civil proceeding in which the parents sought production of Crown disclosure from a parallel criminal proceeding against the father].

[113] This is not a case of exceptional circumstances.

[114] Zurich is correct in its assertion that one of the key factors for consideration on a Wagg motion is the comparative advancement of the civil and criminal proceedings. See also Aylmer and N.G. The proximity of the trials in the criminal and civil cases is a relevant and important consideration. At this time, no one is suggesting that Zurich is going to have to go to trial in its Rescission Action without having had access to the Crown Brief Documents. While some of these documents may be relevant and helpful to the ongoing discoveries in the civil SMH Proceedings, that can be further assessed once the Crown Brief Documents are produced (after the verdict in the criminal trial) and, if need be, some accommodation for focused further discover follow up can be made in the pre-trial schedule that the court has approved in those proceedings.

[115] The civil SMH Proceedings are lagging sufficiently behind the Criminal Proceedings that the court has not found there to be prejudice to Zurich (or the other civil litigants) in having to wait until after the witnesses have testified in the Criminal Proceedings for disclosure of the Crown Brief. This delay is not expected to result in the civil litigants being deprived of the eventual use of the Crown Brief Documents for purposes of the marshalling of evidence in the civil trial(s). While it may be inconvenient, not having the Crown Brief Documents for the upcoming round of discoveries does not amount to significant prejudice to Zurich that outweighs the concerns about witness tainting (and, in the case of the Crown, witness co-operation).

[116] As a practical matter, and for reasons previously indicated, there is no inequality of arms. Counsel for Zurich and civil counsel for the accused will be on an equal footing at the upcoming discoveries in the civil SMH Proceedings. No practical unfairness to Zurich has been established. This does not mean that the court is giving undue precedence to the Criminal Proceedings over the civil SMH Proceedings.

[117] Zurich wants the court to find that it does not need to demonstrate specific prejudice and instead simply say that there is this fundamental “right” to the same disclosure and that there is an inherent unfairness that the court recognized in Wagg that can only be overcome by specific prejudice or privilege demonstrated by the Crown. Conversely, the AG says that if Zurich does not have an immediate prejudice because it is not being told to go to trial without the Crown Brief Documents, that should be sufficient for the court to order a delay in disclosure. In other words, each side asks for a ruling in their favour on the basis that the other has not met their onus to demonstrate specific prejudice.

[118] Since the concerns that remain to be considered are largely theoretical on both sides, they have, instead, been balanced and weighed in light of:

a. the undertakings given by the AG that alleviate the theoretical concerns about prejudice to Zurich, and

b. the proposed terms of production that Zurich has suggested may be agreed to (or imposed) that can alleviate the theoretical concerns about witness tainting and/or witness co-operation, to the extent that they are not addressed through the delay of production of the Crown Brief Documents until after the witnesses have testified in the Criminal Proceedings,

with the result that this court is declining to order any production of the Crown Brief Documents at this time. This is based on the strength of the AG’s undertaking that the Crown will, within eight weeks of a verdict in the Criminal Proceedings, complete the Wagg review of the Crown Brief and provide the Defendants and Zurich with all documents it is willing to produce unconditionally, and identify any that it is withholding production of and the basis for any assertion that they remain (even after the trial of the Criminal Proceedings) subject to privilege or public interest immunity or other grounds for non-disclosure. .

[119] The parties may return to the court for further directions at a case conference regarding any documents about which there are concerns identified in the course of the Wagg review that cannot be resolved by agreement among the parties or regarding any proposed terms for production, including any restrictions upon the use and dissemination of those documents that the parties are unable to agree to or that may require a court order for their implementation.

[120] The production by the Crown shall be made to the Defendants and Zurich who shall, in turn, provide copies of any such materials received to the other parties to the SMH Proceedings upon such terms and conditions as may be agreed to by the parties or ordered by the court at that time.

[121] The court suggests that all parties to the SMH Proceedings (who will be entitled to receive whatever the Crown will be producing from the Crown Brief) be included in any negotiation regarding the terms and conditions of production and that they be put on case conference at which directions may be sought (or a motion may be scheduled).

[122] If something changes giving rise to special circumstances (for example, a material delay in the timing of the trial of the Criminal Proceedings which will delay the timing of the anticipated production of the Crown Brief Documents), any party may request a case conference for further directions concerning the production of the Crown Brief, on notice to all interested parties in both the Criminal Proceedings and the SMH Proceedings.

[123] To avoid any arguments of res judicata at what could end up being a future motion for the same relief I find it preferable to adjourn this motion sine die so that it can be brought back on, in an amended form and with updated supporting material, if necessary.

[124] In meantime, the parties to the SMH Proceedings shall abide by their production and disclosure and other discovery obligations in accordance with their timetable approved by this court’s July 31, 2023 endorsement, irrespective of what may or may not ultimately be provided as part of the later disclosure of the Crown Brief.

Costs

[125] The parties were asked to exchange their costs outlines and attempt to reach an agreement on costs. They did complete this exchange, after which they advised the court as follows in an email dated October 27, 2023 following the hearing of the motion:

The parties to this motion have agreed to fix any costs awarded in the amount of $20,000, to the successful party from the opposing party/ies. However, the parties are not agreed about whether those costs should be payable to the successful parties.

Accordingly, all parties request permission to make short letter-form submissions not exceeding 3 pages on that latter issue following Your Honour’s decision.

[126] With the benefit of the court’s decision herein, the parties are again encouraged to try to reach an agreement on costs. Given that the court has ultimately adopted what the AG proposed but on the basis of undertakings which were only refined and finalized at the hearing, the parties might consider whether this is a case in which it is appropriate that no costs be awarded. However, if they are not able to agree on costs within a week, then they may each, as requested, provide a written submission of no more than three pages double spaced by December 1, 2023 setting out their position on costs and the factual and legal basis for it (including which party or parties, if any, should be paid costs and if so, which other party or parties should pay them and in what proportions). Any party from whom costs are sought may deliver a 1.5 page double spaced response by December 8, 2023.

[127] The parties may attach to their written cost submissions a copy of their respective costs outlines, legal authorities and any relevant offers to settle referred to in the submissions and send them to my judicial assistant linda.bunoza@ontario.ca by December 8, 2023.

Kimmel J.

Date: November 17, 2023

[^1]: Zurich reserves the right to seek production of other documents in the Crown Brief to the extent necessary or appropriate in the future and as further information becomes available.

[^2]: Under either Rule, the role of the Crown does not change. It is a third party with no proprietary interest in the documents but is charged with the responsibility of protecting the public interest in ensuring that the Crown disclosure, which is the property of the public, is used to ensure that justice is done: Wagg at para. 53 quoting Fullowka v. Royal Oak Mines Inc., 1998 CarswellNWT 18, [1998] N.W.T.J. No. 45, at para. 15; see also paras. 38 and 40.

[^3]: Section 19(2) of the CLPA states that the Act should not be construed as compelling the Crown to make production when not a party. There was some suggestion in the responding parties’ submissions that the Crown is immune from third party discovery in civil litigation. See O’Leary v. Ragone, 2021 FC 185, at para. 43, and Canada (Attorney General) v. Thouin, 2017 SCC 46, [2017] 2 S.C.R. 184, at paras. 17–18. Zurich countered this with cites to two cases decided under r. 30.10 after the CLPA was enacted in which crown disclosure was ordered to be produced in a civil action. See: Children’s Aid Society of Ottawa v. Attorney General of Ontario, 2023 ONSC 2045 (Div. Ct.) and Children’s Aid Society of Ottawa v. K.F.et al, 2022 ONSC 7269, 83 R.F.L. (8th) 147.