Court File and Parties

Court File No.: CV-20-639601-00CL Date: 20240112 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 (Written Cost Submissions received November 30, December 1 and December 8, 2023)

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

[1] The court's endorsement and decision on the motion by Zurich Insurance Company Ltd. (“Zurich”) for production from the defendants Vasos Georgiou ("Georgiou") and John Aquino ("Aquino") of the Crown's Disclosure Brief in the criminal proceedings against them was released on November 17, 2023 (the "Wagg Motion Decision"). Zurich's motion was primarily framed as a motion for production from the Defendants under Rule 30 of the Rules of Civil Procedure.

[2] At the conclusion of the hearing, the parties were asked to exchange their cost 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.

[3] The court encouraged the parties to try to reach an agreement on costs in the Wagg Motion Decision, taking into account the court’s reasoning in that decision. The court suggested that, since it had ultimately adopted what the Ministry of the Attorney General (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, they were permitted to make written cost submissions if no agreement could be reached, and they have now done so.

[4] In light of the agreement on quantum of costs, the only issue that the court must decide now is whether any party is entitled to costs.

The Parties' Positions on Costs

[5] The AG is not seeking any costs.

[6] Georgiou and Aquino (also referred to as the "Defendants") ask the court to award them costs in the previously agreed amount of $20,000. They argue that they were successful in resisting the requested order against them for production of the Crown Disclosure Brief. They say that the Crown's conciliatory gestures at the hearing are irrelevant to the question of their costs. They seek to recover some of the resources that they diverted from the preparation for their defence of the criminal proceedings to respond to this motion.

[7] Zurich contends that there should be no costs awarded on this motion since the AG's undertakings that played a central role in the court's balancing of interests in the Wagg Motion Decision were only provided at or shortly before the hearing of the motion. It further contends that the motion was necessary because of the timing of the undertakings and in the face of the combined effect of the positions of the AG and the Defendants (described in more detail below).

[8] Alternatively, Zurich suggests that the court defer the question of any entitlement to costs of this motion until after the verdict in the criminal proceedings, since the Wagg motion was adjourned, not dismissed, and may still need to be brought back on.

Costs Analysis

[9] The court's decision to adjourn Zurich's motion sine die relied in part on two undertakings given by the Attorney General for Ontario on behalf of the Crown (the “AG”). Specifically,

a. 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”); and

b. that the Crown will not rely upon the Crown Liability and Proceedings Act, 2019, S.O. 2019, c. 7. Sched. 17 (“CLPA”) as a basis for resisting the production that is sought by Zurich after the verdict in the Criminal Proceedings.

[10] The court's 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. To avoid any arguments of res judicata at what could end up being a future motion for the same relief, the court decided to adjourn Zurich's motion sine die so that it can be brought back on, in an amended form and with updated supporting material, if necessary.

[11] The court adopted this approach (suggested by the AG), after concluding (at para. 104 of the Wagg Motion Decision) that there was no substantial unfairness to Zurich or "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 Brief Documents for use in those proceedings (subject to the Wagg review to be undertaken after the verdict in the criminal trial)".

[12] However, the court also observed, earlier in the Wagg Motion Decision (at para. 101) that: "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".

[13] The importance of the undertakings provided by the Crown was outlined in various places in the Wagg Motion Decision and summarized in paragraphs 107-109 as follows:

[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 [1] , 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.

[14] Costs are awarded in the discretion of the court under s. 131 of the Courts of Justice Act, having regard to the factors in Rule 57 of the Rules of Civil Procedure. Some of the relevant considerations in this case include that:

a. The issues raised on the Wagg motion were unquestionably important to all of the parties, for different reasons. The AG was concerned with policy issues and precedents, the Respondents were concerned with their rights in the criminal proceedings and Zurich was concerned with its rights in the civil proceedings.

b. The particular constellation of issues raised had never been directly considered before and were, in that regard, novel.

c. The positions of the AG and the Respondents were not entirely aligned and, in the extremes, could have meant no Wagg production could have been sought, even at a later time, from either the Crown or the Defendants.

[15] The undertakings provided by the AG on behalf of the Crown at or shortly prior to the hearing of the motion were not, as the Defendants suggest, just an irrelevant conciliatory gesture. They addressed very real concerns that the court had about the potential implications of the positions of the AG and the Defendants.

[16] Although the Defendants achieved at least part of the outcome they sought, which was to avoid any production of the Crown Disclosure Brief before their criminal trial, the decision was not made, for the most part, on the basis of the arguments that they presented. I do not consider the Defendants to have been the "successful parties" on the Wagg Production Motion, but even if they were, the court has the discretion not to award them any costs of that motion under r. 57.01 of the Rules of Civil Procedure.

[17] I am not satisfied (as I would need to be under r. 57.03(1) of the Rules of Civil Procedure) that this is an appropriate case in which to defer the determination of the issue of costs arising out of this motion.

[18] There shall be no costs awarded to any party arising from the Wagg Motion Decision. If the motion is brought back on, then the issue of the costs of any further consideration of the production of the Crown Disclosure Brief will be addressed at that time.

Kimmel J. Date: January 12, 2024

Footnotes

[1] 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. [Footnote carried over from original quoted text of Wagg Motion Decision]